EX-99.1 2 d31425exv99w1.htm PRESS RELEASE exv99w1
 

EXHIBIT 99.1
(INTERVOICE LETTERHEAD)
         
CONTACT       FOR IMMEDIATE RELEASE
Intervoice, Inc.        
Corbin Baumel        
+ 1 (972) 454-8737        
42-05
Intervoice Announces Results for the Third Quarter of Fiscal 2006
Sales of $41.0 Million and Net Income of $0.09 Per Diluted Share
DALLAS — December 20, 2005 — Intervoice, Inc. (NASDAQ: INTV) today reported revenues of $41.0 million and net income of $3.6 million, or $0.09 per diluted share, for its third quarter ended November 30, 2005. Revenues were down 5 percent from $43.3 million in the second quarter of fiscal 2006, and net income reflects a 21 percent decline from net income of $4.6 million, or $0.12 per diluted share, in the prior quarter. Revenues in the third quarter of fiscal 2005 totaled $48.4 million, and net income was $7.0 million or $0.18 per diluted share. The Company’s net income for the third quarter of fiscal 2006 was favorably impacted by approximately $0.7 million of adjustments related to the finalization of the US tax return for fiscal 2005 and the successful resolution of certain international tax matters.
During the third quarter of fiscal 2006, cash flow from operating activities totaled $4.3 million, and the Company’s cash balances increased by $0.9 million to $70.3 million. In addition, the Company’s working capital grew by $2.4 million during the quarter. The Company’s solutions backlog of $29.9 million at November 30, 2005 was down slightly from $30.3 million at the end of last quarter. The backlog for voice automation solution sales in North America was up 24 percent to $13.8 million while the backlog for international solution sales was down 16 percent to $16.1 million.
“Although top-line growth has been a challenge this year, I am pleased with the continued improvements in the Company’s balance sheet,” said Craig Holmes, the Company’s Executive Vice President and Chief Financial Officer. “Our financial strength continues to provide a strong foundation for future growth.”
On November 18, 2005 the Company announced that it had signed an agreement to purchase Edify Corporation, a leading global supplier of interactive voice response solutions, from S1 Corporation (NASDAQ: SONE), for $33.5 million in cash. The acquisition will strengthen Intervoice’s position in the voice automation market, and the added revenues and resources will

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(INTERVOICE LOGO)
enable Intervoice to accelerate the development and delivery of multi-channel, automated information solutions for both its enterprise and network customers. The merger is expected to close in late December 2005, subject to normal and customary closing conditions.
“I am looking forward to merging with Edify and expect this to be a very positive combination for our customers, partners, employees and shareholders,” said Bob Ritchey, the Company’s President & CEO, “We believe the Company’s long-term outlook continues to be favorable, and I currently believe revenues for the fourth quarter of fiscal 2006 will be in the $41 million to $47 million range, including $3 million to $5 million related to Edify’s business which will be consolidated following the consummation of the merger. I look forward to discussing details of our third fiscal quarter and outlook for the future in tomorrow’s conference call with investors.”
The Company has scheduled a conference call for 9:00 a.m. central time on Wednesday December 21, 2005, to discuss its third fiscal quarter results and its outlook for the future. To participate in the call, dial (719) 457-2637. The conference call confirmation code is 9550946. A webcast and replay of the call will be available at the Company’s Web site: www.intervoice.com.
Intervoice has included in this press release certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning its business and operations that are based on management’s current beliefs. All statements other than statements of historical fact in this press release are forward-looking statements. Readers are cautioned to read the risks and uncertainties, described in the Company’s filings with the Securities and Exchange Commission, including without limitation, the risks and uncertainties set forth under the caption entitled “Cautionary Disclosures to Qualify Forward Looking Statements” in the Company’s Annual Report filed on Form 10-K and Quarterly Reports filed on Form 10-Q. Readers are further cautioned that because Intervoice has not yet acquired Edify, any estimate of revenues related to Edify’s business is speculative. Intervoice cautions current and potential investors that such risks and uncertainties could result in material differences from the forward-looking statements in this press release.
About Intervoice
Intervoice, Inc. (NASDAQ: INTV) provides leading enterprises and network operators with the platform, software, applications and services necessary to optimize the customer experience through voice automation solutions. Omvia®, the open, standards-based Intervoice product suite,

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offers unparalleled flexibility for advanced multi-media messaging, portal, IVR and payment applications. The Company’s two market units focus on enterprise and network markets, providing solutions that improve operational efficiencies, drive revenue and increase customer satisfaction and loyalty. Building on more than 20 years of systems integration and service delivery experience, the Professional Services Agility Suite from Intervoice is designed to provide proven best practices toward design, implementation, and optimization of voice applications. Intervoice systems have been proven in more than 23,000 implementations worldwide at companies across a variety of industries including: Ameritrade, Amtrak, Atmos Energy, Citibank, CSX Transportation, MasterCard, O2, Rogers Wireless, Travelocity, Verizon and Vodafone. A Microsoft Certified Partner and Certified Partner for Learning Solutions, Intervoice is headquartered in Dallas with offices in Europe, the Middle East, South America, Africa and Asia-Pacific. For more information, visit www.intervoice.com.
# # #

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(INTERVOICE LOGO)
INTERVOICE, INC.
CONSOLIDATED BALANCE SHEETS
                 
    (In Thousands, Except Share and Per Share Data)  
ASSETS   November 30, 2005     February 28, 2005  
    (Unaudited)          
Current Assets
                
Cash and cash equivalents
   $ 70,258     $ 60,242  
 
                
Trade accounts receivable, net of allowance for doubtful accounts of $1,129 in fiscal 2006 and $799 in fiscal 2005
     25,211       32,605  
Inventory
     8,836       7,642  
Prepaid expenses and other current assets
     4,620       4,339  
 
            
 
     108,925       104,828  
 
            
Property and Equipment, net of accumulated depreciation of $56,676 in fiscal 2006 and $54,303 in fiscal 2005
     27,151       21,755  
 
                
Other Assets
                
Intangible assets, net of accumulated amortization of $16,803 in fiscal 2006 and $15,840 in fiscal 2005
     4,044       4,707  
Goodwill
     3,401       3,401  
Other assets
     64       168  
 
            
 
   $ 143,585     $ 134,859  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts payable
   $ 9,499     $ 11,485  
Accrued expenses
     9,479       13,745  
Customer deposits
     6,815       6,871  
Deferred income
     25,056       24,448  
Current portion of long-term borrowings
     —       400  
Income taxes payable
     5,515       4,129  
 
            
 
     56,364       61,078  
Long-Term Borrowings
     —       1,333  
 
                
Stockholders’ Equity
                
Preferred stock, $100 par value—2,000,000 shares authorized: none issued
                
Common stock, no par value, at nominal assigned value—62,000,000 shares authorized: 38,286,179 issued and outstanding in fiscal 2006 and 37,196,216 issued and outstanding in fiscal 2005
     19       19  
Additional capital
     90,313       85,421  
Accumulated deficit
     (786 )     (12,931 )
Accumulated other comprehensive loss
     (2,325 )     (61 )
 
            
Stockholders’ equity
     87,221       72,448  
 
            
 
   $ 143,585     $ 134,859  
 
            

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(INTERVOICE LOGO)
INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                 
    (In Thousands, Except Per Share Data)  
    Three Months Ended     Nine Months Ended  
    November 30,     November 30,     November 30,     November 30,  
    2005     2004     2005     2004  
Sales
                                
Solutions
   $ 19,328     $ 27,638     $ 62,720     $ 74,027  
Recurring services
     21,683       20,723       64,844       60,510  
 
                        
 
     41,011       48,361       127,564       134,537  
 
                        
Cost of goods sold
                                
Solutions
     11,474       13,741       37,328       38,997  
Recurring services
     6,409       6,997       18,794       20,973  
 
                        
 
     17,883       20,738       56,122       59,970  
 
                        
Gross margin
                                
Solutions
     7,854       13,897       25,392       35,030  
Recurring services
     15,274       13,726       46,050       39,537  
 
                        
 
     23,128       27,623       71,442       74,567  
 
                                
Research and development expenses
     4,226       4,119       12,305       11,282  
Selling, general and administrative expenses
     15,801       16,380       46,601       44,469  
Amortization of acquisition related intangible assets
     252       252       756       1,209  
 
                        
 
                                
Income from operations
     2,849       6,872       11,780       17,607  
 
                                
Interest income
     685       275       1,781       542  
Interest expense
     —       (129 )     (31 )     (513 )
Other income (expense)
     212       (89 )     379       109  
 
                        
 
                                
Income before taxes
     3,746       6,929       13,909       17,745  
 
                                
Income taxes (benefit)
     121       (104 )     1,764       2,453  
 
                        
 
                                
Net income
   $ 3,625     $ 7,033     $ 12,145     $ 15,292  
 
                        
 
                                
Net income per share — basic
   $ 0.09     $ 0.20     $ 0.32     $ 0.43  
 
                        
 
                                
Shares used in basic per share computation
     38,251       36,060       37,970       35,965  
 
                        
 
                                
Net income per share — diluted
   $ 0.09     $ 0.18     $ 0.31     $ 0.40  
 
                        
 
                                
Shares used in diluted per share computation
     39,080       38,295       39,046       38,260  
 
                        

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(INTERVOICE LOGO)
INTERVOICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                 
    (In Thousands)  
    Three Months Ended     Nine Months Ended  
    November 30,     November 30,     November 30,     November 30,  
    2005     2004     2005     2004  
Operating activities
                                
Net income
   $ 3,625     $ 7,033     $ 12,145     $ 15,292  
Adjustments to reconcile net income to net cash provided by operating activities—depreciation and amortization
     2,324       1,980       5,916       6,047  
Other changes in operating activities
     (1,616 )     (6,621 )     702       (10,276 )
 
                        
Net cash provided by operating activities
     4,333       2,392       18,763       11,063  
 
                        
 
                                
Investing activities
                                
Purchases of property and equipment
     (3,055 )     (1,371 )     (10,099 )     (4,835 )
Other
     —       —       (300 )     —  
 
                        
Net cash used in investing activities
     (3,055 )     (1,371 )     (10,399 )     (4,835 )
 
                        
 
                                
Financing activities
                                
Paydown of debt
     —       (1,100 )     (1,733 )     (10,666 )
Borrowings
     —       —       —       8,000  
Premium on early extinguishment of debt
     —       —       —       (5 )
Release of restricted cash
     —       —       —       2,750  
Exercise of stock options
     314       915       2,392       2,618  
Exercise of warrants
     —       —       2,500       —  
 
                        
Net cash provided by (used in) financing activities
     314       (185 )     3,159       2,697  
 
                        
 
                                
Effect of exchange rates on cash
     (726 )     804       (1,507 )     811  
 
                        
 
                                
Increase in cash and cash equivalents
     866       1,640       10,016       9,736  
 
                                
Cash and cash equivalents, beginning of period
     69,392       48,955       60,242       40,859  
 
                        
 
                                
Cash and cash equivalents, end of period
   $ 70,258     $ 50,595     $ 70,258     $ 50,595  
 
                        

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(INTERVOICE LOGO)
INTERVOICE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(In Thousands, Except Share Data)
                                                 
                                    Accumulated Other        
    Common Stock     Additional     Accumulated     Comprehensive        
    Shares     Amount     Capital     Deficit     Loss     Total  
     
Balance at February 28, 2005
     37,196,216     $ 19     $ 85,421     $ (12,931 )   $ (61 )   $ 72,448  
 
                                                
Net income
     —       —       —       12,145       —       12,145  
 
                                                
Foreign currency translation adjustment
     —       —       —       —       (2,264 )     (2,264 )
 
                                                
 
                                              
Comprehensive income
                                             9,881  
 
                                              
 
                                                
Exercise of stock options
     468,659       —       2,392       —       —       2,392  
 
                                                
Exercise of warrants
     621,304       —       2,500       —       —       2,500  
 
                                                
     
Balance at November 30, 2005
     38,286,179     $ 19     $ 90,313     $ (786 )   $ (2,325 )   $ 87,221  
     

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(INTERVOICE LOGO)
Intervoice, Inc.
Revenues by Market and Geography
For the Quarter Ended November 30, 2005
Unaudited
(In thousands)
                                                 
    North     Rest of        
    America     World     Total  
 
                                                
Solutions
   $ 6,651       34.4 %   $ 12,677       65.6 %   $ 19,328       100.0 %
Customer and Software Support
     11,973       76.8 %     3,616       23.2 %     15,589       100.0 %
Managed Services
     3,482       57.1 %     2,612       42.9 %     6,094       100.0 %
 
                                    
Total Sales
   $ 22,106       53.9 %   $ 18,905       46.1 %   $ 41,011       100.0 %
 
                                    
 
                                                
Voice Automation/IVR
                                   $ 9,749       23.8 %
Network Portal
                                     689       1.7 %
Messaging
                                     5,877       14.3 %
Payment
                                     3,013       7.3 %
 
                                            
Total Solutions
                                     19,328       47.1 %
 
                                            
Customer and Software Support
                                     15,589       38.0 %
Managed Services
                                     6,094       14.9 %
 
                                            
Total Recurring Services
                                     21,683       52.9 %
 
                                            
Total Sales
                                   $ 41,011       100.0 %
 
                                            
Intervoice, Inc.
Revenues by Market and Geography
For the Nine Months Ended November 30, 2005
Unaudited
(In thousands)
                                                 
    North     Rest of        
    America     World     Total  
Solutions
   $ 24,195       38.6 %   $ 38,525       61.4 %   $ 62,720       100.0 %
Customer and Software Support
     34,255       74.5 %     11,709       25.5 %     45,964       100.0 %
Managed Services
     9,058       48.0 %     9,822       52.0 %     18,880       100.0 %
 
                                    
Total Sales
   $ 67,508       52.9 %   $ 60,056       47.1 %   $ 127,564       100.0 %
 
                                                
Voice Automation/IVR
                                   $ 30,954       24.3 %
Network Portal
                                     7,417       5.8 %
Messaging
                                     16,743       13.1 %
Payment
                                     7,606       6.0 %
 
                                            
Total Solutions
                                     62,720       49.2 %
 
                                            
Customer and Software Support
                                     45,964       36.0 %
Managed Services
                                     18,880       14.8 %
 
                                            
Total Recurring Services
                                     64,844       50.8 %
 
                                            
Total Sales
                                   $ 127,564       100.0 %
 
                                            

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