DISCLOSURE: Readers should assume that all stocks mentioned in this column are owned by the author and/or his firm unless otherwise noted.

The on-again off-again recovery of Intervoice’s shares (NASDAQ: INTV) was off again in late April. Disappointing results for its Q4 (ended February 28, 2007) were the culprit, sending the stock down by over 11 percent. But the shares showed resilience by recapturing much of that loss a few sessions later, and a longer-term chart puts the whole gyration into perspective. CPA Insider™ readers and your clients may be interested to know INTV appears to have finally started an uptrend after years of going south.

Intervoice is one of the well-established vendors of those interactive voice recognition (IVR) systems that answer phone calls, and attempt to direct callers to the proper place. Although nightmare stories of people getting lost in IVR purgatory abound, these systems are extremely efficient for businesses — and they're getting better.

Company insiders at the firm have been signaling a turnaround at Intervoice for some time now, with small but consistent purchases that aggregate to make a respectably bullish insider history. Over the past year, five insiders have purchased 95,000 shares for $6.01 to $7.33 each. Two insiders have also exercised 14,750, and held on to them. Most of these insiders increased their Intervoice holdings significantly with their recent buying, and two have traded this stock well in the past.

Also bullish is that Blackrock and Franklin Resources filed Schedule 13Gs at the SEC earlier this year indicating that these two institutions picked up nine percent and six percent of the company’s shares in 2006, respectively. So despite one incident of an insider flipping 18,000 options for a risk-free profit in February, INTV’s insider profile remains solidly bullish in my opinion.

The market for IVR platforms has certainly had its ups and downs over the years, ebbing and flowing with changes in both technology and accepted business practices. Intervoice has vacillated likewise. After nearing $40 in early 2000, it briefly became a penny stock in mid-2002.

Several years ago, expectations were high for Intervoice's deal to incorporate speech recognition into Microsoft's (MSFT) ".Net" platform. Not much ever did come from that initiative, but that dead end was more symptomatic of how the changing nature of the IVR sale into enterprises disrupted revenue across the industry; that resulted in Intervoice entering another year-long bout of weak trading.

But at least one important lesson emerged from that disappointment. It is now recognized that IVR technology is best viewed as an enterprise-wide application instead of some stand-alone system in a company's call center. There is also a move toward IP multimedia services, or IMS, that integrate IVR with Web chat and e-mail-response applications.

Intervoice appears well-positioned for both trends. Its Media Exchange product is IMS-ready, and last September's acquisition of Nuasis jump-started Intervoice's presence in the IP-based solutions market. The purchase of Edify in late 2005 also bulked up Intervoice's competitive position.

More important, the promise is finally starting to show up in Intervoice’s revenue growth and order backlog — although consistently getting these metrics moving northward each quarter is still not a given. After posting three quarters in a row in which revenue growth increased on both a year-over-year and sequential basis, Intervoice’s Q4 finally broke the trend. Although revenues were up a perfectly respectable 17 percent year-over-year, they were down sequentially. The culprit for the miss was a large, expected order that didn’t ship in time to be booked. But what was bad for Q4’s top line is good for backlog. This number increased nearly 60 percent year-over-year, to $54.1 million.

Alas, in the Q4 earnings conference call, management ended their see-saw of “good news, bad news” with a final negative surprise. Although the backlog number was bullish, the company now expects a longer-than-usual lead time before the backlog will be recognized. Q1 revenue was only guided to be between $45 million and $49 million. That last news explains INTV’s swoon in the wake of the earnings release, and definitely highlights the risk that lumpy sales in the coming year could upset quarterly financial trends again.

But looking at Intervoice’s just-ended fiscal year is the better indicator of the company’s likely fortunes. Over the past four quarters, Intervoice’s revenues increased 16.8 percent. That’s a sign of a company on the mend. Other positives include sales channel partners such as Ericsson (NASDAQ: ERIC), BEA Systems (NASDAQ: BEAS) and China's Huawei. The company’s balance sheet is debt-free as well.

All that’s missing are consistent profits. But with cost containment measures in place, and steadily increasing revenues, I think Intervoice is likely to break into the black in the coming fiscal year. The time to get into a turnaround like INTV is before those consistent profits are posted.

Jonathan Moreland is the Director of Research at New York-based Insider Insights.com. Click here for a FREE trial issue of the firm's weekly newsletter Insider Insights.