Nice Ltd (NICE) 2012 Q1 法說會逐字稿

Welcome to the NICE Systems conference call discussing first-quarter 2012 results and thank you all for holding. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded May 9, 2012. I would now like to turn this conference over to Mr. Marty Cohen, the VP, Investor Relations. Please go ahead.

Thank you, operator. With me on the call today are Zeevi Bregman, President and Chief Executive Officer; Dafna Gruber, Chief Financial Officer; and Eran Liron, Executive Vice President, Corporate Development.

Before we start, I'd like to point out that some of these statements made on this call will constitute forward-looking statements. In accordance with the Safe Harbor provision (technical difficulty) that the Company's actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or performance of the Company to differ materially is contained in the section titled Risk Factors in Item 3 of the Company's 2010 Annual Report on Form 20-F as filed with the Securities and Exchange Commission on March 29, 2012.

In this call, we will present a more detailed discussion of first-quarter 2012 results and the Company's guidance for the second quarter and the full year. Following our comments, there will be an opportunity for questions.

Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for acquisition-related revenue, expenses, amortization of intangible assets, accounting for stock-based compensation. The difference between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. With that, I will turn the call over to Zeevi.

Thank you, Marty and welcome, everyone, to our first-quarter 2012 earnings call. Earlier today, we reported strong results for the first quarter of 2012. We continued to see strong growth in our analytics and advanced applications and we continued to enhance and broaden our portfolio offerings, including our performance management and Voice of the Customer solutions. We are pleased with the results of all our business lines, including our financial crime and compliance business, and with our outstanding cash flow generation in this quarter.

Non-GAAP revenues were $215 million, up 15% compared to the first quarter of 2011. Non-GAAP EPS in Q1 was $0.57, which was an increase of 21% compared to the first quarter of last year.

In Q1, our book-to-bill ratio came in below 1. Our pipeline is healthy and includes several large deals that we expect to close later this year. In addition, our backlog is strong and we expect very strong revenues in the second half of the year and especially in Q4.

In the Americas, we continue to see strong customer demand for our solutions and we are particularly pleased to see continued strength in Latin America, including increasing demand for advanced applications and security solutions. In EMEA, buying behavior remained stable and we continued to see further penetration into new markets, especially in Eastern Europe. We believe that once the economy improves in Europe, it will result in better business for us. In APAC, the business climate is strong with a growing pipeline for analytics-based advanced applications.

We hear a lot about Big Data today and for many years, NICE has been at the forefront of delivering value from the enormous amounts of structured and unstructured information trapped inside the organization. Unlike other vendors, this is not new to us. But what really separates NICE from others in the market is our ability to capture voice, text, e-mail, Web, social media, video and billions of financial transactions per day, and analyze this enormous amount of structured and unstructured data in real time.

Our solutions provide our customers the ability to analyze each stage of the interaction or event by preparing them for the interactions or event before they occur, shape them as they happen with real-time decisioning and guidance capabilities, which is referred to as "the decisive moment", and then help them improve each future interaction or event through post-analysis. This is game-changing for our customers as it can help them more than ever improve operational efficiency, enhance the customer experience, increase customer satisfaction, drive revenues, ensure compliance and safeguard people and assets.

Last week, we held our Annual Global Customer Conference in Nashville, Tennessee where we were able to successfully demonstrate our real-time capabilities to more than 1500 participants. Over 50 customers presented compelling stories of their innovative implementation of NICE solutions to support their business goals.

Keynote speakers from leading financial institutions and telecom companies shared how our analytic solutions helped produce customer complaint trends, achieve multiple improvements in customer satisfaction, get employees engaged and drive performance improvement and cost savings.

The customer feedback we received was very positive about the enhancements we are making to our offerings, particularly on the solutions enabling our customers to own the "decisive moment" by making an impact in real time across channels.

A large part of our business is regulation and compliance driven and we continue to benefit from the increasing regulatory environment. A few weeks ago, we announced the opening of a new practice committed to helping our US-based customers prepare for the new requirements of the Dodd-Frank Act. While these are early days before the Act becomes fully interpreted, actionable and implemented, we believe that compliance with the Act will require a combination of advanced recording solutions and interaction and transaction analytics. As the leading provider of these solutions, this uniquely positions NICE to benefit from the new regulations that are expected to emerge from the Dodd-Frank Act. The impending new regulations of the Act are already driving actions with some customers and we already have some of the solutions to meet their needs, including Hedge Fund Trading Compliance and advanced solutions for trading floors.

Let me move to our Customer Interaction business, which performed well in Q1.

One of the main drivers for our Customer Interaction business continues to be the ability to deliver insight and value from Big Data in real time. Consequently, it was a strong quarter for our Interaction Analytic solutions where we continued to see strong momentum globally, including emerging markets like Brazil, South Africa and certain countries in Southeast Asia.

In Q1, we won our first bill for our new real-time guidance solution called Service-to-Sales. This solution enables the agent to identify sales opportunities and then find the next best offer in real time. It guides agents through the entire sales process in order to increase service to sales conversion rates. We are seeing strong momentum in all regions for this new, emerging solution.

One of these deals was with a telco company in Latin America. They are implementing our Service-to-Sales solution to automate the decision process in order to improve their Service to Sale conversion rate. This same company is also implementing our real-time analytics and guidance solution to increase customer retention rates by alerting agents and supervisors in real time when an at-risk customer has been identified.

During Q1, we closed the acquisition of Merced and integration is going well.

Over the past several years, we have been moving to a direct sales model in our Customer Interaction business, especially in North America. We established a key account management structure to selected strategic customers. That has proven to be a successful approach - a major part of the growth in this business has been coming from selling our growing portfolio of enterprise software products to our large and strategic customers using this model. The success of this model led us to take the next step and expand significantly in Q1 to cover more customers. This change is expected to help support up-sell and cross-sell of our growing solutions portfolio and to materialize into a strong second half of the year in this business.

We are also taking steps to increase our focus on the mid-market. Accordingly, in March, we announced the expansion of our relationship with Cisco, becoming part of the very select SolutionPlus program. This means that certain NICE products are now a part of the Cisco branded price list as a strategic and integral component of the Cisco offering, and will be sold worldwide by Cisco channels. We believe that Cisco's growing share of the contact center market and its reach and distribution abilities will provide many mid-market opportunities for NICE.

And finally, we continue to see an increasing number of SaaS, hosted and term license deals and further growth of recurring revenues. We expect this trend to continue by way of further growth in SaaS and hosted deployments of our various solutions.

Let's now turn to our Financial Crime and Compliance business. This business has a good start to the year and we are on track with the plan to resume growth throughout the year.

Our large enterprise business did well, with several seven-digit deals in Q1, along with continued expansion into existing accounts. We also continued to further penetrate the mid-market with new and existing customers. We believe this business can be significant for us and we closed in Q1 a seven-digit deal with a mid-market credit card company.

The changing regulatory environment is continuing to drive interest in our Financial Crime and Compliance solutions. We continue to invest in order to benefit from increasing regulations, with Dodd-Frank being the most prominent example.

In that regard, last week, we announced the availability of the Actimize Hedge Fund Trading Compliance solution, a comprehensive solution designed to monitor the activities of hedge funds. As we mentioned in our previous call, we have already seen early adopters of this solution to comply with the new requirements that the Act poses to hedge funds.

Let me move to our security business, which had another solid quarter of growth. Organizations' continued focus on improving and enhancing the security of their facilities is driving demand for our Surveillance solutions where we, once again, had several seven-digit deals in Q1 with additional opportunities in the pipeline.

Leveraging our strong position in the financial services sector and our good relationships with the world's leading banks, we have been enhancing our physical security offering for this industry. We are now able to offer retail banks a multi-site management dashboard, as well as integration with ATMs. This allows security managers to quickly and easily pinpoint ATM video footage for investigations by querying transaction IDs, locations and other ATM data. We expect to see continued consolidation between data security and physical security. Our ability to offer central Situation Management is also appealing to banks, which are typically spread across multiple geographic locations.

During the quarter, we made a small technology acquisition of a company called MindCite. MindCite's technology enables government agencies and private organizations to gain access, monitor and analyze large volumes of public sources of information such as websites, social networks and forums. MineCite solutions help to reduce crime, prevent terrorism and maintain public safety. The acquired assets are being integrated with NICE intelligent solutions.

A few weeks ago, we participated in ISC West, a key security industry convention. There, we presented our holistic concept for incident lifecycle management, addressing security, safety and operational risks before, during and after the incident, with solutions for real-time management, investigation, planning, improvement and prevention.

In closing, we will continue to focus on developing and growing our world-class solutions portfolio across our business lines to provide our customers with the essential tools to help them improve business performance and customer experience, enhance compliance and safeguard people and assets.

For 2012, we have reaffirmed our revenue guidance and raised our EPS guidance. We expect that our strong pipeline, the expansion of our strategic account management structure in our Customer Interaction business and the completion of the integration of the recent acquisition will lead to another year of profitable growth for NICE with particularly strong results in the second half of 2012.

I would like to thank the NICE team for the strong performance in this quarter. I will now turn the call over to Dafna Gruber, our CFO. Dafna?

Thank you, Zeevi. I am pleased to provide you with an analysis of our financial results and business performance for the first quarter of 2012 and our outlook for the second quarter and full-year 2012.

Revenue for the first quarter reached a record of $215 million, up 15% from $187 million in Q1 last year. Our enterprise business revenues totaled to $170 million, up 16% from Q1 2011. Of that total, Customer Interaction revenues were $140 million and Financial Crime and Compliance revenues reached $30 million. Security revenues were $45 million, up 11% from the first quarter of last year.

Moving to a regional breakdown, revenues in the America in the first quarter increased 19% to $135 million compared with the first quarter of last year. Revenues in Europe, Middle East and Africa increased 7% to $52 million compared to Q1 of last year. Revenues from Asia-Pacific region were $28 million, up 13% from Q1 of 2011.

For the first quarter, the America region accounted for 63% of total revenue, EMEA to 24% and APAC at 13%.

Product revenues in Q1 accounted for 43% of total revenues and maintenance represented 36% of total revenues. Professional services accounted for the remaining 21% of total revenues.

The 2012 first-quarter gross margin was 64.8% compared to 65.9% in Q1 of 2011. We are targeting gross margin to be at least 65% going forward.

Our operating margin for the first quarter was 18.3% compared to 18.2% in the first quarter of last year. Like in the past, we expect to see higher operating margin later this year.

Finance and other income includes this quarter approximately $1 million resulting from the sale of certain patents not in use.

First-quarter 2012 net income increased 17.7% to $35.6 million compared to $30.3 million in Q1 of 2011. First-quarter 2012 fully diluted earnings per share was $0.57, which was an increase of 21.3% compared to Q1 of 2011.

Cash flow from operations was strong in the first quarter and reached a record of $70 million. This strong cash flow represents in part the seasonality for collections throughout the year. Our cash incremental investments were approximately $471 million at the end of March with no debt.

Headcount at the end of the first quarter was 3350 people compared to 2975 one year ago.

During the first quarter, we paid $136 million for acquisitions. We also paid about $35 million to repurchase approximately one million shares as part of our ongoing share repurchase plan. Since we began repurchasing shares in 2011 and until now, we have bought back a total of approximately 4.3 million shares for $143 million.

Turning to guidance. Please note that both second-quarter and full-year guidance take into account the share buyback executed so far, but excludes future buybacks that may be executed during the year.

Based on our strong pipeline and our ongoing move to an enterprise software model and changes in our sales organization structure, we expect revenue to be weighted more towards the second half of the year.

We expect second-quarter 2012 total revenue to be in the range of $215 million to $223 million and fully diluted earnings per share to be in the range of $0.55 to $0.60. We expect total revenues for the full-year 2012 to be in the range of $930 million to $950 million and fully diluted earnings per share to be in the range of $2.32 to $2.50. That concludes my comments. I will now turn the call over for questions. Operator?

(Operator Instructions). Shaul Eyal, Oppenheimer & Co.

Two quick questions on my end. Zeevi, I want to start first with your commentary about the Actimize - you indicated a seven-digit deal that kind of came in this quarter. Was that a deal that kind of got flipped during the fourth quarter or is that more of a kind of recent win that was not part of kind of the fourth-quarter results?

Firstly, the deal that I mentioned is a deal within the mid-market and the news about it that we, in the midmarket, managed to get a seven-digit deal, which speaks to the potential in this specific market. We won several additional seven-digit deals during the quarter and some of these deals were deals that slipped from last year.

Got it. So you're saying you were able to win more seven-digit deals this quarter, the first quarter, correct?

There are several -- during the first quarter, we managed to win several other seven-digit deals.

Got it, got it. And so with that in mind, do you think we're back -- as we look into the second half of 2012 kind of being slightly more backend-loaded, are we back to double-digit growth at the Actimize level?

We believe that we are back to a double-digit growth within the Actimize model.

Got it. Okay, thank you for that. And on the deferred revenue, and again, I don't know if you can break it for us, but what was the approximate contribution from Merced into kind of the deferred revenue numbers this quarter, if you have it, of course?

There was some contribution, but the major increase in deferred revenues this quarter came from maintenance contracts that were paid at the beginning of the year and now going to flow into revenues throughout the year.

Got it. Should we be expecting a similar level of deferred revenue as we start thinking about the second-quarter model?

I believe that deferred revenues would be somehow stable or even decline throughout the year as we benefit from the revenues out of the maintenance -- maintenance revenue. And that's very typical and very common in our model. We are collecting a lot of our maintenance at the beginning of the year.

Got it. Okay, thank you very much for that and good luck.

Shyam Patil, Raymond James.

Congrats on the quarter. I guess the first question -- we pay a lot of attention to the book-to-bill ratio. It seems like some quarters it's above 1, some quarters it's below 1, but you always seem to kind of make the annual estimates and the quarterly estimates. I guess as you make this transition to more of an enterprise software company, how should we think about that ratio in terms of are there certain quarters where it's realistic to expect that to be below 1 and certain quarters where it should be above 1?

Generally, we are shifting more and more to a backend model in which Q4 has a very strong booking, like what happened this year, or last year actually, in the fourth quarter. So the fourth quarter we expect to be very, very strong and the other quarters -- the remaining quarters, we will not be surprised if in any given full quarter book-to-bill may be below 1.

Got it, okay. So maybe to paraphrase that, so 1Q and 3Q, which are typically seasonally weak, wouldn't be surprised to see it below 1; 4Q definitely above 1 and 2Q could go either way. Is that the right way to think about it?

That's correct, yes.

Okay, great. Second question, as you go more towards the direct selling model within the Customer Interaction segment, can you talk about the benefits of that and how that will help you drive continued strong double-digit growth there?

Yes, we are back from our NICE user conference, which was a good example for how it works. We are developing a more intimate and strategic relationship with multiple touch points within our customers. And we are driving -- we have a better understanding of their business and their business needs and they have a better and deeper understanding of our products and our capabilities. And this really enables us to build and design sometimes even jointly solutions that will better fit their model and their business needs and even innovate with us.

So this is the trend that we are doing. We have done it in the past in a smaller scale. This year, we did it -- we basically tripled our account -- key account management practice. And we believe that this is the way forward to expand within these accounts.

Great. And just my last question, Zeevi, you talked about the Cisco relationship in your prepared remarks. Can you talk about just how that -- how we should think about the revenue contribution or growth contribution from that relationship and from midmarket I guess more broadly? And then how that compares to your other main competitors in the Customer Interaction segment?

We are enjoying the relationship with Cisco. We just signed the agreement recently. It will take time for this relationship to develop. It's going to be over time. But we believe that this is a very important addition to our go-to-market, specifically in the midmarket. Cisco is -- within our market, Cisco is capturing a growing share of the market. So we will benefit from that and it will give us access to places where our direct model does not work. It also will expand our distribution network globally. So we believe that it will benefit us quite well. It will take time for this to materialize. Although almost immediately after signing we saw already some traction in some accounts.

Is NICE kind of the highest priority vendor on the list with Cisco in terms of offering your Customer Interaction technology suite?

On the mid-end of the market, yes.

Great, thank you.

Paul Coster, JPMorgan.

(technical difficulty) and I'm not quite sure I get it because I always thought that you were already in that business. What is this about and what is it that you will not be doing moving forward that you previously were doing? Are you going to, for instance, cull some of the more sort of hardware-oriented businesses?

I'm not sure that I understood the --.

Paul, I think you cut out. I think we missed the first part of your question. Can you just repeat it?

Well, it sounds like you're changing your sales strategy a little bit and shifting towards more enterprise software sales as we move forward. And frankly, I thought that's what you were doing anyway. So I'm kind of interested by the emphasis that's being made on that. And does it imply that you're going to start to cull some product lines?

Okay, we are operating more and more direct over the past several years. But what we've done, what we have introduced, what is new is that we started what we call the key account practice, which means that we are putting more resources in coverage of specific accounts that are strategic or major accounts. And we did it with several accounts before, and this was very successful for the customers and for us, and resulted in increased business and increased strategic value, and also better deployment and better success of the services that we deployed. And as a result, strategically, we decided to expand it to a much larger number of customers globally. And this is -- so we are putting more sales, but also support and delivery and consulting resources around a large customer in order to focus and drive the business with this customer. So this is new in terms of magnitude and the amount of accounts that we cover. It's also -- we benefit from the expansion in our product portfolio because we have more and more products to sell to these customers. So overall, this has proven to be a very successful model and therefore, beginning of this year, we expanded it. We also leveraged the acquisition that we made in order to even expand it further.

You also mentioned that there would be some I think two large deals in the second half of this year. Is that associated with this more focused key account practice or is that unrelated?

We didn't say that there are going to be two large deals on the second half of the year. We believe that there will be much more than two large deals in the second half of the year.

Oh, okay. I apologize.

We are expecting to have large deals generally on the -- many large deals on the second half of the year.

Are they related to this enterprise focus or is it --?

The enterprise focus will result in these deals. We are seeing some of them, or many of them, already starting to build opportunities in our pipeline.

Okay, my last question is that you talked about Big Data and I agree, I think this company is one of the first movers in that space. And your growth rate is sort of probably -- it encompasses both very strong growth segments and also some low growth segments. Are you in a position to share with us where the fastest growth in the company is and what percentage of the overall business originates in that very fast growth, let's say 25% plus year-on-year growth? And also what your strategy is regarding the lower growth businesses. Let's take, for instance, voice recording. I assume that that's a fairly low growth business. Is it something you have to do in order to get the other business or in time do you see yourself as kind of moving beyond that segment?

Well, a few things. I think this is a very good question. First, regarding the solutions, our advanced solutions, which are basically with big data, where we are seeing most of the growth across the businesses... (technical difficulty).

Ladies and gentlemen, I'm passing the call through to Marty. Please go ahead.

Thank you, everybody, for dialing back in. We apologize for the inconvenience. There were some technical difficulties at our conference call provider. Why don't we begin where we left off with -- in the Q&A session. So operator, can we take the next question?

Daniel Moran, RBC.

Thank you. Sorry, I joined in rather late and I hope that I'm not barging in on something that you already answered. But can you provide a little bit more color on the reasons for somewhat of a slower second quarter? And then what gives you the confidence for the back half to accelerate as we go in and how is the integration of the company that you've acquired so far?

So first, the integrations of the companies are going well and we are pleased with the progress on this integration. Regarding the mix of revenues among the quarters, we are moving more and more to an enterprise software model and we are going to operate in a more back ended mode. So this is something that we will see.

This year we made a major investment in expanding our sales force, specifically in the large accounts and strategic accounts which we believe will benefit in the long term. So it even -- might be even more if our business skewed and be more back ended. We are developing pipeline for the solutions that we are providing and we believe that this pipeline will materialize in deals.

Okay, thank you, Zeevi. And then as you look forward into the integration -- you guys are working on some integrated solutions on the analytic side, if I recall. Can you provide an update on that solution and how you think -- or what's the time line for such solutions on an integrated basis on the enterprise segment? Thank you.

Indeed we are integrating the solutions and the strength that we have is -- part of the strength that we have is our ability to integrate the analytics and the solutions that deal with multiple touch points and multiple sources within the interaction and do it in a cross channel and in real-time.

And during the call we spoke about one of these solutions, what we call service-to-sales which is a solution that takes incoming calls and helps the agents and the organization to convert the service calls into sales. It identifies the sentiment of the caller, it identifies the topic of the call, it looks at the status and the capacity of the center, and it looks at the static parameters and the profile of the customers and fits in real time what will be the thing to offer to this individual.

And this increases conversion rates significantly and increases revenue and this is integration of capacity of analytic capabilities from different -- of different elements within the different touch points. So we can see the contact center, we can look at the -- we are using the desktop analytics, we are accessing multiple sources and we can also realize what is the status and what is the capacity that is available within the contact center.

Okay, thanks, Zeevi. And last question just before I yield the floor. Can you give us some more maybe milestones or a sense on how big analytics is out of your sales right now? And what are the -- what's the strategic positioning that you feel you have in this market?

Analytics is growing and is growing and growing fast. It represents -- across the different businesses it represents a larger piece of the business and specifically of the product and services revenue. And we believe that it will continue to grow and be even larger.

Okay, thank you, Zeevi. Good luck.

Michael Kim, Imperial Capital.

You guys talked a little about on the securities side some seven digit deals and a strong pipeline. Could you expand a bit and elaborate on where you're seeing these opportunities, which vertical markets and is it a function of some of these solutions becoming more comprehensive?

We are operating in our traditional verticals. We have a very vertical focused approach in terms of security and we are operating mostly within the transportation and the transformation segment, the financial segment, the public safety segment and the critical facilities and safe city. And within these segments we are seeing strong demand, specifically this quarter I think that we saw good traction with critical facilities and with transportation.

And are you finding any geographic differences? Are certain markets appearing to accelerate relative to maybe some of the developed areas?

We have seen some success in emerging and mature markets, specifically in Latin America. But Q1 was also a relatively strong quarter for example in Scandinavia. So it's a combination of emerging and developed markets.

And is some of the opportunities for the balance of the year predicated on consistent funding levels from government customers or do you have any sense of how those budgets will progress through the year?

First we are talking about global so it's difficult to predict government spending on a global basis. But when we look at, it's about -- part of the revenues are government or government-related municipalities and government-related agencies and part of it is on the private sector. Actually a growing part is on the private sector.

When we are looking at the government funding and government budget, it varies from country to country. But generally what we believe and what we see with most of the government officials that we are talking is that they are moving more to invest in technologies that is more in the analytics space and less on the capturing space and this is the area where we are playing.

So it's more on adding "brain" to the different sensors that they have in order to connect the dots and be able to do something with all the sensors that are being deployed. And this is something that we are benefiting, this is part -- this is the core asset that we are providing in the security sector.

And as the deals get larger are you finding any significant change in the sales cycles to close deals?

Normally as deals are becoming larger the sales cycle and the approvals are going higher. And the cycles are -- in general cycles tend to be a bit longer as the size of the deal is growing. By the way, it's not only government, it's across the board. Every time -- even at NICE if we are internally, the higher -- if you look at expense the higher the expense rate the higher the approval that you have to get. I think this is something that is common throughout the -- in all segments of the business.

Okay, great. Thank you very much.

(Operator Instructions).

Operator, I want to just pick up on a question that Paul Coster had before we got cut off so Zeevi maybe can finish answering this question. And it was about Big Data and he had mentioned that we are one of the first movers and he wanted to know where is the fastest growth in the Company and what percentage of the business of that fast growth part of our Company, what is the percentage of that in our business? And also he wanted to ask about the lower growth products as well.

So I'll refer back to Paul's question and, first, we are growing on the -- where we are growing most is within the Big Data and analytics, decisioning and guidance surrounding Big Data. This has been and is the fastest-growing area within our business and it gets to accelerated growth rates.

The legacy business of recording is growing less than the Big Data portion, but there was a question I think that Paul asked whether we need the recording or the capturing piece in order to facilitate Big Data analytics. And what we are doing is more and more we have solutions that are independent of the capturing layer and can be done on other capturing. But still, a large part of our solutions are enjoying and benefiting from the fact that we are capturing the data -- the unstructureed data within our systems. So it's a combination, it's both. It's both -- we are using data that is being captured -- it's unstructured data which is being captured by us and the analytics is also providing the data that is captured by others. This is also -- is a growth catalyst to some of our capturing because more and more capturing is required in order to enable the analytics on top of it.

Thank you, Zeevi. Operator, are there any more questions?

There are no further questions at this time. Before I ask Mr. Bregman to go ahead with his closing statement, I would like to remind participants that a replay of the call is scheduled to begin in two hours. In the US please call 1-888-782-4291; in the UK please call 0-800-917-4256; in Israel please call 03-925-5904; and internationally please call 9-723-925-5904. Please go ahead with your concluding statements.

I would like again to apologize for the technical problem that we had during the call. I would like to thank everybody for joining us today and I would like to wish all of you a nice day. Thank you.

Thank you. This concludes the NICE Systems first-quarter 2012 results conference call. Thank you for your participation; you may go ahead and disconnect.