Reynolds Bish, CEO, Kofax "Corporate Update and Vision"

Many of you know that I joined the company about four and a half years ago at a time when it was struggling with revenue growth and losing market share, and we had to create a new vision for the company. Out of that vision, we implemented a whole host of strategic initiatives that we've been implementing in the business over the last four and a half years. Along the way of implementing all this change, we made several acquisitions to better position the company, and we really think at this point in time that we have accomplished all of the more significant change that we need to affect in our business and have a very strong foundation in place for the future. So at this point in time, we think—and I'll give you some data points to substantiate this position—we believe we are actually a very successful and growing enterprise software company. As you can see here, we have over 20,000 end-user customers around the world. We have over 750 channel partners; these are VARs and system integrators that sell our products to end users throughout the world through our direct presence as well as the efforts of these VARs and system integrators. Our products are actually available in over 60 countries around the world, and we have a direct presence in over 30 countries through our own subsidiaries and employees. We actually spend in excess of 13% of our total revenues on research and development; that amounted to about $32 million in fiscal year '11. It'll be a little more in our current fiscal year, but that actually is greater than the revenues of most of our competitors in this marketplace. I think that's a very significant statement both on the amount that we spend on R&D as well as this adjusted EBITDA number that I gave you before of $40 million in the year ended June 30. Both of those numbers are bigger than the revenues of most of the competitors that we have in this marketplace. I think what's significant about that is that it demonstrates our leading position in the marketplace and the financial resources and the strength that we have to bring to bear in bringing better products and more value to you all as our customers. Most recently, this included something called Kofax Mobile Capture, which adds smartphones and tablet computers as another entry point into our capture process. So effectively, you can use a smartphone and a tablet computer and the cameras in those devices to essentially scan or take pictures of forms and documents at what we refer to as the point of origination, where customer-facing communications and interactions actually occur. I think it's very exciting because if you look at some data from an industry analyst named Harvey Spencer and Associates, he says that the mobile capture software market is expected to grow from virtually nothing today to more than $1.3 billion by 2015. We believe that this is going to disintermediate or revolutionize the way in which capture occurs and the way in which organizations engage with their customers and conduct business. We also, as you all know, particularly here in the UK, acquired Singularity. We closed on this acquisition in early December of 2011, and this was really driven not only by a vision that I've had for the market for a long time as a result of talking to many customers, but listening to your needs and attempting to respond to those. So I've been active in this marketplace for longer than I want to remember or admit, and I can remember throughout that entire period talking to customers who say, 'You do such a great job of automating the processes necessary to enter content into my enterprise applications and repositories, why can't you also automate some of the synergistic downstream business processes that are needed for me to really act upon that information?' By acquiring Singularity, we achieved a number of very important benefits. First and foremost, we are able to better meet the needs of our customers, so we can now not only automate the capture processes but also the downstream knowledge worker processes that are necessary to act upon the information that we are capturing. Our development in the future, and you're going to hear a lot about this as we talk today, is really driven by three factors. Number one is this point of origination concept that I've talked about, which is the continuation of a trend over a long period of time of pushing capture functions from the centralized back offices out to regional locations, to local front offices, and now to smartphones and tablet computers, pushing it ever constantly closer to the point where customer interactions actually occur. Secondly is a concept we talk about called touchless process. So this is essentially automating all these processes to the maximum extent possible so that we can eliminate all or substantially all of the human intervention that is needed to complete the process. And last is to provide an enterprise-ready platform that adheres to all the kind of corporate standards and ease of deployment that you all reasonably expect from a contemporary solution today. You know, we've moved beyond capture, and our new vision for the company is that we want to be the leading provider of capture-enabled BPM solutions.