November 14, 2007
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November 14, 2007


Innuity, Inc. Reports Third Quarter 2007 Financial Results

The Company Posts Second Consecutive Quarter of Positive Adjusted EBITDA


REDMOND, Wash. (November 14, 2007) – Innuity, Inc. (INNU.OB, http://www.innuity.com), a Software as a Service (SaaS) company that designs, acquires, and integrates applications to deliver affordable solutions to small business, reported its financial results for the third quarter of 2007.

The company’s net loss for the third quarter of 2007 was $925,000, or $0.04 per share, compared with a net loss of $1.7 million, or $0.08 per share, for the third quarter of 2006. The significant improvement to net loss resulted from the tightening of operating costs, the elimination of royalty payments, and the improvement of margins. Consolidated revenues for the third quarter of 2007 decreased to $5.2 million from $5.4 million reported during the same quarter of 2006. Revenue for the nine months ended September 30, 2007 was $16.0 million and remained constant with the $16.0 million of revenue for the same period in 2006. The net loss for the nine months ended September 30, 2007 was $3.0 million, or $0.14 per share, compared with $6.7 million, or $0.35 per share, for the same period in 2006. The Company’s Adjusted EBITDA was $268,000 for the three months ended September 30, 2007, and represented the second consecutive quarter of positive Adjusted EBITDA for the Company.

“Delivering positive cash flow from operations has continued to be our focus, and we are pleased with our performance during the period,” said John Wall, Innuity Chairman and CEO. “Our improved financial performance will allow us to expand our focus on integrating our sales efforts across our divisions to better acquire and service our small business customers.”

About Innuity

Headquartered in Redmond, WA, Innuity is a Software as a Service (SaaS) company that designs, acquires, and integrates applications to deliver solutions for small business. Innuity’s Internet technology is based on an affordable, on-demand model that allows small businesses to simply interact with customers, business partners and vendors and efficiently manage their businesses. Innuity delivers its on-demand applications through its Internet technology platform, Innuity Velocity™. The Velocity technology platform enables use-based pricing, provides the opportunity to choose applications individually or as an integrated suite and facilitates minimum start-up costs and maintenance. For more information on Innuity, go to www.innuity.com.

Forward-Looking Statements

This release contains information about management’s view of Innuity’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors, including, but not limited to, risks and uncertainties associated with our ability to develop or offer additional internet technology applications and solutions in a timely and cost-effective manner. If we are unable to develop, license, acquire or otherwise offer through arrangements with third parties the additional services that our customers desire, or if any of our existing or future relationships with these third parties were to be terminated, we could lose our ability to provide key internet technology solutions at cost-effective prices to our customers, which could hinder our ability to introduce new products and services and could cause our revenues to decline.  In addition, we have incurred losses since our inception, and we may not achieve or maintain profitability.  We will need additional funding to support our operations and capital expenditures, which may not be available in amounts or terms acceptable to us.  If adequate additional funds are not available, we may be required to delay, reduce the scope of or eliminate implementation of material parts of our business strategy.  Additional risks and uncertainties include our financial condition and those other risk factors described in our quarterly reports on Form 10-QSB, our annual report on Form 10-KSB, and other documents we file periodically with the Securities and Exchange Commission.

Non-GAAP Financial Information

To supplement Innuity’s consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Innuity uses Adjusted EBITDA which is a non-GAAP measure of financial performance. Adjusted EBITDA is calculated by reducing net losses computed in accordance with GAAP for interest expense, income taxes, depreciation, amortization and share-based payments.  This measure, among other things, is one of the primary metrics by which Innuity evaluates the performance of its business and believes this measure is useful to investors because it represents meaningful supplemental information regarding liquidity and Innuity’s ability to fund operations and its financing obligations.

Innuity’s management believes that investors should have access to, and Innuity is obligated to provide, the same set of tools that management uses in analyzing the company’s results. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Non-GAAP terms, as defined by Innuity, may not be comparable to similarly titled measures used by other companies. A reconciliation of Innuity’s GAAP net losses to Adjusted EBITDA for the three months ended March 31, 2007, June 30, 2007, and September 30, 2007, as well as for the nine months ended September 30, 2007, is included with the financial statement tables.


IR contact:
Jordan Silverstein
Christine Berni
The Investor Relations Group
212-825-3120 (office)
jsilverstein@investorrelationsgroup.com

Company contact:
Linden N Barney
CFO
801-705-5163
lindenb@innuity.com