Intrado Announces Fourth Quarter Earnings; Fourth Quarter Revenue of $

Intrado Announces Fourth Quarter Earnings; Fourth Quarter Revenue of $36.0 Million, Free Cash Flow of $10.8 Million

    Business Editors/Technology Editors

    LONGMONT, Colo.--(BUSINESS WIRE)--Feb. 3, 2005--Intrado Inc. (NASDAQ:TRDO):

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

    Overview

--	Reported fourth-quarter net loss of $0.55 per share; net income of $0.24 per diluted share excluding previously announced goodwill and other asset impairment charges of $13.8 million.
--	Fourth-quarter revenue of $36.0 million, up 9% from fourth-quarter 2003.
--	Wireless fourth-quarter revenue of $13.8 million, up 34% compared to fourth-quarter 2003, driven by continued deployments and a growing customer base.
--	First-quarter 2005 outlook: revenue of $35 million to $37 million; earnings per diluted share of $0.11 to $0.13; free cash flow of breakeven to $2 million. Free cash flow is defined as cash provided by operating activities of $3 million to $5 million, less cash used to acquire property and equipment of $1 million and capitalized software of $2 million.

    Intrado Inc. (NASDAQ:TRDO)(www.intrado.com), a leading provider of integrated data and telecommunications solutions, today reported fourth-quarter growth in revenues and free cash flow, driven primarily by growth in wireless revenue.
    Intrado reported a fourth-quarter 2004 net loss of $0.55 per share that included goodwill and other asset impairment charges of $13.8 million. The goodwill and asset impairment charges related primarily to the company's wholly owned subsidiary, bmd wireless, but also included asset write-offs in the company's Palladium call-handling product line. Total revenues for the fourth quarter increased 9% to $36.0 million from $33.0 million in 2003. The overall increase was driven by wireless revenues, which were up 34%, from $10.3 million in the fourth quarter of 2003 to $13.8 million in the fourth quarter of 2004.
    George Heinrichs, chief executive officer of Intrado, said, "This was an excellent quarter for Intrado. We exceeded revenue and cash flow expectations and continued to provide world-class service for our customers. We have continued to expand our products, enhance our deployed base and improve customer satisfaction. In 2004, we also accelerated our efforts to focus on value-maximizing activities, build a strong liquidity base and invest in the future of emergency telecommunications services via our IEN platform. I am very positive about the progress we will make in 2005."

    Fourth-Quarter Operational Highlights

    Wireline. Revenue was $21.3 million in the fourth quarter of 2004, down 3% from $22.0 million in the fourth quarter of 2003.

    Wireless. Revenue was $13.8 million in the fourth quarter of 2004, up 34% from $10.3 million in the fourth quarter of 2003. Included in wireless revenue for the fourth-quarter of 2004 was $488,000 from our bmd wireless unit.

    New Markets. Revenue was $813,000 in the fourth quarter of 2004, up from $649,000 for the fourth quarter of 2003.

    Direct Expenses. Total reported direct expenses for the fourth quarter were $32.7 million, including non-cash asset impairment charges of $13.8 million. On a pro forma basis, fourth-quarter direct expenses were $18.9 million, compared to $17.3 million in the year-ago quarter, an increase of 9%.

    Indirect Overhead Expenses. Total indirect overhead expenses increased 16% to $11.7 million in the fourth quarter of 2004, compared to the same period in 2003. Total indirect overhead expenses are defined as sales and marketing expenses of $5.3 million, general and administrative expenses of $5.5 million and research and development expenses of $0.8 million. During the fourth quarter of 2003, indirect overhead expenses were $10.0 million and consisted of $4.5 million of sales and marketing expenses, $5.0 million of general and administrative expenses and $0.5 million of research and development expenses.

    Intrado had $40.3 million in cash and cash equivalents, short-term investments and long-term investments at December 31, 2004. At year end, Intrado had $17.2 million available under its revolving line of credit with GE Capital and an additional $8.5 million under existing capital lease facilities. During the fourth quarter of 2004, Intrado retired $7.3 million in debt.
    Days sales outstanding (DSOs) were 49 days at December 31, 2004, down from 59 days at September 30, 2004. DSOs is defined as gross accounts receivable plus unbilled revenue divided by total quarterly revenue, multiplied by 90 days.

    Fourth Quarter Asset Impairment Charges. As previously announced on January 27, 2005, the company was reviewing the carrying value of certain assets of bmd and its Palladium product line as part of its year-end close process. On February 3, 2005, after completing the year-end close process, Intrado's management and Audit Committee determined that the total non-cash asset impairment charges were $13.8 million.

    -- bmd wireless AG. Due to competitive pressure in Europe and a
    longer sales cycle than expected at the time of the
    acquisition, the financial results for bmd were lower than
    expected in 2004. As a result, the company now expects a
    significantly slower path for bmd's technology to penetrate
    the European and North American markets. Based on these
    trends, the company determined in the fourth quarter of 2004
    that the five-year earnings forecast for bmd required a
    substantial downward revision. In light of these factors, the
    company engaged an independent valuation firm to perform an
    analysis of bmd assets. As a result of the analysis, Intrado's
    management and Audit Committee concluded that a non-cash
    goodwill impairment charge of $13.5 million of the original
    $18.9 million should be recorded in the fourth quarter of
    2004, slightly higher than the initial impairment estimate of
    $9 million to $13 million. No portion of the asset impairment
    will result in future cash expenditures. While the forecast
    for bmd is now lower than originally anticipated when
    acquired, Intrado management continues to believe that there
    is a market for bmd technology in the growing wireless market
    and continues to support and pursue sales opportunities under
    a refined marketing and sales strategy, albeit at a lower pace
    and forecasted revenue levels.

    -- Palladium (Call-Handling) Product Line. As previously
    announced, the company recorded an asset impairment charge of
    $322,000 for the write-down of assets related to Palladium,
    its call-handling product line. The write-down of goodwill and
    other intangible assets related to Palladium is based upon the
    company's decision to eliminate future investment in the
    product line and wind down the existing operations in 2005. No
    portion of the asset impairment charge will result in future
    cash expenditures. On February 1, 2005 Intrado and Tel
    Control, Inc. ("TCI") entered into an agreement, subject to
    close, under which TCI will assume the operations of Intrado's
    call-handling business.

    Fourth-Quarter Financial Results

    -- For the three months ended December 31, 2004, the Company
    reported revenue of $36.0 million, up 9% from $33.0 million in
    the fourth quarter last year.

    -- Net loss for the fourth quarter of 2004 was $9.6 million, or
    $0.55 per share, compared to net income of $3.9 million, or
    $0.23 per diluted share, for the same period in 2003.
    Excluding non-cash asset impairment charges, the net income
    for the fourth quarter of 2004 was $4.2 million, or $0.24 per
    share.

    -- Cash from operations for the fourth quarter of 2004 was $13.5
    million, compared to $11.2 million for the same period in
    2003.

    -- Free cash flow (as defined above) for the fourth quarter of
    2004 was $10.8 million compared to $8.5 million for the same
    period in 2003.

    Full-Year Financial Results

    -- For 2004, revenue was $136.5 million, up 9.5% from $124.7
    million in 2003.

    -- Net loss was $3.5 million, or $0.20 per share in 2004,
    compared to net income of $10.7 million, or $0.63 per diluted
    share in 2003. Excluding full-year 2004 non-cash asset
    impairment charges of $16.3 million, or $0.90 per share, full
    year 2004 net income was $12.9 million, or $0.71 per share.

    -- Net cash provided by operating activities was $31.1 million in
    2004, compared to $36.8 million in 2003. The decrease was
    primarily driven by changes in working capital.

    -- Free cash flow (as defined above) for the full year 2004 was
    $19.5 million, compared to $28.2 million in 2003. The decrease
    was primarily driven by increased investments in capitalized
    software and net investments in working capital.

    First-Quarter 2005 Outlook

    In the first quarter of 2005, Intrado expects:

    -- Total revenue in the range of $35 million to $37 million.

    -- Wireline revenue in the range of $21 million to $22 million.

    -- Wireless revenue in the range of $13 million to $14 million.

    -- New Markets revenue of approximately $700,000.

    -- Earnings per diluted share of $0.11 to $0.13, based on an
    estimated effective tax rate of 37.0% and 18.1 million shares
    outstanding.

    -- Free cash flow of breakeven to $2 million, consisting of
    estimated net cash provided by operating activities ranging
    between $3 million and $5 million, less estimated capital
    expenditures of $1 million and estimated capitalized software
    development costs of $2 million.

    -- Sales and marketing expenses of $5.3 million to $5.4 million.

    -- General and administrative expenses of $5.1 million to $5.3
    million.

    -- Research and development costs of approximately $800,000.

    Conference Call Webcast

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

    About Intrado

    Intrado Inc. (NASDAQ:TRDO), now in its 25th year, has been a pioneer in emergency communications since 1979, providing the core of the nation's 9-1-1 infrastructure and delivering innovative solutions to telecommunications companies and public safety organizations.
    Intrado excels in systems engineering of complex, integrated data and telephony environments and in critical operations management. The Company's unparalleled industry knowledge reduces the effort, cost and time associated with providing reliable information for 9-1-1, safety and commercial applications.
    Intrado has received International Organization for Standardization (ISO) 9001-2000 certification.
    Additional information on Intrado, its products and services, and past press releases can be found at the Company'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 the Company'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 number of
    significant telecommunications customers and their ability to
    pay for our services, especially in light of recent
    competitive pressures in the telecommunications industry;

    -- 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
    justify 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;

    -- Competition in service, price and technological innovation
    from entities with substantially greater resources;

    -- 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 our services beyond our traditional
    business and into the highly competitive data management
    industry, such as our IntelliCast(SM) Target Notification and
    Commercial Database 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;

    -- 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 and/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 possibility that we may be required to treat the value of
    the stock options granted to employees and directors as
    compensation expense if proposals that are currently under
    consideration by accounting standards organizations and
    governmental authorities are adopted; and

    -- Developments in governance, accounting and financial
    regulations, including Section 404 of the Sarbanes-Oxley Act
    of 2002 and their unpredictable 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 TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 ----------- ----------- ----------- -----------

Revenues: Wireline business unit $ 21,335 $ 22,008 $ 81,937 $ 83,836 Wireless business unit 13,837 10,294 51,508 38,976 New Markets business unit 813 649 3,079 1,842 ----------- ----------- ----------- ----------- Total revenues 35,985 32,951 136,524 124,654

Costs and expenses: Direct Costs - Wireline 11,761 10,585 43,796 39,890 Direct Costs - Wireless 19,982 5,570 39,326 21,574 Direct Costs - New Markets 936 1,184 6,269 4,641 Sales and marketing 5,349 4,483 20,084 16,933 General and administrative 5,524 5,054 21,727 22,268 Research and development 783 502 2,909 2,322 ----------- ----------- ----------- ----------- Total costs and expenses 44,335 27,378 134,111 107,628 ----------- ----------- ----------- ----------- Income (loss) from operations (8,350) 5,573 2,413 17,026

Other income (expense): Interest and other income 156 75 438 290 Interest and other expense (276) (326) (1,247) (1,408) ----------- ----------- ----------- ----------- Net income (loss) before income taxes (8,470) 5,322 1,604 15,908

Income tax expense 1,093 1,436 5,079 5,194

----------- ----------- ----------- ----------- Net income (loss) $ (9,563) $ 3,886 $ (3,475) $ 10,714 =========== =========== =========== ===========

Net income (loss) per share: Basic $ (0.55) $ 0.25 $ (0.20) $ 0.68 =========== =========== =========== =========== Diluted $ (0.55) $ 0.23 $ (0.20) $ 0.63 =========== =========== =========== ===========

Shares used in computing net income (loss) per share: Basic 17,404,547 15,767,188 17,166,594 15,764,081 =========== =========== =========== =========== Diluted 17,404,547 17,180,511 17,166,594 16,924,130 =========== =========== =========== ===========

INTRADO INC. Non-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Data) (Unaudited) for illustrative purposes only

Reconciliation between Non-GAAP and GAAP Statements of Operations ------------------------------------------------------------------

The non-GAAP Statements of Operations for all periods presented are for illustrative purposes only and are not prepared in accordance with GAAP. The following table details the reconciling items between the GAAP and non-GAAP Statements of Operations.

THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2004 2003 2004 2003 ----------- ----------- ----------- -----------

Revenues: Wireline business unit $ 21,335 $ 22,008 $ 81,937 $ 83,836 Wireless business unit 13,837 10,294 51,508 38,976 New Markets business unit 813 649 3,079 1,842 ------------ ------------ ------------ ------------ Total revenues 35,985 32,951 136,524 124,654

Costs and expenses: Direct Costs - Wireline 11,439 10,585 43,474 39,890 Direct Costs - Wireless 6,499 5,570 25,255 21,574 Direct Costs - New Markets 936 1,184 4,321 4,641 Sales and marketing 5,349 4,483 20,084 16,933 General and administrative 5,524 5,054 21,727 22,268 Research and development 783 502 2,909 2,322 ------------ ------------ ------------ ------------ Total costs and expenses 30,530 27,378 117,770 107,628 ------------ ------------ ------------ ------------ Income from operations 5,455 5,573 18,754 17,026

Other income (expense): Interest and other income 156 75 438 290 Interest and other expense (276) (326) (1,247) (1,408) ----------- ----------- ----------- ----------- Net income before income taxes 5,335 5,322 17,945 15,908

Income tax expense 1,093 1,436 5,079 5,194

----------- ----------- ----------- ----------- Net income $ 4,242 $ 3,886 $ 12,866 $ 10,714 ============ ============ ============ ============

Net income per share: Basic $ 0.24 $ 0.25 $ 0.75 $ 0.68 ============ ============ ============ ============ Diluted $ 0.24 $ 0.23 $ 0.71 $ 0.63 ============ ============ ============ ============

Shares used in computing net income per share: Basic 17,404,547 15,767,188 17,166,594 15,764,081 ============ ============ ============ ============ Diluted 18,047,030 17,180,511 18,059,804 16,924,130 ============ ============ ============ ============

Asset impairment expenses: Impairment expenses included in Direct Costs - Wireline $ 322 $ - $ 322 $ - Impairment expenses included in Direct Costs - Wireless $ 13,483 $ - $ 14,071 $ - Impairment expenses included in Direct Costs - New Markets $ - $ - $ 1,948 $ - ----------- ----------- ----------- ----------- Total asset impairment expenses included in Direct Costs $ 13,805 $ - $ 16,341 $ - ============ ============ ============ ============ Basic $ 0.79 $ - $ 0.95 $ - Diluted $ 0.79 $ - $ 0.95 $ -

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

December 31, December 31, 2004 2003 ------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 31,155 $ 37,981 Short-term investments 8,207 - Accounts receivable, net of allowance for doubtful accounts of approximately $190 and $357, respectively 17,556 15,678 Unbilled revenue 1,675 1,560 Prepaids and other 3,032 1,695 Deferred contract costs 5,775 4,195 Deferred income taxes-current portion 7,491 11,105

------------- ------------ Total current assets 74,891 72,214 ------------- ------------

Property and equipment, net 22,703 26,220 Goodwill, net of accumulated amortization of $1,394 30,278 24,517 Other intangibles, net 4,155 5,586 Long term investments 898 - Deferred contract costs 1,541 2,865 Software development costs, net 16,521 12,910 Other assets 410 955

------------- ------------ Total assets $ 151,397 $ 145,267 ============= ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities: Accounts payable and accrued liabilities $ 9,777 $ 10,906 Current portion of capital lease obligations 1,504 2,935 Current portion of notes payable - 4,250 Mandatorily redeemable preferred stock payable 4,431 4,435 Deferred contract revenue 19,742 15,733

------------- ------------ Total current liabilities 35,454 38,259 ------------- ------------

Capital lease obligations, net of current portion 1,312 1,488 Line of credit 2,000 2,000 Deferred rent, net of current portion 1,643 1,566 Notes payable, net of current portion - 5,917 Mandatorily redeemable preferred stock payable - 4,159 Deferred contract revenue 5,620 6,355 Deferred tax liability 1,158 1,081 ------------- ------------ Total liabilities 47,187 60,825 ------------- ------------

Stockholders' equity: Common stock 17 16 Additional paid-in-capital 112,186 88,944 Accumulated deficit (7,993) (4,518) ------------- ------------ Total stockholders' equity 104,210 84,442

------------- ------------ Total liabilities and stockholders' equity $ 151,397 $ 145,267 ============= ============

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

THREE MONTHS TWELVE MONTHS ENDED DEC. 31, ENDED DEC. 31, 2004 2003 2004 2003 -------- -------- -------- --------

Cash flows from operating activities: Net income (loss) $(9,563) $3,886 $(3,457) $10,714 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,974 3,597 15,620 15,450 Asset impairment charge 13,805 - 16,341 - Tax benefit for stock option exercises 66 64 1,415 1,913 Stock-based compensation 71 80 344 183 Other adjustments (34) 135 249 276 Change in- Accounts receivable and unbilled revenue 4,011 (680) (1,668) 4,059 Prepaids and other 357 272 (712) 170 Deferred contract costs (711) (92) (195) (1,153) Accounts payable and accrued liabilities (1,805) 1,196 (3,527) 2,774 Deferred income taxes, net 938 1,182 3,559 2,983 Deferred revenue 2,396 1,563 3,159 (538) -------- -------- -------- -------- Net cash provided by operating activities 13,505 11,203 31,110 36,831

Cash flows from investing activities: Acquisition of property and equipment (200) (1,125) (1,373) (3,573) Acquisition of business, net of cash acquired - - (4,354) - Purchases of ST and LT investments (1,169) - (9,135) - Capitalized software development costs (2,519) (1,539) (10,228) (5,096) -------- -------- -------- -------- Net cash used in investing activities (3,888) (2,664) (25,090) (8,669)

Cash flows from financing activities: Principal payments on capital lease obligations (634) (844) (3,200) (3,322) Principal payments on notes payable and Lucent inventory payable (6,917) (1,221) (14,464) (9,567) Proceeds from notes payable - (299) - 3,900 Proceeds from exercise of options, warrants and employee stock purchase plan 668 1,066 4,788 5,913 -------- -------- -------- -------- Net cash used in financing activities (6,883) (1,298) (12,876) (3,076)

Effect of exchange rate changes on cash 17 - 30 -

Net increase (decrease) in cash and cash equivalents 2,751 7,241 (6,826) 25,086 Cash and cash equivalents, beginning of period 28,404 30,740 37,981 12,895 -------- -------- -------- -------- Cash and cash equivalents, end of period $31,155 $37,981 $31,155 $37,981 ======== ======== ======== ========

Supplemental schedule of noncash financing and investing activities: Property acquired with capital leases and accounts payable $1,442 $795 $3,027 $1,924 ======== ======== ======== ========

Supplemental reconciliation of free cash flow, not including acquisitions and investments Net cash provided by operating activities $13,505 $11,203 $31,110 $36,831 Net cash used in investing activities (3,888) (2,664) (25,090) (8,669) -------- -------- -------- -------- Free cash flow 9,617 8,539 6,020 28,162 add back purchases of ST and LT investments 1,169 - 9,135 - add back acquisitions, net of cash acquired - - 4,354 - -------- -------- -------- -------- Free cash flow, not including acquisitions and investments $10,786 $8,539 $19,509 $28,162 ======== ======== ======== ========

--30--DJM/dx*

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

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

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