Intrinsyc Software International, Inc.

Intrinsyc Software International, Inc.

July 09, 2008 16:00 ET

Intrinsyc Closes Destinator Technologies Acquisition

Contributes Immediate Revenues and Expands Market Opportunity for Soleus™ and Destinator® Navigation Software Products

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 9, 2008) - Intrinsyc Software International, Inc. (TSX:ICS) ("Intrinsyc" or the "Company"), a global wireless software solutions provider, today announced that it has completed the acquisition of certain assets and operations of Destinator Technologies Inc. ("DTI") and certain of its affiliates, a multinational developer of wireless software for global positioning system ("GPS") devices and navigation software for wireless handsets.

"This acquisition enables Intrinsyc to immediately capture the revenues and business operations of the Destinator wireless software product portfolio which includes navigation software for handsets and personal navigation devices. Customers include tier one Original Equipment Manufacturers Motorola and LG. We have also acquired critical navigation technology, including 17 patents and patents pending, and the engineering expertise that will accelerate Intrinsyc's growth of its wireless software solutions business," said Glenda Dorchak, Chairman and Chief Executive Officer of Intrinsyc. "As a result, we expect Intrinsyc software revenues to make up between 32 percent to 37 percent of overall revenues for fiscal 2008, which is a significant improvement over the software to services revenue mix in fiscal 2007 and accelerates Intrinsyc's transition to a software solutions provider."

Dorchak continued, "By combining the capabilities and products of Intrinsyc and Destinator, we now have a larger software revenue business, multiple wireless software products and a substantially larger set of customers. Our combined customer base and sales operation will be able to cross-sell the Soleus and Destinator software products, leading to accelerated revenue growth. This acquisition will also accelerate our Soleus software development efforts which will create a new product based on the Destinator navigation technology and will utilize the Destinator experienced low-cost development center in Beijing. Navigation is a critical technology for developing consumer smart phones and enabling next-generation converged devices, and as a result of this acquisition, we are ideally positioned to enable innovation as our existing and future customers deliver compelling products to the marketplace."

With the closing of this acquisition, Intrinsyc will have approximately 375 employees worldwide, with the majority in engineering and development. The employees and operations acquired from DTI will be integrated under Intrinsyc's experienced executive team, allowing for a streamlined integration process and achievement of cost synergies. Support for existing DTI customers, suppliers and partners is being transitioned quickly and is expected to continue uninterrupted. Intrinsyc will generate revenues from Destinator products beginning July 10, 2008.

Transaction Details

Intrinsyc paid a total of approximately U.S. $16.0 million for DTI's assets, inclusive of estimated related transaction expenses. The price represents a revenue multiple of approximately 1.4 times based on DTI's historical net revenue, excluding third-party pass through map data revenue, and the share price of Intrinsyc's common shares as at July 2, 2008. The purchase price consists of CDN $8.5 million in cash or assumption of liabilities of DTI and the issuance of 11.0 million Intrinsyc common shares from treasury. All common shares issued pursuant to this transaction will be subject to a six-month lock-up agreement. The majority of the purchase price will be allocated to specific identifiable intangible assets consisting of software, customer base, patent portfolio and trademarks resulting in future amortization expense to be incurred by the Company over their remaining estimated useful lives. The financial results of the Destinator software business will be consolidated with the Company commencing on the transaction closing date. Additional financial information pertaining to DTI will be provided in the Company's business acquisition report to be filed within 75 days following closing.


As a result of this transaction, total annual revenues of Intrinsyc for its fiscal 2008 ending December 31, 2008 are expected to be in a range between U.S. $26 million and U.S. $29 million, including the Destinator product revenue contribution commencing from the transaction closing date with annual gross margin forecast to be in a range between 49 percent and 55 percent. The Company expects to reduce DTI's operating expenses levels by 50% or more based on restructuring and cost synergies. This does not include one-time integration costs which are expected to be between U.S. $1.5 million to U.S. $2 million over the next 12 months.

Conference Call

Intrinsyc will host a conference call on Wednesday, July 9, 2008 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). This conference call will be broadcast live over the Internet and may be accessed by all interested parties on the Investor section of Intrinsyc's web site. On the call, Glenda Dorchak, Chairman and Chief Executive Officer, and George Reznik, Chief Financial Officer, will discuss the integration and forward outlook. Investors and analysts are invited to participate on the call. To listen to the live call, please go to the Investor section of Intrinsyc's web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software.

When: Wednesday, July 9, 2008

Time: 2:00 p.m. PT / 5:00 p.m. ET

Dial In: 1-866-400-2280; outside of the U.S. 416-850-9143

Live Web Cast:

For those unable to participate in the live conference call, a replay will be available shortly after the completion of the call and will be available on Intrinsyc's web site for approximately 3 days. The replay number is 1-866-245-6755 with a pass code of 155262. International callers should dial 416-915-1035 and enter the same pass code at the prompt.

About Intrinsyc Software International, Inc.

Intrinsyc provides wireless software solutions that enable next-generation handheld products, including mobile handsets, smart phones, and converged devices. The company's software products include the Soleus™ software platform for consumer device development and the recently acquired Destinator® GPS/navigation technologies. Combined with award winning engineering services and years of systems integration expertise, these solutions help device makers, service providers, and silicon vendors deliver compelling wireless products with faster time-to-market and improved development cost. Intrinsyc is a Microsoft® Windows Embedded Gold Partner and a winner of Windows Embedded Excellence Awards in 2007 and 2008, a Symbian Competence Center and Symbian Platinum Partner. Intrinsyc is publicly traded (TSX:ICS) and headquartered in Vancouver, Canada, with offices in China, Israel, Taiwan, U.K., and the United States.

(C) 2008 Intrinsyc Software International, Inc. All rights reserved.

Intrinsyc, Soleus, Destinator and their respective logos are trademarks, registered and otherwise, of Intrinsyc Software International, Inc. in Canada, European Union, Taiwan, United States of America and other jurisdictions. Other products and services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations.

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. 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 Company's ability to continue to earn the revenue from Destinator products after the acquisition, and to integrate the acquired business into its own operations; the need to develop, integrate and deploy software solutions to meet our customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer's satisfaction; the timing of entering into significant contracts; our customers' continued commitment to the deployment of our solutions; the risks involved in developing integrated software solutions and integrating them with third-party products and services; the performance of the global economy and growth in software industry sales; market acceptance of the Company's products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by its competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; 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 including but not limited to 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, 2007.
In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors: the Company's ability to execute on its business plan; the acceptance of the Company's products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; the Company's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company's estimated margins. This list is not exhaustive of the factors that may affect our 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.

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