Insightful Corporation (NASDAQ:IFUL), a leading provider of
predictive analytics and reporting solutions, today announced
operating results for the first quarter of 2006. Insightful
reported revenues of $5.5 million for the first quarter of 2006, an
increase of 5% over first quarter 2005 revenues of $5.3 million.
For the first quarter of 2006 the Company reported a net loss of
$43,000, or break even per share, including stock-based
compensation expense of $0.2 million resulting from the
implementation of a new accounting pronouncement on January 1,
2006. Net income for the first quarter of 2005 was $0.3 million, or
$0.03 per share. There was no stock-based compensation expense in
the first quarter of 2005. First quarter 2006 non-GAAP earnings,
which excludes stock based compensation expense and amortization of
intangible assets, was $0.3 million, or $0.02 per share compared to
non-GAAP earnings of $0.5 million, or $0.04 per share in the first
quarter 2005. Non-GAAP earnings or loss as defined in the section
"Use of Non-GAAP Financial Measures" below differs from net income
or loss reported under accounting principles generally accepted in
the United States (GAAP) due to the exclusion of stock based
compensation expense and the amortization of intangible assets. The
reconciliation of Insightful's GAAP net income (loss) to
Insightful's non-GAAP operating results for the quarters ended
March 31, 2006 and 2005 are set forth at the end of this release.
"While we achieved year-over-year revenue growth for the 10th
quarter in a row, more importantly, we continued to make
investments in the future of the business," said Jeff Coombs,
president and CEO of Insightful. "Our investments are focusing on
building solutions and applications in life sciences and financial
services, on extending the S-PLUS family as an enterprise platform,
and building critical mass in our professional services and sales
organizations across the globe. Our goal is to drive further growth
by helping our customers deliver the power of predictive analytics
across the enterprise." Quarterly Highlights -- First quarter 2006
software license revenues were $2.4 million, as compared to $2.5
million in the first quarter of 2005. -- First quarter 2006
maintenance revenues were $1.8 million, as compared to $1.6 million
in the first quarter of 2005. -- First quarter 2006 professional
services and other revenue was $1.3 million, as compared to $1.1
million in the first quarter of 2005. -- Funded research, which is
an offset to research and development expense in the company's
income statement, was $0.6 million in the first quarter of 2006, as
compared to $0.5 million in the first quarter of 2005. The Company
has two product segments, 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
$5.2 million in the first quarter of 2006, compared to $4.7 million
in the first quarter of 2005. -- First quarter 2006 Data Analysis
software license revenues were $2.1 million, compared to $2.2
million in the first quarter of 2005. -- First quarter 2006 Data
Analysis professional services and other revenues were $1.3
million, compared to $0.9 million in the first quarter of 2005. --
Total domestic Data Analysis revenues were $3.1 million in the
first quarter of 2006, compared to $2.8 million in the first
quarter of 2005. -- Total international Data Analysis revenues were
$2.1 million in the first quarter of 2006, compared to $1.9 million
in the first quarter of 2005. Text Analysis -- Total Text Analysis
recognized revenues were $0.4 million in the first quarter of 2006,
compared to $0.5 million in the first quarter of 2005. -- First
quarter 2006 Text Analysis license revenues were $0.3 million,
compared to $0.4 million in the first quarter of 2005. -- First
quarter 2006 Text Analysis professional services and other revenues
were $0.1 million, compared to $0.2 million in the first quarter of
2005 Guidance For the second quarter of 2006, the company expects
an increase in revenues when compared to the second quarter of
2005. It expects costs in the second quarter of 2006 to be higher
than in the first quarter of 2006 as it continues to set the
foundation for future growth by investing in sales, marketing and
development of its product lines. Because of the range of possible
revenue outcomes in the second quarter of 2006, the company is not
giving guidance on earnings, which could include a GAAP or non-GAAP
net loss. Use of Non-GAAP Financial Measures The non-GAAP financial
measure of earnings included in this press release is different
from those otherwise reported under GAAP as this non-GAAP measure
excludes certain charges otherwise included in the computation of
net income (loss). The Company believes this non-GAAP measure is
useful to enhance an overall understanding of its past financial
performance and also its prospects for the future. These
adjustments to the Company's GAAP results are presented with the
intent of providing both management and investors a more complete
understanding of Insightful's underlying operating results and
trends. This non-GAAP measure is among the primary indicators
management uses as a basis for planning and forecasting of future
periods. These adjustments to the Company's GAAP results include
stock-based compensation expense and amortization of intangible
assets arising from the 2004 acquisition of the title to the
software code underlying the "S" programming language from Lucent
Technologies, Inc. Stock-based compensation expense and
amortization of intangible assets have no current effect on cash or
the future uses of cash. Insightful's stock-based compensation
expense fluctuates with changes in the Company's stock price and
interest rates. For this reason, changes in stock prices and
interest rates could mask variation and trends in Insightful's GAAP
operating results that may otherwise be important to an
understanding of the Company's results. The acquisition of
intangible assets was an event outside of the course of
Insightful's normal business operations. For these reasons,
management believes that exclusion of stock-based compensation
expense and amortization of intangible assets may be important to
an understanding of Insightful's ongoing operating performance.
Reconciliations of GAAP to non- GAAP results are as follows: -0- *T
Period Ended Period Ended March 31, March 31, 2006 2005
------------- ------------- Diluted Diluted EPS EPS ------- -------
Net income (loss) as reported $(43) $0.00 $334 $0.03 ----- -------
----- ------- Add Back - Stock Compensation Expense Professional
services and other cost of services 5 - Sales and marketing 37 -
Research and development 23 - General and administrative 101 -
----- ----- 166 0.01 - ----- ------- ----- ------- Add Back -
Amortization of Intangibles 147 0.01 147 $0.01 ----- ------- -----
------- Non-GAAP earnings $270 $0.02 $481 $0.04 ===== ======= =====
======= *T ABOUT INSIGHTFUL 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,
pharmaceuticals, 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 recognition of text analysis revenue over future
quarters, statements about past trends of growth and profitability,
and statements about our financial results for the quarter ended
March 31, 2006. 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 revenue
growth or profitability in accordance with historical trends or in
accordance with our own expectations, and the "Important Factors
That May Affect Our Business, Our Results of Operations and Our
Stock Price" described in the company's most recent annual report
for on form 10-KSB. 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) March 31, Dec. 31,
2006 2005 ----------- --------- (Unaudited) ASSETS Current assets:
Cash and cash equivalents $ 10,755 $ 9,185 Accounts receivable, net
3,759 5,666 Other receivables 309 364 Short term investments 392
724 Prepaid expenses and other current assets 587 636 -----------
--------- Total current assets 15,802 16,575 Property and
equipment, net 1,553 1,212 Purchased technology, net 490 637
Goodwill and other intangibles, net 800 800 Other assets 52 45
----------- --------- $ 18,697 $ 19,269 =========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $ - $ 32 Accounts payable $ 874 $ 701
Accrued expenses and other current liabilities $ 1,688 $ 2,179
Deferred revenue $ 5,930 $ 6,271 ----------- --------- Total
current liabilities $ 8,492 $ 9,183 Long-term debt, less current
portion -- -- 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--30,000,000 shares Issued and outstanding-- 12,548,691
and 12,543,097 shares at March 31, 2006 and December 31, 2005,
respectively $ 125 $ 125 Additional paid-in capital $ 36,784 $
36,610 Accumulated deficit $(26,444) $(26,401) Comprehensive income
(loss) $ (260) $ (248) ----------- --------- Total stockholders'
equity $ 10,205 $ 10,086 ----------- --------- $ 18,697 $ 19,269
=========== ========= INSIGHTFUL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS,
EXCEPT PER SHARE DATA) Three Months Ended -----------------------
March 31, March 31, 2006 2005 ----------- ----------- (Unaudited)
(Unaudited) Revenues: Software licenses $ 2,424 $ 2,527 Software
maintenance 1,811 1,609 Professional services and other 1,307 1,122
----------- ----------- Total revenues 5,542 5,258 -----------
----------- Cost of revenues: Software related 458 404 Professional
services and other 904 762 ----------- ----------- Total cost of
revenues 1,362 1,166 ----------- ----------- Gross profit 4,180
4,092 ----------- ----------- Operating expenses: Sales and
marketing 2,156 1,865 Research and development 1,661 1,252
Less--funded research (579) (526) ----------- ----------- Research
and development, net 1,082 726 General and administrative 1,089
1,074 ----------- ----------- Total operating expenses 4,327 3,665
----------- ----------- Income (loss) from operations (147) 427
Other income (expense), net 112 (74) ----------- ----------- Income
(loss) before income taxes (35) 353 Income tax expense (8) (19)
----------- ----------- Net income (loss) $ (43) $ 334 ===========
=========== Basic and diluted net income (loss) per share $ (0.00)
$ 0.03 =========== =========== Weighted-average number of common
shares outstanding: - Basic 12,546 12,395 =========== =========== -
Diluted 12,546 12,933 =========== =========== *T
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