midastouch017
18 years ago
NICE Systems wins large order from UK’s Network Rail
The order is for NICE's solutions for the reconstruction, analysis, and distribution of voice communications.
Globes correspondent 4 Dec 06 14:16
Digital recording company NICE Systems (Nasdaq: NICE; TASE: NICE) of Ra'anana has received what it describes as a 7-digit order in the UK. The order, from Network Rail, which owns and operates Britain’s rail infrastructure, is for NICE's solutions for the reconstruction, analysis and distribution of voice communications. Initial roll-out entails implementation at 270 signal boxes.
Network Rail is responsible for the operation, maintenance, and development of Britain’s tracks, signaling system, rail bridges, tunnels, level crossings, viaducts, and 17 key stations. As part of its National Voice Recorder Project, NICE will fulfill phase one of the project that will ensure all interactions between signal operators and train drivers are captured and stored.
Network Rail will also deploy Scenario Replay, NICE’s event reconstruction solution that facilitates faster compilation of evidence and information sharing in the event of a post-incident inquiry.
“We needed a complete network-based solution to help us meet our very strict requirements,” said David Lovell, Overall Project Manager of the Network Rail National Voice Recording Project. “With NICE’s powerful applications for scenario reconstruction we are confident that we will be able to fully and accurately understand any situation where signal failure, accident or negligence may have occurred, and to ensure that we can correct or even prevent such occurrences in the future for better public service.”
“We are very pleased to have been selected to support the critical communications infrastructure of Britain’s Network Rail,” said NICE EMEA president Tamir Ginat. “This win is further evidence that NICE is the premier solution for transit systems all over the world, in their efforts to ensure the security of the public.”
Last month, NICE Systems announced a similar order for Metropolitan Transit Authority New York City Transit’s new Rail Control Center, via its partner, Siemens Transportation Systems Inc.
NICE Systems shares are currently up 3.02% on the Tel Aviv Stock Exchange, at NIS 136.30.
Published by Globes [online], Israel business news - www.globes.co.il - on December 4, 2006
midastouch017
18 years ago
Record Results for Third Quarter 2006 Reported by NICE Systems - Revenues Reach $112.2 Million
Wednesday November 1, 6:31 am ET
Company delivers record gross margins, operating margins and net income
RA'ANANA, Israel--(BUSINESS WIRE)--NICE Systems (NASDAQ: NICE - News), the global provider of advanced solutions that enable organizations to extract Insight from Interactions(TM) to drive performance, today announced results for the third quarter of 2006.
Third quarter 2006 pro-forma revenue was a record $112.2 million, representing a 35.6% increase from $82.7 million in the third quarter of 2005.
Pro-forma gross margin in the third quarter was a record 60.6%, or $67.9 million pro-forma gross profit, up from 56.6%, or $46.8 million respectively in the third quarter 2005.
The company reported a record pro-forma operating margin for the quarter of 15.9% and operating profit of $17.8 million, compared with 11.5% and $9.5 million, respectively, in the third quarter of 2005.
Third quarter 2006 pro-forma net income was a record $16.0 million, up 78.5% from $9.0 million in the third quarter of 2005. Pro-forma earnings per fully diluted share were at $0.31, up from $0.22 in the same quarter of 2005.
On a GAAP basis: Third quarter 2006 revenue was $107.5 million, up from $82.7 million in the third quarter of 2005. Third quarter 2006 gross margin was 56.2%, compared with 55.9% in the third quarter of 2005; operating loss was $6.9 million, compared with operating profit of $8.4 million, in the third quarter of 2005; and third quarter 2006 net loss was $5.4 million, or $0.11 per fully diluted share, compared with net income of $7.9 million, or $0.19 per share, on a fully diluted basis, for the third quarter of 2005.
Q3 2006 operating cash flow was a record $25.3 million, Total cash and equivalents at September 30, 2006 was $244.2 million, with no debt, compared with $421.1 million on June 30, 2006. This follows the $200 million that were paid for IEX during the quarter.
Commenting on the results, Haim Shani, Chief Executive Officer of NICE said, "Third quarter results reflect the successful execution of our long term plan and the continually growing demand for our Insight from Interactions solutions both in the enterprise and security sectors. They are also the clearest testament to the success of the paradigm shift we introduced to the enterprise sector with the acquisitions of IEX and Performix and implementation of our best-of-breed strategy for the contact center. Together with our global services, and worldwide footprint our offering enables us to achieve quick and measurable results. We continue to lead our markets going into 2007 and beyond."
Ran Oz, NICE's Corporate Vice President and Chief Financial Officer, stated, "Further to the outstanding results of the last three quarters and the strong momentum we are seeing in both the enterprise and security sectors, we are raising our full year guidance and providing first time Q4 guidance as follows: We expect Q4 revenues to be between $115 and $120 million, and pro-forma EPS per fully diluted share in the range of 32 - 37 cents. For the year we expect revenues at $413- $418 million, up from $408 - $417 million, and pro-forma EPS at a range of $1.12 - $1.17, up from $1.06 - $1.15 per fully diluted share."
Mr. Oz continued, "Looking forward to 2007 we expect the growth in our revenues to continue. This will allow us to enjoy the leverage of our business model, further improving margins and driving stronger bottom line growth. We introduce first time 2007 revenue guidance at $485 - $500 million; and first time pro-forma EPS per fully diluted share guidance of $1.35 - 1.45."
http://biz.yahoo.com/bw/061101/20061101005495.html?.v=1
midastouch017
18 years ago
One of the most interesting companies in the surveillance-monitoring-identification-documentation-etc. field is NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE). I’ve written quite a bit about NICE in the past, and it’s been in my top picks list for a long time, but in recent years, its share had a premium, which from the perspective of investors has created the Marvell Technology Group (Nasdaq: MRVL) problem. In other words, technically, NICE’s share was too expensive, and even though I believe in the company, it was hard for me to recommend it at the prices it was traded. NICE represents the ultimate merger - a rapidly expanding niche, expectations of further growth by the company over the coming years, top-of-the-line products, and exceptional management. Investors should own shares like this, period.
NICE CEO Haim Shani joined the company in early 2001 from Applied Materials Inc. (Nasdaq:AMAT), where he ran the company’s Israeli branch. Shani, it can now be said, took over NICE during a severe crisis, fixed and improved the company and turned into a leader with a rosy future. Investors happily paid for this. What does this mean? At some point, when investors realized who the man was and what he could do, they set a permanent premium on the share. When a share is traded at a premium for years, it’s good for investors, employees, and management; they all benefit. From $3.50 in early October 2002, NICE is now traded at $27.30.
P/e ratios of 24 for 2006 and 20 for 2007 are now considered high. Nevertheless, 10 of the 15 analysts covering NICE give the share a “Buy” recommendation, and the other five rate it at “Hold”. Oscar Gruss analyst Ronny Biran gives its “Buy” recommendation with a target price fo $31.
NICE competes against Comverse Technology Inc. (Nasdaq: CMVT) subsidiary Verint Systems Inc. (Nasdaq: VRNT). In terms of numbers the two companies are quite similar, and were also so in the past, until late 2004 Verint traded at a much higher premium and values than NICE. However, their relative situations subsequently reversed. NICE is now traded at values 30% higher than those of Verint, whereas in 2003 and 2004, Verint was traded at as much as five times the value of NICE. According to the analysts’ consensus, Verint will report a net profit of $42 million on $380 million in sales in 2007. This means a 420% increase in profit, compared with 2004, and a 96% increase in revenue. The share has nevertheless fallen 17% since 2005.
NICE, in contrast, has seen its sales rise 115% over the same period from $224.3 million to $483 million. The company’s net profit will rise 171% from $24.5 million in 2004 to an analysts’ consensus of $66.5 million. The share has risen 140% since the beginning of 2005.
What creates such a difference between the shares of NICE and Verint? Only investors’ confidence in management. It took more than two years for the market to realize that NICE has changed direction, and the premium is the response to the promises made and met. If we look at the multiples predicted for 2006 and 2007 for the two companies, they appear quite similar. It’s true that NICE’s growth rate over the past three years has been higher than Verint’s, but that’s not enough to justify a 17% drop in Verint’s share and a 140% rise in NICE’s.
http://www.globes.co.il/serveen/globes/docview.asp?did=1000137412&fid=1052
midastouch017
18 years ago
Nice Systems, Amdocs on CIBC's global 47 stock picks
25.9.06 | 17:30 By Shirley Yom-Tov
Nice Systems (Nasdaq, TASE: NICE) and Amdocs (NYSE:DOX) appear in CIBC's global list of 47 recommended companies, published on Thursday.
CIBC has been publishing its Special Research Series since 1975, covering investment ideas in a range of categories. This year, Nice and Amdocs appear under hi-tech alongside the likes of Oracle, Cisco Systems, Motorola, and Texas Instruments.
Nice is covered from New York by analyst Shaul Eyal. His rating for the company is Outperform with a 12-month price target of $34, which is 25% above its present level on Nasdaq. The company's business gained momentum in the second half of the year, Eyal writes, with strong sales of enterprise recording systems for call centers. In the second quarter sales of these systems rose 33% against the same period of 2005 to $73 million. EDS recently chose NicePerform as its standard system for all its service centers around the world.
Nice recently signed 11 new deals, including a CRM agreement with Rogers of Canada.
Amdocs is also covered by Eyal, who set it a price target of $42, which is 7% above its present trading level on the NYSE. Shares in Amdocs, which sells software for customer relations management and billing to phone companies, have risen 45% this year.
Eyal believes that the company's forecast for the year 2007, revenues of $2.88 billion, is highly bullish. Its backlog of orders at the end of the fiscal third quarter stood at $1.96 billion, an increase of $120 million from the end of the prior quarter. Of that amount, $80 million derived from organic operations and the $40 million is anticipated to arrive from Cramer Systems, which Amdocs bought for $475 million in mid-August.
CIBC's SRS list includes stocks that analysts think stand out, primarily because they are underpriced versus their growth potential.
In finances, the list includes the Nasdaq exchange, Goldman Sachs, and the Bank of America.
Industry includes General Electric, Honeywell and United Technologies. Healthcare has Barr Pharmaceuticals, which is a great rival of Teva. That Israeli company isn't on the list.
http://www.haaretz.com/hasen/spages/766812.html
midastouch017
18 years ago
Nice Systems won't confirm, or deny, report that it's buying Witness
14.9.06 | 12:34 By Omri Cohen
Nice Systems (Nasdaq: NICE) is not denying rumors that it's positioning to buy rival company Witness Systems (Nasdaq: WITS). Naturally, it is not confirming the rumors, either.
"The company does not comment on rumors," it commented unhelpfully to the Tel Aviv Stock Exchange, after a report in Yedioth Ahronoth that it's about to buy rival company Witness for more than $750 million, in a stock and cash deal. That would be a huge, material acquisition for a company whose market cap on Nasdaq is $1.32 billion.
Pressed by TheMarker, the Nice spokeswoman refused to comment. The company's chief financial officer Ran Oz repeated that Nice doesn't comment on rumors, and sought to stress the mistakes that had appeared in the Yedioth article in respect to Nice's business.
"If we have anything to say, we say it," he said. "We run our business and don't respond to speculation. It seems that whoever wrote the article doesn't understand the business," Oz added.
When silence speaks volumes
Non-denial is also a response, sometimes. Two months ago msystems (Nasdaq: FLSH) CEO Dov Moran wiggled out of questions about an imminent merger, and indicated that msystems would remain independent. But he did not explicitly deny the report and shortly after that interview, msystems was bought by SanDisk.
Is here any evidence beyond Nice's non-denial? Yes: one is Nice's aggressive acquisitions policy, and another is its poor record for transparency when it comes to material issues.
Regarding the aggressive acquisitions policy, two months ago Nice, which develops voice and video recording systems for security and customer-service purposes, bought IEC of Richmond for $200 million cash. IEX sells software for manpower management, strategic planning and more. At the same time Nice bought a smaller company, Performix of Massachusettsm for $13.2 million.
Raising money - what for?
As for the transparency issue, Nice has been assiduous about reporting material developments, after the event. But a claim could be made that it's cagey with the whole truth in advance.
For instance, last year CFO Oz was asked about the company possibly raising money: rumors were running rampant. He said that nice was a profitable company with cash flow, and therefore would need a good strategic reason to raise money in any way. "We won't raise money just to sit on a mountain of cash," Oz stated, and lo and behold, three weeks later the company published a shelf registration to raise up to $220 million. In December it raised $213 million.
No, the law does not require Nice to respond to rumors. It doesn't have to answer questions from reporters or the stock exchange. But if it really is maneuvering to buy Witness for $750 million in stock and cash, it would be hugely material to Nice. Its laconic response is far from convincing.
Witness' market cap on Nasdaq is $580 million, after having lost 12% of its value this year. For the first half of 2006 Witness reported a 22% increase in revenues to $106.3 million, and profit of $6.9 million. In the first half of 2005,it had lost $8.8 million.
Incidentally, Witness is delinquent in its regulatory filings and faces potential delisting from Nasdaq. On Wednesday, yesterday, another class action motion was filed against it, for alleged misrepresentations to shareholders based on a stock options scandal.
http://www.haaretz.com/hasen/spages/762764.html
midastouch017
19 years ago
NICE takes nasty fall
NICE Systems CFO Ran Oz: It’s business as usual.
Gitit Pincas 14 Jun 06 16:52
It’s not every day that a stock like NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) falls nearly 10% in heavy trading. In fact it’s pretty rare. All in all, since the company got itself on track, volatility has only been felt over time, and upwards of late. But NICE fell 9.7% on Wall Street yesterday on an especially large volume, while the Nasdaq fell just 0.9%. NICE’s market cap is now $1.1 billion after the fall.
What happened? As usual, when there’s no information, investors grasp any bit of news they can, even if it’s unreliable. Since yesterday, we’ve heard assessments from a number of sources that NICE - like dozens of other foreign companies as well as Israeli ones such as Comverse Technology Inc. (Nasdaq: CMVT), Mercury Interactive Corp. (Pink Sheets:MERQ), and even M-Systems Flash Disk Pioneers Ltd. (Nasdaq: FLSH) - has set up an internal committee to investigate the granting of options at the company.
Other capital market sources say this is utter rubbish, and attribute the drop in NICE’s share to a number of large institutions reducing their holdings in the company. This will be known only for certain in a few weeks, when these institutions send their reports to the US Securities and Exchange Commission (SEC).
Are any of the rumors correct? Why did the share fall?
“I’ve no idea. We are not aware of any developments,” said NICE Systems corporate VP and CFO Ran Oz today. “What you’ve said are market rumors, and we won’t comment about them or deal with them. We’re now on a road show, and we’ll attend a large number of conferences over the next two weeks. We have no intention of changing our plans. As far as we’re concerned, it’s business as usual.”
NICE specializes in multimedia recordings and quality management. The company’s solutions are used to record conversations, supervise and secure dealing rooms, casinos, and airports, and for other security purposes. Insofar as the rumors about an internal inquiry about options were behind part of the fall in NICE’s share, it seems that this is something unsubstantiated, and attributable to Wall Street’s current witch-hunt atmosphere, in which any company can become a convenient target for an options scandal. When the general market sentiment is negative such rumors fall on eagerly receptive ears.
Oz says, “Without referring to the specific rumor about the options, whatever it is, it should be remembered that we held an offering on Wall Street just six months ago. Highly respected underwriters were involved in that offering, and top-of-the-line attorneys conducted thorough due diligence on the company. This was after the various options scandals erupted and Mercury’s leadership was ousted. These scandals worried investors, also option were given special attention. We’re therefore calm.”
In December 2005, NICE raised $201 million its third offering. JP Morgan Securities Inc. and Banc of America Securities LLC acted as joint book-running managers. CIBC World Markets and UBS Investment Bank acted as co-lead managers for the offering and RBC Capital Markets and William Blair & Company acted as co-managers.
M-Systems, run by chairman, president and CEO Dov Moran, is now planning to hold an offering. It seems that during the underwriters’ examination stage, M-Systems decided to review its options, and announced the establishment of a committee for this purpose.
The likeliest reason for the fall in NICE’s share is a sell-off by large institutions. Over the past 18 months, the company’s holding structure has changed. Today, Fidelity Management and Research (FMR Corp.) owns 6.62% of NICE, Fidelity International Ltd (Bermuda) owns 5.92%, and Massachusetts Financial Services Co. owns 8.7%. Investors of this kind naturally increase and reduce their holdings on a regular basis, and it cannot be ruled out that they did so recently.
Published by Globes [online], Israel business news - www.globes.co.il - on June 14, 2006
Dubi
midastouch017
19 years ago
Cherchez le CEO
The NICE Systems story shows that management changes in a crisis-ridden company are a signal to watch for.
Shlomo Greenberg
As you know, I have been an investor in Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) since the end of the 1980s and I held onto them even when the man because of whom I invested in Teva to start with, Eli Hurvitz, stepped down. Why didn’t I sell? Because I knew his replacement very well and he fitted the job like a hand to a glove. In recent years, I have taken notice of several Israeli managers who show the kind of greatness that Eli Hurvitz did. The managers I name below certainly demonstrate a level of management the likes of which I have not seen in the past in Israel. So it’s worth sitting on the stocks of companies run by such managers for the long-term. As a rule, I advise you to read the chairman or president’s letter to shareholders that accompanies every annual financial report.
The people I refer to are NICE Systems (Nasdaq: NICE; TASE: NICE) CEO Haim Shani, whose company has been recommended by nearly every analyst and expert around; Alon Israel Fuel CEO David Wiessman; Elbit Medical Imaging (Nasdaq: EMITF; TASE: EMIT) chairman Mordechai (Motti) Zisser; M-Systems Flash Disk Pioneers (Nasdaq: FLSH) president and CEO Dov Moran and Chaim Katzman of Equity One Inc. (NYSE: EQY) of the Gazit-Globe (TASE: GLOB) group.
Today I will look at NICE. The NICE of 2006 is exactly the same company that Haim Shani took over five years ago with a few repairs that he made. Has there been any fundamental change since then? The company is operating in the same fields and the same markets, but today it is thriving. Haim Shani is the difference between the mess of 2001-2002 and today. I took NICE as an example because the case there is so obvious and easy to prove.
Some people claim Haim Shani was simply lucky and that the previous management was brought down by the global crisis at the turn of the century. Haim Shani merely came in and rode the subsequent global recovery. This is incorrect. NICE began to decline immediately following the departure of its founder Didi Arazi, a great manager in his own right. Arazi knew only too well what the demands of tomorrow’s world were and led the company he founded with amazing skill. He then abruptly quit and went off to enjoy life (as he is entitled to do) but once he had gone, the company began to falter, because of its management and not the market. The downslide actually began while times were still good and it continued until Shani came along, regardless of the economic turmoil that was taking place. NICE, therefore, is a classic test-case for management performance.
Haim Shani was previously at Applied Materials and left in 2001 to join NICE just as the company was running into serious problems and the board was looking for someone to the get the ship afloat again. He introduced a long-term strategy, and in the review he attached to the company’s 2001 reports, he noted that the tools at the company’s disposal at the beginning of 2001 were the same as those it had at the end of 2001. These were “an excellent technology and products, a strong blue-chip customer base, an outstanding team of people, and prestigious strategic partners. In addition, our competitive position was improved by strengthening our management team, creating a more appropriate organizational structure, leveraging our professional services capability, lowering our expense profile and improving our working capital management.”
Shani didn’t stop there. “In retrospect, perhaps the most important decision was moving aggressively on all fronts to make necessary changes as quickly as possible, even though the disruption could hurt our short term results. After reporting a substantial loss in the first quarter, we snapped back quickly and made a significant improvement in each subsequent quarter.” Any analyst or investor who bothered to read what Shani wrote and then looked at what happened in 2001 and how the situation began to point towards substantial change and then did the same thing in 2002 would conclude that this was a stock worth investing in heavily, not so much because of the turnaround but more because the person in charge was a man who could deliver.
In 2001 Shani also founded the “Security Group” since, as he noted in his review, business in the security sector was set to pass the $1billion mark. When I read this, I was very sorry I hadn’t read it back in 2002, as I have no doubt that I would have bought the stock, just as I strongly recommend Elbit Systems (Nasdaq: ESLT; TASE: ESLT) today.
In April 2003, after the publication of the report for 2002, the stock price was still only $13, even after rising 50% from the low of October 2002. By the middle of 2003, it had risen to $15-16 and then to $25 by the end of the year. 2003 marked NICE’s “switch to profit” and here again I draw attention to the concluding financial reports for 2003, published around April 2004. Anyone who reads them will notice two things immediately. The first is that all the goals mentioned in 2001 were achieved in 2002, which shows credibility. The second is the optimism about the future. At this stage, serious investors were already beginning to enter the stock.
At that time, I already questioned why NICE was lagging so far behind Verint Systems (Nasdaq: VRNT) in terms of market cap. It would appear that I was still affected by past fears and that I wasn’t as confident about the management as I am today. During the period April - October 2004, NICE fell 20% to $19 a share. It then went up and has continued to do so ever since, reaching a price of $55, a 175% increase on the fourth quarter of 2004.
The case of NICE teaches me several important things that we would do well to remember. First of all, when a company management team is replaced and a manager with a record like that of Haim Shani is appointed, investors must start following developments, quarter by quarter. NICE is a classic case, since from the time that Shani took over, the success in meeting company goals was clearly evident quarter after quarter. Secondly, investors must realize that if a company operates in a growth area, and has the right team under competent management, the chances of success for its shares will rise substantially. Thirdly, after 4-5 years of processes such as these which place the ability of company and management beyond question, the chances of losses will gradually decrease.
In the case of NICE, the only instance in which investors could lose money would be a temporary crisis in the entire market or other factors which neither investor nor management could predict upfront. Therefore, NICE is one the best investments a solid investor could make. The analysts are now rushing to revise upwards their forecasts for the stock, and it would appear from the latest updates that the consensus will be earnings per share of $2.05 in 2006 and $2.5 in 2007. The stock’s current price - $55- is therefore reasonable, providing the investment is made on a long-term basis. In the interests of fair disclosure, I will state that I hold NICE and stocks of other companies that I referred to as having outstanding managers.
Published by Globes [online], Israel business news - www.globes.co.il - on May 4, 2006
http://www.globes.co.il/serveen/globes/docview.asp?did=1000088345&fid=1052
Dubi
midastouch017
19 years ago
“It’s part of a strategy”
NICE CEO Haim Shani explains the latest acquisitions.
Gitit Pincas 1 May 06 16:51
At the end of 2005, NICE Systems (Nasdaq: NICE; TASE: NICE) raised $200 million on Nasdaq and said the money would be used primarily to make acquisitions. It was obvious that a company like NICE does not need $411.6 million in cash and that it was only a matter of time until the identity of the acquired companies would be revealed. Last week the company reported it acquired two US companies, IEX Corporation, for which it paid $200 million, and the smaller Performix Technologies, for $13.2 million, a price that may increase by $6.2 million, on the basis of certain performance criteria.
NICE specializes in multimedia content quality management solutions. The company’s applications are used in digital recordings, dealing room security and monitoring, casinos, airports and other security-related uses. NICE has a market cap of $1.3 billion on Nasdaq and it has raised its full year guidance for 2006, incorporating the expected contribution of the acquisitions for the second half of the year.
IEX is a wholly owned subsidiary of Tekelec (NASDAQ: TKLC) and has a market cap on Nasdaq of $955 million. It develops workforce management, strategic planning and performance management solutions for the contact center market. Its main flagship product, TotalView, provides a high-end centralized solution that compiles data seamlessly across the enterprise, enabling more accurate and effective forecasting, planning and scheduling. Performix also develops call center solutions enabling effective performance management. The deals are expected to close at the end of the second quarter or the start of the third quarter of 2006.
In a recent interview with “Globes”, NICE CEO Haim Shani said that the acquisitions were part of the company’s plans. “It’s part of our strategy. TCS, for example, was company which appeared on our list of possible acquisitions as did most of the companies we have acquired in recent years. It didn’t just appear from nowhere.” It is therefore likely that IEX was one of the names on NICE’s list of acquisitions at the time of its share issue last year.
”The closure of the two acquisitions within two hours of each other was a matter of planning but primarily a lot of good luck,” says Shani today. “Both companies appeared in our growth strategy plan. We detected upfront the points we wanted to strengthen and consolidate through acquisitions and we informed the market that we would use the money raised for this purpose.” The IEX acquisition was accompanied by investment bank Bank of America, which was also one of the lead underwriters for NICE’s share issue, its fourth. Shani says the talks for the acquisition continued for several months, although the relationship with IEX goes back even further.
NICE believes that it has “redefined the market of contact center business performance & analytics with the acquisitions of IEX and Performix,” and this was the headline of its announcement to investors. “The contact center market is a multibillion dollar market,” says Shani. “If we take a typical call center, its main suppliers will be companies such as Avaya Inc., (NYSE:AV), Nortel Networks (NYSE: NT) and Cisco Systems (Nasdaq: CSCO) which provide the telecommunications equipment. After them will be companies such as Siebel (Nasdaq: SEBL) and SAP, which will provide the customer relations management (CRM) software.
"The next stage is the buying of products and technologies such as systems for digital recording and quality management, voice analysis, and human resource planning and management such as ours. Previously, the entire third line was divided into segments. We can now say that we offer everything within the third line range and anyone who wants to buy call center accessories can get them from a company whose product range covers all his requirements. We can provide a uniform picture of everything taking place in a business.”
IEX posted annual sales of $50 million. In its conference call, NICE also noted that IEX has an EBITDA rate (earnings before interest, taxation, depreciation and amortization) of 40%, or in other words, an EBITDA multiple of 10. It has 1,000 customers and has an overlap of 10-20% with those of NICE. Shani adds that IEX has a growth rate, in excess of 10%. Performix, on the other hand, is a start-up with annual sales of $5 million. The company is, naturally, not profitable, and was acquired by NICE primarily because of its technology.
IEX employs 170 people while Performix employs 40. Shani says that as the choice of acquisitions was not designed to achieve synergy, NICE intends to retain all the employees and management who will continue to lead the current activities.
”IEX brings with it highly profitable operations, and while this was not the sole consideration in our decision to acquire the company, it is still important,” says Shani. “The overlap between our customers and theirs is not large and we will certainly gain new customers in the telecommunications and financial service sectors, to whom we can offer our existing products. In the short term, we have here a good opportunity for cross sales.” NICE defines the companies’ fields of activity as ‘Insight from Interactions.’
Globes: $200 million is a lot of money. How do you know that this is not too expensive?
Shani: “In the software market, a multiple of 10 is very attractive and this is reflected by our guidance to the market, in which we said we expected the deal to add to our top line in 2006. We assured our investors that the acquisitions would deliver profit in the short term and in this market things move very fast. On the basis of the average profit and revenue multiples, we paid a fair price. As regards Performix, this is a start-up which has received substantial investment but is not making a profit so there would be no point in talking in terms of multiples where it is concerned. We bought it mainly for the technology, which has been on the market for some years and is now reaching maturity with a number of key customers.”
NICE believes that if the deals close on schedule, they will add $28-30 million to its top line for 2006, increasing its sales to $395-400 million. The previous forecast was for $367-375 million. NICE expects pro-forma earnings per share to increase to a range of $2-2.12 a share ($43.3-45.9 million), against the previous forecast of $1.9-2 a share.
The acquired companies are both considered leaders in their fields. IEX is a competitor of Blue Pumpkin, which was acquired by a rival of NICE, Witness Systems (NASDAQ: WITS) at the beginning of 2005 for $75 million. Performix competes with Opus Group, which was acquired by Verint Systems (Nasdaq: VRNT) for $12 million.
”IEX is a competitor of Blue Pumpkin but it is twice the size,” says Shani. “They are rivals but with different nuances. I would say that IEX is the sector’s Rolls Royce while Blue Pumpkin came in as middle market player. There is no comparison between the business, product range and profitability of the two companies, since Blue Pumpkin has had sales of around $30 million and has not made a profit. Opus and Performix are not exactly competitors since Opus Group is more of a service company.”
So are in fact these acquisitions the answer to Verint and Witness?
”Not exactly. Our rationale led us to believe that we have an opportunity here to create a new market. We are number one in digital recordings and voice monitoring and analysis, and we now have the umbrella that brings everything together. We think that there is the potential for a large market in contact centers and I don’t think this is Witness’s strategy. It hasn’t mentioned it, even if everything is possible on paper. On the other hand, we obviously understand that things are not static, and if we take the lead in this market, others will follow us.”
Published by Globes [online], Israel business news - www.globes.co.il - on May 1, 2006
Dubi
midastouch017
19 years ago
NICE Receives 2006 IP Video Surveillance Competitive Strategy Leadership Award
Thursday April 20, 6:56 am ET
Leading Industry Analyst Frost & Sullivan Recognizes Company's Significant Impact on Video Security Market
RA'ANANA, Israel--(BUSINESS WIRE)--April 20, 2006--NICE Systems (Nasdaq:NICE - News), the global provider of advanced solutions that enable organizations to extract Insight from Interactions(TM) to drive performance, today announced that it has received Frost & Sullivan's 2006 Competitive Strategy Leadership of the Year Award for IP Video Surveillance.
This Award is presented each year to a company whose competitive strategy has yielded significant gains in market share during the research period. The Award recipient may have also executed an innovative strategy within the existing competitive landscape, empowering the company to overtake the competition. Frost & Sullivan analysts expect such innovations to produce lasting, precedent-setting trends in the industry.
To determine the Award's recipient, Frost & Sullivan conducted extensive research on the IP Video Surveillance market, including interviews with industry experts, industry participants, and end-users, as well as extensive secondary data research. The Award recipient is ranked number one among all industry participants.
NICE was chosen for its success in achieving significant gains in the market due to superior market strategy, having strengthened its position in the IP video surveillance market by offering market leading home-grown solutions, as well as through a successful acquisition and effective partnerships with channel and technology partners.
Frost & Sullivan commended NICE for the FAST Video Security AG acquisition as having added advanced IP based technology to the company's portfolio, and for having enhanced its presence and distribution channels in NA, EMEA and APAC. Frost & Sullivan also lauded NICE's portfolio of IP based solutions for video surveillance, which include embedded analytics for detecting intruders, unattended luggage, stopped vehicles, and tailgating, for example.
"End-users are demanding surveillance solutions that enable them to take informed decisions rather than applications that simply detect threats. NICE Systems offers Scenario Reconstruction technology to facilitate the end users in identifying an intruder or track the source of a lost bag with a single mouse click. This technology enables the customer to perform context-based investigation, identifying whether the event is suspicious and derive additional information about the suspicious situation," said Sathya Durga, Research Analyst for Frost & Sullivan.
Durga comments, "Through the acquisition of FAST NICE has expanded the breadth and depth of its digital video solutions portfolio, and has become the outstanding participant in IP-based video security solutions." By leveraging the newly extended offering NICE is ideally positioned to become the de-facto choice for organizations seeking to ensure the security and safety of individuals, whether consumers, citizens in public spaces or commuters through mass transit systems, by land or the skies.
About NICE
NICE Systems (Nasdaq:NICE - News) is the leading provider of Insight from Interactions(TM) solutions, based on advanced analytics of unstructured multimedia content - from telephony, web, radio and video communications. NICE is revolutionizing VoIP interactions management with state-of-the-art solutions for IP contact centers, branches, and command and control centers. NICE's solutions are changing the way organizations make decisions, helping them improve business and operational performance, address security threats and be proactive. NICE has over 23,000 customers in 100 countries, including over 75 of the Fortune 100 companies. More information is available at www.nice.com.
http://biz.yahoo.com/bw/060420/20060420005420.html?.v=1
Dubi
midastouch017
19 years ago
NICE Systems' record year
CEO Haim Shani on restoring market confidence and possible future acquisitions.
Gitit Pincas 17 Apr 06 13:18
Let us go back a few years to January 2001, when Applied Materials Israel general manager Haim Shani was appointed CEO of NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE), which was in deep crisis. NICE had a glorious past, a dark present and a clouded future.
“Whether by chance or not, this was the third time in my career that I took up a post with problems,” said Shani at the time. “I was given a clear picture of the problems at the company, and I believe that NICE must, and can, recover from its problems. The company has great potential, and its market position will help it grow.”
On a different occasion, Shani said that NICE had the means to stand on its feet and recover lost market share.
“Globes”: Did you really believe those things at the time? The situation was discouraging, and there were few optimists.
Shani: “Of course I believed them. We’re not an ad agency. I meant what I said. My optimism at the time was based on my knowledge of NICE’s markets, its standing and the need for its products. We had thousands of customers then, and our entire management team, myself included, met them to try to figure out where the market was headed. That was a Sisyphean task. All of NICE’s success was due to the wisdom, know-how and experience of the company’s people. For example, our NICE Perform product, launched in 2004, was initiated three years earlier at those rounds of talks with customers. NICE Perform underwent lengthy development that cost tens of millions of dollars and a long time to reach market, but look at the results. That’s why you need a lot of vision in this business.
“It’s hard for me to say precisely what we did to succeed, but it was definitely connected to the fact that the entire management team was focused on the company’s business. We built a fairly new management with experience in different fields, and we focused on operational matters and processes. In this matter, we were helped by a consultancy firm with which we formulated a long-term multi-year plan that brought us to this point. The plan was fulfilled successfully and completely. We recently prepared a new multi-year plan using the same format, and we hope that it, too, will be implemented.”
So, now you can sit back and relax?
“You never relax for a moment in high tech. We keep a constant finger on the pulse, especially as a company that wants to continue to grow. There’s not a moment of rest.”
“No miracles here”
NICE specializes in multimedia recording and quality management. The company’s solutions are used to record conversations, monitor and secure trading rooms, casinos and airports, and for other security purposes. The company’s market cap is $1.1 billion.
Before Shani was appointed CEO, NICE underwent a number of embarrassing incidents. They began with a severe profit warning in late 2000, a few weeks after then-chairman and CEO Benny Levin told shareholders that the company would see growth, belying rumors to the contrary. This was the company’s second profit warning in two years, and came in the wake of a restatement of its results for 2000 caused by incorrect reporting of revenue. The warning also followed Levin’s resignation as chairman. Above all, the profit warning created a crisis of confidence by the capital market. The rumors that preceded the profit warning slashed the company’s share price within a few days, and it continued to slide thereafter.
How do you restore capital market confidence? “There are no miracles here,” says Shani. “NICE CFO Ran Oz simply did a lot of legwork. I sometimes joined him to speak with investors and analysts, explaining our strategy, and providing guidance, which we eventually met. It was nothing glamorous. Ran would get on a plane, get off, make another connection, meet investment institutions and analysts, and return. It was a lot of hard work.”
Oz says, “After a while, we had more serious talks with American and other investment institutions. Some of them could name every company in our sectors, but didn’t know NICE, even though we were number one in some of these sectors. We had no such problems on our last road show. I think that investors now know that we’re a transparent company; we’re in contact with them, and we’re building trust. We can report the results we predicted, quarter after quarter. We draw them a picture, and while not everyone will ultimately invest in the company, that’s OK; we’re satisfied with less than everyone.”
It’s impossible to talk about NICE’s recovery period without mentioning the takeover attempts. Then, as now, NICE has a lot of cash, and its shares a held by a great many investment institutions, very few of whom are parties at interest. Only six months after Shani’s appointment, Polar Investments Ltd. (TASE: PLR) (then Poalim Investments) and Koor Industries Ltd. (NYSE: KOR; TASE: KOR) tried to take over the company, and Koor became a party at interest in it. There was a lot of criticism, the takeover difficult, and was ultimately dropped. Even now, Shani doesn’t want to talk about takeovers. “It’s not a subject we deal with. Naturally, it’s more relevant during hard times, and so long as we’re successful, we’re not bothered by the matter. In any case, let’s move on.”
NICE’s growth, rising profitability, and jump in market cap are all noteworthy, especially when one remembers that the company was once up to its neck in the mire. The company predicts $367-375 million revenue for 2006, and pro-forma earning per share of $1.90-2 ($41.1-43.3 million). Revenue has grown by an average of 48% a year in 2001-05, and the share price has climbed 260% since the profit warning of February 2001. In other words, anyone who believed in NICE in 2001 has done very well.
Future growth engines
Shani’s carrier includes stints at Orbotech Ltd. (Nasdaq: ORBK) and Applied Materials Inc. (Nasdaq:AMAT). He says he sees parallels with NICE. “Both Applied Materials and Orbotech are global companies, although Orbotech is a fraction of the size of Applied Materials. They both focus on combining technology with marketing, they both try to be number one, and lead in investment in technology. There’s a reason why they’ve been industry leaders for years. I learned from Applied Materials president emeritus Dan Maydan and Orbotech CEO Yochai Richter how to focus on markets, products and auditing, and apply the lessons at NICE.”
2005 was a record year for NICE, and 2006 promises to be better. As noted above, the company predicts $41.1-43.3 million on $367-375 million revenue for the year. What’s next? What will drive the company’s subsequent growth?
“We have a number of growth engines,” says Shani. “The first is enterprises’ need to meet new regulations. The cost of an error in this area is high.”
Shani is referring to the 2003 US national Do Not Call Registry, under which consumers can register to avoid telemarketers and pollsters. A company that calls a person in the registry will be fined. Companies use recordings of these calls to protect themselves from lawsuits, and companies have complete records of all outgoing calls.
“Our second growth engine is the VoIP revolution,” says Shani. “Anyone who lives on a budget who has Skype, for example, knows how important it is for making calls. This opens a new direction for us for recording calls not only at central branches, but also by agents and smaller branches.”
Shani says insurance companies and banks will record calls made from headquarters, but not those made by agents or from various branches, because of the high cost. The cost of recording and storing VoIP calls, even calls between branches, while managing them centrally, is not high.
Shani says a third growth engine is the trend towards outsourcing, especially to India and the Philippines. “Regardless of politics, and whether this is a good thing or not, it’s an additional business. Many companies set up English-speaking customer support teams in these countries. It is vital that these calls are monitored and supervised and that the call centers meet the standards the companies apply in the West. We help them do this.”
A fourth growth engine in security. Municipalities and national governments want to better protect citizens against terrorism and crime in general in city centers.
Without sounding cold, you expected more from the security market in the wake of 9/11.
“True, but with reservations. We didn’t expect that all security systems would utterly change. If someone thought so, it was a pipe dream. On the other hand, there’s the challenge of civil defense. The process is happening, we weren’t wrong about that, but the pace is slower; there’s no quick fix. We didn’t think there’d be a magic solution.
“I remember that after 9/11, at a security conference in Las Vegas, I met executives of a then-popular company that was developing facial identification software. There were stories on CNN at the time that if Bin Laden were to ride the subway, these products would identify him. I watched the company’s demo, and later worked on image processing for quite a few years at Orbotech and Applied Materials, and thought to myself that it had no chance of becoming significant. I thought toys [using the technology] might be sold here and there, but nothing on a large scale. Nevertheless, the company’s share soared at the time, and the hype was huge.
“In 2001, when were about a third of what we are now, we decided to focus on security, among other things, and on video. That’s starting now. A contract like the one we signed with the Baltimore municipality didn’t happen the day after 9/11, but last year. This might be bad news, but the good news is that it happened.”
NICE’s main competitors in the civilian market are Verint Systems Inc. (Nasdaq: VRNT), Witness Systems Inc. (Nasdaq:WITS) and General Electric Company (NYSE:GE) following the latter’s acquisition of Dallmeier Electronics GmbH. In the security and emergency services sector, NICE”s main competitors are Verint, Mercom Systems and ASC Telecom.
When asked about Verint, Shani replies, “It’s an important player, and I don’t want to insult them, but there are others.”
Israel’s Verint, with a market cap of $1.1 billion, is an old-time competitor of NICE, and there have been plenty of rumors about a merger between the two.
How much overlap is there between NICE and Verint?
“We divide the market differently, so I can’t be sure where we overlap today, but it’s certainly not 100% as is sometimes thought.”
Would it be correct to estimate the overlap at 30%?
“I really don’t know, and I don’t think about it.”
”Acquisitions as strategy”
One of the truly astonishing things about NICE”s balance sheet is its $411.6 million in cash, an immense amount that allows the company to make more acquisitions. In late 2005, NICE raise $200.1 million, and it was believed at the time that the money would be used to acquire a specific company, but that the matter was subsequently dropped.
“I don’t know who thought that,” says Shani, “but part of our growth to date has been through acquisitions, and we’ll make more. Future acquisitions will be in the same format as our acquisitions of Thales Contact Solutions (TCS), Fast Video Security, and Dictaphone’s Communications Recording Systems (CRS) business. In other words, acquisitions in both the civilian and security sectors will be on the basis of customers, technology, or distributors. We’re constantly accumulating experience, and the more we do, the more we learn and the better we get.”
Shani says acquisitions, including specific inputs, are part of the company’s plan. “This isn’t something opportunistic because I met someone during a flight. It’s part of our strategy. TCS, for example, was a company whose name appeared in our business plan as a possible acquisition target. The same is true for most of the companies we’ve acquired in recent years. It just didn’t suddenly pop up.”
What’s your vision?
“To be a market leader through solutions for the capture, management and analysis of raw multimedia data in every medium: radio, telephone and VoIP, and to improve enterprises and governments’ business performance to better protect people. We have substantial growth potential in all our areas of business. The fact that neither you nor I have an immediate interaction when we call a customer service center, and dissatisfaction is often measured in time, shows that our vision is rich enough and will fill our activities with content for a long time to come. It will enable the company to achieve growth, profitability, and a higher market cap.”
NICE will publish its financial report for the first quarter of 2006 on May 10.
Published by Globes [online], Israel business news - www.globes.co.il - on April 17, 2006
Dubi
midastouch017
19 years ago
Recent headlines,
Wed, Mar 15, 2006
• Cramer's 'Mad Money' Recap: The Patriot Act's NICE Benefits
at TheStreet.com (Wed 7:38pm)
Tue, Mar 14, 2006
• NICE Announces the Next Generation of Active VoIP Recording Solutions
Business Wire (Tue, Mar 14)
Tue, Feb 21, 2006
• NICE Systems Ltd. [NICE] CEO and CFO to Ring The NASDAQ Stock Market Opening Bell
Market Wire (Tue, Feb 21)
Wed, Feb 8, 2006
• A NICE Pile of Cash
Motley Fool (Wed, Feb 8)
• Nice Systems 4Q Profit Up on Tax Benefit
Associated Press (Wed, Feb 8)
• Q4 and Fiscal Year 2005 NICE Systems Earnings Call scheduled for 8:30 am ET today
CCBN (Wed, Feb 8)
• Q4 and Fiscal Year 2005 NICE Systems Earnings Release - Before Market Open
CCBN (Wed, Feb 8)
• Nice Systems, Nice Quarter
at TheStreet.com (Wed, Feb 8)
• NICE Systems Fourth Quarter and 2005 Results Set New Records
Business Wire (Wed, Feb 8)
Tue, Feb 7, 2006
• Nice Systems downgraded by Deutsche Securities
Briefing.com (Tue, Feb 7)
Mon, Feb 6, 2006
• NICE and Avaya Extend Alliance to Deliver IP-based Contact Center Solutions to Businesses
Business Wire (Mon, Feb 6)
Wed, Jan 18, 2006
• Corum Leads Sale of FAST Video Security to NICE Systems
PR Newswire (Wed, Jan 18)
Wed, Jan 11, 2006
• Analyst Firm DMG Names NICE Systems #1 in Quality Management and Liability Recording
Business Wire (Wed, Jan 11)
Thu, Jan 5, 2006
• Israeli stocks slump after Sharon suffers stroke
at MarketWatch (Thu, Jan 5)
• Israel Stocks Hit on Sharon Hospitalization
at TheStreet.com (Thu, Jan 5)
Tue, Jan 3, 2006
• NICE Systems Announces Fourth Quarter and Year End 2005 Earnings Release and Conference Call Schedule for 2006
Business Wire (Tue, Jan 3)
Mon, Dec 19, 2005
• Motorola, NICE Video Surveillance Goes Wireless
PR Newswire (Mon, Dec 19)
Mon, Dec 12, 2005
• Red Herring Announces Inaugural Red Herring Small Cap 100 List
Market Wire (Mon, Dec 12)
Thu, Nov 17, 2005
• A Nice, Fast Transaction
TheStreet.com (Thu, Nov 17)
• NICE Systems to Acquire FAST Video Security AG - Call scheduled for 10:00 am ET today
CCBN (Thu, Nov 17)
http://finance.yahoo.com/q/h?s=NICE
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