Intrinsyc Reports 2011 Fourth Quarter and Full-Year Financial Results
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Intrinsyc Reports 2011 Fourth Quarter and Full-Year Financial Results

VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- Mar 21, 2012 -- Intrinsyc Software International, Inc. (TSX: ICS) ("Intrinsyc" or the "Company"), developer of intelligent connected devices, today announced its financial results for the fourth quarter and full year ended December 31, 2011, reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS"). The Company's results are presented in comparison to the three months and twelve months ended December 31, 2010, also in accordance with IFRS.

"We are pleased with achievement of positive EBITDA for our second consecutive year," said Tracy Rees, President and Chief Executive Officer. "In 2011, the Company continued to focus on operational efficiency and the stabilization of the company, resulting in improvements in the company's working capital and other balance sheet measures. In the fourth quarter of 2011, we began a progressive series of investments in new solutions that will provide the company with new and scalable sources of revenue."

Q4 2011 Comparative Results

The Company reported revenue of approximately $2.6 million for the three months ended December 31, 2011 as compared to approximately $2.9 million for the three months ended December 31, 2010. The decrease in revenue is primarily attributable to the decrease in revenues of the Company's Device Development Solutions. Total revenue attributable to the Company's Software Solutions was 26 percent of revenues, compared to 17 percent in the comparative quarter with revenue attributable to the Company's Device Development Solutions decreasing to 74 percent in the three months ended December 31, 2011 from 82 percent in the prior year period. Overall, gross margin(1) was 46 percent in the fourth quarter of 2011 representing a decrease from 63 percent in the three months ended December 31, 2010.

Total expenses (excluding other operating expenses)(2) for the three months ended December 31, 2011 were approximately $1.2 million representing a decrease of 27 percent from the approximately $1.6 million for the three months ended December 31, 2010.

EBITDA(3) for the three months ended December 31, 2011 was $399 compared to EBITDA of $243,902 for the three months ended December 31, 2010.

Fiscal 2011 Comparative Results

The Company reported revenue of approximately $10.3 million for the year ended December 31, 2011 as compared to approximately $12.7 million for the year ended December 31, 2010. Total revenue attributable to the Company's Software Solutions decreased to 29 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 31 percent in the respective comparative period. Gross margin was 52 percent for the year ended December 31, 2011, a decrease from 57 percent in the year ended December 31, 2010.

Total operating expenses (excluding other operating expenses) for the year ended December 31, 2011 were approximately $4.6 million, compared to approximately $6.9 million for the year ended December 31, 2010. EBITDA for the year ended December 31, 2011 was $718,432 compared to $420,619 for the year ended December 31, 2010.

Working capital(4) as of December 31, 2011 was approximately $11.9 million (which included cash and cash equivalents of approximately $9.4 million and short-term investments of approximately $2.7 million). This is compared to net working capital of approximately $11.6 million as of December 31, 2011 (which included cash and cash equivalents of approximately $11.2 million).

Business Highlights

Notable developments and achievements during the quarter include the following:


--  In collaboration with a leading communications technology vendor,
    Ubiquisys, the Company began development of WiFi Wake-up, an innovative
    combination of handset and small cell applications. WiFi Wake-up
    switches on WiFi as the user enters a 3G/LTE/WiFi small cell hotspot and
    logs into the hotspot's secure WiFi network. When the user then leaves
    the hotspot, the WiFi is turned-off. This provides a compelling new tool
    for operators to maximize data offload by integrating carrier WiFi with
    small cell base stations, and optimizes power management on the user's
    mobile handset. A provisional patent was filed and WiFi Wake-up was
    announced and demonstrated at Mobile World Congress in February 2012.

--  Began development of the OPEN-6 Design & Production Platform. The OPEN-6
    Design and Production Platform leverages the latest high performance
    multi-core design from Freescale, the i.MX 6 series, based upon the
    ARM® Cortex™ A9 architecture. 

--  Initiated development of an Advanced Metering Infrastructure module
    prototype for integration in smart meters. Advanced Metering
    Infrastructure (AMI) are systems that measure, collect and analyze
    energy usage, and provide two-way communication with metering devices
    such as electricity meters. This enables more efficient utilization of
    energy resources, greater control over energy consumption by consumers,
    and new business models for utility companies.

--  Signed two (2) new customer projects for product development services
    with industry leading device makers and technology suppliers.including a
    material agreement worth 10% or more of projected revenues over the next
    12 months. This agreement to provide engineering services for Android
    platforms with an industry leading semiconductor company is expected to
    exceed $2 million in revenue in fiscal 2012.

--  Opened an engineering center in San Diego, California. In addition to
    product development services for the world's leading OEM companies
    developing wireless devices, the San Diego location will become the
    center for new product initiatives related to development of M2M
    (Machine-to-Machine) solutions.

Conference call

The Company will release its fiscal fourth quarter and full-year 2011 financial results on Wednesday, March 21, 2012 at 4:00 p.m. Eastern Time (1:00 p.m. Pacific Time). The company will hold a conference call to discuss the financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) the same day. On the call, Tracy Rees, President and Chief Executive Officer, and George Reznik, Chief Financial Officer, will discuss the financial results announced. This conference call may be accessed in North America, toll-free, by dialing 1-866-610-8602, and internationally by dialing +1-212-401-8152 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 Email Contact prior to the call.

Non-GAAP 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 evaluation 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 expense, share-based compensation, restructuring, asset impairment and loss (gain) 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.

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; 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, 2011. 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 is a product development company that brings to market next generation intelligent connected devices, from smartphones and tablets, to emerging categories of M2M (Machine-to-Machine) solutions. Intrinsyc is helping to lead the way to a networked society with 50 billion intelligent connected devices expected by 2020. Intrinsyc is publicly traded (TSX: ICS) and is headquartered in Vancouver, Canada, with operations in China, Taiwan and the United States.

www.intrinsyc.com


                   INTRINSYC SOFTWARE INTERNATIONAL, INC.                   
                Consolidated Statements of Financial Position               
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                              December 31,     December 31,       January 1,
As at                                 2011             2010             2010
----------------------------------------------------------------------------

ASSETS                                                                      
Current assets                                                              
  Cash and cash
   equivalents             $     9,382,653  $    11,152,439  $    11,710,227
  Short-term investments         2,688,814                -                -
  Trade and other                1,268,700        2,992,007        3,401,467
   receivables                                                              
  Inventory                         17,702           26,208           14,269
  Prepaid expenses                 174,490          162,336          313,528
----------------------------------------------------------------------------
                                13,532,359       14,332,990       15,439,491
Non-Current Assets                                                          
  Restricted cash                        -                -           95,147
  Prepaid expenses                  59,553           44,551           47,063
  Equipment                        355,955          549,945          735,807
  Intangible assets                      -          580,434        3,880,481
----------------------------------------------------------------------------
Total assets               $    13,947,867  $    15,507,920  $    20,197,989
----------------------------------------------------------------------------
LIABILITIES AND                                                             
 SHAREHOLDERS' EQUITY                                                       
Current liabilities                                                         
  Trade and other payables $       933,873  $     2,164,951  $     3,574,134
  Government assistance -          189,233           72,561                -
   current                                                                  
  Finance lease                          
   obligations                           -            7,818           45,179
  Deferred revenue                 488,976          471,285          526,169
----------------------------------------------------------------------------
                                 1,612,082        2,716,615        4,145,482
Long-Term Liabilities                                                       
  Government assistance                  -          179,162                -
  Finance lease                          -                -            7,388
   obligations                                                              
----------------------------------------------------------------------------
Total liabilities                1,612,082        2,895,777        4,152,870
----------------------------------------------------------------------------

Shareholders' equity                                                        
  Share capital                108,288,585      108,288,585      108,288,585
  Other capital reserves         9,750,619        9,566,250        9,466,400
  Translation of foreign           
   operations reserve              514,748          794,984                -
  Deficit                    (106,218,167)    (106,037,676)    (101,709,866)
----------------------------------------------------------------------------
Total shareholders' equity      12,335,785       12,612,143       16,045,119
----------------------------------------------------------------------------
Total liabilities and
 shareholders' equity      $    13,947,867  $    15,507,920  $    20,197,989
----------------------------------------------------------------------------

                   INTRINSYC SOFTWARE INTERNATIONAL, INC.                   
              Consolidated Statements of Operations and Deficit             
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                   Three months   Three months                              
                          ended          ended                              
                   December 31,   December 31,     Year ended     Year ended
                           2011           2010   December 31,   December 31,
For the             (unaudited)    (unaudited)           2011           2010
----------------------------------------------------------------------------

Revenues         $    2,555,259 $    2,936,636 $   10,298,496  $  12,712,290
Cost of sales         1,373,658      1,080,154      4,939,007      5,430,696
----------------------------------------------------------------------------
                      1,181,601      1,856,482      5,359,489      7,281,594
----------------------------------------------------------------------------

Expenses                                                                    
 Sales and
  marketing             405,346        490,591      1,926,561      1,989,403
 Research and
  development            91,615        313,155        364,250      2,271,452
 Administration         684,241        808,834      2,350,246      2,600,120
 Other operating
  expenses              273,137      2,890,929      1,269,600      4,602,936
----------------------------------------------------------------------------
                      1,454,339      4,503,509      5,910,657     11,463,911
----------------------------------------------------------------------------

Operating loss          272,738      2,647,027        551,168      4,182,317
----------------------------------------------------------------------------

Other expenses                                                              
 (earnings)                                                                 
 Foreign               
  exchange loss      
  (gain)                173,187        163,524       (78,629)        261,607
 Interest income       (32,739)        (9,440)      (105,483)       (45,698)
----------------------------------------------------------------------------
                        140,448        154,084      (184,112)        215,909
----------------------------------------------------------------------------

Loss before               
 income taxes           413,186      2,801,111        367,056      4,398,226

Income tax
 recovery -                                                                 
 current              (187,352)              -      (186,565)       (70,416)
----------------------------------------------------------------------------

Net loss for the        
 period                 225,834      2,801,111        180,491      4,327,810

Deficit,            
 beginning of                                                               
 period             105,992,333    103,236,565    106,037,676    101,709,866
----------------------------------------------------------------------------

Deficit, end of                 
 period          $  106,218,167 $  106,037,676  $ 106,218,167  $ 106,037,676
----------------------------------------------------------------------------

Loss per share                     
 (basic and                                          
 fully diluted)  $         0.00 $         0.02  $        0.00  $        0.03
----------------------------------------------------------------------------

Weighted average                                                            
 number of                                                                  
 shares                                                                     
 outstanding        163,259,070    163,259,070    163,259,070    163,259,070
----------------------------------------------------------------------------

                   INTRINSYC SOFTWARE INTERNATIONAL, INC.                   
                Consolidated Statements of Comprehensive Loss               
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                   Three months   Three months                              
                          ended          ended                              
                   December 31,   December 31,     Year ended     Year ended
                           2011           2010   December 31,   December 31,
For the             (unaudited)    (unaudited)           2011           2010
----------------------------------------------------------------------------

Net loss for the                    
 period          $    (225,834) $  (2,801,111) $    (180,491)  $ (4,327,810)

Other                                                                       
 comprehensive                                                              
 gain:                                                                      

Unrealized gains                                                            
 on translating                                                             
 financial                                                                  
 statements from                                                            
 functional                                                                 
 currency to                                                                
 reporting                                                                  
 currency               371,468        464,529      (280,236)        794,984
----------------------------------------------------------------------------

Comprehensive                                                               
 income (loss)                                                              
 for the period  $      145,634 $  (2,336,582) $    (460,727) $  (3,532,826)
----------------------------------------------------------------------------

                   INTRINSYC SOFTWARE INTERNATIONAL, INC.                   
                 Consolidated Statements of EBITDA and Loss                 
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                   Three months   Three months                              
                          ended          ended                              
                   December 31,   December 31,     Year ended     Year ended
                           2011           2010   December 31,   December 31,
For the             (unaudited)    (unaudited)           2011           2010
----------------------------------------------------------------------------

Revenues         $    2,555,259 $    2,936,636 $   10,298,496 $   12,712,290
Cost of sales         1,373,658      1,080,154      4,939,007      5,430,696
----------------------------------------------------------------------------
                      1,181,601      1,856,482      5,359,489      7,281,594
----------------------------------------------------------------------------

Expenses                                                                    
  Sales and                                                                 
   marketing            405,346        490,591      1,926,561      1,989,403
  Research and                                                              
   development           91,615        313,155        364,250      2,271,452
  Administration        684,241        808,834      2,350,246      2,600,120
----------------------------------------------------------------------------
                      1,181,202      1,612,580      4,641,057      6,860,975
----------------------------------------------------------------------------

EBITDA                      399        243,902        718,432        420,619
----------------------------------------------------------------------------

  Other                                                                     
   operating                                                                
   expenses             273,137      2,890,929      1,269,600      4,602,936
  Foreign                                                                   
   exchange loss                                                            
   (gain)               173,187        163,524       (78,629)        261,607
  Interest                                                                  
   income              (32,739)        (9,440)      (105,483)       (45,698)
  Income tax                                                                
   recovery -                                                               
   current            (187,352)              -      (186,565)       (70,416)
----------------------------------------------------------------------------
                        226,233      3,045,013      (898,923)    (4,748,429)
----------------------------------------------------------------------------

Net loss for the                                                            
 period under                                                               
 IFRS            $    (225,834) $  (2,801,111) $    (180,491) $  (4,327,810)
----------------------------------------------------------------------------

                    INTRINSYC SOFTWARE INTERNATIONAL, INC.                  
                Consolidated Statements of Changes in Equity                
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                                                    Translation        Total
                                Other                of Foreign       Share-
                    Share     Capital                Operations     holder's
                  Capital    Reserves         Deficit   Reserve       Equity
----------------------------------------------------------------------------

Balance,                                                                    
 January 1,                                                                
 2011        $108,288,585  $9,566,250  $(106,037,676)  $794,984  $12,612,143
Net loss                                                                    
 for the                                                                    
 year                   -           -       (180,491)         -    (180,491)
Share-                                                                     
 based                                                                     
 compensation           -     184,369               -         -      184,369
Translation                                                                 
 of                                                                         
 foreign                                                                  
 operations                                                                
 into U.S.                                                                 
 dollars                -           -               - (280,236)    (280,236)
----------------------------------------------------------------------------
Balance,                                                                   
 December 31,                                                               
 2011        $108,288,585  $9,750,619  $(106,218,167)  $514,748  $12,335,785
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance,                                                                  
 January 1,                                                                
 2010        $108,288,585  $9,466,400  $(101,709,866)  $      -  $16,045,119
Net loss                                                                 
 for the                                                                   
 year                   -           -     (4,327,810)         -  (4,327,810)
Share-                                                                     
 based                                                                      
 compensation           -      99,850               -         -       99,850
Translation                                                                
 of foreign                                                                 
 operations                                                                
 into U.S.                                                                 
 dollars                -           -               -   794,984      794,984
----------------------------------------------------------------------------
Balance,                                                                    
 December 31,                                                               
 2010        $108,288,585  $9,566,250  $(106,037,676)  $794,984  $12,612,143
----------------------------------------------------------------------------

                   INTRINSYC SOFTWARE INTERNATIONAL, INC.                   
                    Consolidated Statements of Cash Flows                   
                         (Expressed in U.S. dollars)                        
----------------------------------------------------------------------------
                   Three months   Three months                              
                          ended          ended                              
                   December 31,   December 31,     Year ended     Year ended
                           2011           2010   December 31,   December 31,
For the             (unaudited)    (unaudited)           2011           2010
----------------------------------------------------------------------------

Cash provided by                                                            
 (used in):                                                                 

Operating                                                                   
 Activities                                                                 
  Net loss for                                                              
   the period    $    (225,834) $  (2,801,111) $    (180,491) $  (4,327,810)

Adjustments to                                                              
 reconcile net                                                              
 loss to net                                                                
 cash flows:                                                                
  Amortization                                                              
   and                                                                      
   depreciation         169,275        323,562        755,416      1,190,023
  Non-cash                                                                  
   interest               3,585          7,622         17,311         12,124
  Share-based                                                               
   compensation          47,357         24,824        184,369         99,850
  Asset                                                                     
   impairment                 -      2,542,543              -      2,542,543
  Loss on                                                                   
   disposal of                                                              
   equipment             56,505              -         56,505              -
  Non-cash                                                                  
   restructuring              -              -         98,124              -
  Government                                                                
   assistance                 -        (2,909)              -        304,309
----------------------------------------------------------------------------
                         50,888         94,531        931,234      (178,961)
----------------------------------------------------------------------------

Working capital                                                             
 adjustments:                                                               
  Trade and                                                                 
   other                                                                    
   receivables          610,374        531,379      1,697,182        580,121
  Inventory               1,412       (23,313)          8,116       (11,449)
  Prepaid                                                                   
   expenses             249,532         68,805       (42,648)        169,609
  Trade and                                                                 
   other                                                                    
   payables           (433,310)      (189,513)    (1,138,816)    (1,557,935)
  Deferred                                                                  
   revenue             (67,690)         14,778         34,607       (80,613)
----------------------------------------------------------------------------
                        360,318        402,136        480,240      (900,267)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cash provided by                                                            
 (used in)                                                                  
 operating                                                                  
 activities             411,206        496,667      1,411,474    (1,079,228)
----------------------------------------------------------------------------

Investing                                                                   
 Activities                                                                 
  Redemption                                                                
   (purchase) of                                                            
   short-term                                                               
   investments        1,645,772              -    (2,826,088)              -
  Purchase of                                                               
   equipment          (131,968)        (1,432)      (134,027)       (71,215)
----------------------------------------------------------------------------
Cash provided by                                                            
 (used) in                                                                  
 investing                                                                  
 activities           1,513,804        (1,432)    (2,960,115)       (71,215)
----------------------------------------------------------------------------

Financing                                                                   
 Activities                                                                 
  Repayment of                                                              
   capital lease                                                            
   obligation                 -        (7,554)        (7,890)       (45,935)
  Government                                                                
   assistance          (73,314)       (74,033)       (73,314)       (74,033)
  Restricted                                                                
   cash                       -              -              -         97,248
----------------------------------------------------------------------------
Cash used in                                                                
 financing                                                                  
 activities            (73,314)       (81,587)       (81,204)       (22,720)
----------------------------------------------------------------------------

Effect of                                                                   
 exchange rate                                                              
 changes on cash                                                            
 and cash                                                                   
 equivalents            234,767        366,616      (139,941)        615,375
----------------------------------------------------------------------------

Increase                                                                    
 (decrease) in                                                              
 cash and cash                                                              
 equivalents          2,086,463        780,264    (1,769,786)      (557,788)
Cash and cash                                                               
 equivalents,                                                               
 beginning of                                                               
 period               7,296,190     10,372,175     11,152,439     11,710,227
----------------------------------------------------------------------------
Cash and cash                                                               
 equivalents,                                                               
 end of period   $    9,382,653 $   11,152,439 $    9,382,653 $   11,152,439
----------------------------------------------------------------------------

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. Please refer to
    the reconciliation of EBITDA to reported financial results attached to
    this press release.
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.

Contacts:
Intrinsyc Software International, Inc.
George Reznik
Chief Financial Officer
+1-604-678-3734

Email Contact

www.intrinsyc.com