Interactive Intelligence reports 2008 second quarter results

Interactive Intelligence Inc (Nasdaq: ININ), a global developer of unified IP business communications solutions, announced results for the quarter and six-month period ended 30 June 2008.

The company reported record 2008 second quarter revenue of $30.6 million, a 13% increase from $27.1 million in the same quarter last year.

Operating income for the 2008 second quarter was $1.3 million, compared to $2.2 million in the 2007 second quarter. Non-GAAP (non-generally accepted accounting principles) operating income was $2.2 million, compared to $3 million in the second quarter of 2007. Non-GAAP operating income excludes charges for stock-based compensation for the second quarter of $944 000 in 2008 and $806 000 in 2007.

Net income in the 2008 second quarter was $845 000, with diluted earnings per share (EPS) of $0.04, compared to $2.4 million and $0.12, respectively, in the 2007 second quarter. Net income includes fully taxed earnings in 2008. Non-GAAP net income was $2.4 million with EPS of $0.13, compared to $3.2 million and $0.17, respectively, in the 2007 second quarter. Non-GAAP net income excludes charges for stock-based compensation and non-cash tax expense.

"We received an increased number of orders in the second quarter and we were pleased with the number of new customers licensing our solutions," said Interactive Intelligence founder and CEO, Dr Donald E Brown. "However, we did see a lower dollar amount of orders from existing customers, which we attribute to the current economic slowdown. While we see no change in our long-term market opportunity or in the competitive advantages our solutions offer, we are responding to this tougher sales environment by adjusting our previously planned operating expenses until general market conditions improve."

For the six months ended 30 June 2008, revenues were a record $60.1 million, a 17% increase from $51.4 million in the same period in 2007.

Operating income for the first half of 2008 was $2.7 million, compared to $3.6 million for the first half of 2007. For the first half of 2008, non-GAAP operating income was $4.6 million, compared to $5.1 million in the first half of 2007. Non-GAAP operating income excludes charges for stock-based compensation of $1.9 million in 2008 and $1.5 million in 2007.

Net income for the six months ended 30 June 2008 was $2 million, with EPS of $0.10, compared to $4.1 million and $0.22, respectively, in the first half of 2007. Net income includes fully taxed earnings in 2008. Non-GAAP net income was $5.3 million with EPS of $0.28, compared to $5.6 million and $0.29, respectively, in the first half of 2007. Non-GAAP net income excludes charges for stock-based compensation and non-cash tax expense.

Cash and short-term investments as of 30 June 2008 totalled $49.7 million, up from $46.3 million on 31 December 2007. Cash flow from operations for the first six months of 2008 was $6.8 million, compared to $6.9 million in the first half of 2007.

Today, Interactive Intelligence's board of directors approved a share repurchase programme for its common stock under which the company may purchase up to a maximum aggregate purchase price of $10 million from time to time over the next year. The purchases under this programme may be made in the open market and in privately negotiated transactions. The number of shares to be purchased and the timing of purchases under the programme will be based on both business and market conditions. Any repurchases will be made using the company's cash resources, and the programme may be amended, suspended or discontinued at any time. Interactive Intelligence does not intend to publicly announce any suspension of the programme. Any shares acquired will be available for stock-based compensation awards and other corporate purposes. The programme authorises, but does not commit, the company to repurchase shares of its common stock.

"With our share repurchase programme announced today, we reaffirm our confidence in the long-term future of the company," Brown said. "Our balance sheet and liquidity are strong and the value of our products is being recognised by the market. We believe that we can invest in the growth initiatives that are key to our future success and take this step to enhance returns."

To further reinforce its existing customer relationships through quality education and information, Interactive Intelligence hosted a record number of attendees at its ninth annual User Forum in May. More than 60 sessions were presented during the three-day event. The conference attracted more than 300 customers, including Abbott Labs, American Family Insurance, BMW, DialAmerica, Finish Line, Harvard University, Kohl's, Lockheed Martin, Nautilus, Perot Systems, PETCO, Rolex, and Sony.

Product highlights during the quarter included the release of an upgraded version of Interaction Dialer, announcements of a new integration with Microsoft OCS, and the introduction of a new automated customer satisfaction survey module called Interaction Feedback.

Interactive Intelligence will host a conference call on 28 July, at 4.30pm Eastern time (EDT), featuring Dr Brown and the company's CFO, Stephen R Head. There will be a live Q&A session following opening remarks.

To access the teleconference, please dial 1 877.681.3371 at least five minutes prior to the start of the call. Ask for the teleconference by the following name: "Interactive Intelligence second quarter earnings call."

The teleconference will also be broadcast live on Interactive Intelligence's investor relations' page at http://www.inin.com/investors. An archive of the teleconference will be posted following the call.