EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm
 
EXHIBIT 99.1
 
Interactive Intelligence First Quarter Operating Results Include Record Revenues
Revenues increase 21 percent over same period last year
 
INDIANAPOLIS, April 28, 2008 – Interactive Intelligence (Nasdaq: ININ), a global provider of unified IP business communications solutions, reported first quarter operating results for the period ended March 31, 2008, which included record revenues.
 
For the first quarter, revenues were a record $29.5 million, up 21 percent over revenues of $24.3 million in the same quarter last year.
 
“Driven by the need to reduce costs and retain customers during these uncertain economic times, companies are increasingly adopting our all-in-one contact center and enterprise IP telephony products and services,” said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. “This demand was reflected in our first quarter record revenues and a 39 percent increase in orders compared to the same period last year. We also continued to close large transactions during the quarter, with 15 contracts exceeding $250,000, and a record nine of those representing new customers. With several upcoming products squarely focused on helping organizations further reduce costs and improve customer service, we feel very positive headed into the second quarter.”
 
Operating income for the first quarter of 2008 was $1.5 million, compared to $1.4 million in 2007. Operating income included non-cash, stock-based compensation expense of $932,000 in 2008, and $668,000 in 2007.
 
Net income was $1.1 million for the first quarter of 2008, with diluted earnings per share (EPS) of $0.06. The first quarter of 2008 was the first quarter in which the company recognized full taxes on earnings, although most of the tax expense was non-cash. Net income was $1.8 million in the first quarter of 2007, with EPS of $0.09.
 
For the first quarter of 2008, non-GAAP (generally accepted accounting principles) operating income was $2.4 million, compared to $2.1 million in the first quarter of 2007. Non-GAAP net income in 2008 was $2.9 million, or EPS of $0.15, compared to 2007 non-GAAP net income of $2.4 million, or EPS of $0.13. The non-GAAP differences were due to exclusion of the non-cash income tax expense in the first quarter of 2008, and stock-based compensation expense recorded in both years.
 
Cash and short-term investments as of March 31, 2008 totaled $49.4 million, up from $46.3 million on Dec. 31, 2007. Cash flow from operations for the first quarter of 2008 was $5.3 million, compared to $4.9 million in the same quarter last year.
 
Other Interactive Intelligence achievements in the first quarter included a Best Large Enterprise Solution award and Product of the Year award, both from INTERNET TELEPHONY magazine.
 
The company also received ISO 9001:2000 re-certification, marking its third consecutive year of compliance. Being certified to ISO 9001:2000 gives further assurance to Interactive Intelligence customers and partners that it is able to satisfy their most stringent requirements for quality, reliability, efficiency and cost-effectiveness.
 
As part of its ongoing growth strategy, Interactive Intelligence hired Bill Gildea as vice president of business development to help evaluate acquisition and strategic partnering opportunities. As a complement to its existing east and west regional headquarter offices, the company also opened a regional software development office in Denver to access a larger pool of job candidates.
 
Interactive Intelligence will host a conference call April 28 at 4:30 p.m. Eastern time (EDT) featuring the company’s founder, president and CEO, Dr. Donald E. Brown, and its CFO, Stephen R. Head. There will be a live Q&A session following opening remarks.
 
To access the teleconference please dial 1 877.627.6566 at least five minutes prior to the start of the call. Ask for the teleconference by the following name: "Interactive Intelligence first 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.
 
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. 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 historical periods because certain historical periods excluded stock-based compensation expense for stock options (prior to 2007) and income tax expense and benefits have varied significantly and are primarily non-cash. Interactive Intelligence’s management uses these non-GAAP results to compare its performance to its peers in the software 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.
 
 
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 enterprise messaging. The company was founded in 1994 and has more than 3,000 customers worldwide. Interactive Intelligence is among the top 500 global software and services suppliers, and is ranked among the top 200 North American networking vendors. The company employs approximately 600 people and is headquartered in Indianapolis, Indiana. It has six global corporate offices, with additional sales offices throughout North America, Europe, Middle East, Africa and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or info@inin.com; on the Net: http://www.inin.com.
 
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 and increasingly complex third-party relationships; 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; 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.
 
Contacts:
Stephen R. Head
Chief Financial Officer
Interactive Intelligence Inc.
+1 317.715.8412
steve.head@inin.com
 
Christine Holley
Director of Market Communications
Interactive Intelligence Inc.
+1 317.715.8220
christine.holley@inin.com
 
###
 
 
 
 
 
 
Interactive Intelligence, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Unaudited
           
   
Three Months Ended
  
   
March 31,
  
   
2008
  
2007
  
       
(Note 1)
  
Revenues:
          
Product
   $ 14,845   $ 12,356  
Services
     14,638     11,932  
Total revenues
     29,483     24,288  
Cost of revenues:
              
Product
     3,130     2,441  
Services
     5,897     4,797  
Total cost of revenues
     9,027     7,238  
Gross profit
     20,456     17,050  
Operating expenses:
              
Sales and marketing
     10,178     8,654  
Research and development
     4,965     3,897  
General and administrative
     3,827     3,065  
Total operating expenses
     18,970     15,616  
Operating income
     1,486     1,434  
Other income:
              
Interest income, net
     459     472  
Other income (expense), net
     97     (56 )
Total other income
     556     416  
Income before income taxes
     2,042     1,850  
Income tax expense
     (925 )   (97 )
Net income
   $ 1,117   $ 1,753  
               
Net income per share:
              
Basic
   $ 0.06   $ 0.10  
Diluted
     0.06     0.09  
               
Shares used to compute net income per share:
              
Basic
     17,940     17,247  
Diluted
     19,216     19,236  
               
Note 1: The 2007 amounts for the first quarter have been changed to reflect adjustments to product revenues and related commission expense. These adjustments were deemed immaterial to the prior period.
    
 
  
 
 
 
 
 
Interactive Intelligence, Inc.
Reconciliation of Supplemental Financial Information
(in thousands, except per share amounts)
Unaudited
         
   
Three Months Ended
   
March 31,
   
2008
  
2007
         
Net income, as reported
   $ 1,117   $ 1,753
Non-cash stock-based compensation expense:
            
Cost of services
     72     46
Sales and marketing
     362     300
Research and development
     208     100
General and administrative
     290     222
Total
     932     668
Non-cash income tax expense
     821     --
Non-GAAP net income
   $ 2,870   $ 2,421
             
Operating income, as reported
   $ 1,486   $ 1,434
Non-cash stock-based compensation expense
     932     668
Non-GAAP operating income
   $ 2,418   $ 2,102
             
Diluted EPS, as reported
   $ 0.06   $ 0.09
Non-cash stock-based compensation expense
     0.05     0.04
Non-cash income tax expense
     0.04     --
Non-GAAP diluted EPS
   $ 0.15   $ 0.13
 
 
 
 
 
Interactive Intelligence, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
         
 
March 31,
  
December 31,
  
 
2008
  
2007
  
 
(unaudited)
  
(Note 1)
  
Assets
        
Current assets:
        
Cash and cash equivalents
 $ 36,972   $ 29,270  
Short-term investments
   12,465     17,057  
Accounts receivable, net
   27,373     27,527  
Deferred tax assets, net
   5,833     5,833  
Prepaid expenses
   6,815     6,083  
Other current assets
   1,255     1,414  
Total current assets
   90,713     87,184  
Property and equipment, net
   9,197     6,932  
Deferred tax assets, net
   6,699     7,520  
Other assets, net
   1,820     1,802  
Total assets
 $ 108,429   $ 103,438  
             
Liabilities and Shareholders' Equity
            
Current liabilities:
            
Accounts payable and accrued liabilities
 $ 11,942   $ 9,594  
Accrued compensation and related expenses
   3,325     4,381  
Deferred product revenues
   6,959     6,843  
Deferred services revenues
   35,191     34,001  
Total current liabilities
   57,417     54,819  
             
Commitments and contingencies
   --     --  
             
Shareholders' equity:
            
Preferred stock
   --     --  
Common stock
   180     179  
Additional paid-in-capital
   80,680     79,405  
Accumulated deficit
   (29,848 )   (30,965 )
Total shareholders' equity
   51,012     48,619  
Total liabilities and shareholders' equity
 $ 108,429   $ 103,438  
             
Note 1: December 31, 2007 amounts are derived from the audited Consolidated Balance Sheet included in the 2007 Annual Report on Form 10-K of Interactive Intelligence, Inc.
  
 
  
 
 
 
 
 
Interactive Intelligence, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Unaudited
           
   
Three Months Ended
  
   
March 31,
  
   
2008
  
2007
  
           
Operating activities:
          
Net income
   $ 1,117   $ 1,753  
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation
     795     573  
Accretion of investment income
     (4 )   (153 )
Stock-based compensation expense
     932     668  
Deferred income tax
     821     --  
Changes in operating assets and liabilities:
              
Accounts receivable
     154     2,792  
Prepaid expenses
     (732 )   (277 )
Other current assets
     159     (518 )
Other assets
     (18 )   11  
Accounts payable and accrued liabilities
     1,871     102  
Accrued compensation and related expenses
     (1,056 )   (933 )
Deferred product revenues
     116     (345 )
Deferred services revenues
     1,190     1,185  
Net cash provided by operating activities
     5,345     4,858  
               
Investing activities:
              
Sales of available-for-sale investments
     11,200     8,165  
Purchases of available-for-sale investments
     (6,604 )   (3,454 )
Purchases of property and equipment
     (2,583 )   (1,308 )
Net cash provided by investing activities
     2,013     3,403  
               
Financing activities:
              
Proceeds from stock options exercised
     282     674  
Proceeds from issuance of common stock
     62     50  
Net cash provided by financing activities
     344     724  
               
Net increase in cash and cash equivalents
     7,702     8,985  
Cash and cash equivalents, beginning of period
     29,270     13,531  
Cash and cash equivalents, end of period
   $ 36,972   $ 22,516  
               
Cash paid for taxes
   $ 128   $ 27