Interactive Intelligence (Nasdaq: ININ), a global provider of
unified IP business communications solutions, has announced
operating results for the three months ended March 31, 2010.
The company reported revenues of $35.0 million, an increase of
19 percent compared to revenues for the first quarter of 2009;
product revenues increased by 20 percent, while services revenues
were up 18 percent compared to the first quarter of 2009.
On a generally accepted accounting principles (GAAP) basis, net
income was $1.9 million, with diluted earnings per share (EPS) of
$0.10, compared to $1.2 million, or EPS of $0.07, in the first
quarter of 2009. Net income on a non-GAAP basis was $4.1 million,
with EPS of $0.22, compared to $2.9 million, or EPS of $0.16, for
the same quarter last year.
Cash and investment balances as of March 31, 2010 increased to
$71.4 million with no debt.
“We had strong year-over-year order growth across all major
geographies,” said Interactive Intelligence founder and CEO, Dr.
Donald E. Brown. “These orders included significant new
communications-as-a-service contracts. Revenues recognized from
CaaS continued to build and contributed to our increase in services
revenues. Our new Interaction Process Automation™ application was
also a key differentiator for us in the marketplace, as it directly
connects our communications platform to a customer’s operational
efficiency and profitability.”
Additional first quarter operating results included:
- An increase in gross margins to
70.3 percent in 2010 from 69.4 percent in 2009.
- GAAP operating income of $4.0
million in 2010, up 65 percent from $2.4 million in 2009.
- Non-GAAP operating income of
$5.0 million in 2010, compared to $3.3 million in 2009.
- Other expense of $733,000 in
2010, compared to $316,000 in 2009, reflecting foreign currency
translation losses in both years. The amounts held in Euro deposit
accounts were transferred to U.S. dollar deposit accounts in early
February 2010, reducing future exposure to Euro currency
fluctuations.
- Cash flows from operations,
which were reduced by $1.3 million related to tax expense for
stock-based payments, still increased to $5.3 million in 2010,
compared to $4.4 million in 2009.
For the first quarter of 2010, non-GAAP net income and EPS
exclude charges for stock-based compensation of $1.0 million, or
EPS of $0.05, and non-cash income tax expense of approximately $1.2
million, or EPS of $0.07. For the first quarter of 2009, non-GAAP
net income and EPS exclude charges for stock-based compensation of
$847,000, or EPS of $0.05, and non-cash income tax expense of
$799,000, or EPS of $0.04.
During the first quarter of 2010 the company was also:
- Positioned in the leaders’
quadrant of the Gartner Magic Quadrant for Contact Center
Infrastructure, Worldwide report (Feb. 22, 2010).
- Added to the S&P SmallCap
600 Index and the Nasdaq Global Select Market.
- Awarded Frost & Sullivan’s
2010 Technology Company of the Year for Contact Centers in North
America.
- Among CRM Magazine’s 2010
Service Leaders for Contact Center Infrastructure.
- The recipient of the 2009
Customer Interaction Solutions magazine’s Product of the Year
Award.
Interactive Intelligence will host a conference call April 27 at
4:30 p.m. Eastern time (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 1.877.324.1969 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.
About Interactive IntelligenceInteractive Intelligence
Inc. (Nasdaq: ININ) is a global provider of unified business
communications solutions for contact center automation, enterprise
IP telephony, and business process automation. The company was
founded in 1994 and has more than 3,500 customers worldwide.
Interactive Intelligence is among Software Magazine’s top 500
global software and services suppliers, is a Business Week “hot
growth 50” company, and is among Fortune Small Business magazine’s
top 100 fastest growing companies. The company is also positioned
in the leaders’ quadrant of the Gartner Magic Quadrant for Contact
Center Infrastructure, Worldwide report (Feb. 22, 2010).
Interactive Intelligence employs approximately 650 people and is
headquartered in Indianapolis, Indiana. It has 14 offices
throughout North America, Latin 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: www.inin.com.
* Non-GAAP MeasuresThe 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. Stock-based compensation expense is non-cash and income
tax expense is primarily non-cash. 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 other companies in the technology 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.
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; to
manage successfully its increasingly complex third-party
relationships resulting from the software and hardware components
being licensed or sold with its solutions; to maintain successful
relationships with certain suppliers which may be impacted by the
competition in the technology industry; 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; to successfully
integrate acquired businesses; 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 March 31, 2010 2009
Revenues: Product $ 15,687 $ 13,050 Services 19,336
16,426 Total revenues 35,023
29,476 Costs of revenues: Product 4,799 3,528 Services
5,597 5,502 Total cost of revenues
10,396 9,030 Gross profit 24,627
20,446 Operating expenses: Sales and marketing
10,352 9,214 Research and development 6,425 5,626 General and
administrative 3,861 3,189 Total
operating expenses 20,638 18,029
Operating income 3,989 2,417 Other income (expense): Interest
income 42 108 Other income (expense) (775 ) (424 )
Total other income (expense) (733 ) (316 ) Income
before income taxes 3,256 2,101 Income tax expense 1,388
878 Net income $ 1,868 $ 1,223
Net income per share: Basic $ 0.11 $ 0.07 Diluted 0.10 0.07
Shares used to compute net income per share: Basic 17,320
16,948 Diluted 18,708 17,635
Interactive Intelligence, Inc. Reconciliation of
Supplemental Financial Information (in thousands, except per
share amounts) Unaudited Three Months
Ended March 31, 2010 2009 Net
income, as reported $ 1,868 $ 1,223 Non-cash stock-based
compensation expense: Cost of services 79 65 Sales and marketing
324 308 Research and development 298 245 General and administrative
311 229 Total 1,012 847 Non-cash income
tax expense 1,241 799
Non-GAAP net income $
4,121 $ 2,869
Operating income, as reported $ 3,989 $
2,417 Non-cash stock-based compensation expense 1,012
847
Non-GAAP operating income $ 5,001 $ 3,264
Diluted EPS, as reported $ 0.10 $ 0.07 Non-cash stock-based
compensation expense 0.05 0.05 Non-cash income tax expense
0.07 0.04
Non-GAAP diluted EPS $ 0.22 $ 0.16
Interactive Intelligence,
Inc. Condensed Consolidated Balance Sheets (in
thousands) March 31, December 31,
2010 2009 Unaudited Assets Current
assets: Cash and cash equivalents $ 49,679 $ 48,497 Short-term
investments 21,721 16,482 Accounts receivable, net 26,982 32,092
Deferred tax assets, net 5,808 5,808 Prepaid expenses 6,322 5,976
Other current assets 3,982 3,935 Total
current assets 114,494 112,790 Property and equipment, net 8,482
8,499 Deferred tax assets, net 6,655 6,505 Other assets, net
4,792 4,874 Total assets $ 134,423 $
132,668
Liabilities and Shareholders' Equity
Current liabilities: Accounts payable and accrued liabilities $
10,823 $ 11,903 Accrued compensation and related expenses 3,642
4,946 Deferred product revenues 4,990 5,567 Deferred services
revenues 36,835 36,225 Total current
liabilities 56,290 58,641 Deferred revenue 5,558
6,420 Total liabilities 61,848
65,061 Shareholders' equity: Preferred stock - -
Common stock 174 173 Treasury stock (5,312 ) (6,242 ) Additional
paid-in-capital 95,120 92,815 Accumulated deficit (17,407 )
(19,139 ) Total shareholders' equity 72,575
67,607 Total liabilities and shareholders' equity $
134,423 $ 132,668
Interactive Intelligence, Inc. Condensed
Consolidated Statements of Cash Flows (in thousands)
Unaudited Three Months Ended March 31,
2010 2009 Operating activities: Net income $
1,868 $ 1,223
Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation 1,030 1,055 Stock-based compensation expense 1,012 847
Tax benefits from stock-based payment arrangements (1,251 ) -
Deferred income tax (150 ) 670 Accretion of investment income 27 5
Changes in operating assets and liabilities: Accounts receivable
5,110 4,215 Prepaid expenses (346 ) 443 Other current assets (47 )
(817 ) Other assets 82 72 Accounts payable and accrued liabilities
143 (1,251 ) Accrued compensation and related expenses (1,304 )
(957 ) Deferred product revenues (615 ) (413 ) Deferred services
revenues (214 ) (682 ) Net cash provided by operating
activities 5,345 4,410
Investing activities: Sales of available-for-sale
investments 2,550 7,800 Purchases of available-for-sale investments
(7,828 ) (897 ) Purchases of property and equipment (985 ) (266 )
Unrealized loss on investment - (2 ) Net cash
(used in) provided by investing activities (6,263 )
6,635
Financing activities: Proceeds from
stock options exercised 691 111 Proceeds from issuance of common
stock 158 69 Tax benefits from stock-based payment arrangements
1,251 - Net cash provided by financing
activities 2,100 180 Net
increase in cash and cash equivalents 1,182 11,225 Cash and cash
equivalents, beginning of period 48,497 34,705
Cash and cash equivalents, end of period $ 49,679 $
45,930
Cash paid during the period for:
Interest $ 1 $ - Income taxes 318 150
Other non-cash
item: Purchases of property and equipment payable at end of
period $ 57 $ 51
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