Interactive Intelligence, Inc. provides software applications for contact centers and voice over Internet protocol (VoIP) applications to enterprises. Its products include Customer Interaction Center that provides contact centers and enterprises a single platform and a pre-integrated all-in-one application solution for IP telephony; Vonexus Enterprise Interaction Center, an IP PBX phone and communications system for SIP-supported VoIP in the mid-sized enterprises; Interaction Dialer that provides call scripting, multi-site campaign management, intelligent campaign staging, and compliance options; and Interaction EasyScripter, which integrates to Interaction Dialer for easy Web-based scripting. The company's products also comprise Interaction Optimizer that supports workforce management forecasting, scheduling, and real-time adherence for contact centers; Interaction Director that could migrate to various PBX/ACD platforms to route calls; Interaction Supervisor that provides a single real-time interface for monitoring agent, user, and workgroup activities; and Interaction Tracker, an interaction segment/contact history management utility, which tracks multimedia interactions and allows authorized users to resolve new contacts and search for and view historical interaction-based information. In addition, it offers Interaction Recorder that offers quality assessment control; Communite that provides enterprise messaging voice mail and voice mail replacement, and SIP-supported VoIP; e-FAQ, which uses linguistic analysis to clarify incoming questions, search for matches, and instantly reply when an appropriate match is found; Interaction Mobile Office for the mobile workforce; Interaction Gateway that configure Interaction Dialer 2.4; SIP Interaction Media Server; and Interaction SIP Proxy for organizations employing the SIP communications for VoIP. The company was founded in 1994 and is headquartered in Indianapolis, Indiana.
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Interactive Intelligence Reports Record Third Quarter Revenues
Monday October 29, 4:00 pm ET
29 Percent Increase in Revenues Drives Profitability
INDIANAPOLIS--(BUSINESS WIRE)--Interactive Intelligence Inc. (Nasdaq:ININ - News), a global developer of business communications solutions, reported record results for the quarter and nine-month period ended Sept. 30, 2007.
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For the third quarter, revenues in 2007 were a record $28.7 million, up 29 percent over revenues of $22.2 million in 2006. Operating income for the third quarter increased 23 percent to $2.1 million in 2007 from $1.7 million in 2006, which included stock-based compensation expense of $812,000 in 2007 and $451,000 in 2006. Diluted earnings per share (EPS) for the third quarter were $0.13 in 2007. EPS in the same quarter last year were $0.36, including a non-cash income tax benefit of $5.0 million, or $0.26 per share, recorded to reduce the valuation allowance for deferred tax assets.
For the third quarter, non-GAAP (generally accepted accounting principles) net income was $3.3 million in 2007, or EPS of $0.17, compared to non-GAAP net income of $2.2 million in 2006, or EPS of $0.12. The non-GAAP differences were due to exclusion of the non-cash income tax benefit recorded in the third quarter of 2006 and stock-based compensation expense recorded in both years.
"We are seeing growth in all major geographies," said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. "During the quarter we experienced strength in large contact center sales, as well as a rise in the licensing of our foundational voice over IP products, such as our gateways and media servers. These higher revenues are driving steady increases in profitability while we continue to invest in the development of new technology."
For the nine months ended Sept. 30, revenues in 2007 were a record $79.9 million, up 35 percent over revenues of $59.4 million in 2006. Operating income for the nine months ended Sept. 30 increased 48 percent to $5.4 million in 2007 from $3.7 million in 2006, which included stock-based compensation expense of $2.3 million in 2007 and $1.6 million in 2006. EPS for the nine months ended Sept. 30 were $0.33 in 2007. EPS for the same period in 2006 were $0.48, including the non-cash income tax benefit of $5.0 million.
Cash and short-term investments as of Sept. 30, 2007 totaled $34.4 million, up from $27.1 million on Dec. 31, 2006. Cash flow from operations for the first nine months of 2007 was $9.8 million, compared to $6.6 million for the first nine months of 2006.
As further testament to its success in the contact center market, industry analyst firm, Gartner, positioned Interactive Intelligence in the leaders' quadrant of its recently published Contact Center Infrastructure report.
An additional benchmark of the company's continued growth was a jump this year of 21 spots to rank 209th among Software Magazine's 500 largest global software and services suppliers.
Interactive Intelligence was also added earlier this year to the Russell 2000® Index, a listing of U.S. stocks from industry-leading small-cap companies.
Interactive Intelligence will host a conference call today, Oct. 29, at 4:30 p.m. EDT, featuring Dr. Brown and the company's CFO, Stephen R. Head. There will be a live Q&A session following opening remarks.
To access the teleconference, please dial 1 866.316.1372 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 Interactive Intelligence's investor relations' page at http://www.inin.com/investors. 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 a non-cash income tax benefit. 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, generally accepted accounting principles 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 did not include stock-based compensation expense for stock options or the non-cash income tax benefit related to the reduction in the valuation allowance for the deferred tax assets. Interactive Intelligence's management uses these non-GAAP results to compare its performance to its competitors in the software industry. Because the stock-based compensation expense and non-cash tax benefit can vary significantly between companies, it is useful to compare results without these amounts. Management also uses financial statements that do not include stock-based compensation expense related for stock options or non-cash income tax benefits for its internal budgets.
About Interactive Intelligence
Interactive Intelligence Inc. (Nasdaq: ININ - News) is a global provider of business communications solutions for contact center automation, enterprise IP telephony, and enterprise messaging. The company was founded in 1994 and has more than 2,500 customers worldwide. Recent awards include Software Magazine's 2007 Top 500 Global Software and Services Companies, the 2006 Network World 200, CRM Magazine's 2006 Rising Star Excellence Award, and Network Computing Magazine's 2006 Well-Connected Award. Interactive Intelligence employs more than 550 people and is headquartered in Indianapolis, Indiana. The company has six global corporate offices, with additional sales offices throughout North America, Europe and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or
[email protected]; 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.
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,
2007 2006 2007 2006
Revenues:
Product $ 15,032 $ 12,143 $ 41,740 $ 30,590
Services 13,676 10,030 38,141 28,766
Total revenues 28,708 22,173 79,881 59,356
Cost of revenues:
Product 4,232 2,707 10,173 6,073
Services 5,533 3,828 15,475 10,121
Total cost of revenues 9,765 6,535 25,648 16,194
Gross profit 18,943 15,638 54,233 43,162
Operating expenses:
Sales and marketing 9,231 7,711 26,680 21,459
Research and development 4,348 3,519 12,472 9,933
General and administrative 3,310 2,739 9,660 8,106
Total operating expenses 16,889 13,969 48,812 39,498
Operating income 2,054 1,669 5,421 3,664
Other income (expense):
Interest income, net 412 162 1,268 382
Other income (expense), net 29 (25 ) (69 ) (89 )
Total other income (expense) 441 137 1,199 293
Income before income taxes 2,495 1,806 6,620 3,957
Income tax benefit (expense) 37 4,912 (163 ) 4,735
Net income $ 2,532 $ 6,718 $ 6,457 $ 8,692
Net income per share:
Basic $ 0.15 $ 0.40 $ 0.37 $ 0.53
Diluted $ 0.13 $ 0.36 $ 0.33 $ 0.48
Shares used to compute net income per share:
Basic 17,461 16,626 17,388 16,438
Diluted 19,407 18,545 19,336 18,010
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,
2007 2006 2007 2006
Net income, as reported $ 2,532 $ 6,718 $ 6,457 $ 8,692
Non-cash stock-based compensation expense:
Cost of services 70 38 184 116
Sales and marketing 313 219 943 768
Research and development 153 69 411 179
General and administrative 276 125 748 545
Total 812 451 2,286 1,608
Non-cash income tax benefit - (5,000 ) - (5,000 )
Non-GAAP net income $ 3,344 $ 2,169 $ 8,743 $ 5,300
Operating income, as reported $ 2,054 $ 1,669 $ 5,421 $ 3,664
Non-cash stock-based compensation expense 812 451 2,286 1,608
Non-GAAP operating income $ 2,866 $ 2,120 $ 7,707 $ 5,272
Diluted EPS, as reported $ 0.13 $ 0.36 $ 0.33 $ 0.48
Non-cash stock-based compensation expense 0.04 0.02 0.12 0.09
Non-cash income tax benefit - (0.26 ) - (0.28 )
Non-GAAP diluted EPS $ 0.17 $ 0.12 $ 0.45 $ 0.29
Interactive Intelligence, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2007 2006
(unaudited) (Note 1)
Assets
Current assets:
Cash and cash equivalents $ 23,430 $ 13,531
Short-term investments 10,949 13,555
Accounts receivable, net 29,561 21,370
Deferred tax assets, net 1,314 1,314
Prepaid expenses 6,057 5,358
Other current assets 1,602 1,818
Total current assets 72,913 56,946
Property and equipment, net 7,165 5,469
Deferred tax assets, net 3,686 3,686
Other assets, net 1,769 674
Total assets $ 85,533 $ 66,775
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 9,077 $ 7,885
Accrued compensation and related expenses 4,487 3,825
Deferred product revenues 6,818 5,910
Deferred services revenues 30,352 24,877
Total current liabilities 50,734 42,497
Commitments and contingencies - -
Shareholders' equity:
Preferred stock - -
Common stock 175 171
Additional paid-in-capital 76,588 72,528
Accumulated deficit (41,964 ) (48,421 )
Total shareholders' equity 34,799 24,278
Total liabilities and shareholders' equity $ 85,533 $ 66,775
Note 1: December 31, 2006 amounts derived from the audited Consolidated Balance Sheet included in the 2006 Annual Report on Form 10-K of Interactive Intelligence, Inc.
Interactive Intelligence, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Unaudited
Nine Months Ended
September 30,
2007 2006
Operating activities:
Net income $ 6,457 $ 8,692
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 1,941 1,327
Accretion of investment income (317 ) (51 )
Stock-based compensation expense 2,286 1,617
Deferred income tax - (5,000 )
Loss on disposal of fixed assets - 4
Changes in operating assets and liabilities:
Accounts receivable (8,191 ) (4,048 )
Prepaid expenses (699 ) (1,733 )
Other current assets 216 (71 )
Other assets (49 ) (80 )
Accounts payable and accrued liabilities 1,192 974
Accrued compensation and related expenses 662 372
Deferred product revenues 908 301
Deferred services revenues 5,426 4,328
Net cash provided by operating activities 9,832 6,632
Investing activities:
Purchases of available-for-sale investments (15,192 ) (10,895 )
Sale of available-for-sale investments 18,115 5,189
Purchases of property and equipment (3,601 ) (1,866 )
Acquisition of intangible and other assets (1,033 ) -
Net cash used in investing activities (1,711 ) (7,572 )
Financing activities:
Proceeds from stock options exercised 1,628 2,258
Proceeds from issuance of common stock 150 138
Net cash provided by financing activities 1,778 2,396
Net increase in cash and cash equivalents 9,899 1,456
Cash and cash equivalents, beginning of period 13,531 11,551
Cash and cash equivalents, end of period $ 23,430 $ 13,007
Cash paid for interest $ - $ 46
Cash paid for taxes 147 314
Contact:
Interactive Intelligence Inc.
Stephen R. Head, +1 317-715-8412
Chief Financial Officer
[email protected]or
Interactive Intelligence Inc.
Christine Holley, +1 317-715-8220
Director, Market Communications
[email protected]--------------------------------------------------------------------------------
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