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 third quarter of 2005. Insightful reported revenues of $5.4 million for the third quarter of 2005, an increase of 12% over third quarter 2004 revenues of $4.8 million. Insightful reported net income of $0.3 million, or $0.02 per share, for the third quarter of 2005, as compared to net income of $0.6 million, or $0.05 per share, in the third quarter of 2004. "We continue to see year-over-year revenue growth and profitability," said Jeff Coombs, president and CEO of Insightful. "Compared to the third quarter of 2004, we achieved revenue growth in both the Data Analysis and Text Analysis segments. Record Data Analysis revenues, which exceeded $5.0 million for the first time, were driven by professional services delivery of analytic solutions in the life sciences and financial services industries." "On top of our analytic platform, which enables our customers to apply statistics for competitive advantage, we provide industry solutions that can be easily deployed to business users, researchers, and analysts who need to access the insight enabled by predictive analytics, but who lack special expertise in statistical methods. Our focus on solutions, particularly in life sciences where we have applications for drug discovery and clinical trials, is beginning to drive growth." Quarterly Highlights -- Third quarter 2005 software license revenues were $2.2 million, as compared to $2.2 million in the third quarter of 2004. -- Third quarter 2005 maintenance revenues were $1.7 million, as compared to $1.6 million in the third quarter of 2004. -- Third quarter 2005 professional services and other revenue was $1.5 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 $0.5 million in the third quarter of 2005, as compared to $0.7 million in the third quarter of 2004. The Company has two segments for its product and service offerings, Data Analysis and Text Analysis. Following are highlights for the quarter in each segment. Data Analysis -- Total Data Analysis revenues, including software licenses, maintenance, and professional services and other, were $5.0 million in the third quarter of 2005, as compared to $4.5 million in the third quarter of 2004. -- Third quarter 2005 Data Analysis software license revenues were $2.0 million, as compared to $2.0 million in the third quarter of 2004. -- Third quarter 2005 Data Analysis professional services and other revenues were $1.4 million, as compared to $0.9 million in the third quarter of 2004. -- Total domestic Data Analysis revenues were $2.9 million in the third quarter of 2005, as compared to $2.9 million in the third quarter of 2004. -- Total international Data Analysis revenues were $2.1 million in the third quarter of 2005, as compared to $1.6 million in the third quarter of 2004. Text Analysis -- Total Text Analysis revenues were $0.4 million in the third quarter of 2005, as compared to $0.3 million in the third quarter of 2004. Text Analysis license revenues were 0.3 million in the third quarter of 2005, as compared to 0.2 million in the third quarter of 2004. Text Analysis service revenues were 0.1 million in the third quarter of 2005, as compared to 0.1 million in the third quarter of 2004. -- During the quarter, the Defense Intelligence Agency (DIA) renewed its relationship with the company upon the expiration of its term-based site license of InFact for text analysis and relationship search by purchasing a perpetual site license. The renewal follows a successful year of comprehensive evaluation and testing by DIA analysts. Outlook Because of the range of possible revenue outcomes, the Company is not making a prediction for either revenues or net income for the fourth quarter of 2005. The company expects costs to be higher than in the third quarter of 2005, as it continues to set the foundation for future growth by investing in development and marketing for its core product lines and solutions, and in its IT and accounting infrastructure. 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 and statements about our potential revenue growth. 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 or see growth in our revenues, 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) September December 30, 31, 2005 2004 ---------- ---------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,650 $ 9,650 Accounts receivable, net 3,020 4,157 Other receivables 553 501 Short term investments 632 -- Prepaid expenses and other current assets 495 453 ---------- --------- Total current assets 14,350 14,761 Property and equipment, net 912 966 Purchased technology, net 785 1,226 Goodwill and other intangibles, net 800 800 Other assets 45 60 ---------- --------- $ 16,892 $ 17,813 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 65 $ 129 Accounts payable $ 555 1,644 Accrued expenses and other current liabilities $ 1,775 1,912 Deferred revenue $ 5,499 6,318 ---------- --------- Total current liabilities $ 7,894 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 -- 12,507,006 and 12,393,950 shares at September 30, 2005 and December 31, 2004, respectively $ 125 124 Additional paid-in capital $ 36,531 36,329 Accumulated deficit $ (27,404) (28,383) Comprehensive income (loss) $ (254) (292) ---------- --------- Total stockholders' equity $ 8,998 7,778 ---------- --------- $ 16,892 $ 17,813 ========== ========= INSIGHTFUL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) UNAUDITED Three Months Ended -------------------- September September 30, 30, 2005 2004 ---------- --------- Revenues: Software licenses $ 2,227 $ 2,164 Software maintenance $ 1,681 1,626 Professional services and other $ 1,500 979 --------- -------- Total revenues 5,408 4,769 --------- -------- Cost of revenues: Software related 538 390 Professional services and other 742 526 --------- -------- Total cost of revenues 1,280 916 --------- -------- Gross profit 4,128 3,853 --------- -------- Operating expenses: Sales and marketing 1,955 1,678 Research and development 1,407 1,342 Less -- funded research (533) (650) --------- -------- Research and development, net 874 692 General and administrative 1,074 961 --------- -------- Total operating expenses 3,903 3,331 --------- -------- Income from operations 225 522 Other income, net 86 90 --------- -------- Income before income taxes 311 612 Income tax expense - 3 --------- -------- Net income $ 311 $ 609 ========= ======== Basic and diluted net income per share $ 0.02 $ 0.05 ========= ======== Weighted-average number of common shares outstanding: 12,494 12,312 ========= ======== - Basic - Diluted 13,224 12,572 ========= ======== *T