Intrinsyc 2008 and Fourth Quarter Financial Results
>> Intrinsyc Reports 2008 Full-Year and Fourth Quarter Financial Results
pr-usa.net
[Above link includes Financial Tables]
Intrinsyc Software International, Inc. (TSX:ICS), a leading provider of software solutions for mobile devices, today announced its financial results for the full year and fourth quarter ended December 31, 2008, reported in United States dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP). Resulting from the implementation in 2008 of the change in the Company's fiscal year end, management believes a comparison of twelve-month results ended December 31, 2008 to four-month results ended December 31, 2007 would provide little insight regarding the relative performance of the Company, due to the disproportionate duration of the two periods, and therefore will not be provided herein. As such, the twelve-month results ended December 31, 2008 will only be compared to the twelve-month results ended August 31, 2007. As well, a comparison of the three months ended December 31, 2008, four months ended December 31, 2007 and three months ended August 31, 2007 is also provided.
Fiscal 2008 Comparative Results
The Company reported revenue of $24.7 million for the twelve-month period ended December 31, 2008 as compared to $17.6 million for the twelve-month period ended August 31, 2007. The year-over-year revenue improvement of forty-one percent was primarily attributable to the addition of navigation software revenues from the acquisition of assets of Destinator Technologies Inc. Revenue attributable to the Company's software solutions increased to thirty-one percent of revenues, including software licensing, maintenance/support and software-related services, as compared to ten percent in the respective comparative period, while revenue attributable to engineering services marginally increased, contributing sixty-four percent of total revenue. Overall gross margin was fifty-three percent for the twelve-month period ended December 31, 2008, up from forty-nine percent in the twelve months ended August 31, 2007.
During the twelve months ended December 31, 2008, the Company recorded a non-cash expense of $19.3 million due to the write-off of goodwill of approximately $12.8 million primarily attributable to two acquisitions executed in 2002 and 2003 and $6.5 million due to the write down of intangible assets acquired in 2008. In addition, the Company incurred total restructuring charges during this period of $3.8 million resulting from the cost reduction initiatives previously announced by the Company in September and December 2008, including an $800,000 non-cash write-off of redundant assets.
Loss before restructuring, asset impairment, interest, amortization, stock-based compensation expense and income tax ("EBITDA") for the twelve months ended December 31, 2008 was $13.3 million, compared to $13.0 million the twelve months ended August 31, 2007. Total operating expenses, excluding amortization and stock-based compensation, for the twelve months ended December 31, 2008 were $26.3 million, compared to $21.7 million for the twelve months ended August 31, 2007. See further discussion on EBITDA under the heading, "Supplemental Information", later in this press release.
Q4 2008 Comparative Results
The Company reported revenue of $5.7 million for the three months ended December 31, 2008, as compared to $5.3 million for the four months ended December 31, 2007 and $4.3 million for the three months ended August 31, 2007. The revenue improvement of thirty-three percent over the three months ended August 31, 2007 was primarily attributable to the addition of navigation software revenues from the acquisition of assets of Destinator Technologies Inc. Total revenue attributable to the Company's software solutions increased to forty-three percent of revenues, including software licensing, maintenance/support and software-related services, as compared to ten percent and thirteen percent in the respective comparative periods.
Gross margin was fifty-four percent for the three months ended December 31, 2008, up from thirty-six percent in the four months ended December 31, 2007. When compared to the three months ended August 31, 2007, the total gross margin of $3.1 million increased by forty-seven percent from $2.2 million. The gross margin of fifty-four percent for the three months ended December 31, 2008 was higher than the forty-nine percent achieved in the three months ended August 31, 2007 due to increased revenue from the Company's software offerings, which have higher margins than engineering services.
During the three months ended December 31, 2008, the Company recorded a non-cash expense of $19.3 million due to the write-off of goodwill of approximately $12.8 million primarily attributable to two acquisitions executed in 2002 and 2003 and $6.5 million due to the write down of intangible assets acquired in 2008. In addition, the Company incurred total restructuring charges during this period of $3.8 million resulting from the cost reduction initiatives previously announced by the Company in September and December 2008, including an $800,000 non-cash write-off of redundant assets.
Loss before restructuring, asset impairment, interest, amortization, stock-based compensation expense and income tax ("EBITDA") for the three months ended December 31, 2008 was $2.0 million, compared to $6.3 million in the four month period ended December 31, 2007, and $3.7 million for the three months ended August 31, 2007. Total operating expenses, excluding amortization and stock-based compensation, for the three months ended December 31, 2008 were $5.1 million, compared to $8.2 million in the four months ended December 31, 2007 and $5.8 million for the three months ended August 31, 2007. See further discussion on EBITDA under the heading, "Supplemental Information", later in this press release.
Cash and cash equivalents at December 31, 2008 were $12.4 million, compared to $12.2 million as at December 31, 2007 and $18.6 million as at August 31, 2007.
"In 2009, we are committed to continuing to reduce our operating expense levels and preserve cash, while maintaining our investments in sales and development activities most essential to drive long-term growth and profitability," said Tracy Rees, Interim Chief Executive Officer of Intrinsyc. "We believe that our navigation solutions and location-aware content services will be key contributors to our future growth as these markets are expected to expand over the next several years."
Q4 2008 Business Highlights
- Licensed Soleus Transit, Navigation Edition, to Supa Technology Co., Ltd for a personal navigation device (PND) that connects to the Internet via GSM cellular networks. Soleus Transit, Navigation Edition provides data connectivity and user interface framework, plus Destinator turn-by-turn navigation software.
- Licensed Soleus to one of the world's largest ODMs of computers and consumer electronics. The ODM will create two distinctly different devices - a handheld barcode-reading payment device, and a mobile phone capable of delivering location-based services. The ODM will employ the company's Solutions Engineering services to aid in product development.
- Licensed Soleus and signed a Solutions Engineering agreement with Elitegroup Computer Systems (ECS). ECS chose the Soleus software platform and Solutions Engineering group to speed the development of a dual-function external dongle that will support high-speed wireless data communications over Mobile WiMAX and voice over Quad-Band EDGE networks.
- Provided Unitech Electronics with Windows Mobile and Windows Embedded CE systems integration for a data collection terminal with data-only wireless connectivity. Intrinsyc's Taipei office developed Windows Mobile and Windows Embedded CE 6.0 board support package targeting a Marvell PXA320 and Siemens Wireless Module HC25 platform; the Company also delivered on-site support for board bring-up, application porting, driver debugging, and training.
- Became an accredited S60 Competence Center.
- Announced "Symbian Ready" validation for Destinator navigation software. Destinator was one of the first LBS applications to be certified as "Symbian Ready" under the Symbian Ready for Location Aware Applications program.
- Licensed Destinator navigation software to a leading mobile phone and consumer device manufacturer for a touch-screen Windows Mobile Device for select Asian and Latin American markets. The Company will leverage its technology and Solutions Engineering expertise to customize and integrate its Destinator software to provide a complete navigation solution for a GPS-enabled Windows Mobile handset.
- Licensed Destinator navigation software to a leading mobile phone and consumer device manufacturer for a Windows Mobile 6.1 handset aimed at the Latin American consumer smartphone market. The GPS-enabled handset is currently shipping in Brazil with additional phones to be released at a later date in additional Latin American markets.
- Implemented cost reduction initiatives resulting in the reduction of the Company's annual operating expenses to a range of $18 - $19 million.
- Recorded a non-cash expense of $19.3 million due to the write-off of goodwill of approximately $12.8 million primarily attributable to two acquisitions executed in 2002 and 2003 and $6.5 million due to the write down of intangible assets acquired in 2008.
Supplemental Information
In addition to results disclosed in accordance with Canadian GAAP, Intrinsyc disclosed a non-GAAP measure of EBITDA as a method to evaluate the Company's operating performance. This non-GAAP measure should not be considered a substitute for measurements required by accounting principles generally accepted in Canada such as loss and loss per share. Management believes that this non-GAAP metric provides additional information allowing comparability regarding the Company's ongoing operating performance and the items excluded are considered to be non-operational and/or non-recurring. EBITDA is defined as earnings before restructuring, asset impairment, interest, tax, depreciation and amortization. This non-GAAP measure is not necessarily comparable to non-GAAP information provided by other issuers. A reconciliation of the Company's EBITDA loss to the loss under Canadian GAAP is provided in the table attached.
Conference Call
Consolidated unaudited financial statements are attached and a conference call to discuss these results will be held at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time), today. To listen to the conference call live by telephone, dial +1-866-400-2280 toll free for participants in North America, and +1-416-850-9143 for Toronto area and international participants, approximately 10 minutes before the start time. The conference call will also be broadcast live over the Internet and available for replay on the company's Conference Calls web page (www.intrinsyc.com/investors/conference_calls.aspx). Analysts and investors are invited to participate on the call. Questions may be submitted to invest@intrinsyc.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it prior to the call.
Forward-Looking Statements <snip>
About Intrinsyc Software International, Inc.
Intrinsyc provides software solutions that enable next-generation handheld products, including mobile handsets, smart phones, and embedded devices. The company's products include Destinator® navigation and Location Based Services platform, the Soleus® Transit platform for connected personal navigation devices and Soleus for converged device development. Combined with award winning Solutions Engineering and 12 years of expertise, Intrinsyc helps device makers, and silicon vendors deliver compelling mobile products with faster time-to-market and higher quality. Intrinsyc is a Microsoft Windows Embedded Gold Partner and a winner of Windows Embedded Excellence Awards in 2007 and 2008, and S60 and Symbian Competence Centers. Intrinsyc is publicly traded (TSX:ICS) and headquartered in Vancouver, Canada, with offices in China, Israel, Taiwan, and the United States. intrinsyc.com ###
- Eric - |
