Intralinks Announces First Quarter 2014 Results

May 07, 2014, 16:02 ET from 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.

 

 

SOURCE Intralinks Holdings, Inc.



RELATED LINKS

http://www.intralinks.com