INDIANAPOLIS–(BUSINESS WIRE)–
Interactive Intelligence Group Inc. (ININ – News), a global provider of
unified IP business communications solutions, has announced financial
results for its first quarter ended March 31, 2012.
“Our first quarter was highlighted by rapid growth in cloud-based
revenue, which continues to have a positive impact on the growth and
scale of our overall recurring revenues,” said Interactive Intelligence
founder and CEO, Dr. Donald Brown. “For the first quarter, a higher mix
of cloud-based orders and the structure of certain product orders
resulted in more revenues being deferred to future quarters. These
factors also contributed to the 48 percent year-over-year growth in our
total billed and unbilled deferred revenues. We are optimistic about our
outlook for the remainder of the year, and we are maintaining our
revenue, order growth and profitability guidance for 2012.”
Brown added: “Our pipeline of opportunities is strong and growing, and
we believe we are well positioned to leverage the sales and marketing,
and research and development investments we are making in our business.
We continue to gain share at the high end of the contact center market,
and we believe our continued success in winning large cloud customers
supports our view that we have a sustainable long-term advantage in the
fastest growing segment of the overall contact center market.”
First Quarter 2012 Financial Highlights:
-
Orders: Cloud-based orders increased 19 percent and total
orders increased 6 percent, both compared to the first quarter of
2011. The company signed 60 new customers during the first quarter of
2012, including 11 new customers for its cloud-based offering. The
average new customer cloud-based order was $748,000, up from $488,000
during the same quarter last year.
-
Revenues: Total revenues were $52.8 million, an increase of 11
percent on a year-over-year basis. Recurring revenues, which include
both maintenance and cloud revenues, increased 31 percent to $27.6
million and accounted for 52 percent of total revenues. Cloud-based
revenues increased 81 percent year-over-year to $5.0 million. Product
revenues were $19.4 million and services revenues were $5.7 million,
compared to $20.4 million and $6.2 million, respectively, for the
first quarter of last year.
-
Total Deferred Revenues: Deferred revenues increased to $77.8
million as of March 31, 2012 compared to $61.0 million as of March 31,
2011. The amount of unbilled future cloud-based revenues as of March
31, 2012 increased to $40.6 million from $18.6 million as of March 31,
2011. The combination of deferred revenues and unbilled future cloud
revenues was $118.4 million as of March 31, 2012, up 49 percent
compared to $79.6 million as of March 31, 2011.
-
Operating Income: GAAP operating income for the first quarter
was $0.3 million, compared to $4.9 million for the first quarter of
2011. Non-GAAP operating income was $2.4 million, compared to $6.8
million for the first quarter of 2011. The year-over-year decline in
operating income was primarily due to the shift toward cloud-based
orders, which are recognized over the life of the contract. In
addition, as previously discussed, the company increased investments
in sales and marketing and research and development during the first
quarter of 2012 to expand its product leadership and its share in the
cloud-based market.
-
Net Income: GAAP net income for the first quarter was $0.2
million, or $0.01 per diluted share based on a 34 percent effective
tax rate and 20.0 million weighted average shares outstanding. This
compares to GAAP net income of $3.1 million, or $0.16 per diluted
share based on a 35.5 percent effective tax rate and 19.8 million
weighted average shares outstanding for the same period last year.
Non-GAAP
net income for the first quarter was $1.9 million, or $0.09 per
diluted share based on a 24 percent annual effective non-GAAP tax
rate. This compares to non-GAAP net income of $5.5 million, or $0.28
per diluted share for the same period last year.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the financial statement tables included with this press
release. An explanation of these measures is also included below under
the heading “Non-GAAP Measures.”
Additional First Quarter 2012 and Recent
Highlights:
-
The company acquired certain assets of its South African reseller,
ATIO Corp. Pty Ltd. in January, and acquired its Netherlands reseller,
Brightware B.V. in April, continuing its strategy of growing its
operations in key international markets.
-
CRM magazine named Interactive Intelligence Contact Center
Infrastructure Service Leader winner for 2012, beating out larger
competitors based on company direction, customer satisfaction and cost.
Interactive Intelligence will host a conference call today at 4:30 p.m.
Eastern time (EDT) to review the company’s financial results for the
first quarter of 2012. To access the teleconference, please dial 1
877.324.1969 at least five minutes prior to the start of the call. Ask
for the teleconference by the following name: “Interactive Intelligence
first quarter earnings call.”
The teleconference will also be broadcast live on the company’s investor
relations’ page at http://investors.inin.com.
An archive of the teleconference will be posted following the call.
About Interactive Intelligence
Interactive Intelligence Group Inc. (ININ – News) is a global provider
of contact center automation, unified communications, and business
process automation software and services. The company’s unified IP
business communications solutions, which can be deployed on-premise or
via the cloud, are ideal for industries such as financial services,
insurance, outsourcers, collections, and utilities. Interactive
Intelligence was founded in 1994 and has more than 4,500 customers
worldwide. The company is among Forbes Magazine’s 2011 Best Small
Companies in America and Software Magazine’s 2011 Top 500 Global
Software and Service Providers. It employs more than 1,000 people and is
headquartered in Indianapolis, Indiana. The company has offices
throughout North America, Latin America, Europe, Middle East, Africa and
Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000
or info@inin.com; on the Net: www.inin.com.
Non-GAAP Measures
The non-GAAP measures shown in this release include revenue which was
not recognized on a GAAP basis due to purchase accounting adjustments
and exclude non-cash stock-based compensation expense for stock options,
the amortization of certain intangible assets related to acquisitions by
the company and non-cash income tax expense. Reconciliations of these
non-GAAP measures to the most directly comparable GAAP measures are
included with the financial information included in this press release.
These measures are not in accordance with, or an alternative for, GAAP
and may be different from non-GAAP measures used by other companies.
Stock-based compensation expense and amortization of intangibles related
to acquisitions are non-cash and certain amounts of income tax expense
are non-cash. Management believes that the presentation of non-GAAP
results, when shown in conjunction with corresponding GAAP measures,
provides useful information to management and investors regarding
financial and business trends related to the company’s results of
operations. Further, management believes that these non-GAAP measures
improve management’s and investors’ ability to compare the company’s
financial performance with other companies in the technology industry.
Because stock-based compensation expense, non-cash income tax expense
amounts and amortization of intangibles related to acquisitions can vary
significantly between companies, it is useful to compare results
excluding these amounts. Management also uses financial statements that
exclude stock-based compensation expense related to stock options,
non-cash income tax amounts and amortization of intangibles related to
acquisitions for its internal budgets.
This release may contain certain forward-looking statements that involve
a number of risks and uncertainties. Among the factors that could cause
actual results to differ materially are the following: rapid
technological changes in the industry; the company’s ability to maintain
profitability; to manage successfully its growth; to manage successfully
its increasingly complex third-party relationships resulting from the
software and hardware components being licensed or sold with its
solutions; to maintain successful relationships with certain suppliers
which may be impacted by the competition in the technology industry; to
maintain successful relationships with its current and any new partners;
to maintain and improve its current products; to develop new products;
to protect its proprietary rights adequately; to successfully integrate
acquired businesses; and other factors described in the company’s SEC
filings, including the company’s latest annual report on Form 10-K.
Interactive Intelligence is the owner of the marks INTERACTIVE
INTELLIGENCE, its associated LOGO and numerous other marks. All other
trademarks mentioned in this document are the property of their
respective owners.
Interactive Intelligence Group, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
2012
2011
Revenues:
Product
$
19,435
$
20,424
Recurring
27,639
21,088
Services
5,694
6,218
Total revenues
52,768
47,730
Costs of revenues:
Product
5,652
6,196
Recurring
7,240
5,282
Services
4,574
3,712
Amortization of intangible assets
35
35
Total cost of revenues
17,501
15,225
Gross profit
35,267
32,505
Operating expenses:
Sales and marketing
17,422
14,157
Research and development
10,380
8,147
General and administrative
6,888
5,095
Amortization of intangible assets
301
184
Total operating expenses
34,991
27,583
Operating income
276
4,922
Other income (expense):
Interest income, net
182
43
Other expense
(184
)
(166
)
Total other income (expense)
(2
)
(123
)
Income before income taxes
274
4,799
Income tax expense
85
1,704
Net income
$
189
$
3,095
Net income per share:
Basic
$
0.01
$
0.17
Diluted
0.01
0.16
Shares used to compute net income per share:
Basic
19,099
18,417
Diluted
20,020
19,780
Three Months Ended
March 31,
2012
2011
Recurring revenue, as reported
$
27,639
$
21,088
Purchase accounting adjustments
130
59
Non-GAAP recurring revenue
$
27,769
$
21,147
Recurring revenue gross profit as reported
$
20,399
$
15,806
Purchase accounting adjustments
130
59
Non-cash stock-based compensation expense
122
105
Non-GAAP recurring revenue gross profit
$
20,651
$
15,970
Non-GAAP recurring revenue gross margin
74.4
%
75.5
%
Services revenue, as reported
$
5,694
$
6,218
Purchase accounting adjustments
-
31
Non-GAAP services revenue
$
5,694
$
6,249
Services revenue gross profit as reported
$
1,120
$
2,506
Purchase accounting adjustments
-
31
Non-cash stock-based compensation expense
34
25
Non-GAAP services revenue gross profit
$
1,154
$
2,562
Non-GAAP services revenue gross margin
20.3
%
41.0
%
Total revenue, as reported
$
52,768
$
47,730
Purchase accounting adjustments
130
90
Non-GAAP total revenue
$
52,898
$
47,820
Operating income, as reported
$
276
$
4,922
Purchase accounting adjustments
588
510
Non-cash stock-based compensation expense
1,579
1,318
Non-GAAP operating income
$
2,443
$
6,750
Non-GAAP operating margin
4.6
%
14.1
%
Three Months Ended
March 31,
2012
2011
Net income, as reported
$
189
$
3,095
Purchase accounting adjustments:
Increase to revenues:
Recurring
130
59
Services
-
31
Reduction of operating expenses:
Customer relationships
256
139
Technology
35
35
Non-compete agreements
45
45
Acquisition costs
122
201
Total
588
510
Non-cash stock-based compensation expense:
Cost of recurring revenues
122
105
Cost of services revenues
34
25
Sales and marketing
533
392
Research and development
397
408
General and administrative
493
388
Total
1,579
1,318
Non-cash income tax expense
(501
)
549
Non-GAAP net income
$
1,855
$
5,472
Diluted EPS, as reported
$
0.01
$
0.16
Purchase accounting adjustments
0.03
0.03
Non-cash stock-based compensation expense
0.08
0.07
Non-cash income tax expense
(0.03
)
0.02
Non-GAAP diluted EPS
$
0.09
$
0.28
Interactive Intelligence Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31,
December 31,
2012
2011
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
25,616
$
28,465
Short-term investments
39,076
40,589
Accounts receivable, net
51,679
56,331
Deferred tax assets, net
8,303
8,952
Prepaid expenses
11,910
11,474
Other current assets
5,120
4,966
Total current assets
141,704
150,777
Long-term investments
24,440
23,415
Property and equipment, net
19,454
18,304
Goodwill
28,494
22,696
Intangible assets, net
16,071
15,029
Other assets, net
2,423
2,581
Total assets
$
232,586
$
232,802
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
13,329
$
16,545
Accrued compensation and related expenses
6,209
8,870
Deferred product revenues
4,633
3,870
Deferred services revenues
58,441
57,423
Total current liabilities
82,612
86,708
Deferred revenue
14,708
14,141
Deferred tax liabilities, net
876
1,688
Other long-term liabilities
300
291
Total liabilities
98,496
102,828
Shareholders’ equity:
Preferred stock
-
-
Common stock
192
190
Additional paid-in-capital
122,956
119,644
Accumulated other comprehensive income (loss)
420
(193
)
Retained earnings
10,522
10,333
Total shareholders’ equity
134,090
129,974
Total liabilities and shareholders’ equity
$
232,586
$
232,802
Interactive Intelligence Group, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
March 31,
2012
2011
Operating activities:
Net income
$
189
$
3,095
Depreciation, amortization and other non-cash items
2,051
1,481
Stock-based compensation expense
1,579
1,318
Tax benefits from stock-based payment arrangements
(70
)
(862
)
Deferred income tax
(163
)
34
Accretion of investment income
112
(682
)
Gain on disposal of fixed assets
25
-
Changes in operating assets and liabilities:
Accounts receivable
5,771
(49
)
Prepaid expenses
(394
)
(1,311
)
Other current assets
(154
)
272
Other assets
158
(128
)
Accounts payable and accrued liabilities
(2,973
)
(1,598
)
Accrued compensation and related expenses
(2,835
)
(1,585
)
Deferred product revenues
518
1,793
Deferred services revenues
605
4,889
Net cash provided by operating activities
4,419
6,667
Investing activities:
Sales of available-for-sale investments
21,908
21,028
Purchases of available-for-sale investments
(21,300
)
(22,740
)
Purchases of property and equipment
(2,569
)
(2,139
)
Acquisition, net of cash
(7,042
)
(4,111
)
Unrealized gain on investment
-
26
Net cash used in investing activities
(9,003
)
(7,936
)
Financing activities:
Proceeds from stock options exercised
1,271
3,881
Proceeds from issuance of common stock
141
96
Employee taxes withheld for restricted stock units
253
-
Tax benefits from stock-based payment arrangements
70
862
Net cash provided by financing activities
1,735
4,839
Net (decrease) increase in cash and cash equivalents
(2,849
)
3,570
Cash and cash equivalents, beginning of period
28,465
48,300
Cash and cash equivalents, end of period
$
25,616
$
51,870
Cash paid during the period for:
Income taxes
$
2,094
$
842
Other non-cash item:
Purchases of property and equipment payable at end of period
(234
)
(746
)
Supplemental Data
(Dollars in thousands)
(unaudited)
2011
2012
Q1
Q2
Q3
Q4
Total
Q1
Margins (GAAP):
Product
70.2%
73.9%
69.9%
78.7%
73.5%
70.9%
Recurring
74.5%
73.6%
73.2%
74.5%
74.0%
73.8%
Services
40.3%
28.0%
27.9%
22.7%
29.9%
19.7%
Overall
68.1%
68.9%
66.7%
71.1%
68.8%
66.8%
Year-over-year Revenue Growth (GAAP):
Product
31.5%
33.7%
7.3%
9.0%
18.7%
-4.8%
Recurring
30.3%
35.1%
45.7%
22.8%
33.0%
31.1%
Services
87.7%
30.4%
26.3%
4.3%
31.6%
-8.4%
Overall
36.3%
33.9%
24.6%
13.9%
26.0%
10.6%
Orders:
Over $1 million
3
5
3
6
17
6
Between $250,000 and $1 million
24
27
14
31
96
11
Number of new customers
65
81
54
101
301
60
Average new customer order:
Overall
$
275
$
240
$
316
$
257
$
267
$
237
Cloud-based
488
282
3,691
689
720
748
ININ-G
Article source: http://finance.yahoo.com/news/interactive-intelligence-reports-first-quarter-201000687.html
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