Communication Intelligence Corporation Reports First Quarter 2010 Financial Results

REDWOOD SHORES, Calif., May 17 /PRNewswire-FirstCall/ -- Communication Intelligence Corporation ("CIC" or "the Company") (OTC Bulletin Board: CICI), a leading supplier of electronic signature solutions for business process automation in the financial industry and the recognized leader in biometric signature verification, announced today its financial results for the first quarter ended March 31, 2010.

Also, as previously announced, the Company recently established a credit facility with Phoenix Venture Fund LLC, as the lead investor, (Phoenix) which, subject to certain conditions provides the Company with access of up to $1 million. Phoenix and its CEO, Philip Sassower have been the primary source of financial backing to CIC for over a decade.  The intent of this credit facility is to provide the ongoing financial backing required by CIC to secure a longer term financing solution and to maintain the leadership position it has established in the growing electronic signature market.

Total revenue was $207,000 for the three months ended March 31, 2010 compared to revenue of $246,000 in the corresponding prior year period.  Revenue in the first quarter ended March 31, 2010 was primarily attributable to American Family Insurance Company, Fiserv, John Deere Information Systems, Inc., Oracle Corporation, Prudential Financial Inc., St. Vincent Hospital, Travelers Indemnity Company ("Travelers"), and Wells Fargo Bank NA.

The Company believes the first quarter revenue reflects primarily the lingering effect of the unprecedented, negative impact on 2009 financial services industry IT spending brought about by the meltdown in the financial markets. IT spending was virtually non-existent in the first quarter of 2009 and although CIC orders rebounded in the second and third quarters due to the priority placed on mission critical electronic signature projects, fourth quarter 2009 IT spending fell significantly, reflecting the reduced 2009 IT budgets.  According to industry analysts such as TowerGroup, Celent and Gartner, IT financial industry spending is forecasted to recover in the last half of 2010, returning to levels of spending before the financial meltdown and higher in 2011-2012.

The operating loss for the quarter ended March 31, 2010 was $926,000 compared to an operating loss of $922,000 in the corresponding prior year period.  Cost of sales decreased approximately 18%, to $180,000 for the three months ended March 31, 2010 compared to the corresponding prior year period, primarily due to reduced direct engineering labor related to meeting customer specific requirements associated with integration of our standard products into customer systems. Operating expenses increased by less than 1%, to $953,000, compared to the prior year period, primarily attributable to sales and marketing related expenses.  The net loss applicable to common stockholders for the quarter ended March 31, 2010 was $1,665,000 compared with a net loss applicable to common stockholders of $1,303,000 in the corresponding prior year period. Net loss on a per share basis was $0.01 on 190.6 million weighted average shares outstanding for the quarter ending March 31, 2010 compared to a net loss per share of $0.01 on 130.7 million weighted average shares outstanding for the quarter ending March 31, 2009.

"The Phoenix series of investments over the last decade reflects confidence in CIC and acknowledges the progress and opportunity available to CIC and its investors in the electronic signature market," stated Guido DiGregorio CIC's Chairman & CEO.  "We have been experiencing an uptick in proposal activity consistent with forecasts by industry analysts and expect recovery of IT spending and increasing sales in the last half of the year.  Our objective has been to build unwavering customer loyalty by delivering exceptional customer value on our focused financial industry applications such as retail banking, property/casualty & life insurance and achieving the sustained revenue and income growth that will provide the increasing shareholder value we seek."

Selected financial information follows.  Detailed corporate and financial information is available on CIC's website at www.cic.com

About CIC

Communication Intelligence Corporation ("CIC") is a leading supplier of electronic signature solutions for business process automation in the Financial Industry and the recognized leader in biometric signature verification. CIC's products enable companies to achieve truly paperless work flow in their eBusiness processes by enabling them with "The Power to Sign Online®" with multiple signature technologies across virtually all applications in SaaS and fully deployed delivery models.

Industry leaders such as AGLA, Allstate, Charles Schwab, Prudential, Snap-on Credit, Travelers, Wells Fargo and WFG (World Financial Group) chose CIC's products to meet their needs. CIC has deployments with over 400 channel partners and enterprises worldwide representing hundreds of thousands of users, with over 500 million electronic signatures captured, eliminating the need for over a billion pieces of paper. CIC sells directly to enterprises and through system integrators, channel partners and OEMs. CIC is headquartered in Redwood Shores, California and has a joint venture, CICC, in Nanjing, China. For more information, please visit our website at http://www.cic.com.

Forward Looking Statements

Certain statements contained in this press release, including without limitation, statements containing the words "believes", "anticipates", "hopes", "intends", "expects", and other words of similar import, constitute "forward looking" statements within the meaning of the Private Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause actual events to differ materially from expectations.  Such factors include the following (1) technological, engineering, quality control or other circumstances which could delay the sale or shipment of products containing the Company's technology; (2) economic, business, market and competitive conditions in the software industry and technological innovations which could affect the Company's business; (3) the Company's inability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others or prevent others from infringing on the proprietary rights of the Company; and (4) general economic and business conditions and the availability of sufficient financing.

SOURCE Communication Intelligence Corporation