Witness (NASDAQ:WITS)
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Witness Systems (NASDAQ: WITS), a leading global provider of workforce
optimization software and services, announced that today it has acquired
Demos Solutions Consulting Group Ltd. (also known as Demos Solutions)
and Exametric, Inc., the two leaders in supplying enterprise
productivity and resource planning solutions to the financial services
industry. The acquisitions broaden the revenue opportunity and customer
base for Witness Systems, further extending the business value of its
workforce optimization (WFO) solutions from contact centers to bank
branches and ultimately to other areas in the enterprise.
The aggregate purchase price for both transactions is $29 million in
cash plus a potential earn-out of up to $18 million based on the growth
of the business over the next few years. The acquisitions will be
financed from Witness Systems’ existing cash
resources. These acquisitions are expected to be accretive (before
amortization of intangibles and other acquisition-related costs) and add
$13 million to $15 million to the company’s
revenue in 2007.
“Today we’re
announcing a pair of innovative, market-changing acquisitions that
expand our opportunity by extending workforce optimization into the
enterprise,” said Dave Gould, CEO of Witness
Systems. “This combination creates immediate
scale and momentum, with over $10 million of revenue from a blue chip
customer base in the financial services industry. We’ve
been probing this market for a while and believe it will emerge as a
real growth driver for us over the next 18–24
months. By combining the two leaders, we enter this new market with the
deepest talent and strongest offering.”
The two companies will be combined and operate as Witness Enterprise
Solutions, a group focusing initially on WFO solutions for retail bank
branches and operations. Gould added, “Approximately
30 percent of our revenue is derived from financial services, and we
have been extending our overall reach through our leadership in
providing VoIP solutions. Starting with branch offices allows us to
leverage the congruence of WFO and VoIP, and is a natural catalyst for
our continued expansion across the broader enterprise.”
Banks Focused on Improving the Customer Experience
According to the Bank Administration Institute (BAI), a leading
professional organization focused on enhancing employee and
organizational performance, 70 percent of customers view their bank as a
commodity service provider, and 30 percent desire a hands-on
relationship. As a result, BAI contends that it’s
no longer enough for banks to know what their customers want; they also
need to understand the nuances of how their customers feel. Many branch
renewal projects are targeting improving staff skills, such as
consultative selling, and broadening branch technology infrastructure.
Further, according to TowerGroup, a global research and consulting firm
for the financial services industry, a shift to relationship banking is
clearly under way in banks of all asset sizes. Banking customers are
demanding a consistent customer experience across all touch points.
According to Forrester Research, an independent technology and market
research company, banking is one of the industries with the most
comprehensive multi-channel requirements and sophisticated multi-channel
solutions. Enterprise WFO technology from Witness Systems can now
address this challenge both in the contact center and retail branch
banks.
Demos Solutions and Exametric have both built industry-leading solutions
and an impressive customer base committed to optimizing workforce
performance. The new Witness Enterprise Solutions group will be led by
Darryl Demos, the CEO and founder of Demos Solutions.
“The combined organization will help further
enable companies to model and monitor business processes to maximize
their return on resource investments and the customer experience,”
explained Demos. “Creating accurate forecasts
and optimizing staff resources is no longer a ‘nice
to have’ in the competitive landscape for
customers. Workforce optimization is the only way to improve margins and
drive customer and employee satisfaction, which ultimately creates a
more loyal and profitable customer base.”
According to Dr. Ali S. Kiran, Ph.D., founder and CEO of Exametric, this
acquisition will further the company’s
strategy of expanding to other markets while continuing its strong,
managed growth. “As part of the greater
Witness Systems organization, Exametric and Demos Solutions make a
powerful alliance through our combined programs that help banks improve
and quantify how changes in processes, layout, technology and staffing
impact both customer satisfaction levels and overall branch efficiency,”
said Dr. Kiran.
With this combination, current Witness Systems customers will be able to
extend their technology investment from the contact center to their
branch offices and other areas of the enterprise that impact the
customer experience. Similarly, Demos Solutions and Exametric customers
will have access to a broader range of WFO solutions, including customer
interaction recording, performance management, e-learning and other
performance improvement and analytical software, from the established
market leader, Witness Systems.
William Evans, CFO of Witness Systems added, “We
have an established, proven model in place to ensure the successful
integration of products, people and processes following strategic
acquisitions, enabling meaningful value creation for our customers and
shareholders. We believe this combination will be accretive to earnings
in 2007 and will enhance our future value proposition.”
Financial Update
Also today, the company provided a preliminary estimate of third quarter
2006 revenue in the range of $50 to $51 million, excluding hardware
revenue of approximately $1 million. The company’s
cash and short term investments exceeded $160 million at September 30,
2006.
Previously, on August 9, 2006, Witness Systems announced that the
company has voluntarily formed a special committee of independent
directors to review stock option practices and grants. Given the status
of the review, which is ongoing, the company does not expect to be in a
position to announce further financial results for the third quarter
until the option review and audit procedures have been completed,
appropriate accounting adjustments and restated financial statements
have been finalized, and amended Reports on Forms 10-K and 10-Q have
been filed.
Conference Call Information
Witness Systems will conduct a conference call on Tuesday, October 3,
2006 beginning at 8:30 a.m. ET to discuss the details of the
acquisitions and respond to appropriate questions. The conference call
and replay will be available online at www.witness.com.
About Demos Solutions
Demos Solutions is a leading productivity solution provider for the
financial services industry. Demos Solutions applies the Art and Science
of Workforce Optimization(SM) to improve the
productivity of leading financial services companies through its
combination of hands-on consulting and workforce management
technologies. Demos Solutions is the workforce optimization partner to
four of the five largest banks in Canada, and 33 percent of the top 100
North American bank branches use Demos Solutions’
StaffSmart Enterprise®
resource planning and scheduling tool.
About Exametric
Exametric Inc. is a leading software solutions company specializing in
workforce management and optimization. The Exametric Workforce
Management Suite provides precision forecasting, automated scheduling,
time and attendance, and strategic planning solutions. The solution
helps companies predict service and transaction levels in order to
manage labor scheduling, improve customer satisfaction and increase
revenue. Exametric’s products are in use at
more than 12,000 locations worldwide.
About Witness Systems
Witness Systems (NASDAQ: WITS) is the worldwide leader in software and
services that help businesses capture customer intelligence and optimize
their workforce performance. The company's Impact 360™
solution features quality monitoring, compliance and IP recording,
workforce management, performance management and e-learning. Primarily
deployed in contact centers – as well as the
remote, branch and back offices of global organizations –
the workforce optimization solution captures, analyzes and enables users
to share and act on cross-functional information across the enterprise.
With Impact 360, organizations can improve interactions and the
underlying back-office processes that enhance the customer experience
and build customer loyalty. For more information, visit us at www.witness.com.
Cautionary Note Regarding Forward-looking Statements:
Information in this release that involves expectations, plans,
intentions or strategies regarding the future are forward-looking
statements that are not facts and involve a number of risks and
uncertainties. They are identified by words such as “will,”
"anticipates," "expects," "intends," "plans," "believes," "estimates,"
and similar expressions and statements about present trends and
conditions that may extend into the future. These statements are based
upon information available to Witness Systems as of the date of this
release, and the company assumes no obligation to update any such
forward-looking statement. Forward-looking statements believed true when
made may ultimately prove to be incorrect. These statements are not
guarantees of future performance and are subject to risks, uncertainties
and other factors, some of which are beyond our control and may cause
actual results to differ materially from our current expectations. Some
of the factors that could cause actual future results to differ
materially from current expectations include the company’s
ability to compete successfully in the future; fluctuations and changes
in customer demand and preferences; the timing of orders; the company's
ability to manage its growth; the risk of new product introductions and
customer acceptance of new products; the rapid technological change
which characterizes the company's markets; the risks associated with
international sales as the company expands its markets, including the
risks associated with foreign currency exchange rates; the ability of
the company to complete and integrate successfully the Demos Solutions
and Exametric acquisitions and any other acquisitions or investments it
may make; strategy and execution risks relating to these and other
acquisitions and investments; the risk of management distraction and
other consequences that might result from the review of certain option
grants and option granting practices described in the Current Report on
Form 8-K filed by the Company on August 11, 2006 and related
developments, as well as other risks identified under the caption
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" in the company's Form 10-K for the year ended December
31, 2005 and its Form 10-Q for the quarter ended March 31, 2006, as
filed with the Securities and Exchange Commission.
Witness, Impact 360, Improve Everything and the Witness logo are the
trademarks (registered or otherwise) of Witness Systems, Inc. protected
by laws of the U.S. and other countries. All other trademarks mentioned
in this document are the property of their respective owners.
Witness Systems (NASDAQ: WITS), a leading global provider of
workforce optimization software and services, announced that today it
has acquired Demos Solutions Consulting Group Ltd. (also known as
Demos Solutions) and Exametric, Inc., the two leaders in supplying
enterprise productivity and resource planning solutions to the
financial services industry. The acquisitions broaden the revenue
opportunity and customer base for Witness Systems, further extending
the business value of its workforce optimization (WFO) solutions from
contact centers to bank branches and ultimately to other areas in the
enterprise.
The aggregate purchase price for both transactions is $29 million
in cash plus a potential earn-out of up to $18 million based on the
growth of the business over the next few years. The acquisitions will
be financed from Witness Systems' existing cash resources. These
acquisitions are expected to be accretive (before amortization of
intangibles and other acquisition-related costs) and add $13 million
to $15 million to the company's revenue in 2007.
"Today we're announcing a pair of innovative, market-changing
acquisitions that expand our opportunity by extending workforce
optimization into the enterprise," said Dave Gould, CEO of Witness
Systems. "This combination creates immediate scale and momentum, with
over $10 million of revenue from a blue chip customer base in the
financial services industry. We've been probing this market for a
while and believe it will emerge as a real growth driver for us over
the next 18-24 months. By combining the two leaders, we enter this new
market with the deepest talent and strongest offering."
The two companies will be combined and operate as Witness
Enterprise Solutions, a group focusing initially on WFO solutions for
retail bank branches and operations. Gould added, "Approximately 30
percent of our revenue is derived from financial services, and we have
been extending our overall reach through our leadership in providing
VoIP solutions. Starting with branch offices allows us to leverage the
congruence of WFO and VoIP, and is a natural catalyst for our
continued expansion across the broader enterprise."
Banks Focused on Improving the Customer Experience
According to the Bank Administration Institute (BAI), a leading
professional organization focused on enhancing employee and
organizational performance, 70 percent of customers view their bank as
a commodity service provider, and 30 percent desire a hands-on
relationship. As a result, BAI contends that it's no longer enough for
banks to know what their customers want; they also need to understand
the nuances of how their customers feel. Many branch renewal projects
are targeting improving staff skills, such as consultative selling,
and broadening branch technology infrastructure.
Further, according to TowerGroup, a global research and consulting
firm for the financial services industry, a shift to relationship
banking is clearly under way in banks of all asset sizes. Banking
customers are demanding a consistent customer experience across all
touch points. According to Forrester Research, an independent
technology and market research company, banking is one of the
industries with the most comprehensive multi-channel requirements and
sophisticated multi-channel solutions. Enterprise WFO technology from
Witness Systems can now address this challenge both in the contact
center and retail branch banks.
Demos Solutions and Exametric have both built industry-leading
solutions and an impressive customer base committed to optimizing
workforce performance. The new Witness Enterprise Solutions group will
be led by Darryl Demos, the CEO and founder of Demos Solutions.
"The combined organization will help further enable companies to
model and monitor business processes to maximize their return on
resource investments and the customer experience," explained Demos.
"Creating accurate forecasts and optimizing staff resources is no
longer a 'nice to have' in the competitive landscape for customers.
Workforce optimization is the only way to improve margins and drive
customer and employee satisfaction, which ultimately creates a more
loyal and profitable customer base."
According to Dr. Ali S. Kiran, Ph.D., founder and CEO of
Exametric, this acquisition will further the company's strategy of
expanding to other markets while continuing its strong, managed
growth. "As part of the greater Witness Systems organization,
Exametric and Demos Solutions make a powerful alliance through our
combined programs that help banks improve and quantify how changes in
processes, layout, technology and staffing impact both customer
satisfaction levels and overall branch efficiency," said Dr. Kiran.
With this combination, current Witness Systems customers will be
able to extend their technology investment from the contact center to
their branch offices and other areas of the enterprise that impact the
customer experience. Similarly, Demos Solutions and Exametric
customers will have access to a broader range of WFO solutions,
including customer interaction recording, performance management,
e-learning and other performance improvement and analytical software,
from the established market leader, Witness Systems.
William Evans, CFO of Witness Systems added, "We have an
established, proven model in place to ensure the successful
integration of products, people and processes following strategic
acquisitions, enabling meaningful value creation for our customers and
shareholders. We believe this combination will be accretive to
earnings in 2007 and will enhance our future value proposition."
Financial Update
Also today, the company provided a preliminary estimate of third
quarter 2006 revenue in the range of $50 to $51 million, excluding
hardware revenue of approximately $1 million. The company's cash and
short term investments exceeded $160 million at September 30, 2006.
Previously, on August 9, 2006, Witness Systems announced that the
company has voluntarily formed a special committee of independent
directors to review stock option practices and grants. Given the
status of the review, which is ongoing, the company does not expect to
be in a position to announce further financial results for the third
quarter until the option review and audit procedures have been
completed, appropriate accounting adjustments and restated financial
statements have been finalized, and amended Reports on Forms 10-K and
10-Q have been filed.
Conference Call Information
Witness Systems will conduct a conference call on Tuesday, October
3, 2006 beginning at 8:30 a.m. ET to discuss the details of the
acquisitions and respond to appropriate questions. The conference call
and replay will be available online at www.witness.com.
About Demos Solutions
Demos Solutions is a leading productivity solution provider for
the financial services industry. Demos Solutions applies the Art and
Science of Workforce Optimization(SM) to improve the productivity of
leading financial services companies through its combination of
hands-on consulting and workforce management technologies. Demos
Solutions is the workforce optimization partner to four of the five
largest banks in Canada, and 33 percent of the top 100 North American
bank branches use Demos Solutions' StaffSmart Enterprise(R) resource
planning and scheduling tool.
About Exametric
Exametric Inc. is a leading software solutions company
specializing in workforce management and optimization. The Exametric
Workforce Management Suite provides precision forecasting, automated
scheduling, time and attendance, and strategic planning solutions. The
solution helps companies predict service and transaction levels in
order to manage labor scheduling, improve customer satisfaction and
increase revenue. Exametric's products are in use at more than 12,000
locations worldwide.
About Witness Systems
Witness Systems (NASDAQ: WITS) is the worldwide leader in software
and services that help businesses capture customer intelligence and
optimize their workforce performance. The company's Impact 360(TM)
solution features quality monitoring, compliance and IP recording,
workforce management, performance management and e-learning. Primarily
deployed in contact centers - as well as the remote, branch and back
offices of global organizations - the workforce optimization solution
captures, analyzes and enables users to share and act on
cross-functional information across the enterprise. With Impact 360,
organizations can improve interactions and the underlying back-office
processes that enhance the customer experience and build customer
loyalty. For more information, visit us at www.witness.com.
Cautionary Note Regarding Forward-looking Statements:
Information in this release that involves expectations, plans,
intentions or strategies regarding the future are forward-looking
statements that are not facts and involve a number of risks and
uncertainties. They are identified by words such as "will,"
"anticipates," "expects," "intends," "plans," "believes," "estimates,"
and similar expressions and statements about present trends and
conditions that may extend into the future. These statements are based
upon information available to Witness Systems as of the date of this
release, and the company assumes no obligation to update any such
forward-looking statement. Forward-looking statements believed true
when made may ultimately prove to be incorrect. These statements are
not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control
and may cause actual results to differ materially from our current
expectations. Some of the factors that could cause actual future
results to differ materially from current expectations include the
company's ability to compete successfully in the future; fluctuations
and changes in customer demand and preferences; the timing of orders;
the company's ability to manage its growth; the risk of new product
introductions and customer acceptance of new products; the rapid
technological change which characterizes the company's markets; the
risks associated with international sales as the company expands its
markets, including the risks associated with foreign currency exchange
rates; the ability of the company to complete and integrate
successfully the Demos Solutions and Exametric acquisitions and any
other acquisitions or investments it may make; strategy and execution
risks relating to these and other acquisitions and investments; the
risk of management distraction and other consequences that might
result from the review of certain option grants and option granting
practices described in the Current Report on Form 8-K filed by the
Company on August 11, 2006 and related developments, as well as other
risks identified under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
company's Form 10-K for the year ended December 31, 2005 and its Form
10-Q for the quarter ended March 31, 2006, as filed with the
Securities and Exchange Commission.
Witness, Impact 360, Improve Everything and the Witness logo are
the trademarks (registered or otherwise) of Witness Systems, Inc.
protected by laws of the U.S. and other countries. All other
trademarks mentioned in this document are the property of their
respective owners.