Intrinsyc Reports 2008 Third Quarter Financial Results
Vancouver, BC – Intrinsyc Software International, Inc. (TSX: ICS), a global wireless software solutions provider, today announced its financial results for the third quarter ended September 30, 2008, reported in United States dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP). The Company’s results are presented in comparison to the three-month period ended June 30, 2008 and the three-month period ended August 31, 2007. As previously announced, Intrinsyc changed its fiscal year-end from August 31 to December 31.
The Company reported third quarter revenue of $7.9 million as compared to $5.6 million for the period ended June 30, 2008 and $4.3 million in the period ended August 31, 2007. The year-over-year revenue improvement of 84 percent was primarily attributable to the addition of navigation software revenues from the acquisition of assets of Destinator Technologies Inc., combined with consistent revenue generation from the Company’s wireless engineering services. Total revenue attributable to the Company’s software solutions increased to 38 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 23 percent and 15 percent in the respective comparative quarters.
Gross margin was 61 percent in the third quarter of 2008, up from 47 percent in the three months ended June 30, 2008. When compared to the three months ended August 31, 2007, the total gross profit of $4.8 million increased by 127 percent, while gross margin of 61 percent was higher than the 49 percent achieved in that period based on the increased revenue from the Company’s software offerings, which has higher margins than engineering services.
“We increased revenue in the past quarter significantly over the prior periods, which is attributable to strong performance by our engineering services business, in addition to revenue generated by our Destinator® acquisition. We also commenced generating Soleus® royalty revenue from MiTAC and SiRF during this period,” commented Tracy Rees, Interim Chief Executive Officer of Intrinsyc. “While we continue to focus our efforts on accelerating execution, we have taken and will continue to take important steps to preserve cash and better align our business with the current economic environment and the ramping of Soleus and Destinator. Included in these efforts are initiatives to streamline our organizational structure, deliver operating efficiencies, reduce costs and further our efforts towards profitability.”
Loss before interest, amortization, stock-based compensation expense and income tax (“EBITDA”) for the three months ended September 30, 2008 was $3.9 million, compared to $3.9 million in the three month period ended June 30, 2008, and $3.7 million for the three months ended August 31, 2007. Total operating expenses, excluding amortization and stock-based compensation, for the three months ended September 30, 2008 were $8.7 million, compared to $6.5 million in the three months ended June 30, 2008 and $5.7 million for the three months ended August 31, 2007. See further discussion on EBITDA under the heading, “Supplemental Information”, later in this press release.
Cash at the end of the third quarter was $19.7 million, compared to $30.0 million as of June 30, 2008.
The Company expects revenues for its fiscal year ending December 31, 2008 to be slightly lower than the range of $26 million to $29 million provided previously due to the impact of the challenging macroeconomic conditions. Gross margin is expected to be consistent with prior guidance of 49 percent to 55 percent, with revenue attributable to software of 28 percent to 33 percent of total revenues for this period. Due to the current economic environment resulting in reduced visibility regarding the timing of execution of sales opportunities, the Company is not able to provide additional financial outlook at this time.
Recent Business Highlights
* Announced the appointment of Tracy Rees as Interim Chief Executive Officer and Philip Ladouceur as Chairman following the departure of Glenda Dorchak as Chairman, Chief Executive Officer and Director of the Company.
* Signed a Soleus license agreement with GPS Technologies Company, Ltd. (GPS-E), a leading manufacturer of personal navigation devices (PNDs) located in Hong Kong, China.
* Announced Soleus design win with existing Soleus licensee whereby Soleus customer is acting as ODM for deployment of a connected PND by its customer in the European market.
* Launched Motorola A1600 MING in China, a consumer phone which uses Destinator navigation software.
* Released GPS phone development platform by SiRF that combines the Soleus software platform and SiRF’s location technology chipset to enable OEMs and ODMs to deliver connected consumer navigation handhelds.
* Announced product launch of “Cronos” smartphone by Shanghai RagenTek Communication Technology Co. Ltd., in China, which is based on the complete software/hardware platform from Intrinsyc and SiRF.
* Signed design win with Motorola for two new PNDs (MOTONAV TN20 and MOTONAV TN30) in the United States with Motorola’s MOTONAV which is based on a custom version of Destinator navigation software.
* Announced design win with Supa Technologies for personal navigation products based on Destinator version 8, to be sold through leading North American office supply retailers.
* Signed a multi-year agreement establishing a sales relationship with NAVTEQ, a global leader in premium-quality digital map data.
* Announced Soleus Transit, which addresses the connected PND market and combines Soleus with Destinator for a complete connected PND solution.
* Announced the launch of RapidRIL™, a proprietary radio interface layer technology for rapid Windows Mobile telephony development, delivered with Intrinsyc’s engineering services engagement for customer, InterDigital, Inc.
Consolidated unaudited financial statements are attached and a conference call to discuss these results will be held at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time), today. To listen to the conference call live by telephone, dial +1-866-400-2280 toll free for participants in North America, and +1-416-850-9143 for Toronto area and international participants, approximately 10 minutes before the start time. A telephone playback will be available for three business days, beginning approximately two hours after the call. To listen to the telephone replay please dial +1-866-245-6755 toll free, and for international callers, dial +1-416-915-1035. Enter access code 984490.
The Audit Committee of the Company has reviewed the contents of this news release.
Adobe PDF 2008 Third Quarter Financial Statements (PDF): http://www.intrinsyc.com/docs/financials/FY2008/FY2008-Q3-Financials.pdf
Forward Looking Statements
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company’s future plans, objectives, performance, revenues, growth, profits, operating expenses or the company’s underlying assumptions. The words “may”, “would”, “could”, “will”, “likely”, “expect,” “anticipate,” “intend”, “plan”, “forecast”, “project”, “estimate” and “believe” or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company’s actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the Company’s ability to continue to earn the revenue from Destinator products after the acquisition, and to integrate the acquired business into its own operations; the need to develop, integrate and deploy software solutions to meet our customer’s requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer’s satisfaction; the timing of entering into significant contracts; our customers’ continued commitment to the deployment of our solutions; the risks involved in developing integrated software solutions and integrating them with third-party products and services; the performance of the global economy and growth in software industry sales; market acceptance of the Company’s products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by its competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and including but not limited to other factors described in the Company’s reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2007. In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors: the Company’s ability to execute on its business plan; the acceptance of the Company’s products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company’s subjective assessment of the likelihood of success of a sales lead or opportunity; the Company’s historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company’s estimated margins. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
About Intrinsyc Software International, Inc.
Intrinsyc provides wireless software solutions that enable next-generation handheld products, including mobile handsets, smart phones, and converged devices. The company’s software products include the Soleus™ software platform for consumer device development and the recently acquired Destinator® GPS/navigation technologies. Combined with award winning engineering services and years of systems integration expertise, these solutions help device makers, service providers, and silicon vendors deliver compelling wireless products with faster time-to-market and improved development cost. Intrinsyc is a Microsoft® Windows Embedded Gold Partner and a winner of Windows Embedded Excellence Awards in 2007 and 2008, a Symbian Competence Center and Symbian Platinum Partner. Intrinsyc is publicly traded (TSX:ICS) and headquartered in Vancouver, Canada, with offices in China, Israel, Taiwan, U.K., and the United States.
© 2008 Intrinsyc Software International, Inc. All rights reserved.
Intrinsyc and Intrinsyc logo are registered trademarks, and Soleus and Soleus logo are trademarks in Canada, the European Community and the U.S.A. of Intrinsyc Software International, Inc. All other marks are the trademarks of the respective owners and are hereby acknowledged.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.