RICHARDSON, Texas, Aug. 13 /PRNewswire-FirstCall/ -- Intrusion Inc. (OTC:INTZ) (BULLETIN BOARD: INTZ) , ("Intrusion") announced today financial results for the three and six months ended June 30, 2008. Intrusion's net income was $41 thousand in the second quarter 2008 compared to a $0.5 million net loss for the second quarter 2007. Revenue for the second quarter 2008 was $1.3 million compared to $1.0 million for the second quarter 2007. Gross profit margin was 66 percent of revenue in the second quarter of 2008 compared to 61 percent of revenue in the second quarter of 2007. Intrusion's second quarter 2008 operating expenses were $0.8 million, compared to $1.1 million for the second quarter 2007. As of June 30, 2008, Intrusion reported cash and cash equivalents of $0.2 million, working capital of $(1.3) million and debt of $1.2 million. "Revenue increased 28%, gross profit margin increased from 61% to 66% and operating expenses decreased 31% in the second quarter of 2008 compared to the second quarter of 2007. These positive achievements resulted in net income for the second quarter of 2008," stated G. Ward Paxton, Chairman, President and CEO of Intrusion. "The growth in revenue and profit in the second quarter was primarily driven by the $2.5 million of orders booked in the first half of the year. We entered the third quarter with a backlog of $1.0 million," Paxton concluded. 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 August 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 58845317. 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 regulated information compliance, entity identification systems, data privacy protection products, and network intrusion prevention and detection solutions. In addition, Intrusion offers deployment technologies along with security services for the information-driven economy. Intrusion's product families include the Compliance Commander(TM) for regulated information compliance, data privacy protection and identity theft prevention, TraceCop(TM) identification and location service, Intrusion SpySnare(TM) for real-time inline blocking of spyware and unwanted P2P applications, and Intrusion SecureNet(TM) 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. Financial Contact Michael L. Paxton, VP, CFO 972.301.3658, INTRUSION INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except par value amounts) June 30, December 31, 2008 2007 ASSETS Current Assets: Cash and cash equivalents $212 $362 Accounts receivable, net of allowance for doubtful accounts of $40 in 2008 and 2007 554 110 Inventories, net 83 146 Prepaid expenses 64 75 Total current assets 913 693 Property and equipment, net 121 144 Other assets 39 39 TOTAL ASSETS $1,073 $876 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Line of credit $- $100 Loan payable to officer 1,180 - Accounts payable and accrued expenses 736 688 Deferred revenue 266 312 Total current liabilities 2,182 1,100 Stockholders' Deficit: Preferred stock, $.01 par value: Authorized shares - 5,000 Series 1 shares issued and outstanding - 260 Liquidation preference of $1,347 as of June 30, 2008 918 918 Series 2 shares issued and outstanding - 460 Liquidation preference of $1,184 as of June 30, 2008 724 724 Series 3 shares issued and outstanding - 354 in 2008 Liquidation preference of $795 as of June 30, 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 55,475 55,527 Accumulated deficit (58,305) (57,472) Accumulated other comprehensive loss (179) (179) Total stockholders' deficit (1,109) (224) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $1,073 $876 INTRUSION INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Revenue $1,283 $1,003 $1,746 $2,095 Cost of revenue 440 393 620 814 Gross profit 843 610 1,126 1,281 Operating expenses: Sales and marketing 361 504 732 1,019 Research and development 195 388 710 811 General and administrative 230 248 496 475 Operating income (loss) 57 (530) (812) (1,024) Interest income (expense), net (16) (1) (22) 1 Other income - 1 - 1 Income (loss) before income taxes 41 (530) (834) (1,022) Income tax provision - - - - Net income (loss) 41 (530) (834) (1,022) Preferred stock dividends accrued (40) (43) (105) (86) Net income (loss) attributable to common stockholders $1 $(573) $(939) $(1,108) Net income (loss) per share attributable to common stockholders (basic and diluted) $0.00 $(0.06) $(0.08) $(0.12) Weighted average shares outstanding - Basic and Diluted 11,638 9,271 11,638 8,873 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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