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COMPANY PROFILE Headquartered in Israel, NICE-Systems is a leading provider of solutions that capture, manage, and analyze unstructured multimedia content. The content includes calls to contact centers and back offices, video captured on closed circuit television cameras, radio communications, e-mail, and instant messaging. Products and related software applications contribute approximately 60% of company revenue, while professional services account for the rest. The company’s solutions are deployed at over 24,000 customers, including over 85 of the Fortune 100 companies. International sales accounted for 48% of 2007 revenue, up from 46% in the prior year.

The company’s major customer markets include the enterprise segment (75% of sales), made up mainly of financial services, outsourced service providers, and telecom, and the public safety and security segment (25%), which includes air traffic control, homeland security, and public transportation. Within the enterprise segment, solutions can largely be categorized into three value proposition groups: compliance and risk solutions (50% of enterprise revenue), operational efficiency solutions (20%-30%), and customer retention solutions (10%-20%).

12-month target price of $40 is largely based on a forward price-earnings-to-growth (PEG) ratio of 1.1 times, in line with peers, using our three-year projected EPS growth rate of 18% for the company and our 2009 earnings per ADR estimate of $2.05. Our target price translates to a price-earnings ratio of 20, which represents an approximate 20% discount to the stock’s median p-e multiple experienced over the past several years. We think the stock’s current multiple will expand as NICE continues to exhibit strong execution and earnings growth in this difficult economic climate.