Intrinsyc Software Reports Q1 2006 Financial Results.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Quarterly Revenues Up 24% Compared to Q1 2005 Intrinsyc Intrinsyc Software International, Inc. (TSX: ICS) is a mobility software and services company, founded in 1996. Products include:
TSX Transfer from Stack Pointer to Index TSX True Space Extension :ICS (1) (Internet Connection Sharing) A Windows feature that enables two or more computers to share one Internet connection. First introduced in Windows 98 Second Edition, sharing is accomplished with network address translation (NAT), which is the common method. ) today announced its financial results for its first quarter of the 2006 fiscal year, which ended November November: see month. 30, 2005. - Q1 2006 revenue was $4.6 million, a 24% increase from the same quarter in the previous year (Q1 2005 - $3.7 million) - The $8 Million Debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. Financing closed during the quarter, contributing to the Company's quarter end cash position of $11.1 million Executive Commentary Vince Schiralli, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , said: "The first quarter sales results of our core business(1) are well ahead of our internal plan of record and we expect to continue to be ahead of plan throughout the remainder of the year. The growth of our mobile systems integration business and the relationships that we have with the various vendors in this ecosystem, including leading silicon vendors and handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. manufacturers, continues to be a critical component of our feature phone commercial product launch." Derek Derek is a male name of English and Old German origin, possibly derived from the Old German Theodoric,[1] meaning power of the tribe or ruler of the people. Spratt, Chief Executive Officer, said: "Our feature phone product development and customer pursuits continue to progress according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. our plan, which is to be the leading feature phone software provider in a market that represents more than 500 million handset units in 2005. We were able to achieve all of our development and partner objectives in the quarter, yet spent significantly below our internal plan of record. We are now moving rapidly toward the commercial launch of our mobile software product offerings at 3GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. ." Financial and Operational Highlights - Q1 2006 - On December December: see month. 6, 2005, the Company announced its partnership with Enfora L.P. to develop a complete feature phone design that enables mobile phone manufacturers to develop handsets faster and at lower cost. This partnership is the first time that Intrinsyc is combining their Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. (R) Windows(TM) CE-based software platform together with a Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. (TI)-based OMAP OMAP Office of Medical Assistance Programs (Oregon Department of Human Services) OMAP Open Multimedia Applications Platform (Texas Instruments semiconductor operating system) (TM) 850 dual-core architecture radio module to deliver a complete feature phone solution. Enfora is a leader in enabling GSM, GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. , EDGE and WiFi See Wi-Fi. wireless data solutions in a variety of devices and has developed and certified See certification. a radio module design based on Texas Instruments' (TI) market-leading OMAP(TM) 850 dual-core architecture. Together with Intrinsyc's feature phone software suite, this customized radio module design will enable handset manufacturers to implement their mobile solutions quickly, confidently and with low risk to build compelling, lower-cost handsets. - On November 16, 2005, the Company announced the availability of previews of its feature phone software platform. The previews are a software development kit (SDK (Software Developer's Kit) See developer's toolkit and Windows SDK. SDK - Software Developers Kit (or "Software Development Kit"). ) of the world's first Microsoft(R) Windows(TM) CE-based platform for mobile phones. Intrinsyc has shipped the SDK to a select group of silicon vendors, original equipment manufacturers (OEMs), original design manufacturers (ODMs), independent software vendors (ISVs) and network operators to gain final feedback prior to shipping the full product release in 2006. Intrinsyc's SDK contains the software development tools and the licensable software components required to build a feature phone based on Windows CE (Windows Consumer Electronics) Microsoft's version of Windows for handheld devices and embedded systems that use x86, ARM, MIPS and SHx CPUs. Windows CE .NET superseded Windows CE 3.0. . - On November 14, 2005, the Company announced that it will provide Windows Mobile The Windows platform from Microsoft for handheld devices, including PDAs, cellphones and Portable Media Centers. See Pocket PC, Pocket PC Phone Edition, Smartphone and Portable Media Center. (TM) support for Texas Instruments' (TI) OMAP(TM) platform through Intrinsyc's iQuickStart 3G Program. Intrinsyc, which is an OMAP(TM) Technology Center, will provide TI with Windows Mobile(TM) 5.0 board support for the feature-rich OMAP2420 application processor software development platform, to accelerate the development time and flexibility of customer-specific, Microsoft(R) Windows Mobile(TM)-based mobile phones. - The Company announced the appointment of Mr. Mark McQueen, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Wellington Wellington, city (1996 pop. 157,647; urban agglomeration 334,051), capital of New Zealand, extreme S North Island, on Port Nicholson, an inlet of Cook Strait. Financial LP on October October: see month. 4, 2005, and Mr. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs Bitove on December 19, 2005 as Directors of the Company. The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (2) loss excluding stock based compensation expense for the first quarter of fiscal 2006 was $2.1 million compared to $1.1 million in the first quarter of fiscal 2005. The first quarter EBITDA loss excluding stock based compensation expense includes research and development expenditures on the mobile software products of $1.540 million in fiscal 2006 and $263,000 in fiscal 2005. The loss for the first quarter was $2.7 million or $0.05 per share compared to a loss of $1.4 million or $0.03 per share in the first quarter of fiscal 2005 and includes stock based compensation expense of $204,000 in fiscal 2006 and $152,000 in fiscal 2005. The increase in the loss reflects the $1.5 million in spending on the development of mobile software products. The cash used in operations increased to $3.1 million in the first quarter fiscal 2006 compared to $1.6 million cash used in the first quarter of fiscal 2005 as result of the $1.3 million increase in spending on the development of mobile software and a $400,000 receivable that was collected several days subsequent to the quarter end. The Company also recorded $7.0 million of cash provided by financing activities, which reflects the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the Debentures issued to Wellington Financial. Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. unaudited interim financial statements are attached and a conference call to discuss these results will be held Thursday, January 12, 2006 at 10:00 a.m. PST PST Paroxysmal supraventricular tachycardia, see there . Shareholders and interested parties wishing to listen to the conference call may dial 1-800-470-5906 (toll free) five minutes prior to the scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas . Alternatively, you may listen to a live audio Webcast of the conference call at http://www.intrinsyc.com/investors/pres_and_conf_calls.asp. Please submit questions to invest@intrinsyc.com prior to the call. For those unable to participate, a replay of the conference call will be available from 12:00 p.m. PST on January 12, 2006 to 12:00 a.m. PST on January 19, 2006. The replay number is 1-800-633-8625 and the pass code for callers is 21280011. The call will also be archived at http://www.intrinsyc.com/investors/pres_and_conf_calls.asp. The Audit Committee and Board of Directors of the Company have reviewed the contents of this news release. About Intrinsyc Software International, Inc. Intrinsyc is a mobility software and services company. Its technologies and services allow companies to identify and create innovative solutions that make mobile devices connect and work. Intrinsyc's unique knowledge enables companies to deliver winning mobile devices and solutions that build stronger and more successful businesses. By leveraging Intrinsyc's mobile software products, engineering design services and systems integration expertise, customers make better decisions, improve productivity, and reduce time-to-market. Since 1996, Intrinsyc has built a strong customer base and has formed solid alliances with many leading technology companies including Microsoft, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Intel, Philips, Siemens, General Electric, Hand Held Products, Texas Instruments and Ford. The Company's current strategic business initiative focuses on creating the world's leading feature phone operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. based on Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. CE. The purpose of this initiative is to deliver licensable software and tool extensions to help mobile phone manufacturers more efficiently design and deliver cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. handsets. Intrinsyc is a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , headquartered in Vancouver, Canada with additional regional offices in Bellevue, Washington Bellevue is a rapidly growing city in King County, Washington, U.S., across Lake Washington from Seattle. Long known as a suburb or satellite city of Seattle,[1] it is now categorized as an edge city or a boomburb. , and Birmingham, UK. To find out more about Intrinsyc, visit: www.Intrinsyc.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains statements which, to the extent that they are not recitations of historical fact may constitute forward-looking information. Such forward-looking statements may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. or the Company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect", "anticipate", "intend", "estimate", "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. are intended to identify forward-looking statements. Persons reading this press release are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include the risk factors set out in the Company's Annual Information Form. 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. Intrinsyc is a registered trademark of Intrinsyc Software International, Inc. All other trademarks are registered trademarks of the respective owners, and are hereby acknowledged. (1) Core business is defined as the operations of the Company excluding the research and development activities and associated costs of the Mobile Software Products business unit. (2) EBITDA is a non-GAAP measure that does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning and may not be comparable to similar measures disclosed by other issuers. This measure does not have a comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure. EBITDA is defined as earnings before interest, tax, depreciation and amortization.
Intrinsyc Software International, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
November 30, August 31,
2005 2005
$ $
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ASSETS
Current
Cash and cash equivalents 11,129,003 7,318,210
Accounts receivable 4,390,565 3,909,596
Inventory 131,819 134,318
Prepaid expenses 374,611 345,762
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Total current assets 16,025,998 11,707,886
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Equipment 1,000,128 980,580
Goodwill 14,189,478 14,189,478
Intangible assets 1,075,006 1,212,577
Deferred financing costs 810,133 --
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Total assets 33,100,743 28,090,521
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 2,477,039 2,790,071
Taxes payable 252,319 263,382
Deferred revenue 748,536 836,660
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Total current liabilities 3,477,894 3,890,113
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Debentures 7,363,699 --
Future income taxes 237,773 261,425
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Total liabilities 11,079,366 4,151,538
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Shareholders' equity
Share capital 57,454,091 57,452,141
Warrants 769,234 163,500
Contributed surplus 2,101,220 1,896,760
Cumulative translation adjustment (27,792) (27,792)
Deficit (38,275,376) (35,545,626)
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Total shareholders' equity 22,021,377 23,938,983
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Total liabilities and shareholders'
equity 33,100,743 28,090,521
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Intrinsyc Software International, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited)
Three months ended
November 30
2005 2004
$ $
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Revenues 4,552,688 3,685,703
Cost of sales 2,668,686 1,998,416
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1,884,002 1,687,287
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Expenses
Administration 1,388,747 867,275
Marketing and sales 807,399 815,541
Research and development 1,648,381 618,539
Amortization 222,473 202,999
Stock-based compensation 204,460 152,099
Technology Partnerships Canada Funding
Investment 1,173 (37,689)
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4,272,633 2,618,764
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Loss before other expense (income) and
income taxes 2,388,631 931,477
Other expense (income)
Foreign exchange loss 107,423 496,475
Interest income (49,918) (10,537)
Interest expense - long term debt 285,278 --
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342,783 485,938
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Loss before income taxes 2,731,414 1,417,415
Income tax expense (recovery)
Current 21,988 --
Future (23,652) (23,652)
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(1,664) (23,652)
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Loss for the period 2,729,750 1,393,763
Deficit, beginning of period 35,545,626 30,565,645
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Deficit, end of period 38,275,376 31,959,408
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Loss per share (basic and diluted) 0.05 0.03
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Weighted average number of shares
outstanding 56,234,336 49,065,464
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Intrinsyc Software International, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
November 30
2005 2004
$ $
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OPERATING ACTIVITIES
Loss for the period (2,729,750) (1,393,763)
Items not involving cash
Amortization 222,473 202,999
Future income taxes (23,652) (23,652)
Stock-based compensation 204,460 152,099
Non-cash interest 126,374 --
Changes in non-cash operating working
capital
Accounts receivable (480,969) (376,785)
Other receivable -- (37,689)
Inventory 2,499 51,993
Prepaid expenses (28,849) 43,695
Accounts payable and accrued liabilities (313,032) (365,481)
Income taxes payable (11,063) 69,686
Deferred revenue (88,124) 113,995
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Cash used in operating activities (3,119,633) (1,562,903)
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INVESTING ACTIVITIES
Purchase of short term investments -- (5,000,000)
Purchase of equipment (104,450) (120,621)
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Cash used in investing activities (104,450) (5,120,621)
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FINANCING ACTIVITIES
Issuance of common shares 1,950 5,632,671
Share issuance costs -- (454,750)
Debentures 8,000,000 --
Debentures issuance costs (967,074) --
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Cash provided by financing activities 7,034,876 5,177,921
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Increase (decrease) in cash and cash
equivalents 3,810,793 (1,505,603)
Cash and cash equivalents, beginning
of period 7,318,210 4,600,460
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Cash and cash equivalents, end of period 11,129,003 3,094,857
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