iLinc Announces Fiscal 2007 Second Quarter Results
Thursday October 26, 8:30 am ET
Fourth Consecutive Quarter of Profitability
Second Fiscal Quarter Highlights
* Earned revenues of $3.5 million, an increase of 15% over the same three-month period last year
* Fourth consecutive quarter of profitability with net income of $156,000
* New records set in per minute usage and number of concurrent connections to hosted servers
* Achieved Adjusted EBITDA(1) of $754,000
PHOENIX, Oct. 26 /PRNewswire-FirstCall/ -- iLinc Communications, Inc. (Amex: ILC - News), developers of Web conferencing software and audio conferencing solutions, today announced results for fiscal 2007 second quarter ended September 30, 2006.
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Revenues increased 15% to $3.5 million for the three months ended September 30, 2006, when compared with revenues of $3.0 million for the same three-month period last year. Revenues increased 24% to $7.1 million for the six months ended September 30, 2006, when compared with revenues of $5.7 million for the same six-month period last year.
The Company reported a net income of $156,000 or breakeven per basic and diluted share, as compared with a net loss of $521,000, or ($0.02) per basic and diluted share, for the same three-month period last year. The Company reported a net income of $290,000 or $0.01 per basic and diluted share, as compared with a net loss of $1.4 million, or ($0.06) per basic and diluted share, for the same six-month period last year.
For the three months ended September 30, 2006, income from operations was $536,000, compared to $312,000 for the same three-month period last year. For the six months ended September 30, 2006, income from operations was $1.1 million compared to a loss from operations of $146,000 for the same six-month period last year. The Company reported Adjusted EBITDA(1) of $754,000 for the three months ended September 30, 2006, an improvement of $33,000 over the same three-month period last year. The Company reported Adjusted EBITDA(1) of $1.6 million for the six months ended September 30, 2006, an improvement of $934,000 over the same six-month period last year.
James M. Powers, Jr., President and Chief Executive Officer of iLinc Communications, said "iLinc again recorded significant gains in the September quarter in top-line revenue growth and bottom-line net income improvement when compared to the same period last year. We continue to advance our announced indirect sales distribution strategy which is beginning to have an impact after two quarters of implementation. Recent accolades put iLinc in the top four enterprise class Web conferencing software providers, with version 8.5 of our award winning software suite due for release in December. While our quarter-over-quarter revenue growth was less than planned, we have made course corrections where necessary to achieve our fiscal year goals."
James Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc Communications, said, "The September quarter marks our fourth consecutive quarter of profitability and continued improvement in our overall financial condition. We were pleased to post record level of earnings from operations and net income. With our relatively flat cost structure, we expect to see rapidly improving margins as we grow top-line revenue. We remain well-positioned from an operational and financial standpoint to achieve the goals we established for the 2007 fiscal year."
"With the execution of two significant distribution agreements in June and another OEM agreement this quarter, we look to aggressively grow market share and sales by leveraging our new indirect channels. During the quarter we made significant progress with those new distribution partners and we expect to see meaningful revenues from indirect channels in the December quarter. With indirect sales ramping up and our growing pipeline of direct sales opportunities, we expect to exceed the 22% annual projected growth rate in the Web conferencing industry during fiscal 2007," concluded Dr. Powers.
A Webcast of iLinc Communications' second quarter fiscal year 2007 conference call will be hosted live at 11:00 a.m. Eastern time on October 26, 2006. A replay of the event will be available after the call and accessible online through the Company's Web site at www.iLinc.com.
(1) Explanation of Adjusted EBITDA, Non-GAAP Financial Measure
We report adjusted EBITDA, a financial measure that is not defined by Generally Accepted Accounting Principles. We believe that adjusted EBITDA is a useful performance metric for our investors and is a measure of operating performance that is commonly reported and widely used by financial and industry analysts, investors and other interested parties because it eliminates significant non-cash and/or one-time charges to earnings. It is important to note that non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income (loss), cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of net loss to Adjusted EBITDA is as follows for the three months and six months ended September 30, 2006 and 2005.
Three months ended Six months ended
September 30, September 30,
2006 2005 2006 2005
(in thousands) (in thousands)
Net income (loss) $156 $(521) $290 $(1,406)
Non-cash charges and credits:
Interest expense 397 588 798 1,019
Financing and late fees 7 13 23 16
Debt conversion expense -- 329 -- 329
Warrant expense -- -- 15 7
Gain on debt settlement (8) (50) (8) (42)
Gain on sale of assets (3) (40) (3) (40)
Interest income (13) (2) (16) (4)
Stock Compensation Expense 46 10 73 20
Depreciation 55 235 226 471
Amortization 117 159 234 328
Adjusted EBITDA $754 $721 $1,632 $698
About iLinc Communications, Inc.
iLinc Communications, Inc. is a leading developer of Web conferencing software and audio conferencing services for highly secure and cost-effective collaborative meetings, presentations, and training sessions. The Company enables customers to purchase and own iLinc Web conferencing software, which can be installed inside of a customer's network or hosted by iLinc. Our products and services include the iLinc Suite of Web Conferencing software (MeetingLinc, LearnLinc, ConferenceLinc, and SupportLinc); Audio Conferencing Services; On-Demand Conferencing; and EventPlus, a service for professionally managed online and audio conferencing events. iLinc's products and services are used by organizations worldwide in sales, HR and training, marketing, and customer support. More information about the Phoenix-based Company may be found on the Web at www.ilinc.com.
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described within the forward-looking statements. Factors that could contribute to such differences are disclosed in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates and expectations as of the date of the press release, and subsequent events and developments may cause the Company's estimates and expectations to change. The Company specifically disclaims any obligation to update the forward- looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates and expectations of its future financial performance as of any date subsequent to the date of this press release.
iLinc, iLinc Communications, iLinc Suite, MeetingLinc, LearnLinc,
ConferenceLinc, SupportLinc, EventPlus, On-Demand, Web Presenter and its logos
are trademarks or registered trademarks of iLinc Communications, Inc. All
other company names and products may be trademarks of their respective
companies.
iLINC COMMUNICATIONS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended Six months ended
September 30, September 30,
2006 2005 2006 2005
(unaudited) (unaudited)
Revenues
Software licenses $916 $751 $2,150 $1,273
Software and audio services 1,841 1,711 3,609 3,411
Maintenance and professional
services 694 543 1,297 994
Total revenues $3,451 $3,005 $7,056 $5,678
Cost of revenues
Software Licenses 36 -- 81 32
Software and audio services 867 796 1,843 1,879
Maintenance and professional
services 230 185 400 298
Amortization of acquired
developed technology 67 108 134 227
Total cost of revenues 1,200 1,089 2,458 2,436
Gross profit 2,251 1,916 4,598 3,242
Operating expenses
Research and development 294 346 598 704
Sales and marketing 756 769 1,614 1,554
General and administrative 665 489 1,299 1,130
Total operating expenses 1,715 1,604 3,511 3,388
Income (loss) from operations 536 312 1,087 (146)
Interest expense (246) (259) (497) (527)
Amortization of beneficial
debt conversion (151) (329) (301) (492)
Total interest expense (397) (588) (798) (1,019)
Net (loss) gain on settlement
of debt and other obligations 8 (279) 8 (287)
Interest income (charges)
and other 7 (11) (20) (6)
Gain on sale of assets 3 40 3 40
Income (loss) from continuing
operations before income
taxes 157 (526) 280 (1,418)
Income taxes -- -- -- --
Income (loss) from continuing
operations 157 (526) 280 (1,418)
Income (loss) from
discontinued operations (1) 5 10 12
Net income (loss) 156 (521) 290 (1,406)
Series A and B preferred stock
dividends (40) (26) (79) (51)
Imputed preferred stock dividends -- (55) -- (55)
Income (loss) available to
common shareholders 116 (602) 211 (1,512)
Income (loss) per common share,
basic and diluted
From continuing operations $-- $(0.02) $0.01 $(0.06)
From discontinued operations -- -- -- --
Income (loss) per
common share $-- $(0.02) $0.01 $(0.06)
Number of shares used in
calculation of income
(loss) per share:
Basic 33,020 25,855 30,919 25,000
Diluted 33,227 25,855 31,104 25,000
iLINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30, March 31,
2006 2006
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $401 $466
Certificates of deposit and marketable
securities 1,012 --
Accounts receivable, net of allowance
for doubtful accounts of $103 and $120,
respectively 2,498 2,207
Note receivable 64 12
Prepaid and other current assets 538 30
Total current assets 4,513 2,715
Property and equipment, net 469 336
Goodwill 11,206 11,206
Intangible assets, net 1,585 1,731
Other assets 14 12
Assets of discontinued operations -- --
Total assets $17,787 $16,000
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long term debt $3,269 $199
Accounts payable trade 1,228 1,257
Accrued liabilities 1,511 2,213
Current portion of capital lease liabilities -- 70
Deferred revenue 998 917
Total current liabilities 7,006 4,656
Long term debt, less current maturities,
net of discount and beneficial conversion
feature of $1,273 and $1,493,
at September 30, and March 31, 2006,
respectively 4,006 6,974
Capital lease liabilities, less
current maturities -- --
Total liabilities 11,012 11,630
Shareholders' Equity:
Preferred stock, $.001 par value
10,000,000 shares authorized, Series A
120,000 and 127,5000 shares issued and
outstanding, respectively, liquidation
preference of $1,200,000 and $1,275,000,
respectively; and Series B, 70,000 shares
issued and outstanding, liquidation
preference of $700,000 -- --
Common stock, $.001 par value
100,000,000 shares authorized,
34,493,677 and 28,923,168 issued,
respectively 34 29
Additional paid-in capital 46,417 44,228
Accumulated deficit (38,268) (38,479)
Less: 1,432,412 treasury shares at cost (1,408) (1,408)
Total shareholders' equity 6,775 4,370
Total liabilities and shareholders'
equity $17,787 $16,000
