Seventeen years after establishing the software company Liraz Systems, and six years after bringing in
as its largest shareholder, Arik Kilman is going home, and this time it seems final.
Yesterday, the Liraz-controlled company
(Nasdaq:LVEL) published a particularly poor quarterly report. As well as the reports, the company issued a discreet announcement concerning the resignation of its CSO (strategic operations officer), Arik Kilman, who also submitted his resignation from Level 8's board of directors.
Kilman became Level 8's CSO after resigning (or being asked to resign some say) from his position as CEO in December, several days before the company published a profit warning for its fourth quarter of 2000. Level 8 has since changed its direction.
This year the company focused on the CRM market and selling its products to financial institutions. This focus has revolved around its product, Cicero, purchased from
for use in call centers in banks, investment banks and insurance companies.
"I resigned because I want to join my family in Israel. I have a six month-old son and I wish to spend more time with my family," Arik Kilman told TheMarker.com during an interview.
Do Level 8's poor results have any bearing on your decision?
"No. There is absolutely no connection. I have wanted to resign for some time. The fact that the announcement came on the same day as the results is purely coincidental. Since the fourth quarter, I have reduced my activities in the company. I will retain shares in Liraz, but will adopt a low profile. I will have no further involvement in Level 8, not even as a consultant."
What do you think of Level 8's results for the first quarter?
"They're not great. But the company is moving in new directions, which is a good thing. I believe that Level 8 has a great future. Let's remember that most of the losses derive from one-time write-offs, rather than from operational costs. There was a marked decrease in cash flow due mainly to the downfall of Winstar Communications, which left its suppliers with a doubtful debt of $3.8 million. Payment of this debt would have given us a fairly neutral cash flow."
Do you intend selling off your Liraz shares?
"I strongly believe in my Liraz shares (current share value of NIS 18 million S.G.) at this stage, and I stress at this stage. I regard Liraz as a platform that has the potential to develop in interesting directions. I am not ruling out the possibility that at some stage and under certain circumstances, I will play a more active role in the company."
What are your plans for the near future?
"I am going on leave for several weeks. I have worked very hard during the past few years. Besides which, I have investments in several startup companies, mainly abroad. Although I am not a major shareholder in these companies, I have enough of a share to be of influence."
Kilman established Liraz with a partner in 1984. The company went public on the Tel Aviv Stock Exchange in Tel Aviv in 1991, and two years later Kilman's artner left. In 1995, Discount Investments acquired 42% of the firm's shares through a private placement.
Liraz currently operates several software houses supplying information technology related services. In November, Liraz sold its information systems integration activities and its outsourcing services to the American software giant
(NYSE, LSE:EDS) for around $20 million. The result was a profit of NIS 61 million for Liraz.