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Total revenue of $246,000 for the quarter ended March 31, 2009 decreased $184,000 or 43%, compared to revenues of $430,000 in the corresponding quarter of the prior year. The Company believes the first quarter revenue reflects primarily the freeze in IT spending resulting from the meltdown in the financial market which delayed orders, even beyond the historical delays consistent with companies entering a new year and new budget period, because of the heightened senior management oversights, reviews, and prioritization processes implemented. The discontinuity in first quarter revenue necessitates the need for a cash investment to bridge the Company to cash flow positive operations. The Company is in the process of finalizing such a financing and anticipates it will close by the end of May 2009.
The operating loss for the quarter ended March 31, 2009 was $922,000 compared to an operating loss of $650,000 in the corresponding prior year period. Cost of sales increased approximately 10%, to $219,000 for the three months ended March 31, 2009 compared to the corresponding prior year period, primarily driven by amortization of capitalized software development costs. Operating expenses increased by approximately 8%, to $949,000, compared to the prior year period, primarily attributable to a reduction in the capitalization of software development costs. The net loss applicable to common stockholders for the quarter ended March 31, 2009 was $1,303,000 compared with a net loss applicable to common stockholders of $850,000 in the corresponding prior year period. Net loss on a per share basis was $0.01 on 130.7 million weighted average shares outstanding for the quarter ending March 31, 2009 compared to a net loss per share of $0.01 on 129.1 million weighted average shares outstanding for the quarter ending March 31, 2008.
"Despite the discontinuity in first quarter revenue, we expect revenue for 2009 to exceed 2008. Revenue for 2008 was up 12% over 2007 and the last half of 2008 was up 25% over the last half of 2007 and we anticipate the momentum to continue into 2009," stated CIC's Chairman & CEO, Guido DiGregorio. "Beyond the first quarter delay in orders, we have not received any significant input from customers or prospects suggesting that the adverse market conditions have resulted in cancellation of their planned 2009 IT spending. Our current sales related activity remains high and strongly indicates that planned automation programs involving our technology will be deployed. We get the consistent message, thus far, that awareness of electronic signature technology as the answer to their challenges is understood and that there is no rationale presently to expect anything further than the first quarter delays. These companies recognize the need to deploy before mid year to stay competitive and to gain the benefits in 2009."
Selected financial information follows. Detailed corporate and financial information is available on CIC's website at www.cic.com
About CIC
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 AGLA, Allstate, Charles Schwab, Prudential, Snap-on Credit, Travelers, Wells Fargo and WFG (World Financial Group) chose CIC's products to meet their needs. CIC has deployments with over 400 channel partners and enterprises worldwide representing hundreds of thousands 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.
*In December 2008, CIC was named to Forrester Research's "Hot Banking Tech Companies To Watch in 2009" Report.
**In October 2007, CIC was awarded the 2007 Global Frost & Sullivan Award for Market Leadership in the dynamic signature verification market.
Forward Looking Statements
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 Statements of Operations Information
(In thousands, except per share amounts)
03/31/09 03/31/08
-------- --------
Revenues $246 $430
Net loss $(1,303) $(850)
Basic and diluted net loss per share $(0.01) $(0.01)
Weighted average common shares outstanding 130,670 129,057
Selected Consolidated Balance Sheets Information
(In thousands)
03/31/09 12/31/08
----------- --------
(Unaudited)
-----------
Cash & cash equivalents $317 $929
Total current assets 665 1,709
Total assets 5,450 6,643
Deferred revenue (1) 198 343
Total short-term debt (2) 48 60
Total current liabilities (3) 892 1,100
Total long-term debt (4) 2,937 2,765
Stockholders' equity (5) 183 2,778
NOTES:
(1) Deferred revenues consist principally of deferred maintenance
contract revenue.
(2) Net of $2 and $5 unamortized fair value assigned to warrants at
March 31, 2009 and December 31, 2008, respectively.
(3) Includes deferred revenues of $198 and $343 as of March 31, 2009 and
December 31, 2008, respectively.
(4) Net of $773 and $873 unamortized fair value of warrants at March 31,
2009 and December 31, 2008, respectively.
(5) Additional Paid in Capital and Retained Earnings have been adjusted
as of January 1, 2009 by the fair value of the warrants issued in
connection with the Company's financings in accordance with ETIF
07-5, effective for fiscal years beginning after December 15, 2008.
Frank V. Dane
650-802-7737
fdane@cic.com
SOURCE Communication Intelligence Corporation
http://www.cic.com
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