Intrado Announces First Quarter Earnings; First Quarter Revenue of $37

Intrado Announces First Quarter Earnings; First Quarter Revenue of $37.6 Million, Earnings Per Diluted Share of $0.16

    Business Editors

    LONGMONT, Colo.--(BUSINESS WIRE)--May 3, 2005--Intrado Inc. (NASDAQ: TRDO) (www.intrado.com), a leading provider of integrated data and telecommunications solutions, today reported first-quarter growth in revenues and earnings.

--	For the three months ended March 31, 2005, Intrado reported revenue of $37.6 million, up 27% from $29.6 million in the first quarter of 2004.
--	Net income for the first quarter of 2005 was $2.9 million, or $0.16 per diluted share, compared to $1.9 million, or $0.11 per diluted share, for the same period in 2004.
--	Cash from operations for the first quarter of 2005 was $1.3 million, compared to $7.0 million for the same period in 2004. Cash from operations was primarily impacted by delayed receipt of $5.3 million in receivables which were collected during the first two weeks of April.
--	Free cash flow (cash from operations of $1.3 million less cash used in acquisition of property and equipment of $0.6 million and capitalized software development costs of $1.7 million) for the first quarter of 2005 was negative $1.0 million compared to $4.5 million for the same period in 2004 (cash from operations of $7.0 million less cash used in acquisition of property and equipment of $0.5 million and capitalized software development costs of $2.0 million).

    "I am pleased with the strong first quarter operating and financial results," said George Heinrichs, chief executive officer of Intrado. "The first quarter also marked new highs in the interest and pursuit of high quality 9-1-1 service for VoIP consumers. I am encouraged by the diligent and thoughtful work of the FCC, carriers and public safety community on this important front as well. We have been more successful than previously anticipated in accelerating the deployment of advanced IEN-based VoIP 9-1-1 solutions with our partners and customers."

    Recent Highlights

    -- Intrado increased its presence in wireless E9-1-1 with the
    addition of new products and customers. SureWest Wireless and
    Immix Wireless contracted for Intrado-hosted E9-1-1 solutions.
    Intrado and Casabyte, Inc., a worldwide provider of automated
    end-to-end service quality monitoring technology, introduced
    an automated Accuracy Compliance Testing solution. This
    solution is designed to provide wireless carriers with the
    ability to satisfy location testing and verification
    objectives of E9-1-1 calls as required by the FCC for Phase II
    deployments.

    -- Intrado expanded its presence in the VoIP 9-1-1 market with
    new solutions targeting providers of enterprise VoIP services
    and the acquisition of new enterprise VoIP customers
    Accessline, New Global Telecom and Kancharla.

    -- Intrado continued the phased rollout of the Intrado(R)
    Intelligent Emergency Network(TM), its blueprint for the next
    generation of emergency services communication. Intrado
    announced its first equipment vendor alliance to deliver next
    generation 9-1-1 solutions to public safety entities. It also
    has driven and supported regulatory changes that enhance
    emergency services for Internet telephony. And Intrado has
    been working with leading telecommunications providers and
    municipalities, most notably Verizon and New York City, to
    better integrate VoIP with the existing 9-1-1 infrastructure.
    Intrado continues to seek collaboration with best-in-class
    industry partners, customers and public safety agencies to
    create the next generation of emergency communications
    services.

    -- Intrado announced plans to jointly develop and market an
    enhanced service management and message delivery solution with
    724 Solutions, a leading provider of next-generation IP-based
    network and data services. Intrado's Zug operation and 724
    Solutions intend to combine capabilities that will help mobile
    network operators accelerate content delivery, reduce
    operational costs and increase the value of their service
    offerings.

    -- Intrado further enhanced its emergency notification business
    by introducing Intrado(R) Target Notification. This service
    includes a First Responder application to support incident
    command, interagency communication and personnel mobilization
    during emergency situations. The First Responder module can
    notify public safety teams using multiple devices, including
    wired and wireless phones, text and fax paging and email
    notification. In addition, The National Center for Missing &
    Exploited Children(R) and the U.S. Department of Justice
    launched a secure system that will redistribute AMBER Alerts
    to secondary distributors such as online service providers.
    Intrado will host the system which will allow citizens to
    receive geographically targeted messages pertaining to
    abducted children.

    First-Quarter Operational Results

    Operational Changes. In the first quarter of 2005, Intrado's New Markets segment, consisting primarily of the IntelliCast(R) Notification product, was moved into the Wireline business segment as a result of a re-alignment of product, sales and management resources. In addition, the Palladium business, formerly accounted for in the Wireline segment, was sold during the quarter and was recorded as discontinued operations.
    Wireline. Revenue was $23.1 million in the first quarter of 2005, up 24% from $18.7 million in the first quarter of 2004. Wireline revenue growth is primarily attributable to $5.3 million in system and software sales in the first quarter of 2005 compared to approximately $1.2 million in system and software sales in the first quarter of 2004.
    Wireless. Revenue was $14.5 million in the first quarter of 2005, up 33% from $10.9 million in the first quarter of 2004. Wireless revenue growth was driven primarily by additional wireless customers and deployments of enhanced 9-1-1 services.
    Direct Costs. Direct costs for the first quarter of 2005 were $20.8 million, compared to $16.1 million in the year-ago quarter, an increase of 29%. The majority of this increase is attributable to additional costs associated with the delivery of the software and systems projects in the quarter.
    Indirect Overhead Expenses. Total indirect overhead expenses increased 13% to $12.0 million in the first quarter of 2005, compared to the same period in 2004. Total indirect overhead expenses are defined as sales and marketing expenses of $5.5 million, general and administrative expenses of $5.6 million and research and development expenses of $0.9 million. During the first quarter of 2004, indirect overhead expenses were $10.6 million and consisted of $4.5 million of sales and marketing expenses, $5.5 million of general and administrative expenses and $0.6 million of research and development expenses.
    Intrado had $39.2 million in cash and cash equivalents and short-term investments at March 31, 2005. Intrado had $17.2 million available under its revolving line of credit with GE Capital and an additional $10.0 million under existing capital lease facilities.
    Days sales outstanding (DSOs) were 50 days at March 31, 2005, up slightly from 49 days at December 31, 2004. DSOs is defined as gross accounts receivable plus unbilled revenue divided by total quarterly revenue, multiplied by 90 days.

    Second-Quarter 2005 Outlook

    Intrado expects:

    -- Total revenue in the range of $33 million to $35 million.
    -- Wireline revenue in the range of $20 million to $21 million.
    -- Wireless revenue in the range of $13 million to $14 million.
    -- Earnings per diluted share of $0.08 to $0.14, based on an
    estimated effective tax rate of 36% and 18.2 million shares
    outstanding.
    -- Free cash flow of $4.6 to $6.6 million, consisting of
    estimated net cash provided by operating activities ranging
    between $7.0 million and $9.0 million, less estimated capital
    expenditures of $1.1 million and estimated capitalized
    software development costs of $1.3 million.
    -- Sales and marketing expenses of $5.6 million to $5.8 million.
    -- General and administrative expenses of $4.6 million to $4.9
    million.
    -- Research and development costs of approximately $0.8 million.

    Full-Year 2005 Business Drivers

    Financial results for the remainder of 2005 may be affected by the following key business drivers:

    -- Revenue

    -- Licensed Product Revenue. Management believes demand for
    license product remains favorable into the foreseeable
    future; however, uncertainty regarding the size and timing
    of license product sales during the next several quarters
    may create significant volatility in recognized revenue,
    gross profit and earnings.

    -- Wireless renewals/extensions. Wireless contract renewals
    are progressing more rapidly than originally anticipated.
    If accelerated negotiations continue, the potential
    benefits associated with contract extension and
    incremental market share opportunities may be accompanied
    by near-term pressure on financial results, including a
    significant reduction in the recognition of Wireless
    deferred revenue and related gross profit. Additionally,
    the effect of unit price concessions on Wireless revenue
    in advance of anticipated potential increases in unit
    volumes may temporarily affect the growth rate in Wireless
    revenue for the next several quarters.

    -- Disposition -- Call handling equipment business. The
    disposition of the Palladium business is expected to
    reduce revenue during the remainder of FY 2005 by
    approximately $2.5 - $3 million, with little or no impact
    on earnings for the full year.

    -- Expenses

    -- New initiatives. As opportunities across Intrado's
    business become more attractive, management may elect to
    increase its investments in developing those opportunities
    in future quarters, temporarily putting pressure on
    operating margins and earnings in the near to medium term.

    Conference Call Webcast

    Intrado's first-quarter earnings conference call will be hosted live via the Internet on May 3, 2005 at 4:30 p.m. ET at www.intrado.com. An online archive of the broadcast will be available through May 10, 2005.

    About Intrado

    For over two decades, telecommunications providers, public safety organizations and government agencies have turned to Intrado for their communications needs. Intrado provides the core of the nation's 9-1-1 network and delivers innovative solutions to communications service providers and public safety organizations, including complex data management, network transactions, wireless data services and notification services. The company's unparalleled industry knowledge and experience reduce the effort, cost and time associated with providing reliable information for 9-1-1, safety and mobility applications. Additional information on Intrado, its products and services, and past press releases can be found at Intrado's Web site: www.intrado.com.

    Note Concerning Non-GAAP Financial Measures

    Certain information set forth herein, including net income, direct expenses and earnings per share excluding non-cash asset impairment charges are non-GAAP financial measures; further, total indirect overhead expenses and free cash flow, may be considered non-GAAP financial measures. Intrado believes this information, along with comparable GAAP measurements, is useful to investors because it provides a basis for measuring its operating performance, ability to retire debt and invest in new business opportunities. Intrado's management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating Intrado's operating performance and capital resources. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by Intrado may not be comparable to similarly titled amounts reported by other companies. A reconciliation of GAAP and non-GAAP Statements of Operations is provided in the financial statements attached to this press release.

    Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

    Statements in this announcement that are not historical facts are hereby identified as forward-looking statements for the purpose of the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. Known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those contemplated in forward-looking statements.
    The forward-looking statements included in this announcement are necessarily estimates reflecting the best judgment of senior management. Although we believe that these forward-looking statements are reasonable, we cannot promise that they will turn out to be correct. Our actual results could be materially different from our expectations due to a variety of risks and uncertainties, including, but not limited to, the following:

    -- Our reliance on large contracts from a limited and potentially
    decreasing number of significant telecommunications customers
    and their ability to pay for our services, especially in light
    of recent competitive pressures in the telecommunications
    industry;

    -- Whether acquisitions, consolidations, bankruptcies and
    reorganizations among our telecommunications customers will
    result in volume pricing discounts or otherwise have a
    material adverse effect on our market share, revenue and
    liquidity;

    -- Competition in service, price and technological innovation
    from entities with substantially greater resources, especially
    in light of the fact that the increased use of Voice over
    Internet Protocol (VoIP) technology may open our traditional
    9-1-1 data management services business to new competition;

    -- Our ability to enter or renew wireline, VoIP and wireless
    contracts at prices that will allow us to maintain current
    profit margins;

    -- Our ability to integrate businesses and assets that we have
    acquired or may acquire;

    -- Whether our efforts to expand into European and other
    international markets will prove to be economically viable and
    whether we will be able to generate revenue sufficient to
    recover our investment in bmd wireless AG;

    -- Adverse trends in the telecommunications industry in general,
    including bankruptcy filings by our customers and other
    factors that are beyond our control;

    -- Whether our investments in research and development and
    capitalized software will expand our service offerings and
    prove to be economically viable;

    -- Constraints on our sales and marketing channels because many
    of our customers compete with each other;

    -- Our ability to accurately predict, control and recoup the
    large amount of up-front expenditures necessary to serve new
    customers and possible delays in sales cycles;

    -- Our ability to expand beyond our traditional business and into
    highly competitive notification and data management sectors,
    including, but not limited to, our efforts to employ
    IntelliCast(R) Target Notification and Commercial Database
    (CDB) services;

    -- The unpredictable rate of adoption of wireless 9-1-1 services,
    including further delays in the Federal Communications
    Commission's mandated deployment of Phase I and Phase II
    wireless location services;

    -- The potential for liability claims, including product
    liability claims relating to our software and services;

    -- Technical difficulties and network downtime, including those
    caused by sabotage or unauthorized access to our systems;

    -- Changes in interest rates, including the LIBOR and prime rate
    and their potentially adverse effect on our results of
    operations and cash flows;

    -- The possibility that we will not generate taxable income in an
    amount sufficient to allow us to utilize previously generated
    net operating loss carryforwards or research and development
    tax credits;

    -- Our ability to economically attract, motivate and retain
    high-quality employees with skills that match our business
    needs;

    -- Developments in telecommunications regulation and the
    unpredictable manner in which existing or new legislation and
    regulation may be applied to our business;

    -- The potential impact of recent accounting pronouncements
    related to share-based payments on our prospective and
    historical financial statements; and

    -- Developments in governance, accounting and financial
    regulations, including Section 404 of the Sarbanes-Oxley Act
    of 2002 and their impact on general and administrative
    expenses.

    This list is intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere in this announcement. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed risk factors included in our SEC filings. Except for our ongoing obligations to disclose material information under U.S. federal securities laws, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this announcement or to reflect the occurrence of unanticipated events.

INTRADO INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Data) (Unaudited)

THREE MONTHS ENDED MARCH 31, 2005 2004 ----------- ----------- Revenues: Wireline business unit $23,082 $18,693 Wireless business unit 14,482 10,862 ----------- ----------- Total revenues 37,564 29,555

Costs and expenses: Direct costs - Wireline 13,550 10,326 Direct costs - Wireless 7,259 5,804 Sales and marketing 5,464 4,510 General and administrative 5,642 5,530 Research and development 943 583 ----------- ----------- Total costs and expenses 32,858 26,753 ----------- ----------- Income from operations 4,706 2,802

Other income (expense): Interest and other income 165 87 Interest and other expense (208) (368) ----------- ----------- Income before income taxes 4,663 2,521

Income tax expense 1,679 928 ----------- ----------- Income from continuing operations 2,984 1,593 Discontinued operations: Income (loss) from discontinued operations before income taxes (133) 530 Income tax benefit (expense) 51 (202) ----------- ----------- Income (loss) from discontinued operations (82) 328 ----------- ----------- Net income $2,902 $1,921 =========== ===========

Net income per share: Basic: Continuing operations $0.17 $0.10 Discontinued operations $0.00 $0.02 ----------- ----------- Total $0.17 $0.12 =========== ===========

Diluted: Continuing operations $0.16 $0.09 Discontinued operations $0.00 $0.02 ----------- ----------- Total $0.16 $0.11 =========== ===========

Shares used in computing net income per share: Basic 17,529,483 16,631,019 =========== =========== Diluted 18,146,740 17,957,929 =========== ===========

INTRADO INC. CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited)

March 31, December 31, 2005 2004 ---------- ------------

ASSETS Current assets: Cash and cash equivalents $4,962 $10,657 Short-term investments 34,240 28,705 Accounts receivable, net of allowance for doubtful accounts of approximately $256 and $190, respectively 18,799 17,556 Unbilled revenue 1,841 1,675 Prepaids and other 3,556 3,032 Deferred contract costs 5,579 5,775 Deferred income taxes 5,214 7,507

---------- ------------ Total current assets 74,191 74,907 ---------- ------------

Property and equipment, net of accumulated depreciation of $48,503 and $46,591 21,492 22,703 Goodwill, net of accumulated amortization of $1,394 29,937 30,278 Other intangibles, net of accumulated amortization of $8,159 and $7,836, respectively 3,914 4,260 Long-term investments - 898 Deferred contract costs 1,621 1,541 Software development costs, net of accumulated amortization of $10,658 and $8,875, respectively 15,553 16,551 Other assets 365 410

---------- ------------ Total assets $147,073 $151,548 ========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities: Accounts payable and accrued liabilities $10,757 $9,777 Current portion of capital lease obligations 1,437 1,504 Mandatorily redeemable preferred stock payable 4,500 4,431 Deferred contract revenue 12,070 19,742

---------- ------------ Total current liabilities 28,764 35,454 ---------- ------------

Capital lease obligations, net of current portion 1,170 1,312 Line of credit 2,000 2,000 Deferred rent, net of current portion 1,666 1,643 Deferred contract revenue 5,402 5,620 Deferred tax liability 287 1,174

---------- ------------ Total liabilities 39,289 47,203 ---------- ------------

Commitments and contingencies - -

Stockholders' equity: Preferred stock, $.001 par value; 15,000,000 shares authorized; 4,552 issued and outstanding as of March 31, 2005 and December 31, 2004 Common stock, $.001 par value; 50,000,000 shares authorized; 17,622,362 and 17,473,860 shares issued and outstanding as of March 31, 2005 and December 31, 2004, respectively 18 17 Accumulated other comprehensive income 248 656 Additional paid-in-capital 113,136 112,192 Accumulated deficit (5,618) (8,520) ---------- ------------ Total stockholders' equity 107,784 104,345

---------- ------------ Total liabilities and stockholders' equity $147,073 $151,548 ========== ============

INTRADO INC. CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in Thousands) (Unaudited)

THREE MONTH ENDED MARCH 31, 2005 2004 --------- --------

Cash flows from operating activities: Net income $2,902 $1,921 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,174 3,879 Tax benefit for stock option exercises 204 1,013 Loss from sale of discontinued operations, net of tax (5) - Accretion of interest on mandatorily redeemable preferred stock payable 68 138 Other 155 118

Change in- Accounts receivable and unbilled revenue (1,514) 1,784 Prepaids and other assets (488) (958) Deferred contract costs 78 (306) Deferred income taxes 1,454 102 Accounts payable and accrued liabilities 832 (346) Deferred revenue (7,530) (343) --------- -------- Net cash provided by operating activities 1,330 7,002

Cash flows from investing activities: Acquisition of property and equipment (609) (485) Purchases of investments (8,696) (7,633) Proceeds from sales of investments 4,060 8,350 Capitalized software development costs (1,696) (1,971) Cash paid on disposal of discontinued operations (291) - Acquisition, net of cash acquired - (4,374) --------- -------- Net cash used in investing activities (7,232) (6,113)

Cash flows from financing activities: Principal payments on capital lease obligations (455) (958) Principal payments on notes payable, Lucent inventory payable and mandatorily redeemable preferred stock - (1,084) Proceeds from exercise of stock options, warrants and employee stock purchase plan 686 2,520 --------- -------- Net cash provided by financing activities 231 478

Effect of exchange rate changes on cash (24) - --------- -------- Net increase (decrease) in cash and cash equivalents (5,695) 1,367 Cash and cash equivalents, beginning of period 10,657 17,281 --------- -------- Cash and cash equivalents, end of period $4,962 $18,648 ========= ========

Supplemental schedule of noncash financing and investing activities: Property acquired with capital leases and accounts payable $413 $294 ========= ========

Supplemental reconciliation of free cash flow, not including acquisitions and investments Net cash provided by operating activities $1,330 $7,002 Net cash used in investing activities (7,232) (6,113) --------- -------- Free cash flow (5,902) 889 Add back net purchases (sales) of ST and LT investments 4,636 (717) Add back acquisitions, net of cash acquired 291 4,374 --------- -------- Free cash flow, not including acquisitions and investments $(975) $4,546 ========= ========

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CONTACT: Intrado Inc. Stephen Calk, 720-864-5238 stephen.calk@intrado.com

KEYWORD: COLORADO INDUSTRY KEYWORD: HARDWARE LEGAL/LAW GOVERNMENT TELECOMMUNICATIONS SOFTWARE EARNINGS CONFERENCE CALLS SOURCE: Intrado Inc.

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