inContact Inc. (SAAS, Financial) filed Quarterly Report for the period ended 2008-03-31.
inContact Inc. operates as a hosted software as a service company offering a range of hosted contact handling and performance management software services in addition to a variety of connectivity options for carrying an inbound call into its inContact suite of services.The Company sells telecom services unbundled from its inContact service offering including dedicated switched toll free and data lines.The company also operates as a reseller of domestic and international long distance and other services provided by national and regional wholesale providers.It was formerly known as UCN Inc. and is based in Midvale Utah..
Costs of revenue decreased $1.0 million or 9% to $10.5 million for the three months ended March 31, 2008 from $11.5 million for the same period in 2007. Consistent with other telecommunication companies, we do not include depreciation and amortization in our calculation of costs of revenue. Costs of revenue as a percentage of revenue decreased five percentage points to 53% during the quarter compared to 58% in the same period in 2007. The decrease in our costs of revenue is primarily driven by a significant decline of $2.2 million in our Telecom segment revenue that has much lower margins than our SaaS technology products and services revenue. In addition to the decline in our long distance revenue, we have been successful in negotiating better terms with our long distance carriers and have moved long distance traffic from our legacy long distance network to our least cost routing technology. Our least cost routing technology routes calls in a manner that chooses the most economical path to terminate a call transaction. In addition to these measurers, we incurred very little costs to generate the $527,000 of additional revenue from the BenchmarkPortal and ScheduleQ acquisitions.
The SaaS segment revenue increased by $2.2 million or 104% to $4.4 million from $2.2 million during the quarter ended March 31, 2008 compared to the same period in 2007. The increase is a result of the selling and promotional efforts we have undertaken to expand these services in the market. Revenue related to sales of services acquired in the BenchmarkPortal and Schedule Q acquisitions in February 2007 provided $1.1 million of revenue in the current quarter, an additional $527,000 of revenue as compared to the quarter ended March 31, 2007.
We continue to focus a significant amount of our resources in expanding our inContact suite of services in the market. As a result, selling and promotion expenses in the SaaS segment increased $910,000 million or 48% during the quarter compared to the same period in 2007. General and administrative expenses increased $1.2 million or 153% during the quarter ended March 31, 2008 compared to the same period in 2007 due primarily to a significant increase in the number of user support and new user implementation personnel hired during 2007 to support our SaaS products. We also continue to develop the services provided in the segment by investing in research and development. During the quarter ended March 31, 2008, we spent $958,000 in research and development costs as compared to $428,000 for the same period in 2007 and have capitalized an additional $440,000 of costs incurred during the quarter ended March 31, 2008 related to our internally developed software.
We experienced net losses of $2.7 million and $1.7 million for the three months ended March 31, 2008 and 2007, respectively. The primary factors affecting operations during the current quarter were: 1) continued investments in the promotion and development of our inContact suite of services; 2) $1.5 million of depreciation and amortization; 3) additional legal and auditing expenses of $411,000 associated with the internal investigation and restatement of previously filed financial statements; and 4) $378,000 of non-cash stock-based compensation expense.
Our working capital surplus of $3.3 million at December 31, 2007 decreased to $149,000 at March 31, 2008. The decrease is primarily due to a $1.1 million increase in accounts payable and accrued liabilities, a $1.1 million dollar reduction in accounts receivable and a $890,000 reclassification of our investments from short-term to long-term. These factors were offset by a $788,000 increase in cash and cash equivalents.
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inContact Inc. operates as a hosted software as a service company offering a range of hosted contact handling and performance management software services in addition to a variety of connectivity options for carrying an inbound call into its inContact suite of services.The Company sells telecom services unbundled from its inContact service offering including dedicated switched toll free and data lines.The company also operates as a reseller of domestic and international long distance and other services provided by national and regional wholesale providers.It was formerly known as UCN Inc. and is based in Midvale Utah..
Highlight of Business Operations:
Consolidated revenues increased $61,000 to $19.9 million for the three months ended March 31, 2008 from $19.8 million compared to the same period in 2007. This increase is primarily due to significant increases in SaaS segment revenue, which increased $2.2 million or 104% from the first quarter of 2007. The BenchmarkPortal acquisition in first quarter 2007 allowed us to provide customers a hosted process for measuring the effectiveness of agent interactions with clients. The ScheduleQ acquisition allowed us to provide our customers a hosted solution for automating the scheduling, forecasting and alert notification functions common to most contact center/customer service type operations. These additions augmented our all-in-one hosted inContact solution and accounted for $527,000 of the $2.2 million increase in SaaS segment revenue. The increase is offset by decreased revenue in our Telecom segment, which was down $2.2 million or 12% compared to the same period in 2007. The decrease in our Telecom segment is due to expected attrition as we have focused our sales and marketing efforts on increasing customers in our SaaS segment.Costs of revenue decreased $1.0 million or 9% to $10.5 million for the three months ended March 31, 2008 from $11.5 million for the same period in 2007. Consistent with other telecommunication companies, we do not include depreciation and amortization in our calculation of costs of revenue. Costs of revenue as a percentage of revenue decreased five percentage points to 53% during the quarter compared to 58% in the same period in 2007. The decrease in our costs of revenue is primarily driven by a significant decline of $2.2 million in our Telecom segment revenue that has much lower margins than our SaaS technology products and services revenue. In addition to the decline in our long distance revenue, we have been successful in negotiating better terms with our long distance carriers and have moved long distance traffic from our legacy long distance network to our least cost routing technology. Our least cost routing technology routes calls in a manner that chooses the most economical path to terminate a call transaction. In addition to these measurers, we incurred very little costs to generate the $527,000 of additional revenue from the BenchmarkPortal and ScheduleQ acquisitions.
The SaaS segment revenue increased by $2.2 million or 104% to $4.4 million from $2.2 million during the quarter ended March 31, 2008 compared to the same period in 2007. The increase is a result of the selling and promotional efforts we have undertaken to expand these services in the market. Revenue related to sales of services acquired in the BenchmarkPortal and Schedule Q acquisitions in February 2007 provided $1.1 million of revenue in the current quarter, an additional $527,000 of revenue as compared to the quarter ended March 31, 2007.
We continue to focus a significant amount of our resources in expanding our inContact suite of services in the market. As a result, selling and promotion expenses in the SaaS segment increased $910,000 million or 48% during the quarter compared to the same period in 2007. General and administrative expenses increased $1.2 million or 153% during the quarter ended March 31, 2008 compared to the same period in 2007 due primarily to a significant increase in the number of user support and new user implementation personnel hired during 2007 to support our SaaS products. We also continue to develop the services provided in the segment by investing in research and development. During the quarter ended March 31, 2008, we spent $958,000 in research and development costs as compared to $428,000 for the same period in 2007 and have capitalized an additional $440,000 of costs incurred during the quarter ended March 31, 2008 related to our internally developed software.
We experienced net losses of $2.7 million and $1.7 million for the three months ended March 31, 2008 and 2007, respectively. The primary factors affecting operations during the current quarter were: 1) continued investments in the promotion and development of our inContact suite of services; 2) $1.5 million of depreciation and amortization; 3) additional legal and auditing expenses of $411,000 associated with the internal investigation and restatement of previously filed financial statements; and 4) $378,000 of non-cash stock-based compensation expense.
Our working capital surplus of $3.3 million at December 31, 2007 decreased to $149,000 at March 31, 2008. The decrease is primarily due to a $1.1 million increase in accounts payable and accrued liabilities, a $1.1 million dollar reduction in accounts receivable and a $890,000 reclassification of our investments from short-term to long-term. These factors were offset by a $788,000 increase in cash and cash equivalents.
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