Exhibit 99.1
PRESS RELEASE | ||||
32-07 | MEDIA CONTACTS | |||
Rob Sutton | ||||
Intervoice, Inc. | ||||
972-454-8891 | ||||
rob.sutton@intervoice.com |
FOR IMMEDIATE RELEASE
Intervoice Announces Results for the Second Quarter of Fiscal 2008
Intervoice reports revenues of $48.7 million and record solutions backlog of $64.5 million
DALLAS — September 26, 2007 —Intervoice, Inc. (NASDAQ: INTV) today reported revenues of $48.7 million for its second fiscal quarter ended August 31, 2007, up from revenues of $47.7 million posted in the prior quarter, and down from $50.5 million recorded in the second quarter of the prior year. The Company’s solutions backlog of $64.5 million at August 31, 2007 was up 7 percent from $60.4 million at the end of the first quarter of fiscal 2008, and up 55 percent from $41.6 million at the end of the second quarter of the prior year.
“I am pleased with the continued strength in bookings in both our voice portal and IP-messaging product lines,” said Bob Ritchey, the Company’s President and CEO. “Driven by our key operational initiatives and record backlog, I believe the Company’s long-term outlook is very favorable, and I currently believe revenues for the third quarter of fiscal 2008 will increase to the $50 million to $54 million range. I look forward to discussing details of our second fiscal quarter and outlook for the future in today’s conference call with investors.”
On a non-GAAP basis, the Company reported second quarter fiscal 2008 income of $3.8 million, or $0.10 per diluted share up from $1.4 million, or $0.04 per diluted share in the prior quarter and up from $3.0 million, or $0.08 per diluted share in the second quarter of the prior year. Also on a non-GAAP basis, operating income for the quarter was $5.6 million, up from $1.7 million in the prior quarter and up from $4.3 million in the second quarter of the prior year. Second quarter fiscal 2008 non-GAAP operating expenses exclude $1.1 million of restructuring and other charges, $0.7 million related to acquisition amortization expenses and $1.5 million related to non-cash stock compensation expenses.
On a GAAP basis, the Company reported second quarter fiscal 2008 net income of $1.4 million, or $0.04 per diluted share, an increase from a $0.9 million net loss, or $0.02 net loss per diluted share in the prior quarter, and about flat with $1.6 million net income, or $0.04 per diluted share in the second quarter of the prior year. Also on a GAAP basis, second fiscal quarter operating income of $2.3 million is an increase from $1.4 million operating loss in the prior quarter, and an increase from $2.0 million operating income in the second quarter of the prior year.
“I am very pleased that we achieved such improved profitability over the prior quarter,” said Craig Holmes, the Company’s Executive Vice President and Chief Financial Officer. “We have worked through several quarters of significant consolidation, integration and restructuring activities, which have been key to strengthening our financial, operational and competitive positions.”
On July 10, 2007, the Company’s Board of Directors approved a share repurchase program for up to 2 million shares of its common stock, from time to time over the following 2 years in the open market or in negotiated transactions. During the quarter ended August 31, 2007, Intervoice repurchased approximately 400,000 shares of common stock at a total cost of approximately $3.2 million under this repurchase program. The
number of shares to be purchased and the timing of purchases under the program are based on the level of cash balances, general business and market conditions, securities law limitations and other factors, including alternative investment opportunities. Any repurchases are made using Intervoice’s cash resources, and the program may be amended, suspended or discontinued at any time. This program authorizes, but does not commit, the Company to repurchase additional shares of its common stock.
The Company has scheduled a conference call for 4:00 p.m. central time today, Wednesday, September 26, 2007, to discuss its second fiscal quarter results and its outlook for the future. To participate in the call, dial (877) 743-6785 or (706) 679-4758 and reference the conference ID of 17668345. A replay of the call will be available at the Company’s Web site at www.intervoice.com.
Non-GAAP Financial Measures
The Company reports its financial results in accordance with GAAP. However, the Company’s internal reporting and measurement programs include adjustments to exclude stock-based compensation charges, amortization of acquisition intangibles, restructuring and certain special charges from GAAP financial measures. In addition, for comparison purposes, the Company adjusts income tax expense to reflect a 34 percent tax rate on the non-GAAP pre-tax income measure. The Company uses these non-GAAP financial measures in its budgeting and forecasting process to analyze financial trends. The Company believes these adjustments provide an additional meaningful measurement of results that enhances period to period comparisons and which is also used as a component of internal incentive compensation programs.
In the future, the Company anticipates incurring expenses similar to certain of the non-GAAP adjustments described in the non-GAAP financial measures, and exclusion of these items in the presentation of our non-GAAP financial measures should not be construed as an inference that all of these costs are unusual, infrequent, or non-recurring. In addition, other companies, including those in the Company’s industry, may calculate non-GAAP financial measures differently, potentially limiting non-GAAP measures for cross-company comparisons. The Company acknowledges that the items excluded from GAAP based measures may have a material impact on the Company’s financial results determined in accordance with GAAP.
Non-GAAP adjusted results are supplemental information and are not intended to be a substitute for GAAP results or considered in isolation, and should be read only in conjunction with consolidated financial statements prepared in accordance with GAAP. These non-GAAP measures and their reconciliation to the most directly comparable GAAP measures are shown as an additional table at the end of this press release and in schedules provided on the Company’s website at www.intervoice.com.
Forward-Looking Statements
Intervoice has included in this press release certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended 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 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 Item 1A “Risk Factors”, in the Company’s Annual Report filed on Form 10-K and Quarterly Reports filed on Form 10-Q. Intervoice cautions current and potential investors that
such risks and uncertainties could result in material differences from the forward-looking statements in this press release, and investors should not place reliance on forward-looking statements as a prediction of future results. We undertake no obligation to update or revise any forward-looking statement.
About Intervoice
Intervoice is a world leader in unified communications, providing scalable, switch-independent software and professional services that power standards-based voice portals, multi-channel IP contact centers, and next-generation mobile-enhanced services. Since 1983, Intervoice solutions have been used by many of the world’s leading banks, communications companies, healthcare institutions, utilities and government entities. With more than 5,000 customers in 75 countries, Intervoice helps enterprises and network operators stay competitive by offering their customers best-in-class services. Intervoice Voice Portal, IP contact center software, enhanced messaging products, Media Exchange™ platform and custom-built and packaged applications are available on-premise and, selectively, as managed or hosted services by Intervoice. For more information, visit www.intervoice.com.
###
INTERVOICE, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share and Per Share Data) | ||||||||
August 31, 2007 | February 28, 2007 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $30,615 | $28,215 | ||||||
Trade accounts receivable, net of allowance for doubtful accounts of $885 in fiscal 2008 and $1,476 in fiscal 2007 | 31,036 | 36,837 | ||||||
Inventory | 19,266 | 13,751 | ||||||
Prepaid expenses and other current assets | 4,520 | 3,909 | ||||||
Income taxes receivable | — | 1,098 | ||||||
Deferred income taxes | 4,596 | 3,880 | ||||||
Total current assets | 90,033 | 87,690 | ||||||
Property and Equipment, net of accumulated depreciation of $67,129 in fiscal 2008 and $62,419 in fiscal 2007 | 32,689 | 34,429 | ||||||
Other Assets | ||||||||
Intangible assets, net of accumulated amortization of $21,551 in fiscal 2008 and $20,040 in fiscal 2007 | 8,472 | 9,505 | ||||||
Goodwill | 32,193 | 32,193 | ||||||
Long term deferred income taxes | 3,000 | 4,613 | ||||||
Other assets | 158 | 135 | ||||||
$ | 166,545 | $ | 168,565 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 13,500 | $ | 12,881 | ||||
Accrued expenses | 11,614 | 15,571 | ||||||
Customer deposits | 6,045 | 4,365 | ||||||
Deferred income | 32,583 | 32,368 | ||||||
Income taxes payable | 513 | — | ||||||
Deferred income taxes | 170 | 196 | ||||||
Total current liabilities | 64,425 | 65,381 | ||||||
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: 38,609,108 issued and outstanding in fiscal 2008 and 38,727,628 issued and outstanding in fiscal 2007 | 19 | 19 | ||||||
Additional capital | 102,186 | 101,608 | ||||||
Retained earnings (deficit) | (159 | ) | 1,861 | |||||
Accumulated other comprehensive income (loss) | 74 | (304 | ) | |||||
Stockholders’ equity | 102,120 | 103,184 | ||||||
$ | 166,545 | $ | 168,565 | |||||
INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Sales | ||||||||||||||||
Solutions | $ | 22,741 | $ | 24,245 | $ | 44,443 | $ | 43,714 | ||||||||
Recurring services | 25,947 | 26,235 | 51,976 | 52,434 | ||||||||||||
48,688 | 50,480 | 96,419 | 96,148 | |||||||||||||
Cost of goods sold | ||||||||||||||||
Solutions | 15,523 | 15,286 | 30,705 | 27,590 | ||||||||||||
Recurring services | 7,405 | 7,192 | 14,696 | 14,666 | ||||||||||||
22,928 | 22,478 | 45,401 | 42,256 | |||||||||||||
Gross margin | ||||||||||||||||
Solutions | 7,218 | 8,959 | 13,738 | 16,124 | ||||||||||||
Recurring services | 18,542 | 19,043 | 37,280 | 37,768 | ||||||||||||
25,760 | 28,002 | 51,018 | 53,892 | |||||||||||||
Research and development expenses | 3,798 | 5,239 | 9,115 | 11,021 | ||||||||||||
Selling, general and administrative expenses | 18,956 | 20,208 | 39,649 | 41,008 | ||||||||||||
Amortization of acquisition related intangible assets | 714 | 582 | 1,409 | 1,163 | ||||||||||||
Income from operations | 2,292 | 1,973 | 845 | 700 | ||||||||||||
Interest income | 442 | 448 | 1,032 | 947 | ||||||||||||
Interest expense | (32 | ) | — | (32 | ) | — | ||||||||||
Other income (expense) | (204 | ) | (125 | ) | (348 | ) | 82 | |||||||||
Income before taxes | 2,498 | 2,296 | 1,497 | 1,729 | ||||||||||||
Income taxes | 1,099 | 700 | 970 | 538 | ||||||||||||
Net income | $ | 1,399 | $ | 1,596 | $ | 527 | $ | 1,191 | ||||||||
Net income per share — basic | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.03 | ||||||||
Shares used in basic per share computation | 38,843 | 38,552 | 38,825 | 38,528 | ||||||||||||
Net income per share — diluted | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.03 | ||||||||
Shares used in diluted per share computation | 39,586 | 39,114 | 39,366 | 39,143 | ||||||||||||
INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
August 31, | August 31, | August 31, | August 31, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Operating activities | ||||||||||||||||
Net income | $ | 1,399 | $ | 1,596 | $ | 527 | $ | 1,191 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 3,336 | 2,573 | 6,371 | 5,251 | ||||||||||||
Non-cash compensation expense | 1,467 | 1,368 | 2,474 | 2,749 | ||||||||||||
Change in accounts receivable | (2,220 | ) | (6,062 | ) | 6,117 | (6,003 | ) | |||||||||
Other changes in operating activities | (10,484 | ) | (4,756 | ) | (7,911 | ) | (4,442 | ) | ||||||||
Net cash provided by (used in) operating activities | (6,502 | ) | (5,281 | ) | 7,578 | (1,254 | ) | |||||||||
Investing activities | ||||||||||||||||
Purchases of property and equipment | (1,041 | ) | (4,207 | ) | (3,183 | ) | (8,614 | ) | ||||||||
Purchase of Edify Corporation | — | (90 | ) | — | (926 | ) | ||||||||||
Net cash used in investing activities | (1,041 | ) | (4,297 | ) | (3,183 | ) | (9,540 | ) | ||||||||
Financing activities | ||||||||||||||||
Exercise of stock options | 671 | 109 | 1,272 | 258 | ||||||||||||
Repurchase of common stock | (3,168 | ) | — | (3,168 | ) | — | ||||||||||
Net cash provided by (used in) financing activities | (2,497 | ) | 109 | (1,896 | ) | 258 | ||||||||||
Effect of exchange rate changes on cash | (99 | ) | (30 | ) | (99 | ) | 423 | |||||||||
Increase (decrease) in cash and cash equivalents | (10,139 | ) | (9,499 | ) | 2,400 | (10,113 | ) | |||||||||
Cash and cash equivalents, beginning of period | 40,754 | 41,462 | 28,215 | 42,076 | ||||||||||||
Cash and cash equivalents, end of period | $ | 30,615 | $ | 31,963 | $ | 30,615 | $ | 31,963 | ||||||||
INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(In Thousands, Except Share Data)
Retained | Accumulated Other | |||||||||||||||||||||||
Common Stock | Additional | Earnings | Comprehensive | |||||||||||||||||||||
Shares | Amount | Capital | (Deficit) | Income (Loss) | Total | |||||||||||||||||||
Balance at February 28, 2007 | 38,727,628 | $ | 19 | $ | 101,608 | $ | 1,861 | $ | (304 | ) | $ | 103,184 | ||||||||||||
Net income | — | — | — | 527 | — | 527 | ||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | 378 | 378 | ||||||||||||||||||
Comprehensive income | 905 | |||||||||||||||||||||||
Cumulative effect of adopting FIN48 | — | — | — | (2,547 | ) | — | (2,547 | ) | ||||||||||||||||
Exercise of stock options | 281,480 | — | 1,272 | — | — | 1,272 | ||||||||||||||||||
Repurchase and retirement of shares | (400,000 | ) | — | (3,168 | ) | — | — | (3,168 | ) | |||||||||||||||
Non-cash compensation | — | — | 2,474 | — | — | 2,474 | ||||||||||||||||||
Balance at August 31, 2007 | 38,609,108 | $ | 19 | $ | 102,186 | $ | (159 | ) | $ | 74 | $ | 102,120 | ||||||||||||
Intervoice, Inc.
Revenues by Market and Geography
For the Quarter Ended August 31, 2007
Unaudited
(In thousands)
Revenues by Market and Geography
For the Quarter Ended August 31, 2007
Unaudited
(In thousands)
North | Rest of | |||||||||||||||||||||||
America | World | Total | ||||||||||||||||||||||
Solutions | $ | 10,885 | 47.9 | % | $ | 11,856 | 52.1 | % | $ | 22,741 | 100.0 | % | ||||||||||||
Customer and Software Support | 16,032 | 74.3 | % | 5,549 | 25.7 | % | 21,581 | 100.0 | % | |||||||||||||||
Hosted Solutions | 4,135 | 94.7 | % | 231 | 5.3 | % | 4,366 | 100.0 | % | |||||||||||||||
Total Sales | $ | 31,052 | 63.8 | % | $ | 17,636 | 36.2 | % | $ | 48,688 | 100.0 | % | ||||||||||||
Voice Portal | $ | 13,528 | 27.8 | % | ||||||||||||||||||||
Messaging | 7,992 | 16.4 | % | |||||||||||||||||||||
Payment | 1,221 | 2.5 | % | |||||||||||||||||||||
Total Solutions | 22,741 | 46.7 | % | |||||||||||||||||||||
Customer and Software Support | 21,581 | 44.3 | % | |||||||||||||||||||||
Hosted Solutions | 4,366 | 9.0 | % | |||||||||||||||||||||
Total Recurring Services | 25,947 | 53.3 | % | |||||||||||||||||||||
Total Sales | $ | 48,688 | 100.0 | % | ||||||||||||||||||||
Intervoice, Inc.
Revenues by Market and Geography
For the Six Months Ended August 31, 2007
Unaudited
(In thousands)
Revenues by Market and Geography
For the Six Months Ended August 31, 2007
Unaudited
(In thousands)
North | Rest of | |||||||||||||||||||||||
America | World | Total | ||||||||||||||||||||||
Solutions | $ | 21,441 | 48.2 | % | $ | 23,002 | 51.8 | % | $ | 44,443 | 100.0 | % | ||||||||||||
Customer and Software Support | 32,373 | 75.5 | % | 10,483 | 24.5 | % | 42,856 | 100.0 | % | |||||||||||||||
Hosted Solutions | 8,402 | 92.1 | % | 718 | 7.9 | % | 9,120 | 100.0 | % | |||||||||||||||
Total Sales | $ | 62,216 | 64.5 | % | $ | 34,203 | 35.5 | % | $ | 96,419 | 100.0 | % | ||||||||||||
Voice Portal | $ | 26,777 | 27.8 | % | ||||||||||||||||||||
Messaging | 14,518 | 15.0 | % | |||||||||||||||||||||
Payment | 3,148 | 3.3 | % | |||||||||||||||||||||
Total Solutions | 44,443 | 46.1 | % | |||||||||||||||||||||
Customer and Software Support | 42,856 | 44.4 | % | |||||||||||||||||||||
Hosted Solutions | 9,120 | 9.5 | % | |||||||||||||||||||||
Total Recurring Services | 51,976 | 53.9 | % | |||||||||||||||||||||
Total Sales | $ | 96,419 | 100.0 | % | ||||||||||||||||||||
INTERVOICE, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In Thousands, Except Per Share Data) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
August 31, | August 31, | August 31, | August 31, | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||||||
Gross margin | ||||||||||||||||||||
GAAP gross margin | $ | 25,760 | $ | 28,002 | $ | 51,018 | $ | 53,892 | ||||||||||||
Gross margin % | 52.9 | % | 55.5 | % | 52.9 | % | 56.1 | % | ||||||||||||
Stock-based compensation charges | (A | ) | 322 | 261 | 523 | 524 | ||||||||||||||
Restructuring charges and intangible amortization | (B | ) | (18 | ) | 275 | 378 | 275 | |||||||||||||
Non-GAAP gross margin | $ | 26,064 | $ | 28,538 | $ | 51,919 | $ | 54,691 | ||||||||||||
Non-GAAP gross margin % | 53.5 | % | 56.5 | % | 53.8 | % | 56.9 | % | ||||||||||||
Operating income | ||||||||||||||||||||
GAAP operating income | $ | 2,292 | $ | 1,973 | $ | 845 | $ | 700 | ||||||||||||
Stock-based compensation charges | (A | ) | 1,466 | 1,323 | 2,473 | 2,662 | ||||||||||||||
Restructuring charges and intangible amortization | (B | ) | 1,131 | 975 | 3,287 | 1,666 | ||||||||||||||
Proxy contest expenses | (C | ) | 714 | — | 714 | — | ||||||||||||||
Non-GAAP operating income | $ | 5,603 | $ | 4,271 | $ | 7,319 | $ | 5,028 | ||||||||||||
Net income | �� | |||||||||||||||||||
GAAP net income | $ | 1,399 | $ | 1,596 | $ | 527 | $ | 1,191 | ||||||||||||
Net income per share — diluted | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.03 | ||||||||||||
Stock-based compensation charges | (A | ) | 1,466 | 1,323 | 2,473 | 2,662 | ||||||||||||||
Restructuring charges and intangible amortization | (B | ) | 1,131 | 975 | 3,287 | 1,666 | ||||||||||||||
Proxy contest expenses | (C | ) | 714 | — | 714 | — | ||||||||||||||
Non-GAAP adjustment for income tax | (D | ) | (876 | ) | (862 | ) | (1,740 | ) | (1,521 | ) | ||||||||||
Non-GAAP income | $ | 3,834 | $ | 3,032 | $ | 5,261 | $ | 3,998 | ||||||||||||
Non-GAAP income per share — diluted | $ | 0.10 | $ | 0.08 | $ | 0.13 | $ | 0.10 | ||||||||||||
Shares used in non-GAAP diluted per share computation | (E | ) | 39,586 | 39,114 | 39,366 | 39,143 |
The non-GAAP financial measures of non-GAAP gross margin, non-GAAP operating income, non-GAAP income and non-GAAP income per share-diluted are adjusted for the following items: stock-based compensation charges, restructuring charges and intangible amortization, proxy contest expenses and the related income tax effects. Management believes that the presentation of these non-GAAP financial measures is useful to investors for the reasons discussed earlier and below.
The non-GAAP financial measures in the table, “Reconciliation of GAAP to non-GAAP Financial Measures” include the following adjustments to GAAP based reported results and are further described below and correspond to the following paragraphs, (A) through (E).
(A) Stock-based compensation charges consist of non-cash charges relating to employee stock based compensation awards determined in accordance with SFAS 123R, beginning March 1, 2006, which requires companies to measure all employee stock based compensation awards using a fair value method and recognize compensation costs in its financial statements. Because of varying available valuation methodologies, subjective assumptions and the variety of award types, the Company believes that the exclusion of stock-based compensation allows for useful comparisons of financial results to peer companies, and of financial results between periods. In addition, the Company believes it is useful to investors to understand the specific impact of the application of SFAS 123R on operating results.
(B) Restructuring charges and intangible amortization include severance and facilities consolidation, as well as amortization of intangible assets relating to acquisitions. The Company’s management excludes these costs when evaluating its ongoing performance and believes that the exclusion of these costs allows for useful comparisons of operating results to peer companies and enhanced period to period comparisons.
(C) During the second quarter of fiscal year 2008 we completed the election and alignment of our Board of Directors following our Annual Shareholders meeting held on July 23, 2007. Legal and other expenses were incurred in connection therewith which management believes are not related to the on-going operations of the Company and believes their exclusion in the determination of non-GAAP measures allows for useful comparisons of operating results. In addition, management believes it is useful to investors to understand the specific impact of these expenses.
(D) Non-GAAP adjustment for income tax. The Company’s management adjusts the reported effective tax rate to a 34 percent non-GAAP effective tax rate to calculate non-GAAP income. Management believes that the 34 percent effective tax rates are reflective of a long-term normalized tax rate based on the Company’s current tax structure.
(E) Shares used in computing non-GAAP income per share-diluted are on the same basis as our reported net income per share-diluted. No adjustment has been made to exclude unrecognized compensation cost and windfall tax benefits from the calculation of assumed proceeds, as the impact is not material to the calculation.