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.
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"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. |
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CONDENSED CONSOLIDATED BALANCE SHEETS - (Unaudited) |
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(in thousands) |
|||
March 31, |
December 31, |
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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, respectively |
17,350 |
18,043 |
|
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 |
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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 capital lease obligations |
2,489 |
2,691 |
|
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. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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and COMPREHENSIVE LOSS (Unaudited) |
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(in thousands, except per share data) |
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Three months |
|||
ended March 31, |
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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: |
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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): |
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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: |
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Basic and diluted |
$ (0.02) |
$ (0.04) |
|
Weighted average common shares outstanding: |
|||
Basic and diluted |
53,594 |
44,188 |
|
INCONTACT, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited) |
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(in thousands) |
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Three months ended March 31, |
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2013 |
2012 |
||
Cash flows from operating activities: |
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Net loss |
$ (1,163) |
$ (1,868) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
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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: |
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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: |
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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: |
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Proceeds from exercise of options |
1,164 |
580 |
|
Proceeds from sale of stock under employee stock purchase plan |
91 |
45 |
|
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 |
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Software |
Telecom |
Consolidated |
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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 |
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Gross margin |
60% |
35% |
48% |
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Operating expenses: |
|||||
Direct selling and marketing |
6,963 |
992 |
7,955 |
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Direct research and development |
2,539 |
- |
2,539 |
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Indirect |
4,745 |
999 |
5,744 |
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(Loss) income from operations |
$ (4,510) |
$ 3,449 |
$ (1,061) |
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Quarter Ended March 31, 2012 |
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Software |
Telecom |
Consolidated |
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Net revenue |
$ 12,302 |
$ 13,254 |
$ 25,556 |
||
Costs of revenue |
5,090 |
9,227 |
14,317 |
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Gross profit |
7,212 |
4,027 |
11,239 |
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Gross margin |
59% |
30% |
44% |
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Operating expenses: |
|||||
Direct selling and marketing |
5,805 |
843 |
6,648 |
||
Direct research and development |
1,654 |
- |
1,654 |
||
Indirect |
3,833 |
816 |
4,649 |
||
(Loss) income from operations |
$ (4,080) |
$ 2,368 |
$ (1,712) |
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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 |
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common stockholders as it is presented on the Condensed Consolidated |
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Statements of Operations for inContact, Inc. |
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(in thousands - unaudited) |
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Quarter Ended March 31, |
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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) |
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Quarter Ended March 31, 2013 |
Quarter Ended March 31, 2012 |
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Gross Profit |
Gross Margin |
Gross Profit |
Gross Margin |
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Consolidated gross profit and margin |
$ 15,177 |
48% |
$ 11,239 |
44% |
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Depreciation and amortization |
1,921 |
6% |
1,609 |
6% |
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Stock-based compensation |
149 |
0% |
130 |
1% |
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Consolidated gross profit and margin, excluding non-cash charges |
$ 17,247 |
55% |
$ 12,978 |
51% |
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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) |
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Quarter Ended March 31, 2013 |
Quarter Ended March 31, 2012 |
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Gross Profit |
Gross Margin |
Gross Profit |
Gross Margin |
||||
Software segment gross profit and margin |
$ 9,737 |
60% |
$ 7,212 |
59% |
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Depreciation and amortization |
1,707 |
11% |
1,384 |
11% |
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Stock-based compensation |
146 |
1% |
127 |
1% |
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Software segment gross profit and margin, excluding non-cash charges |
$ 11,590 |
72% |
$ 8,723 |
71% |
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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.
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