##### Table of Contents





As Filed with the Securities and Exchange Commission on
    April 24, 2008
     UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    February 29, 2008Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to       Commission File
    Number: 1-15045
 Intervoice, Inc.
 (Exact name of registrant as
    specified in its charter)
  Texas

75-1927578(State of
    Incorporation)

(I.R.S. Employer
    Identification Number)17811 Waterview Parkway
    Dallas, Texas(Address of principal
    executive offices)

75252(Zip
    Code)   Registrants telephone number, including area code:(972) 454-8000
  Securities registered pursuant to Section 12(b) of the
    Act:
    None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Title of
    Each Class
    Common Stock, No Par Value
    Preferred Share Purchase Rights
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Overview


3Products and Services


4Markets


7Competition


8Sales and Marketing


8Backlog


9Research and Development


9Proprietary Rights


10Manufacturing and Facilities


10Employees


11Availability of Company Filings with the SEC


11Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


17Item 2.


Properties


17Item 3.


Legal Proceedings


17Item 4.


Submission of Matters to a Vote of Security Holders


20PART IIItem 5.


Market for Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities


20Item 6.


Selected Financial Data


23Item 7.


Managements Discussion and Analysis of Financial Condition
    and Results of Operations


23Item 7A.


Quantitative and Qualitative Disclosures about Market Risk


39Item 8.


Financial Statements and Supplementary Data


39Item 9.


Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure


72Item 9A.


Controls and Procedures


72Item 9B.


Other Information


72PART IIIItem 10.


Directors, Executive Officers and Corporate Governance


74Item 11.


Executive Compensation


74Item 12.


Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


74Item 13.


Certain Relationships and Related Transactions, and Director
    Independence


74Item 14.


Principal Accountant Fees and Services


74PART IVItem 15.


Exhibits and Financial Statement Schedules


74SubsidiariesConsent of Grant Thornton LLPConsent of Ernst & Young LLPCertification of CEO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification of CFO Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification of CEO Pursuant to Rule 13a-14(b)Certification of CFO Pursuant to Rule 13a-14(b)




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PART I  Item 1.
    Business Overview    IP-based
  Mark-up Mark-up Mark-up
  IP-based
    
    The increasing demand for sophisticated speech applications that
    enable users to use their voices to interact with technology;
    The emerging interest worldwide in multi-channel, multimedia and
    multimodal communication;
    The accelerated adoption of open-standards that increase
    compatibility and interoperability among hardware components and
    software applications;
    The burgeoning adoption of VoIP (Voice over IP) that is driving
    convergence of voice and data communications, including the
    ability to network customer service agents regardless of their
    location  in a call center, branch office, or at home;
    The growing demand from businesses for end-to-end solutions that
    give them a single-point of accountability; and
    The increasing popularity of software-as-a-service (SaaS), where
    Intervoice delivers hosted solutions, onsite maintenance and
    support for Intervoice software installed at customers
    premises. 3




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Products
    and Services  and/or
  Contact
    Center Solutions
  Intervoice
    Voice Portal
     4




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return-on-investment
      Intervoice
    IP Contact Center
  e-mail
  Horizontal
    Application Modules
    Survey Automation
  Auto Attendant
  Locator Automation
  Vertical
    Application Modules
            Network
    Service Provider Solutions
  IP-based
 5




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Media
    Exchange with
    HomeZonetm
  tm IP-based
      Voicemail MX
  Video Mail
  Voice to MMS (V2MMS)
  Traditional,
    IN-based Messaging
    Portal
    Payment
     6




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Consulting
    Services
    return-on-investment
  Recurring
    Services
  Maintenance
    and Software Support
    ®
  Hosted
    Solutions
     Markets   7




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Competition      and/or
  IP-based
 Sales and
    Marketing   8




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Backlog   Research
    and Development    return-on-investment
 9




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Proprietary
    Rights    and/or
 Manufacturing
    and Facilities   10




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Employees   Availability
    of Company Filings with the SEC  Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    Risk
    Factors  Form 10-K Form 10-K,
  
    Our operating results may fluctuate significantly from period
    to period, and this may cause our stock price to
    decline.  Our revenue and operating results have
    fluctuated in the past and we expect further fluctuations in the
    future. Given these fluctuations, we believe that quarter to
    quarter comparisons of our revenue and operating results are not
    necessarily meaningful or an accurate indicator of our future
    performance. As a result, our results of operations may not meet
    the expectations of securities analysts or investors in the
    future, which could cause our stock price to decline. Factors
    that contribute to fluctuations in our operating results and can
    preclude our ability to accurately forecast our results include
    the following:  
    variability in the time periods necessary to complete projects
    and achieve project milestones in order to recognize revenue,
    which may be influenced by volume, size, timing, contractual
    terms for new sales orders and cash basis revenues;
    the components of our revenue that are deferred, including our
    subscription-based hosted solutions and that portion of our
    sales revenue attributable to support and maintenance;
    volume, timing and fulfillment of customer orders, particularly
    with respect to large orders (sales of approximately
    $1.0 million or more), some of which are completed in the
    same quarter in which they are ordered and some of which are
    completed over several quarters, and fluctuations in demand for
    our products and services;
    our ability to complete orders from our solutions backlog,
    subject to timing changes requested by our customers, and
    projects accounted for on a percentage of completion basis,
    including estimates based on a variety of factors and subject to
    revision;
    our ability to convert our pipeline of opportunities into sales; 11




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
    the use of low pricing to win important customers, and the
    possible recognition of loss contingencies for certain projects
    that we estimate will be delivered at a negative gross margin;
    the lengthy sales cycle for our products, which typically
    involve comprehensive solutions that may require detailed
    customer evaluations;
    the performance of our international business, which accounts
    for a significant portion of our consolidated revenues, and
    fluctuations in foreign currency exchange rates;
    the mix of products we sell and services we offer and whether
    our products are sold through our direct sales force or through
    an intermediary;
    introduction of new products, product upgrades or updates by us
    or our competitors, and any resulting customer delays in
    purchasing products;
    any increased price sensitivity by our customers, particularly
    due to increased competition including open source or free
    software;
    periodic difficult economic conditions, particularly affecting
    the technology industry, as well as economic uncertainties;
    higher than anticipated costs related to fixed-price contracts
    with our customers;
    our ability to effectively manage our operating expense levels;
    timing of significant marketing and sales promotions, and
    expenses incurred pursuing new product or market opportunities;
    stock-based compensation expense, which we began recognizing for
    our stock-based compensation plans in the first quarter of
    fiscal 2007;
    costs and charges related to certain events, including
    Sarbanes-Oxley compliance efforts, matters relating to our
    litigation and other potential loss contingencies;
    the structure, timing and integration of acquisitions of
    businesses, products and technologies and related disruption of
    our current business;
    factors that lead to substantial declines in estimated values of
    long-lived assets below their carrying value; and
    changes in generally accepted accounting principles.    
    Our stock price has been and may continue to be subject to
    wide fluctuations.  Our stock price historically
    has been volatile and may continue to be volatile in the future.
    Various factors contribute to the volatility of our stock price,
    including business developments (such as new product
    introductions and acquisitions or dispositions), litigation
    developments, quarterly variations in our financial results, our
    ability to meet investors expectations, and general
    economic and market conditions. In addition, third-party
    announcements by our partners and competitors may contribute to
    our stock price volatility. Certain types of investors may
    choose not to invest in stocks with this level of stock price
    volatility. Fluctuations in our stock price could cause
    increased risk of shareholder litigation, which could result in
    substantial costs and divert managements attention and
    resources.
    We are subject to potential and pending lawsuits and other
    claims.  We are subject to certain potential and
    pending lawsuits and other claims discussed in
    Item 3  Legal Proceedings of
    Part I of this Annual 12




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Report on
    Form 10-K.
    Furthermore, we may become subject to additional claims. Any
    adverse judgment, penalty or settlement related to any lawsuit
    or other such claim could have consequences that would be
    material to our financial position or results of operations. We
    may be required to indemnify certain of our current and former
    directors and officers under existing arrangements in connection
    with the defense, or advancement of defense-related expenses we
    are currently providing to certain individuals in connection
    with the class action lawsuit. Our insurance policies provide
    coverage for certain losses and expenses incurred by us and our
    current and former directors and officers in connection with
    claims made under the federal securities laws. These policies,
    however, exclude losses and expenses related to the Barrie class
    action lawsuit discussed in Item 3 or to other litigation
    based on claims that are substantially the same as the claims in
    the Barrie class action and contain other customary provisions
    to limit or exclude coverage for certain losses and expenses.  
    We face intense competition based on product capabilities and
    we experience ever increasing demands from our actual and
    prospective customers for our products to be compatible with a
    variety of rapidly proliferating computing, telephony and
    computer networking technologies and
    standards.  Our success is dependent, to a large
    degree, on our effectiveness in allocating resources to
    developing and improving products compatible with those
    technologies, standards and functionalities that ultimately
    become widely accepted by our current and prospective customers.
    Our success is also dependent, to a large degree, on our ability
    to implement arrangements with vendors of complementary product
    offerings so that we can provide our current and prospective
    customers greater functionality. Our principal competitors
    include Avaya, Cisco, Nortel, Nuance Communications, Comverse
    Technology, Unisys and Alcatel-Lucent. Many of our competitors
    have greater financial, technological and marketing resources
    than we have, as well as greater name recognition. Although we
    have committed substantial resources to enhance our existing
    products and to develop and market new products, there is no
    assurance we will be successful. In addition, it is possible
    that new entrants to the market and strategic acquisitions and
    partnerships between existing companies could increase the
    competition in the markets in which we participate. An increase
    in such competition could materially adversely affect our
    ability to sell our products, thereby adversely affecting our
    business, operating results and financial condition.
    We may not be successful in selling and implementing our
    products and services in the face of the new, standards-based
    market.  Intervoice has historically provided
    complete, bundled hardware and software solutions using
    internally developed components to address our customers
    total business needs. The markets for our products have required
    a shift to the development of products and services based on an
    open, standards-based architecture utilizing VoiceXML standards.
    Such an open, standards-based approach allows customers to
    independently purchase and combine hardware components,
    standardized software modules, and customization, installation
    and integration services from individual vendors deemed to offer
    the best value in the particular class of product or service.
    The standards based approach has and will continue to foster
    increased competition, including competition based on price
    resulting in increased pressure on gross margins. In such an
    environment, we believe we may sell less hardware and fewer
    bundled systems and may become increasingly dependent on our
    development and sale of software application packages,
    customized software and consulting and integration services.
    This shift places new challenges on us to hire and retain the
    mix of personnel necessary to respond to this business
    environment, to adapt to the changing expense structure that the
    new environment may tend to foster, to respond to potentially
    different competitors, and to increase sales of services,
    customized software and application packages to offset reduced
    sales of hardware and bundled solutions. Failure to develop,
    enhance, acquire and introduce new products and services to
    respond to continually changing market conditions or customer
    requirements, or lack of customer acceptance of our products or
    services, will materially adversely affect the value of our
    intellectual property, barriers to entry to our business,
    customer retention, gross margins, and the results of operations
    and financial condition.
    We may not be able to retain our customer base, and, in
    particular, our more significant customers.  Our
    success is heavily dependent on our ability to retain our
    significant customers. The loss of one of our significant
    customers could negatively impact our operating results. Our
    installed base of customers 13




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generally is not contractually obligated to place further
    solutions orders with us or to extend their services contracts
    with us at the expiration of their current contracts.  
    We will be harmed if we lose key business and technical
    personnel.  We rely upon the services of a
    relatively small number of key technical, project management and
    senior management personnel, most of whom do not have employment
    contracts. If we were to lose any of our key personnel,
    replacing them could be difficult and costly. If we were unable
    to successfully and promptly replace such personnel, our
    business could be materially harmed.
    Our reliance on significant vendor relationships could result
    in significant expense or an inability to serve our customers if
    we lose these relationships.  Although we
    generally use standard parts and components in our products,
    some of our hardware components are available only from a small
    number of vendors. Likewise, we license speech recognition
    technology primarily from Nuance Communications, Inc., the
    dominant vendor for this technology. 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 instances, 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.
    If third parties assert claims that our products or services
    infringe on their technology and related intellectual property
    rights, whether the claims are made directly against us or
    against our customers, we could incur substantial
    costs.  We believe software and technology
    companies, including us and others in our industry, increasingly
    may become subject to infringement claims. Such claims may
    require us to enter into costly license agreements or result in
    even more costly litigation. To the extent a licensing
    arrangement is required, the arrangement may not be available at
    all, or, if available, may be very expensive or even
    prohibitively expensive. As with any legal proceeding, there is
    no guarantee we will prevail in any litigation instituted
    against us asserting infringement of intellectual property
    rights. To the extent we suffer an adverse judgment, we might
    have to pay substantial damages, discontinue the use and sale of
    infringing products, repurchase infringing products from our
    customers in accordance with indemnity obligations, expend
    significant resources to acquire non-infringing alternatives,
    and/or
    obtain licenses to the intellectual property that has been
    infringed upon. As with licensing arrangements, non-infringing
    substitute technologies may not be available and, if available,
    may be very expensive, or even prohibitively expensive, to
    implement. Accordingly, for all of the foregoing reasons, a
    claim of infringement could ultimately have a material adverse
    effect on our business, financial condition and results of
    operations.
    We are exposed to risks related to our international
    operations that could increase our costs and hurt our
    business.  Our products are currently sold in more
    than 80 countries. Our international sales were 39% and 35% of
    total sales for the fiscal years ended February 29, 2008
    and February 28, 2007, respectively. International sales,
    personnel and property are subject to certain risks, including:  
    terrorism;
    fluctuations in currency exchange rates;
    ability to collect on accounts receivable;
    the difficulty and expense of maintaining foreign offices and
    distribution channels;
    tariffs and other barriers to trade;
    greater difficulty in protecting and enforcing intellectual
    property rights;
    general economic and political conditions in each country,
    including nationalization of customers or channel partners;
    loss of revenue, property and equipment from expropriation; 14




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
    import and export licensing requirements; and
    additional expenses and risks inherent in conducting operations
    in geographically distant locations, including risks arising
    from differences in language and cultural approaches to the
    conduct of business.  
    Our inability to meet contracted performance targets could
    subject us to significant penalties.  Many of our
    contracts, particularly for hosted solutions, foreign contracts
    and contracts with telecommunication companies, include
    provisions for the assessment of damages for delayed project
    completion
    and/or for
    our failure to achieve certain minimum service levels. We have
    had to pay damages in the past and may have to pay additional
    damages in the future. Any such future damages could be
    significant.
    Increasing consolidation in the telecommunications and
    financial industries could adversely affect our revenues and
    profitability.  The majority of our largest
    customers are in the telecommunications and financial
    industries. These industries are undergoing significant
    consolidation as a result of merger and acquisition activity.
    This activity could result in a decrease in the number of
    customers purchasing our products
    and/or in
    delayed purchases of our products by customers that are
    reviewing their strategic alternatives in light of a pending
    merger or acquisition. If these results occur, our revenues and
    profitability could decline.
    Our products are complex, and software defects could reduce
    our revenues and expose us to litigation.  The
    software products we offer are complex and may contain errors or
    defects, even after extensive testing and quality control,
    particularly in early versions. Furthermore, because our
    products increasingly are designed around an open standards
    based architecture incorporating elements developed by third
    parties, such errors or defects may be outside of our direct
    ability to control or correct. Any defects or errors could
    potentially result in loss of revenues, product returns or order
    cancellations, and could potentially hinder market acceptance of
    our products and harm our reputation. Accordingly, any defects
    or errors could have a material adverse effect on our business,
    results of operations and financial condition. Our customer
    agreements typically contain provisions to limit our product
    warranty obligations and exposure to potential liability claims.
    We have grown, and may continue to grow, through
    acquisitions, which could dilute our existing shareholders and
    could involve substantial acquisition risks.  As
    part of our business strategy, we have in the past acquired, and
    expect to continue to acquire or make investments in, other
    businesses and technologies. We may issue equity securities for
    future acquisitions, which would dilute our existing
    shareholders, and we may incur debt in connection with future
    acquisitions, which may include covenants or other restrictions
    that hinder our ability to operate our business. Furthermore,
    our prior acquisitions required substantial integration and
    management efforts. Acquisitions can involve a number of risks,
    including:  
    difficulty in transitioning and integrating the operations,
    facilities and personnel of the acquired businesses, including
    different and complex order processing, support and accounting
    and financial reporting systems;
    loss of key management, sales, research and development and
    other key employees of the acquired company;
    difficulty in integrating acquired products into our product
    portfolio, including engineering, sales and marketing
    integration;
    impairment of relationships with partners, suppliers and
    customers;
    difficulty in implementing and standardizing company-wide
    financial, accounting, billing, information and other systems
    and the internal controls surrounding those systems and
    processes;
    disruption of our ongoing operations and distraction of
    management and other employees;
    difficulty in incorporating acquired technology and rights into
    our products and technology;
    unanticipated expenses and delays in completing acquired
    development projects and technology integration; 15




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
    difficulty in management of geographically remote operations in
    the United States and internationally;
    delay of sales to customers pending resolution of product
    integration between our existing and our newly acquired
    products; and
    difficulty entering new markets or businesses in which we have
    limited experience.    
    We are exposed to risks related to our channel program that
    could decrease our revenues and hurt our
    business.  A significant amount of our sales are
    made through intermediaries such as distributors, system
    integrators and other strategic channel partners. We endeavor to
    increase the percentage of sales through intermediaries as we
    continue to focus our sales efforts through our channel and
    other partners. We anticipate future revenue growth to depend in
    large part on our success in expanding relationships, and
    establishing new relationships, with intermediaries. These
    intermediaries may sell their own products or other
    vendors products that compete with our products, and may
    compete with our own direct sales force in certain sales
    opportunities. While we have instituted programs designed to
    increase sales of our products through intermediaries, certain
    intermediaries may give greater priority to products of other
    suppliers, including competitors. Our ability to grow sales
    through intermediaries depends on our investment in appropriate
    financial incentives, support and sales tools for
    intermediaries, while effectively alleviating conflict with our
    own sales force. Failure to effect this strategy appropriately
    may result in certain intermediaries choosing to cease or reduce
    the sales of our products, resulting in a material adverse
    change in our business, results of operations and financial
    condition.
    Unanticipated changes in our effective tax rates or exposure
    to additional income tax liabilities could affect our
    profitability or increase our loss.  We are a
    U.S.-based
    multinational company subject to tax in multiple U.S. and
    foreign tax jurisdictions. We are generally required to account
    for taxes in each jurisdiction in which we operate, including
    making assumptions, interpretations and judgments with respect
    to the applicable tax requirements. Our provision for income
    taxes is calculated based on a mix of earnings, statutory rates,
    and enacted tax rules by jurisdiction, including transfer
    pricing. Significant judgment is required in determining our
    provision for income taxes and in evaluating our tax positions
    on a worldwide basis. It is possible that these positions may be
    challenged which may have a significant impact on our effective
    tax rate, which could affect our results of operations and
    financial condition.
    Failure to maintain effective internal controls could have a
    material adverse effect on our business, results of operations,
    financial condition, and our stock price.  A
    failure to maintain adequate internal control procedures as
    required by Section 404 of the Sarbanes-Oxley Act of
    2002 may preclude our managements ability to conclude
    that we have effective internal controls over our financial
    reporting. These internal controls are also required for us to
    produce management financial information, make determinations on
    revenue recognition and other material accounting issues, and
    prevent financial fraud. If we are unable to produce reliable
    financial reports, make appropriate determinations on revenue
    recognition and material accounting policies or prevent fraud,
    our business, operating results and financial condition could be
    adversely affected.
    We have sustained operating losses in the past, and may incur
    additional losses in the future which may require us to raise
    additional capital on unfavorable terms.  We
    cannot be certain that our revenue will grow or that we will
    achieve or maintain profitable operations in the future. If we
    are unable to maintain profitability, the market price for our
    stock may decline, perhaps substantially. If we have significant
    operating losses, we may be required to raise additional capital
    to maintain or grow our operations. Such additional capital may
    only be available at unfavorable terms that could be dilutive to
    existing shareholders, have a high interest rate, contain
    restrictive covenants, or contain other unfavorable terms. 16




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Square FeetOrlando, Florida


34,000Manchester, United Kingdom


35,000Mountain View, California


26,000Other domestic and international locations


12,000   Item 3.
    Legal
    Proceedings  Intellectual
    Property Matters
  and/or
     17




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No. ML07-1816-RGU
  and/or
     18




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Pending
    Litigation
  David Barrie, et al., on Behalf of Themselves and All Others
    Similarly Situated v. InterVoice-Brite, Inc., et al., No. 3-01CV1071-K,
  Rule 10b-5
    class-certification Oscar Private Equity Investments v. Allegiance Telecom,
    Inc.
  Phoenix Solutions, Inc. vs. Sony Electronics, Inc., No. C07-2112 Phoenix Solutions, Inc. vs. Sony
    Electronics, Inc., No. C07-2112
 19




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No. 3:08-CV-00147-AHN.
  Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Common
    Stock
      Fiscal 2008 Quarter

High


Low4th

$
9.85


$
5.263rd

$
11.03


$
7.872nd

$
9.07


$
7.291st

$
8.04


$
6.07   Fiscal 2007 Quarter

High


Low4th

$
8.10


$
6.343rd

$
7.75


$
5.952nd

$
7.40


$
5.581st

$
8.70


$
6.24    20




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Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    A


B


CNumber of SecuritiesRemaining Available forFuture Issuance UnderNumber of Securities to


Weighted-Average


Equity Compensationbe Issued Upon Exercise


Exercise Price of Outstanding


Plans (Excludingof Outstanding Options,


Options, Warrants


Securities Reflected inWarrants and Rights


and Rights


Column (A))Plan CategoryEquity compensation plans approved by security holders*


6,672,355


$
8.39



1,832,714Equity compensation plans not approved by security holders


100,263


$
4.60



Total


6,772,618


$
8.34



1,832,714     *
    
    We have 731,798 Restricted Stock Units outstanding that were
    issued through equity compensation plans approved by security
    holders. There is no exercise price for these restricted stock
    units.   21




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Stock
    Performance Graph
    COMPARISON
    OF 5-YEAR CUMULATIVE TOTAL RETURN
    AMONG INTERVOICE, INC.,
    NASDAQ MARKET INDEX AND SIC CODE INDEX
  
  ASSUMES $100
    INVESTED ON MAR. 1, 2003
    ASSUMES DIVIDEND REINVESTED
    FISCAL YEAR ENDING FEB. 29, 2008
  COMPARISON
    OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
    COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD
    MARKETS
  Fiscal Year EndingCompany/Index/Market

2/28/2003

2/29/2004

2/28/2005

2/28/2006

2/28/2007

2/29/2008InterVoice, Inc.


100.00



714.12



638.24



504.12



377.65



415.88Telephone, Telegraph Apparatus


100.00



250.46



220.52



250.87



294.22



257.51NASDAQ Market Index


100.00



152.22



154.10



172.40



183.46



172.24  22




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Item 6.
    Selected
    Financial Data    Fiscal Year Ended February 28/292008(1)


2007(2)


2006(3)


2005


2004(In millions, except per share data)Sales

$
202.4


$
196.3


$
168.1


$
183.3


$
165.3Income (loss) from operations


6.2



(3.1
)


9.0



24.7



18.8Net income (loss)


5.5



(1.7
)


16.5



22.5



11.3Total assets


177.5



168.6



158.1



134.9



111.6Current portion of long term debt














0.4



Long term debt, net of current portion














1.3



13.1Per basic common share:Net income (loss)


0.14



(0.04
)


0.43



0.62



0.33Shares used in per basic common share calculation


38.8



38.6



38.1



36.2



34.4Per diluted common share:Net income (loss)


0.14



(0.04
)


0.42



0.59



0.32Shares used in per diluted common share calculation


39.5



38.6



39.0



38.5



35.7     (1)
    
    During fiscal 2008, we incurred approximately $1.9 million
    in charges in connection with two severance and organizational
    changes in regard to integration and consolidation related
    activities related to prior period acquisitions affecting
    approximately 45 positions. In addition, we incurred
    approximately $0.4 million in facilities consolidation
    charges and approximately $0.4 million in corporate
    restructuring and related legal and professional fees. We also
    reversed a facilities related charge of approximately
    $0.3 million. We incurred legal fees and other expenses of
    approximately $0.7 million in relation to proxy activities
    regarding the re-election of our Board of Directors.(2)
    
    During fiscal 2007, we incurred approximately $2.5 million
    in charges in connection with three severance and organizational
    changes affecting approximately 55 positions. In addition, we
    incurred approximately $1.2 million in facilities charges
    in connection with the elimination of redundant office leases.
    In addition, we recorded a loss provision of approximately
    $1.9 million related to a contract and a loss provision of
    approximately $0.9 million related to the settlement
    discussions with the SEC.(3)
    
    We acquired all of the outstanding stock of Edify on
    December 30, 2005. Beginning December 31, 2005, our
    financial results include the operations of Edify. During fiscal
    2006, we incurred approximately $1.9 million in charges in
    connection with restructuring expenses for severance and
    organizational changes affecting approximately 50 persons
    made at the time of the acquisition of Edify. In addition,
    during fiscal 2006, our income tax benefit totaled
    $5.3 million including benefits totaling $7.6 million
    resulting from the reversal of valuation allowances on certain
    deferred tax assets and from the resolution of tax
    contingencies, partially offset by a provision of
    $1.0 million related to the repatriation of foreign
    earnings.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Critical
    Accounting Policies
   23




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##### Table of Contents



Revenue
    Recognition
  No. 97-2 (SOP 97-2), EITF 00-21
  Sale of Hardware and Software Solutions: and/or No. 81-1 (SOP 81-1),
       24




---



##### Table of Contents



and/or
  Sale of Maintenance and Software Support:
  Sale of Hosted Solutions:
    Loss Contracts:
  Stock-Based
    Compensation
       25




---



##### Table of Contents



Intangible
    Assets and Goodwill
  Intangible Assets:
    Goodwill:
  Income
    Taxes
     26




---



##### Table of Contents



Results
    of Operations
    Year Ended February 29/282008


2007


2006Sales


100.0
%


100.0
%


100.0
%Cost of goods sold


48.1



45.0



43.7Gross margin


51.9



55.0



56.3Research and development expenses


9.5



12.0



10.7Selling, general and administrative expenses


38.0



42.8



39.6Settlement provision






0.5



Amortization of acquisition related intangible assets


1.3



1.3



0.7Income (loss) from operations


3.1



(1.6
)


5.3Interest income (expense) and other income (expense), net


0.8



0.6



1.4Income (loss) before income taxes (benefit)


3.9



(1.0
)


6.7Income taxes (benefit)


1.2



(0.1
)


(3.1
)Net income (loss)


2.7
%


(0.9
)%


9.8
%   Sales
  and/or
 27




---



##### Table of Contents



% Change





% Changefrom





from2008


Prior Year


2007


Prior Year


2006Voice portal solution sales

$
54.5



(21.2
)%

$
69.2



40.7
%

$
49.2Messaging solution sales


35.5



143.2
%


14.6



(23.6
)%


19.1Payment solution sales


6.9



(19.8
)%


8.6



(12.2
)%


9.8Total solution sales


96.9



4.9
%


92.4



18.3
%


78.1Maintenance and related services revenues


86.4



3.8
%


83.2



29.2
%


64.4Hosted solutions revenues


19.1



(7.7
)%


20.7



(19.1
)%


25.6Total recurring services revenues


105.5



1.5
%


103.9



15.4
%


90.0Total sales

$
202.4



3.1
%

$
196.3



16.8
%

$
168.1     % Change





% Changefrom





from2008


Prior Year


2007


Prior Year


2006North America

$
123.4



(3.4
)%

$
127.7



38.7
%

$
92.1Europe


34.3



20.4
%


28.5



(27.1
)%


39.1Middle East and Africa


24.2



57.1
%


15.4



(19.4
)%


19.1Central and South America


13.2



(10.2
)%


14.7



16.7
%


12.6Pacific Rim


7.3



(27.0
)%


10.0



92.3
%


5.2Total

$
202.4



3.1
%

$
196.3



16.8
%

$
168.1     book-and-ship
   28




---



##### Table of Contents



Year Ended February 29/282008


2007


2006(Based on averages of quarterly activity)Sales from recurring service and support contracts, including
    contracts for hosted solutions


52
%


53
%


54
%Sales from solutions backlog


30
%


27
%


29
%Sales from the pipeline


18
%


20
%


17
%100
%


100
%


100
%    29




---



##### Table of Contents



Restructuring
    and Other Charges
  Fiscal
    2008
   30




---



##### Table of Contents



Selling,Cost of


Research and


General andGoods Sold


Development


Administrative


TotalSeverance payments and related benefits

$
0.4


$
0.5


$
1.0


$
1.9Facility costs










0.4



0.4Corporate restructuring and related professional and legal fees










0.4



0.4Total

$
0.4


$
0.5


$
1.8


$
2.7       Fiscal
    2007
    Selling,Cost of


Research and


General andGoods Sold


Development


Administrative


TotalSeverance payments and related benefits

$
1.0


$
0.3


$
1.2


$
2.5Facility costs










1.2



1.2Total

$
1.0


$
0.3


$
2.4


$
3.7     Fiscal
    2006
    Selling,Cost of

Research and

General andGoods Sold

Development

Administrative

TotalSeverance payments and related benefits

$
0.5


$
0.2


$
1.2


$
1.9    31




---



##### Table of Contents



Cost of
    Goods Sold
    2008


2007


2006Solution COGS

$
66.7


$
59.2


$
48.0As percentage of solutions sales


68.8
%


64.1
%


61.5
%Services COGS

$
30.7


$
29.1


$
25.5As percentage of services revenues


29.1
%


28.0
%


28.4
%Total COGS

$
97.4


$
88.3


$
73.5As percentage of total sales


48.1
%


45.0
%


43.7
%       Research
    and Development Expenses
    2008

2007

2006Research and development expenses

$
19.1


$
23.6


$
17.9As percentage of total sales


9.4
%


12.0
%


10.7
%    32




---



##### Table of Contents



return-on-investment
    Selling,
    General and Administrative Expenses
    2008

2007

2006Selling, general and administrative expenses

$
77.0


$
84.1


$
66.5As percentage of total sales


38.0
%


42.8
%


39.5
%     Settlement
    provision
   33




---



##### Table of Contents



Amortization
    of Acquisition Related Intangible Assets
    2008

2007

2006Amortization of acquisition related intangible assets

$
2.7


$
2.5


$
1.2     Fiscal 2009

$
2.6Fiscal 2010

$
1.9Fiscal 2011

$
1.5Fiscal 2012

$
0.5Fiscal 2013

$
0.3     Interest
    Income
    Other
    Income (Expense), Net
    Income
    Taxes (Benefit)
     34




---



##### Table of Contents



non-U.S. income
    Income
    (Loss) From Operations and Net Income (Loss)
   35




---



##### Table of Contents



Liquidity
    and Capital Resources
        and/or
   36




---



##### Table of Contents



Letter of
    Credit Facility
    Off-Balance
    Sheet Arrangements
    Summary
    of Future Obligations
    Payments Due by PeriodLess Than


1-3


3-5


More ThanTotal


1 Year


Years


Years


5 YearsNature of commitmentOperating lease payments

$
8.7


$
2.6


$
5.8


$
0.3


$
Firm purchase commitments


10.4



5.7



4.7







Total obligations and commitments

$
19.1


$
8.3


$
10.5


$
0.3


$
      37




---



##### Table of Contents



Impact of
    Inflation
    Selected
    Quarterly Financial Data
  Three Months EndedMay 31,


August 31,


November 30,


February 29,Fiscal 2008

2007(1)


2007(2)


2007(3)


2008(4)(In millions, except per share data)Sales

$
47.7


$
48.7


$
52.9


$
53.1Gross profit


25.3



25.7



26.7



27.3Income (loss) from operations


(1.4
)


2.3



3.5



1.8Net income (loss)


(0.9
)


1.4



2.9



2.1Net income (loss) per basic share


(0.02
)


0.04



0.07



0.05Net income (loss) per diluted share


(0.02
)


0.04



0.07



0.05   Three Months EndedMay 31,


August 31,


November 30,


February 28,Fiscal 2007

2006


2006


2006(5)


2007(6)(In millions, except per share data)Sales

$
45.7


$
50.5


$
52.8


$
47.4Gross profit


25.9



28.0



28.8



25.4Income (loss) from operations


(1.3
)


2.0



(0.1
)


(3.7
)Net income (loss)


(0.4
)


1.6



(0.1
)


(2.8
)Net income (loss) per basic share


(0.01
)


0.04



0.00



(0.07
)Net income (loss) per diluted share


(0.01
)


0.04



0.00



(0.07
)     (1)
    
    During the first quarter of fiscal 2008, we incurred
    approximately $1.8 million in charges associated with
    severance and organizational changes affecting approximately 45
    positions. In addition, we reversed a facilities related charge
    of approximately $0.3 million.(2)
    
    During the second quarter of fiscal 2008, we incurred
    approximately $0.4 million in facilities consolidation
    costs. We also incurred approximately $0.7 million of legal
    and other fees related to the re-election of our Board of
    Directors.(3)
    
    During the third quarter of fiscal 2008, we incurred
    approximately $0.3 million related to corporate
    restructuring and related professional and legal fees.(4)
    
    During the fourth quarter of fiscal 2008, we incurred
    approximately $0.1 million related to severance and
    $0.1 million corporate restructuring and related legal and
    professional fees.(5)
    
    During the third quarter of fiscal 2007, we incurred
    approximately $1.3 million in charges in connection with
    organizational changes affecting approximately 35 positions. In
    addition, we incurred $1.1 million in facilities charges in
    connection with the elimination of redundant office leases.(6)
    
    During the fourth quarter of fiscal 2007, we incurred
    approximately $0.7 million in charges in connection with
    severance and organizational changes affecting approximately 10
    positions. In addition, we incurred approximately
    $0.1 million in facilities charges in connection with the
    elimination of redundant office leases. We also recorded a loss
    provision of approximately $1.9 million related to a
    contract and a loss provision of approximately $0.9 million
    related to the status of settlement discussions with the SEC. 38




---



##### Table of Contents



Recent
    Accounting Pronouncements
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Interest
    Rate Risks
    Foreign
    Currency Risks
      and/or
  Item 8.
    Financial
    Statements and Supplementary Data   39




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
           Accounting for Uncertainty in Income Taxes: an interpretation
    of FASB Statement No. 109
  Internal Control  Integrated Framework
      40




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 41




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  February 29,


February 28,2008


2007(In thousands, except share and per share data)ASSETSCurrent assetsCash and cash equivalents

$
38,732


$
28,215Trade accounts receivable, net of allowance for doubtful
    accounts of $634 in fiscal 2008 and $1,476 in fiscal 2007


36,971



36,837Inventory


14,628



13,751Prepaid expenses and other current assets


5,141



3,909Income taxes receivable


608



1,098Deferred income taxes


3,360



3,88099,440



87,690Property and equipment, net of accumulated depreciation of
    $71,744 in fiscal 2008 and $62,419 in fiscal 2007


32,524



34,429Other assetsIntangible assets, net of accumulated amortization of $22,944 in
    fiscal 2008 and $20,040 in fiscal 2007


7,080



9,505Goodwill


32,193



32,193Long term deferred income taxes


6,078



4,613Other assets


183



135$
177,498


$
168,565LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
10,516


$
12,881Accrued expenses


12,736



15,571Customer deposits


8,289



4,365Deferred income


32,708



32,368Deferred income taxes


1,067



19665,316



65,381Commitments and contingencies (See Notes K, L and R)Stockholders equityPreferred stock, $100 par value 
    2,000,000 shares authorized: none issuedCommon stock, no par value, at nominal assigned
    value  62,000,000 shares authorized: 38,843,851
    issued and outstanding in fiscal 2008, 38,727,628 issued and
    outstanding in fiscal 2007


19



19Additional capital


107,329



101,608Retained earnings


4,843



1,861Accumulated other comprehensive loss


(9
)


(304
)112,182



103,184$
177,498


$
168,565    42




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Fiscal Year EndedFebruary 29,


February 28,


February 28,2008


2007


2006(In thousands, except per share data)SalesSolutions

$
96,911


$
92,455


$
78,107Recurring services


105,524



103,890



89,996202,435



196,345



168,103Cost of goods soldSolutions


66,696



59,151



48,007Recurring services


30,751



29,116



25,53497,447



88,267



73,541Gross marginSolutions


30,215



33,304



30,100Recurring services


74,773



74,774



64,462104,988



108,078



94,562Research and development expenses


19,071



23,630



17,918Selling, general and administrative expenses


77,031



84,120



66,462Settlement provision






943



Amortization of acquisition related intangible assets


2,705



2,518



1,228Income (loss) from operations


6,181



(3,133
)


8,954Interest income


1,701



1,526



2,245Interest expense


(37
)


(17
)


(31
)Other income (expense), net


94



(276
)


56Income (loss) before income taxes (benefit)


7,939



(1,900
)


11,224Income taxes (benefit)


2,410



(203
)


(5,265
)Net income (loss)

$
5,529


$
(1,697
)

$
16,489Net income (loss) per share  basic

$
0.14


$
(0.04
)

$
0.43Shares used in basic per share computation


38,798



38,585



38,064Net income (loss) per share  diluted

$
0.14


$
(0.04
)

$
0.42Shares used in diluted per share computation


39,515



38,585



39,044    43




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
    AND COMPREHENSIVE INCOME
  Retained


AccumulatedEarnings


OtherCommon Stock


Additional


(Accumulated


ComprehensiveShares


Amount


Capital


Deficit)


Loss


Total(In thousands, except share data)Balance at February 28, 2005


37,196,216


$
19


$
85,421


$
(12,931
)

$
(61
)

$
72,448Net income














16,489







16,489Foreign currency translation adjustment


















(1,844
)


(1,844
)Comprehensive income






















14,645Utilization of net operating loss carryforward and current year
    tax benefits










952











952Exercise of stock options


652,567







3,152











3,152Exercise of warrants


621,304







2,500











2,500Stock-based compensation










25











25Balance at February 28, 2006


38,470,087


$
19


$
92,050


$
3,558


$
(1,905
)

$
93,722Net income














(1,697
)






(1,697
)Foreign currency translation adjustment


















1,601



1,601Comprehensive loss






















(96
)Utilization of net operating loss carryforward and current year
    tax benefits










3,823











3,823Exercise of stock options


257,541







715











715Stock-based compensation










5,020











5,020Balance at February 28, 2007


38,727,628


$
19


$
101,608


$
1,861


$
(304
)

$
103,184Net income














5,529







5,529Foreign currency translation adjustment


















295



295Comprehensive income






















5,824Repurchase and retirement of shares


(400,000
)






(3,168
)










(3,168
)Utilization of net operating loss carryforward and current year
    tax benefits










1,320











1,320Cumulative effect of adopting FIN 48














(2,547
)






(2,547
)Exercise of stock options


516,223







2,378











2,378Stock-based compensation










5,191











5,191Balance at February 29, 2008


38,843,851


$
19


$
107,329


$
4,843


$
(9
)

$
112,182    44




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Fiscal Year EndedFebruary 29,


February 28,


February 28,2008


2007


2006(In thousands)Operating activitiesNet income (loss)

$
5,529


$
(1,697
)

$
16,489Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


12,665



11,433



8,602Deferred income taxes


(2,455
)


(4,205
)


(4,082
)Provision for doubtful accounts


(178
)


475



506Write down of inventories










501Disposal of equipment


53



145



23Foreign exchange loss (gain)


406



275



(233
)Utilization of net operating loss carryforward


789



2,153



603Excess tax benefit from exercise of stock options


(531
)


(1,669
)


Tax benefit from exercise of stock options










349Stock-based compensation


5,191



5,020



25Changes in operating assets and liabilities:Accounts receivable


(100
)


(10,010
)


10,085Inventory


(1,077
)


(3,110
)


(3,296
)Prepaid expenses and other current assets


(1,218
)


758



546Income taxes receivable


841



121



Accounts payable and accrued expenses


(4,343
)


2,054



(3,977
)Settlement provision


(943
)


943



Income taxes payable










(3,506
)Customer deposits


3,924



(1,792
)


(714
)Deferred income


362



(863
)


4,817Other


(48
)


205



(16
)Net cash provided by operating activities


18,867



236



26,722Investing activitiesPurchase of Edify Corporation, net of cash acquired






(926
)


(34,341
)Purchase of property and equipment


(7,962
)


(13,571
)


(13,182
)Purchase of Nuasis assets, net of cash acquired






(2,439
)


Other










(300
)Net cash used in investing activities


(7,962
)


(16,936
)


(47,823
)Financing activitiesPaydown of debt










(1,733
)Exercise of stock options


2,378



715



3,152Repurchase of common stock


(3,168
)






Excess tax benefit from exercise of stock options


531



1,669



Exercise of warrants










2,500Net cash provided by (used in) financing activities


(259
)


2,384



3,919Effect of exchange rate changes on cash


(129
)


455



(984
)Increase (decrease) in cash and cash equivalents


10,517



(13,861
)


(18,166
)Cash and cash equivalents, beginning of period


28,215



42,076



60,242Cash and cash equivalents, end of period

$
38,732


$
28,215


$
42,076    45




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note A 
    Description of Business
  and/or return-on-investment
  Note B 
    Significant Accounting Policies
  Principles of Consolidation:
  Use of Estimates:
  Cash and Cash Equivalents:
  Allowance for Doubtful Accounts:
  Inventory: first-in,
  Property and Equipment:
 46




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Intangible Assets and Impairment of Long-Lived
    Assets:
    Goodwill: 
  Customer Deposits:
  Deferred Income:
  Product Warranties:
  Revenue Recognition:
 47




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  No. 97-2 (SOP 97-2), EITF 00-21
  Sale of Hardware and Software Solutions: and/or No. 81-1 (SOP 81-1),
       48




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    and/or
  Sale of Maintenance and Software Support:
  Sale of Hosted Solutions:
    Loss Contracts:
  Research and Development:
  Advertising Costs:
  Income Taxes:
   49




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Sales Taxes: How Taxes Collected from
    Customers and Remitted to Governmental Authorities Should Be
    Presented in the Income Statement,
  Stock-based Compensation:
      Recent Accounting Pronouncements:
   50




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note C 
    Acquisition of Edify Corporation
    Cash

$
0.2Accounts receivable, net


4.8Prepaid expenses


0.7Property and equipment, net


0.5Separately identifiable intangible assets


6.8Goodwill


28.8Other assets


0.3Total assets acquired


42.1Accounts payable


0.3Accrued restructuring costs


0.3Other accrued liabilities


2.7Deferred income


3.3Total liabilities assumed


6.6Total purchase price

$
35.5      51




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note D 
    Goodwill and Intangible Assets
    Balance at February 28, 2006

$
32.5Adjustments  Edify


(0.3
)Balance at February 28, 2007

$
32.2Adjustments


Balance at February 29, 2008

$
32.2     February 29, 2008GrossAmortization


Carrying


Accumulated


UnamortizedAmortized Intangible Assets

Period


Amount


Amortization


BalanceCustomer relationships  Brite


10 years


$
18.6


$
17.3


$
1.3Developed technology  Edify


5 years



4.0



1.8



2.2Customer relationships  Edify


8 years



2.5



0.7



1.8Trademark/trade name  Edify


18 months



0.3



0.3



Purchased technology  Nuasis


5 years



2.4



0.7



1.7Other intangibles


5-12 years



2.2



2.1



0.1Total





$
30.0


$
22.9


$
7.1   February 28, 2007GrossAmortization


Carrying


Accumulated


UnamortizedAmortized Intangible  Assets

Period


Amount


Amortization


BalanceCustomer relationships  Brite


10 years


$
18.6


$
16.3


$
2.3Developed technology  Edify


5 years



4.0



0.9



3.1Customer relationships  Edify


8 years



2.5



0.4



2.1Trademark/trade name  Edify


18 months



0.3



0.2



0.1Purchased technology  Nuasis


5 years



1.9



0.2



1.7Other intangibles


5-12 years



2.2



2.0



0.2Total





$
29.5


$
20.0


$
9.5     Fiscal 2009

$
2.6Fiscal 2010

$
1.9Fiscal 2011

$
1.5Fiscal 2012

$
0.5Fiscal 2013

$
0.3  52




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note E 
    Inventory
    2008


2007Purchased parts

$
3.9


$
4.5Work in progress


10.7



9.3$
14.6


$
13.8   Note F 
    Property & Equipment
    February 29,


February 28,2008


2007Land and buildings

$
17.4


$
17.4Computer equipment and software


57.3



52.3Furniture and fixtures


3.5



3.3Hosted solutions equipment


19.3



16.5Maintenance services equipment


6.7



7.3104.2



96.8Less allowance for accumulated depreciation


(71.7
)


(62.4
)Property and equipment, net

$
32.5


$
34.4     Note G 
    Accrued Expenses
    2008


2007Accrued compensation and other employee related costs, including
    accrued vacation

$
7.9


$
8.9Other


4.8



6.7$
12.7


$
15.6   Note H 
    Borrowings
    Letter
    of Credit Facility
   53




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Cash
    Interest Paid
    Note I 
    Income Taxes
    Domestic


ForeignFiscal Year

Operations


Operations


Total2008

$
4.2


$
3.7


$
7.92007


0.9



(2.8
)


(1.9
)2006


5.8



5.4



11.2     2008


2007


2006Income tax provision (benefit):Current:Federal

$
2.1


$
0.3


$
(1.1
)State


0.1







(0.1
)International


2.6



(0.6
)


Total current


4.8



(0.3
)


(1.2
)Deferred:Federal


(0.8
)






(4.4
)State










International


(1.6
)


0.1



0.3Total deferred


(2.4
)


0.1



(4.1
)$
2.4


$
(0.2
)

$
(5.3
)  54




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007


2006Federal income taxes (benefit) at statutory rates

$
2.8



35
%

$
(0.7
)


35
%

$
3.9



35
%AJCA repatriation tax


















1.0



9Release of valuation allowance


(1.0
)


(12
)










(4.4
)


(39
)Change in valuation allowance, primarily as a result of the use
    of net operating losses and tax credits carried forward from
    prior years


















(0.6
)


(5
)Resolution of tax contingencies


















(3.2
)


(29
)Other foreign tax adjustments


















(0.4
)


(4
)Effect of
    non-U.S. tax
    rates


0.1



1



0.3



(14
)


(0.6
)


(5
)State taxes and foreign taxes, net of federal effect


0.5



6



0.1



(5
)


(0.1
)


(1
)Other










0.1



(5
)


(0.9
)


(8
)$
2.4



30
%

$
(0.2
)


11
%

$
(5.3
)


(47
)%                55




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007Deferred tax assets:Net operating loss carryforwards

$
1.2


$
1.2Tax credit carryforwards


1.8



4.1Accrued expenses


2.3



2.2Inventory


0.9



1.4Depreciation and amortization


2.8



1.4Deferred income


0.3



0.4Allowance for doubtful accounts


0.2



0.4Stock-based compensation


3.0



1.5Other items


0.3



0.4Total deferred tax assets


12.8



13.0Valuation allowance


(1.2
)


(2.9
)Net deferred tax assets


11.6



10.1Deferred tax liabilities:Acquisition-related identified intangibles


(1.5
)


(1.0
)Prepaid expenses


(0.6
)


(0.8
)Deferred income


(1.1
)


Total deferred tax liabilities


(3.2
)


(1.8
)Net deferred tax assets

$
8.4


$
8.3          56




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      non-U.S. income
    Balance at March 1, 2007

$
3,644Additions based on tax positions related to the current year


81Reductions as a result of lapse of applicable statute of
    limitations


(51
)Settlements


(28
)Balance at February 29, 2008

$
3,646     non-U.S. subsidiaries
  Note J 
    Stock-Based
    Compensation   57




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Year Ended


Year EndedFebruary 29,


February 28,2008


2007Cost of Goods Sold

$
1.2


$
0.9R&D


0.7



0.6SG&A


3.3



3.5Decrease in operating income

$
5.2


$
5.0Related deferred income tax benefit


1.5



1.5Decrease in net income

$
3.7


$
3.5Decrease in earnings per share  basic

$
0.10


$
0.09Decrease in earnings per share  diluted

$
0.09


$
0.09   No. 00-15
 58




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended February 29/28,2008


2007


2006Expected Volatility


56.1
%


57.7
%


57.0
%Expected term (in years)


3.88



3.76



3.52Risk-free interest rates


4.1
%


4.9
%


3.99
%Dividend yield


0.0
%


0.0
%


0.0
%Forfeiture rate


8.0
%


8.0
%


0.0
%           Year EndedFebruary 28,2006Net income, as reported

$
16.5Less: Total stock-based compensation expense determined under
    fair value based methods for all awards, net of tax


(5.2
)Pro forma net income

$
11.3Net income per share:Basic  as reported

$
0.43Basic  pro forma

$
0.30Diluted  as reported

$
0.42Diluted  pro forma

$
0.30  59




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Stock
    Options
    Weighted Average


AggregateNumber of


Weighted Average


Remaining


IntrinsicShares


Exercise Price


Contractual Term


ValueOutstanding as of February 28, 2007


7,960,643


$
8.12Granted


86,000


$
9.34Exercised


(507,780
)

$
4.75Forfeited and cancelled


(766,245
)

$
8.56Outstanding as of February 29, 2008


6,772,618


$
8.34



4.9 years


$
2.6 millionExercisable as of February 29, 2008


4,963,596


$
8.47



4.8 years


$
2.4 million     Restricted
    Stock Units
        Weighted Average


Weighted Average


AggregateNumber of


Grant Date Fair


Remaining


IntrinsicRSUs


Value


Contractual Term


ValueOutstanding as of February 28, 2007


147,500


$
7.17Granted


660,829


$
9.05Vested and issued


(12,500
)

$
7.96Forfeited


(64,031
)

$
8.55Outstanding as of February 29, 2008


731,798


$
8.73



2.8 years


$
5.2 million    60




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note K 
    Stockholders
    Equity    Preferred
    Share Purchase Rights
    Warrants
   61




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Accumulated
    Comprehensive Loss
    Balance at February 28, 2005

$
(0.1
)Foreign currency translation adjustments


(1.8
)Balance at February 28, 2006

$
(1.9
)Foreign currency translation adjustments


1.6Balance at February 28, 2007

$
(0.3
)Foreign currency translation adjustments


0.3Balance at February 29, 2008

$
(0.0
)   Note L 
    Leases
    and other commitments    Fiscal Year

Amount2009

$
2.62010

$
2.02011

$
2.02012

$
1.82013

$
0.3Thereafter

$
0.0     Note M 
    Restructuring
    and other charges  Fiscal
    2008
   62




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Selling,Cost of


Research


GeneralGoods


and


andSold


Development


Administrative


TotalSeverance payments and related benefits

$
0.4


$
0.5


$
1.0


$
1.9Facility costs










0.4



0.4Corporate restructuring and related professional and legal fees










0.4



0.4Total

$
0.4


$
0.5


$
1.8


$
2.7       Fiscal
    2007
    Selling,Cost of


Research


GeneralGoods


and


andSold


Development


Administrative


TotalSeverance payments and related benefits

$
1.0


$
0.3


$
1.2


$
2.5Facility costs










1.2



1.2Total

$
1.0


$
0.3


$
2.4


$
3.7     Fiscal
    2006
   63




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Selling,Cost of

Research

GeneralGoods

and

andSold

Development

Administrative

TotalSeverance payments and related benefits

$
0.5


$
0.2


$
1.2


$
1.9     Note N 
    Earnings
    Per Share    Year Ended February 29/282008


2007


2006(In millions, except per share data)Numerator:Net income (loss)

$
5.5


$
(1.7
)

$
16.5Denominator:Denominator for basic earnings per share


38.8



38.6



38.1Effect of dilutive securities:Employee stock options and restricted stock units


0.7







0.9Denominator for diluted earnings per share


39.5



38.6



39.0Net income per share  basic

$
0.14


$
(0.04
)

$
0.43Net income per share  diluted

$
0.14


$
(0.04
)

$
0.42     Note O 
    Operating
    Segment Information and Major Customers   64




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007


2006Voice portal solution sales

$
54.5


$
69.2


$
49.2Messaging solution sales


35.5



14.6



19.1Payment solution sales


6.9



8.6



9.8Total solution sales


96.9



92.4



78.1Maintenance and related services revenues


86.4



83.2



64.4Hosted solutions revenues


19.1



20.7



25.6Total recurring services revenues


105.5



103.9



90.0Total sales

$
202.4


$
196.3


$
168.1   Geographic
    Operations
    2008


2007


2006North America

$
123.4


$
127.7


$
92.1Europe


34.3



28.5



39.1Middle East and Africa


24.2



15.4



19.1Central and South America


13.2



14.7



12.6Pacific Rim


7.3



10.0



5.2Total

$
202.4


$
196.3


$
168.1     2008


2007United States

$
31.5


$
33.2United Kingdom


1.0



1.2$
32.5


$
34.4   Concentration
    of Revenue
    Note P 
    Concentrations
    of Credit Risk   65




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##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note Q 
    Employee
    Benefit Plan    Note R 
    Contingencies  Intellectual
    Property Matters
  and/or
       66




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    No. ML07-1816-RGU
  and/or
     67




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Pending
    Litigation
  David Barrie, et al., on Behalf of Themselves and All Others
    Similarly Situated v. InterVoice-Brite, Inc., et al., No. 3-01CV1071-K,
  Rule 10b-5
    class-certification Oscar Private Equity Investments v. Allegiance Telecom,
    Inc.
  Phoenix Solutions, Inc. vs. Sony Electronics, Inc., No. C07-2112 Phoenix Solutions, Inc. vs. Sony
    Electronics, Inc., No. C07-2112
 68




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    No. 3:08-CV-00147-AHN.
  Other
    Matters
      and/or
         69




---



##### Table of Contents



INTERVOICE,
    INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Article 2.02-1
  Article 2.02-1
  Article 2.02-1
 70




---



##### Table of Contents



SCHEDULE II
  INTERVOICE,
    INC.
  VALUATION
    AND QUALIFYING ACCOUNTS
  Column A

Column B


Column C


Column D


Column EAdditions


Additions(1)


(2)Balance at


Charged to


Charged to





Balance atBeginning of


Costs and


Other





End ofDescription

Period


Expenses


Accounts


Deductions


Period(In millions)Year Ended February 29, 2008:Allowance for doubtful accounts

$
1.5


$
(0.2
)

$



$
(0.7
)(A)

$
0.6Year Ended February 28, 2007:Allowance for doubtful accounts

$
1.7


$
0.5


$



$
(0.7
)(A)_

$
1.5Year Ended February 28, 2006:Allowance for doubtful accounts

$
0.8


$
0.5


$
0.5
(B)

$
(0.1
)(A)

$
1.7     (A)
    
    Accounts written off.(B)
    
    Allowance accounts included in Edify acquisition. 71




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Regulation S-K.
  Regulation S-K Regulation S-K).
  Item 9A.
    Controls
    and Procedures  Evaluation of disclosure controls and
    procedures. Rule 13a-15(e)
  Managements Report on Internal Control over Financial
    Reporting. Rule 13a-15(f)
        Changes in Internal Control Over Financial
    Reporting.
  Item 9B.
    Other
    Information   72




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
     Internal Control  Integrated Framework
        Internal Control  Integrated Framework
        73




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K. Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K.
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Page(1
)

Financial StatementsReport of Independent Registered Public Accounting Firm


40Consolidated Balance Sheets at February 29, 2008 and
    February 28, 2007


42Consolidated Statements of Operations for each of the three
    years in the period ended February 29, 2008


43Consolidated Statements of Changes in Stockholders Equity
    and Comprehensive Income for each of the three years in the
    period ended February 29, 2008


44Consolidated Statements of Cash Flows for each of the three
    years in the period ended February 29, 2008


45Notes to Consolidated Financial Statements


46(2
)

Financial Statement Schedule II Valuation and
    Qualifying Accounts


71     (3
)

Exhibits:    74




---



##### Table of Contents



SIGNATURES
      By:
    /s/  ROBERT
    E. RITCHEY    Chief Executive Officer
      Signature

Title

Date/s/  ROBERT
    E. RITCHEYRobert
    E. Ritchey

Chief Executive Officer and Director

April 24, 2008/s/  CRAIG
    E. HOLMESCraig
    E. Holmes

Executive Vice President,
    Chief Financial Officer

April 24, 2008/s/  CHARLES
    E. MCDONALDCharles
    E. McDonald

Chief Accounting Officer

April 24, 2008/s/  DAVID
    W. BRANDENBURGDavid
    W. Brandenburg

Chairman of the Board

April 24, 2008/s/  MICHAEL
    J. WILLNERMichael
    J. Willner

Vice-Chairman of the Board

April 24, 2008/s/  TIMOTHY
    W. HARRISTimothy
    W. Harris

Director

April 24, 2008/s/  GERALD
    F. MONTRYGerald
    F. Montry

Director

April 24, 2008/s/  GEORGE
    C. PLATTGeorge
    C. Platt

Director

April 24, 2008/s/  DONALD
    B. REEDDonald
    B. Reed

Director

April 24, 2008  75




---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated November 18, 2005 by and
    among S1 Corporation, Edify Corporation, Edify Holding Company,
    Inc., Intervoice, Inc. and Arrowhead I, Inc.(28)2
.2

Asset Purchase Agreement dated September 1, 2006 by and
    between Intervoice, Inc. and Nuasis Corporation.(31)3
.1

Articles of Incorporation, as amended, of Registrant.(1)3
.2

Amendment to Articles of Incorporation of Registrant.(7)3
.3

Amendment to Articles of Incorporation of Registrant.(12)3
.4

Third Restated Bylaws of Registrant.(19)3
.5

Fourth Amended and Restated Bylaws of Registrants(43)4
.1

Third Amended and Restated Rights Agreement dated as of May 1,
    2001 between the Registrant and Computershare Investor Services,
    LLC, as Rights Agent.(3)4
.2

Registration Rights Agreement, dated as of May 29, 2002,
    between the Registrant and each of the Buyers under a Securities
    Purchase Agreement.(10)4
.3

First Amendment to Third Amended and Restated Rights Agreement
    dated as of May 29, 2002, between the Registrant and
    Computershare Investor Services, LLC, as Rights Agent.(10)10
.1

The InterVoice, Inc. 1990 Incentive Stock Option Plan, as
    Amended.(5)10
.2

The InterVoice, Inc. 1990 Nonqualified Stock Option Plan for
    Non-Employees, as amended.(2)10
.3

InterVoice, Inc. Restricted Stock Plan.(4)10
.4

InterVoice, Inc. 1998 Stock Option Plan.(6)10
.5

Acquisition Agreement and Plan of Merger dated as of April 27,
    1999, by and among the Company, InterVoice Acquisition
    Subsidiary III, Inc. (Acquisition Subsidiary) and
    Brite Voice Systems, Inc.(8)10
.6

Patent License Agreement between Lucent Technologies GRL Corp.
    and InterVoice Limited Partnership, effective as of
    October 1, 1999. Portions of this exhibit have been
    excluded pursuant to a request for confidential treatment.(7)10
.7

Intervoice, Inc. 1999 Stock Option Plan.(9)10
.8

Second Amended Employment Agreement dated as of
    February 18, 2002, between the Company and David W.
    Brandenburg.(11)10
.9

Employment Agreement dated as of October 23, 2002, between
    the Company and Robert E. Ritchey.(13)10
.10

Separation Agreement with Rob-Roy J. Graham dated June 25,
    2003.(14)10
.11

Intervoice, Inc. Employee Stock Purchase Plan, as amended and
    restated effective June 24, 2003.(15)10
.12

Credit and Security Agreement dated as of January 26, 2004,
    between the Company and Wells Fargo Bank, N.A.(16)10
.13

Amended and Restated Credit Agreement dated as of June 3,
    2004, between the Registrant and Wells Fargo Bank, National
    Association (Wells Fargo).(18)10
.14

First Amendment to Credit Agreement dated as of August 17,
    2004, between Registrant and Wells Fargo.(19)10
.15

Fiscal Year 2005 Transition Year Incentive Plan Summary.(19)10
.16

Intervoice, Inc. 2003 Stock Option Plan.(19)10
.17

Letter Agreement dated November 18, 2004 between Registrant
    and David W. Brandenburg.(21)10
.18

Summary of Fiscal Year 2005 Second Half Incentive Plan.(20)10
.19

Summary of Fiscal Year 2006 Annual Incentive Compensation
    Plan.(22)10
.20

Summary of Fiscal Year 2006 Non-Employee Director Cash
    Compensation.(23)10
.21

Employment Agreement effective December 1, 2004 between
    Registrant and Robert E. Ritchey.(29)10
.22

Statement of Terms and Conditions of Employment for Francis
    Sherlock.(24) 76




---



##### Table of Contents



ExhibitNumber

Description10
.23

Intervoice, Inc. 2005 Stock Incentive Plan Summary of Stock
    Option Grant and Stock Option Award Agreement for Employees.(25)10
.24

Intervoice, Inc. 2005 Stock Incentive Plan Summary of Stock
    Option Grant and Stock Option Award Agreement for Non-employee
    Directors.(25)10
.25

Intervoice, Inc. 2005 Stock Incentive Plan.(26)10
.26

Extension of Health Care Coverage to Non-Employee Directors.(27)10
.27

Salary Increases for Executive Officers.(27)10
.28

Summary of the Fiscal Year 2007 Annual Incentive Compensation
    Plan.(30)10
.29

Employment Agreement effective May 8, 2006 between
    Registrant and Craig E. Holmes.(32)10
.30

Employment Agreement effective May 8, 2006 between
    Registrant and James A. Milton.(32)10
.31

Separation Agreement dated as of September 19, 2006 between
    Registrant and Ronald Nieman.(33)10
.32

Sublease dated as of March 30, 2004 by and between PayPal,
    Inc., a Delaware corporation (Sublandlord) and
    Nuasis Corporation, a Delaware corporation regarding property
    know as 303 Bryant Street in the city of Mountain View,
    California.(34)10
.33

Assignment, Assumption and Amendment of Sublease dated as of
    August 30, 2006, by and between Nuasis Corporation, as
    Assignor, Intervoice, Inc., as Assignee and PayPal, Inc., as
    Sublandlord.(34)10
.34

Employment Agreements effective March 1, 2007 between
    Registrant and Senior Vice Presidents.(35)10
.35

Separation agreement dated as of April 23, 2007 between
    Registrant and Marie Jackson.(36)10
.36

Termination of Employment Agreement between Registrant and
    George T. Platt effective July 25, 2007.(36)10
.37

Intervoice, Inc. 2007 Stock Incentive Plan.(37)10
.38

Resignation Agreement between the Company and Saj-nicole A. Joni
    dated June 22, 2007.(38)10
.39

Resignation Agreement between the Company and Joseph J.
    Pietropaolo dated June 22, 2007.(38)10
.40

Resignation Agreement between the Company and Jack P. Reily
    dated June 22, 2007.(38)10
.41

Board Representation and Governance Agreement between the
    Company and David W. Brandenburg dated June 22, 2007.(38)10
.42

Amendment No. 1 dated July 1, 2007 to the Board
    Representation and Governance Agreement.(39)10
.43

General Release Agreement between Registrant and George T. Platt
    effective July 27, 2007.(40)10
.44

First Amendment to Employment Agreement between Registrant and
    Michael J. Polcyn effective July 16, 2007.(41)10
.45

Election of Charles E. McDonald to the position of Chief
    Accounting Officer effective September 13, 2007.(42)10
.46

Second Amendment to Employment Agreement between Registrant and
    Robert E. Ritchey effective February 28, 2008.(44)14


Code of Ethics.(17)21


Subsidiaries.(45)23
.1

Consent of Grant Thornton LLP.(45)23
.2

Consent of Ernst & Young LLP.(45)31
.1

Certification of Chief Executive Officer of Periodic Report
    Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).(45)31
.2

Certification of Chief Financial Officer of Periodic Report
    Pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a).(45)32
.1

Certification by Chief Executive Officer of Periodic Report
    Pursuant to
    Rule 13a-14(b)
    and 18 U.S.C. Section 1350.(45)*32
.2

Certification by Chief Financial Officer of Periodic Report
    Pursuant to
    Rule 13a-14(b)
    and 18 U.S.C. Section 1350.(45)* 77




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##### Table of Contents



ExhibitNumber

Description99
.1

Pages 12, 13, 18,
    38-40, 43
    and 45 of the Registration Statement on
    Form S-4,
    as amended (incorporated by reference to pages 12, 13, 18,
    38-40, 43
    and 45 of the Registration Statement on
    Form S-4/A
    (Amendment No. One) filed by the Company on July 13,
    1999).(7)     (1)
    
    Incorporated by reference to exhibits to the Companys 1995
    Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 1995, filed with the
    SEC on May 30, 1995.(2)
    
    Incorporated by reference to exhibits to the Companys
    Registration Statement on
    Form S-8
    filed with the SEC on April 6, 1994, with respect to the
    Companys 1990 Nonqualified Stock Option Plan for
    Non-Employees, Registration Number
    33-77590.(3)
    
    Incorporated by reference to exhibits to
    Form 8-A/A
    (Amendment 3) filed with the SEC on May 9, 2001.(4)
    
    Incorporated by reference to exhibits to the Companys 1996
    Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 1996, filed with the
    SEC on May 29, 1996.(5)
    
    Incorporated by reference to the Companys 1997 Annual
    Report on
    Form 10-K
    for the fiscal year ended February 28, 1997, filed with the
    SEC on May 29, 1997.(6)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 1998, filed with
    the SEC on October 14, 1998.(7)
    
    Incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the fiscal quarter ended August 31, 1999, filed with
    the SEC on October 14, 1999.(8)
    
    Incorporated by reference to Exhibit 99(b)(1) of the
    Schedule 14-D1
    filed by Brite Voice Systems, Inc. and Intervoice Acquisition
    Subsidiary III, Inc. on May 3, 1999.(9)
    
    Incorporated by reference to Registration Statement on
    Form S-8
    filed with the SEC on October 15, 1999, Registration Number
    333-89127.(10)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on May 30, 2002.(11)
    
    Incorporated by reference to exhibits to the Companys 2002
    Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2002, filed with the
    SEC on May 30, 2002.(12)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 2002, filed with
    the SEC on October 15, 2002.(13)
    
    Incorporated by reference to exhibits to the Companys
    Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2003, filed with the
    SEC on May 29, 2003.(14)
    
    Incorporated by reference to exhibits to Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended May 31, 2003, filed with the
    SEC on July 15, 2003.(15)
    
    Incorporated by reference to exhibits to Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 2003, filed with
    the SEC on October 14, 2003.(16)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on January 26, 2004.(17)
    
    Incorporated by reference to exhibits to the Companys
    Annual Report on
    Form 10-K
    for the fiscal year ended February 29, 2004, filed with the
    SEC on May 14, 2004.(18)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on June 4, 2004.(19)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 2004, filed with
    the SEC on October 12, 2004.(20)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on November 19, 2004.(21)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended November 30, 2004, filed with
    the SEC on January 10, 2005.(22)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed with the SEC on April 28, 2005. 78




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##### Table of Contents



(23)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K,
    filed with the SEC on January 21, 2005.(24)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended November 30, 2005, filed with
    the SEC on January 9, 2006.(25)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended August 31, 2005, filed with
    the SEC on October 7, 2005.(26)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on June 3, 2005.(27)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended May 31, 2005, filed with the
    SEC on July 8, 2005.(28)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on January 3, 2006.(29)
    
    Incorporated by reference to exhibits to the Companys
    Annual Report on
    Form 10-K
    for the fiscal year ended February 28, 2005, filed with the
    SEC on May 16, 2005.(30)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on March 10, 2006.(31)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on September 6, 2006.(32)
    
    Incorporated by reference to exhibits to the Companys
    Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended May 31, 2006, filed with the
    SEC on July 10, 2006.(33)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on October 5, 2006.(34)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on September 20, 2006.(35)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on March 7, 2007.(36)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on April 26, 2007.(37)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on June 1, 2007.(38)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on June 25, 2007.(39)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on July 3, 2007.(40)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on August 1, 2007.(41)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on August 21, 2007.(42)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on September 14, 2007.(43)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on October 19, 2007.(44)
    
    Incorporated by reference to exhibits to the Companys
    Current Report on
    Form 8-K,
    filed with the SEC on March 3, 2008.(45)
    
    Filed herewith.*
    
    The certifications attached as Exhibit 32.1 and
    Exhibit 32.2 accompany the
    Form 10-K
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    and shall not be deemed filed by the Company for
    purposes of Section 18 of the Securities Exchange Act of
    1934. 79