Insightful Corporation Announces Operating Results for Second Quarter 2008

Business Wire, July 31, 2008

Insightful Also Provides Update Regarding Proposed Acquisition by TIBCO Software Inc.

SEATTLE -- Insightful Corporation (NASDAQ:IFUL), a leading provider of predictive analytics and reporting solutions, today announced its operating results for the second quarter ended June 30, 2008.

Insightful reported total revenues of $5.4 million for the second quarter of 2008, a decrease of 2% compared to revenues of $5.5 million for the second quarter of 2007. For the second quarter of 2008, Insightful reported a net loss of $0.5 million, or $0.04 per share, compared to a net loss of $1.3 million, or $0.10 per share, for the second quarter of 2007. Included in operating results for the second quarter of 2008 are $0.8 million in expenses directly related with the proposed acquisition of the company by TIBCO Software Inc.

Non-GAAP operating results, which exclude stock-based compensation expense, were a loss of $0.3 million, or $0.03 per share, for the second quarter of 2008, compared to a loss of $1.1 million, or $0.08 per share, for the second quarter of 2007. As described in the section below entitled "Use of Non-GAAP Financial Measures," non-GAAP earnings or loss differs from net income or loss reported under accounting principles generally accepted in the United States (GAAP) due to the exclusion of stock-based compensation expense. The reconciliation of Insightful's GAAP net loss to its non-GAAP operating results for the quarters ended June 30, 2008 and 2007 are set forth at the end of this release.

"We are pleased that, excluding costs directly associated with the proposed acquisition by TIBCO, we were profitable for the quarter," said Jeff Coombs, president and CEO of Insightful.

Insightful's cash, cash equivalents, and short and long-term investments totaled $11.5 million at June 30, 2008, up from $11.0 million at December 31, 2007.

On June 19, 2008, Insightful announced that it had signed a definitive agreement to be acquired by TIBCO Software Inc. (NASDAQ:TIBX) in a transaction valued at approximately $25 million, including the value of certain assumed options. Under the terms of the agreement, following the closing, Insightful stockholders will receive $1.87 in cash for each outstanding share of common stock they own. On July 24, 2008, Insightful filed a definitive proxy statement related to the proposed acquisition with the Securities and Exchange Commission (SEC). Insightful will hold a special meeting of stockholders to vote on the proposed transaction at 9:00 a.m. Seattle time on August 29, 2008, at the offices of RR Donnelly, 999 Third Avenue, Suite 3201, Seattle, Washington 98104. Stockholders at the close of business on July 8, 2008, the record date, will be entitled to vote on the transaction.

Quarterly Financial Highlights

* Software license revenues were $1.7 million in the second quarters of both 2008 and 2007. License revenues declined slightly domestically and increased slightly internationally.

* Maintenance revenues were $2.3 million in the second quarter of 2008, compared to $2.0 million in the second quarter of 2007. Maintenance revenue increased primarily as a result of increases in our maintenance renewal rates and the late renewal of a number of maintenance contracts that had expired in earlier quarters.

* Professional services and other revenues were $1.4 million in the second quarter of 2008, compared to $1.8 million in the second quarter of 2007. The entire decline in professional services revenues was in the company's domestic segment.

* Domestic revenues were $2.5 million in the second quarter of 2008, compared to $2.9 million in the second quarter of 2007. International revenues were $2.9 million in the second quarter of 2008, compared to $2.6 million in the second quarter of 2007.

* Funded research, which is an offset to research and development expense in the company's income statement, was $250,000 in the second quarter of 2008, compared to $511,000 in the second quarter of 2007. The decline was due to several billable research employees moving to our data analysis product group in 2007 and several others leaving Insightful in 2007 and 2008.

* Total operating expenses were $4.8 million in the second quarter of 2008, including $0.8 million in expenses directly related to the proposed acquisition of the company by TIBCO Software Inc., compared to $5.4 million in the second quarter of 2007.

* Gross profit margin was 77% in the second quarter of 2008 compared to 72% in the second quarter of 2007. The increase resulted from a smaller percentage of the company's total revenues coming from lower-margin professional services revenues in 2008 than in 2007.

Use of Non-GAAP Financial Measures

The non-GAAP financial measure of loss included in this press release is different from the GAAP measure of net loss, as this non-GAAP measure excludes certain expenses otherwise included in the computation of net loss. Insightful believes this non-GAAP measure is useful to enhance an overall understanding of its past financial performance and also its prospects for the future. These adjustments to the company's GAAP results are presented with the intent of providing both management and investors a more complete understanding of Insightful's underlying operating results and trends. This non-GAAP measure is among the primary indicators management uses as a basis for planning and forecasting of future periods.