EXHIBIT 99.1
iLinc Communications logo
CONTACT: JAMES M. POWERS, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(602) 952-1200
JAMES L. DUNN, JR.
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(602) 952-1200
ILINC COMMUNICATIONS ANNOUNCES FISCAL 2006
FOURTH QUARTER AND YEAR-END RESULTS
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SECOND CONSECUTIVE QUARTER OF PROFITABILITY AND RECORD REVENUE
FOURTH FISCAL QUARTER AND RECENT HIGHLIGHTS
o Earned revenues of $3.6 million, an increase of 16% over the same
three-month period last year
o Modest profit earning Net Income of $28,000
o Achieved Adjusted EBITDA(1) of $779,000
o Operating Profit of $470,000
o Raised $2 million in equity capital in June 2006
FISCAL YEAR 2006 HIGHLIGHTS
o Earned revenues of $12.5 million, an increase of 21% over prior year
o Achieved Adjusted EBITDA(1) of $1.9 million
o Net loss of $1.2 million, an improvement of $4.1 million over prior
year loss of $5.3 million
o Launched version 8.0 of iLinc's award winning suite of Web
conferencing software
PHOENIX, Arizona (June 22, 2006) - iLinc Communications, Inc. (AMEX:ILC),
developers of Web conferencing software and audio conferencing solutions, today
announced results for fiscal 2006 fourth quarter and year ended March 31, 2006.
Revenues increased 16% to $3.6 million for the three months ended March 31,
2006, when compared with revenues of $3.1 million for the same three-month
period last year. The Company reported a net income of $28,000 or break even per
basic and diluted share, as compared with a net loss of $925,000, or $0.04 per
basic and diluted share, for the same three-month period last year. For the
three months ended March 31, 2006, income from operations was $470,000, compared
to a loss from operations of $407,000 for the same three-month period last year.
The Company also reported Adjusted EBITDA(1) of $779,000 for the three months
ended March 31, 2006, an improvement of $926,000 over the same three-month
period last year.
Revenues increased 21% to $12.5 million for the twelve months ended March 31,
2006, when compared with revenues of $10.4 million for same twelve-month period
last year. The Company reported a net loss of $1.2 million, or $0.05 per basic
and diluted share, as compared with a net loss of $5.3 million, or $0.23 per
basic and diluted share, for the same twelve-month period last year. The Company
also reported income from operations of $743,000 for fiscal year 2006 as
compared to a loss from operations of $3.4 million for the fiscal year 2005. The
Company reported Adjusted EBITDA(1) of $1.9 million for the twelve months ended
March 31, 2006, an improvement of $3.9 million over the same twelve-month period
last year.
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James M. Powers, Jr., president and chief executive officer of iLinc
Communications, said "I am very pleased to report continued improvement in
almost every aspect of our operational and financial performance. In the fourth
quarter, we again achieved gains in top line revenue, while posting significant
EBITDA and a modest net income. I am proud of our team and the results of their
efforts which contributed to recent industry recognition received from
Forrester Research, noting iLinc as a 'strong performer'." Dr. Powers added,
"During the fourth fiscal quarter, we continued to grow revenues with sales to
new customers, in combination with repeat sales within our notable customer
base. We remain committed to continued investment in technology and product
development."
James Dunn, Jr., senior vice president and chief financial officer of iLinc
Communications, said, "During the fiscal year ending March 31, 2006 we focused
on cost reductions and cost containment that would sustain revenue growth while
achieving bottom line improvement. Sustaining profitability in Fiscal 2007 will
remain a high priority for iLinc. We will continue to hold down overhead where
possible, without stifling top-line revenue growth. We recently raised $2
million in equity capital to shore up our balance sheet and provide further
confidence to our customers and shareholder's alike. We hope our continued
improvement in both our top and bottom line demonstrates to our customers,
partners and shareholders our commitment to financial stability and sustainable
quarterly growth."
Dr. Powers continued, "With our unique license model and the scalability of our
product line, we expect to match or exceed the 22% annual projected growth rate
in the Web conferencing industry during fiscal 2007. We continue to take market
share from larger competitors by leveraging our distinctive competencies and are
making solid progress toward our goal of expanding our indirect channel
distribution. We are accomplishing this through strategic partnerships that we
believe will provide significant external growth opportunities as well as
sustainable financial performance in future quarters."
A webcast and replay of iLinc Communications' fourth quarter and fiscal year
2006 conference call will be available online through the Company's Web site at
www.iLinc.com beginning at 12:00 p.m. Eastern time on June 22, 2006.
(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 years ended March 31, 2006 and 2005.
THREE MONTHS ENDED YEAR ENDED
MARCH 31, MARCH 31,
2006 2005 2006 2005
(IN THOUSANDS) (IN THOUSANDS)
---------- ---------- ---------- ----------
Net income/(loss) ......................... $ 28 $ (925) $ (1,171) $ (5,237)
Non-cash charges and credits:
Interest expense and financing fees ....... 453 423 1,958 1,939
Debt conversion expense .................. 9 -- 338 --
Gain on debt settlement .................. (29) (47) (81) (82)
Gain on sale of assets ................... -- (2) (40) (6)
Adjustment to acquisition liabilities .... (32) -- (643) --
Interest income .......................... -- (4) (5) (31)
Depreciation .............................. 233 236 940 845
Amortization .............................. 117 172 575 618
---------- ---------- ---------- ----------
Adjusted EBITDA .................... $ 779 $ (147) $ 1,871 $ (2,044)
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ABOUT ILINC COMMUNICATIONS, INC.
iLinc Communications, Inc. is a leading developer of Web conferencing software
and audio (telephone) 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 INCLUDE THE RATE OF ACCEPTANCE OF THE
COMPANY'S PRODUCTS AND SERVICES BY CUSTOMERS, CHANGES IN THE WEB CONFERENCING
AND AUDIO CONFERENCING MARKET IN GENERAL, THE COMPANY'S NEED FOR WORKING
CAPITAL, THE COMPETITION THE COMPANY FACES FROM LARGER AND MORE WELL-CAPITALIZED
COMPETITORS, AND OTHER MATTERS MORE FULLY 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 YEAR ENDED
MARCH 31, MARCH 31,
--------------------------- ---------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
(unaudited) (audited)
Revenues
Software Licenses .............................................. $ 891 $ 931 $ 3,014 $ 3,274
Software and audio services .................................... 1,912 1,591 7,070 5,052
Maintenance and professional services .......................... 777 574 2,448 2,043
----------- ----------- ----------- -----------
Total revenues ............................................. 3,580 3,096 12,532 10,369
----------- ----------- ----------- -----------
Cost of revenues
Software Licenses .............................................. (21) 8 51 154
Software and audio services .................................... 1,043 1,083 3,881 3,799
Maintenance and professional services .......................... 292 193 827 792
Amortization of acquired developed technology .................. 67 126 376 451
----------- ----------- ----------- -----------
Total cost of revenues ..................................... 1,381 1,410 5,135 5,196
----------- ----------- ----------- -----------
Gross profit ...................................................... 2,199 1,686 7,397 5,173
----------- ----------- ----------- -----------
Operating expenses
Research and development ....................................... 337 386 1,392 1,545
Sales and marketing ............................................ 820 904 3,075 4,078
General and administrative ..................................... 572 803 2,187 2,924
----------- ----------- ----------- -----------
Total operating expenses ................................... 1,729 2,093 6,654 8,547
----------- ----------- ----------- -----------
Income/(loss) from operations ..................................... 470 (407) 743 (3,374)
Interest expense ............................................... (268) (232) (1,041) (1,081)
Amortization of beneficial debt conversion ..................... (151) (188) (856) (853)
----------- ----------- ----------- -----------
Total interest expense ..................................... (419) (420) (1,897) (1,934)
Net (loss)/gain on settlement of debt and other obligations .... 30 47 (257) 82
Interest income and other ...................................... (54) (2) 117 27
Gain on sale of assets ......................................... -- -- 40 --
----------- ----------- ----------- -----------
Income/(loss) from continuing operations before income taxes ... 27 (782) (1,254) (5,199)
Income taxes ................................................... -- -- -- --
----------- ----------- ----------- -----------
Income/(loss) from continuing operations .......................... 27 (782) (1,254) (5,199)
Income/(loss) from discontinued operations ........................ 1 (143) 83 (128)
----------- ----------- ----------- -----------
Net income/(loss) ................................................. $ 28 $ (925) $ (1,171) $ (5,327)
Series A and B preferred stock dividends .......................... (39) (24) 30)
Imputed preferred stock dividends ................................. -- -- (55) --
----------- ----------- ----------- -----------
Loss available to common shareholders ............................. $ (11) $ (949) $ (1,356) $ (5,432)
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Loss per common share, basic and diluted
From continuing operations ..................................... $ -- $ (0.03) $ (0.05) $ (0.23)
From discontinued operations ................................... -- (0.01) -- --
----------- ----------- ----------- -----------
loss per common share ...................................... $ -- $ (0.04) $ (0.05) $ (0.23)
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Number of shares used in calculation of loss per share:
Basic ......................................................... 27,186 24,145 26,075 23,179
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Diluted ....................................................... 27,186 24,145 26,075 23,179
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ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
MARCH 31, MARCH 31,
2006 2005
----------- -----------
(AUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents ............................................... $ 466 $ 532
Accounts receivable, net of allowance for doubtful accounts of
$120 and $84, respectively ............................................ 2,207 1,949
Note receivable ......................................................... 12 25
Prepaid and other current assets ........................................ 30 69
----------- -----------
Total current assets .................................................. 2,715 2,575
Property and equipment, net ................................................ 336 1,221
Goodwill ................................................................... 11,206 10,797
Intangible assets, net ..................................................... 1,731 2,504
Other assets .............................................................. 12 18
Assets of discontinued operations ......................................... -- 114
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Total assets .......................................................... $ 16,000 $ 17,229
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ....................................... $ 199 $ 885
Accounts payable trade .................................................. 1,257 1,771
Accrued liabilities ..................................................... 2,213 2,960
Current portion of capital lease liabilities ............................ 70 196
Deferred revenue ........................................................ 917 1,014
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Total current liabilities ............................................. 4,656 6,826
Long term debt, less current maturities, net of discount and
beneficial conversion feature of $1,493 and $2,120, respectively ......... 6,974 6,702
Capital lease liabilities, less current maturities ......................... -- 31
----------- -----------
Total liabilities ..................................................... 11,630 13,559
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value 10,000,000 shares authorized, Series A
127,500 shares and 127,500 shares issued and outstanding, liquidation
preference of $1,275,000 and $1,275,000, respectively; and Series B,
70,000 shares and no shares issued and outstanding, liquidation
preference of $700,000 and $0, respectively ............................. -- --
Common stock, $.001 par value 100,000,000 shares authorized, 28,923,168
and 25,577,287 issued, respectively ..................................... 29 26
Additional paid-in capital .............................................. 44,228 42,175
Accumulated deficit ..................................................... (38,479) (37,123)
Less: 1,432,412 treasury shares at cost ................................ (1,408) (1,408)
----------- -----------
Total shareholders' equity ............................................ 4,370 3,670
----------- -----------
Total liabilities and shareholders' equity ............................ $ 16,000 $ 17,229
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