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Intellinetics, Inc. Reports Second Quarter Results
Revenue and Channel Growth Accelerating
August 17, 2015 08:30 AM Eastern Daylight Time
COLUMBUS, Ohio--(BUSINESS WIRE)--Intellinetics, Inc. (OTCQB: INLX), an Enterprise Content Management (ECM) software company focused on cloud-based document solutions for the Small to Medium Business (SMB) market, announced financial results for the second quarter ended June 30, 2015.
“Adjusted EBITDA loss for the second quarter was $149,358, compared with a loss of $310,312 in the second quarter last year, a 52% improvement. For the six month period the adjusted EBITDA improvement was 60%.”
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First Quarter Key Metrics Trending Positively
Revenue increased 80%
Adjusted EBITDA improving
3rd consecutive quarter of revenue growth
Summary - Second Quarter Results
Revenues for the three months ended June 30, 2015 were $587,170, as compared with $326,352 for the same period in 2014, an increase of $260,818, or 80%, primarily attributable to increases in revenues from the sale of software, software as a service and professional services. Overall gross margins were 79% and 79% for the three months ended June 30, 2015 and 2014, respectively. Revenues for the six months ended June 30, 2015 were $1,170,945, as compared with $625,535, an increase of $545,410, or 87%. Overall gross margins were 80% and 79% for the six months ended June 30, 2015 and 2014, respectively.
Intellinetics reported a net loss of $642,742 and $372,714 for the three months ended June 30, 2015 and 2014, respectively, representing an increase in net loss of $270,028, or 72%. For the six months ended June 30, 2015 and 2014, Intellinetics reported a net loss of $851,599 and $776,536, respectively, an increase of $75,063. The total increase in loss was non-cash and was attributable to the $395,000 in the fair value of stock options vested and the increase in interest expense of $88,000 from increased debt for the six months ended June 30, 2015.
Matthew L. Chretien, President and CEO of Intellinetics, stated, “We saw the expected increase in net-new sales from our existing channel. We continue to profile and recruit the largest, best-performing office solution providers who focus on small to medium businesses (SMB’s) to add to our network. In this regard, while we increased sales within existing partners in Q2, we also closed two new channel partners adding 77 new sales people and 18,300 active customers to our growing channel. Partner sales training, enablement, and automation are additional focus areas we are targeting to increase revenue contributions per partner.”
Murray Gross, Chairman of the Board, stated, “Adjusted EBITDA loss for the second quarter was $149,358, compared with a loss of $310,312 in the second quarter last year, a 52% improvement. For the six month period the adjusted EBITDA improvement was 60%.
IntelliCloud™ – Powered by the Intel® NUC
The Intellinetics’ IntelliCloud Program provides turnkey document workflow solutions for SMB’s through a growing network of partners who target the mid-market. Partners simply attach IntelliCloud to the software, hardware, and/or services they already sell to existing customers and deliver more value to the customer and create new / recurring revenue streams for themselves…and us, all without the sales or technical complexity of other less effective options in the market.
Non-GAAP Financial Measure
Intellinetics uses non-GAAP Adjusted EBITDA as supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).
A non-GAAP financial measure is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of a company. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or a measure of our liquidity. Intellinetics urges investors to review the reconciliation of non-GAAP Adjusted EBITDA to the comparable GAAP Net Loss, which is included in this press release, and not to rely on any single financial measure to evaluate Intellinetics’ financial performance.
We believe that Adjusted EBITDA is a useful performance measure and is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. We define “Adjusted EBITDA” as earnings before interest expense, income taxes, depreciation and amortization expense, and other non-cash expenses such as amortization of beneficial conversion option and stock option compensation expense.
Reconciliation of Net Loss to Adjusted EBITDA:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2015 2014 2015 2014
Net Loss - GAAP $ (642,742 ) $ (372,714 ) $ (851,599 ) $ (776,536 )
Interest expense, net * 95,711 55,592 191,611 103,596
Depreciation & Amortization 2,673 6,810 6,051 13,740
Stock option compensation 395,000 - 395,000 -
Adjusted EBITDA $ (149,358 ) $ (310,312 ) $ (258,937 ) $ (659,200 )
* Interest expense includes amortization of beneficial conversion option and deferred financing costs
About Intellinetics, Inc.
Intellinetics, Inc. is a Columbus, Ohio-based ECM software company. Intellinetics partnered with Intel to create the IntelliCloud Channel Program that makes it easy to add turnkey document workflow solutions to the copiers, productivity software and services they already provide. IntelliCloud provides dealers a “deploy once, use many” innovation where one IntelliCloud customer sale/activation creates endless possibilities to add other software applications that deliver more value and increase revenue. For additional information, please visit: http://www.intel.com/intellicloud or www.intellinetics.com.
Cautionary Statement
Statements in this press release which are not purely historical, including statements regarding Intellinetics’ intentions, beliefs, expectations, representations, projections, plans or strategies regarding the future are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company’s cash flow or adequacy of capital resources, market acceptance risks, technical development risks, and other risk factors. The company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics and its Affiliates on its website or at www.intellinetics.com or at www.sec.gov.
INTELLINETICS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2015 2014 2015 2014
Revenues:
Sale of software $ 147,723 $ 4,496 $ 337,760 $ 12,496
Software as a service 60,966 41,028 117,505 80,470
Software maintenance services 231,939 212,000 460,610 422,522
Professional services 92,782 47,350 175,020 76,774
Third Party services 53,760 21,478 80,050 33,273
Total revenues 587,170 326,352 1,170,945 625,535
Cost of revenues:
Sale of software 19,704 1,260 67,226 7,704
Software as a service 11,764 6,941 22,674 13,870
Software maintenance services 31,451 31,076 62,459 62,823
Professional services 23,593 10,627 44,111 20,338
Third Party services 35,933 18,631 39,512 27,228
Total cost of revenues 122,445 68,535 235,982 131,963
Gross profit 464,725 257,817 934,963 493,572
Operating expenses:
General and administrative 791,404 443,077 1,157,245 911,547
Sales and marketing 217,679 125,052 431,655 241,225
Depreciation 2,673 6,810 6,051 13,740
Total operating expenses 1,011,756 574,939 1,594,951 1,166,512
Loss from operations (547,031 ) (317,122 ) (659,988 ) (672,940 )
Other income (expense)
Derivative gain - - -
Interest expense, net (95,711 ) (55,592 ) (191,611 ) (103,596 )
Total other income (expense) (95,711 ) (55,592 ) (191,611 ) (103,596 )
Net loss $ (642,742 ) $ (372,714 ) $ (851,599 ) $ (776,536 )
Basic and diluted net loss per share: $ (0.09 ) $ (0.06 ) $ (0.12 ) $ (0.11 )
Weighted average number of common shares outstanding - basic and diluted
7,123,024 6,765,930 7,123,024 6,765,930
Contacts
Intellinetics, Inc.
Matthew L. Chretien, 614-921-8170
President and CEO
matt@intellinetics.com
http://www.businesswire.com/news/home/20150817005187/en/Intellinetics-Reports-Quarter-Results
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