Intralinks Announces First Quarter 2014 Results - WKRN News 2

Intralinks Announces First Quarter 2014 Results

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SOURCE Intralinks Holdings, Inc.

NEW YORK, May 7, 2014 /PRNewswire/ -- Intralinks Holdings, Inc. (NYSE: IL), a leading, global SaaS provider of inter-enterprise content management and collaboration solutions, today announced results for its first quarter of 2014.

"We delivered revenue and profitability above our guidance range, on the continued strength of our M&A business," said Ron Hovsepian, Intralinks' president and CEO. "Our product platform for content collaboration continues to get stronger and more secure, with announcements last month of our acquisition of information rights management company docTrackr and the availability of customer-managed encryption keys this summer. With these enhancements, Intralinks becomes the de facto standard for collaboration and file sharing of valuable information where security, privacy and regulatory compliance are key concerns."

First Quarter 2014

Total revenue was $59.2 million, compared to $55.0 million for the corresponding quarter last year.

  • M&A revenue was $29.6 million, compared to $24.3 million for the corresponding quarter last year.
  • Enterprise revenue was $22.5 million, compared to $23.9 million for the corresponding quarter last year.
  • DCM revenue was $7.1 million, compared to $6.8 million for the corresponding quarter last year.

GAAP gross margin was 71.3%, compared to 71.7% for the corresponding quarter last year. Non-GAAP adjusted gross margin was 75.0%, compared to 75.6% for the corresponding quarter last year.

GAAP operating loss was ($6.2) million, compared to ($4.3) million for the corresponding quarter last year.  Non-GAAP adjusted operating income was $2.0 million, compared to $3.7 million for the corresponding quarter last year.

GAAP net loss was ($5.4) million, compared to ($4.6) million for the corresponding quarter last year.  GAAP net loss per share was ($0.10) on the basis of 55.6 million shares outstanding. In the corresponding quarter last year, GAAP net loss per share was ($0.08) on the basis of 54.9 million shares outstanding.

Non-GAAP adjusted net income was $0.7 million, compared to $1.0 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.01 on the basis of 57.6 million shares outstanding. In the corresponding quarter last year, non-GAAP adjusted net income per share was $0.02 on the basis of 55.3 million shares outstanding.

Non-GAAP adjusted EBITDA was $8.2 million, compared to $8.5 million for the corresponding quarter last year.

Cash, restricted cash and investments were $78.2 million at the end of the quarter, down from $87.9 million at the end of last year.

Business Outlook:

Based on information available as of May 7, 2014, Intralinks is providing guidance for the second quarter and full year 2014 as follows:

Second Quarter 2014

Revenue: $59 million to $61 million
GAAP operating loss: ($10.4) million to ($8.9) million
Non-GAAP adjusted operating loss: ($2.0) million to ($0.5) million
Non-GAAP adjusted EBITDA: $4.5 million to $6.0 million
GAAP net loss per share: ($0.14) to ($0.12)
Non-GAAP adjusted net loss per share: ($0.03) to ($0.02)

Full Year 2014

Revenue: $240 million to $248 million
GAAP operating loss: ($25.3) million to ($21.3) million
Non-GAAP adjusted operating income: $8 million to $12 million
Non-GAAP adjusted EBITDA: $34 million to $38 million
GAAP net loss per share: ($0.38) to ($0.32)
Non-GAAP adjusted net income per share: $0.04 to $0.08

Quarterly Conference Call

In conjunction with this announcement, Intralinks will host a conference call on Wednesday, May 7, 2014 at 5:00 p.m. Eastern Time (ET) to discuss the company's financial results and its business outlook. To access this call, dial 877-300-8521 (domestic) or 412-317-6026 (international). A passcode is not required. The call will also be webcast live on the investor relations section of the Intralinks website at www.Intralinks.com/ir.  In conjunction with this call, there will also be slides with supplemental information available at that same website location.

Following the conference call, a replay will be available until May 14, 2014, at 877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10044043. An archived webcast of the call will also be available on the investor relations section on the Intralinks website at www.Intralinks.com/ir.

About Intralinks

Intralinks Holdings, Inc. (NYSE: IL) is a leading, global technology provider of inter-enterprise content management and collaboration solutions. Through innovative Software-as-a-Service solutions, Intralinks solutions are designed to enable the secure and compliant exchange, control, and management of information between organizations when working through the firewall. More than 2.7 million professionals at 99% of the Fortune 1000 companies have depended on Intralinks' experience. With a track record of enabling high-stakes transactions and business collaborations valued at more than $23.5 trillion, Intralinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.Intralinks.com.

Non-GAAP Financial Measures

This press release includes information about certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP"), including non-GAAP adjusted gross profit and non-GAAP adjusted gross margin, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share, non-GAAP adjusted EBITDA and non-GAAP adjusted EBITDA margin and free cash flow. These non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies.

Management defines its non-GAAP financial measures as follows:

  • Non-GAAP gross profit represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets, and (2) stock-based compensation expense.
  • Non-GAAP adjusted operating income represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets, (2) stock-based compensation expense, (3) impairment charges or asset write-offs and (4) costs related to public stock offerings.
  • Non-GAAP adjusted net income represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets, (2) stock-based compensation expense, (3) impairment charges or asset write-offs, (4) costs related to debt repayments and (5) costs related to public stock offerings.  The income tax expense included in non-GAAP adjusted net income is calculated using an estimated long-term effective tax rate.
  • Non-GAAP adjusted net income per share represents non-GAAP adjusted net income (which is defined above) divided by fully diluted weighted average shares outstanding.
  • Non-GAAP adjusted EBITDA represents net loss adjusted to exclude, if applicable: (1) amortization of intangible assets,  (2) depreciation and amortization,  (3) stock-based compensation expense, (4) impairment charges or asset write-offs,  (5) interest expense,  (6) amortization of debt issuance costs, (7) other expense (income), net, (8) costs related to public stock offerings and (9) income tax (benefit) expense.
  • Free cash flow represents net cash provided by operating activities less capitalized software development costs and capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provide useful information about our period-over-period growth and provide additional information that is useful for evaluating our operating performance. In addition, free cash flow provides management with useful information for managing the cash needs of our business.  Management also believes that these non-GAAP financial measures provide a more meaningful comparison of our operating results against those of other companies in our industry, as well as on a period-over-period basis, because these measures exclude items that are not representative of our operating performance, such as amortization of intangible assets and interest expense. Management believes that including these costs in our results of operations results in a lack of comparability between our operating results and those of our peers in the industry, the majority of which are not highly leveraged and do not have comparable amortization costs related to intangible assets. However, non-GAAP adjusted gross profit, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share, non-GAAP adjusted EBITDA and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to gross profit, loss from operations, net loss, net loss per share and net cash provided by operating activities as indicators of operating performance.

Reconciliations of GAAP to Non-GAAP financial measures are included in this press release.

Forward Looking Statements

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  This press release contains expressed or implied forward-looking statements that are not based on historical information relating to, among other things, expectations and assumptions concerning management's forecast of financial performance, future business growth, and management's plans, objectives, and strategies. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things:  the uncertainty of our future profitability; our ability to sustain positive cash flow or to attain our enterprise backlog objectives; periodic fluctuations in our operating results; our ability to manage our expected growth; risks related to our substantial debt balances and our ability to generate or obtain sufficient capital to service our debt and fund our business; our ability to maintain the security and integrity of our systems; risks associated with the privacy and protection of information in our possession; our ability to increase our penetration in our principal existing markets and expand into additional markets; our ability to expand into new geographic markets; delays in market adoption and penetration of our products and services; difficulties developing, integrating and introducing new products and services; our dependence on the volume of financial and strategic business transactions; our dependence on customer referrals and relationships; our ability to maintain and expand our direct sales capabilities; our ability to develop and maintain strategic relationships to sell and deliver our solutions; customer renewal rates and attrition; our ability to maintain the compatibility of our services with third-party applications; competition and our ability to maintain our average sales prices; our ability to adapt to changing technologies; interruptions or delays in our service; international risks; uncertainties surrounding domestic and global economic conditions; our ability to protect our intellectual property; costs of being a public company; and risks related to changes in laws, regulations or governmental policy, including data privacy and tax regulations. Further information on these and other factors that could affect our financial results is contained in our public filings with the Securities and Exchange Commission (the "SEC") from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2013.  Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Intralinks undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise.

"Intralinks" and the Intralinks logo are registered trademarks of Intralinks, Inc. "Intralinks VIA" is a trademark of Intralinks, Inc. © 2014. All rights reserved.

 

 


Intralinks Holdings, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
(unaudited)








March 31,


December 31,



2014



2013


ASSETS





Current assets:





Cash and cash equivalents


$

41,609



$

50,540


Accounts receivable, net of allowances of $3,120 and $3,152, respectively


42,663



38,322


Investments


25,677



34,886


Deferred taxes


11,017



12,148


Prepaid expenses


5,319



6,036


Restricted cash


2,442



2,442


Other current assets


4,983



4,576


Total current assets


133,710



148,950


Investments


8,508



-


Fixed assets, net


13,522



14,100


Capitalized software, net


33,571



32,341


Goodwill


215,869



215,869


Other intangibles, net


77,779



83,648


Other assets


4,968



1,054


Total assets


$

487,927



$

495,962


LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts Payable


$

8,920



$

11,052


Current portion of long-term debt


937



209


Deferred revenue


45,982



44,651


Accrued expenses and other current liabilities


22,073



26,667


Total current liabilities


77,912



82,579


Long-term debt


78,485



75,004


Deferred taxes


12,947



16,989


Other long-term liabilities


5,431



5,289


Total liabilities


174,775



179,861


Commitments and contingencies







Stockholders' equity:





Undesignated Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0
shares issued and outstanding


-



-


Common Stock, $0.001 par value; 300,000,000 shares authorized; 56,304,083 and
56,054,484 shares issued and outstanding, respectively


56



56


Additional paid-in capital


431,753



429,549


Accumulated deficit


(118,093)



(112,714)


Accumulated other comprehensive loss


(564)



(790)


  Total stockholders' equity


313,152



316,101


  Total liabilities and stockholders' equity


$

487,927



$

495,962


 


Intralinks Holdings, Inc.
Consolidated Statements of Operations
(In Thousands, Except Share Data)
(unaudited)






Three Months Ended
March 31,



2014



2013


Revenue


$

59,241



$

55,021


Cost of revenue


17,002



15,566


Gross profit


42,239



39,455


Operating expenses:







Sales and marketing


26,119



24,914


General and administrative


16,848



14,138


Product development


5,465



4,678


Total operating expenses


48,432



43,730


  Loss from operations


(6,193)



(4,275)


Interest expense


960



1,122


Amortization of debt issuance costs


116



112


Other (income) expense, net


(191)



779


Net loss before income tax


(7,078)



(6,288)


Income tax benefit


(1,699)



(1,733)


Net loss


$

(5,379)



$

(4,555)


Net loss per common share







Basic


$

(0.10)



$

(0.08)


Diluted


$

(0.10)



$

(0.08)


Weighted average number of shares







Basic


55,580,116



54,913,773


Diluted


55,580,116



54,913,773


 


Intralinks Holdings, Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(unaudited)






Three Months Ended March 31,



2014



2013


Cash flows from operating activities:







Net loss


$

(5,379)



$

(4,555)


Adjustments to reconcile net loss to net cash (used in) provided by operating activities:







Depreciation and amortization


6,152



4,831


Amortization of intangible assets


5,869



5,844


Stock-based compensation expense


2,329



2,116


Deferred income tax benefit


(3,107)



(2,953)


Other, net


718



586


Changes in operating assets and liabilities:







Accounts receivable


(4,601)



(1,141)


Prepaid expenses and other assets


498



44


Accounts payable


(2,340)



6,079


Accrued expenses and other liabilities


(4,429)



(4,110)


Deferred revenue


1,152



1,190


Net cash (used in) provided by operating activities


(3,138)



7,931


Cash flows from investing activities:







Capitalized software development costs


(4,939)



(5,356)


Capital expenditures


(1,424)



(1,814)


Purchases of investments


(15,464)



(10,116)


Maturities of investments


15,972



7,500


Purchase of a cost method investment


(1,499)



-


Acquisitions


-



(602)


Net cash used in investing activities


(7,354)



(10,388)


Cash flows from financing activities:







Proceeds from issuance of long-term debt


79,200



-


Payments on long-term debt


(74,898)



(205)


Payments of outstanding financing arrangements


(148)



(347)


Payment of debt issuance costs


(2,716)



-


Exercise of stock options and issuance of common stock, net of withholding taxes


(127)



112


Net cash provided by (used in) financing activities


1,311



(440)


Effect of foreign exchange rate changes on cash and cash equivalents


250



(108)


Net decrease in cash and cash equivalents


(8,931)



(3,005)


Cash and cash equivalents at beginning of period


50,540



43,798


Cash and cash equivalents at end of period


$

41,609



$

40,793


 


Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In Thousands)
(unaudited)






Three Months Ended
March 31,



2014



2013


Gross profit


$

42,239



$

39,455


Gross margin


71.3

%


71.7

%

Cost of revenue – amortization of intangible assets


1,989



1,988


Cost of revenue – stock-based compensation expense


178



168


Non-GAAP adjusted gross profit


$

44,406



$

41,611


Non-GAAP adjusted gross margin


75.0

%


75.6

%








Loss from operations


$

(6,193)



$

(4,275)


Amortization of intangible assets


5,869



5,844


Stock-based compensation expense


2,329



2,116


Non-GAAP adjusted operating income


$

2,005



$

3,685









Net loss before income tax


$

(7,078)



$

(6,288)


Amortization of intangible assets


5,869



5,844


Stock-based compensation expense


2,329



2,116


Non-GAAP adjusted net income before tax


1,120



1,672


Non-GAAP income tax expense


426



635


Non-GAAP adjusted net income


$

694



$

1,037









Net loss


$

(5,379)



$

(4,555)


Depreciation and amortization


6,152



4,831


Amortization of intangible assets


5,869



5,844


Stock-based compensation expense


2,329



2,116


Interest expense


960



1,122


Amortization of debt issuance costs


116



112


Other (income) expense, net


(191)



779


Income tax benefit


(1,699)



(1,733)


Non-GAAP adjusted EBITDA


$

8,157



$

8,516


Non-GAAP adjusted EBITDA margin


13.8

%


15.5

%








Net cash (used in) provided by operating activities


$

(3,138)



$

7,931


Capitalized software development costs


(4,939)



(5,356)


Capital expenditures


(1,424)



(1,814)


Free cash flow


$

(9,501)



$

761


 

Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures - Guidance
(In Thousands)
(unaudited)










Three Months
Ending
June 30,
2014



Year Ending
December 31,
2014


Gross profit


$

42,820



$

175,294


Gross margin


71.4

%


71.8

%

Cost of revenue - amortization of intangible assets


1,988



7,952


Cost of revenue - stock-based compensation expense


192



754


Non-GAAP adjusted gross profit


$

45,000



$

184,000


Non-GAAP adjusted gross margin


75.0

%


75.4

%








Loss from operations


$

(9,629)



$

(23,335)


Amortization of intangible assets


5,867



23,470


Stock-based compensation expense


2,512



9,865


Non-GAAP adjusted operating (loss) income


$

(1,250)



$

10,000









Net loss before income tax


$

(10,878)



$

(27,892)


Amortization of intangible assets


5,867



23,470


Stock-based compensation expense


2,512



9,865


Non-GAAP adjusted net (loss) income before tax


(2,499)



5,443


Non-GAAP income tax (benefit) expense


(950)



2,068


Non-GAAP adjusted net (loss) income


$

(1,549)



$

3,375









Net loss


$

(7,445)



$

(19,624)


Depreciation and amortization


6,500



26,000


Amortization of intangible assets


5,867



23,470


Stock-based compensation expense


2,512



9,865


Interest expense


1,073



4,184


Amortization of debt issuance costs


176



564


Other (income) expense, net


-



(191)


Income tax benefit


(3,433)



(8,268)


Non-GAAP adjusted EBITDA


$

5,250



$

36,000


Non-GAAP adjusted EBITDA margin


8.8

%


14.8

%

 

Note: All forward-looking figures presented in these tables are stated at the mid-point of the estimated range.

 

 

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