Exhibit 99.1
45-04
Intervoice Announces Fiscal 2005 Second Quarter Results
Sales of $44.3 Million and Net Income of $0.13 Per Diluted Share
DALLAS-September 23, 2004- Intervoice, Inc. (NASDAQ: INTV) today reported revenues of $44.3 million for its second fiscal quarter ended August 31, 2004, a 6.5 percent increase from $41.6 million posted in the same quarter last year. Net income for the second quarter was $5.1 million, or $0.13 per diluted share. These results reflect significant improvement from net income of $3.6 million, or $0.10 per diluted share posted in the second quarter of last year. Revenues for the second quarter last year included a $2.1 million receipt from a cash-basis international managed services company. Revenues for the current quarter included no such cash receipt.
The Company’s solutions backlog of $40.2 million at August 31, 2004, is up 33.6% from $30.1 million at August 31, 2003 and is down 6.9% from $43.2 million at the end of last quarter. During the second quarter of this year, cash balances increased by $3.5 million to $49.0 million, and the Company reduced its total debt balance to $11.5 million through repayments totaling $1.1 million. Working capital increased from $2.0 million at August 31, 2003 to $29.7 million at August 31, 2004. Fiscal 2005 second quarter activities resulted in working capital increases totaling $5.9 million.
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“We are pleased to report great quarterly results and the continued strengthening of our balance sheet. Revenue growth combined with management’s focus on cost control is continuing to pay off,” said Craig Holmes, the Company’s Executive Vice President and Chief Financial Officer.
“Our total sales organization continues to perform well and we are clearly making great progress toward our goal of increasing sales of voice solutions to both our enterprise and global carrier markets,” said David Brandenburg, the Company’s Chairman and CEO. “Our solutions backlog remains solid, and I believe the Company’s outlook continues to be very favorable. I currently believe revenues for the third quarter of fiscal 2005 will be in the $44 million to $48 million range. I look forward to discussing details of our second fiscal quarter and outlook for the future in tomorrow’s conference call with investors.”
“Further, we wish to bring to your attention that in the course of attempting to settle a commercial dispute with one of our vendors, we obtained new information concerning transactions that occurred in calendar years 2000 and 2001. Management reviewed the new information and notified our Audit Committee which is looking into the matter,” said David Brandenburg.
The Audit Committee is investigating transactions accounted for as purchases of licenses from a supplier in calendar years 2000 and 2001, particularly $900,000 paid in calendar 2001, and whether any such transaction was related to the modification of a warrant issued to the Company by such supplier. The Audit Committee will also review the accounting treatment for certain sales transactions in calendar years 2000 and 2001. The sales transactions currently under review did not exceed 1% and 3% of the Company’s revenues in fiscal 2000 and 2002, respectively. The Audit Committee is being assisted by separate independent counsel and accountants. Intervoice self-reported the investigation and the basis therefor to the Securities and Exchange Commission. While these transactions occurred in calendar years 2000 and 2001, Intervoice’s Board and management are fully supportive of a thorough review to determine whether any further action is appropriate.
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The Company has scheduled a conference call for 9:00 a.m. central daylight time on Friday, September 24, 2004, to discuss its second fiscal quarter results and its outlook for the future. To participate in the call, dial (719) 457-2657. The conference call confirmation code is 912431. A replay of the call will be available at the Company’s Web site: www.intervoice.com.
Intervoice, Inc. has included in this press release certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning its business and operations that are based on management’s current beliefs. All statements other than statements of historical fact in this press release, including without limitation, any and all statements regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, potential future revenues and industry conditions are forward-looking statements. Readers are cautioned to read the risks and uncertainties, described in the Company’s filings with the Securities and Exchange Commission, including without limitation, the risks and uncertainties set forth under the caption entitled “Cautionary Disclosures to Qualify Forward Looking Statements” in the Company’s Annual Reports filed on Form 10-K and Quarterly Reports filed on Form 10-Q. Intervoice cautions current and potential investors that such risks and uncertainties sometimes in the past have affected, and in the future could affect Intervoice’s actual results and cause such results to differ 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 sold more than 23,000 systems worldwide to companies including Ameritrade, Amtrak, Citibank, MasterCard, O2, Rogers 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 | August 31, 2004 | February 29, 2004 | ||||||
(Unaudited) | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 48,955 | $ | 40,859 | ||||
Trade accounts receivable, net of allowance for doubtful accounts of $970 in fiscal 2005 and $947 in fiscal 2004 | 25,855 | 23,719 | ||||||
Inventory | 8,328 | 8,415 | ||||||
Prepaid expenses and other current assets | 5,588 | 5,087 | ||||||
88,726 | 78,080 | |||||||
Property and Equipment | ||||||||
Land and buildings | 16,912 | 16,857 | ||||||
Computer equipment and software | 42,084 | 39,073 | ||||||
Furniture, fixtures and other | 3,152 | 3,190 | ||||||
Service equipment | 8,961 | 9,421 | ||||||
71,109 | 68,541 | |||||||
Less allowance for depreciation | 50,483 | 48,325 | ||||||
20,626 | 20,216 | |||||||
Other Assets | ||||||||
Intangible assets, net of accumulated amortization of $15,258 in fiscal 2005 and $34,443 in fiscal 2004 | 5,289 | 6,363 | ||||||
Goodwill | 3,401 | 3,401 | ||||||
Other assets | 731 | 3,491 | ||||||
$ | 118,773 | $ | 111,551 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 11,128 | $ | 10,746 | ||||
Accrued expenses | 11,732 | 11,919 | ||||||
Customer deposits | 5,569 | 6,625 | ||||||
Deferred income | 23,429 | 22,257 | ||||||
Current portion of long-term borrowings | 400 | — | ||||||
Income taxes payable | 6,774 | 7,379 | ||||||
59,032 | 58,926 | |||||||
Long-Term Borrowings | 11,135 | 13,101 | ||||||
Other Long-Term Liabilities | 12 | 271 | ||||||
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: 36,004,683 issued and outstanding in fiscal 2005 and 35,691,389 issued and outstanding in fiscal 2004 | 18 | 18 | ||||||
Additional capital | 76,979 | 75,276 | ||||||
Accumulated deficit | (27,182 | ) | (35,441 | ) | ||||
Accumulated other comprehensive loss | (1,221 | ) | (600 | ) | ||||
Stockholders’ equity | 48,594 | 39,253 | ||||||
$ | 118,773 | $ | 111,551 | |||||
Certain prior year balances have been reclassified to conform to the current year presentation.
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
August 31, | August 31, | August 31, | August 31, | |||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Sales | ||||||||||||||||
Solutions | $ | 25,244 | $ | 20,625 | $ | 46,389 | $ | 38,655 | ||||||||
Recurring services | 19,015 | 20,982 | 39,786 | 41,353 | ||||||||||||
44,259 | 41,607 | 86,175 | 80,008 | |||||||||||||
Cost of goods sold | ||||||||||||||||
Solutions | 13,276 | 11,271 | 25,256 | 22,484 | ||||||||||||
Recurring services | 6,894 | 7,472 | 13,975 | 14,202 | ||||||||||||
20,170 | 18,743 | 39,231 | 36,686 | |||||||||||||
Gross margin | ||||||||||||||||
Solutions | 11,968 | 9,354 | 21,133 | 16,171 | ||||||||||||
Recurring services | 12,121 | 13,510 | 25,811 | 27,151 | ||||||||||||
24,089 | 22,864 | 46,944 | 43,322 | |||||||||||||
Research and development expenses | 3,419 | 3,703 | 7,162 | 7,574 | ||||||||||||
Selling, general and administrative expenses | 13,936 | 13,091 | 28,088 | 26,562 | ||||||||||||
Amortization of acquisition related intangible assets | 252 | 705 | 957 | 1,410 | ||||||||||||
Income from operations | 6,482 | 5,365 | 10,737 | 7,776 | ||||||||||||
Other income (expense) | 97 | 139 | 464 | (47 | ) | |||||||||||
Interest expense | (110 | ) | (536 | ) | (384 | ) | (1,081 | ) | ||||||||
Income before taxes | 6,469 | 4,968 | 10,817 | 6,648 | ||||||||||||
Income taxes | 1,387 | 1,372 | 2,558 | 2,116 | ||||||||||||
Net income | $ | 5,082 | $ | 3,596 | $ | 8,259 | $ | 4,532 | ||||||||
Net income per share — basic | $ | 0.14 | $ | 0.11 | $ | 0.23 | $ | 0.13 | ||||||||
Shares used in basic per share computation | 35,988 | 34,195 | 35,918 | 34,153 | ||||||||||||
Net income per share — diluted | $ | 0.13 | $ | 0.10 | $ | 0.22 | $ | 0.13 | ||||||||
Shares used in diluted per share computation | 37,963 | 35,370 | 38,299 | 34,814 | ||||||||||||
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
August 31, | August 31, | August 31, | August 31, | |||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Operating activities | ||||||||||||||||
Net income | $ | 5,082 | $ | 3,596 | $ | 8,259 | $ | 4,532 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 1,783 | 2,418 | 4,067 | 4,800 | ||||||||||||
Other changes in operating activities | (2,819 | ) | 5,738 | (3,655 | ) | 6,022 | ||||||||||
Net cash provided by operating activities | 4,046 | 11,752 | 8,671 | 15,354 | ||||||||||||
Investing activities | ||||||||||||||||
Purchases of property and equipment | (2,531 | ) | (1,210 | ) | (3,464 | ) | (2,473 | ) | ||||||||
Proceeds from sale of assets | — | 14 | — | 14 | ||||||||||||
Net cash used in investing activities | (2,531 | ) | (1,196 | ) | (3,464 | ) | (2,459 | ) | ||||||||
Financing activities | ||||||||||||||||
Paydown of debt | (9,066 | ) | (1,833 | ) | (9,566 | ) | (2,667 | ) | ||||||||
Borrowings | 8,000 | — | 8,000 | — | ||||||||||||
Premium on early extinguishment of debt | — | — | (5 | ) | — | |||||||||||
Release of restricted cash | 2,750 | — | 2,750 | — | ||||||||||||
Exercise of stock options | 120 | 907 | 1,703 | 907 | ||||||||||||
Net cash provided by (used in) financing activities | 1,804 | (926 | ) | 2,882 | (1,760 | ) | ||||||||||
Effect of exchange rates on cash | 148 | (420 | ) | 7 | (332 | ) | ||||||||||
Increase in cash and cash equivalents | 3,467 | 9,210 | 8,096 | 10,803 | ||||||||||||
Cash and cash equivalents, beginning of period | 45,488 | 27,804 | 40,859 | 26,211 | ||||||||||||
Cash and cash equivalents, end of period | $ | 48,955 | $ | 37,014 | $ | 48,955 | $ | 37,014 | ||||||||
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INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(In Thousands, Except Share Data)
Accumulated | ||||||||||||||||||||||||
Common Stock | Other | |||||||||||||||||||||||
Additional | Accumulated | Comprehensive | ||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Loss | Total | |||||||||||||||||||
Balance at February 29, 2004 | 35,691,389 | $ | 18 | $ | 75,276 | $ | (35,441 | ) | $ | (600 | ) | $ | 39,253 | |||||||||||
Net income | — | — | — | 8,259 | — | 8,259 | ||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (621 | ) | (621 | ) | ||||||||||||||||
Comprehensive income | 7,638 | |||||||||||||||||||||||
Exercise of stock options | 313,294 | — | 1,703 | — | — | 1,703 | ||||||||||||||||||
Balance at August 31, 2004 | 36,004,683 | $ | 18 | $ | 76,979 | $ | (27,182 | ) | $ | (1,221 | ) | $ | 48,594 | |||||||||||
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Intervoice, Inc.
Revenues by Market and Geography
For the Quarter Ended August 31, 2004
Unaudited
(In thousands)
North | Rest of | |||||||||||||||||||||||
America | World | Total | ||||||||||||||||||||||
Solutions | $ | 15,551 | 61.6 | % | $ | 9,693 | 38.4 | % | $ | 25,244 | 100.0 | % | ||||||||||||
Customer and Software Support | 10,113 | 73.4 | % | 3,665 | 26.6 | % | 13,778 | 100.0 | % | |||||||||||||||
Managed Services | 2,369 | 45.2 | % | 2,868 | 54.8 | % | 5,237 | 100.0 | % | |||||||||||||||
Total Sales | $ | 28,033 | 63.3 | % | $ | 16,226 | 36.7 | % | $ | 44,259 | 100.0 | % | ||||||||||||
IVR/Portal | $ | 20,450 | 46.2 | % | ||||||||||||||||||||
Messaging | 2,224 | 5.0 | % | |||||||||||||||||||||
Payment | 2,570 | 5.8 | % | |||||||||||||||||||||
Total Solutions | 25,244 | 57.0 | % | |||||||||||||||||||||
Customer and Software Support | 13,778 | 31.1 | % | |||||||||||||||||||||
Managed Services | 5,237 | 11.9 | % | |||||||||||||||||||||
Total Recurring Services | 19,015 | 43.0 | % | |||||||||||||||||||||
Total Sales | $ | 44,259 | 100.0 | % | ||||||||||||||||||||
Intervoice, Inc.
Revenues by Market and Geography
For the Six Months Ended August 31, 2004
Unaudited
(In thousands)
North | Rest of | |||||||||||||||||||||||
America | World | Total | ||||||||||||||||||||||
Solutions | $ | 27,959 | 60.3 | % | $ | 18,430 | 39.7 | % | $ | 46,389 | 100.0 | % | ||||||||||||
Customer and Software Support | 20,677 | 71.3 | % | 8,316 | 28.7 | % | 28,993 | 100.0 | % | |||||||||||||||
Managed Services | 4,734 | 43.9 | % | 6,059 | 56.1 | % | 10,793 | 100.0 | % | |||||||||||||||
Total Sales | $ | 53,370 | 61.9 | % | $ | 32,805 | 38.1 | % | $ | 86,175 | 100.0 | % | ||||||||||||
IVR/Portal | $ | 36,036 | 41.8 | % | ||||||||||||||||||||
Messaging | 4,630 | 5.4 | % | |||||||||||||||||||||
Payment | 5,723 | 6.6 | % | |||||||||||||||||||||
Total Solutions | 46,389 | 53.8 | % | |||||||||||||||||||||
Customer and Software Support | 28,993 | 33.7 | % | |||||||||||||||||||||
Managed Services | 10,793 | 12.5 | % | |||||||||||||||||||||
Total Recurring Services | 39,786 | 46.2 | % | |||||||||||||||||||||
Total Sales | $ | 86,175 | 100.0 | % | ||||||||||||||||||||
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