Press Room
inContact Reports First Quarter 2009 Fiscal Results
Software Segment Revenue Up 55% to Record $6.8 Million
SALT LAKE CITY – May 7, 2009 – inContact, Inc. (NASDAQ: SAAS), the market leader in on-demand contact center software and agent optimization tools, today reported financial results for the first quarter ended March 31, 2009.
FIRST QUARTER FINANCIAL RESULTS
Revenue
Software segment revenue for the three months ended March 31, 2009 was $6.8 million, an increase of 55% from $4.4 million for the same period in 2008. Software segment revenue includes all monthly recurring revenue related to the delivery of our software applications, plus the associated professional services and setup fees related to software service product features.
Consolidated revenue for the three months ended March 31, 2009 was $21.0 million, an increase of 5% from $19.9 million for the same period in 2008. This reflects an increase of $2.4 million in Software segment revenue, which was partially offset by a decrease of $1.3 million in Telecom segment revenue that is largely related to expected attrition in the legacy component of this segment.
EBITDAS
Earnings before interest, taxes, depreciation and amortization, and stock-based compensation (EBITDAS) for the first quarter was a positive $142,000 versus a negative EBITDAS of $862,000 for the first quarter of 2008. First quarter 2009 EBITDAS was impacted by one-time expenses of $275,000 related to severance and recruiting fees. EBITDAS was also impacted by a non-cash charge of $236,000 related to the change in fair value of certain warrants. After removing these one-time and non-cash expenses, first quarter EBITDAS would have been a positive $653,000. EBITDAS is a non-GAAP measure management believes provides important insight into our operating results (see reconciliation of non-GAAP measures below).
Gross Margin
Gross margin percentage increased to 51% in the first quarter compared to 47% for the same period in 2008. The 4% improvement in gross margin percentage is attributable to our continuing increase of higher margin Software segment revenue as a result of increased sales of our inContact software.
Net Loss
Net loss for the first quarter was $1.7 million, or $0.05 per share, as compared to a net loss of $2.7 million or $0.09 per share for the same period in 2008. The net loss is attributable, in part, to $1.9 million of non-cash expenses, which included $1.3 million of depreciation and amortization, $388,000 of stock-based compensation, and $236,000 for the change in the fair value of certain warrants as well as one-time charges of $275,000 related to severance and recruiting fees.
HIGHLIGHTS SINCE JANUARY 1, 2009
- Signed 30 new Software contracts during the quarter, 20 of which were with new companies, while 10 represent an expansion of business within existing customers.
- Added a Fortune 500 distribution company to our customer base bringing the total to 16 customers in the Fortune 500.
- Released Phase 2 of our next-generation inContact platform in April, with the next quarterly release scheduled for July. This new platform raises the bar on reliability, scalability, security and the ability to integrate with external applications, such as CRM systems.
- Signed an agreement with a large international outsourced contact center with well over 25,000 agents and announced the completion of a successful pilot program with another large outsourced organization that has resulted in 2 initial contact center deployments.
- Integrated inContact with Microsoft Dynamics™ CRM. The integration was featured at the Microsoft Convergence show in New Orleans, March 10-13, 2009.
- Made the following additions to the Executive Team: Greg Ayers, Executive Vice President and Chief Financial Officer, Marc Cullers, Senior Vice President of Sales, and Durinda Biesman, Vice President of Client Services.
- inContact was awarded the 2009 CRM Excellence Award from Customer Interaction Solutions Magazine and the Unified Communications Magazine 2008 Product of the Year Award.
"I am extremely pleased to once again report another strong quarter of financial performance and progress for inContact," said Paul Jarman, CEO of inContact, Inc. “During the first quarter of 2009 we signed 30 new software contracts, 20 of which were with new companies. Software segment revenue grew to a record $6.8 million, a 55% increase from the year ago period.
“First quarter results further confirm the value of our business model. We continue to see growing interest in our products and services from a broad cross section of companies, including a number of large outsourced contact center organizations, which represent more than 10% of the total contact center marketplace. Through these relationships, we gain invaluable credibility and visibility and expose ourselves to significant vertical growth potential over time.
“We’re seeing positive trends that are driving our growth. Software-as-a-Service acceptance is accelerating, businesses are expanding their use of at-home agents and contact centers are looking for alternative solutions to capital expenses. Our inContact platform addresses these goals far better than premises-based solutions. With our leadership position, we continue to attract top industry talent as demonstrated with the most recent additions to our management.
“In summary, we have had a strong start to 2009. We are capitalizing on market trends and have the right product offerings that solve difficult customer problems. In short, our model is working. Speaking for myself and the entire management team, we are confident that the positive operational progress we have demonstrated to date will continue throughout 2009 and beyond.”
CONFERENCE CALL INFORMATION
We will host a conference call to discuss our first quarter 2009 financial results later today at 4:30 p.m. Eastern time (1:30 p.m. Pacific).
Dial-In Number: 1-800-894-5910
International: +1-785-424-1052
Conference ID#: 7INCONTACT
An audio file of the call will be available after May 8, 2009 on the inContact Investor Relations website at http://investor.incontact.com, in the Webcasts and Presentations section. A replay of the call will be available via telephone after 7:30 p.m. Eastern time today and until May 14, 2009:
Toll-free replay number: 1-800-283-7928
International replay number: +1-402-220-0866
(No replay pass code required)
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on inContact’s current expectations, estimates and projections about inContact’s industry, management’s beliefs, and certain assumptions made by management, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to, risks associated with inContact’s business model; our ability to develop or acquire, and gain market acceptance for new products, including our new sales and marketing and voice automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; its ability to expand operations; fluctuations in its earnings as a result of the impact of stock-based compensation expense; interruptions or delays in our hosting operations; breaches of our security measures; its ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; and its ability to expand, retain and motivate our employees and manage its growth. Further information on potential factors that could affect our financial results is included in inContact’s Annual Report on Form 10-K, quarterly reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. inContact undertakes no obligation to revise or update publicly any forward-looking statement for any reason.
Segment Reporting
We operate under two business segments: Software and Telecom. The Software segment includes all monthly recurring revenue related to the delivery of our software applications plus the associated professional services and setup fees related to the software services product features. The Telecom segment includes all voice and data long distance services provided to customers. Operating segment revenues and profitability for the three months ended March 31, 2009 and 2008 were as follows (in thousands):
Reconciliation of Non-GAAP Measures:
“EBITDAS,” which is calculated as Earnings Before deductions for Interest, Taxes, Depreciation and Amortization, and Stock-Based Compensation, is not a measure of financial performance under generally accepted accounting principles (GAAP). EBITDAS is provided for the use of the reader in understanding our operating results and is not prepared in accordance with, nor does it serve as an alternative to GAAP measures and may be materially different from similar measures used by other companies. While not a substitute for information prepared in accordance with GAAP, management believes that this information is helpful for investors to more easily understand our operating financial performance. Management also believes this measure may better enable an investor to form views of our potential financial performance in the future. This measure has limitations as an analytical tool, and investors should not consider EBITDAS in isolation or as a substitute for analysis of our results prepared in accordance with GAAP.
Contacts
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Investor Contact: |
General Contact: Heather Hurst Communications Director 866-698-8911 heather.hurst@inContact.com |
inContact, Inc. 7730 S. Union Park Ave. Suite 500 Salt Lake City, UT 84047 866-965-7227 info@inContact.com |
