NICE Ltd. (NICE) Q3 2011 Earnings Report, Transcript and Summary

Welcome to the NICE Systems Conference Call discussing Third Quarter 2011 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 November 3, 2011. I would now like to turn the call over to Mr. Zeevi Bregman, President and Chief Executive Officer. Please go ahead. Zeevi Bregman – President and Chief Executive Officer: Thank you, operator. Before we begin, I want to welcome our new VP, Investor Relations Marty Cohen who joined us a few weeks ago from SAP. Marty joins the NICE management team and is based in New York. Marty? Marty Cohen – Vice President, Investor Relations: Thank you, Zeevi. With me on the call today are Zeevi Bregman, President and Chief Executive Officer; and Dafna Gruber, Chief Financial Officer. Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, please be advised 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 entitled Risk Factors and Item 3 of the company’s 2010 annual report on Form 20-F as filed with the Securities and Exchange Commission on March 3, 2011. During today’s call, we will present a more detailed discussion of the third quarter 2011 results and the company’s updated guidance for the fourth quarter and full year 2011. 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 has reflected mainly in accounting for acquisition-related revenues and expenses, amortization of intangible assets and 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. Zeevi Bregman – President and Chief Executive Officer: Thank you everyone for joining our third quarter 2011 earnings call. We are pleased to announce that in Q3 we crossed the $200 million mark for the first time achieving record revenues of $200.4 million. Revenues increased 14% compared to the third quarter of 2010. We again achieved record revenues for both our enterprise and security businesses with especially strong results in security. We are very pleased with our growth in the Americas, the especially strong growth in APAC and we are pleased to see the improving performance in EMEA. We continued to demonstrate good operating leverage and showed an increase in operating margin. Non-GAAP EPS increased 20% from last year to a record $0.54. We continued to expand profitability and are raising our guidance for the year. The book-to-bill ratio in Q3 was lower mainly due to (indiscernible) customer buying decisions. We have already seen some of those deals closed in Q4. Furthermore, we expect Q4 bookings to be strong resulting in a book-to-bill ratio much greater than 1 for the fourth quarter and greater than 1 for the full year. Our backlog is very strong at more than two quarters of revenue. And our pipeline is very healthy. That gives us confidence about the business as we head into the fourth quarter and into 2012. NICE leads the market in enterprising web-based solutions. We are helping our customers to address the issue a bit later. Our solutions enable our customers to understand and respond to vast amount of structured and unstructured data. This data is created by their interaction with outside world as it produced in real time. Our customer views are on a related solution to obtain insight into the business and deliver impact all-time. This impact results in an improvement in the customer experience, revenue growth, enhanced great deal of security and increased operational efficiency. As the market leader in delivery compliance solutions, customers also turn to NICE to help them to run into compliance, our compliance solution to a customer interaction and financial transaction and then for proper utilization for a store safety. Compliance along with increasing operational efficiency (indiscernible) people lasts and then moving the customer experience remains a top priority for our customers throughout the economic cycle. Moving on to our enterprise business which is comprised of our customer interaction business and financial decline in compliance business, let’s start with our customer interaction business. We are the clear leader in this market and we continue to enhance our in-time cost tunnel analytics offering to a both organic growth and a position. Last week, we closed the fixed acquisition, which we announced in September. We are very excited about the tradition to our analytics based customer experience management offering. Since they provide their in-time cost base Fizzback solution, which we have game changing customer responsibly with up to 50%. This is a much higher than the industry standard of below 10%. To took it simply Fizzback solution which is an automatic dialog with a consumer immediately following a specific interactional transaction. (indiscernible) Fizzback to provide the voice of the customer and provide immediate action by the organization. The combination of in-time contact space to flexible dialog and the high response way allows for the use of customer Fizzback solutions we were not possible it before and we Fizzback into our customers and operations. Providing utilization with insight is enabled than to us in the lead-time and provides both from the layer responses to this interest is because of our strategy. We now offer our customer a new way to interact their customers as well as to evaluate customer service and agent performance. In the short period, these announcement of this acquisition we are already seeing a high level of interest from our customers for this solution. We expect to rapidly integrate this business as we have done with (indiscernible) acquisition. The acquisition of Fizzback augments our cost initiative as did report that’s our cloud solution sold for the subscription basis. Furthermore, we are seeing demand for our customer interaction management and financial climate compliance cloud solution. We are recently formed several partnerships to sell our cloud solutions to customers are true to manage the contact sector in the cloud. This partnership has already generated several subscription bases. For doing the quarter, we want a relatively large interaction management deal with a videogame developer to one of our partnership. They are releasing a new game and after going for significant increase in customer interaction as we (indiscernible). Revenue of solution to manageably focus and used our interaction analytics to meet our customer experience to end before the game performance. Overall, we see increasing demand for our cloud solutions in both clouds in small and medium size enterprises. We continue to weakness strong demand for our in-time impact offering and about a month ago we also made the small technology acquisition of the company called (Composia). Composia, for instance, our technology in area of Fizzback impact enabling much easier integration of new vehicle sources for in-time analytics. The integration of this technology is in process and moving forward according to plan. During the third quarter, we continue to win big deals and replace competitor solutions in the customer interaction business. One example was a seven-digit deal with large U.S. group companies that was driven by the strength of our PCIP system plan solution. This security standard for the payment going industry requires compensates to secure (indiscernible) information and protected against for. Our solutions health organization meets this mandate by leveraging our internal analytics, this capability with a power differentiator that led us to win. Turning to our financial decline in compliance business about a month ago, we held our unlined customer event with enormously under participant. This event we brought together for the Maryland compliance executive for more than 65 institutions across the globe. Many institutions, case studies, and industry experts share their expertise and insight with our customers. The strong turnout and interest important client solution from our customers attending the event also demonstrates the increasing opportunities for NICE in this segment. Among the case studies which was also covered in an article by bankinfosecurity.com was a presentation by the (indiscernible) operations with Capital One Bank. He discussed the integration of further (indiscernible) activity into a single platform using NICE Actimize solutions. Among other operational benefit, our solution enabled the bank to cut its (indiscernible) by 20%. The interest for the event also we assumed that the migration (indiscernible) like operational risk implementation continues. We are continuing to see more and more banks structured on organization in a way to make enterprise rise consolidation possible. Banks continued to face persistent pressure to continue to see drive down losses from reducing the lower cost. While at the same time, they all be named with an increasing amount of compliance on regulatory issues. This drives interest because our compliance may attend in four business segments. For example, in the operator case, as UBS demonstrates the critical need for identifying activity which is addressed by one of our products that run on top of our platform. On regulation front, in July, the IRS announced plans to facing the requirements of foreign accounting tax compliance act or factor and published implementation timelines with the due diligence requirement becoming a safe deal in 2013. These factors require foreign financial institutions to report directly to the IRS certain information about financial accounts by U.S. taxpayers. We are developing an expansion to our AML solution that (indiscernible) this requirement. We are already seeing interest from customers. Finally, we were pleased to see that once again Chartis Research has recognized NICE Actimize as the industry leader in financial claim risk management technology. The research still considers NICE Actimize as a provider of best-in-class in depth and breadth of functionality and support services. It ranked as the highest in both market share potential and completeness of offering and rewards our focus coming from (indiscernible). Moving on to our security business which had a strong quarter with good execution, we closed some large deals, a good number of (indiscernible) management solution. Moreover, we continue to see growing demand in all regions as well as an increasing pipeline for this market leading solution. We see growing interest for both customers and vendors in PSIM or physical security information management drives us the need for increased security, safety, and compliance and through more operational efficiency. Most opening, however, focused fully on video management (indiscernible) and integration mail. NICE differentiated its ability to provide customers a comprehensive situation management solution. This includes situation on our latest business process automation and investigation capabilities. We have a proven track record in the verticals of (indiscernible) transportation, critical stability, utility, and financial institution. During the quarter, we closed a seven-digit deal in EMEA in a critical facility in which we are seeing a good momentum. The key driver for ROE was our demonstrated understanding of all the operational needs as well as our proven ability to adapt the procedure specifically to the relevant (indiscernible). This deep understanding would allow for the integration of 12 different security systems. In this deal, we were successful in combining both our video surveillance and situation management solution the value of a fully integrated holistic solution that enhanced solution in an efficient and cost effective way. Before I conclude during the last few months, we took advantage of market opportunities and expedited our share repurchases. We announced today a new $100 million write-back plan as part of our commitment to increasing shareholder value. We remain committed to organic growth and growth through acquisition. Coming off a solid third quarter, we look forward to a strong fourth quarter resulting in another year of profitable growth to record results. We have a strong backlog and a healthy pipeline. We see good amount for our solutions resulting from increasing compliance and regulatory requirements, rising security plans, and the need for our customers to improve business performance. Our customers need to analyze vast amount of structured and unstructured data to give them better insight to the businesses and we believe that NICE is best positioned to capture these market opportunities. I would like to thank the NICE team for their performance in the quarter. And with that, I will turn the call over to Dafna Gruber, our CFO. Dafna? Dafna Gruber – Chief Financial Officer: Thank you, Zeevi. I am pleased to provide you with an analysis of our financial results and business performance for the third quarter of 2011 and our outlook for the fourth quarter and full year. Revenues for the third quarter reached a record of $200.4 million which was in line with the expectations and was up 14% from $176 million in Q3 last year. We achieved growth from last year in both our enterprise and security businesses as well as in all regions. Our revenues by business sales were as follows. Enterprise revenues reached a record $151.7 million in the third quarter, up 12% from last year. Security revenues reached a record of $48.7 million, up 20% from last year. By geography, we continue to see growth in the America region with revenues increasing 12% compared to Q3 last year to a record $127 million. Our revenues in Europe, Middle East, and Africa increased 9% from last year reaching $49 million. APAC continued to demonstrate strong growth. Revenues were up 42% from last year reaching $24 million in Q3. In summary, the America region accounted for 63% of total revenues, EMEA 25%, and APAC 12%. Products revenues accounted for approximately 45% of Q3 revenues, maintenance about 35% and professional services close to 20%. Q3 gross margin was 64.6% compared to 65.8% last year. The slight decrease in the gross margin was the result of product mix mainly coming from strong results in security. This was partially offset by the improvement in service gross margin. We continue to target gross margins of at least 65%. We continue to show lesser, as you know, business model over time with the record operating margin of 19.4% for the quarter, up from 18.1% in the same period last year. Operating income in the third quarter increased 22% to a record of $39 million. Net income was up 20% from $28.7 million last year to $34.5 million in Q3 this year. The tax rate in Q3 was 15.9%. While we continue to see some fluctuations in tax rate resulting from our international tax structure, we continue to target 17% to 18% as our average tax rate. We also achieved our highest ever quarterly fully diluted earnings per share $0.54, which was up $0.09 or 20% from Q3, 2010. Cash flow from operations was $18 million in the third quarter. In the first nine months of 2011, we generated over $100 million cash from operations. Our cash and financial investments were approximately $600 million at the end of September with no debt. During the quarter, we took advantage of market opportunities and expedited execution of our share buyback plan announced at the beginning of the year. We used $59 million to repurchase approximately 1,930,000 shares. As of September 30, we have purchased approximately 2.8 million shares for a total of $90 million. While we continue to view acquisitions as the prime use of cash, we announced today a new share buyback plan to purchase up to $100 million. This new plan reflects our strong cash position and our confidence in our continued strong cash generation. This plan will be executed mainly in 2012. Purchases will be down from time-to-time in the open market or in privately negotiated transactions from our available cash balance. We will determine the timing in the amount of any repurchases based on our evaluation of market conditions and other factors including the alternative investment opportunities in our future growth. At the end of the October, we closed Fizzback acquisition. As previously disclosed, we expect Fizzback to be $0.02 to $0.03 dilutive to the first quarter fully diluted non-GAAP EPS. Furthermore, we expect Fizzback to add approximately $2 million to the fourth quarter total revenue. Turning to guidance, we are introducing today our guidance for the fourth quarter of 2011 and updating the yearly guidance also to include impact of Fizzback acquisition. We expect total revenues in the first quarter to be in the range of $208 million to $218 million and into a fully diluted share are expected to be in the range of $0.55 to $0.59. We expect total revenues for the year to be in the range of $792 million to $802 million and despite the slight dilution for Fizzback acquisition, we are increasing our expectations for earnings per fully diluted share to be in the range of $2.05 to $2.09. That concludes my comments. I will now turn the call over to questions. Operator?

Thank you. Ladies and gentlemen at this time, we will begin the question-and-answer session. (Operator Instructions) The first question is from Shaul Eyal of Oppenheimer. Please go ahead. Shaul Eyal – Oppenheimer: Thank you operator, good afternoon everybody, (Marty), welcome on the board and also kind of want to comment Dafna for a kind of prior stunning work at night.

Thank you, so we still see an instrument, I appreciate it. Shaul Eyal – Oppenheimer: Thanks.

Thank you, Shaul. Shaul Eyal – Oppenheimer: Couple of quick questions on my may be the slight book-to-bill softness that you had and I understand kind of which already kind of for most put back booked and probably can now heading into the backlog. Was it enterprise driven or was it security driven?

It was not in a particular product line and not in a particular geography. Shaul Eyal – Oppenheimer: Got it. Any initial thinking about what fiscal 2012 guidance might looks like or is it too early at this stage?

It is too early at this stage. We are seeing a very strong pipeline for Q4. And we will – we are planning to provide guidance at the third quarter – at the annual call on the first quarter. Shaul Eyal – Oppenheimer: Got it. Again in order to you’ve mentioned in your prepared remarks the whole found at the UBS on the $2.3 billion trading loss. In your view if had our UBS used the specific product, which is stated to trying flag those potential compliance issues. Do you think NICE would have been capable of flagging in advance everything that was happened internally at UBS?

We obviously not know all the detail, but we’re in the product that these other things to basically in this kind of a scheme and we saw a raising interest in this product after the impact. Shaul Eyal – Oppenheimer: Got it. Okay thank you very much. Good luck.

The next question is from Daniel Meron of RBC. Please go ahead. Daniel Meron – RBC: Thank you. Congrats on the consist execution here as Zeevi and Dafna and I’m joining Shaul here for regretting Marty on board and I guess the lower than to that’s why I’m thinking for her job. So, to my question if there a way to kind of like see how much the economic impact or news has had on the sales process in general and how quickly can think to accelerate once your clients have decided this time to move ahead.

For us, it’s – we have some mix signal deal. On one hand, we had from order that fleet and from the quarter and not all of them by the way is – not all of this is related to any economic uncertainty. On the other hand, we are entering Q4 with a very strong pipeline. So, it’s really typical for us to tell. Daniel Meron – RBC: Okay. And how much of your revenue, would you estimate right now is kind of recurring any of you?

We have about one sales of our revenues – maintenance revenues which are recurring and on top of that, we have some term and some term business and some things that over a deal for the 11% more of a business that is either part recurring or professional services is basically recurrent. Daniel Meron – RBC: Okay. And last one from me before you slightly missed it earlier on. Can you provide us with a little bit more color on the dynamics, which you see for geography right now?

Yes, we can provide – we have seen – we are very – last quarter and this quarter we are very pleased with the goals which have seen in APAC. In America, we have a consistent performance and goals. In EMEA, we felt that the yield which is low, but since then we are recovering and when we are pleased with the improvement in the business in the past two quarters. Daniel Meron – RBC: Okay, very good. Thank you, good luck.

The next question is from Daniel Ives of FBR Capital Markets. Please go ahead. Daniel Ives – FBR Capital Market: Hey guys. Few questions, first on that margins, I mean obviously in this improvement there, I mean can you kind of speak whether just curbing expenses is just sort of something we should think about in over the next year in terms of expansion (indiscernible) and usually happen in terms of expense reduction this quarter?

I think there was nothing unusual this quarter, I think the improvement in the operating margin is part of the overall term and as we’ve been in the past usually in the serve comp of yield operating margin slower than the second half. That’s the nature in our business and what we want to see going forward this continuous improvement in operating margin and what we seen this quarter is in line with the plan. Daniel Ives – FBR Capital Market: Okay. And then when you talk about, I mean book-to-bill was less than one and but obviously you expected to be is in much greater than one in Q4. Just kind speak to gives your confidence what you’re seen in totaling in field that characterize you.

We have dealing very carefully our pipeline across regions cost product line and in many ways and we have the additional coming from the sales. Usually by the way, we have given positive surprise in the first quarter to what we see in the pipeline. But even without this surprise we are in very good shape like. Daniel Ives – FBR Capital Market: Okay, thanks and (Marty) it’s a good day for the board, thanks.

Thanks, Dan.

The next question is from Paul Coster of JPMorgan. Please go ahead. Paul Coster – JPMorgan: Yeah, thank you and good morning. Obviously there is a little bit volatility in the bookings at the moment and closing is the pipeline. I wonder if you could perhaps provide some color what you think modest course that the recovery and activity there. And most this maybe bit difficult sees every, but if you go back to late away and early on nine. The book-to-bill was trembling along above one to one until the first quarter of 2009. And I am just wondering if there is anything in this quarter that echos, they can have looking feel of the market back in that sort of Lehman post Lehman era.

So, first, when we look at the Q3 last year, we also at the book-to-bill, which was the below one, I think year ago, so I don’t think that you should when you conclusion and again when we are looking at the first quarter we are seeing very good pipeline. And we believe that the we have goes possibilities and we believe that the 2010 at this point, we believe that 2012 is going to be year of continued the growth and the increasing profitability and when we are looking at the model that we have we are moving more and more to enterprise software model and like many other enterprise software companies, we are more in the Q4, our fourth quarter has the larger share of our overall booking. This is also because the increase in our maintenance booking and also because of the way that this business is being conducted. So, we believe that this is a pattern. It actually was the pattern in previous years and we believe that this will be the pattern also during this year. Paul Coster – JPMorgan: What do you think accounts for the improvement in your momentum in EMEA in particular?

We had a very good quarter with good execution on the quarter on two elements, both on the (indiscernible) acquisition and the other is on the security front. Paul Coster – JPMorgan: Dafna, are you positioned to share the number of seven-digit deals this quarter or give us some sense of the makeup of your deal flow at the moment?

Yeah, we are not breaking the exact number of seven-digit deals, but I think that the picture this quarter looked quite similar to what we had in previous quarter. So, there is no abnormal situation right now.

Maybe a bit of increasing security, we had one….

Maybe, yeah.

More business security. Paul Coster – JPMorgan: Okay. And my last question is there has been some M&A in the sort of unstructured data space, information space, HP and Oracle have obviously been active here. Has this changed the competitive landscape at all, are you seeing new entrants of exits from your space?

First of all, it probably would be early to tell at this point. But when we look at the – we look at some of these acquisitions, maybe the closure is HP with Autonomy. And frankly after the – we saw after the acquisition of etalk by Autonomy we saw less of etalk at the market. Overall, we believe that we are in attractive market and we are not combined to see that the more people are looking in area that our adjacent level market. Paul Coster – JPMorgan: Okay, thank you very much.

The next question is from Jonathan Ho of William Blair. Please go ahead. Jonathan Ho – William Blair: Good morning guys. Just a quick question on the product growth rates versus the services growth rates, can you talk a little bit about how we should be thinking about the growth in those two rates and when they start to maybe convert a little bit more?

Yes. Overall, again, we anticipate that product will be between 45% to 55% of revenues and then overall this quarter product was 35% and services was 55%. As the maintenance is becoming a larger (indiscernible) business, this is something that we might expect. And overall we expect that to go in all different type of revenues on maintenance, on the license, as well as any professional services. Jonathan Ho – William Blair: Okay. And can you also give us a little bit more color around the APAC region growth, what was driving the strength here with this distribution build out or with this strength in particular of that product segment?

I think it’s mainly execution on our behalf. We also guide from earlier (indiscernible) coverage in APAC. Jonathan Ho – William Blair: Got it. And just lastly, you talked a little bit about your new SaaS offering, are you seeing an increase in the interest and doing business via SaaS and do you think that potentially be the markets or shift in this direction longer term?

Still SaaS is a small part of our business. And there is a growing demand for SaaS solution and the overall time we believe that this portion would bill out of our business. This will happen gradually. Jonathan Ho – William Blair: Great. Thank you.

The next question is from Shyam Patil of Raymond James & Associates. Please go ahead. Shyam Patil – Raymond James & Associates: Yeah, hi, good morning. Zeevi, could you talk a little bit about the closed rate assumptions that you are making in the fourth quarter and that compares to this quarter and also when you look out to fiscal ’12, do you still feel comfortable with the annual kind of equity agency instead of low to mid teens growth with (marketing) leverage.

So, let’s – in terms of growth rate, the group rate on Q4, we are looking at the pipeline in Q4 and we are fairly confident that we are going to be strong booking in the quarter and Q4 is different because the collision plans of our sales people are ending at the end of the quarter. So, closer rates are typically ideal, the leverage we are not factoring at the end. So, this is on the booking side that we are – we can never be confident sure, but we are very confident in both the booking level on Q4. When it comes to – when it goes to 2012, we are currently in the budget process and we are compelling the numbers and our long-term model didn’t change and they are specifically for 2012 we are again we believe that this is going to be another year of course and the expansion is profitability to what extent we will all – we will probably share the data on our call during the first quarter. Shyam Patil – Raymond James & Associates: Great and using to emphasize on cloud of that solutions more in the prepared remarks and you have an about. In addition to Fizzback what are the other key elements of your staff solution that you are seeing attraction for anything within the mid-market or it is also within large enterprises.

So, first we do have – when we are looking at the recurring product revenues both (indiscernible). It’s – we have Fizzback, we have some I mentioned some partnership on the customer interaction business that are starting to provide the results and also within the financial crime and compliance business we have buy partners in direct business which is providing term license and hosting in subscription based licensing mechanism. Shyam Patil – Raymond James & Associates: Great. And then just last, you basically touch on etalk and single less in the market after they required by economy, did you seeing to have pretty good solid based reporting cost in a reporting phase and (indiscernible). Given the issues about economy currently do you expect that to be an incremental opportunity for NICE?

(indiscernible) not to say to any specific competitive, like I just say that every time that there is an acquisition business deflection in the company that is being acquired and this opportunity that we are marching our folks to talk advantage of this opportunity.

Is that answer to your question sir?

Please go ahead with the next question please.

Well. The next question is from Craig Nankervis of First Analysis. Please go ahead. Craig Nankervis – First Analysis: Yes, thank you very much. I wondered if you just may be provide a little more color on the security side of the business, how – I know it’s lumpy and all that sort of stuff and you’re working of big projects from years ago. How much of a sustainable return to better performance do you think that you have now with one pretty solid quarter under your belt or is it hard to read.

If you recall also the previous quarter was a solid security quarter, but we are now two quarters in a row, not a single event. And overall this was indeed a very good quarter for security. We see a lot of interaction. As I said in the previous call, we moved less to dependency of large deals – on very large deal to dependent that we have more a large deal. So, we believe the total lumpiness in this business will decrease and we are starting to – we are seeing the part of our strategy to look at the around situation management and differentiating our offering with our award winning product deal. And we are starting to benefit from the part of exhibiting on this strategy. Craig Nankervis – First Analysis: So what areas of security were particularly well is a government…

I’m not – I think that this will – I cannot those not specific segments, but I give a traditional segmental government and our facility and we had several critical facilities as we mentioned the call and transportation. Craig Nankervis – First Analysis: Okay, thank you very much.

Thank you.

The next question is from (Toby Rosner) of Barclays Capital. Please go ahead. Toby Rosner – Barclays Capital: Hi, good afternoon everyone. Just a very quick question about increasing receivables, do you think was a back end this quarter or customer requesting more credit and maybe better terms.

Nothing very unusual, we saw some increasing there were some delays in payments that we received in October, but nothing unusual on that front and this quarter was not different in the business distribution from previous quarters. Toby Rosner – Barclays Capital: Okay, thank you very much.

The next question is from Brian Ruttenbur of Morgan Keegan. Please go ahead. Brian Ruttenbur – Morgan Keegan: Thank you. Can we talk about timing of the share buyback, do you plan to do the $400 in 2012. Just talk a little bit about that and I’ll follow on.

Yes, well, we announced the plan we would start executing on towards the end of the year after we finished the content and it is mainly for 2012 as I believe the vast majority will be purchased in 2012. Brian Ruttenbur – Morgan Keegan: Okay.

Over side and we will continue to take for opportunities like we had in Q3 and may expedited this we feel it’s – we feel we should do that. Brian Ruttenbur – Morgan Keegan: Okay. And then are you just purchasing those shares on open market.

We’re purchasing in the open market, but replaced in the size plans for the execution. Brian Ruttenbur – Morgan Keegan: Okay. And then can you talk a little bit about selling and marketing expense, you had a big drop, was there anything going on there in the quarter. Did you like people also with the just controlling expenses seasonal just talk about that a little bit?

I think it’s more has to do with seasonal impact usually the second quarter is high because we have a lot of events and the third quarter is usually low well and also some sales related costs that you may have going down a little bit this quarter, but nothing unusual. Brian Ruttenbur – Morgan Keegan: Okay, thank you very much.

There are no further questions at this time. Before I ask Mr. Bregman to ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the U.S., please call 1-888-782-4291. In the U.K., please call 0800-917-4256. In Israel, please call 03-92-55-900 and internationally, please call 972-3-92-55-900. Mr. Bregman, would you like to make your concluding statement? Zeevi Bregman – President and Chief Executive Officer: Thank you everybody for joining us and have a nice day.

Thank you. This concludes NICE Systems third quarter 2011 results conference call. Thank you for your participation. You may go ahead and disconnect.