Interactive Intelligence reports 2008 fourth quarter and full-year results

Interactive Intelligence (Nasdaq: ININ), a global provider of unified IP business communications solutions, has announced results for its fourth quarter and year, ended 31 December 2008.

The company is reporting 2008 fourth quarter total revenue of $31.3 million, compared to $29.3 million in the fourth quarter of 2007. Total revenue for 2008 was $121.4 million, compared to $109.9 million in 2007, an increase of 10.5%.

“We are pleased to report double-digit annual revenue growth,” said Interactive Intelligence founder and CEO Dr Donald E Brown. “Our product revenue growth rate was reduced from the prior year by the economic down-turn which slowed end-user spending. Despite this tougher economic environment, during 2008 we licensed our solutions to 366 new customers, a record number for a single year, and we managed a notable increase in services revenue with our growing customer base.”

Locally in SA, business remained strong for the company in 2008. “We continued to see further expansion and penetration into Africa, with new customer wins in Nigeria, Kenya and Ghana in Q4 2008. We remain optimistic about business opportunities in 2009,” commented Dave Paulding, regional sales director for UK, Middle East and Africa. He highlighted that a strong ROI and demonstrable cost savings are now more than ever required for a company to be able to justify a new system purchase. “The all software approach that we have pioneered allows us to deliver a lower initial investment and significantly lower ongoing total cost of ownership.”

Fourth quarter 2008 results include:

*.Product revenue of $15.4 million, compared to $15.2 million in the fourth quarter of 2007;
*.Services revenue of $15.9 million, compared to $14.1 million in the fourth quarter of 2007;
*.Gross margins of 67%, the same as in the fourth quarter of 2007;
*.Net income on a generally accepted accounting principles (GAAP) basis of $1.5 million, with diluted earnings per share (EPS) of $0.08; and
*.Net income on a non-GAAP* basis of $3.2 million, with EPS of $0.18, compared to non-GAAP net income of $3.1 million and EPS of $0.16 in the fourth quarter of 2007.

Non-GAAP net income and EPS exclude charges for stock-based compensation of $651 000, or EPS of $0.04, and non-cash income tax expense of approximately $1.1 million, or EPS of $0.06, for the fourth quarter of 2008, and charges for stock-based compensation of $840 000, or EPS of $0.04, and non-cash income tax benefit of $8.1 million, or EPS of $0.41, for the fourth quarter of 2007.

The fourth quarter of 2008 operating expenses includes a reduction of $577 000 resulting from the resolution of certain tax disputes in France.

Full year 2008 results include:

*.Product revenue of $60.3 million, compared to $57.7 million in 2007;
* Services revenue of $61.2 million, compared to $52.2 million in 2007;
* Gross margins of 68%, the same as 2007;
* Net income on a GAAP basis of $4.3 million, with EPS of $0.23; and
* Net income on a non-GAAP basis of $10.5 million, with EPS of $0.56, in 2008, compared to non-GAAP net income of $12.5 million and EPS of $0.65 in 2007.

“While 2009 comes with some market uncertainty, we believe that we have good expense controls in place, very exciting products under development, and we continue to offer a distinct competitive advantage with our SIP-based, all-in-one software architecture,” Dr Brown said.

Non-GAAP net income and EPS exclude charges for stock-based compensation of $3 million, or EPS of $0.16, and non-cash income tax expense of approximately $3.2 million, or EPS of $0.17, for 2008, and charges for stock-based compensation of $3.1 million, or EPS of $0.16, and non-cash income tax benefit of $8.1 million, or EPS of $0.42, for 2007.

Other financial highlights in 2008 include:

* Purchases of 1.2 million shares of outstanding common stock totalling $10 million for the year, including 851 000 shares for $6.6 million in the fourth quarter;
* Deferred revenue totalling $43.1 million as of 31 December 2008, up from $40.8 million as of 31 December 2007;
* Cash flows from operations of $14.6 million, compared to $20.2 million in 2007; and
* Cash and investment balances as of 31 December 2008 totalling $45.5 million with no debt.