Interactive Intelligence (Nasdaq: ININ), a global provider of
unified IP business communications solutions, has announced
operating results for the three and six months ended June 30,
2010.
The company reported revenues of $38.8 million, an increase of
18 percent over the second quarter of 2009. Product revenues were
up 10 percent and services revenues increased 26 percent compared
to the same quarter last year. During the 2010 second quarter, the
company’s analysis of the collectability of invoiced services
increased current quarter services revenues by $673,000.
“We again experienced an increase in the dollar amount of orders
from last year, which is what drives the growth in our revenues,”
said Interactive Intelligence founder and CEO, Dr. Donald E. Brown.
“Communications-as-a-service continues to gain momentum,
representing 14 percent of orders received. CaaS revenues were up
87 percent this quarter compared to the second quarter of 2009. The
ongoing signing of new customers in turn is driving increases in
support and professional services revenue.”
The company reported operating income on a generally accepted
accounting principles (GAAP) basis of $4.7 million for the 2010
second quarter, up 56 percent from $3.0 million in the same quarter
last year. Non-GAAP operating income was $5.6 million for the
second quarter of 2010, compared to $3.7 million for the second
quarter of 2009.
GAAP net income was $2.5 million, with diluted earnings per
share (EPS) of $0.13, compared to $2.1 million, or EPS of $0.12,
for the second quarter of 2009. Net income on a non-GAAP basis was
$5.0 million, with EPS of $0.26, compared to $4.4 million, or EPS
of $0.24, for the same quarter last year.
Non-GAAP net income and EPS for the 2010 second quarter exclude
charges for stock-based compensation of $964,000, or EPS of $0.05,
and non-cash income tax expense of approximately $1.5 million, or
EPS of $0.08. For the second quarter of 2009, non-GAAP net income
and EPS exclude charges for stock-based compensation of $725,000,
or EPS of $0.04, and non-cash income tax expense of $1.5 million,
or EPS of $0.08.
These results include other expense of $523,000 in the 2010
second quarter primarily due to foreign exchange losses, compared
to other income of $722,000, primarily from foreign exchange gains,
in the same quarter last year. In the second quarter of 2010, the
company instituted a currency hedging program to help mitigate
future effects of fluctuations in the foreign exchange rates on
cash and receivables.
Cash and investment balances as of June 30, 2010 increased to
$75.5 million. The company has no debt.
First half 2010 results included:
- Total revenues of $73.8 million,
an 18 percent increase over revenues of $62.4 million in the first
half of 2009.
- GAAP operating income of $8.6
million, up from $5.4 million for the first half of 2009.
- Non-GAAP operating income of
$10.6 million, compared to $7.0 million for the first half of
2009.
- Other expense, principally due
to foreign exchange losses, of $1.3 million for the first half of
2010, compared to other income, due to foreign exchange gains, of
$406,000 for the first half of 2009.
- GAAP net income of $4.3 million,
or EPS of $0.23, compared to $3.3 million, or EPS of $0.19, for the
first half of 2009.
- Non-GAAP net income of $9.1
million, or EPS of $0.48, compared to $7.2 million, or EPS of
$0.41, for the same period last year.
For the first six months of 2010, non-GAAP net income and EPS
exclude charges for stock-based compensation of $2.0 million, or
EPS of $0.11, and non-cash income tax expense of $2.8 million, or
EPS of $0.14. For the first half of 2009, non-GAAP net income and
EPS exclude charges for stock-based compensation of $1.6 million,
or EPS of $0.09, and non-cash income tax expense of $2.3 million,
or EPS of $0.13.
Other 2010 second quarter highlights included:
- The signing of a partnership
with Buzzient, Inc. to offer integrated social media monitoring,
routing and reporting solutions.
- A record number of attendees at
the 2010 Interactive Intelligence User Forum in May.
- The company’s designation as one
of the "Best Places to Work in Indiana" by the Chamber of Commerce
for the fourth consecutive year.
- The honoring of Interactive
Intelligence founder and CEO, Dr. Donald E. Brown, by the Indiana
University School of Informatics with its “Career Achievement
Award.”
Interactive Intelligence will host a conference call July 26 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
second 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 Intelligence
Interactive 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
BusinessWeek “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 2009
Contact Center Infrastructure, Worldwide Magic Quadrant report.
Interactive Intelligence employs approximately 700 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 Measures
The 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 may contain 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.
ININ-G
Interactive Intelligence, Inc. Condensed Consolidated
Statements of Income (in thousands, except per share
amounts) Unaudited
Three Months Ended Six Months Ended June 30,
June 30, 2010 2009 2010 2009
Revenues: Product $ 18,212 $ 16,494 $ 33,899 $ 29,543 Services
20,599 16,401 39,935 32,828 Total revenues 38,811
32,895 73,834 62,371 Costs of revenues: Product 5,502
4,841 10,301 8,369 Services 6,187 5,708 11,784 11,210
Total cost of revenues 11,689 10,549 22,085 19,579
Gross profit 27,122 22,346 51,749 42,792 Operating
expenses: Sales and marketing 11,480 9,965 21,832 19,179 Research
and development 6,945 5,986 13,370 11,613 General and
administrative 4,038 3,416 7,899 6,604 Total
operating expenses 22,463 19,367 43,101 37,396
Operating income 4,659 2,979 8,648 5,396 Other income (expense):
Interest income 67 73 109 181 Other income (expense) (590 ) 649
(1,365 ) 225 Total other income (expense) (523 ) 722 (1,256 ) 406
Income before income taxes 4,136 3,701 7,392 5,802 Income tax
expense 1,680 1,604 3,068 2,482 Net income $ 2,456
$ 2,097 $ 4,324 $ 3,320 Net income per share:
Basic $ 0.14 $ 0.12 $ 0.25 $ 0.20 Diluted 0.13 0.12 0.23 0.19
Shares used to compute net income per share: Basic 17,445
17,015 17,383 16,981 Diluted 18,772 18,070 18,740 17,859
Interactive Intelligence, Inc. Reconciliation of
Supplemental Financial Information (in thousands, except per
share amounts) Unaudited
Three Months Ended Six Months Ended June
30, June 30, 2010 2009 2010
2009 Net income, as reported $ 2,456 $ 2,097 $
4,324 $ 3,320 Non-cash stock-based compensation expense: Cost of
services 63 50 142 115 Sales and marketing 318 230 642 538 Research
and development 298 227 596 472 General and administrative 285 218
596 447 Total 964 725 1,976 1,572 Non-cash income tax expense 1,547
1,544 2,788 2,343
Non-GAAP net income $ 4,967 $ 4,366 $
9,088 $ 7,235
Operating income, as reported $ 4,659 $
2,979 $ 8,648 $ 5,396 Non-cash stock-based compensation expense 964
725 1,976 1,572
Non-GAAP operating income $ 5,623 $ 3,704 $
10,624 $ 6,968
Diluted EPS, as reported $ 0.13 $ 0.12
$ 0.23 $ 0.19 Non-cash stock-based compensation expense 0.05 0.04
0.11 0.09 Non-cash income tax expense 0.08 0.08 0.14 0.13
Non-GAAP diluted EPS $ 0.26 $ 0.24 $ 0.48 $ 0.41
Interactive Intelligence, Inc. Condensed Consolidated
Balance Sheets (in thousands)
June 30, December 31, 2010 2009
(unaudited) Assets Current assets: Cash and cash
equivalents $ 38,924 $ 48,497 Short-term investments 36,621 16,482
Accounts receivable, net 28,393 32,092 Deferred tax assets, net
5,808 5,808 Prepaid expenses 6,534 5,976 Other current assets 4,486
3,935 Total current assets 120,766 112,790 Property
and equipment, net 8,701 8,499 Deferred tax assets, net 6,787 6,505
Other assets, net 4,807 4,874 Total assets $ 141,061
$ 132,668
Liabilities and Shareholders'
Equity Current liabilities: Accounts payable and accrued
liabilities $ 11,886 $ 11,903 Accrued compensation and related
expenses 5,003 4,946 Deferred product revenues 5,632 5,567 Deferred
services revenues 34,599 36,225 Total current
liabilities 57,120 58,641 Deferred revenue 5,821 6,420
Total liabilities 62,941 65,061
Shareholders' equity: Preferred stock - - Common stock 175 173
Treasury stock (4,654 ) (6,242 ) Additional paid-in-capital 97,560
92,815 Accumulated deficit (14,961 ) (19,139 ) Total shareholders'
equity 78,120 67,607 Total liabilities and
shareholders' equity $ 141,061 $ 132,668
Interactive Intelligence, Inc. Condensed Consolidated
Statements of Cash Flows (in thousands) Unaudited
Six Months Ended June 30,
2010 2009 Operating activities: Net
income $ 4,324 $ 3,320 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation 2,058 2,094
Stock-based compensation expense 1,976 1,572 Tax benefits from
stock-based payment arrangements (2,789 ) (1,278 ) Deferred income
tax (282 ) 538 Accretion of investment income (444 ) (142 ) Changes
in operating assets and liabilities: Accounts receivable 3,699
2,969 Prepaid expenses (558 ) 622 Other current assets (551 )
(1,312 ) Other assets 67 308 Accounts payable and accrued
liabilities 2,554 1,824 Accrued compensation and related expenses
57 368 Deferred product revenues (32 ) 168 Deferred services
revenues (2,128 ) (1,704 ) Net cash provided by operating
activities 7,951 9,347
Investing
activities: Sales of available-for-sale investments 7,300
10,800 Purchases of available-for-sale investments (27,078 ) (5,850
) Purchases of property and equipment (2,042 ) (833 ) Acquisition
of intangible and other assets, net of cash and cash equivalents
acquired - (2,249 ) Net cash (used in) provided by investing
activities (21,820 ) 1,868
Financing
activities: Proceeds from stock options exercised 1,343 732
Proceeds from issuance of common stock 164 132 Tax benefits from
stock-based payment arrangements 2,789 1,278 Net cash
provided by financing activities 4,296 2,142
Net (decrease) increase in cash and cash equivalents (9,573 )
13,357 Cash and cash equivalents, beginning of period 48,497
34,705 Cash and cash equivalents, end of period $ 38,924
$ 48,062
Cash paid during the period
for: Interest $ 1 $ - Income taxes 520 199
Other
non-cash item: Purchases of property and equipment payable at
end of period $ 247 $ 78
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