News Release |
FOR IMMEDIATE RELEASE
CONTACTS
Intervoice, Inc.
Craig Holmes
Chief Financial Officer
+1 (972) 454-8708
49-03
Intervoice Announces Third Quarter Results
Revenues of $41.8 M, Net Income of $0.10 Per Share
DALLAS-December 18, 2003- Intervoice, Inc. (Nasdaq: INTV) today announced revenues of $41.8 million and net income of $3.6 million, or $0.10 per diluted share, for its third quarter, which ended November 30, 2003. The Company’s backlog of systems sales orders totaled approximately $34.0 million at November 30, 2003, a $3.9 million increase from the prior quarter. During the third quarter, cash balances increased to $38.6 million and the Company reduced its debt balance to $14.6 million through repayments totaling $1.8 million.
Systems revenues grew seven percent to $22.0 million in the third quarter, as compared to the prior quarter, while services revenues decreased six percent to $19.8 million. The decrease in services revenues was primarily attributable to the reduction in receipts from a cash basis, international managed services customer. The Company’s overall gross margin remained virtually flat at approximately 55 percent. Total operating expenses increased from $17.5 million in the second quarter to $17.9 million in the third quarter due to increased selling, general and administrative expenses. Income tax expenses included the effect of a $1.0 million benefit related to adjustments to prior year provisions and a favorable tax settlement. During the quarter, the U.S. dollar weakened against the U.K. pound resulting in a $600,000 pretax charge, a $1.4 million increase in the Company’s cash position, and a $1.3 million increase in the Company’s backlog of systems sales orders.
“We are pleased to report our third straight quarter of operating profits,” said David Brandenburg, the Company’s Chairman and CEO. “We had exceptionally strong systems sales revenues for the quarter, and we believe the systems backlog increase is a positive sign going forward. Our focus is unchanged. We are committed to maintaining profitable operations through diversifying and expanding our pipeline of sales opportunities and through managing
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costs and our balance sheet. We believe the Company’s long-term outlook continues to be strong and currently believe revenues for the fourth quarter ending February 29, 2004 will be in the $39 — $45 million range. We look forward to discussing the Q3 results and our outlook for the future in tomorrow’s conference call.”
The Company has scheduled a conference call for 10:30 a.m., central time, Friday, December 19, 2003 to discuss its third quarter results and its outlook for the future. To participate in the call, dial 719-457-2696 and refer to confirmation code 679632. A replay of the call will be available at the Company’s web site: www.intervoice.com.
This press release contains forward-looking statements, which are based on Company management’s current beliefs. Readers are cautioned to read the risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause actual results to vary materially from the forward-looking statements in this press release.
About Intervoice
With more than 20 years of experience, Intervoice, Inc. (NASDAQ: INTV) creates measurable business value by applying innovative speech technology to optimize voice automation solutions. Intervoice provides developers, enterprises and carriers with the platform, software and services necessary to enable an interactive dialogue with technology, resulting in improved operational efficiencies, revenue, and customer satisfaction. Omvia®, the open, standards-based Intervoice product suite, consists of advanced messaging, portal, IVR and payment applications. The Omvia Voice Framework is the most open voice solution on the market, allowing unparalleled scalability and flexibility within a traditional, VXML or SALT environment. Intervoice has more than 22,000 active deployments worldwide including Ameritrade, Amtrak, Citibank, MasterCard, O2, Rogers AT&T Wireless, SBC, Travelocity, Verizon and Vodafone. A Microsoft Certified Partner, Intervoice is headquartered in Dallas with offices in Europe, the Middle East, South America, Africa and Asia-Pacific. For more information, visit www.intervoice.com.
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INTERVOICE, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data) | ||||||||||
ASSETS | November 30, 2003 | February 28, 2003 | ||||||||
(Unaudited) | ||||||||||
Current Assets | ||||||||||
Cash and cash equivalents | $ | 38,620 | $ | 26,211 | ||||||
Trade accounts receivable, net of allowance for doubtful accounts of $2,585 in fiscal 2004 and $2,527 in fiscal 2003 | 23,815 | 25,853 | ||||||||
Inventory | 8,239 | 8,895 | ||||||||
Prepaid expenses and other current assets | 6,007 | 5,277 | ||||||||
76,681 | 66,236 | |||||||||
Property and Equipment | ||||||||||
Land and buildings | 16,811 | 16,708 | ||||||||
Computer equipment and software | 36,636 | 32,660 | ||||||||
Furniture, fixtures and other | 2,867 | 2,667 | ||||||||
Service equipment | 9,384 | 8,744 | ||||||||
65,698 | 60,779 | |||||||||
Less allowance for depreciation | 46,390 | 40,406 | ||||||||
19,308 | 20,373 | |||||||||
Other Assets | ||||||||||
Intangible assets, net of accumulated amortization of $33,684 in fiscal 2004 and $32,218 in fiscal 2003 | 7,122 | 9,326 | ||||||||
Goodwill | 3,401 | 3,401 | ||||||||
Other assets | 1,035 | 1,655 | ||||||||
$ | 107,547 | $ | 100,991 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current Liabilities | ||||||||||
Accounts payable | $ | 11,219 | $ | 12,513 | ||||||
Accrued expenses | 12,925 | 12,705 | ||||||||
Customer deposits | 6,621 | 9,061 | ||||||||
Deferred income | 23,814 | 25,478 | ||||||||
Current portion of long term borrowings | 3,333 | 3,333 | ||||||||
Income taxes payable | 11,203 | 6,240 | ||||||||
69,115 | 69,330 | |||||||||
Long term borrowings | 11,278 | 15,778 | ||||||||
Other long term liabilities | 464 | 856 | ||||||||
Deferred income taxes | 68 | 44 | ||||||||
Stockholders’ Equity | ||||||||||
Preferred Stock, $100 par value—2,000,000 shares authorized: none issued | ||||||||||
Common Stock, no par value, at nominal assigned value-62,000,000 shares authorized: 34,481,697 issued and outstanding in fiscal 2004, 34,111,101 issued and outstanding in fiscal 2003 | 17 | 17 | ||||||||
Additional capital | 67,783 | 65,144 | ||||||||
Accumulated deficit | (38,648 | ) | (46,768 | ) | ||||||
Accumulated other comprehensive loss | (2,530 | ) | (3,410 | ) | ||||||
Stockholders’ equity | 26,622 | 14,983 | ||||||||
$ | 107,547 | $ | 100,991 | |||||||
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
November 30, | November 30, | November 30, | November 30, | ||||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||||||
Sales | |||||||||||||||||
Systems | $ | 22,034 | $ | 23,679 | $ | 60,689 | $ | 63,219 | |||||||||
Services | 19,726 | 20,271 | 61,079 | 54,760 | |||||||||||||
41,760 | 43,950 | 121,768 | 117,979 | ||||||||||||||
Cost of goods sold | |||||||||||||||||
Systems | 12,606 | 15,488 | 35,090 | 48,706 | |||||||||||||
Services | 6,359 | 6,725 | 20,561 | 21,020 | |||||||||||||
18,965 | 22,213 | 55,651 | 69,726 | ||||||||||||||
Gross margin | |||||||||||||||||
Systems | 9,428 | 8,191 | 25,599 | 14,513 | |||||||||||||
Services | 13,367 | 13,546 | 40,518 | 33,740 | |||||||||||||
22,795 | 21,737 | 66,117 | 48,253 | ||||||||||||||
Research and development expenses | 3,677 | 5,020 | 11,251 | 17,544 | |||||||||||||
Selling, general and administrative expenses | 13,555 | 15,787 | 40,117 | 51,880 | |||||||||||||
Amortization of goodwill and acquisition related intangible assets | 705 | 1,775 | 2,115 | 5,325 | |||||||||||||
Income (loss) from operations | 4,858 | (845 | ) | 12,634 | (26,496 | ) | |||||||||||
Other income (expense) | (352 | ) | (89 | ) | (400 | ) | (858 | ) | |||||||||
Interest expense | (507 | ) | (774 | ) | (1,587 | ) | (3,792 | ) | |||||||||
Loss on extinguishment of debt | — | (1,868 | ) | — | (1,868 | ) | |||||||||||
Income (loss) before taxes and the cumulative effect of a change in accounting principle | 3,999 | (3,576 | ) | 10,647 | (33,014 | ) | |||||||||||
Income taxes (benefit) | 411 | 4,256 | 2,527 | (231 | ) | ||||||||||||
Income (loss) before the cumulative effect of a change in accounting principle | 3,588 | (7,832 | ) | 8,120 | (32,783 | ) | |||||||||||
Cumulative effect on prior years of a change in accounting principle | — | — | — | (15,791 | ) | ||||||||||||
Net income (loss) | $ | 3,588 | $ | (7,832 | ) | $ | 8,120 | $ | (48,574 | ) | |||||||
Per Basic Share: | |||||||||||||||||
Income (loss) before the cumulative effect of a change in accounting principle | $ | 0.10 | $ | (0.23 | ) | $ | 0.24 | $ | (0.96 | ) | |||||||
Cumulative effect on prior years of a change in accounting principle | — | — | — | (0.47 | ) | ||||||||||||
Net income (loss) | $ | 0.10 | $ | (0.23 | ) | $ | 0.24 | $ | (1.43 | ) | |||||||
Per Diluted Share: | |||||||||||||||||
Income (loss) before the cumulative effect of a change in accounting principle | $ | 0.10 | $ | (0.23 | ) | $ | 0.23 | $ | (0.96 | ) | |||||||
Cumulative effect on prior years of a change in accounting principle | — | — | — | (0.47 | ) | ||||||||||||
Net income (loss) | $ | 0.10 | $ | (0.23 | ) | $ | 0.23 | $ | (1.43 | ) | |||||||
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
November 30, | November 30, | November 30, | November 30, | ||||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||||||
Operating activities | |||||||||||||||||
Income (loss) before the cumulative effect of a change in accounting principle | $ | 3,588 | $ | (7,832 | ) | $ | 8,120 | $ | (32,783 | ) | |||||||
Adjustments to reconcile income (loss) before the cumulative effect of a change in accounting principle to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 2,368 | 3,841 | 7,168 | 12,307 | |||||||||||||
Other changes in operating activities | (4,299 | ) | 3,634 | 1,723 | 30,251 | ||||||||||||
Net cash provided by (used in) operating activities | 1,657 | (357 | ) | 17,011 | 9,775 | ||||||||||||
Investing activities | |||||||||||||||||
Purchases of property and equipment | (1,062 | ) | (369 | ) | (3,536 | ) | (2,817 | ) | |||||||||
Proceeds from sale of assets | 7 | 11 | 22 | 1,863 | |||||||||||||
Net cash used in investing activities | (1,055 | ) | (358 | ) | (3,514 | ) | (954 | ) | |||||||||
Financing activities | |||||||||||||||||
Paydown of debt | (1,833 | ) | (12,056 | ) | (4,500 | ) | (42,036 | ) | |||||||||
Debt issuance costs | — | (497 | ) | — | (2,515 | ) | |||||||||||
Premium on debt extinguishment | — | (470 | ) | — | (470 | ) | |||||||||||
Borrowings | 10,000 | — | 34,000 | ||||||||||||||
Exercise of stock options | 1,453 | — | 2,360 | 130 | |||||||||||||
Net cash used in financing activities | (380 | ) | (3,023 | ) | (2,140 | ) | (10,891 | ) | |||||||||
Effect of exchange rates on cash | 1,384 | 85 | 1,052 | 902 | |||||||||||||
Increase (decrease) in cash and cash equivalents | 1,606 | (3,653 | ) | 12,409 | (1,168 | ) | |||||||||||
Cash and cash equivalents, beginning of period | 37,014 | 20,131 | 26,211 | 17,646 | |||||||||||||
Cash and cash equivalents, end of period | $ | 38,620 | $ | 16,478 | $ | 38,620 | $ | 16,478 | |||||||||
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(In Thousands, Except Share Data)
Common Stock | Accumulated Other | |||||||||||||||||||||||
Additional | Accumulated | Comprehensive | ||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Total | |||||||||||||||||||
Balance at February 28, 2003 | 34,111,101 | $ | 17 | $ | 65,144 | $ | (46,768 | ) | $ | (3,410 | ) | $ | 14,983 | |||||||||||
Net income | — | — | — | 8,120 | — | 8,120 | ||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 880 | 880 | ||||||||||||||||||
Extension of stock options | — | — | 279 | — | — | 279 | ||||||||||||||||||
Exercise of stock options | 370,596 | — | 2,360 | — | — | 2,360 | ||||||||||||||||||
Balance at November 30, 2003 | 34,481,697 | $ | 17 | $ | 67,783 | $ | (38,648 | ) | $ | (2,530 | ) | $ | 26,622 | |||||||||||
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Intervoice, Inc.
Reconciliation of Net Income to EBITDA
For the Quarter Ended November 30, 2003
The Company recognizes that its shareholders are interested in its performance against certain of the covenants associated with its debt facilities, particularly its earnings before interest, taxes, depreciation and amortization (EBITDA) covenant. A reconciliation of net income to EBITDA follows:
($000s | ) | ||||
Net income | $ | 3,588 | |||
Add back EBITDA elements | |||||
Interest | 507 | ||||
Taxes | 411 | ||||
Depreciation and amortization | 2,368 | ||||
EBITDA | $ | 6,874 | |||
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Intervoice, Inc.
Revenues by Market and Geography
For the Quarter Ended November 30, 2003
($s in 000s)
North | Rest of | ||||||||||||||||||||||||
America | World | Total | |||||||||||||||||||||||
Systems | $ | 10,084 | 45.8 | % | $ | 11,950 | 54.2 | % | $ | 22,034 | 100.0 | % | |||||||||||||
Customer and Software Support | 10,206 | 73.5 | % | 3,672 | 26.5 | % | 13,878 | 100.0 | % | ||||||||||||||||
Managed Services | 2,118 | 36.2 | % | 3,730 | 63.8 | % | 5,848 | 100.0 | % | ||||||||||||||||
Total Sales | $ | 22,408 | 53.7 | % | $ | 19,352 | 46.3 | % | $ | 41,760 | 100.0 | % | |||||||||||||
IVR/Portal | $ | 12,633 | 30.3 | % | |||||||||||||||||||||
Messaging | 2,811 | 6.7 | % | ||||||||||||||||||||||
Payment | 6,590 | 15.8 | % | ||||||||||||||||||||||
Total Systems | 22,034 | 52.8 | % | ||||||||||||||||||||||
Customer and Software Support | 13,878 | 33.2 | % | ||||||||||||||||||||||
Managed Services | 5,848 | 14.0 | % | ||||||||||||||||||||||
Total Services | 19,726 | 47.2 | % | ||||||||||||||||||||||
Total Sales | $ | 41,760 | 100.0 | % | |||||||||||||||||||||
Intervoice, Inc.
Revenues by Market and Geography
For the Nine Months Ended November 30, 2003
($s in 000s)
North | Rest of | ||||||||||||||||||||||||
America | World | Total | |||||||||||||||||||||||
Systems | $ | 34,366 | 56.6 | % | $ | 26,323 | 43.4 | % | $ | 60,689 | 100.0 | % | |||||||||||||
Customer and Software Support | 31,418 | 75.3 | % | 10,330 | 24.7 | % | 41,748 | 100.0 | % | ||||||||||||||||
Managed Services | 5,642 | 29.2 | % | 13,689 | 70.8 | % | 19,331 | 100.0 | % | ||||||||||||||||
Total Sales | $ | 71,426 | 58.7 | % | $ | 50,342 | 41.3 | % | $ | 121,768 | 100.0 | % | |||||||||||||
IVR/Portal | $ | 39,978 | 32.8 | % | |||||||||||||||||||||
Messaging | 5,954 | 4.9 | % | ||||||||||||||||||||||
Payment | 14,757 | 12.1 | % | ||||||||||||||||||||||
Total Systems | 60,689 | 49.8 | % | ||||||||||||||||||||||
Customer and Software Support | 41,748 | 34.3 | % | ||||||||||||||||||||||
Managed Services | 19,331 | 15.9 | % | ||||||||||||||||||||||
Total Services | 61,079 | 50.2 | % | ||||||||||||||||||||||
Total Sales | $ | 121,768 | 100.0 | % | |||||||||||||||||||||
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