Intrinsyc Software International, Inc.

TSX : ICS


Intrinsyc Software International, Inc.

March 19, 2014 16:00 ET

Intrinsyc Reports 2013 Fourth Quarter and Full Year Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 19, 2014) - Intrinsyc Software International, Inc. (TSX:ICS) ("Intrinsyc" or the "Company"), a leading provider of solutions for the development of embedded and wireless devices, today announced its financial results for the fourth quarter and full year ended December 31, 2013. Intrinsyc achieved revenue of approximately $1.6 million in the fourth quarter compared to approximately $1.5 million in the previous quarter, with lower operating expenses resulting in net income of approximately $103,000. Financial information is reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS").

"I'm pleased we were able to achieve positive net income on improved revenue and lower operating expenses," said Tracy Rees, Intrinsyc, President and CEO. "An even more positive development was the progress we made with our new embedded computing solutions, signified by the signing of a development agreement and significant commitment for the purchase of Intrinsyc's Open-Q™ System on Modules ("SOM"). The momentum in our embedded computing initiative continued with new customer wins and orders announced in the first quarter. Continuing our progress in this area, Intrinsyc strengthened the strategic relationship with our silicon partner with the signing of a license agreement for a new generation of application processor technology and agreement for a new mobile development platform to be introduced in the first quarter."

Business Highlights

Notable developments and achievements during the quarter include the following:

  • Signed a design and development agreement with an original equipment manufacturer ("OEM") for a custom consumer electronics solution based on Intrinsyc's Open-Q SOM. The agreement includes a commitment by the OEM to enter into a master supply agreement with Intrinsyc within 90 days for the purchase of a minimum of ten thousand SOMs over a 12 month period, with delivery expected to begin late in 2014.
  • Signed a license agreement with its' silicon partner for a new generation of application processor technology and agreement for a new mobile development platform to be introduced in the first quarter of 2014.
  • Signed strategic manufacturing/supply agreement for Intrinsyc's Open-Q SOM with Asian based contract manufacturer to support high volume customers.

Financial Highlights

Three Month Comparative Results

The Company reported revenue of approximately $1.6 million for the three months ended December 31, 2013 as compared to approximately $1.5 million for the three months ended September 30, 2013 and $1.6 million for the three months ended December 31, 2012. Net income was approximately $103,000 for the three months ended December 31, 2013 as compared to a net loss of approximately $328,000 for the three months ended September 30, 2013 and a net loss of approximately $253,000 for the three months ended December 31, 2012.

Gross margin(1) was 36% for the three months ended December 31, 2013 representing a slight decrease from 37% for the three months ended September 30, 2013 but an increase from 31% for the three months ended December 31, 2012. Total expenses (excluding other operating expenses)(2) for the three months ended December 31, 2013 were approximately $552,000 representing a decrease of 30% from the approximately $785,000 for the three months ended September 30, 2013 and a decrease of 27% from the approximately $754,000 for the three months ended December 31, 2012.

EBITDA(3) for the three months ended December 31, 2013 was approximately $30,000 compared to approximately ($245,000) for the previous three months ended September 30, 2013 and approximately ($264,000) for the three months ended December 31, 2012.

Twelve Month Comparative Results

The Company reported revenue of approximately $5.9 million for the year ended December 31, 2013 as compared to approximately $7.5 million for the year ended December 31, 2012. Net loss was approximately $2.1 million for the year ended December 31, 2013 as compared to a net loss of approximately $875,000 for the year ended December 31, 2012.

Gross margin was 37% for the year ended December 31, 2013, a slight decrease from 39% in the year ended December 31, 2012. Total expenses (excluding other operating expenses) for the year ended December 31, 2013 were approximately $4.4 million, compared to approximately $3.7 million for the year ended December 31, 2012.

EBITDA for the year ended December 31, 2013 was approximately ($2.2 million) compared to approximately ($706,000) for the year ended December 31, 2012.

Financial Position as at December 31, 2013

Working capital(4) as of December 31, 2013 was approximately $8.8 million (which included cash and cash equivalents of approximately $4.6 million and short term investments of $4.5 million). This is compared to net working capital of approximately $11.4 million as of December 31, 2012 (which included cash and cash equivalents of approximately $6.0 million and short-term investments of approximately $5.3 million).

Conference call

The Company will hold a conference call to discuss its fiscal fourth quarter and full year 2013 financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today. On the call, Mr. Rees and George Reznik, Chief Financial Officer, will discuss the financial results announced. This conference call may be accessed, toll-free, by dialing 1-888-340-9642, and internationally by dialing 1-416-340-8530 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.

Non-IFRS Measures

The following and preceding discussion of financial results includes reference to Gross Margin, Total Expenses (excluding other operating expenses), EBITDA and Working Capital, which are all non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluating the operating performance of the Company.

Total expenses excluding other operating expenses is provided as a proxy for cash expenses incurred from the operations of the business. EBITDA is defined as operating loss less other operating expenses. The measure is provided as a proxy for the cash earnings from the operations of the business as operating loss for the Company includes non-cash amortization and depreciation expense, share-based compensation and loss on disposal of equipment which are classified as other operating expenses. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.

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

1 Non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced here relates to revenues less cost of sales.
2 Non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Total expenses excludes other operating expenses.
3 Non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. EBITDA referenced here relates to operating loss less other operating expenses.
4 Non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. Working capital is defined as current assets less current liabilities.

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; reliance on products manufactured by other companies for resale or distribution and reliance on third-party suppliers; 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, 2013. 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 Software International, Inc. (www.intrinsyc.com) is a product development company that provides hardware, software, and service solutions that enable next-generation embedded and wireless products. Solutions span the development life cycle from concept to production and help device makers and technology suppliers create compelling differentiated products with faster time-to-market. Intrinsyc is publicly traded (TSX: ICS) and is headquartered in Vancouver, BC, Canada.

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