Intrinsyc Software International, Inc.
TSX : ICS

Intrinsyc Software International, Inc.

March 25, 2010 16:00 ET

Intrinsyc Reports 2009 Fourth Quarter and Full-Year Financial Results

Company achieves third consecutive quarter of positive EBITDA

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 25, 2010) - Intrinsyc Software International, Inc. (TSX:ICS), a leading provider of software solutions for mobile devices, today announced its financial results for the fourth quarter and full year ended December 31, 2009, reported in United States dollars and in accordance with Canadian Generally Accepted Accounting Principles ("GAAP"). The Company's results are presented in comparison to the three and twelve months ended December 31, 2008.

Q4 2009 Comparative Results

The Company reported fourth quarter revenue of $3.9 million as compared to $5.7 million for the three months ended December 31, 2008. The decline in revenue is primarily attributable to the decline in engineering services performed for Symbian Ltd. due to their decision to cease commercial sale of the Symbian operating system. Total revenue attributable to the Company's software solutions was 52 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 43 percent in the comparative quarter. Gross margin was 60 percent in the fourth quarter of 2009 representing an increase from 54 percent in the three months ended December 31, 2008.

Total operating expenses, excluding amortization, stock-based compensation, TPC royalty, asset impairment, restructuring charges and loss on disposal of equipment, for the three months ended December 31, 2009 were $2.0 million representing a decrease of 68 percent from the $6.2 million for the three months ended December 31, 2008. Earnings before interest, amortization, stock-based compensation expense, restructuring charges, asset impairment, loss on disposal of equipment, foreign exchange loss (gain), TPC royalty, and income tax ("EBITDA") for the three months ended December 31, 2009 was $314,938 compared to EBITDA of ($3.1 million) for the three months ended December 31, 2008. Cash and cash equivalents were $11.7 million with net working capital of $11.3 million as of December 31, 2009 compared to cash and cash equivalents of $12.4 million with net working capital of $10.6 million as of December 31, 2008.

"The achievement of positive EBITDA for our third consecutive quarter and the year over year increase in net working capital are indications of the stabilization of the company's operations and testament to the
restructuring plan we put into place at the beginning of 2009," stated Tracy Rees, President and Chief Executive Officer. "We intend to maintain our financial discipline while focusing on activities to improve revenue growth in 2010, chief among these being our recent launch of Destinator® on mobile application stores and the planned broad expansion to countries around the world."

Fiscal 2009 Comparative Results

The Company reported revenue of $17.5 million for the year ended December 31, 2009 as compared to $24.7 million for the year ended December 31, 2008. Total revenue attributable to the Company's software solutions increased to 44 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 31 percent in the respective comparative period. Gross margin was 56 percent for the year ended December 31, 2009, up from 53 percent in the year ended December 31, 2008.

Total operating expenses, excluding amortization, stock-based compensation, TPC royalty, asset impairment, restructuring charges and loss on disposal of equipment, for the year ended December 31, 2009 were $10.0 million, compared to $27.6 million for the year ended December 31, 2008. EBITDA for the year ended December 31, 2009 was ($293,460) compared to ($14.6 million) for the year ended December 31, 2008.

Business Highlights

During the fourth quarter, Intrinsyc made significant progress in developing Destinator software for new handheld devices and introducing into new on-line markets, and also continued the expansion of software and service solutions for Windows® and Android based mobile devices. Notable developments and achievements include the following:

- Recipient of a Windows Embedded Excellence Award for "2009 North American Partner of the Year" in the Consumer Devices category.

- Presented three technical sessions at the ARM Techcon3 (October 21-23, 2009) at the Santa Clara Convention Center.

- Demonstrated (along with leading femtocell provider Ubiquisys) the UX-Zone™ femtocell application at the Symbian Exchange and Exposition 2009 in London's Earls Court. Intrinsyc's UX-Zone incorporates femtocell presence triggers from Ubiquisys, changing the appearance of the phone interface automatically and allowing for most efficient use of network bandwidth.

- Announced the availability of Destinator 9 for purchase on the Android Market, the online applications and media portal for Android mobile phones. With a host of new capabilities and features designed to get people to their destinations easily, quickly and safely, Destinator 9 for Android includes updated on-board maps of the US and Canada along with rich visual content such as extended lane guidance, speed limits and 2D building footprints.

- Announced online availability for consumers to purchase and download Destinator 9 GPS Navigation through Intrinsyc's corporate web store, and the newly launched Destinator NavStore, an online marketplace for location-based services and navigation-related content.

- Announced that the Destinator GPS navigation software solution is currently shipping in a smart phone companion navigation system being sold in China. The device is an ultra-durable Bluetooth®-enabled portable GPS navigation system that combines the confidence of finding destinations with a speaker for hands-free smart phone connectivity on the road.

- Announced that Destinator GPS Navigation is available on Samsung Omnia Pro smart phones in Brazil. The Microsoft® Windows Mobile-based smart phones with Destinator preloaded are being sold through the dealer and retail store network of Vivo (NYSE:VIV), a major wireless carrier with more than 43 million subscribers.

- Entered into a global reseller agreement with Delta Mobile Systems, a leading provider of innovative wireless products and services. Intrinsyc will resell the DM600-DEV, a comprehensive development platform for Android-based Internet appliances, wired and wireless gateways, monitoring and control systems, and wireless handheld products.

- Announced availability of Windows Embedded CE 6.0 Release 3 (R3) Board Support Package (BSP) for the Cerf® Board 270 reference designs. The new software offering will enable developers of embedded and handheld devices to leverage the latest Microsoft Windows technologies, including Silverlight for Windows Embedded and touch/gesture input, to create rich applications and user interfaces.

- Completed development of the innovative nook eBook reader from Barnes and Noble. This device was winner of the 2009 TechCrunch, "Gadget of the Year".

Conference call

The Company will release its fiscal fourth quarter and full-year 2009 financial results on Thursday, March 25, 2010 at 4:00 p.m. Eastern Time (1:00 p.m. Pacific Time). The company will hold a conference call to discuss the financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) the same day. On the call, Tracy Rees, President and Chief Executive Officer, and George Reznik, Chief Financial Officer, will discuss the financial results announced. This conference call may be accessed in North America, toll-free, by dialing 1-866-610-8602, and internationally by dialing +1-212-401-8152 approximately 10 minutes prior to the start of the call. This conference line is operator assisted and an access PIN is not required. The conference call will also be broadcast live over the Internet and available for replay on the company's Investor Relations 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.com prior to the call.

The Audit Committee of the Company has reviewed the contents of this news release.

Forward-Looking Statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect," "anticipate," "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the need to develop, integrate and deploy software solutions to meet the Company's customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on the Company's customer's satisfaction; the timing of entering into significant contracts; customers' continued commitment to the deployment of the Company's solutions; the performance of the global economy and growth in software industry sales; market acceptance of the Company's products and services; the success of certain business combinations engaged in by the Company or by its competitors; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to international expansion; concentration of sales; international operations and sales; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and other factors described in the Company's reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2009. This list is not exhaustive of the factors that may affect the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

About Intrinsyc Software International, Inc.

Intrinsyc provides software solutions that enable next-generation mobile devices. The company provides award winning software and services for mobile device design and development and industry leading navigation and location based services software. Intrinsyc helps device makers, mobile operators, and silicon vendors deliver compelling mobile products with faster time-to-market, higher quality, and differentiating innovation. Intrinsyc supports customers globally with solutions that span all major mobile operating systems and platforms, including Windows CE and Windows Mobile, Linux/Android, and Symbian. 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 and the United States. www.intrinsyc.com.



INTRINSYC SOFTWARE INTERNATIONAL, INC.
Consolidated Balance Sheets
(Expressed in U.S. dollars)
---------------------------------------------------------------------------
December 31, December 31,
As at 2009 2008
---------------------------------------------------------------------------

ASSETS
Current assets
Cash and cash equivalents $11,710,227 $12,391,452
Restricted cash - 125,653
Accounts receivable 3,401,467 6,083,190
Inventory 14,269 14,649
Prepaid expenses - current 313,528 523,916
---------------------------------------------------------------------------
Total current assets 15,439,491 19,138,860

Restricted cash 95,147 82,102
Prepaid expenses 47,063 18,998
Equipment 735,807 1,397,550
Intangible assets 3,880,481 4,203,914
---------------------------------------------------------------------------
Total assets $20,197,989 $24,841,424
---------------------------------------------------------------------------
---------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 3,574,134 $ 7,727,497
Capital lease obligation - current 45,179 82,911
Deferred revenue 526,169 754,301
---------------------------------------------------------------------------
Total current liabilities 4,145,482 8,564,709

Long-term capital lease obligations 7,388 39,483
---------------------------------------------------------------------------
Total liabilities 4,152,870 8,604,192
---------------------------------------------------------------------------

Shareholders' equity
Share capital 108,288,585 108,288,133
Warrants and underwriters' options 4,029,953 4,489,508
Contributed surplus 5,230,217 4,260,625
Accumulated other comprehensive income (loss) 2,068,103 (159,400)
Deficit (103,571,739) (100,641,634)
---------------------------------------------------------------------------
Total shareholders' equity 16,045,119 16,237,232
---------------------------------------------------------------------------
Total liabilities and shareholders' equity $20,197,989 $24,841,424
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---------------------------------------------------------------------------


INTRINSYC SOFTWARE INTERNATIONAL, INC.
Consolidated Statements of Operations and Deficit
(Expressed in U.S. dollars)
---------------------------------------------------------------------------
Three months Three months
ended ended
December 31, December 31, Year ended Year ended
2009 2008 December December
For the (unaudited) (unaudited) 31, 2009 31, 2008
---------------------------------------------------------------------------

Revenues $ 3,854,306 $ 5,727,564 $ 17,485,074 $ 24,719,235
Cost of sales 1,542,204 2,639,255 7,738,538 11,707,991
---------------------------------------------------------------------------
2,312,102 3,088,309 9,746,536 13,011,244
---------------------------------------------------------------------------

Expenses
Marketing and sales 706,946 1,181,411 3,345,696 7,149,756
Research and development 1,133,457 3,437,036 4,576,596 12,775,487
Administration 156,761 1,577,367 2,117,704 7,659,316
Amortization 287,641 697,810 1,252,184 1,858,002
Stock-based compensation 148,956 214,509 510,238 1,061,761
Technology Partnerships
Canada Funding
Investment - 24,338 342,055 323,502
Asset impairment - 19,278,706 - 19,278,706
Restructuring charges - 3,011,947 - 3,826,615
Loss on disposal of
equipment 23,631 - 204,166 -
---------------------------------------------------------------------------
2,457,392 29,423,124 12,348,639 53,933,145
---------------------------------------------------------------------------

Loss before other expense
(earnings) and income
taxes 145,290 26,334,815 2,602,103 40,921,901
Other expense (earnings)
Foreign exchange (gain)
loss 164,075 (1,097,138) 665,847 (1,570,634)
Extraordinary expenses 166,171 - - -
Interest income (25,515) (54,195) (72,350) (606,605)
---------------------------------------------------------------------------
Loss before income taxes 450,021 25,183,482 3,195,600 38,744,662

Income tax expense
(recovery)
Current (68,791) (129,159) (265,495) 163,770
Future - (18,628) - (48,550)
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(68,791) (147,787) (265,495) 115,220
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Net loss for the period 381,230 25,035,695 2,930,105 38,859,882

Deficit, beginning of
period 103,190,509 75,605,938 100,641,634 61,781,752
---------------------------------------------------------------------------
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Deficit, end of period $103,571,739 $100,641,633 $103,571,739 $100,641,634
---------------------------------------------------------------------------
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Loss per share (basic
and diluted) $ 0.00 $ 0.15 $ 0.02 $ 0.26
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Weighted average number
of shares outstanding 163,259,070 162,480,446 163,256,969 151,546,475
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INTRINSYC SOFTWARE INTERNATIONAL, INC.
Consolidated Statements of Comprehensive Loss
(Expressed in U.S. dollars)
---------------------------------------------------------------------------
Three months Three months
ended ended
December 31, December 31, Year ended Year ended
2009 2008 December December
For the (unaudited) (unaudited) 31, 2009 31, 2008
---------------------------------------------------------------------------

Net loss for the period ($381,230) ($25,035,695) ($2,930,105) ($38,859,882)

Other comprehensive
gain (loss):

Unrealized gains
(losses) on
translating financial
statements from
functional currency
to reporting currency $298,172 ($ 6,924,850) $2,227,503 ($ 9,382,349)
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Comprehensive loss ($ 83,058) ($31,960,545) ($ 702,602) ($48,242,231)
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INTRINSYC SOFTWARE INTERNATIONAL, INC.
Consolidated Statements of EBITDA and Loss
(Expressed in U.S. dollars)
---------------------------------------------------------------------------
Three months Three months
ended December ended December Year ended Year ended
31, 2009 31, 2008 December 31, December 31,
For the (unaudited) (unaudited) 2009 2008
---------------------------------------------------------------------------

Revenues $3,854,306 $ 5,727,564 $17,485,074 $24,719,235
Cost of sales 1,542,204 2,639,255 7,738,538 11,707,991
---------------------------------------------------------------------------
2,312,102 3,088,309 9,746,536 13,011,244
---------------------------------------------------------------------------

Expenses
Sales and marketing 706,946 1,181,411 3,345,696 7,149,756
Research and
development 1,133,457 3,437,036 4,576,596 12,775,487
Administration 156,761 1,577,367 2,117,704 7,659,316
---------------------------------------------------------------------------
1,997,164 6,195,814 10,039,996 27,584,559
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EBITDA Income
(Loss) 314,938 (3,107,505) (293,460) (14,573,315)

Amortization 287,641 697,810 1,252,184 1,858,002
Stock-based
compensation 148,956 214,509 510,238 1,061,761
Technology
Partnerships
Canada Funding
Investment - 24,338 342,055 323,502
Foreign exchange
loss (gain) 164,075 (1,097,138) 665,847 (1,570,634)
Extraordinary
expenses (income) 166,171 - - -
Interest income (25,515) (54,195) (72,350) (606,605)
Loss on disposal of
equipment 23,631 - 204,166 -
Asset impairment - 19,278,706 - 19,278,706
Restructuring
charges - 3,011,947 - 3,826,615
Income tax expense
(recovery)
Current (68,791) (129,159) (265,495) 163,770
Future - (18,628) - (48,550)
---------------------------------------------------------------------------
696,168 21,928,190 2,636,645 24,286,567
---------------------------------------------------------------------------

Net loss for the
period under
Canadian GAAP ($ 381,230) ($25,035,695) ($ 2,930,105) ($38,859,882)
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---------------------------------------------------------------------------


INTRINSYC SOFTWARE INTERNATIONAL, INC.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
--------------------------------------------------------------------------
Three months Three months
ended ended
December 31, December 31, Year ended Year ended
2009 2008 December 31, December 31,
For the (unaudited) (unaudited) 2009 2008
--------------------------------------------------------------------------

OPERATING
ACTIVITIES
Net loss
for the
period $ (381,230) $ (25,035,695) $ (2,930,105) $ (38,859,882)
Items not
involving
cash:
Amortization 287,641 697,810 1,252,184 1,858,002
Future income
taxes - (10,297) (2,603) (43,389)
Non-cash
restructuring - 799,804 - 799,804
Stock-based
compensation 148,956 214,509 510,238 1,061,761
Asset
impairment - 19,278,706 - 19,278,706
Loss on
disposal
of
equipment 23,631 - 243,976 -
Changes in
non-cash
operating
working
capital:
Accounts
receivable 1,001,497 (354,903) 3,318,137 (3,723,826)
Inventory 14,061 (14,727) 794 87,716
Prepaid
expenses 71,190 (38,327) 231,717 (123,422)
Accounts
payable
and
accrued
liabilities (661,829) 283,697 (4,580,038) 5,588,609
Deferred
revenue (68,907) (134,343) (346,738) (209,313)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Cash used in
operating
activities 435,010 (4,313,766) (2,302,438) (14,285,234)
--------------------------------------------------------------------------

INVESTING
ACTIVITIES
Purchase of
equipment 2,741 (19,062) (55,858) (1,625,908)
Loan receivable - - - (62,321)
Deferred
acquisition
costs - - - (1,448,982)
Cash paid on
acquisition
of Destinator,
net of cash
acquired - - - (7,844,264)
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Cash used in
investing
activities 2,741 (19,062) (55,858) (10,981,475)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

FINANCING
ACTIVITIES
Issuance of
common
shares and
warrants - - 251 32,119,750
Share issuance
costs - - - (2,186,676)
Settlement of
services in
shares - 162,219 - 162,219
Repayment of
capital lease
obligation (6,835) (12,073) (78,050) (44,505)
Restricted cash - (208,870) 139,725 (208,870)
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--------------------------------------------------------------------------
Cash provided
by financing
activities (6,835) (58,724) 61,926 29,841,918
--------------------------------------------------------------------------

Effect of
exchange rate
changes on
cash and
cash equivalents 209,987 (2,875,713) 1,615,145 (4,337,358)
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Increase
(decrease)
in cash and
cash
equivalents 640,903 (7,267,265) (681,225) 237,851
Cash and cash
equivalents,
beginning of
period 11,069,324 19,658,717 12,391,452 12,153,601
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Cash and cash
equivalents,
end of
period $ 11,710,227 $ 12,391,452 $ 11,710,227 $ 12,391,452
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