[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 ANNOUNCES FISCAL 2007 FIRST QUARTER RESULTS
-------------------------------------------------
THIRD CONSECUTIVE QUARTER OF PROFITABILITY AND RECORD REVENUE
FIRST FISCAL QUARTER HIGHLIGHTS
o Earned revenues of $3.6 million, an increase of 35% over the same
three-month period last year
o Third Consecutive Quarter of Profitability with Net Income of
$134,000
o Achieved Adjusted EBITDA(1) of $851,000
o Raised $2 million of equity capital
o Removed Going Concern from Auditor's Fiscal 2006 Opinion
PHOENIX, Arizona (July 27, 2006) - iLinc Communications, Inc. (AMEX:ILC),
developers of Web conferencing software and audio conferencing solutions, today
announced results for fiscal 2007 first quarter ended June 30, 2006.
Revenues increased 35% to $3.6 million for the three months ended June 30, 2006,
when compared with revenues of $2.7 million for the same three-month period last
year. The Company reported a net income of $134,000 or break even per basic and
diluted share, as compared with a net loss of $885,000, or $0.04 loss per basic
and diluted share, for the same three-month period last year. For the three
months ended June 30, 2006, income from operations was $551,000, compared to a
loss from operations of $458,000 for the same three-month period last year. The
Company also reported Adjusted EBITDA(1) of $851,000 for the three months ended
June 30, 2006, an improvement of over $900,000 over the same three-month period
last year.
James M. Powers, Jr., president and chief executive officer of iLinc
Communications, said "iLinc has long had one of the best products in the
industry and now we have the operational results to back it up. Recent
accolades, new distribution agreements, and renewed investor interest are only a
few of the third-party validations that demonstrate we are headed in the right
direction. This quarter, we posted our third consecutive quarter of
profitability and continued to improve our overall financial condition." Dr.
Powers added, "Again this quarter, through a combination of sales to new
customers and growth among existing customers, we were pleased to achieve record
license sales revenues that started off fiscal 2007 in the direction of
sustained growth."
James Dunn, Jr., senior vice president and chief financial officer of iLinc
Communications, said, "We will continue to hold down overhead where possible
while striving for efficient top-line revenue growth. With the $2 million of
equity capital raised in June, our auditors concluded that removal of the going
concern qualification from their fiscal 2006 opinion was appropriate. This was
one step in a ten step program that was implemented in Fiscal 2006 that we
believe will yield continuing dividends during fiscal 2007. We are
well-positioned in the marketplace and from an operational standpoint to achieve
the goals established for this fiscal year. We expect to remain profitable while
we continue our investment in direct and indirect sales as well as continued
product development."
Dr. Powers continued, "With the sales achieved this quarter and our growing
pipeline of opportunities, we expect to match or exceed the 22% annual projected
growth rate in the Web conferencing industry during fiscal 2007. With the
execution of two significant distribution agreements, we look to aggressively
grow market share by leveraging our distinctive competencies in combination with
our distributors' existing sales structure and customer base. We expect to see
meaningful sales from those two new distribution agreements in the September
quarter."
A Webcast and replay of iLinc Communications' first quarter fiscal year 2007
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 July 27, 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 three months ended June 30, 2006 and 2005.
THREE MONTHS ENDED
JUNE 30,
2006 2005
(IN THOUSANDS)
----- -----
Net income (loss) .................................. $ 134 $(885)
Non-cash charges and credits:
Interest expense and financing fees ................ 417 434
Warrant expense .................................... 15 7
Gain on debt settlement .......................... -- (8)
Interest income .................................. (3) (2)
Depreciation ....................................... 171 236
Amortization ....................................... 117 169
----- -----
Adjusted EBITDA ............................. $ 851 $ (49)
===== =====
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
JUNE 30,
---------------------
2006 2005
-------- --------
(unaudited)
Revenues
Software Licenses ............................................... $ 1,234 $ 522
Software and audio services ..................................... 1,768 1,700
Maintenance and professional services ........................... 603 451
-------- --------
Total revenues .............................................. 3,605 2,673
-------- --------
Cost of revenues
Software Licenses ............................................... 45 32
Software and audio services ..................................... 976 1,083
Maintenance and professional services ........................... 170 113
Amortization of acquired developed technology ................... 67 119
-------- --------
Total cost of revenues ...................................... 1,258 1,347
-------- --------
Gross profit ....................................................... 2,347 1,326
-------- --------
Operating expenses
Research and development ........................................ 304 358
Sales and marketing ............................................. 858 785
General and administrative ...................................... 634 641
-------- --------
Total operating expenses .................................... 1,796 1,784
-------- --------
Income (loss) from operations ..................................... 551 (458)
Interest expense ................................................ (251) (268)
Amortization of beneficial debt conversion ...................... (150) (163)
-------- --------
Total interest expense ...................................... (401) (431)
Net (loss) gain on settlement of debt and other obligations ..... -- (8)
Interest income (charges) and other ............................. (27) 5
-------- --------
Income (loss) from continuing operations before income taxes .... 123 (892)
-------- --------
Income taxes .................................................... -- --
-------- --------
Income (loss) from continuing operations ........................ 123 (892)
Income (loss) from discontinued operations ...................... 11 7
-------- --------
Net income (loss) ................................................. $ 134 $ (885)
Series A and B preferred stock dividends .......................... (39) (25)
Imputed preferred stock dividends ................................. -- --
-------- --------
Income (loss) available to common shareholders .................... $ 95 $ (910)
======== ========
Loss per common share, basic and diluted
From continuing operations ...................................... $ -- $ (0.04)
From discontinued operations .................................... -- --
-------- --------
loss per common share ....................................... $ -- $ (0.04)
======== ========
Number of shares used in calculation of loss per share:
Basic .......................................................... 28,818 24,145
======== ========
Diluted ........................................................ 28,944 24,145
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-MORE-
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, MARCH 31,
2006 2006
-------- --------
(UNAUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents ............................................................. $ 925 $ 466
Certificates of deposit and marketable securities ..................................... 1,002 --
Accounts receivable, net of allowance for doubtful accounts of $144
and $120, respectively .............................................................. 2,444 2,207
Note receivable, net of allowance for doubtful accounts $10 and $0, respectively ...... -- 12
Prepaid and other current assets ...................................................... 79 30
-------- --------
Total current assets ................................................................ 4,450 2,715
Property and equipment, net .............................................................. 181 336
Goodwill ................................................................................. 11,206 11,206
Intangible assets, net ................................................................... 1,630 1,731
Other assets ........................................................................... 12 12
Assets of discontinued operations ...................................................... -- --
-------- --------
Total assets ........................................................................ $ 17,479 $ 16,000
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ..................................................... $ 586 $ 199
Accounts payable trade ................................................................ 1,070 1,257
Accrued liabilities ................................................................... 1,873 2,213
Current portion of capital lease liabilities .......................................... 21 70
Deferred revenue ...................................................................... 998 917
-------- --------
Total current liabilities ........................................................... 4,548 4,656
Long term debt, less current maturities, net of discount and beneficial
conversion feature of $1,493 and $2,120, at June 30 and March 31, 2006,
respectively ......................................................................... 6,684 6,974
Capital lease liabilities, less current maturities ....................................... -- --
-------- --------
Total liabilities ................................................................... 11,232 11,630
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value 10,000,000 shares authorized, Series A 127,500
shares issued and outstanding, liquidation preference of $1,275,000; and
Series B, 70,000 shares issued and outstanding, liquidation preference of $700,000 .... -- --
Common stock, $.001 par value 100,000,000 shares authorized, 34,342,115 and
28,923,168 issued, respectively ....................................................... 34 29
Additional paid-in capital ............................................................ 46,005 44,228
Accumulated deficit ................................................................... (38,384) (38,479)
Less: 1,432,412 treasury shares at cost .............................................. (1,408) (1,408)
-------- --------
Total shareholders' equity .......................................................... 6,247 4,370
-------- --------
Total liabilities and shareholders' equity .......................................... $ 17,479 $ 16,000
======== ========
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