Intervoice, Inc. (NASDAQ: INTV), a Texas corporation formed in 1983, is a world leader in delivering natural, intuitive ways for people to interact, transact and communicate. Intervoice software and professional services provide innovative voice portal, IP (Internet Protocol) contact center, mobile messaging and self-service applications. More than 5,000 customers in 80 countries have relied on Intervoice, including many of the world’s leading financial and healthcare institutions, telecommunications companies, utilities, and governments. We offer our contact center and network service provider customers flexible, scalable, integrated software platforms, powerful development and reporting tools, customized and packaged software applications, comprehensive consulting services, and post-sale support.

 

Intervoice has long been an industry innovator, introducing the world’s first PC-based Interactive Voice Response (“IVR”) system in 1983. Now, 25 years later, Intervoice innovation includes multimedia communications providing end-to-end contact center solutions as well as a portfolio of IP-based messaging and call completion applications for network service providers. We are also an industry leader in the deployment of standards-based systems.

 

Intervoice is committed to delivering end-to-end solutions that are compliant with industry standards, are hardware independent, and integrate seamlessly with other systems and software. We support standards including VoiceXML (Voice eXtensible Mark-up Language), SCXML (State Chart eXtensible Mark-up Language) and CCXML (Call Control eXtensible Mark-up Language) for voice-enabled Web applications and contact center software architectures. We continuously assess evolving industry standards and are actively involved in industry associations such as the Eclipse Foundation, the VoiceXML Forum, and the Internet Engineering Task Force, as well as network-focused organizations such as the 3GPP (IMS), the GSM Association, TMIA, VMA and AVIOS.

 

Intervoice contact center software and professional consulting services allow businesses to build brand loyalty by enriching their customers’ user experiences while lowering their overall cost of operations. Our contact center customer base is among the largest in the industry with more than 20,000 deployments. We offer our customers the option of deploying solutions as a customer-premise sale or as a hosted service, an option that we feel is a competitive differentiator. Our Hosted Solutions group manages approximately 30,000 ports and 100 million minutes a month of self service applications through our network operations centers. For network service providers, Intervoice’s product and service suite includes next-generation IP-based voice messaging, text messaging, voice portal and payment systems — all revenue-generating services that meet their customers’ growing demands for enhanced mobile services and access from any device, any place and any time.

 

The foundation of Intervoice’s decades-long success is a corporate strategy influenced by six key market trends:

 

 

Intervoice’s strategy is not only guiding our development of standards-based products, but is also sharpening our focus on enabling more complex and intelligent customer interactions throughout the enterprise. We help network service providers accelerate the rate at which they can bring new subscriber offerings to market by providing tools that support third-party application development. In addition, we are bringing new levels of quality and personalization to speech self-service through our global consulting services group — one of the most experienced in the industry. Our focus on ensuring exceptional value and usability helps our contact center and network service provider customers enhance the experience of their customers while lowering costs and increasing revenues.

 

Our activities in both the contact center and network service provider markets are supported by shared resources in sales, operational support, research and development and administration. Our corporate headquarters is in Dallas, Texas, and we operate remote facilities in Florida and California. Our global presence extends throughout the world, including Europe, the Middle East, Africa, South America and Asia.

 

We sell our products through a direct sales force and through an established network of distributors, system integrators and channel partners. For the fiscal year ended February 29, 2008, we reported revenues of approximately $202.4 million, including $96.9 million of solution sales, $86.4 million of maintenance and related service revenues and $19.1 million of hosted solutions revenues. Sales to North American customers totaled $123.4 million or 61% of total sales for the year.

 

Intervoice also delivers unique value through the integration of industry-standard hardware, software, and professional services provided by our numerous alliance partners. These strategic relationships are an integral part of our product strategy and allow us to create voice automation and network services solutions tailored to fit each of our customer’s specific business needs. Key Intervoice technology alliance partners include BEA, Nuance, Intel/Dialogic, IBM and HP.

 

When we use the term “solutions sales” in this Annual Report, we mean the sale of hardware and/or software applications and the related integration, installation and testing of such custom applications. When we use the term “recurring services,” we mean the sale of maintenance and software upgrade offerings and the provision of customized solutions to customers on a hosted solutions (outsourced) basis.

 

Contact Center Solutions

 

Intervoice Voice Portal

 

Intervoice is a recognized market leader in the creation and deployment of voice portal solutions, which include traditional and standards-based IVR systems and other voice portal solutions for businesses. Our voice portal solutions allow organizations of all types to automate communications, reduce costs and improve interactions with customers, employees and business partners. Our solutions provide callers with access to information when, where, and how they want to receive it using speech-enabled and touch-tone interfaces that have been designed and optimized for usability — in other words, designed with the callers’ needs in mind. As speech recognition and text-to-speech technologies gain acceptance as natural user interfaces, our solutions allow for the automation of interactions previously seen as too complex for a traditional touch-tone interface. Businesses use our solutions to streamline access to account information, allow for secured access to sensitive information through voice verification, edit name and address information, and support workforce management activities. Enterprise-wide applications also enable customers to order products, activate accounts, pay bills, enroll for college courses, apply for jobs, execute securities trades, and recharge prepaid accounts and conduct many other increasingly complex interactions. All of these applications can be designed to give our customers the ability to offer their callers easy access to information and an exceptional user experience.

 

Intervoice Voice Portal is our advanced software-based platform that can be used to create, manage and deploy voice-based solutions. Intervoice Voice Portal delivers a flexible, modular and highly scalable design (built upon open industry standards including VoiceXML, SCXML, CCXML and others) that encourages the seamless

integration of Web and enterprise-based systems into intuitive speech-enabled solutions with a clear business return-on-investment (“ROI”).

 

Companies in a wide range of industries use our contact center solutions to drive operational efficiencies. Our software delivers a true end-to-end converged voice and data solution and supports best-of-class deployments through our alliance partnerships with the leading names in information technology.

 

Our self service solutions can be implemented individually to meet specific requirements or applied as a comprehensive solution to achieve enterprise-class voice automation results. The solutions include leading technologies, proven applications, an award-winning development environment, and intuitive management tools that are backed by comprehensive professional consultation services and technical support. The solutions can be deployed in a customer premise or hosted solutions environment.

 

Intervoice IP Contact Center

 

The Intervoice IP Contact Center provides an end-to-end solution for self-service IVR and speech applications with live assistance support through contact center agents. It seamlessly integrates traditional automatic call distribution (“ACD”) for routing phone calls as well as other contact types such as e-mail response and Web chat requests. All media types are handled with a single, consistent routing application and user interface for agents. The system also provides traditional computer telephony integration (“CTI”) functionality at a fraction of the cost of a traditional hardware-based implementation. Lastly, the distributed IP architecture takes advantage of the distributed corporate network to allow low-cost networking of agents regardless of their location — in a call center, branch office, or at home — creating a single virtual call center.

 

Horizontal Application Modules

 

Intervoice delivers voice automation applications and solutions through a spectrum of re-usable application modules and components that can be bundled together or used separately. Our solutions combine horizontal applications, server-side software modules and components with our world-class consulting services to deliver an exceptional user experience. Examples of Intervoice’s horizontal solutions include:

 

Survey Automation — provides an automated and confidential method of surveying customers, callers and clients

 

Auto-Attendant — provides an easy and automated way to self direct calls in place of a live operator

 

Locator Automation — a portal application that provides callers with detailed location information about nearby ATMs, stores or other destinations

 

Vertical Application Modules

 

Intervoice offers industry-specific vertical solutions, applications and repeatable components. Our pre-built components help accelerate the development and deployment of applications for faster ROI for our customers. Our offerings address needs in the following industries:

 

Banking & Financial Services

Healthcare

Public Sector

Retail & Manufacturing

Telecommunications

Transportation & Travel

Utilities

 

Network Service Provider Solutions

 

We offer network service providers an array of revenue generating solutions that include next generation IP-based messaging and media management applications, traditional Intelligent Network (“IN”)-based voice and

text messaging applications and prepaid payment solutions. To date, our network service provider solutions have primarily been sold to wireless network service providers in Latin America, Europe, Asia Pacific, the Middle East and Africa.

 

Media Exchange with HomeZone^tm

 

Media Exchange with HomeZone^tm is a flexible, IP-based multimedia enhanced services platform designed for mobile network operators and fixed line operators. Designed specifically for high availability, it includes a customizable mix of multimedia service options including next generation messaging, Web user interfaces, voice portal, calendar management and text to speech capabilities. Media Exchange offers touch tone and Web user interfaces.

 

Our Media Exchange solution helps network service providers accelerate the rate at which they can bring enhanced services to market. Our standards-based software platform incorporates tools which support third-party application development through the HomeZone, and gives subscribers easy access to enhanced services. Each unique combination of enhanced services allows network service providers to offer their subscribers a differentiated service that can enhance their brand, increase revenue per subscriber and increase subscriber loyalty and retention.

 

The Media Exchange with HomeZone suite of solutions includes the following packaged application options:

 

Voicemail MX — next-generation voice mail and unified messaging functionality offering a common message store and common data base

 

Video Mail — a store and forward video solution for messaging

 

Voice to MMS (“V2MMS”) — a media-independent message deposit and call completion utility that allows subscribers to record a voice message and have it delivered as a Multi-Media Message (“MMS”)

 

Traditional, IN-based Messaging

 

Our traditional, IN-based messaging solutions include voicemail, short message service (“SMS”) and missed-call notification. These solutions incorporate a range of advanced features, including intelligent call return, mailbox-to-mailbox messaging, universal mailboxes, missed-call alerts and conditional personal greetings. Our applications support network service providers in their efforts to build subscriber counts, loyalty and usage.

 

Portal

 

Our Media Exchange applications allow subscribers instant access to information content and entertainment services via a touch-tone user interface or through a Web browser. Portal applications include access to horoscope information, sports, weather, traffic and financial data and can be “branded” and customized to enhance subscriber loyalty and revenues.

 

Payment

 

We provide a range of products and services that allows network service providers to offer prepaid services. Providers can offer prepaid telephony services to facilitate subscriber acquisition and usage in selected markets where subscribers prefer to pay by cash or where collection might be an issue. We support a wide range of prepaid services, including prepaid calling cards, prepaid residential, prepaid wireless and automated operator services. Our prepaid solutions integrate seamlessly with other telco-grade, revenue-generating applications, including our messaging and portal solutions.

 

Intelligent Network Prepaid can be deployed to provide enhanced flexibility and efficiency in both wireline and wireless networks. Network service providers can use IN Prepaid solutions to manage rapid subscriber growth, provide cost-effective roaming, and boost subscriber satisfaction.

Consulting Services

 

Intervoice offers the services of solution engineers, designers, developers and other consulting services specialists who provide our customers the benefit of the experience we have gained in the development of thousands of custom touch-tone and speech-enabled solutions. We offer customers a single source for needs assessment and application design, voice user interface (“VUI”) design, system integration, project management, effective training and optimization of their custom solution. With more than 150 solution-services experts worldwide and 25 years of experience designing, deploying and managing voice and multi-modal applications for contact center and network service provider customers across functions and industries, this team also possesses one of the highest concentrations of industry-recognized leaders in human factors and voice user interface design.

 

Our focus on caller habits, preferences and needs allows us to generate customized dialogue and call flows, as well as innovative integration and presentation of data across all channels, thus helping our customers maximize personalization, resulting in increased customer satisfaction. Customers using Intervoice consulting services can access our industry-unique Center for User Experience (“CUE”) testing lab, caller goal completion rate analysis and our Usability Grade Testing Metric that helps measure a voice application’s ease of use. Our consulting services are designed to reduce the time and cost of speech automation deployments, improve customer communication and satisfaction, and drive higher return-on-investment performance through increased transaction resolution rates.

 

Recurring Services

 

Maintenance and Software Support

 

Intervoice offers the services and support needed to keep our solutions running at peak efficiency. We understand our customers’ requirements to protect their investment through world-class technical support that is accessible, effective and responsive to their business requirements and objectives.

 

Our RealCare^® Services portfolio gives customers a choice of comprehensive plans to ensure the performance of their Intervoice solution — including 24x7x365 responsive and proactive services to help minimize or prevent service-impacting events. Our RealCare Advantage maintenance programs offer three levels of services in order to provide customers with choices when it comes to support. Our maintenance offerings include software support services as a subscription-based service that provides convenient, cost-effective software upgrades. In addition, we offer value-added services such as application consulting support and remote application monitoring to further support our customers’ operations. Maintenance is part of Intervoice’s ongoing commitment to provide immediate access to the people and information our customers need to keep their operations running smoothly.

 

Hosted Solutions

 

Intervoice Hosted Solutions offer our customers a comprehensive portfolio of contact center applications delivered through our unique approach to hosted services. We offer a suite of hosted solutions designed to give contact centers and network service providers access to leading-edge applications while reducing the cost and risk of deploying state-of-the-art voice automation. In addition, Intervoice offers enhanced services such as Management, Monitoring and Hosted Security Services. Hosted applications also enable incremental and rapid integration of emerging technologies, as well as easier migration to speech-enabled services employing VoiceXML and next-generation network environments such as 2.5G, 3G, GPRS, IN and SIP-based VoIP.

 

Intervoice supports approximately 100 million minutes per month supplying hosted solutions for some of the world’s largest financial institutions, enterprises and network service providers with highly stringent network uptime and performance demands. Intervoice supports these customers from secure, integrated network operations centers locations in Orlando, Florida and Dallas, Texas in the U.S. We also have hosting agreements with Verizon and AT&T which enable us to deploy our solutions and services in most developed countries in the world.

 

Intervoice provides the platform, software and professional services that contact centers and network service providers need to develop, deliver and support interactive speech-enabled technologies.

The contact center market confronts three ongoing challenges — to continuously improve customer service, increase user satisfaction and build brand loyalty — all while controlling the cost of communications. Automated communications are increasingly the norm for cost-conscious enterprises, and after initial reluctance, consumers are beginning to show a preference for well-designed self-service voice solutions that can speed them through the call process. Organizations in a wide range of industries are responding to customer demand for speed and easy access by deploying converged speech and data technologies. Intervoice’s products and services have continued to evolve to meet the needs of the contact center marketplace.

 

Network service providers seek innovative, next-generation, high-demand services that can generate immediate subscriber acceptance and an accelerated ROI while keeping capital and operational expenditures to a minimum. Network service providers view “hot” consumer services such as contextual messaging, multimedia messaging, location based services, video, personal alerts, visual voicemail, and other enhanced services as clear opportunities to increase their subscriber base, solidify brand loyalty and stimulate network usage. Intervoice network solutions are designed to support the needs of both wireline and wireless network service providers for rapid-return, low-risk features that extend and enhance the useful life of their existing network infrastructure.

 

The markets we serve are fragmented and highly competitive. The principal competitive factors in our markets include breadth and depth of software and services, product features, product scalability, consulting services, maintenance services, pricing, and the ability to create and maintain a reference-able customer base. Our major competitors in our contact center market are Nortel, Genesys (a subsidiary of Alcatel-Lucent), Cisco and Avaya. All four of these companies are larger than Intervoice and focus on a larger portfolio of products beyond voice automation and contact routing. In addition, with respect to consulting services, we also compete with one of our alliance partners, Nuance Communications, a supplier of embedded advanced speech recognition and text-to-speech licenses.

 

We believe that our long history in the industry coupled with our unmatched speech-enabled product line, our professional consulting services, and our extensive customer base allow us to compete favorably in this market. The market is evolving rapidly, however, and we anticipate intensified competition not only from our traditional competitors but also from emerging vendors with non-traditional technologies and solutions, such as unified communications offerings. There is also continued competition from small venture-funded companies that attempt to build market share by targeting the installed base of larger established companies such as Intervoice.

 

Competition in our network service provider market ranges from large telecommunication suppliers offering turnkey, multi-application solutions to niche companies that specialize in a particular enhanced service such as messaging, video or content delivery. Our primary competitors in this market are Comverse Technology, Alcatel-Lucent and Unisys, each of which provides a suite of enhanced services. Other companies that compete with us in various niche geographic and/or product markets include Tecnomen, Movius, Acision and Mobeon.

 

We believe that, with our current suite of integrated and interoperable payment, messaging and portal services, our standards- and IP-based platform, our flexible business models, and our consulting services, we compare favorably with our competition. Nevertheless, we anticipate that competition will continue to grow from existing and new competitors, some of which may have greater financial, technological and marketing resources and greater market share than Intervoice.

 

We market our products directly, with a global sales force, and through more than 100 domestic and international distributors. We enter into arrangements with distributors to broaden distribution channels, to increase our sales penetration in specific markets and industries and to provide certain customer services. We select distributors based on their access to the markets, industries and customers that are candidates for Intervoice products. Our direct sales force consisted of approximately 80 personnel at February 29, 2008, including area vice presidents, regional sales directors and sales representatives worldwide. During fiscal 2008, approximately 68% of our solutions sales were attributable to direct sales to end-users and 32% came from sales to distributors.

Our major domestic distributors include Fiserv (multiple business units), Black Box, DDV, Siemens Business Communications, Symitar Systems, Verizon and Vexis. Our major international distributors include Ericsson (worldwide), Huawei (worldwide), Information Technologies Australia (Australia), Beijing Eable (China), IVRS (Hong Kong, China), Loxbit (Thailand), NextCom K.K. (Japan), Black Box (Canada), OLTP (Venezuela and the Caribbean), Promotora Kranon (Mexico), Siemens AG (Worldwide), Switch (Chile), Tatung (Taiwan), Telia Promotor (Sweden), Voice Outsourcing (Latin America and the Caribbean) and Wittel (Brazil).

 

Intervoice subsidiaries maintain offices in the U.K., Germany, Switzerland, the Netherlands, the United Arab Emirates, and South Africa to support sales throughout Europe, the Middle East and Africa. Company offices located in Singapore and China support sales in the Pacific Rim. We support Latin American sales from our Dallas headquarters and through a regional office in Brazil.

 

Our international revenues were 39% of total revenues in fiscal 2008, 35% of total revenues in fiscal 2007 and 45% of total revenues in fiscal 2006. See “Risk Factors” under Item 1A for a discussion of risks attendant to our international operations.

 

See “Sales” in Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information on sales by product line and geographic area and concentration of revenue.

 

Our solutions backlog at February 29/28, 2008, 2007 and 2006, which does not include the contracted value of future maintenance and hosted solutions to be recognized, was approximately $66 million, $54 million, and $34 million, respectively. Our service and support contracts range in original duration from one month to five years, with most hosted solutions contracts having initial terms of two to three years and most maintenance and related contracts having initial terms of one year. Because many of the longer duration contracts give customers early cancellation privileges, we do not consider our book of services contracts to be reportable backlog, as a portion of the potential revenue reflected in the contract values may never be realized. At February 29, 2008, a portion of our backlog related to long-term projects and cash basis customers. We generally expect all projects in our existing backlog to be initiated within fiscal 2009 and most of such backlog to be recognized as revenue during fiscal 2009. Approximately 12% of such backlog could revenue subsequent to fiscal 2009. Some of our sales are completed in the same fiscal quarter as ordered. Thus, our backlog at any particular date may not be indicative of actual sales for any future period.

 

Research and development expenses were approximately $19 million, $24 million and $18 million during fiscal 2008, 2007 and 2006, respectively, and included the design of new products and the enhancement of existing products.

 

Our research and development spending is focused in six key areas. First, we are developing software tools to aid in the development and deployment of customer applications incorporating speech recognition, text-to-speech, and other rich media technologies for enterprises and wireless and wireline providers. Next, we are developing server-based application software platforms for operations and management of contact center, speech and call completion applications. We will use these software platforms for deployment and management of enterprise, wireless and wireline network operator applications. Third, we are developing media servers, “voice browsers,” and call processing infrastructure based on open standards such as VoiceXML, CCXML and SCXML. These media servers are VoIP enabled, allowing operation in soft-switch and hybrid PSTN and VoIP networks. Fourth, we are developing packaged, speech enabled applications for the network operator and enterprise markets. These include vertical and horizontal applications that are designed to greatly enhance customer return-on-investment by providing many commonly used configurable functions that can be deployed more quickly than custom applications. Fifth, we are developing software and tools designed to provide integration of live agent positions in a customer contact center setting. This software covers a broad range of functions including agent call-screen transfer, workflow management, full call recording, agent and supervisor management systems and reporting and various integration functions. Finally, we are developing modular productivity and communications applications for

wireless and wireline applications including speech driven voice mail, voice activated dialing, and enhanced personal information management.

 

We expect to maintain a strong commitment to research and development so that we can remain at the forefront of technology development in our markets.

 

We believe our existing patent, copyright, license and other proprietary rights in our products and technologies are material to the conduct of our business. To protect these proprietary rights, we rely on a combination of patent, trademark, trade secret, copyright and other proprietary rights laws, nondisclosure safeguards and license agreements. As of February 29, 2008, we owned 92 patents and had 35 pending applications for patents in the United States. In addition, we have registered “Intervoice” as a trademark in the United States, which is part of our portfolio of 23 registered trademarks and service marks. Some of our patents and marks are also registered in certain foreign countries. Our software and other products are generally licensed to a customer under the terms of a non-exclusive, and generally nontransferable and perpetual license agreement that restricts the use of the software and other products to the customer’s internal purposes. Although our license agreements prohibit a customer from disclosing proprietary information contained in our products to any other person, it is technologically possible for our competitors to copy aspects of our products in violation of our rights. Furthermore, even in cases where we hold patents, the detection and policing of the unauthorized use of the patented technology are difficult. Moreover, judicial enforcement of copyrights may be uncertain, particularly in foreign countries. The unauthorized use of our proprietary information by our competitors could have a material adverse effect on our business, operating results and financial condition.

 

We generally provide our customers a qualified indemnity against the infringement of third party intellectual property rights. From time to time, various owners of patents and copyrighted works send us or our customers letters alleging that our products do or might infringe upon the owner’s intellectual property rights, and/or suggesting that we or our customers should negotiate a license or cross-license agreement with the owner. Our policy is to never knowingly infringe upon any third party’s intellectual property rights. Accordingly, we forward any such allegation or licensing request to our outside legal counsel for their review, analysis and, where appropriate, opinion. We generally attempt to resolve any such matter by informing the owner of our position concerning non-infringement or invalidity, and/or, if appropriate, negotiating a license or cross-license agreement. Even though we attempt to resolve these matters without litigation, it is always possible that the owner of a patent or copyrighted work will sue us. Other than the current litigation discussed in Item 3 — “Legal Proceedings,” no such litigation is currently pending against us. As noted above, we currently have a portfolio of 92 United States patents, and we have applied for and will continue to apply for and receive a number of additional patents to protect our technological innovations. We believe our patent portfolio could allow us to assert counterclaims for infringement against certain owners of intellectual property rights if those owners were to sue us for infringement. In certain situations, it might be beneficial for us to cross-license certain of our patents for other patents which are relevant to the call automation industry. See Item 3 — “Legal Proceedings” for a discussion of certain patent matters. See “Risk Factors” in Item 1A for a discussion of risks associated with claims of intellectual property infringement.

 

Our manufacturing operations consist primarily of the final assembly, integration and extensive testing of subassemblies, host computer platforms, operating software and our run time software. We currently use third parties to perform printed circuit board assembly, sheet metal fabrication and customer-site service and repair. Although we generally use standard parts and components for our products, some of our components, including semi-conductors and, in particular, digital signal processors manufactured by Texas Instruments, are available only from a small number of vendors. Likewise, we license speech recognition technology from a small number of vendors. As we continue to migrate to open, standards-based systems, we will become increasingly dependent on our component suppliers and software vendors. To date, we have been able to obtain adequate supplies of needed components and licenses in a timely manner, and we expect to continue to be able to do so. Nevertheless, if our significant vendors are unable to supply components or licenses at current levels, we may not be able to obtain these items from another source or at historical prices. In such situations, we would be unable to provide products and

services to our customers or generate historical operating margins, and our business and operating results would suffer.

 

As of April 21, 2008, we had 736 employees.

 

Our Internet website is www.intervoice.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are posted on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).

 

 

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). All statements other than statements of historical facts included in this Form 10-K, including, without limitation, statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Notes to Consolidated Financial Statements” located elsewhere in this report regarding our financial position, business strategy, plans and objectives of management for future operations, future sales and industry conditions, are forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. In addition to important factors described elsewhere in this Annual Report, we caution current and potential investors that the following important risk factors, among others, sometimes have affected, and in the future could affect, our actual results and could cause such results during fiscal 2009, and beyond, to differ materially from those expressed in any forward-looking statements made by or on behalf of Intervoice:

 

 

 

 

Due to these and other factors, our revenue and operating results are difficult to forecast and are prone to fluctuate, which may cause a decline in our stock price. Our expense levels are based in significant part on our expectations of future revenue, and we may not be able to reduce our expenses quickly to respond to a shortfall in projected revenue. Therefore, our failure to meet revenue expectations could seriously harm our business, operating results and financial condition. See the discussion entitled “Sales” in Item 7 of Part II for a discussion of our system for estimating sales and tracking sales trends in our business.

 

 

 

 

 

 

 

 

 

As a result