Intrinsyc Reports 2011 Second Quarter Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 11, 2011) - Intrinsyc Software International, Inc. (TSX:ICS) ("Intrinsyc" or the "Company"), a leading provider of software solutions for mobile devices, today announced its financial results for the second quarter ended June 30, 2011, reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS"). The Company's results are presented in comparison to the three months ended March 31, 2011 and the three months ended June 30, 2010, also in accordance with IFRS.

"We are pleased with our continued achievement of positive EBITDA and improvements in cash and net working capital as at June 30, 2011," stated Tracy Rees, Chief Executive Officer. "During the second quarter, we announced a new customer for our proprietary RapilRIL™ telephony software, expanded our strategic alliances through selection into the Open Handset Alliance (OHA) and initiated our third party distribution business with the signing of an agreement with AnyDATA Corporation that will allow us to sell communication modules for a wide variety of vertical and consumer applications. Revenue in the quarter was constrained by the timing of delivery of a customer engagement and resource limitations. We are aggressively seeking to increase our services capacity to meet demand."

The Company reported second quarter revenue of approximately $2.4 million as compared to approximately $2.6 million for the three months ended March 31, 2011 and approximately $3.0 million in the period ended June 30, 2010. Total revenue attributable to the Company's Software Solutions was 30 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 36 percent and 37 percent in the respective comparative quarters. Gross margin was 50 percent during the second quarter of 2011, which was lower than 55 percent for the three months ended March 31, 2011 but consistent with the margin experienced of 50 percent for the three months ended June 30, 2010.

Total operating expenses, excluding other operating expenses, for the three months ended June 30, 2011 were 3 percent lower over the preceding three months ended March 31, 2011 and 23 percent lower over the three months ended June 30, 2010. Earnings before other operating expenses, finance income and foreign exchange gain (loss) ("EBITDA") for the three months ended June 30, 2011 was $53,776 compared to $212,136 in the previous three months ended March 31, 2011 and $11,012 for the three months ended June 30, 2010. Cash and cash equivalents were approximately $8.9 million and short-term investments were approximately $3.0 million with net working capital of approximately $12.0 million as of June 30, 2011, compared to cash and cash equivalents of approximately $11.2 million with net working capital of approximately $11.6 million as of December 31, 2010.

The Company reported revenue of approximately $5.0 million for the six months ended June 30, 2011 as compared to approximately $6.5 million for the six months ended June 30, 2010. Total revenue attributable to the Company's Software Solutions decreased to 33 percent of revenues, including software licensing, maintenance/support and software-related services, as compared to 39 percent in the respective comparative period. Gross margin was 53 percent for the six months ended June 30, 2011, down from 56 percent in the six months ended June 30, 2010.

Total operating expenses, excluding other operating expenses, for the six months ended June 30, 2011 were approximately $2.4 million, compared to approximately $3.5 million for the six months ended June 30, 2010. EBITDA for the six months ended June 30, 2011 was $265,912 compared to $114,006 for the six months ended June 30, 2010.

Business Highlights

• Signed a software license agreement with u-blox for RapidRIL telephony software. u-blox will integrate Intrinsyc's technology into its LISA family of 3G modules for use in its wireless devices for consumer, industrial, and automotive applications.

• Joined the Open Handset Allilance (OHA). The OHA is a consortium with over 80 mobile industry members that are strongly committed to promoting the open and royalty free Android platform.

• Signed a distribution agreement with AnyDATA Corporation, a leader in the quality design and manufacture of high-performance wireless devices for network operators and OEMs worldwide. Intrinsyc will distribute and support AnyDATA's industry leading M2M modules based on Qualcomm's Internet of Everything Module (IEM) technology.

The new accounting policies under IFRS have been consistently applied to all of the periods presented in this news release and all prior period information has been restated or reclassified for comparative purposes unless otherwise noted. Further details on the conversion to IFRS are provided in Management's Discussion and Analysis and in the notes to the Company's unaudited condensed consolidated financial statements as at and for the quarter ended June 30, 2011.

Conference call

The Company will release its fiscal second quarter financial results on Thursday, August 11, 2011 at 4:00 p.m. Eastern Time (1:00 p.m. Pacific Time). The company will hold a conference call to discuss the financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) the same day. On the call, Tracy Rees, President and Chief Executive Officer, and George Reznik, Chief Financial Officer, will discuss the financial results announced. This conference call may be accessed in North America, toll-free, by dialing 1-866-610-8602, and internationally by dialing +1-212-401-8152 approximately 10 minutes prior to the start of the call. This conference line is operator assisted and an access PIN is not required. The conference call will also be broadcast live over the Internet and available for replay on the Company's Investor Relations Conference Calls web page (www.intrinsyc.com/investors/conference_calls.aspx). Analysts and investors are invited to participate on the call. Questions may be submitted to invest@intrinsyc.com prior to the call.

The Audit Committee of the Company has reviewed the contents of this news release.

Forward-Looking Statements

This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect," "anticipate," "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the need to develop, integrate and deploy software solutions to meet the Company's customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on the Company's customer's satisfaction; the timing of entering into significant contracts; customers' continued commitment to the deployment of the Company's solutions; the performance of the global economy and growth in software industry sales; market acceptance of the Company's products and services; the success of certain business combinations engaged in by the Company or by its competitors; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to international expansion; concentration of sales; international operations and sales; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and other factors described in the Company's reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2010. This list is not exhaustive of the factors that may affect the Company's forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

About Intrinsyc Software International, Inc.

Intrinsyc empowers device makers, mobile operators, and silicon vendors to deliver compelling, next generation mobile devices faster with higher quality, and differentiating innovation. We help our customers deliver compelling products using our unmatched expertise with the leading OS platforms including Android, Apple, Blackberry, Linux, Symbian, QNX, Windows® CE and Windows Mobile. Intrinsyc is publicly traded (TSX: ICS) and is headquartered in Vancouver, Canada, with operations in China, Taiwan and the United States.

INTRINSYC SOFTWARE INTERNATIONAL, INC.
Interim Condensed Consolidated Statements of Financial Position
(Unaudited and expressed in U.S. dollars)
As at		June 30, 2011		December 31, 2010
ASSETS
Current assets
	Cash and cash equivalents	$	8,897,355	$	11,152,439
	Short-term investments		3,026,779		-
	Trade and other receivables		1,888,258		2,992,007
	Inventory		18,357		26,208
	Prepaid expenses		60,989		162,336
			13,891,738		14,332,990
Non-Current Assets
	Prepaid expenses		44,767		44,551
	Equipment		360,703		549,945
	Intangible assets		292,541		580,434
Total assets		$	14,589,749	$	15,507,920
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Trade and other payables	$	1,315,233	$	2,164,951
	Technology Partnerships Canada		77,760		72,561
	Finance lease obligations		-		7,818
	Deferred revenue		507,898		471,285
			1,900,891		2,716,615
Technology Partnerships Canada			192,001		179,162
Total liabilities			2,092,892		2,895,777
Shareholders' equity
	Share capital		108,288,585		108,288,585
	Other capital reserves		9,642,300		9,566,250
	Translation of foreign operations reserve		1,185,411		794,984
	Deficit		(106,619,439)		(106,037,676)
Total shareholders' equity			12,496,857		12,612,143
Total liabilities and shareholders' equity		$	14,589,749	$	15,507,920

INTRINSYC SOFTWARE INTERNATIONAL, INC.
Interim Condensed Consolidated Statements of Operations and Deficit
(Unaudited and expressed in U.S. dollars)
For the		Three months ended June 30, 2011		Three months ended June 30, 2010		Six months ended June 30, 2011		Six months ended June 30, 2010
Continuing Operations
	Revenues	$	2,415,228	$	3,024,458	$	4,968,395	$	6,531,455
	Cost of sales		1,196,550		1,497,857		2,337,375		2,888,723
			1,218,678		1,526,601		2,631,020		3,642,732
Expenses
	Sales and marketing		435,848		399,111		1,027,816		1,014,332
	Research and development		124,400		638,852		235,978		1,479,787
	Administration		604,654		477,626		1,101,314		1,034,607
	Other operating expenses		524,082		618,039		760,060		1,380,777
			1,688,984		2,133,628		3,125,168		4,909,503
Operating Loss before other expense (earnings) and income taxes			470,306		607,027		494,148		1,266,771
Other expense (earnings)
	Foreign exchange loss (gain)		38,274		(229,798)		133,516		(31,503)
	Finance income		(27,055)		(10,194)		(46,688)		(16,796)
			11,219		(239,992)		86,828		(48,299)
Operating Loss before income taxes			481,525		367,035		580,976		1,218,472
Income tax expense – current			-		(71,183)		787		(69,229)
Net loss for the period			481,525		295,852		581,763		1,149,243
Deficit, beginning of period			106,137,914		102,563,257		106,037,676		101,709,866
Deficit, end of period		$	106,619,439	$	102,859,109	$	106,619,439	$	102,859,109
Loss per share (basic and diluted)		$	0.00	$	0.00	$	0.00	$	0.01
Weighted average number of shares outstanding			163,259,070		163,259,070		163,259,070		163,259,070

INTRINSYC SOFTWARE INTERNATIONAL, INC.
Interim Condensed Consolidated Statements of Comprehensive Loss
(Unaudited and expressed in U.S. dollars)
For the		Three months ended June 30, 2011		Three months ended June 30, 2010		Six months ended June 30, 2011		Six months ended June 30, 2010
Net loss for the period		$	(481,525)	$	(295,852)	$	(581,763)	$	(1,149,243)
Other comprehensive income (loss):
	Translation of foreign operations reserve		66,445		(711,683)		390,427		(176,447)
Comprehensive loss		$	(415,080)	$	(1,007,535)	$	(191,336)	$	(1,325,690)

INTRINSYC SOFTWARE INTERNATIONAL, INC.
Interim Condensed Consolidated Statements of EBITDA and Loss
(Unaudited and expressed in U.S. dollars)
For the		Three months ended June 30, 2011		Three months ended June 30, 2010		Six months ended June 30, 2011		Six months ended June 30, 2010
Continuing Operations
	Revenues	$	2,415,228	$	3,024,458	$	4,968,395	$	6,531,455
	Cost of sales		1,196,550		1,497,857		2,337,375		2,888,723
			1,218,678		1,526,601		2,631,020		3,642,732
Expenses
	Sales and marketing		435,848		399,111		1,027,816		1,014,332
	Research and development		124,400		638,852		235,978		1,479,787
	Administration		604,654		477,626		1,101,314		1,034,607
			1,164,902		1,515,589		2,365,108		3,528,726
EBITDA Income			53,776		11,012		265,912		114,006
	Other operating expenses		524,082		618,039		760,060		1,380,777
	Foreign exchange loss (gain)		38,274		(229,798)		133,516		(31,503)
	Finance income		(27,055)		(10,194)		(46,688)		(16,796)
	Income tax expense – current		-		(71,183)		787		(69,229)
			535,301		306,864		847,675		1,263,249
Net loss for the period under IFRS		$	(481,525)	$	(295,852)	$	(581,763)	$	(1,149,243)

INTRINSYC SOFTWARE INTERNATIONAL, INC. Interim Condensed Consolidated Statements of Changes in Equity (Unaudited and expressed in U.S. dollars)
			Share Capital		Other Capital Reserves		Deficit		Translation of Foreign Operations Reserve		Total Shareholder's Equity
	Balance, January 1, 2011		$	108,288,585	$	9,566,250	$	(106,037,676)	$	794,984	$	12,612,143
	Total comprehensive income for the period			-		-		223,744		-		223,744
	Share-based compensation			-		27,050		-		-		27,050
	Translation of foreign operations			-		-		(323,982)		323,982		-
	Balance, March 31, 2011		$	108,288,585	$	9,593,300	$	(106,137,914)	$	1,118,966	$	12,862,937
	Total comprehensive loss for the period			-		-		(415,080)		-		(415,080)
	Share-based compensation			-		49,000		-		-		49,000
		Translation of foreign operations		-		-		(66,445)		66,445		-
	Balance, June 30, 2011		$	108,288,585	$	9,642,300	$	(106,619,439)	$	1,185,409	$	12,496,857
	Balance, January 1, 2010		$	108,288,585	$	9,466,400	$	(101,709,866)	$	-	$	16,045,119
	Total comprehensive loss for the period			-		-		(318,155)		-		(318,155)
	Share-based compensation			-		(14,561)		-		-		(14,561)
		Translation of foreign operations		-		-		(535,236)		535,236		-
	Balance, March 31, 2010		$	108,288,585	$	9,451,839	$	(102,563,257)	$	535,236	$	15,712,403
	Total comprehensive loss for the period			-		-		(1,007,535)		-		(1,007,535)
	Share-based compensation			-		45,073		-		-		45,073
		Translation of foreign operations		-		-		711,683		(711,683)		-
	Balance, June 30, 2010		$	108,288,585	$	9,496,912	$	(102,859,109)	$	(176,447)	$	14,749,941

INTRINSYC SOFTWARE INTERNATIONAL, INC
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited and expressed in U.S. dollars)
For the		Three months ended June 30, 2011		Three months ended June 30, 2010		Six months ended June 30, 2011		Six months ended June 30, 2010
Cash flows from operating activities
	Net loss for the period	$	(481,525)	$	(295,852)	$	(581,763)	$	(1,149,243)
Adjustments to reconcile net loss before tax to net cash flows:
	Amortization		201,772		290,889		410,700		579,745
	Non-cash interest		5,122		-		10,056		-
	Share-based compensation		49,000		45,073		76,050		30,512
	Non-cash restructuring		98,124		-		98,124		-
			(127,507)		40,110		13,167		(538,986)
Working capital adjustments:
	Trade and other receivables		593,627		(842,175)		1,182,095		240,511
	Inventory		(169)		(18,958)		8,481		(12,178)
	Prepaid expenses		83,338		117,153		106,771		170,253
	Trade and other payables		(727,064)		(1,035,809)		(910,627)		(1,508,695)
	Current portion of long-term payable to Technology Partnerships Canada		-		72,936		-		72,936
	Deferred revenue		150,704		1,555		24,128		(97,291)
			100,436		(1,705,298)		410,848		(1,134,464)
Net cash flows from operating activities			(27,071)		(1,665,188)		424,015		(1,673,450)
Cash flows from investing activities
	Redemption (purchase) of short-term investments		1,023,809		-		(2,943,698)		-
	Purchase of equipment		(2,059)		-		(2,059)		-
Cash provided by (used in) investing activities			1,021,750		-		(2,945,757)		-
Cash flows from financing activities
	Repayment of capital lease obligation		-		(7,233)		(7,890)		(14,272)
	Long-term payable to Technology Partnerships Canada		-		234,282		-		234,282
	Restricted cash		-		97,248		-		97,248
Cash provided by (used in) financing activities			-		324,297		(7,890)		317,258
Effect of exchange rate changes on cash and cash equivalents			45,154		(508,944)		274,548		(103,522)
Increase (decrease) in cash and cash equivalents			1,039,833		(1,849,835)		(2,255,084)		(1,459,714)
Cash and cash equivalents, beginning of period			7,857,522		12,100,348		11,152,439		11,710,227
Cash and cash equivalents, end of period		$	8,897,355	$	10,250,513	$	8,897,355	$	10,250,513