EXHIBIT 99.1
iLinc
COMMUNICATIONS
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 SECOND QUARTER RESULTS
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FOURTH CONSECUTIVE QUARTER OF PROFITABILITY
SECOND FISCAL QUARTER HIGHLIGHTS
o Earned revenues of $3.5 million, an increase of 15% over the
same three-month period last year
o Fourth consecutive quarter of profitability with net income of
$156,000
o New records set in per minute usage and number of concurrent
connections to hosted servers
o Achieved Adjusted EBITDA(1) of $754,000
PHOENIX, Arizona (October 26, 2006) - iLinc Communications, Inc. (AMEX:ILC),
developers of Web conferencing software and audio conferencing solutions, today
announced results for fiscal 2007 second quarter ended September 30, 2006.
Revenues increased 15% to $3.5 million for the three months ended September 30,
2006, when compared with revenues of $3.0 million for the same three-month
period last year. Revenues increased 24% to $7.1 million for the six months
ended September 30, 2006, when compared with revenues of $5.7 million for the
same six-month period last year.
The Company reported a net income of $156,000 or breakeven per basic and diluted
share, as compared with a net loss of $521,000, or ($0.02) per basic and diluted
share, for the same three-month period last year. The Company reported a net
income of $290,000 or $0.01 per basic and diluted share, as compared with a net
loss of $1.4 million, or ($0.06) per basic and diluted share, for the same
six-month period last year.
For the three months ended September 30, 2006, income from operations was
$536,000, compared to $312,000 for the same three-month period last year. For
the six months ended September 30, 2006, income from operations was $1.1 million
compared to a loss from operations of $146,000 for the same six-month period
last year. The Company reported Adjusted EBITDA(1) of $754,000 for the three
months ended September 30, 2006, an improvement of $33,000 over the same
three-month period last year. The Company reported Adjusted EBITDA(1) of $1.6
million for the six months ended September 30, 2006, an improvement of $934,000
over the same six-month period last year.
James M. Powers, Jr., President and Chief Executive Officer of iLinc
Communications, said "iLinc again recorded significant gains in the September
quarter in top-line revenue growth and bottom-line net income improvement when
compared to the same period last year. We continue to advance our announced
indirect sales distribution strategy which is beginning to have an impact after
two quarters of implementation. Recent accolades put iLinc in the top four
enterprise class Web conferencing software providers, with version 8.5 of our
award winning software suite due for release in December. While our
quarter-over-quarter revenue growth was less than planned, we have made course
corrections where necessary to achieve our fiscal year goals."
James Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc
Communications, said, "The September quarter marks our fourth consecutive
quarter of profitability and continued improvement in our overall financial
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condition. We were pleased to post record level of earnings from operations and
net income. With our relatively flat cost structure, we expect to see rapidly
improving margins as we grow top-line revenue. We remain well-positioned from an
operational and financial standpoint to achieve the goals we established for the
2007 fiscal year."
"With the execution of two significant distribution agreements in June and
another OEM agreement this quarter, we look to aggressively grow market share
and sales by leveraging our new indirect channels. During the quarter we made
significant progress with those new distribution partners and we expect to see
meaningful revenues from indirect channels in the December quarter. With
indirect sales ramping up and our growing pipeline of direct sales
opportunities, we expect to exceed the 22% annual projected growth rate in the
Web conferencing industry during fiscal 2007," concluded Dr. Powers.
A Webcast of iLinc Communications' second quarter fiscal year 2007 conference
call will be hosted live at 11:00 a.m. Eastern time on October 26, 2006. A
replay of the event will be available after the call and accessible online
through the Company's Web site at www.iLinc.com.
(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 and six months ended
September 30, 2006 and 2005.
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2006 2005 2006 2005
---- ---- ---- ----
(IN THOUSANDS) (IN THOUSANDS)
Net income (loss) ............. $ 156 $ (521) $ 290 $(1,406)
Non-cash charges and credits:
Interest expense ........... 397 588 798 1,019
Financing and late fees .... 7 13 23 16
Debt conversion expense .... -- 329 -- 329
Warrant expense ............ -- -- 15 7
Gain on debt settlement .... (8) (50) (8) (42)
Gain on sale of assets ..... (3) (40) (3) (40)
Interest income ............ (13) (2) (16) (4)
Stock Compensation Expense.. 46 10 73 20
Depreciation ............... 55 235 226 471
Amortization ............... 117 159 234 328
------- ------- ------- -------
Adjusted EBITDA ........ $ 754 $ 721 $ 1,632 $ 698
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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.
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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.
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ILINC COMMUNICATIONS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
2006 2005 2006 2005
-------- -------- -------- --------
(unaudited) (unaudited)
Revenues
Software licenses ................................................... $ 916 $ 751 $ 2,150 $ 1,273
Software and audio services ......................................... 1,841 1,711 3,609 3,411
Maintenance and professional services ............................... 694 543 1,297 994
-------- -------- -------- --------
Total revenues .................................................. $ 3,451 $ 3,005 $ 7,056 $ 5,678
-------- -------- -------- --------
Cost of revenues
Software Licenses ................................................... 36 -- 81 32
Software and audio services ......................................... 867 796 1,843 1,879
Maintenance and professional services ............................... 230 185 400 298
Amortization of acquired developed technology ....................... 67 108 134 227
-------- -------- -------- --------
Total cost of revenues .......................................... 1,200 1,089 2,458 2,436
-------- -------- -------- --------
Gross profit ........................................................... 2,251 1,916 4,598 3,242
-------- -------- -------- --------
Operating expenses
Research and development ............................................ 294 346 598 704
Sales and marketing ................................................. 756 769 1,614 1,554
General and administrative .......................................... 665 489 1,299 1,130
-------- -------- -------- --------
Total operating expenses ........................................ 1,715 1,604 3,511 3,388
-------- -------- -------- --------
Income (loss) from operations ......................................... 536 312 1,087 (146)
Interest expense .................................................... (246) (259) (497) (527)
Amortization of beneficial debt conversion .......................... (151) (329) (301) (492)
-------- -------- -------- --------
Total interest expense .......................................... (397) (588) (798) (1,019)
Net (loss) gain on settlement of debt and other obligations ......... 8 (279) 8 (287)
Interest income (charges) and other ................................ 7 (11) (20) (6)
Gain on sale of assets .............................................. 3 40 3 40
-------- -------- -------- --------
Income (loss) from continuing operations before income taxes ........ 157 (526) 280 (1,418)
Income taxes ........................................................ -- -- -- --
-------- -------- -------- --------
Income (loss) from continuing operations ............................ 157 (526) 280 (1,418)
Income (loss) from discontinued operations .......................... (1) 5 10 12
-------- -------- -------- --------
Net income (loss) ..................................................... 156 (521) 290 (1,406)
Series A and B preferred stock dividends .............................. (40) (26) (79) (51)
Imputed preferred stock dividends ..................................... -- (55) -- (55)
-------- -------- -------- --------
Income (loss) available to common shareholders ........................ 116 (602) 211 (1,512)
======== ======== ======== ========
Income (loss) per common share, basic and diluted
From continuing operations .......................................... $ -- $ (0.02) $ 0.01 $ (0.06)
From discontinued operations ........................................ -- -- -- --
-------- -------- -------- --------
Income (loss) per common share .................................. $ -- $ (0.02) $ 0.01 $ (0.06)
======== ======== ======== ========
Number of shares used in calculation of income (loss) per share:
Basic .............................................................. 33,020 25,855 30,919 25,000
======== ======== ======== ========
Diluted ............................................................ 33,227 25,855 31,104 25,000
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ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, MARCH 31,
2006 2006
-------- --------
(UNAUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents ......................................................... $ 401 $ 466
Certificates of deposit and marketable securities ................................. 1,012 --
Accounts receivable, net of allowance for doubtful accounts of $103 and $120,
respectively ...................................................................... 2,498 2,207
Note receivable ................................................................... 64 12
Prepaid and other current assets .................................................. 538 30
-------- --------
Total current assets ............................................................ 4,513 2,715
Property and equipment, net .......................................................... 469 336
Goodwill ............................................................................. 11,206 11,206
Intangible assets, net ............................................................... 1,585 1,731
Other assets ......................................................................... 14 12
Assets of discontinued operations .................................................... -- --
-------- --------
Total assets .................................................................... $ 17,787 $ 16,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ................................................. $ 3,269 $ 199
Accounts payable trade ............................................................ 1,228 1,257
Accrued liabilities ............................................................... 1,511 2,213
Current portion of capital lease liabilities ...................................... -- 70
Deferred revenue .................................................................. 998 917
-------- --------
Total current liabilities ....................................................... 7,006 4,656
Long term debt, less current maturities, net of discount and beneficial conversion
feature of $1,273 and $1,493, at September 30, and March 31, 2006, respectively ...... 4,006 6,974
Capital lease liabilities, less current maturities ................................... -- --
-------- --------
Total liabilities ............................................................... 11,012 11,630
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value 10,000,000 shares authorized, Series A 120,000
and 127,5000 shares issued and outstanding, respectively, liquidation
preference of $1,200,000 and $1,275,000, respectively; and Series B, 70,000
shares issued and outstanding, liquidation preference of $700,000 ................. -- --
Common stock, $.001 par value 100,000,000 shares authorized, 34,493,677 and
28,923,168 issued, respectively ................................................... 34 29
Additional paid-in capital ........................................................ 46,417 44,228
Accumulated deficit ............................................................... (38,268) (38,479)
Less: 1,432,412 treasury shares at cost .......................................... (1,408) (1,408)
-------- --------
Total shareholders' equity ...................................................... 6,775 4,370
-------- --------
Total liabilities and shareholders' equity ...................................... $ 17,787 $ 16,000
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