Interactive Intelligence reports record first quarter operating results

Interactive Intelligence Inc, a global developer of business communications software, today reported record operating results for its first quarter ending 31 March 2006.

Revenues for the first quarter of 2006 were $17.9 million, up 23% from $14.6 million recorded in the first quarter of 2005. Net income for the first quarter, calculated in accordance with US generally accepted accounting principles (GAAP), was $1 million with diluted earnings per share (EPS) of $0.06, compared to net income of $25 000 and EPS of $0.00 in the first quarter of 2005.

Non-GAAP net income for the first quarter of 2006 was $1.5 million with EPS of $0.09. These non-GAAP results exclude the recording of stock-based compensation expense for employee stock options as required by Financial Accounting Standards (FAS) 123R. A reconciliation of GAAP operating results to non-GAAP results is included in an attached schedule.

"This quarter was a great start to the year and shows continued positive momentum in the market," said Interactive Intelligence CEO, Dr Donald E Brown. "Our contact centre product portfolio continued to win head-to-head against competitors, large and small, and we continue to have the dollar value of orders increase at a rate that is greater than the overall market growth rate. Orders for our IP PBX distributed through Vonexus, our enterprise IP communications subsidiary, again posted solid growth. This positive momentum was supported by our marketing efforts, which have strengthened the company`s brand presence and provided us with a growing number of sales opportunities."

Other financial highlights from the first quarter included:

* Cash flow from operations was $3.3 million, up from $934 000 for the first quarter of 2005.
* Cash and investments totalled $18.9 million, an increase from $15.1 million as of 31 December 2005.
* Days` sales outstanding (DSO) in accounts receivable of 71 days, down from 77 days as of 31 December 2005.
* Deferred revenues totalled $24.1 million, up from $22 million as of 31 December 2005.

Customer orders received for the company`s contact centre automation software in the first quarter included Baxter Credit Union; Kluth Customer Care and Kluth Telemarketing, Germany; Proctor Financial, Inc; Quion groep, the Netherlands; State of Indiana, Bureau of Motor Vehicles; and many others.

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Interactive Intelligence ended the quarter with two more product of the year awards. The first was from Customer Inter@ction Solutions Magazine for the company`s contact centre automation software, Customer Interaction Centre (CIC); and the second was from Internet Telephony Magazine for the company`s IP communications system, Enterprise Interaction Centre (EIC). Over the past 10 years the company has garnered more than 60 corporate and product awards.

Interactive Intelligence will host an earnings conference call today 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. The teleconference is expected to last approximately 45 minutes.

To access the teleconference, please dial 1 800.670.3544 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://www.inin.com/investors An archive of the teleconference will be posted following the call.

To receive a copy of the earnings release, please call 317.872.3000 and press "4" for investor relations, or e-mail investorrelations@inin.com.