-----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, UQdogcHTmfL2qjUhXFnoupLeB6wI2lKFnlbOIRrGGmVZGCNe8fX1KIMj1Sn49Bx0 ZbZHRnZYFJGLCiSqeHeJyw== 0000950137-07-016222.txt : 20071030 0000950137-07-016222.hdr.sgml : 20071030 20071030163648 ACCESSION NUMBER: 0000950137-07-016222 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071030 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071030 DATE AS OF CHANGE: 20071030 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: 071200022 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 c21001e8vk.txt CURRENT REPORT 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) October 30, 2007 ------------------------- SPSS Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 000-22194 36-2815480 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of 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 October 30, 2007, SPSS Inc. issued a press release announcing its results for its fiscal quarter ended September 30, 2007. The full text of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference. The information in this Form 8-K and Exhibit 99.1 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. 99.1 SPSS Press Release, dated October 30, 2007 (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: October 30, 2007 Chief Financial Officer and Secretary 3 EX-99.1 2 c21001exv99w1.txt PRESS RELEASE FOR IMMEDIATE RELEASE (SPSS COMPANY LOGO) Contact: Janine Warell, SPSS 312-261-6535 jwarell@spss.com SPSS REPORTS RECORD THIRD QUARTER REVENUE AND EARNINGS NEW LICENSE REVENUE GROWTH DRIVES INCREASE IN OPERATING INCOME CHICAGO, USA, October 30, 2007 -SPSS Inc. (NASDAQ:SPSS), a worldwide provider of predictive analytics software, today announced results for the quarter and nine months ended September 30, 2007. The company reported record third quarter revenues of $72.3 million, a 12 percent increase from $64.7 million in the third quarter of 2006. New license revenues were $34.5 million, up 15 percent from $30.0 million in the third quarter of 2006. Operating income increased 29 percent to $12.5 million, or 17 percent of total revenues, from $9.6 million, or 15 percent of total revenues, in the third quarter of 2006. Reported operating income for the third quarter of 2007 includes $1.2 million in charges related to the previously announced R&D facility closures and consolidation. Diluted earnings per share (EPS) in the 2007 third quarter were a record $0.41, compared to $0.28 for the same period last year. These results included charges for share-based compensation of $1.0 million and $1.9 million in the third quarter of 2007 and 2006, respectively. "In the third quarter, we saw growth in all major geographies driven by solid new license revenue," said SPSS president and CEO Jack Noonan. "Contributing to this improvement were strong sales of our statistics and data mining products, as well as several larger predictive analytic solutions deals. With the benefits of predictive analytics increasingly recognized in the marketplace along with the proven value of SPSS products, we remain positive about the future." Revenues for the nine months ended September 30, 2007 totaled $211.4 million, an 11 percent increase from $190.4 million in the same period last year. New license revenues were $101.8 million, up 14 percent from $89.2 million in the 2006 nine-month period. Operating income increased 54 percent to $34.8 million, or 16 percent of total revenues, from $22.6 million, or 12 percent of total revenues, for the same period in 2006. Operating income in 2007 includes charges of $1.9 million for restructuring and R&D facility closures. Charges for share-based compensation were $5.5 million and $5.0 million in the first nine months of 2007 and 2006, respectively. EPS for the 2007 nine-month period was $1.16, compared to $0.63 for the same period in 2006. The effective income tax rate for the 2007 nine-month period was 39 percent, compared with a 37 percent effective tax rate in the same period last year. Cash at September 30, 2007 was $297.1 million, up from $140.2 million on December 31, 2006. Cash flow from operations for the nine months ended September 30, 2007 totaled $51.5 million compared with $26.0 million for the same period last year. OUTLOOK AND GUIDANCE "Strong revenue growth combined with the benefits from our ongoing productivity improvement efforts resulted in record earnings and operating margin for the 2007 third quarter despite the charges for restructuring and facility closures," said Raymond Panza, SPSS executive vice president and CFO. "Looking ahead, we remain focused on building upon the momentum of our revenue growth and further operational efficiencies to ensure we continue to capitalize on the increasing market adoption of predictive analytic technologies." Panza added, "We expect revenues for the 2007 fourth quarter of between $74.0 million and $76.0 million with reported EPS in the range of $0.34 to $0.40. EPS for the 2007 fourth quarter includes estimated charges of $0.06 for share-based compensation and $0.09 related to the previously announced R&D facility closures that will be completed by year-end. For the 2007 fiscal year, the total costs recognized relative to the restructuring and R&D facilities consolidations are estimated to be $5.0 million. It is expected that the resulting savings realized during 2008 will exceed those restructuring costs. Earnings guidance assumes an effective income tax rate of 39 percent for fourth quarter and fiscal year." CONFERENCE CALL The company will host a conference call at 5 p.m. CT/6 p.m. ET on October 30, 2007, 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 888-396-2356 in the United States and 617-847-8709 internationally. The live call pass-code is 59820382. A replay will be available via phone for one week after the call. To access it, participants should dial in the United States 888-286-8010 or 617-801-6888 internationally. Access code 82305419 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. ABOUT SPSS INC. SPSS Inc. (Nasdaq: SPSS) is a leading global provider of predictive analytics software and solutions. The company's predictive analytics technology improves business processes by giving organizations forward visibility for decisions made every day. By incorporating predictive analytics into their daily operations, organizations become Predictive Enterprises--able to direct and automate decisions to meet business goals and achieve a measurable competitive advantage. More than 250,000 public sector, academic, and commercial customers rely on SPSS technology to help increase revenue, reduce costs, and detect and prevent fraud. Founded in 1968, SPSS is headquartered in Chicago, Illinois. For more information, please visit www.spss.com. SAFE HARBOR STATEMENT In addition to historical information, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements regarding the Company's expectations, beliefs, intentions or future strategies that are signified by the words "expects," "anticipates," "intends," "believes," "estimates" or similar language. All forward-looking statements included in this document are based on information available to the Company on the date hereof. The Company cautions investors that its business and financial performance and the matters described in these forward-looking statements are subject to substantial risks and uncertainties. Because of these risks and uncertainties, some of which may not be currently ascertainable and many of which are beyond the Company's control, actual results could differ materially from those expressed in or implied by the forward-looking statements. The potential risks and uncertainties that could cause results to differ materially include, but are not limited to: the Company's ability to predict revenue, the Company's ability to respond to rapid technological changes, a potential loss of relationships with third parties from whom the Company licenses certain software, fluctuations in currency exchange rates, the impact of new accounting pronouncements, increased competition and risks associated with product performance and market acceptance of new products. A detailed discussion of other risk factors that affect the Company's business is contained in the Company's Annual Reports on Form 10-K, particularly under the heading "Risk Factors." The Company does not intend to update these forward-looking statements to reflect actual future events. SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
Three Months Ended September 30, % of Total -------------------------- Revenue Yr/Yr ---------- 2007 2006 % Chg. 2007 2006 ------- ------- ------ ---- ---- Net revenues: License $34,477 $30,013 15% 48% 47% Maintenance 28,475 27,970 2% 39% 43% Services 9,328 6,701 39% 13% 10% ------- ------- --- --- Net revenues 72,280 64,684 12% 100% 100% ------- ------- --- --- Operating expenses: Cost of license and maintenance revenues 4,277 4,253 1% 6% 7% Sales, marketing and services 35,176 31,448 12% 49% 49% Research and development 11,822 11,414 4% 16% 18% General and administrative 8,555 7,935 8% 12% 11% ------- ------- --- --- Operating expenses 59,830 55,050 9% 83% 85% ------- ------- --- --- Operating income 12,450 9,634 29% 17% 15% ------- ------- --- --- Other income (expense): Net interest income 2,302 929 148% 3% 1% Gain on divestiture of Sigma-series product line -- 1,000 -100% 0% 2% Other (190) (2,621) -93% 0% -4% ------- ------- --- --- Other income (expense) 2,112 (692) NM 3% -1% ------- ------- --- --- Income before income taxes 14,562 8,942 63% 20% 14% Income tax expense 6,190 3,189 94% 8% 5% ------- ------- --- --- Net income $ 8,372 $ 5,753 46% 12% 9% ======= ======= === === Basic net income per common share $ 0.44 $ 0.29 52% Diluted net income per common share $ 0.41 $ 0.28 46% Share data: Shares used in basic per share computation 19,071 19,697 -3% Shares used in diluted per share computation 20,304 20,649 -2%
SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)
Nine Months Ended September 30, % of Total ---------------------------- Revenue Yr/Yr ----------- 2007 2006 % Chg. 2007 2006 -------- -------- ------ ---- ---- Net revenues: License $101,815 $ 89,198 14% 48% 47% Maintenance 87,850 81,461 8% 42% 43% Service 21,703 19,730 10% 10% 10% -------- -------- --- --- Net revenues 211,368 190,389 11% 100% 100% -------- -------- --- --- Operating expenses: Cost of license and maintenance revenues 13,070 12,449 5% 7% 6% Cost of license and maintenance revenues -- software write-off -- 1,283 NM -- 1% Sales, marketing and services 101,839 93,405 9% 48% 49% Research and development 36,444 37,332 -2% 17% 20% General and administrative 25,245 23,312 8% 12% 12% -------- -------- --- --- Operating expenses 176,598 167,781 5% 84% 88% -------- -------- --- --- Operating income 34,770 22,608 54% 16% 12% -------- -------- --- --- Other income (expense): Net interest income 5,557 1,934 187% 3% 1% Gain on divestiture of Sigma-series product line -- 1,000 -100% 0% 1% Other (1,535) (4,682) -67% -1% -3% -------- -------- --- --- Other income (expense) 4,022 (1,748) NM 2% -1% -------- -------- --- --- Income before income taxes 38,792 20,860 86% 18% 11% Income tax expense 15,078 7,718 95% 7% 4% -------- -------- --- --- Net income $ 23,714 $ 13,142 80% 11% 7% ======== ======== === === Basic net income per common share $ 1.24 $ 0.67 85% Diluted net income per common share $ 1.16 $ 0.63 84% Share data: Shares used in basic per share computation 19,152 19,642 -2% Shares used in diluted per share computation 20,512 20,885 -2%
SPSS INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
SEPTEMBER 30, DECEMBER 31, 2007 2006 ------------- ------------ ASSETS Current assets Cash and cash equivalents $297,074 $140,203 Accounts receivable, net 47,773 53,814 Inventories, net 747 752 Deferred income taxes 4,176 3,784 Prepaid income taxes 3,319 3,285 Other current assets 4,954 4,692 -------- -------- Total current assets 358,043 206,530 Net property, equipment and leasehold improvements 17,825 17,708 Capitalized software development costs, net 34,533 31,583 Goodwill 41,891 41,923 Intangibles, net 3,325 3,470 Deferred income taxes 25,282 28,714 Other noncurrent assets 6,868 2,566 -------- -------- Total assets $487,767 $332,494 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 6,599 $ 6,496 Income and value added taxes payable 11,854 10,249 Deferred revenues 76,604 73,483 Other accrued liabilities 23,467 24,203 -------- -------- Total current liabilities 118,524 114,431 Long-term debt 150,000 -- Noncurrent deferred income taxes 637 795 Noncurrent deferred revenue 740 745 Stockholders' equity Common Stock 191 198 Additional paid-in capital 181,211 205,912 Accumulated other comprehensive income (loss) 2,594 (1,335) Retained earnings 33,870 11,748 -------- -------- Total stockholders' equity 217,866 216,523 -------- -------- Total liabilities and stockholders' equity $487,767 $332,494 ======== ========
SPSS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ------------------- 2007 2006 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 23,714 $ 13,142 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,137 12,747 Deferred income taxes 7,676 2,630 Excess tax benefit from share-based compensation (5,361) (4,340) Amortization of share-based compensation 5,543 5,028 Write-off of software -- 1,283 Gain on sale of product line -- (1,000) Changes in assets and liabilities: Accounts receivable 8,208 (3,468) Inventories 12 135 Prepaid and other assets (146) 491 Accounts payable (39) (2,454) Accrued expenses (1,299) (681) Income taxes 914 (1,137) Deferred revenue 296 1,624 Other (1,116) 1,952 -------- -------- Net cash provided by operating activities 51,539 25,952 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (4,600) (4,231) Capitalized software development costs (10,540) (9,407) Proceeds from the divestiture of Sigma-series product line -- 1,000 -------- -------- Net cash used in investing activities (15,140) (12,638) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 150,000 -- Debt issuance costs (4,281) -- Purchases of common stock (49,998) -- Proceeds from stock option exercises and employee stock purchase plan 15,611 18,530 Tax benefit from stock option exercises 5,361 4,340 Net repayments under line-of-credit agreements -- (3,372) -------- -------- Net cash provided by financing activities 116,693 19,498 -------- -------- Effect of exchange rates on cash 3,779 2,308 -------- -------- Net change in cash and cash equivalents 156,871 35,120 Cash and cash equivalents at beginning of period 140,203 84,408 -------- -------- Cash and cash equivalents at end of period $297,074 $119,528 ======== ========
SPSS INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION--EFFECT OF SHARE-BASED COMPENSATION ON OPERATING INCOME (IN THOUSANDS, EXCEPT PERCENT AMOUNTS) (UNAUDITED)
Three Months Ended September 30, ------------------------------------------------------------------------- Adjusted To Exclude Reported--GAAP Share-Based Compensation Share-Based Compensation ------------------- ------------------------ ------------------------ 2007 2006 2007 2006 2007 2006 -------- -------- ------- ------- -------- -------- Net revenues $72,280 $64,684 $ -- $ -- $72,280 $64,684 ------- ------- ------- ------- ------- ------- Operating expenses: Cost of license and maintenance revenues 4,277 4,253 -- -- 4,277 4,253 Sales, marketing and services 35,176 31,448 4 321 35,172 31,127 Research and development 11,822 11,414 7 312 11,815 11,102 General and administrative 8,555 7,935 990 1,272 7,565 6,663 ------- ------- ------- ------- ------- ------- Operating expenses 59,830 55,050 1,001 1,905 58,829 53,145 ------- ------- ------- ------- ------- ------- Operating income $12,450 $ 9,634 $(1,001) $(1,905) $13,451 $11,539 ======= ======= ======= ======= ======= ======= Operating income as % of revenues 17% 15% 19% 18% ======= ======= ======= ======= Diluted net income per common share $ 0.41 $ 0.28 $ (0.03) $ (0.06) $ 0.44 $ 0.34 ======= ======= ======= ======= ======= =======
Nine Months Ended September 30, ------------------------------------------------------------------------- Adjusted To Exclude Reported--GAAP Share-Based Compensation Share-Based Compensation ------------------- ------------------------ ------------------------ 2007 2006 2007 2006 2007 2006 -------- -------- ------- ------- -------- -------- Net revenues $211,368 $190,389 $ -- $ -- $211,368 $190,389 -------- -------- ------- ------- -------- -------- Operating expenses: Cost of license and maintenance revenues 13,070 12,449 -- -- 13,070 12,449 Cost of license and maintenance revenues -- software write-off -- 1,283 -- -- -- 1,283 Sales, marketing and services 101,839 93,405 959 1,362 100,880 92,043 Research and development 36,444 37,332 967 921 35,477 36,411 General and administrative 25,245 23,312 3,617 2,745 21,628 20,567 -------- -------- ------- ------- -------- -------- Operating expenses 176,598 167,781 5,543 5,028 171,055 162,753 -------- -------- ------- ------- -------- -------- Operating income $ 34,770 $ 22,608 $(5,543) $(5,028) $ 40,313 $ 27,636 ======== ======== ======= ======= ======== ======== Operating income as % of revenues 16% 12% 19% 15% ======== ======== ======== ======== Diluted net income per common share $ 1.16 $ 0.63 $ (0.17) $ (0.15) $ 1.33 $ 0.78 ======== ======== ======= ======= ======== ========
NOTE - SHARE-BASED COMPENSATION ON JANUARY 1, 2006, THE COMPANY ADOPTED THE PROVISIONS OF SFAS NO. 123(R), SHARE-BASED PAYMENT ("SFAS NO. 123(R)" OR THE "STATEMENT") USING THE MODIFIED PROSPECTIVE METHOD. SFAS NO. 123(R) FOCUSES PRIMARILY ON ACCOUNTING FOR TRANSACTIONS IN WHICH AN ENTITY OBTAINS EMPLOYEE SERVICES IN SHARE-BASED PAYMENT TRANSACTIONS. PRIOR TO THE ADOPTION OF SFAS NO. 123(R), THE COMPANY FOLLOWED THE INTRINSIC VALUE METHOD IN ACCORDANCE WITH APB NO. 25 TO ACCOUNT FOR ITS EMPLOYEE STOCK OPTIONS AND SHARE-BASED AWARDS ISSUED BEFORE 2006. THE COMPANY HAS PROVIDED THE EFFECTS OF SHARE-BASED COMPENSATION TO SHOW THE COMPARABLE YEAR EFFECTS OF SHARE-BASED COMPENSATION AND THE RELATED EFFECTS ON OPERATING INCOME AND DILUTED NET INCOME PER COMMON SHARE THEREBY FACILITATING YEAR OVER YEAR COMPARISONS. -----END PRIVACY-ENHANCED MESSAGE-----