Intrinsyc Technologies Corporation
TSX : ITC

Intrinsyc Technologies Corporation

August 13, 2014 16:00 ET

Intrinsyc Reports 2014 Second Quarter Results; Year-To-Date Revenue Up 71% From Prior Year

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 13, 2014) - Intrinsyc Technologies Corporation (TSX:ITC) ("Intrinsyc" or the "Company"), a leading provider of solutions for the development of embedded and wireless devices, today announced its financial results for the second quarter ending June 30, 2014. Intrinsyc achieved strong annual and sequential revenue growth. Revenue was $2.5 million in the second quarter, up 58% from $1.6 million in the second quarter of 2013 and up 12% from $2.3 million in the previous quarter. Higher revenue resulted in achievement of positive EBITDA1 of $113,786 and net income of $199,868. Financial information is reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS").

"I was pleased with our progress in improving revenue and achieving positive net income in the second quarter. This marks our third consecutive quarter of revenue growth, with revenue up 71% year-to-date, compared with the prior year-to-date period, stated Tracy Rees, Intrinsyc's President and CEO. "Contributing to our improving revenue was strong sales from our development kits including the mobile development platform we began selling in the prior quarter. Intrinsyc also added development platforms for creating connected devices for the Internet of Things and automotive infotainment markets. In addition to the direct revenue contribution, these development platforms are an excellent source of new opportunities for Intrinsyc's other value added products and services."

"Intrinsyc made significant progress gaining new customers for our Open-Q™ computing module," added Rees. "We currently have more than ten customers planning to use Intrinsyc's Open-Q computing modules that are in various stages of development. We expect to see growing revenue contribution from these customers as they enter production later this year and early in 2015."

Business Highlights

Notable developments and achievements during the quarter include the following:

  • The Company filed Articles of Amendment to give effect to a change in its name to Intrinsyc Technologies Corporation and the consolidation of its common shares on the basis of eight (8) old Common Shares for one (1) new Common Share basis effective June 17, 2014.
  • Introduced new development kits for the Internet of Things and automotive infotainment markets.
  • Participated in several key industry conferences including: Augmented World Expo 2014, AnDevCon and Maker Faire.

Financial Highlights

Three Month Comparative Results

The Company reported revenue of $2.5 million, up 58% year-over-year, from $1.6 million, and up 12% quarter-over-quarter, from $2.3 million.

Gross margin2 was 37%, down from 48% in the same period in the prior year and down from 41% in the prior period. The decrease in margin was primarily due to increased hardware sales which generally have lower margins relative to software and services as well as lower utilization.

EBITDA was $113,786, a substantial improvement from ($1.2) million in the same period in the prior year and up from $102,131 in the prior quarter. The Company had net income of $199,868 compared to a net loss of $1.1 million in the same period in the prior year and a net loss of $159,725 in the prior quarter.

Six Month Comparative Results

The Company reported revenue of $4.8 million compared to $2.8 million for the six months ended June 30, 2013.

Gross margin was 39% for the six months ended June 30, 2014, which was consistent with gross margin experienced of 38% for the six months ended June 30, 2013.

EBITDA for the six months ended June 30, 2014 was $215,917 compared to ($2.0) million for the six months ended June 30, 2013. The Company had net income of $40,143 during the six months ended June 30, 2014 compared to a net loss of $1.9 million during the six months ended June 30, 2013.

Financial Position as at June 30, 2014

Working capital3 as of June 30, 2014 was $8.9 million (which included cash and cash equivalents of $5.7 million and short term investments of $2.7 million). This is compared to net working capital of $8.8 million as of December 31, 2013 (which included cash and cash equivalents of $4.6 million and short-term investments of $4.5 million).

Financial Statements and Management Discussion & Analysis

Please see the unaudited condensed consolidated interim financial statements and related Management's Discussion & Analysis ("MD&A") for more details. The unaudited condensed consolidated interim financial statements for the three and six month periods ended June 30, 2014 and related MD&A have been reviewed and approved by Intrinsyc's Audit Committee and Board of Directors. Intrinsyc recognizes that the majority of its investors are now accessing Intrinsyc's corporate and financial information either through pushed news services, directly from www.intrinsyc.com or SEDAR. Thus, Intrinsyc has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com and also posted at www.intrinsyc.com.

Conference call

The Company will hold a conference call to discuss its fiscal second quarter 2014 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 income (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.

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 Technologies Corporation

Intrinsyc Technologies Corporation (www.intrinsyc.com) a leading provider of solutions for the development of embedded and wireless devices is a product development company that provides hardware, software, and service solutions that enable next-generation embedded and Internet of Things ("IoT") 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:ITC) and is headquartered in Vancouver, BC, Canada.


1 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 income (loss) less other operating expenses.

2 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.

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. Working capital is defined as current assets less current liabilities.

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