Intrinsyc Reports Quarterly Revenue Growth of 90% Over Prior Year

VANCOUVER, BC--(Marketwired - May 11, 2016) - Intrinsyc Technologies Corporation (TSX: ITC)(OTC: ISYRF) ("Intrinsyc" or the "Company"), a leading provider of solutions for the development of embedded and IoT products, today announced its financial results for the first quarter of fiscal 2016 ended March 31, 2016. Intrinsyc achieved annual revenue growth of 90% in the first quarter of fiscal 2016 over the prior year, with sequential growth of 6%. Revenue was US$4.3 million representing an increase from US$2.3 million in the first quarter of fiscal 2015, and US$4.0 million in the previous quarter. Intrinsyc achieved net income of US$490,738 and earnings per share of US$0.02. Financial information is reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS").

"I am pleased with the substantial growth in revenue over the prior year," stated Tracy Rees, President and Chief Executive Officer, Intrinsyc Technologies Corporation. "The Company is delivering revenue growth and positive EBITDA1 performance while making investments for future growth; including expansion of our engineering resources and new product development."

The Company made progress with several new client projects signed and new products developed including the following business highlights:

Quarterly Business Highlights

  • Announced the availability of the Open-Q™ 600 Single Board Computer ("SBC"). The Open-Q™ 600 is a powerful embedded computing platform designed to enable the rapid commercial production of intelligent connected products across a variety of embedded computing industries.
  • Introduced the Open‐Q™ 410 Wearable Camera Reference Design. The reference design enables companies to develop a body-worn camera product for law enforcement, fire safety, emergency medical response, security, military, and other applications.
  • Announced it has expanded operations with the recent opening of an engineering center in Boulder, Colorado, and with an additional office planned to open in Taipei, Taiwan in the second quarter of 2016.
  • Announced the Company signed two agreements with an existing client that are valued at US$985,000. The agreements cover the Company's Field Programmable Gate Array ("FPGA") design and development services. FPGAs are semiconductor devices that are based around a matrix of configurable logic blocks ("CLBs") connected via programmable interconnects. FPGAs are used in embedded systems to increase system performance, reliability, security, and intellectual property protection.
  • Participated in several key industry conferences throughout the quarter in North America and Europe including: CES, Embedded World 2016 and Cantech Investment Conference. The Company frequently exhibits at these events as an invited guest of our strategic technology partner.
  • As of March 31, 2016, the Company had 28 companies that are currently incorporating Intrinsyc's Open-Q™ embedded computing modules into their products, with six of those companies in commercial production.

Financial Highlights

Three Month Comparative Results

The Company reported revenue of US$4.3 million, up 90% over the same period in the prior year of US$2.3 million and up 6% over the US$4.0 million in the prior fourth quarter of fiscal 2015. The increase in revenue was due to increased revenue from the sale of product development engineering services, as well as hardware products.

The Company had net income of US$490,738 in the three months ended March 31, 2016, compared to a net loss of US$328,335 in the same period in the prior year and net income of US$805,352 in the prior quarter.

Gross margin2 in the first quarter of fiscal 2016 was 38%, which was lower than the 47% gross margin in the same period in the prior year and the 49% gross margin in the previous fourth quarter of fiscal 2015. Reduction in gross margin over the prior period was due to several factors, including; the temporary increased engagement of third party contractors, increased Vancouver facilities expansion costs, ramp up of the Company's new engineering center in Boulder, increased labor cost due to the recent strengthening in the value of the Canadian dollar against the US dollar, and the increased sales of embedded computing products to a single client at less than typical margins. Adjusted EBITDA3 was as follows:

                    Three months ended Three months ended Three months ended
                        March 31, 2016  December 31, 2015     March 31, 2015
Operating income              $308,040           $814,767            $ 4,288
Add: revenue                                                                
 recognized as                                                              
 interest income as                                                         
 per IFRS                       33,750             33,750             33,750
Add back: Other                                                             
 operating expenses            119,240            116,677             82,538
Adjusted EBITDA               $461,030           $965,194           $120,576

Financial Position as at March 31, 2016

Working capital4 as of March 31, 2016 was US$10.2 million (which included cash and cash equivalents of US$3.9 million and short term investments of US$2.3 million). This is compared to net working capital of US$9.8 million as of December 31, 2015 (which included cash and cash equivalents of US$5.9 million and short-term investments of US$1.1 million).

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