Interactive Intelligence (ININ)

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Interactive Intelligence First Quarter Operating Results Include Record Revenues
Monday April 28, 4:00 pm ET
Revenues Increase 21 Percent over Same Period Last Year

INDIANAPOLIS--(BUSINESS WIRE)--Interactive Intelligence (Nasdaq: ININ - News), a global provider of unified IP business communications solutions, reported first quarter operating results for the period ended March 31, 2008, which included record revenues.

For the first quarter, revenues were a record $29.5 million, up 21 percent over revenues of $24.3 million in the same quarter last year.

“Driven by the need to reduce costs and retain customers during these uncertain economic times, companies are increasingly adopting our all-in-one contact center and enterprise IP telephony products and services,” said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. “This demand was reflected in our first quarter record revenues and a 39 percent increase in orders compared to the same period last year. We also continued to close large transactions during the quarter, with 15 contracts exceeding $250,000, and a record nine of those representing new customers. With several upcoming products squarely focused on helping organizations further reduce costs and improve customer service, we feel very positive headed into the second quarter.”

Operating income for the first quarter of 2008 was $1.5 million, compared to $1.4 million in 2007. Operating income included non-cash, stock-based compensation expense of $932,000 in 2008, and $668,000 in 2007.

Net income was $1.1 million for the first quarter of 2008, with diluted earnings per share (EPS) of $0.06. The first quarter of 2008 was the first quarter in which the company recognized full taxes on earnings, although most of the tax expense was non-cash. Net income was $1.8 million in the first quarter of 2007, with EPS of $0.09.

For the first quarter of 2008, non-GAAP (generally accepted accounting principles) operating income was $2.4 million, compared to $2.1 million in the first quarter of 2007. Non-GAAP net income in 2008 was $2.9 million, or EPS of $0.15, compared to 2007 non-GAAP net income of $2.4 million, or EPS of $0.13. The non-GAAP differences were due to exclusion of the non-cash income tax expense in the first quarter of 2008, and stock-based compensation expense recorded in both years.

Cash and short-term investments as of March 31, 2008 totaled $49.4 million, up from $46.3 million on Dec. 31, 2007. Cash flow from operations for the first quarter of 2008 was $5.3 million, compared to $4.9 million in the same quarter last year.

Other Interactive Intelligence achievements in the first quarter included a Best Large Enterprise Solution award and Product of the Year award, both from INTERNET TELEPHONY magazine.

The company also received ISO 9001:2000 re-certification, marking its third consecutive year of compliance. Being certified to ISO 9001:2000 gives further assurance to Interactive Intelligence customers and partners that it is able to satisfy their most stringent requirements for quality, reliability, efficiency and cost-effectiveness.

As part of its ongoing growth strategy, Interactive Intelligence hired Bill Gildea as vice president of business development to help evaluate acquisition and strategic partnering opportunities. As a complement to its existing east and west regional headquarter offices, the company also opened a regional software development office in Denver to access a larger pool of job candidates.

Interactive Intelligence will host a conference call April 28 at 4:30 p.m. Eastern time (EDT) featuring the company’s founder, president and CEO, Dr. Donald E. Brown, and its CFO, Stephen R. Head. There will be a live Q&A session following opening remarks.

To access the teleconference please dial 1 877.627.6566 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.

The non-GAAP measures shown in this release exclude non-cash stock-based compensation expense for stock options and non-cash income tax expense. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included after 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. 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 historical periods because certain historical periods excluded stock-based compensation expense for stock options (prior to 2007) and income tax expense and benefits have varied significantly and are primarily non-cash. Interactive Intelligence’s management uses these non-GAAP results to compare its performance to its peers in the software industry. Because stock-based compensation expense and non-cash income tax expense amounts 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 and non-cash income tax amounts for its internal budgets.