InContact Reports (NASDAQ:SAAS) 4Q and FY2009 Results

inContact Inc a provider of cloud-based call center software and agent optimization tools reported financial results for fourth quarter and year ended December 31 2009

Revenue

Software segment revenue totaled 79 million in the quarter ended December 31 2009 an increase of 31% from 60 million in the same period in 2008 For the full year ended December 31 2009 software segment revenue totaled 291 million an increase of 46% from 200 million for 2008 Software segment revenue includes all monthly recurring revenue related to the delivery of our software applications plus the associated professional services and setup fees

Consolidated revenue for the three months ended December 31 2009 was 208 million versus 207 million for the same period in 2008 This reflects an increase of 19 million in Software segment revenue which was partially offset by a decrease of 17 million in Telecom segment revenue due to expected attrition Consolidated revenue for the full year of 2009 was 842 million versus 796 million for 2008

Gross Profit and Gross Margin

Consolidated gross profit increased 20 million in the fourth quarter compared to the same period in 2008 Software segment gross profit increased 17 million in the quarter compared to the same period in 2008

Consolidated gross margin percentage increased to 43% in the fourth quarter compared to 34% for the same period in 2008 Software segment gross margin percentage increased to 66% in the fourth quarter compared to 58% for the same period in 2008 This 8% improvement in Software segment gross margin percentage is attributable to continued growth in sales of our inContact software and a decrease in amortization due to certain technologies being fully amortized in 2008

Net Income

Net income for the quarter ended December 31 2009 was 332000 or 001 per share as compared to a net loss of 24 million or (008) per share for the same period in 2008 During the quarter we recorded 13 million of depreciation and amortization and 402000 of stock-based compensation For the full year ended December 31 2009 the company reported a net loss of 29 million versus a net loss of 103 million for 2008

EBITDAS

Earnings before interest taxes depreciation and amortization and stock-based compensation (EBITDAS) for the fourth quarter was a positive 22 million versus 66000 during the same period in 2008 Our ability to effectively leverage operating costs enabled us to realize a 21 million improvement in EBITDAS from primarily due to the increased gross profit of 20 million The leverage in costs of software revenue and operating expenses which created the significant increase in EBITDAS illustrates the power of our business model EBITDAS for the full year ended December 31 2009 was a positive 44 million versus a negative 20 million in 2008 EBITDAS is a non-GAAP measure management believes provides important insight into our operating results (see reconciliation of non-GAAP measures below)

I am very pleased to report a strong finish to a great year for inContact both operationally and in terms of our financial performance said Paul Jarman inContact CEO We grew software segment revenue 46% versus 2008 during a period when many other software companies struggled to achieve even single digit performance We delivered four consecutive quarters of EBITDAS growth culminating with our first quarter of positive net income since we shifted our focus to software and signed 152 new contracts 31% more than in the prior year

During 2009 we gained a strong foothold in several new industries such as direct response marketing outsourcers healthcare and retail where we won key accounts that we can build on in 2010 We continued to add significant new partners to our leveraged sales model while leveraging and maturing existing relationships By integrating and combining our solutions with those of other industry-leading companies in the contact center space we create a powerful ecosystem from both a marketing and lead generation perspective while offering customers the operational efficiencies and cost savings of having their call routing needs and systems interact and communicate with one another As pleased as I am with our 2009 performance I am equally excited about how many of the past years accomplishments position us for continued success and market penetration in 2010

Jarman continued The market acceptance of cloud computing is growing exponentially year over year with multi-tenant applications such as ours leading the way With the successful launch of our next-generation platform we have further increased our competitive advantages The architecture of this new platform will allow us to accelerate new feature developments that will continue to keep us at the forefront of the contact center software space The fact that we have continued to enhance and improve our offering and have clearly grown into a leadership position within the cloud-based sector bodes very well for inContact to capitalize on this wave of acceptance and interest In 2010 inContact will strive to become recognized as not just the best cloud-based offering in the market place but to become recognized as one of the premier offerings available industrywide to meet the ever increasing needs and challenges of the contact center industry

In summary as we enter 2010 we feel that we are at a point with our reference customers partners next-generation platform and favorable market trends to grow our awareness and take advantage of this window of opportunity We will continue to leverage our industry-leading products and people and are confident that we will see the cumulative benefits of the momentum we have demonstrated across our entire organization continue throughout 2010 and beyond (MarketWatch)