inContact Reports First Quarter 2013 Financial Results

            inContact Reports First Quarter 2013 Financial Results

Company Achieves Year-Over-Year Software Revenue Growth of 31%, Consolidated
Revenue Growth of 24% and Record Bookings

PR Newswire

SALT LAKE CITY, May 2, 2013

SALT LAKE CITY, May 2, 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
first quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120216/LA54560LOGO)

"Q1 was the strongest bookings quarter in inContact's history, fueled by the
increasing momentum of cloud adoption and our growing win rate in larger
enterprise deals. We closed a total of 57 contracts, 39 with new customers
and 18 with existing customers," said Paul Jarman, inContact CEO. "In
addition, we continued to experience very positive momentum in our reseller
channel during the quarter."

Revenue

Software segment revenue totaled $16.2 million for the quarter ended March 31,
2013, an increase of $3.9 million or 31% from $12.3 million in Q1 2012.
Telecom segment revenue for Q1 2013 was $15.5 million for the quarter ended
March 31, 2013, an increase of $2.2 million or 17% from $13.3 million in Q1
2012, driven by increases in software-related telecom revenue. This increase
marks the tenth consecutive quarter that software and software related telecom
revenue has increased.

Consolidated revenue for the quarter ended March 31, 2013 was $31.6 million
versus $25.6 million for the same period in 2012, an increase of 24%.

Gross Margin

The Q1 2013 Software segment gross margin was 60% versus 59% in Q1 2012, and
excluding non-cash charges, non-GAAP Software segment gross margin was 72% for
the quarter, versus 71% in Q1 2012. This increase in gross margin is
principally attributable to revenue increases in 2013 as well as operational
efficiencies and leverage in international infrastructure investments made in
Q4 of 2011. First quarter 2013 Telecom segment gross margin was 35% versus 30%
in Q1 2012.

Consolidated gross margin percentage was 48% in the first quarter compared to
44% for the same period in 2012. Excluding non-cash charges, consolidated
gross margin was 55% for the first quarter compared to 51% for the same period
in 2012.

Adjusted EBITDA

Earnings before interest, taxes, depreciation, amortization and stock-based
compensation ("Adjusted EBITDA") for the first quarter 2013 was $2.2 million
versus $816,000 during the same period in 2012. 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).

Net Loss

Net loss for the quarter ended March 31, 2013 was $1.2 million, or ($0.02) per
share, as compared to a net loss of $1.9 million or ($0.04) per share for the
same period in 2012. This improvement in net results is due to the items
mentioned above.

Jarman concluded, "We are experiencing great traction across a wide variety of
vertical markets, and are seeing an increasing frequency of large enterprises
moving to the cloud. We are extremely encouraged by our strong start to the
year and are well positioned to meet our guidance and growth commitments for
the remainder of 2013."

CONFERENCE CALL INFORMATION

We will host a conference call to discuss our first quarter 2013 financial
results later today at 4:30 p.m. Eastern time (1:30 p.m. Pacific).

Dial-In Number: 1-866-952-7532
International: + 1-785-424-1834
Conference ID#: INCONTACT

An audio file of the call will be available after May 3, 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 May 9, 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 - (Unaudited)
(in thousands)
                                              March 31,     December 31,
                                              2013          2012
ASSETS
Current assets:
 Cash and cash equivalents                   $  44,771   $     48,836
 Restricted cash                             81            81
 Accounts and other receivables, net of
allowance for
uncollectible accounts of $1,038 and $831,   17,350        18,043
respectively
 Other current assets                        3,398         3,278
Total current assets                          65,600        70,238
Property and equipment, net                   21,475        19,862
Intangible assets, net                        1,103         1,156
Goodwill                                      4,086         4,086
Other assets                                  1,211         1,005
Total assets                                  $  93,475   $     96,347
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Trade accounts payable                      $   8,260  $      7,247
 Accrued liabilities                         4,451         5,638
 Accrued commissions                         1,961         1,610
 Current portion of deferred revenue         1,622         1,973
 Current portion of long-term debt and       2,489         2,691
capital lease obligations
Total current liabilities                     18,783        19,159
Long-term debt and capital lease obligations  1,387         2,859
Deferred rent                                 396           383
Deferred revenue                              2,785         1,958
Total liabilities                             23,351        24,359
Total stockholders' equity                    70,124        71,988
Total liabilities and stockholders' equity    $  93,475   $     96,347



INCONTACT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
and COMPREHENSIVE LOSS (Unaudited)
(in thousands, except per share data)
                                       Three months
                                       ended March 31,
                                       2013               2012
Net revenue:
 Software                             $    16,172    $      12,302
 Telecom                              15,473             13,254
 Total net revenue                    31,645             25,556
Costs of revenue:
 Software                             6,435              5,090
 Telecom                              10,033             9,227
 Total costs of revenue               16,468             14,317
Gross profit                           15,177             11,239
Operating expenses:
 Selling and marketing                8,422              7,020
 Research and development             2,771              1,837
 General and administrative           5,045              4,094
 Total operating expenses             16,238             12,951
 Loss from operations                 (1,061)            (1,712)
Other income (expense):
 Interest expense                     (60)               (94)
 Other expense                        (25)               (47)
 Total other expense                  (85)               (141)
 Loss before income taxes             (1,146)            (1,853)
Income tax expense                     (17)               (15)
 Net loss and comprehensive loss      $    (1,163)   $      (1,868)
Net loss per common share:
 Basic and diluted                    $     (0.02)  $       (0.04)
Weighted average common shares
outstanding:
 Basic and diluted                    53,594             44,188



INCONTACT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)
(in thousands)
                                                          Three months ended

                                                          March 31,
                                                          2013       2012
Cash flows from operating activities:
Net loss                                                  $ (1,163)  $ (1,868)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation of property and equipment                    1,392      1,087
Amortization of software development costs                1,079      899
Amortization of intangible assets                         53         80
Amortization of note financing costs                      4          8
Interest accretion                                        2          4
Stock-based compensation                                  775        509
Loss on disposal of property and equipment                25         46
Changes in operating assets and liabilities:
Accounts and other receivables, net                       (2,038)    141
Other current assets                                      (120)      (639)
Other non-current assets                                  (195)      (65)
Trade accounts payable                                    998        (183)
Accrued liabilities                                       (1,190)    (542)
Accrued commissions                                       351        238
Deferred rent                                             16         19
Deferred revenue                                          476        447
Net cash provided by operating activities                 465        181
Cash flows from investing activities:
 Purchases of intangible assets                          -          (93)
 Payments made for deposits                              (11)       -
 Acquisition of assets                                   (1,923)    -
 Capitalized software development costs                  (1,476)    (1,361)
 Purchases of property and equipment                     (695)      (704)
Net cash used in investing activities                     (4,105)    (2,158)
Cash flows from financing activities:
 Proceeds from exercise of options                       1,164      580
 Proceeds from sale of stock under employee stock        91         45
purchase plan
 Principal payments on long-term debt and capital leases (680)      (690)
 Borrowings under the revolving credit notes             -          3,000
 Payments under the revolving credit notes               (1,000)    (2,500)
Net cash (used in) provided by financing activities       (425)      435
Net decrease in cash and cash equivalents                 (4,065)    (1,542)
Cash and cash equivalents at the beginning of the period  48,836     17,724
Cash and cash equivalents at the end of the period        $ 44,771   $ 16,182

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 ended March 31,
2013 and 2012 were as follows (in thousands - unaudited):



                         Quarter Ended March 31, 2013
                         Software         Telecom        Consolidated
Net revenue              $    16,172  $         $          
                                          15,473         31,645
Costs of revenue         6,435            10,033         16,468
Gross profit             9,737            5,440          15,177
Gross margin             60%              35%            48%
Operating expenses:
 Direct selling and     6,963            992            7,955
marketing
 Direct research and    2,539            -              2,539
development
 Indirect               4,745            999            5,744
 (Loss) income from     $             $        $          
operations               (4,510)         3,449          (1,061)
                         Quarter Ended March 31, 2012
                         Software         Telecom        Consolidated
Net revenue              $    12,302  $         $          
                                          13,254         25,556
Costs of revenue         5,090            9,227          14,317
Gross profit             7,212            4,027          11,239
Gross margin             59%              30%            44%
Operating expenses:
 Direct selling and     5,805            843            6,648
marketing
 Direct research and    1,654            -              1,654
development
 Indirect               3,833            816            4,649
 (Loss) income from     $             $        $          
operations               (4,080)         2,368          (1,712)

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 Condensed Consolidated
Statements of Operations for inContact, Inc.
(in thousands - unaudited)
                                 Quarter Ended March 31,
                                 2013              2012
Net loss and comprehensive loss  $    (1,163)  $      (1,868)
Depreciation and amortization    2,524             2,066
Stock-based compensation         775               509
Interest income and expense, net 60                94
Income tax expense               17                15
EBITDAS                          $     2,213  $        816



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 March 31,      Quarter Ended March
                    2013                         31, 2012
                    Gross            Gross       Gross          Gross
                                     Margin                     Margin
                    Profit                       Profit
Consolidated gross  $                         $     
profit and margin   15,177          48%                   44%
                                                 11,239
 Depreciation and  1,921            6%          1,609          6%
amortization
 Stock-based       149              0%          130            1%
compensation
 Consolidated                                   $     
gross profit and    $             55%                   51%
margin, excluding   17,247                      12,978
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 March 31,      Quarter Ended March
                    2013                         31, 2012
                    Gross            Gross       Gross          Gross
                                     Margin                     Margin
                    Profit                       Profit
Software segment    $                        $     
gross profit and    9,737           60%                  59%
margin                                           7,212
Depreciation and    1,707            11%         1,384          11%
amortization
Stock-based         146              1%          127            1%
compensation
Software segment                                 $     
gross profit and    $             72%                  71%
margin, excluding   11,590                      8,723
non-cash charges



About inContact

inContact (NASDAQ: SAAS) is the cloud contact center software leader, helping
organizations around the globe create high quality customer experiences.
inContact is 100% focused on the cloud and is the only provider to combine
cloud software with an enterprise-class telecommunications network for a
complete customer interaction solution. Winner of Frost & Sullivan 2012 North
American Cloud Company of the Year in Cloud Contact Center Solutions,
inContact has deployed over 1,300 cloud contact center instances. 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,
spasko@marketstreetpartners.com, or General Contact: Mariann McDonagh,
inContact, Chief Marketing Officer, 801-320-3347,
mariann.mcdonagh@inContact.com
 
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