Intralinks Announces Second Quarter 2014 Results - Hawaii News Now - KGMB and KHNL

Intralinks Announces Second Quarter 2014 Results

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SOURCE Intralinks Holdings, Inc.

NEW YORK, Aug. 6, 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 second quarter of 2014.

"We delivered good financial performance and showed continued progress against our long-term objectives," said Ron Hovsepian, Intralinks' president and CEO. "Total revenue was at a record level, up 10% for the quarter on the strength of 23% growth in our M&A business. We saw improved Enterprise backlog growth in the quarter and continued to gain customer and industry analyst validation of our content management and collaboration offerings. We are looking forward to continued progress in the second half of the year."

Second Quarter 2014

Total revenue was $63.6 million, compared to $57.7 million for the corresponding quarter last year.

  • M&A revenue was $32.5 million, compared to $26.3 million for the corresponding quarter last year.
  • Enterprise revenue was $23.4 million, compared to $23.6 million for the corresponding quarter last year.
  • DCM revenue was $7.7 million, compared to $7.8 million for the corresponding quarter last year.

GAAP gross margin was 73.1%, compared to 71.9% for the corresponding quarter last year. Non-GAAP adjusted gross margin was 76.5%, compared to 75.8% for the corresponding quarter last year.

GAAP operating loss was $(7.0) million, compared to $(4.2) million for the corresponding quarter last year.  Non-GAAP adjusted operating income was $1.6 million, compared to $3.8 million for the corresponding quarter last year.

GAAP net loss was $(5.7) million, compared to $(4.4) million for the corresponding quarter last year.  GAAP net loss per share was $(0.10) on the basis of 55.8 million shares outstanding. In the corresponding quarter last year, GAAP net loss per share was $(0.08) on the basis of 55.0 million shares outstanding.

Non-GAAP adjusted net income was $0.2 million, compared to $1.5 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.00 on the basis of 57.3 million shares outstanding. In the corresponding quarter last year, non-GAAP adjusted net income per share was $0.03 on the basis of 55.4 million shares outstanding.

Non-GAAP adjusted EBITDA was $7.6 million, compared to $8.8 million for the corresponding quarter last year.

Cash, restricted cash and investments was $72.5 million at the end of the quarter, down from $78.2 million at the end of the first quarter.

Business Outlook:

Based on information available as of August 6, 2014, Intralinks is providing guidance for the third quarter and full year 2014 as follows:

Third Quarter 2014

Revenue: $61.0 million to $63.0 million
GAAP operating loss: $(7.5) million to $(5.5) million
Non-GAAP adjusted operating income: $1.0 million to $3.0 million
Non-GAAP adjusted EBITDA: $7.5 million to $9.5 million
GAAP net loss per share: $(0.11) to $(0.08)
Non-GAAP adjusted net income per share: $0.00 to $0.02

Full Year 2014

Revenue: $248.0 million to $252.0 million
GAAP operating loss: $(25.8) million to $(21.8) million
Non-GAAP adjusted operating income: $8.0 million to $12.0 million
Non-GAAP adjusted EBITDA: $34.0 million to $38.0 million
GAAP net loss per share: $(0.38) to $(0.33)
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, August 6, 2014 at 5:00 p.m. Eastern Time (ET) to discuss its second quarter financial results and 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 August 13, 2014, at 877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10049493. 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 exchange, control, and management of information between organizations securely and compliantly 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 adjusted 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) depreciation and amortization, (2) amortization of intangible assets, (3) stock-based compensation expense, (4) impairment charges or asset write-offs, (5) interest expense, (6) amortization of debt issuance costs, (7) other (income) expense, 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 and subsequent quarterly reports.  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. © 2014. All rights reserved.

 

Intralinks Holdings, Inc.

Consolidated Balance Sheets

(In Thousands, Except Share Data)

(unaudited)













June 30,


December 31,



2014


2013

ASSETS







Current assets:







Cash and cash equivalents


$

37,581


$

50,540

Investments


18,070


34,886

Accounts receivable, net of allowances of $3,293 and $3,152, respectively


41,210


38,322

Deferred taxes


12,182


12,148

Prepaid expenses


6,244


6,036

Restricted cash


-


2,442

Other current assets


3,966


4,576

Total current assets


119,253


148,950

Investments


16,850


-

Fixed assets, net


15,380


14,100

Capitalized software, net


36,860


32,341

Goodwill


224,383


215,869

Other intangibles, net


74,032


83,648

Other assets


4,873


1,054

Total assets


$

491,631


$

495,962

LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable


$

12,187


$

11,052

Current portion of long-term debt


937


209

Deferred revenue


46,107


44,651

Accrued expenses and other current liabilities


25,770


26,667

Total current liabilities


85,001


82,579

Long-term debt


78,290


75,004

Deferred taxes


11,400


16,989

Other long-term liabilities


6,281


5,289

Total liabilities


180,972


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; 56,435,515 and

56,054,484 shares issued and outstanding, respectively


56


56

Additional paid-in capital


434,687


429,549

Accumulated deficit


(123,766)


(112,714)

Accumulated other comprehensive loss


(318)


(790)

Total stockholders' equity


310,659


316,101

Total liabilities and stockholders' equity


$

491,631


$

495,962

 

Intralinks Holdings, Inc.

Consolidated Statements of Operations

(In Thousands, Except Share Data)

(unaudited)













Three Months Ended June 30,


Six Months Ended June 30,



2014


2013


2014


2013

Revenue


$

63,557


$

57,742


$

122,798


$

112,763

Cost of revenue


17,083


16,223


34,085


31,790

Gross profit


46,474


41,519


88,713


80,973

Operating expenses:









Sales and marketing


29,872


27,275


55,991


52,188

General and administrative


18,105


13,719


34,953


27,857

Product development


5,460


4,680


10,925


9,358

Total operating expenses


53,437


45,674


101,869


89,403

Loss from operations


(6,963)


(4,155)


(13,156)


(8,430)

Interest expense


1,005


1,152


1,965


2,274

Amortization of debt issuance costs


177


104


293


216

Other (income) expense, net


(18)


189


(209)


968

Net loss before income tax


(8,127)


(5,600)


(15,205)


(11,888)

Income tax benefit


(2,454)


(1,242)


(4,153)


(2,975)

Net loss


$

(5,673)


$

(4,358)


$

(11,052)


$

(8,913)

Net loss per common share









Basic


$

(0.10)


$

(0.08)


$

(0.20)


$

(0.16)

Diluted


$

(0.10)


$

(0.08)


$

(0.20)


$

(0.16)

Weighted average number of shares










Basic


55,812,187


55,018,219


55,696,792


54,966,284

Diluted


55,812,187


55,018,219


55,696,792


54,966,284

 

Intralinks Holdings, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(unaudited)












Six Months Ended June 30,



2014


2013

Cash flows from operating activities:





Net loss


$

(11,052)


$

(8,913)

Adjustments to reconcile net loss to net cash provided by operating activities:





Depreciation and amortization


12,234


9,852

Amortization of intangible assets


11,814


11,811

Stock-based compensation expense


4,897


4,128

Deferred income tax benefit


(6,262)


(4,840)

Other, net


1,951


1,427

Changes in operating assets and liabilities:





Accounts receivable


(3,974)


(1,875)

Prepaid expenses and other assets


703


(2,751)

Accounts payable


1,378


7,595

Accrued expenses and other liabilities


(2,014)


(511)

Deferred revenue


1,212


3,834

Net cash provided by operating activities


10,887


19,757

Cash flows from investing activities:





Capitalized software development costs


(13,102)


(10,836)

Capital expenditures


(4,443)


(3,289)

Purchases of investments


(24,866)


(24,990)

Maturities of investments


24,490


22,446

Purchase of a cost method investment


(1,499)


-

Acquisitions, net of cash acquired


(8,632)


(602)

Restricted cash


2,443


(2,464)

Net cash used in investing activities


(25,609)


(19,735)

Cash flows from financing activities:





Proceeds from issuance of long-term debt


79,200


-

Payments on long-term debt


(75,098)


(410)

Payments of outstanding financing arrangements


(224)


(556)

Payment of debt issuance costs


(2,704)


-

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


240


131

Other


(188)


-

Net cash provided by (used in) financing activities


1,226


(835)

Effect of foreign exchange rate changes on cash and cash equivalents


537


(509)

Net decrease in cash and cash equivalents


(12,959)


(1,322)

Cash and cash equivalents at beginning of period


50,540


43,798

Cash and cash equivalents at end of period


$

37,581


$

42,476

 

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In Thousands)

(unaudited)













Three Months Ended
June 30,


Six Months Ended

June 30,



2014



2013



2014



2013


Gross profit


$

46,474



$

41,519



$

88,713



$

80,973


Gross margin


73.1

%


71.9

%


72.2

%


71.8

%

Cost of revenue – amortization of intangible assets


2,045



2,081



4,034



4,069


Cost of revenue – stock-based compensation expense


94



149



272



317


Non-GAAP adjusted gross profit


$

48,613



$

43,749



$

93,019



$

85,359


Non-GAAP adjusted gross margin


76.5

%


75.8

%


75.7

%


75.7

%














Loss from operations


$

(6,963)



$

(4,155)



$

(13,156)



$

(8,430)


Amortization of intangible assets


5,945



5,967



11,814



11,811


Stock-based compensation expense


2,568



2,012



4,897



4,128


Non-GAAP adjusted operating income


$

1,550



$

3,824



$

3,555



$

7,509















Net loss before income tax


$

(8,127)



$

(5,600)



$

(15,205)



$

(11,888)


Amortization of intangible assets


5,945



5,967



11,814



11,811


Stock-based compensation expense


2,568



2,012



4,897



4,128


Non-GAAP adjusted net income before tax


386



2,379



1,506



4,051


Non-GAAP income tax expense


146



904



572



1,539


Non-GAAP adjusted net income


$

240



$

1,475



$

934



$

2,512















Net loss


$

(5,673)



$

(4,358)



$

(11,052)



$

(8,913)


Depreciation and amortization


6,082



5,021



12,234



9,852


Amortization of intangible assets


5,945



5,967



11,814



11,811


Stock-based compensation expense


2,568



2,012



4,897



4,128


Interest expense


1,005



1,152



1,965



2,274


Amortization of debt issuance costs


177



104



293



216


Other (income) expense, net


(18)



189



(209)



968


Income tax benefit


(2,454)



(1,242)



(4,153)



(2,975)


Non-GAAP adjusted EBITDA


$

7,632



$

8,845



$

15,789



$

17,361


Non-GAAP adjusted EBITDA margin


12.0

%


15.3

%


12.9

%


15.4

%














Net cash provided by operating activities


$

14,025



$

11,826



$

10,887



$

19,757


Capitalized software development costs


(8,163)



(5,480)



(13,102)



(10,836)


Capital expenditures


(3,019)



(1,475)



(4,443)



(3,289)


Free cash flow


$

2,843



$

4,871



$

(6,658)



$

5,632


 

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures - Guidance

(In Thousands)

(unaudited)













Three Months Ending

September 30, 2014


Year Ending

December 31, 2014

Gross profit


$

44,428



$

180,350


Gross margin


71.7

%


72.1

%

Cost of revenue - amortization of intangible assets


2,079



8,192


Cost of revenue - stock-based compensation expense


93



458


Non-GAAP adjusted gross profit


$

46,600



$

189,000


Non-GAAP adjusted gross margin


75.2

%


75.6

%








Loss from operations


$

(6,534)



$

(23,780)


Amortization of intangible assets


5,983



23,780


Stock-based compensation expense


2,551



10,000


Non-GAAP adjusted operating income


$

2,000



$

10,000









Net loss before income tax


$

(7,742)



$

(28,248)


Amortization of intangible assets


5,983



23,780


Stock-based compensation expense


2,551



10,000


Non-GAAP adjusted net income before tax


792



5,532


Non-GAAP income tax expense


301



2,102


Non-GAAP adjusted net income


$

491



$

3,430









Net loss


$

(5,281)



$

(19,949)


Depreciation and amortization


6,500



26,000


Amortization of intangible assets


5,983



23,780


Stock-based compensation expense


2,551



10,000


Interest expense


1,065



4,098


Amortization of debt issuance costs


143



579


Other (income) expense, net


-



(209)


Income tax benefit


(2,461)



(8,299)


Non-GAAP adjusted EBITDA


$

8,500



$

36,000


Non-GAAP adjusted EBITDA margin


13.7

%


14.4

%

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

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