-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GNJawBsIEDwUSxZ9jHI+QWl1uBctuZcIzBuNCfOTSz6UUb3nBTggubwwknt0vA3l 61b/iVHnnZ/1J4d+WFaOzQ== 0000950137-06-001897.txt : 20060215 0000950137-06-001897.hdr.sgml : 20060215 20060215134422 ACCESSION NUMBER: 0000950137-06-001897 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060214 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060215 DATE AS OF CHANGE: 20060215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPSS INC CENTRAL INDEX KEY: 0000869570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 362815480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22194 FILM NUMBER: 06621166 BUSINESS ADDRESS: STREET 1: 233 S WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123292400 MAIL ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 8-K 1 c02549e8vk.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) February 14, 2006 --------------------------- SPSS Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 000-22194 36-2815480 - -------------------------------------------------------------------------------- (State or Other Jurisdiction of (Commission (I.R.S. Employer Incorporation) File Number) Identification No.) 233 South Wacker Drive, Chicago, Illinois 60606 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (312) 651-3000 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On February 14, 2006, SPSS Inc. issued a press release announcing its results for its fiscal quarter and fiscal year ended December 31, 2005. The full text of the press release is attached as Exhibit 99.3 to this Form 8-K and is incorporated herein by reference. The information in this Form 8-K and Exhibit 99.3 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing made by SPSS under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as set forth by specific reference in such filing. ITEM 9.01: FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. 99.3 SPSS Press Release, dated February 14, 2006 (furnished pursuant to Item 2.02) 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SPSS INC. By: /s/ Raymond H. Panza ------------------------------------- Raymond H. Panza Executive Vice President, Corporate Operations, Dated: February 15, 2006 Chief Financial Officer and Secretary 3 EX-99.3 2 c02549exv99w3.txt PRESS RELEASE EXHIBIT 99.3 [SPSS LOGO] FOR IMMEDIATE RELEASE Contact: Marc Brailov, SPSS 312-651-3459 mbrailov@spss.com SPSS REPORTS RECORD REVENUES STRONG INCREASES IN PROFITABILITY AND CASH FLOW CHICAGO, Ill. (USA), February 14, 2006 -- SPSS Inc. (NASDAQ: SPSS), a leading worldwide provider of predictive analytics software, today announced results for its fourth quarter and fiscal year ended December 31, 2005. The Company reported record revenues of $62.2 million and diluted earnings per diluted share (EPS) of $0.30 for the fourth quarter of 2005, representing the highest single revenue quarter in its history. These results compare to revenues of $60.5 million and EPS of $0.20 in the fourth quarter of 2004. Operating income for the fourth quarter of 2005 increased to $8.6 million, or 14 percent of total revenues, from $3.7 million, or 6 percent of total revenues, in the same quarter last year. Revenues for the 2005 fiscal year totaled $236.1 million with EPS of $0.85, compared to $224.1 million and $0.31, respectively, in 2004. New license revenues increased 12 percent to $107.6 million from $95.8 million in 2004. Operating income for the 2005 fiscal year reached $28.0 million, or 12 percent of total revenues, through the combination of record revenues and a 4 percent decrease in operating expenses resulting from widespread gains in productivity, cost management and more efficient revenue generation. Cash totaled $84.4 million as of December 31, 2005, compared to $37.1 million at the end of the 2004 fiscal year. Net cash flow from operating activities in 2005 increased to $51.5 million from $12.3 million in 2004. "SPSS concluded 2005 in the strongest position in its history," said Jack Noonan, SPSS president and chief executive officer. "Our financial foundation is solid, and with our technological leadership and market success increasingly recognized, we are well positioned for the future." Noonan continued, "There is mounting evidence that the future will involve a larger role for predictive analytics in enterprise IT implementations. SPSS is prepared to meet this demand with technology that easily scales from the desktop to the enterprise while providing increasing returns on investment for customers using our products in mission critical applications." SPSS signed software license or service agreements during the 2005 fourth quarter with organizations including: ABN AMRO; Alliance & Leicester plc; American Academy of Neurology; Avis Europe plc; Banco Popular North America; Center Parcs Europe N.V.; City of New York, Department of Information Technology & Telecommunications; Credit Agricole (GIE Synergie); ENIGMA GfK Medien-u.Marketingforschung GmbH; Interior Health Authority (Canada); Janssen-Cilag GmbH; Marc Ecko Enterprises; Mothers Against Drunk Driving; MotorCity Casino; Navy Federal Credit Union; Publicis Groupe Media; RentWay; R.J. Reynolds Tobacco Co. Puerto Rico; Texas A&M University; The Pennsylvania State University; The Stationery House; Turner Broadcasting System, Inc.; United Negro College Fund Special Programs Corporation; University of Arizona; Vattenfall Europe Hamburg AG; Vodafone K.K.; and Western Wats. A YEAR OF SUCCESSFUL PRODUCT LAUNCHES AND GROWING INDUSTRY RECOGNITION Two-thousand five was highlighted by successful product launches and growing industry recognition of SPSS' leadership in the market for predictive analytics technology and services. The Company released SPSS 14.0, an enhanced version of its flagship statistical software package, and SPSS(R) Statistical Services for Microsoft(R) SQL Server 2005, which markedly expands the analytical options of major organizations by readily integrating with Windows Server System products. In 2005 SPSS also released: o A significantly upgraded version of its ShowCase(R) Suite 7.0, the leading business intelligence and data mining solution for organizations using the IBM(R) eServer iSeries(TM) (AS/400(R)) computing platform. o PredictiveClaims(TM), a new solution to reduce insurance fraud, improve the claims process and cut costs, an application based on real-time predictive analytics technology that integrates with existing claims-management systems to instantly determine which claims qualify for immediate approval and which are potentially fraudulent. o Dimensions(TM)3.0, a significant upgrade of its comprehensive suite for survey design, data collection, data management, analysis and publishing of survey results. An International Data Corporation (IDC) study released in early 2005 confirmed predictive analytics as a distinct software sector. IDC (http://www.idc.com/) projected that this sector will grow at a compound annual growth rate of 8 percent during the next five years.(1) Nucleus Research (http://www.spss.com/home_page/NucleusResearch.htm) released the results of its independent study on SPSS predictive analytics solutions. Entitled, "The Real ROI from SPSS," the study concluded that 94 percent of SPSS' customers examined had achieved a positive return on investment (ROI) from their deployments after an average deployment time of 10.7 months. "This is one of the highest ROI scores Nucleus has ever seen in its Real ROI series of research reports," the firm noted. Based on a survey of users, SPSS was honored in 2005 by CRMGuru.com as the most customer-centric solution provider in marketing automation. CRMGuru.com is the - ------------------ (1) Source: Worldwide End-user Business Analytics 2004-2008 Forecast: Core Versus Predictive, IDC #32642 December 2004. world's largest industry portal for business executives to learn about Customer Relationship Management (CRM). SPSS was one of seven CRM solution providers tapped for CRMGuru Summit Awards for CRM Solution Excellence based on a year-long study of CRM solution providers. SPSS was selected for marketing automation over Epiphany, Inc., the SAS Institute, and Unica Corporation. Finally, Frost & Sullivan (www.frost.com) announced that it selected SPSS as the recipient of the 2005 Product Innovation Award for its pioneering role in predictive customer relationship management (CRM) analytics. Frost & Sullivan presents this award to companies demonstrating excellence in new products and technologies in their industries. OUTLOOK AND GUIDANCE "Our 2005 results were driven by successful execution of a disciplined company-wide operational strategy," said Raymond Panza, SPSS executive vice president, corporate operations and chief financial officer. "That ongoing strategy is to sustain a culture of progress focused on increasing revenues, improving productivity and greater cost-efficiencies. With cash flow and cash at record levels, the company has both the financial strength and flexibility for achieving continued growth." Panza further stated, "2006 first quarter revenues are anticipated to be between $58 and $60 million. EPS for the quarter is expected to be in the range of $0.14 to $0.20. The 2006 EPS guidance includes the estimated effect of the adoption of FAS 123R - Share Based Payments, requiring the expensing of stock option compensation, which is expected to result in $0.03 per share additional expense in the first quarter. Reported revenue and earnings growth for the 2006 first quarter will be negatively impacted by foreign exchange rates reflecting a stronger dollar compared to the same period last year, and the expectation that more than 55 percent of our revenues will continue to be generated outside the United States. For the 2006 fiscal year, we expect revenues to total between $248 and $254 million, with EPS in the range from $0.98 to $1.09. For the year 2006, the EPS guidance includes an expected charge in the range of $0.12 to $0.16 for the adoption of FAS 123R, expensing of stock options." CONFERENCE CALL The company will host a conference call at 5:00 p.m. CT on February 14, 2006, to discuss its financial results. The live call will be broadcast online at www.spss.com/invest. Those interested in participating in the live call should dial 800-510-9834 in the United States and 617-614-3669 internationally. The live call pass-code is 86722895. A replay will be available via phone for one week after the call. To access it, participants should dial 888-286-8010 in the United States or 617-801-6888 internationally. Access code 38372926 is required for the replay. An archived version of the call will also be made available online at www.spss.com/invest approximately two hours after the live call. SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
Three Months Ended December 31, ------------------------------------ % of Total Revenue Yr/Yr ------------------ 2005 2004 % Chg. 2005 2004 ---- ---- ------ ---- ---- Net revenues: License $ 29,799 $ 27,706 8% 48% 45% Maintenance 25,453 25,130 1% 41% 42% Service 6,982 7,626 -8% 11% 13% ------------ ------------- ----------- ----------- Net revenues 62,234 60,462 3% 100% 100% Operating expenses: Cost of license and maintenance revenues 4,630 3,943 17% 7% 7% Sales, marketing and services 30,025 32,977 -9% 48% 55% Research and development 11,807 12,611 -6% 19% 21% General and administrative 7,185 7,231 -1% 12% 11% ------------ ------------- ----------- ----------- Operating expenses 53,647 56,762 -5% 86% 94% ------------ ------------- ----------- ----------- Operating income 8,587 3,700 132% 14% 6% Other income (expense): Net interest income (expense) 140 (111) NM - - Gain on divestiture of Sigma-series product line 1,000 82 NM 2% - Other 154 1,446 NM - 2% ------------ ------------- ----------- ----------- Other income 1,294 1,417 -9% 2% 2% ------------ ------------- ----------- ----------- Income before income taxes 9,881 5,117 93% 16% 8% Income tax expense 3,991 1,543 159% 7% 2% ------------ ------------- ----------- ----------- Net income $ 5,890 $ 3,574 65% 9% 6% ============ ============= =========== =========== Basic net income per common share $ 0.32 $ 0.20 60% Diluted net income per common share $ 0.30 $ 0.20 50% Share data: Shares used in basic per share computation 18,308 17,626 4% Shares used in diluted per share computation 19,516 17,711 10%
SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
Year Ended December 31, ------------------------------------- % of Total Revenue Yr/Yr ------------------ 2005 2004 % Chg. 2005 2004 ---- ---- ------ ---- ---- Net revenues: License $ 107,568 $ 95,819 12% 46% 43% Maintenance 102,241 97,735 5% 43% 44% Service 26,254 30,520 -14% 11% 13% ------------ ------------ ------------ ----------- Net revenues 236,063 224,074 5% 100% 100% Operating expenses: Cost of license and maintenance revenues 16,381 14,642 12% 7% 7% Sales, marketing and services 117,872 129,987 -9% 50% 58% Research and development 45,418 47,765 -5% 19% 21% General and administrative 28,368 25,104 13% 12% 11% ------------ ------------ ------------ ----------- Operating expenses 208,039 217,498 -4% 88% 97% ------------ ------------ ------------ ----------- Operating income 28,024 6,576 326% 12% 3% Other income (expense): Net interest income (expense) 161 (282) -157% - - Gain on divestiture of Sigma-series product line 1,000 82 NM 1% - Other (2,013) 1,680 NM -1% 1% ------------ ------------ ------------ ----------- Other income (expense) (852) 1,480 NM - 1% ------------ ------------ ------------ ----------- Income before income taxes 27,172 8,056 237% 12% 4% Income tax expense 11,080 2,513 341% 5% 1% ------------ ------------ ------------ ----------- Net income $ 16,092 $ 5,543 190% 7% 3% ============ ============ ============ =========== Basic net income per common share $ 0.88 $ 0.31 184% Diluted net income per common share $ 0.85 $ 0.31 174% Share data: Shares used in basic per share computation 18,228 17,671 3% Shares used in diluted per share computation 18,880 17,884 6%
SPSS INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
DECEMBER 31, DECEMBER 31, 2005 2004 ------------ ------------ ASSETS Current assets Cash and cash equivalents $ 84,408 $ 37,107 Accounts receivable, net 42,488 50,007 Inventories, net 879 789 Deferred income taxes 5,624 15,503 Prepaid income taxes 5,067 7,064 Other current assets 5,233 5,248 --------- --------- Total current assets 143,699 115,718 Net Property, equipment and leasehold improvements 20,441 21,480 Capitalized software development costs, net 28,522 28,178 Goodwill 41,207 42,197 Intangibles, net of accumulated amortization 3,627 3,278 Noncurrent deferred income taxes 32,938 22,860 Other noncurrent assets 1,463 1,614 --------- --------- Total assets $ 271,897 $ 235,325 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 2,500 $ 2,500 Accounts payable 9,678 6,127 Income and value added taxes payable 9,024 7,340 Deferred revenues 63,980 62,148 Other accrued liabilities 21,102 23,757 --------- --------- Total current liabilities 106,284 101,872 Noncurrent deferred income taxes 449 632 Noncurrent notes payable 872 3,381 Other noncurrent liabilities 546 981 Stockholders' equity Common Stock 187 177 Additional paid-in capital 174,188 152,477 Deferred compensation (1,069) (145) Accumulated other comprehensive loss (9,420) (7,818) Accumulated deficit (140) (16,232) --------- --------- Total stockholders' equity 163,746 128,459 --------- --------- Total liabilities and stockholders' equity $ 271,897 $ 235,325 ========= =========
SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
YEAR ENDED DECEMBER 31, ------------------------- 2005 2004 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 16,092 $ 5,543 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 16,948 16,405 Deferred income taxes (1,711) (11,190) Tax benefit from stock option exercises 2,749 134 Noncash survey service recoveries - (1,125) Gain on sale of Sigma-series product line (1,000) (82) Gain from property disposal - (771) Write-off of internal use software and acquired technology - 1,505 Changes in assets and liabilities: Accounts receivable 3,984 969 Inventories (125) 691 Prepaid and other assets (147) (236) Accounts payable 3,841 (1,253) Accrued expenses (1,488) (423) Income taxes 3,991 835 Deferred revenue 5,916 1,747 Other, net 2,459 (415) -------- -------- Net cash provided by operating activities 51,509 12,334 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,543) (5,477) Capitalized software development costs (9,021) (9,208) Consideration for acquisition (780) - Repurchase of common stock issued for acquisition - (5,421) Proceeds from the divestiture of Sigma-series product line 1,000 3,000 Proceeds from property disposal - 2,633 Other investing activities - 187 -------- -------- Net cash used in investing activities (16,344) (14,286) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net repayments under line-of-credit agreements (2,509) (2,570) Proceeds from issuance of common stock 17,544 4,145 -------- -------- Net cash provided by financing activities 15,035 1,575 -------- -------- Effect of exchange rates on cash (2,899) 1,383 -------- -------- Net change in cash and cash equivalents 47,301 1,006 Cash and cash equivalents at beginning of period 37,107 36,101 -------- -------- Cash and cash equivalents at end of period $ 84,408 $ 37,107 ======== ========
ABOUT SPSS INC. SPSS Inc. (NASDAQ: SPSS) is a leading worldwide provider of predictive analytics software and solutions. The company's predictive analytics technology connects data to effective action by drawing reliable conclusions about current conditions and future events. More than 250,000 commercial, academic, and public sector customers rely on SPSS technology to help increase revenue, reduce costs, improve important processes, and detect and prevent fraud. More than 95 percent of the Fortune 1000 companies are SPSS customers. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For additional information, please visit www.spss.com. SAFE HARBOR STATEMENT This press release contains forward-looking information made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by phrases such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "could," "designed," "should be" and other similar expressions which denote expectations of future events rather than statements of fact. These forward-looking statements involve factors that are subject to risks and uncertainties. These risks and uncertainties, which may not be currently ascertainable and many of which are beyond the Company's control, may cause the Company's actual results, performance or achievements to be materially different than the results, performance or achievements expressed in or implied by the forward-looking statements. These risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission ("SEC"). Copies of these filings are available either on the SEC's website at www.sec.gov or from the Company's investor relations department. In light of these risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that any future results, performance or achievements will be attained. These forward-looking statements speak only as of the date on which they are made. The Company assumes no obligation to update the forward-looking statements contained in this press release. ### -----END PRIVACY-ENHANCED MESSAGE-----