inContact Reports Fourth Quarter and Full Year 2012 Financial Results Quarterly Highlights Include Record Software Revenue, Up 42% Year-over-Year PR Newswire SALT LAKE CITY, Feb. 14, 2013 SALT LAKE CITY, Feb. 14, 2013 /PRNewswire/ --inContact, Inc. (NASDAQ: SAAS),the leading provider of cloud contact center software and contact center agent optimization tools, today reported financial results for the fourth quarter and year ended December 31, 2012. (Logo: http://photos.prnewswire.com/prnh/20120216/LA54560LOGO) Said Paul Jarman, inContact CEO, "It was another record quarter for inContact and we closed 51 new customers and 11 expansions for a total of 62 contracts. In addition, during the quarter, we added 2 new Fortune 500 customers and booked the largest deal in the company's history." Continued Jarman, "2012 was a great year for inContact driven by growth in the following key areas: new bookings, as we continue our focus on sales and marketing, revenue from existing accounts, as our "land and expand strategy" delivered strong results, and customer retention, as the recurring revenue model continues to demonstrate its true power. These three growth pillars combined to create a powerful result in 2012, giving us a software growth rate for the full year 2012 of 37%." Revenue Consolidated revenue for the quarter ended December 31, 2012 was $30.7 million versus $23.8 million for the same period in 2011. This record consolidated revenue reflects an increase of $4.6 million in Software segment revenue and an increase of $2.4 million in Telecom segment revenue over the same period in 2011. Software segment revenue totaled $15.6 million for the quarter ended December 31, 2012, an increase of 42% from Q4 2011 and the largest organic quarterly sequential increase ever. Telecom segment revenue totaled $15.1 million for the quarter ended December 31, 2012, an increase of 19% from Q4 2011, driven by increases in software-related telecom revenue. This increase marks the ninth consecutive quarter that software and software related telecom revenue has increased. For the year ended December 31, 2012, Software segment revenue totaled $54.7 million, an increase of 37% from $39.9 million for 2011. For the year ended December 31, 2012, Telecom segment revenue totaled $55.8 million, an increase of 14% from $49.1 million for 2011 Gross Margin The Q4 Software segment gross margin was 60% versus 56% in Q4 2011, and excluding non-cash charges, non-GAAP Software segment gross margin was 72% for the quarter, versus 68% in Q4 2011. This increase in gross margin is principally attributable to revenue increases in 2012 as well as operational efficiencies and leverage in international infrastructure investments made in Q4 of 2011. Fourth quarter 2012 Telecom segment gross margin was 34% versus 30% in Q4 2011. Consolidated gross margin percentage was 47% in the fourth quarter compared to 42% for the same period in 2011. Excluding non-cash charges, consolidated gross margin was 54% for the fourth quarter compared to 48% for the same period in 2011. Net Results GAAP net loss for the quarter ended December 31, 2012 was $793,000, or ($0.01) per share, as compared to a net loss of $3.1 million, or ($0.07) per share for the same period in 2011. This decrease in net loss is primarily due to the combination of increased revenues and improved margins. For the full year ended December 31, 2012, the Company reported a GAAP net loss of $5.2 million versus a net loss of $9.4 million for 2011. Adjusted EBITDA Earnings before interest, taxes, depreciation, amortization and stock-based compensation ("Adjusted EBITDA") for the fourth quarter was $2.4 million versus ($761,000) during the same period in 2011. Our increase in Adjusted EBITDA is primarily due to the increase in margins discussed above. Adjusted EBITDA is a non-GAAP measure management believes provides important insight into our operating results (see reconciliation of non-GAAP measures below). Jarman concluded, "We are pleased to have achieved the high end of our market guidance in 2012 and believe these results have established the foundation for a strong growth trajectory for 2013. We've made significant progress over the past year in supporting our resellers, expanding sales and marketing initiatives, developing cutting-edge innovation and delivering unmatched customer satisfaction. This progress, combined with our cloud market leadership, positions us extremely well throughout 2013 and beyond, as the cloud contact center market continues to accelerate." CONFERENCE CALL INFORMATION We will host a conference call to discuss our fourth quarter and year ended 2012 financial results later today, February 14^th, 2013, at 4:30 p.m. Eastern time (1:30 p.m. Pacific). Dial-in Number: 1-866-952-7532 International Dial-in Number: + 1-785-424-1834 Conference ID#: INCONTACT An audio file of the call will be available after February 16, 2013 on the inContact Investor Relations website at http://investor.incontact.com, in the Webcasts and Presentations section. A replay of the call will be available via telephone after 7:30 p.m. Eastern time today and until February 21, 2013: Toll-free replay number: 1-877-870-5176 International replay number: + 1-858-384-5517 Replay Pin Number: 12329 Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on inContact's current expectations, estimates and projections about inContact's industry, management's beliefs, and certain assumptions made by management, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management's future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties referred to above include, but are not limited to, risks associated with inContact's business model; our ability to develop or acquire, and gain market acceptance for new products, including our new sales and marketing and voice automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; its ability to expand operations; fluctuations in its earnings as a result of the impact of stock-based compensation expense; interruptions or delays in our hosting operations; breaches of our security measures; its ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; and its ability to expand, retain and motivate our employees and manage its growth. Further information on potential factors that could affect our financial results is included in inContact's annual report on Form 10-K, quarterly reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. inContact undertakes no obligation to revise or update publicly any forward-looking statement for any reason. INCONTACT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2012 2011 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 48,836 $ 17,724 Restricted cash 81 246 Accounts and other receivables, net of allowance for uncollectible accounts of $831 and $491 respectively 18,043 12,916 Other current assets 3,278 2,526 Total current assets 70,238 33,412 Property and equipment, net 19,862 18,685 Intangible assets, net 1,156 1,394 Goodwill 4,086 4,086 Other assets 1,005 837 Total assets $ 96,347 $ 58,414 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 7,247 $ 7,180 Accrued liabilities 3,820 2,769 Accrued commissions 1,610 1,291 Current portion of deferred revenue 1,973 1,056 Current portion of long-term debt and 2,691 2,831 capital lease obligations Total current liabilities 17,341 15,127 Long-term debt and capital lease 2,859 5,964 obligations Deferred rent 383 161 Deferred revenue 1,958 946 Total liabilities 22,541 22,198 Total stockholders' equity 73,806 36,216 Total liabilities and $ 96,347 $ 58,414 stockholders' equity INCONTACT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Quarter ended December 31, Year ended December 31, 2012 2011 2012 2011 (Unaudited) (Unaudited) (Unaudited) Net revenue: Software $ $ $ $ 15,599 11,018 54,705 39,870 Telecom 15,133 12,737 55,779 49,115 Total net revenue 30,732 23,755 110,484 88,985 Costs of revenue: Software 6,162 4,869 22,134 16,940 Telecom 10,024 8,957 37,642 35,637 Total costs of 16,186 13,826 59,776 52,577 revenue Gross profit 14,546 9,929 50,708 36,408 Operating expenses: Selling and 7,717 6,825 28,591 24,563 marketing Research and 2,790 2,007 9,401 6,354 development General and 4,656 3,987 17,140 14,090 administrative Total operating 15,163 12,819 55,132 45,007 expenses Loss from (617) (2,890) (4,424) (8,599) operations Other income (expense): Interest income - 1 3 1 Interest expense (33) (170) (364) (507) Change in fair - - - (158) value of warrants Other expense (74) (33) (275) (91) Total other expense (107) (202) (636) (755) Loss before income (724) (3,092) (5,060) (9,354) taxes Income tax expense (69) (26) (120) (74) Net loss $ $ $ $ (793) (3,118) (5,180) (9,428) Net loss per common share: Basic and diluted $ $ $ $ (0.01) (0.07) (0.11) (0.23) Weighted average common shares outstanding: Basic and diluted 53,410 43,980 47,108 40,434 Diluted 53,410 43,980 47,108 40,434 INCONTACT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year ended December 31, 2012 2011 (Unaudited) Cash flows from operating activities: Net loss $ (5,180) $ (9,428) Adjustments to reconcile net loss to net cash from (used in) operating activities: Depreciation of property and equipment 5,047 3,504 Amortization of software development costs 4,133 2,994 Amortization of intangible assets 238 544 Amortization of note financing costs 29 61 Interest accretion 9 16 Stock-based compensation 1,967 1,431 Warrants and stock issued for services - 67 Change in fair value of warrants - 158 Loss on disposal of property and equipment 274 95 Intangible assets written off 133 - Changes in operating assets and liabilities: Accounts and other receivables, net (5,178) (3,522) Other current assets (758) (405) Other non-current assets (144) (375) Trade accounts payable 92 2 Accrued liabilities 1,245 411 Accrued commissions 319 233 Deferred rent 78 (88) Deferred revenue 1,929 1,070 Net cash from (used in) operating activities 4,233 (3,232) Cash flows from investing activities: Gross decrease in restricted cash 165 - Contingent purchase price payments - (135) Purchase of intangible assets (133) - Payments made for deposits (23) (98) Proceeds from deposits - 181 Capitalized software development costs (5,504) (4,753) Purchases of property and equipment (3,737) (5,217) Net cash used in investing activities (9,232) (10,022) Cash flows from financing activities: Proceeds from issuance of common stock 37,475 23,865 Offering costs payments (214) (32) Proceeds from exercise of options and warrants 3,262 1,182 Proceeds from sale of stock under employee stock 280 225 purchase plan Principal payments on long-term debt and capital (3,163) (2,234) leases Borrowings under promissory note - 2,500 Payment of debt financing fees (29) (79) Borrowings under the revolving credit notes 7,000 12,730 Payments under the revolving credit notes (8,500) (17,500) Net cash from financing activities 36,111 20,657 Net increase (decrease) in cash and cash equivalents 31,112 7,403 Cash and cash equivalents at the beginning of the 17,724 10,321 year Cash and cash equivalents at the end of the year $ 48,836 $ 17,724 SEGMENT REPORTING We operate under two business segments: Software and Telecom. The Software segment includes all monthly recurring revenue related to the delivery of our software applications, plus the associated professional services and setup fees and revenue related to quarterly minimum purchase commitments through July 2014, from a related party reseller. The Telecom segment includes all voice and data long distance services provided to customers. For segment reporting, we classify operating expenses as either "direct" or "indirect." Direct expense refers to costs attributable solely to either selling and marketing efforts or research and development efforts. Indirect expense refers to costs that management considers to be overhead in running the business. Management evaluates expenditures for both selling and marketing and research and development efforts at the segment level without the allocation of overhead expenses, such as rent, utilities and depreciation on property and equipment. Operating segment revenues and profitability for the quarters and years ended December 31, 2012 and 2011 were as follows (in thousands): Quarter Ended December 31, 2012 Year Ended December 31, 2012 Software Telecom Consolidated Software Telecom Consolidated (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net $ $ $ $ $ $ revenue 15,599 15,133 30,732 54,705 55,779 110,484 Costs of 6,162 10,024 16,186 22,134 37,642 59,776 revenue Gross 9,437 5,109 14,546 32,571 18,137 50,708 profit Gross 60% 34% 47% 60% 33% 46% margin Operating expenses: Direct selling 6,428 853 7,281 23,758 3,207 26,965 and marketing Direct research 2,548 - 2,548 8,502 - 8,502 and development Indirect 4,559 775 5,334 16,688 2,977 19,665 Income (loss) $ $ $ $ $ $ from (4,098) 3,481 (617) (16,377) 11,953 (4,424) operations Quarter Ended December 31, 2011 Year Ended December 31, 2011 Software Telecom Consolidated Software Telecom Consolidated (Unaudited) (Unaudited) (Unaudited) Net $ $ $ $ $ $ revenue 11,018 12,737 23,755 39,870 49,115 88,985 Costs of 4,869 8,957 13,826 16,940 35,637 52,577 revenue Gross 6,149 3,780 9,929 22,930 13,478 36,408 profit Gross 56% 30% 42% 58% 27% 41% margin Operating expenses: Direct selling 5,561 901 6,462 19,810 3,421 23,231 and marketing Direct research 1,820 - 1,820 5,706 - 5,706 and development Indirect 3,565 972 4,537 12,734 3,336 16,070 Income (loss) $ $ $ $ $ $ from (4,797) 1,907 (2,890) (15,320) 6,721 (8,599) operations RECONCILIATION of NON-GAAP MEASURES: "Adjusted EBITDA" is Earnings Before deductions for Interest, Taxes, Depreciation and Amortization and Stock-Based Compensation. "Gross Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation" is Gross Margin before deductions for Depreciation and Amortization and Stock-Based Compensation. Neither are measures of financial performance under generally accepted accounting principles (GAAP). Adjusted EBITDA and Gross Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation are provided for the use of the reader in understanding our operating results and are not prepared in accordance with, nor does it serve as an alternative to GAAP measures and may be materially different from similar measures used by other companies. While not a substitute for information prepared in accordance with GAAP, management believes that this information is helpful for investors to more easily understand our operating financial performance. Management also believes these measures may better enable an investor to form views of our potential financial performance in the future. These measures have limitations as analytical tools, and investors should not consider these measures in isolation or as a substitute for analysis of our results prepared in accordance with GAAP. Reconciliation of Adjusted EBITDA to Net loss applicable to common stockholders as it is presented on the Consolidated Statements of Operations for inContact, Inc. (in thousands - unaudited) Quarter ended December 31, 2012 2011 Net loss $ (793) $ (3,118) Depreciation and amortization 2,507 1,831 Stock-based compensation 587 331 Interest income and expense, net 33 169 Income tax expense 69 26 Adjusted EBITDA $ 2,403 $ (761) Year ended December 31, 2012 2011 Net loss $ (5,180) $ (9,428) Depreciation and amortization 9,418 7,042 Stock-based compensation 1,967 1,498 Interest income and expense, net 361 506 Income tax expense 120 74 Adjusted EBITDA $ 6,686 $ (308) Reconciliation of Consolidated Gross Profit and Margin to Consolidated Gross Profit and Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation, as presented in Segment Reporting for inContact, Inc. (in thousands - unaudited) Quarter ended December Quarter ended December 31, 2012 31, 2011 Gross Profit Gross Gross Gross Margin Profit Margin Consolidated gross $ 47% $ 42% profit and margin 14,546 9,929 Depreciation and 1,904 6% 1,387 6% amortization Stock-based 99 0% 85 0% compensation Consolidated gross profit and margin, $ 54% $ 48% excluding 16,549 11,401 non-cash charges Reconciliation of Software Segment Gross Profit and Margin to Software Segment Gross Profit and Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation, as presented in Segment Reporting for inContact, Inc. (in thousands - unaudited) Quarter ended December Quarter ended December 31, 2012 31, 2011 Gross Profit Gross Gross Gross Margin Profit Margin Software segment $ $ gross profit and 9,437 60% 6,149 56% margin Depreciation and 1,687 11% 1,271 12% amortization Stock-based 96 1% 81 1% compensation Software segment gross profit and $ $ margin, 11,220 72% 7,501 68% excluding non-cash charges About inContact inContact (NASDAQ:SAAS) helps contact centers around the globe create profitable customer experiences through its powerful portfolio of cloud contact center software solutions. The company's services and solutions enable contact centers to operate more efficiently, optimize the cost and quality of every customer interaction, create new pathways to profit and ensure ongoing customer-centric business improvement and growth. To learn more, visit www.inContact.com. inContact® is the registered trademark of inContact, Inc. SOURCE inContact, Inc. Website: http://www.inContact.com Contact: Investor Contact, Steven Pasko, Market Street Partners, 415-445-3238, firstname.lastname@example.org, or General Contact, Mariann McDonagh, inContact, Chief Marketing Officer, 801-320-3347, mariann.mcdonagh@inContact.com
inContact Reports Fourth Quarter and Full Year 2012 Financial Results
Press spacebar to pause and continue. Press esc to stop.