RICHARDSON, Texas, May 13 /PRNewswire-FirstCall/ -- Intrusion Inc. (OTC:INTZ) (BULLETIN BOARD: INTZ) , ("Intrusion") today announced financial results for the quarter ended March 31, 2008. Revenue for the first quarter 2008 was $0.5 million, compared to $1.1 million for the first quarter 2007. Intrusion's operating loss was $0.9 million in the first quarter 2008, compared to $0.5 million for the first quarter 2007. Gross profit margin was 61% of revenue in the first quarter of 2008; the same as in the first quarter 2007. Intrusion's first quarter 2008 operating expenses were $1.2 million; the same as the first quarter 2007. As of March 31, 2008, Intrusion reported cash and cash equivalents of $0.1 million, a working capital deficiency of $1.3 million and debt of $0.7 million. "Revenue in the first quarter was reduced by slippage of contracts from the U.S. Government; however, since April 1, 2008, we have booked a total of $1,250,000 of new TraceCop orders from the U.S. Government and a U.S. Defense Contractor. These new TraceCop orders, along with the $700,000 of orders announced on March 26, 2008 are expected to produce revenue over the next twelve months," stated G. Ward Paxton, President and CEO of Intrusion. 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 May 20, 2008 by calling 1-800-642-1687 (if outside the United States, 1-706-645-9291). At the replay prompt, enter conference identification number 46941655. 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) March 31, December 31, 2008 2007 ASSETS Current Assets: Cash and cash equivalents $93 $362 Accounts receivable, net of allowance for doubtful accounts of $40 in 2008 and 2007 163 110 Inventories, net 123 146 Prepaid expenses 63 75 Total current assets 442 693 Property and equipment, net 132 144 Other assets 39 39 TOTAL ASSETS $613 $876 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Line of credit $14 $100 Loan payable to officer 705 -- Accounts payable and accrued expenses 695 688 Deferred revenue 333 312 Total current liabilities 1,747 1,100 Stockholders' Deficit: Preferred stock, $.01 par value: Authorized shares - 5,000 Series 1 shares issued and outstanding - 260 Liquidation preference of $1,331 as of March 31, 2008 918 918 Series 2 shares issued and outstanding - 460 Liquidation preference of $1,169 as of March 31, 2008 724 724 Series 3 shares issued and outstanding - 354 in 2008 Liquidation preference of $785 as of March 31, 2008 504 504 Common stock, $.01 par value: Authorized shares - 80,000 Issued shares - 11,648 Outstanding shares - 11,638 116 116 Common stock held in treasury, at cost - 10 shares (362) (362) Additional paid-in capital 55,492 55,527 Accumulated deficit (58,347) (57,472) Accumulated other comprehensive loss (179) (179) Total stockholders' deficit (1,134) (224) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $613 $876 INTRUSION INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) Quarter ended Quarter ended March 31, March 31, 2008 2007 Revenue $462 $1,092 Cost of revenue 179 421 Gross profit 283 671 Operating expenses: Sales and marketing 371 515 Research and development 516 423 General and administrative 265 227 Operating loss (869) (494) Interest income (expense), net (6) 2 Loss before income taxes (875) (492) Income tax provision -- -- Net loss (875) (492) Preferred stock dividends accrued (40) (43) Net loss attributable to common stockholders $(915) $(535) Net loss per share attributable to common stockholders (basic and diluted) $(0.08) $(0.06) Weighted average shares outstanding -Basic and Diluted 11,638 8,471 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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