REDWOOD SHORES, Calif., Oct. 23 /PRNewswire-FirstCall/ -- (OTC Bulletin Board: CICI) Communication Intelligence Corporation ("CIC" or the "Company"), a leading supplier of electronic signature solutions for business process automation in the financial industry and the recognized leader in biometric signature verification, announced today its financial results for the three and nine-month periods ended September 30, 2008.
Total revenues for the three months ended September 30, 2008 were $721,000 compared to revenues of $456,000 in the corresponding prior year period, an increase of $265,000, or 58%. Orders received during the three months ended September 30, 2008, however, were $1,350,000, $629,000 higher than revenue recognizable for that period. The Company expects at least $525,000 of such orders to be recognized as revenue in the fourth quarter of 2008. Revenues were primarily attributable to Altria, Fiserv/Integrasys, Palm Inc., Phoenix Life Insurance, Prudential Insurance, Sony Ericsson, Snap-on Credit, Misys Healthcare, Travelers Insurance and Wells Fargo Bank.
The operating loss for the three months ended September 30, 2008, before interest expense and amortization of the loan discount, and deferred financing cost, was $487,000 compared to an operating loss of $605,000 in the prior year period. The improvement in the operating loss is due primarily to an increase in revenue and reduced operating expenses, excluding cost of sales. The Company's net loss applicable to common stockholders for the three month period ended September 30, 2008 was $776,000, compared to a net loss of $1,105,000 for the corresponding prior year period, a decrease of 30%. Non-operating expenses for the three months ended September 30, 2008, including interest expense, deferred financing costs and non-cash amortization of loan discounts, decreased by $232,000 to $268,000 compared to $500,000 for the corresponding prior year period, a decrease of 46%. The basic and diluted loss per share was $0.01 on approximately 129.1 million weighted average common shares outstanding for the three months ended September 30, 2008 and $0.01 on approximately 111.5 million shares outstanding for the comparable prior year period.
Total revenues of $1,558,000 for the nine months ended September 30, 2008 increased $213,000, or 16%, compared to revenues of $1,345,000 in the corresponding prior year period.
The operating loss for the nine months ended September 30, 2008, before interest expense and amortization of the loan discount, and deferred financing cost, was $1,880,000 compared to an operating loss of $1,751,000 in the prior year period. The increase in the operating loss is due to an increase in cost of sales related to engineering cost, increased amortization of product development cost and third party hardware. The Company's net loss applicable to common stockholders for the nine months ended September 30, 2008 and 2007 was $3,090,000 and $2,755,000, respectively. The increase in the net loss applicable to common stockholders is due primarily to a non-cash expense for the beneficial conversion feature of the convertible preferred shares issued in June 2008 of $371,000. There was no such charge in the comparable period of the prior year. The basic and diluted loss per share was $0.02 on approximately 129.1 million weighted average common shares outstanding for the nine months ending September 30, 2008 and $0.02 on approximately 108.9 million shares outstanding for the comparable prior year period.
"We continue to experience demand for our electronic signature technology in the insurance sector despite the turmoil and volatility in the financial markets. Based upon prior large scale deployments at AEGON/WFG, AIG, Prudential and State Farm, two new customer wins with top tier insurance companies together with pending orders from other insurance companies, we believe CIC is emerging as the leading and preferred supplier of electronic signature solutions for property/casualty and life applications. Due to the credit crisis, certain orders we had anticipated from banks and lending institutions were not received; however, today's scheduled webinar with Computer Science Corporation (CSC) focusing on a solution to automate the mortgage workout process has generated encouraging interest and we anticipate that it will lead to near term revenue opportunities. US banks and lenders are challenged with the need to increase revenue while improving the effectiveness and efficiency of their processes in the face of increased regulatory and compliance demands exacerbated by the recent sub prime and credit crisis. We anticipate that this crisis, which will lead to increased regulatory controls and the need to administer the billions of bailout dollars to settle troubled mortgages, will accelerate the deployment of electronic signature technology based solutions to address those challenges," stated CIC's Chairman & CEO Guido DiGregorio. "Although there is uncertainty relative to how long the capital market/credit crisis will last and to what degree its impact will effect IT spending in the financial market that we serve, it seems increasingly apparent that financial institutions are recognizing that our technology addresses their needs for both revenue growth and expense reduction and that the crisis may well accelerate the adoption of electronic signature solutions in the financial services industry. It's important to note that had we been able to recognize, as revenue, approximately $500,000 more of the orders received in the third quarter, we would have achieved an operating profit for that quarter. So, despite the turmoil/volatility in the capital markets and the impact on our target financial entities I believe our objective of achieving and sustaining quarterly profitability and cash flow positive operations in the near term continues to be viable. Further, I believe our overall strategy and organization structure constitutes a significant competitive advantage. To operate a cost effective organizational expense structure while maintaining product and market leadership is a key factor in achieving and sustaining profitability in an emerging market. I believe it is becoming increasingly evident that we are winning orders due to our sales strategy and product differentiation. We have responded to evolving market needs with a high level of repeatable software products that afford a competitive advantage and cost effective product structure for both direct end user deployments and embeds into partner software platforms. The Company, as a strategy, has been focused for years on being at its core "lean and agile" while establishing long standing strategic relationships that allow the Company to rapidly access product development and deployment capabilities required to address virtually any deployment requirement. The Company has developed a core team of skilled employees scalable to virtually any deployment/business requirement through existing agreements with specialized development teams (well versed in the area of signature technology and processes), mid-size vertical market IT services groups (with explicit knowledge of the intricacies of the financial services industry) and with tier one IT Services firms with virtually limitless deployment resources available. This scalable product development and deployment capability allows CIC to maintain a lean, agile expense structure with the potential to rapidly achieve sustained profitability at minimal levels of revenue as the emerging eSignature market develops and adoption matures."
Selected financial information follows. Detailed corporate and financial information is available on CIC's website at http://www.cic.com.
Communication Intelligence Corporation ("CIC") is a leading supplier of electronic signature solutions for business process automation in the Financial Industry and the recognized leader in biometric signature verification. CIC's products enable companies to achieve truly paperless work flow in their eBusiness processes by enabling them with "The Power to Sign Online(R)" with multiple signature technologies across virtually all applications in SaaS and fully deployed delivery models.
Industry leaders such as AEGON/WFG, AIG, Charles Schwab, Prudential, Nationwide (UK), Snap-on Credit and Wells Fargo chose CIC's products to meet their needs. CIC has deployments with over 400 channel partners and enterprises worldwide representing tens of thousand of users, with over 500 million electronic signatures captured, eliminating the need for over a billion pieces of paper. CIC sells directly to enterprises and through system integrators, channel partners and OEMs. CIC is headquartered in Redwood Shores, California and has a joint venture, CICC, in Nanjing, China. For more information, please visit our website at http://www.cic.com
Forward Looking Statement
Certain statements contained in this press release, including without
limitation, statements containing the words "believes", "anticipates",
"hopes", "intends", "expects", and other words of similar import,
constitute "forward looking" statements within the meaning of the Private
Litigation Reform Act of 1995. Such statements involve known and unknown
risks, uncertainties and other factors which may cause actual events to
differ materially from expectations. Such factors include the following (1)
technological, engineering, quality control or other circumstances which
could delay the sale or shipment of products containing the Company's
technology; (2) economic, business, market and competitive conditions in
the software industry and technological innovations which could affect the
Company's business; (3) the Company's inability to protect its trade
secrets or other proprietary rights, operate without infringing upon the
proprietary rights of others or prevent others from infringing on the
proprietary rights of the Company; and (4) general economic and business
conditions and the availability of sufficient financing.
COMMUNICATION INTELLIGENCE CORPORATION
Selected Consolidated Statement of Operations Information
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
09/30/08 09/30/07 09/30/08 09/30/07
Revenues $ 721 $ 456 $ 1,558 $ 1,345
Net loss $ (755) $ (1,105) $ (2,692) $ (2,755)
Net income (loss)
applicable to $ (776) $ (1,105) $ (3,090) $ (2,755)
Basic and diluted income
(loss) per common share $ (0.01) $ (0.01) $ (0.02) $ (0.03)
Weighted average common
shares outstanding 129,057 111,530 129,057 108,891
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Cash & cash equivalents $1,276 $1,144
Total current assets $1,998 $1,731
Total assets $7,118 $6,475
Short-term debt (1) $ . $1,370
Deferred revenue (2) $ 266 $ 431
Total current liabilities (3) $1,065 $2,598
Long-term debt related party (4) $2,683 $ 96
Total stockholder's equity $3,370 $3,781
(1) Short-term debt - net of unamortized fair value assigned to warrants
of $350 at December 31, 2007, including related party debt of $1,170
at December 31, 2007, net of unamortized fair value assigned to
(2) Deferred revenues consist principally of advances from customers and
deferred maintenance contract revenue. Billed but unpaid maintenance
contracts at September 30, 2008 amounted to $125, and are not included
in deferred revenue at September 30, 2008.
(3) Includes deferred revenues of $266 and $431 as of September 30, 2008
and December 31, 2007, respectively.
(4) Long-term debt -net of unamortized fair value assigned to warrants of
$1,034 and $21 at September 30, 2008 and December 31, 2007, including
related party debt of $2,458 at September 30, 2008, net of unamortized
fair value assigned to warrants.
Contact: Frank V. Dane
|SOURCE Communication Intelligence Corporation|
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