Gang_NiceThe three top positions at Israeli company Nice (www.nice.com ) are held by the ExScite members (from left to right in the picture above) Haim Shani (Shaposhnik) CEO (ex- Applied Materials, Orbot, Orbotech, and Scitex), Lauri Hanover CFO (ex-Scitex and Phillip-Morris) and Shlomo Shamir Nice America president (Ex-Scitex America, Scitex Israel and the Government of Israel). Click here to see the other ExScite members at Nice. That’s nice.

The company has published reasonable Q1 financial reports showing improved orders backlog following the closing of several multimillion-dollar deals. NICE retained the second quarter revenue forecast of $37-39 million. Our visibility improved thanks to contracts we closed. We’re retaining our 2002 growth forecast of 20-30%,” said NICE CEO Haim Shani (see complete Globes article).

Nicer, NICE

CEO Haim Shani: We’re seeing significant recovery

Globes, Israel, by: Hadass Geyfman 14 May 02 19:04

NICE-Systems (Nasdaq: NICE) published reasonable first quarter 2001 financial reports today. They show improved orders backlog following the closing of several multimillion dollar deals. NICE’s managers retained the second quarter revenue forecast of $37-39 million.

 

“Our visibility improved thanks to contracts we closed. We’re retaining our 2002 growth forecast of 20-30%,” said NICE Systems CEO Haim Shani. “We signed several million dollars worth of deals in each of our businesses in the first quarter, including two CEM (Customer Experience Management) deals. Some of the contracts will begin generating revenue in by the second quarter of 2002, and others in the following quarters. There has been an increase in forward orders on a scale not previously seen.”

 

NICE’s first quarter orders totaled $91.7 million, compared with $89 million in the fourth quarter of 2001. Inventory fell to $9.2 million, mainly because of implementation of the first stage of the company’s production outsourcing plan.

 

“NICE is currently involved in several deals requiring a move from only quality management solutions to comprehensive recording solutions,” added Shani. “We received substantial order in the first quarter for our NiceTrack and NiceVision Pro products from a major US airport. Revenues from Europe, Middle East and Africa (EMEA) rose 10% thanks to the investment of resources in this region.”

 

“Globes”: What’s happening in CEM?

 

Shani: “We are seeing a significant recovery in the CEM business; our core business. I think NICE is recovering quite well.”

 

Is your market beginning to show signs for the better?

 

“Market is a relative concept. On the macro level, we are part of the global economy, where we see no change. At the micro level, we are beginning to see results for our efforts and we’re recovering lost market share, mainly in CEM. Although we weakened in this field early this year, we have now stabilized and are beginning to expand our market share.”

 

You’re still losing money on providing services.

 

“We actually see our service business as one of our greatest achievements in the quarter. We had 200 service personnel last year, and they’re still employed. This activity is a strategic asset for us. We have set a target this year to increase revenue from professional services and maintenance. Revenue increased from $3.9 million in the fourth quarter of 2001 to $4.9 million in the first quarter of 2002. There was a considerable improvement compared with the almost $2 million loss in the fourth quarter of 2001.

 

“After all, the aim was to build an professional services and maintenance organization. We had to professionalize and make services into a business. We used to lose a lot of money on services, since NICE provided them virtually gratis. We are now approaching the break-even point, and I hope we earn a profit from services in the future.”

 

Verint Systems is expected to hold an IPO on Nasdaq tomorrow. Will you consider a merger afterwards?

 

“We’re not thinking about it at all.”

 

You’ve talked about a multimillion dollar deal with the defense sector. When will you fill the order?

 

“This year.”

 

What is the importance of this deal for new contracts?

 

“We hope a successful deal will open doors for us with similar organizations in other countries.”

 

Is revenue from the deal included in your forecast?

 

“Yes.”

 

Oscar Gruss Israel senior analyst Rami Rosen comments: “Most of the improvement in the profit and loss statement was derived from declines in almost all the operational expenditures items. While this item amounted to $19.7 million in the previous quarter, excluding amortization, it totaled $18.4 million this quarter. This means that NICE is taking significant streamlining measures.

 

“I think NICE will reach operational break-even only in another two quarters. Nevertheless, the good news is that the company is maintaining its trend of improving results.”

 

NICE announced when it published its results that it was setting up a new Security Group under the leadership of Doron Eidelman, who joins NICE as Executive Vice President and President of the Security Group. The Security Group will combine the digital video recording and threat analysis capabilities of the VIM Division with the government, military, and law enforcement communications intelligence experience of the ISS Division, and is expected to represent about 25% of NICE’s total revenue this year

 

“We concluded that in order to exploit the opportunity of this huge market, we must integrate all our varied security and intelligence systems and exploit their synergy,” said Shani. “We estimate the market potential for security products at $15 billion a year. NICE operates in a segment within his market worth $1-1.5 billion.”

 

Published by Globes [online] – www.globes.co.il – on May 14, 2002