Communication Intelligence Corporation Reports Fourth Quarter and Fiscal 2009 Results

REDWOOD SHORES, Calif., March 31 /PRNewswire-FirstCall/ -- Communication Intelligence Corporation ("CIC" or the "Company") (OTC Bulletin Board: CICI), a leading supplier of electronic signature solutions for business process automation in the financial industry* and the recognized leader** in biometric signature verification announced today its financial results for the fourth quarter and the year ended December 31, 2009.

Total revenue for the year ended December 31, 2009 of $1,936,000 decreased $465,000 or 19%, compared to revenue of $2,401,000 in the prior year. The decrease in revenue for 2009 reflects the significant negative impact on financial services industry IT spending brought about by the meltdown in the financial markets beginning in November 2008. Product revenue reflects a decrease of $221,000 or 16%, in eSignature revenue and a decrease of $280,000 or 98%, in natural input revenues compared to the prior year. Revenue for 2009 was primarily attributable to Allstate Insurance Company ("Allstate"), American Family Insurance Company, Guardian/LenderLive, Fiserv, John Deere Information Systems, Inc., Oracle Corporation, Prudential Financial Inc., Travelers Indemnity Company ("Travelers"), and Wells Fargo Bank N.A.

The loss from operations for the year ended December 31, 2009 was $2,770,000 an increase of $526,000 or 23% compared to $2,244,000 in the prior year. The increase in the operating loss was primarily due to lower revenue compared to the prior year.  The net loss attributable to Common Stockholders for the year ended December 31, 2009 was $10,827,000 compared to $3,727,000 in the prior year, $7,998,000 of which is attributable to non-cash charges to interest expense, deferred financing costs, loan discount amortization related to the Company's debt, and a loss on derivative liabilities, resulting from a change in accounting principles, representing an increase of $6,490,000 in these non-cash charges compared to $1,508,000 in the prior year. Operating expenses, including cost of sales, increased approximately 1%, or $61,000 from $4,645,000 for the year ended December 31, 2008 to $4,706,000 for the year ended December 31, 2009. The increase in operating expense including cost of sales is primarily due to the reasons for the three month period described below.

Total revenue for the three months ended December 31, 2009 was $409,000 compared to revenue of $843,000 in the corresponding prior year period, a decrease of $434,000.  The decrease in revenue for the three month period reflects the significant negative impact on financial services industry year-end IT, mentioned previously. Fourth quarter IT spending was unusually low due to the reduced 2009 IT budgets established in the fourth quarter 2008 amid the meltdown and uncertainty occurring during the fourth quarter 2008 budget formulation period.

The loss from operations for the three months ended December 31, 2009 was $823,000, an increase of $459,000 or 126% compared to $364,000 in the prior year period. The increase in the operating loss was primarily due to lower revenue compared to the corresponding quarter in the prior year. Operating expenses, including cost of sales, increased approximately 2%, or $25,000 from $1,207,000 for the three months ended December 31, 2008 to $1,232,000 for the three months ended December 31, 2009. The increase in operating expense, including cost of sales, primarily reflects the increases in amortization of capitalized software development costs related to product development and enhancements, and less direct engineering costs charged to cost of sales related to engineering revenue earned from meeting customer specific requirements associated with integration of our standard products into customer systems. The net loss attributable to Common Stockholders for the three months ended December 31, 2009 was $4,149,000 compared to $637,000 in the prior year period, $3,311,000 of which is attributable to non-cash charges to interest expense, deferred financing costs, loan discount amortization related to the Company's debt, and a loss on derivative liabilities, resulting from a change in accounting principles, compared to $280,000 in the prior year.

"Despite a challenging start, our 2009 orders received were up 26% over 2008, $3.3 million versus $2.6 million and 2009 second half orders received of $2.2 million were double that of the $1.1 million first half orders received.  In addition, we achieved cash flow positive operations for the third and fourth quarters and the year," stated CIC's Chairman & CEO Guido DiGregorio.  "Financial Industry IT spending, according to industry analysts such as Gartner, is forecasted to return to higher levels of spending in 2010 and increase through 2011 and 2012.  Our progress in 2009 was significant. Our SignatureOne Ceremony Server product, capable of delivering hosted solutions, was vetted, chosen and successfully deployed by both leading financial institutions and by top tier solution providers with whom we partner.

"As previously communicated, we believe the underlying and driving factors necessary for the electronic signature market to enter the high growth phase have finally merged including, the right technology to allow hosted electronic signature based recurring revenue solutions through top-tier solution providers who are capable of reaching the mainstream Financial Services Industry market, and economic stability sufficient to sustain reasonable IT spending.  We also believe we are well positioned to participate in and benefit from the market take-off with increasing and sustainable revenue/ income growth, and of course, the share price increase that is expected to accompany such growth."

Selected financial information follows.  Detailed corporate and financial information is available on CIC's website at www.cic.com.

About CIC

Communication Intelligence Corporation ("CIC") is a leading supplier of electronic signature solutions for business process automation in the Financial Industry and the recognized leader in biometric signature verification. CIC's products enable companies to achieve truly paperless work flow in their eBusiness processes by enabling them with "The Power to Sign Online®" with multiple signature technologies across virtually all applications in SaaS and fully deployed delivery models.

Industry leaders such as AGLA, Allstate, American Family, Charles Schwab, Prudential, Snap-on Credit, Travelers, Wachovia, Wells Fargo and WFG (World Financial Group) chose CIC's products to meet their needs. CIC has deployments with over 400 channel partners and enterprises worldwide representing hundreds of thousands of users, with over 500 million electronic signatures captured, eliminating the need for over a billion pieces of paper. CIC sells directly to enterprises and through system integrators, channel partners and OEMs. CIC is headquartered in Redwood Shores, California and has a joint venture, CICC, in Nanjing, China. For more information, please visit our website at http://www.cic.com

*In December 2008, CIC was named to Forrester Research's "Hot Banking Tech Companies To Watch in 2009" Report.

**In October 2007, CIC was awarded the 2007 Global Frost & Sullivan Award for Market Leadership in the dynamic signature verification market.

CIC's logo, SignatureOne, Ceremony, and The Power to Sign Online are registered trademarks of CIC. All other trademarks are properties of their respective owners.

SOURCE Communication Intelligence Corporation

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