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Interactive Intelligence Reports 2009 Third Quarter ResultsINDIANAPOLIS --(Business Wire)-- Interactive Intelligence (News - Alert) (Nasdaq: ININ), a global provider of unified IP business communications solutions, today announced operating results for the three and nine months ended Sept. 30, 2009. The company reported record revenues of $33.2 million for the third quarter of 2009, an increase of 10.4 percent over revenues of $30.1 million for the third quarter of 2008. Third quarter 2009 results included: Operating income on a generally accepted accounting principles (GAAP) basis of $4.3 million, up from $1.6 million in the third quarter of 2008 Non-GAAP operating income of $5.3 million, compared to $2.0 million in the same quarter last year Gross margins of 71.4 percent, compared to 67.5 percent in the third quarter of 2008 GAAP net income of $2.8 million, or diluted earnings per share (EPS) of $0.15, up from $924,000, or EPS of $0.05, in the third quarter of 2008 Non-GAAP net income of $5.7 million, or EPS of $0.31, compared to $2.0 million, or EPS of $0.11, for the same quarter last year Cash and investment balances at quarter-end of $60.0 million, up from $54.0 million at June 30, 2009 Non-GAAP net income and EPS exclude charges for stock-based compensation of $975,000, or EPS of $0.05, and non-cash income tax expense of $1.9 million, or EPS of $0.10, for the third quarter of 2009, and charges for stock-based compensation expense of $439,000, or EPS of $0.02, and non-cash income tax expense of $635,000, or EPS of $0.03, for the third quarter of 2008. "Our positive results for the quarter came from growth in product and services revenue compared to last year, combined with continued expense management," said Interactive Intelligence founder, chairman and CEO, Dr. Donald E. Brown. "During the quarter, we continued to compete well at the mid and upper ends of the market, having received two orders exceeding $1 million and an additional eight orders greater than $250,000. "Another bright spot in the quarter was the strong growth in our communications-as a-service offering, where we contracted for what is expected to be at least $3.6 million in future revenues over the term of the contracts. While the new orders did not result in revenue in the third quarter, they demonstrate the viability and competitiveness of our CaaS offering and the increased consideration this deployment model is receiving in the marketplace." Nine month 2009 results included: Total revenues of $95.5 million, a 6.0 percent increase over revenues of $90.1 million for the first nine months of 2008 GAAP operating income of $9.7 million, up from $4.2 million in the first nine months of 2008 Non-GAAP operating income of $12.2 million, compared to $6.5 million in the first nine months of 2008 Gross margins of 69.6 percent, compared to 68.1 percent for the first nine months of 2008 GAAP net income of $6.1 million, or EPS of $0.34, compared to $2.9 million, or EPS of $0.15, for the first nine months of 2008 Non-GAAP net income of $12.9 million, or EPS of $0.71, compared to $7.3 million, or EPS of $0.38, for the same period last year Non-GAAP net income and EPS exclude charges for stock-based compensation of $2.5 million, or EPS of $0.14, and non-cash income tax expense of $4.3 million, or EPS of $0.23, for the first nine months of 2009, and charges for stock-based compensation expense of $2.3 million, or EPS of $0.12, and non-cash income tax expense of $2.1 million, or EPS of $0.11, for the first nine months of 2008. Third quarter 2009 operating results also included: A drop in interest income to $50,000, compared to $329,000 in the third quarter of 2008 due to lower yields on investments Other income, principally related to foreign exchange gains, of $480,000, compared to a loss of $277,000 in the third quarter of 2008 Cash flows from operations of $3.7 million, compared to $4.6 million in the third quarter of 2008 Non-financial third quarter 2009 highlights included: Ranked by Fortune Small Business magazine among "America's 100 Fastest Growing Small Public Companies" Ranked by Software Magazine among the world's "Top 500 Software and Service Providers" Honored by TMC (News - Alert) Labs with "Unified Communications Innovation Award" for the company's new communications-based process automation product Honored by Frost & Sullivan with "Innovation Award" for the company's new communications-based process automation product Announced reseller agreement with national partner, Spanlink (News - Alert) Named former JBA International CEO, Richard G. Halperin, to board of directors Released Interaction Conference™ 3.0, offering additional audio conferencing features Interactive Intelligence will host a conference call Oct. 26 at 4:30 p.m. Eastern time (EDT), featuring Dr. Brown and the company's CFO, Stephen R. Head. A live Q&A session will follow opening remarks. To access the teleconference, please dial 1.888.516.2377 at least five minutes prior to the start of the call. Ask for the teleconference by the following name: "Interactive Intelligence third quarter earnings call." The teleconference will also be broadcast live on the company's investor relations' page at http://investors.inin.com. An archive of the teleconference will be posted following the call. About Interactive Intelligence Interactive Intelligence Inc. (Nasdaq: ININ) is a global provider of unified business communications solutions for contact center automation, enterprise IP telephony, and business process automation. The company was founded in 1994 and has approximately 3,000 customers worldwide. Interactive Intelligence is among Software Magazine's top 500 global software and services suppliers, is ranked among Network World's (News - Alert) top 200 North American networking vendors, is a BusinessWeek "hot growth 50" company, and is among Fortune Small Business magazine's top 100 fastest growing companies. The company is also positioned in the leaders' quadrant of the Gartner (News - Alert) 2008 Contact Center Infrastructure, Worldwide Magic Quadrant report. Interactive Intelligence employs more than 600 people and is headquartered in Indianapolis, Indiana. It has six global corporate offices with additional sales offices throughout North America, Latin America, Europe, Middle East, Africa and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or [email protected]; on the Net: www.inin.com. * Non-GAAP Measures The non-GAAP measures shown in this release exclude non-cash stock-based compensation expense for stock options and non-cash income tax expense. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included after the financial information included in this press release. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. Stock-based compensation expense is non-cash and income tax expense is primarily non-cash. Management believes that the presentation of non-GAAP results, when shown in conjunction with corresponding GAAP measures, provides useful information to management and investors regarding financial and business trends related to the company's results of operations. Further, management believes that these non-GAAP measures improve management's and investors' ability to compare the company's financial performance with other companies in the technology industry. Because stock-based compensation expense and non-cash income tax expense amounts can vary significantly between companies, it is useful to compare results excluding these amounts. Management also uses financial statements that exclude stock-based compensation expense related to stock options and non-cash income tax amounts for its internal budgets. This release contains certain forward-looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: rapid technological changes in the industry; the company's ability to maintain profitability; to manage successfully its growth; to manage successfully its increasingly complex third-party relationships resulting from the software and hardware components being licensed or sold with its solutions; to maintain successful relationships with certain suppliers which may be impacted by the competition in the technology industry; to maintain successful relationships with its current and any new partners; to maintain and improve its current products; to develop new products; to protect its proprietary rights adequately; to successfully integrate acquired businesses; and other factors described in the company's SEC filings, including the company's latest annual report on Form 10-K. Interactive Intelligence Inc. is the owner of the marks INTERACTIVE INTELLIGENCE, its associated LOGO and numerous other marks. All other trademarks mentioned in this document are the property of their respective owners. Interactive Intelligence, Inc. Condensed Consolidated Statements of Income (in thousands, except per share amounts) Unaudited Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Revenues: Product $ 15,557 $ 14,687 $ 45,100 $ 44,853 Services 17,613 15,369 50,441 45,296 Total revenues 33,170 30,056 95,541 90,149 Costs of revenues: Product 3,950 3,702 12,320 10,741 Services 5,549 6,059 16,758 18,044 Total cost of revenues 9,499 9,761 29,078 28,785 Gross profit 23,671 20,295 66,463 61,364 Operating expenses: Sales and marketing 9,696 9,547 28,877 29,870 Research and development 6,135 5,801 17,747 16,102 General and administrative 3,562 3,376 10,166 11,162 Total operating expenses 19,393 18,724 56,790 57,134 Operating income 4,278 1,571 9,673 4,230 Other income (expense): Interest income 50 329 232 1,132 Other income (expense) 480 (277 ) 706 (152 ) Total other income 530 52 938 980 Income before income taxes 4,808 1,623 10,611 5,210 Income tax expense 2,005 699 4,488 2,324 Net income $ 2,803 $ 924 $ 6,123 $ 2,886 Net income per share: Basic $ 0.16 $ 0.05 $ 0.36 $ 0.16 Diluted 0.15 0.05 0.34 0.15 Shares used to compute net income per share: Basic 17,148 17,976 17,038 17,969 Diluted 18,486 18,855 18,125 19,059 Interactive Intelligence, Inc. Reconciliation of Supplemental Financial Information (in thousands, except per share amounts) Unaudited Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Net income, as reported $ 2,803 $ 924 $ 6,123 $ 2,886 Non-cash stock-based compensation expense: Cost of services 71 13 186 154 Sales and marketing 352 132 890 876 Research and development 254 205 726 637 General and administrative 298 89 745 648 Total 975 439 2,547 2,315 Non-cash income tax expense 1,913 635 4,257 2,112 Non-GAAP net income $ 5,691 $ 1,998 $ 12,927 $ 7,313 Operating income, as reported $ 4,278 $ 1,571 $ 9,673 $ 4,230 Non-cash stock-based compensation expense 975 439 2,547 2,315 Non-GAAP operating income $ 5,253 $ 2,010 $ 12,220 $ 6,545 Diluted EPS, as reported $ 0.15 $ 0.05 $ 0.34 $ 0.15 Non-cash stock-based compensation expense 0.05 0.02 0.14 0.12 Non-cash income tax expense 0.11 0.04 0.23 0.11 Non-GAAP diluted EPS $ 0.31 $ 0.11 $ 0.71 $ 0.38 Interactive Intelligence, Inc. Condensed Consolidated Balance Sheets (in thousands) September 30, December 31, 2009 2008 (unaudited) Assets Current assets: Cash and cash equivalents $ 50,584 $ 34,705 Short-term investments 9,427 10,805 Accounts receivable, net 24,723 27,533 Deferred tax assets, net 4,719 6,017 Prepaid expenses 4,528 5,507 Other current assets 3,924 1,995 Total current assets 97,905 86,562 Property and equipment, net 8,907 10,762 Deferred tax assets, net 5,550 5,136 Other assets, net 4,864 2,723 Total assets $ 117,226 $ 105,183 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 10,507 $ 11,361 Accrued compensation and related expenses 4,529 3,486 Deferred product revenues 3,297 4,754 Deferred services revenues 31,585 31,457 Total current liabilities 49,918 51,058 Deferred revenue 6,576 6,878 Total liabilities 56,494 57,936 Shareholders' equity: Preferred stock - - Common stock 172 169 Treasury stock (6,736 ) (9,714 ) Additional paid-in-capital 88,965 83,604 Accumulated deficit (21,669 ) (26,812 ) Total shareholders' equity 60,732 47,247 Total liabilities and shareholders' equity $ 117,226 $ 105,183 Interactive Intelligence, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Unaudited Nine Months Ended September 30, 2009 2008 Operating activities: Net income $ 6,123 $ 2,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,139 2,621 Stock-based compensation expense 2,547 2,315 Tax benefits from stock-based payment arrangements (2,814 ) (177 ) Deferred income tax 884 1,785 Accretion of investment income (172 ) (104 ) Changes in operating assets and liabilities: Accounts receivable 2,872 2,296 Prepaid expenses 1,009 204 Other current assets (1,928 ) (1,099 ) Other assets 281 (397 ) Accounts payable and accrued liabilities 1,969 2,845 Accrued compensation and related expenses 1,043 (792 ) Deferred product revenues (1,349 ) (1,505 ) Deferred services revenues (566 ) 527 Net cash provided by operating activities 13,038 11,405 Investing activities: Sales of available-for-sale investments 13,100 20,050 Purchases of available-for-sale investments (11,550 ) (17,890 ) Purchases of property and equipment (1,275 ) (6,186 ) Acquisition of intangible and other assets, net of cash and cash equivalents acquired (2,249 ) - Net cash used in investing activities (1,974 ) (4,026 ) Financing activities: Proceeds from stock options exercised 1,812 717 Proceeds from issuance of common stock 189 205 Repurchase of treasury stock - (3,361 ) Tax benefits from stock-based payment arrangements 2,814 177 Net cash provided by (used in) financing activities 4,815 (2,262 ) Net increase in cash and cash equivalents 15,879 5,117 Cash and cash equivalents, beginning of period 34,705 29,359 Cash and cash equivalents, end of period $ 50,584 $ 34,476 Cash paid during the period for: Income taxes $ 533 $ 195 Other non-cash item: Purchases of property and equipment payable at end of period $ 42 $ 594 ININ-G |
