Intervoice Announces Results for the Third Quarter of Fiscal 2006; Sales of $41.0 Million and Net Income of $0.09 Per Diluted Share

Business Wire, Dec 20, 2005

DALLAS -- Intervoice, Inc. (Nasdaq:INTV) today reported revenues of $41.0 million and net income of $3.6 million, or $0.09 per diluted share, for its third quarter ended November 30, 2005. Revenues were down 5 percent from $43.3 million in the second quarter of fiscal 2006, and net income reflects a 21 percent decline from net income of $4.6 million, or $0.12 per diluted share, in the prior quarter. Revenues in the third quarter of fiscal 2005 totaled $48.4 million, and net income was $7.0 million or $0.18 per diluted share. The Company's net income for the third quarter of fiscal 2006 was favorably impacted by approximately $0.7 million of adjustments related to the finalization of the U.S. tax return for fiscal 2005 and the successful resolution of certain international tax matters.

During the third quarter of fiscal 2006, cash flow from operating activities totaled $4.3 million, and the Company's cash balances increased by $0.9 million to $70.3 million. In addition, the Company's working capital grew by $2.4 million during the quarter. The Company's solutions backlog of $29.9 million at November 30, 2005 was down slightly from $30.3 million at the end of last quarter. The backlog for voice automation solution sales in North America was up 24 percent to $13.8 million while the backlog for international solution sales was down 16 percent to $16.1 million.

"Although top-line growth has been a challenge this year, I am pleased with the continued improvements in the Company's balance sheet," said Craig Holmes, the Company's Executive Vice President and Chief Financial Officer. "Our financial strength continues to provide a strong foundation for future growth."

On November 18, 2005 the Company announced that it had signed an agreement to purchase Edify Corporation, a leading global supplier of interactive voice response solutions, from S1 Corporation (Nasdaq:SONE), for $33.5 million in cash. The acquisition will strengthen Intervoice's position in the voice automation market, and the added revenues and resources will enable Intervoice to accelerate the development and delivery of multi-channel, automated information solutions for both its enterprise and network customers. The merger is expected to close in late December 2005, subject to normal and customary closing conditions.

"I am looking forward to merging with Edify and expect this to be a very positive combination for our customers, partners, employees and shareholders," said Bob Ritchey, the Company's President & CEO, "We believe the Company's long-term outlook continues to be favorable, and I currently believe revenues for the fourth quarter of fiscal 2006 will be in the $41 million to $47 million range, including $3 million to $5 million related to Edify's business which will be consolidated following the consummation of the merger. I look forward to discussing details of our third fiscal quarter and outlook for the future in tomorrow's conference call with investors."

The Company has scheduled a conference call for 9:00 a.m. Central Time on Wednesday, December 21, 2005, to discuss its third fiscal quarter results and its outlook for the future. To participate in the call, dial 719-457-2637. The conference call confirmation code is 9550946. A webcast and replay of the call will be available at the Company's Web site: www.intervoice.com.

Intervoice has included in this press release certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning its business and operations that are based on management's current beliefs. All statements other than statements of historical fact in this press release are forward-looking statements. Readers are cautioned to read the risks and uncertainties, described in the Company's filings with the Securities and Exchange Commission, including without limitation, the risks and uncertainties set forth under the caption entitled "Cautionary Disclosures to Qualify Forward-Looking Statements" in the Company's Annual Report filed on Form 10-K and Quarterly Reports filed on Form 10-Q. Readers are further cautioned that because Intervoice has not yet acquired Edify, any estimate of revenues related to Edify's business is speculative. Intervoice cautions current and potential investors that such risks and uncertainties could result in material differences from the forward-looking statements in this press release.

About Intervoice

Intervoice, Inc. (Nasdaq:INTV) provides leading enterprises and network operators with the platform, software, applications and services necessary to optimize the customer experience through voice automation solutions. Omvia(R), the open, standards-based Intervoice product suite, offers unparalleled flexibility for advanced multi-media messaging, portal, IVR and payment applications. The Company's two market units focus on enterprise and network markets, providing solutions that improve operational efficiencies, drive revenue and increase customer satisfaction and loyalty. Building on more than 20 years of systems integration and service delivery experience, the Professional Services Agility Suite from Intervoice is designed to provide proven best practices toward design, implementation and optimization of voice applications. Intervoice systems have been proven in more than 23,000 implementations worldwide at companies across a variety of industries including: Ameritrade, Amtrak, Atmos Energy, Citibank, CSX Transportation, MasterCard, O2, Rogers Wireless, Travelocity, Verizon and Vodafone. A Microsoft Certified Partner and Certified Partner for Learning Solutions, Intervoice is headquartered in Dallas with offices in Europe, the Middle East, South America, Africa and Asia-Pacific. For more information, visit www.intervoice.com.