IFUL Insightful Corp (MM)

Insightful Corporation (NASDAQ:IFUL), a leading provider of software solutions for analysis of numeric and text data, today announced financial results for the second quarter of 2005. Insightful reported revenues of $5.1 million for the second quarter of 2005, an increase of 14% over second quarter 2004 revenues of $4.5 million. Insightful reported net income of $0.3 million, or $0.03 per share, for the second quarter of 2005, as compared to net income of $0.3 million, or $0.02 per share, in the second quarter of 2004. "We are pleased to see year-over-year revenue growth and continued profitability," said Jeff Coombs, president and CEO of Insightful. "Compared to the second quarter of 2004, we achieved revenue growth across our two product segments -- Data Analysis and Text Analysis -- and in all of the major geographies in which we operate -- the United States, Europe, and Asia." "And while remaining profitable, we continued to invest in the S-PLUS platform, strengthening its position as a de facto standard for statistical modeling and visualization, and further enabling the integration of statistics within the business processes of our diverse customer base," continued Coombs. During the quarter the company launched S-PLUS(R) 7, the first major release of its flagship product since its purchase of the S programming language from Lucent in 2004. "The release of the S-PLUS 7 platform, along with several vertical modules built on that platform, clearly demonstrates our dedication to making the S-PLUS product line the industry leader across the data analysis lifecycle, from prototyping to enterprise deployment of analytic applications," Coombs said. "S-PLUS 7 delivers the power of statistics across the enterprise, scaling to large amounts of data and to large numbers of users," continued Coombs. "It's designed to enable statisticians and developers to create targeted statistical applications that can be easily deployed to business users, researchers, and analysts who need to access the insight enabled by predictive analytics, but lack special expertise in statistical methods." -0- *T Quarterly Highlights -- Second quarter 2005 software license revenues were $2.1 million, as compared to $1.9 million in the second quarter of 2004. -- Second quarter 2005 maintenance revenues were $1.7 million, as compared to $1.6 million in the second quarter of 2004. -- Second quarter 2005 professional services and other revenue was $1.3 million, as compared to $1.0 million in the second quarter of 2004. -- Funded research, which is an offset to research and development expense in the company's income statement, was $0.7 million in the second quarter of 2005, as compared to $0.8 million in the second quarter of 2004. *T The Company has two product segments, Data Analysis and Text Analysis. Following are highlights for the quarter in each segment. -0- *T Data Analysis -- Total Data Analysis revenues, including software licenses, maintenance, and professional services and other, were $4.8 million in the second quarter of 2005, as compared to $4.3 million in the second quarter of 2004. -- Second quarter 2005 Data Analysis software license revenues were $1.9 million, as compared to $1.7 million in the second quarter of 2004. -- Second quarter 2005 Data Analysis professional services and other revenues were $1.2 million, as compared to $1.0 million in the second quarter of 2004. -- Total domestic Data Analysis revenues $2.84 million in the second quarter of 2005, as compared to $2.77 million in the second quarter of 2004. -- Total international Data Analysis revenues were $2.0 million in the second quarter of 2005, as compared to $1.6 million in the second quarter of 2004. -- During the quarter, Insightful launched S-PLUS 7, which is designed to enable analysis of large data sets and development of enterprise applications for delivery of statistics across the enterprise. -- The company also launched several vertical modules and solutions for targeted industries: -- S+Finmetrics(TM) 2.0, and S+NuOpt 1.6, flexible econometric software applications for financial services firms, providing for analysis, simulation, forecasting and portfolio optimization designed to improve the accuracy of complex, dynamic trading systems -- S+ArrayAnalyzer(R) 2.1, rigorous statistical analysis software that now scales to large array experiments improving drug discovery accuracy for the growing DNA microarray market -- S-PLUS Clinical Pack, a new clinical data analysis and reporting solution for SAS(R) software users that provides rich graphics and modern analytics in validated enterprise environments in the life sciences industry. Text Analysis -- Total Text Analysis revenues were $0.3 million in the second quarter of 2005, as compared to $0.1 million in the second quarter of 2004. -- During the quarter, the company entered into new term license agreements with a U.S. government defense agency as well as with a large pharmaceutical company. Revenues under these arrangements will be recognized in the future over the term of the licenses. *T Outlook For the third quarter of 2005, the company expects higher revenues when compared to the third quarter of 2004. The company expects costs in the third quarter of 2005 to be higher than in the second quarter of 2005, as it continues to set the foundation for future growth by investing in development and marketing for its core product lines, making investments in its IT infrastructure, and preparing to be compliant with the Sarbanes Oxley Act of 2002. Because of the range of possible revenue outcomes, the Company cannot predict at this time whether it will be profitable in the third quarter of 2005. About Insightful Corporation Insightful Corporation (NASDAQ:IFUL) provides enterprises with scalable data analysis solutions that drive better decisions faster by revealing patterns, trends and relationships. The company is a leading supplier of software and services for statistical data analysis, data mining and knowledge access enabling clients to gain intelligence from numeric and text data. Insightful products include S-PLUS(R), S-PLUS Server, Insightful Miner(TM), and InFact(R). Insightful consulting services provide specialized expertise and proven processes for the design, development and deployment of customized solutions. The company has been delivering industry-leading, high-ROI solutions for 18 years to thousands of companies in the financial services, life sciences, biotechnology, telecommunications, and manufacturing industries, as well as to government and research institutions. Note to Investors -- Forward Looking Statements This press release contains forward-looking statements, including statements about our expected financial results in future periods. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The words "predict", "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could affect our actual results include, but are not limited to, the risk that we may not achieve expected financial results, and the "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price" described in the company's most recent periodic report on form 10-QSB. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Insightful undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. -0- *T INSIGHTFUL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) June 30, December 31, 2005 2004 ----------- ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,644 $ 9,650 Accounts receivable, net 3,027 4,157 Other receivables 625 501 Prepaid expenses and other current assets 661 453 ----------- ----------- Total current assets 13,957 14,761 Property and equipment, net 972 966 Purchased technology, net 932 1,226 Goodwill and other intangibles, net 800 800 Other assets 46 60 ----------- ----------- $ 16,707 $ 17,813 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 96 $ 129 Accounts payable 620 1,644 Accrued expenses and other current liabilities 1,606 1,912 Deferred revenue 5,730 6,318 ----------- ----------- Total current liabilities 8,052 10,003 Long-term debt, less current portion -- 32 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value-- Authorized--1,000,000 shares Issued and outstanding--none -- -- Common stock, $0.01 par value-- Authorized--20,000,000 shares Issued and outstanding-- 12,484,113 and 12,393,950 shares at June 30, 2005 and December 31, 2004, respectively 125 124 Additional paid-in capital 36,495 36,329 Accumulated deficit (27,715) (28,383) Cumulative translation adjustment (250) (292) ----------- ----------- Total stockholders' equity 8,655 7,778 ----------- ----------- $ 16,707 $ 17,813 =========== =========== INSIGHTFUL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) UNAUDITED Three Months Ended ----------------------- June 30, June 30, 2005 2004 --------- --------- Revenues: Software licenses $ 2,140 $ 1,851 Software maintenance 1,705 1,621 Professional services and other 1,265 1,005 --------- --------- Total revenues 5,110 4,477 --------- --------- Cost of revenues: Software related 437 448 Professional services and other 673 572 --------- --------- Total cost of revenues 1,110 1,020 --------- --------- Gross profit 4,000 3,457 --------- --------- Operating expenses: Sales and marketing 2,035 1,659 Research and development 1,462 1,241 Less--funded research (649) (777) --------- --------- Research and development, net 813 464 General and administrative 817 1,019 --------- --------- Total operating expenses 3,665 3,142 --------- --------- Income from operations 335 315 Other income, net 5 2 --------- --------- Income before income taxes 340 317 Income tax expense 6 17 --------- --------- Net income $ 334 $ 300 ========= ========= Basic net income (loss) per share $ 0.03 $ 0.02 ========= ========= Diluted net income (loss) per share $ 0.03 $ 0.02 ========= ========= Weighted-average number of common shares outstanding: - Basic 12,445 12,238 ========= ========= - Diluted 13,182 13,207 ========= ========= *T