RICHARDSON, Texas, March 26 /PRNewswire-FirstCall/ -- Intrusion Inc. (OTC:INTZ) (BULLETIN BOARD: INTZ) , ("Intrusion") today announced financial results for the quarter and year ended December 31, 2007. Revenue for the fourth quarter 2007 was $0.5 million, compared to $1.5 million for the fourth quarter 2006. Revenue for the year 2007 was $3.5 million, compared to $5.2 million in 2006. Intrusion's net loss was $0.8 million in the fourth quarter 2007, compared to $0.2 million for the fourth quarter 2006. Net loss was $2.4 million for the year 2007, compared to $3.0 million for the year 2006. Gross profit margin was 61% of revenue in the fourth quarter of 2007, compared to 60% of revenue in the fourth quarter 2006. For the year 2007, the gross profit margin was 61%, compared to 58% in 2006. Intrusion's fourth quarter 2007 operating expenses were $1.1 million; the same as the fourth quarter 2006. For the year 2007, operating expenses were $4.5 million, down from $6.0 million in 2006. As of December 31, 2007, Intrusion reported cash and cash equivalents of $0.4 million, working capital of $(0.4) million and debt of $0.1 million. "Revenue in the fourth quarter was reduced by slippage of contracts from the U.S. Government which was impacted by Congress' delay in approving the 2008 U.S. Government budget," stated G. Ward Paxton. Intrusion's management will host its regularly scheduled quarterly conference call to discuss the Company's financial and operational progress at 4:00 P.M., CDT today. Interested investors can access the call at 1-800-399-2043 (if outside the United States, 1-706-634-5518). For those unable to participate in the live conference call, a replay will be accessible beginning today at 7:00 P.M., CDT until April 2, 2008 by calling 1-800-642-1687 (if outside the United States, 1-706-645-9291). At the replay prompt, enter conference identification number 41042829. Additionally, a live and archived audio webcast of the conference call will be available at http://www.intrusion.com/. About Intrusion Inc. Intrusion Inc. is a global provider of entity identification systems, regulated information compliance, and data privacy protection and network intrusion prevention and detection products. Intrusion's product families include TraceCop(TM) for identity identification, the Compliance Commander(TM) for regulated information and data privacy protection, and Intrusion SecureNet for network intrusion prevention and detection. Intrusion's products help protect critical information assets by quickly detecting, protecting, analyzing and reporting attacks or misuse of classified, private and regulated information for government and enterprise networks. For more information, please visit http://www.intrusion.com/. This release, other than historical information, may include forward-looking statements regarding future events or the future financial performance of the Company. Such statements include, without limitations, statements regarding future revenue growth and profitability, as well as other statements. These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including but not limited to the following: the difficulties in forecasting future sales caused by current economic and market conditions, the effect of military actions on government and corporate spending on information security products, spending patterns of, and appropriations to, U.S. government departments, the impact of our cost reduction programs and our refocused product line, the difficulties and uncertainties in successfully developing and introducing new products in emerging markets, market acceptance of our products, the impact of our sustained losses on our ability to successfully operate and grow our business, our stock price and the recent loss of our Nasdaq listing, our ability to generate sufficient cash flow or obtain additional financing on acceptable terms in order to fund ongoing liquidity needs, the highly competitive market for our products, the effects of sales and implementation cycles for our products on our quarterly results, difficulties in accurately estimating market growth, the consolidation of the information security industry, the impact of changing economic conditions, business conditions in the information security industry, our ability to manage acquisitions effectively, the impact of market peers and their products as well as risks concerning future technology and others identified in our Annual Report on Form 10-KSB, as amended, and other Securities and Exchange Commission filings. These filings can be obtained by contacting Intrusion Investor Relations. INTRUSION INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except par value amounts) December 31, December 31, 2007 2006 ASSETS Current Assets: Cash and cash equivalents $ 362 $ 933 Accounts receivable, net of allowance for doubtful accounts of $40 in 2007 and $90 in 2006 110 844 Inventories, net 146 209 Prepaid expenses 75 198 Total current assets 693 2,184 Property and equipment, net 144 162 Other assets 39 41 TOTAL ASSETS $ 876 $ 2,387 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Line of credit $ 100 $ 200 Accounts payable and accrued expenses 688 1,099 Deferred revenue 312 367 Total current liabilities 1,100 1,666 Stockholders' Equity (Deficit): Preferred stock, $.01 par value: Authorized shares - 5,000 Series 1 shares issued and outstanding - 260 Liquidation preference of $1,315 in 2007 918 918 Series 2 shares issued and outstanding - 460 Liquidation preference of $1,155 in 2007 724 724 Series 3 shares issued and outstanding - 354 in 2007, 469 in 2006 Liquidation preference of $776 in 2007 504 667 Common stock, $.01 par value: Authorized shares - 80,000 Issued shares - 11,648 in 2007 and 8,306 in 2006 Outstanding shares - 11,638 in 2007 and 8,296 in 2006 116 83 Common stock held in treasury, at cost - 10 shares (362) (362) Additional paid-in capital 55,527 53,947 Accumulated deficit (57,472) (55,077) Accumulated other comprehensive loss (179) (179) Total stockholders' equity (deficit) (224) 721 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 876 $ 2,387 INTRUSION INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) Three Months Ended Year Ended December 31, December 31, 2007 2006 2007 2006 Revenue $ 496 $ 1,451 $ 3,510 $ 5,242 Cost of revenue 192 580 1,376 2,204 Gross profit 304 871 2,134 3,038 Operating expenses: Sales and marketing 413 487 1,933 2,714 Research and development 486 388 1,655 2,067 General and administrative 218 222 947 1,261 Operating loss (813) (226) (2,401) (3,004) Interest income, net 3 1 5 45 Other income (expense), net - - 1 (65) Loss before income taxes (810) (225) (2,395) (3,024) Income tax provision - - - - Net loss (810) (225) (2,395) (3,024) Preferred stock dividends accrued (43) (44) (173) (175) Net loss attributable to common stockholders $ (853) $ (269) $ (2,568) $ (3,199) Net loss per share attributable to common stockholders (basic and diluted) $(0.07) $(0.04) $(0.26) $(0.45) Weighted average shares outstanding (basic and diluted) 11,539 7,100 9,929 7,043 Contact Michael L. Paxton, VP, CFO 972.301.3658, http://www.newscom.com/cgi-bin/prnh/20030703/INTRUSIONLOGO http://photoarchive.ap.org/ DATASOURCE: Intrusion Inc. CONTACT: Michael L. Paxton, VP, CFO, of Intrusion Inc., +1-972-301-3658, Web site: http://www.intrusion.com/

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