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 ANNOUNCES FISCAL 2007 THIRD QUARTER RESULTS
THIRD FISCAL QUARTER HIGHLIGHTS
o Earned revenues of $3.65 million, an increase of 12% over the same
three-month period last year
o Pro Forma Net Income(1) of $125,000 results in Fifth Consecutive
Quarter of Profitability
o Achieved Adjusted EBITDA(1) of $723,000
o New Significant Partnership with InterTel
o Senior Debt Extended to July, 2010
PHOENIX, Arizona (January 25, 2007) - iLinc Communications, Inc. (AMEX:ILC),
developers of Web conferencing software and audio conferencing solutions, today
announced results for fiscal 2007 third quarter ended December 31, 2006.
Revenues increased 12% to $3.65 million for the three months ended December 31,
2006, when compared with revenues of $3.3 million for the same three-month
period last year. Revenues increased 20% to $10.7 million for the nine months
ended December 31, 2006, when compared with revenues of $9.0 million for the
same nine-month period last year.
The Company reported a pro forma net income(1) of $125,000 or breakeven per
basic and diluted share for the three months ended December 31, 2006, as
compared with a net income of $207,000, or $0.01 per basic and diluted share,
for the same three-month period last year. The pro forma net income is net
income before a one-time charge of $160,000 recorded as a loss on debt
extinguishment as a result of the extension of the Company's senior debt to
2010. The Company reported a pro forma net income(1) of $415,000 or $0.01 per
basic and diluted share for the nine months ended December 31, 2006, as compared
with a net loss of $1.2 million, or $0.05 per basic and diluted share, for the
same nine-month period last year, an improvement at the bottom line of over $1.6
million.
For the three months ended December 31, 2006, income from operations was
$519,000, compared to $419,000 for the same three-month period last year. For
the nine months ended December 31, 2006, income from operations was $1.6 million
compared to income from operations of $273,000 for the same nine-month period
last year. The Company also reported Adjusted EBITDA(1) of $723,000 for the
three months ended December 31, 2006, an improvement of $282,000 over the same
three-month period last year. The Company also reported Adjusted EBITDA(1) of
$2.4 million for the nine months ended December 31, 2006, an improvement of $1.2
million over the same nine-month period last year.
James M. Powers, Jr., President and Chief Executive Officer of iLinc
Communications, said "Our revenues returned to the upward growth trend that we
have come to expect. We remain confident in the growth plans established for
this fiscal year and expect to continue to post quarter over quarter revenue
growth. To that end, we anticipate a significant increase in revenue for our
fourth fiscal quarter and we anticipate continued gains in net income and
EBITDA."
James Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc
Communications, said, "We were pleased to have extended our senior debt for an
additional three years on what we view as favorable terms, further strengthening
our balance sheet and overall capital structure. We continue to seek ways to
grow top-line revenue while maintaining profitability. We remain well-positioned
from an operational and financial standpoint to achieve the goals we established
for the 2007 fiscal year."
"Notably in the Quarter we executed a reseller agreement with Inter-Tel, a new
and significant reseller that advances our announced indirect sales distribution
strategy. We look to aggressively grow market share and sales by leveraging our
new indirect channels and expect to see meaningful sales from those efforts in
the March quarter," concluded Dr. Powers.
A Webcast of iLinc Communications' third quarter fiscal year 2007 conference
call will be hosted live at 11:00 a.m. Eastern time on January 25, 2007.
Interested parties may participate in the iLinc online meeting and/or listen to
the audio portion via the telephone. To join the live online session and see the
presentation, please go to http://ir.ilinc.com/join/rmscrf and follow the login
instructions. To hear the audio portion of the meeting, call 1-800-282-9233 and
enter pin number 3494# when prompted. 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 AND PRO FORMA NET INCOME, NON-GAAP FINANCIAL
MEASURES
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. The net loss for the three months
ended December 31, 2006 was primarily attributed to the non-recurring loss of
$160,000 on extinguishment of debt resulting from the extension of the Company's
senior debt. This was a one-time charge to accelerate the interest expense
accounted for as debt discount and deferred offering costs under the original
terms of the senior debt and accounted for as an "extinguishment of debt for
accounting purposes" under the Guidance of EITF 96-19. Excluding this one-time
charge, pro forma net income for the three months ended December 31, 2006 was
$125,000. A reconciliation of net loss to Adjusted EBITDA is as follows for the
three and nine months ended December 31, 2006 and 2005.
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------- -------------------
2006 2005 2006 2005
(IN THOUSANDS) (IN THOUSANDS)
Net loss (income) ............................ $ (35) $ 207 $ 255 $(1,199)
Loss on extinguishment of debt ............... 160 -- 160 --
------- ------- ------- -------
Pro forma net income (loss) .............. 125 207 415 (1,199)
Non-cash charges and credits:
Interest expense ............................. 394 459 1,192 1,478
Financing and late fees ...................... 9 11 32 27
Debt conversion expense ...................... -- -- -- 329
Warrant expense .............................. -- -- 15 7
Gain on debt settlement ...................... -- -- (8) (42)
Gain on sale of assets ....................... -- -- (3) (40)
Adjustment of acquisition liabilities to
cost of sales .............................. -- (355) -- (355)
Adjustment of acquisition liabilities to
general and administrative expenses ........ -- (89) -- (89)
Adjustment of acquisition liabilities to
other income ............................... -- (167) -- (167)
Interest income .............................. (9) (1) (25) (5)
Stock Compensation Expense ................... 33 10 106 30
Depreciation ................................. 54 236 280 707
Amortization ................................. 117 130 351 458
------- ------- ------- -------
Adjusted EBITDA ....................... $ 723 $ 441 $ 2,355 $ 1,139
======= ======= ======= =======
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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.
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.
-3-
ILINC COMMUNICATIONS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------- ---------------------
2006 2005 2006 2005
(unaudited) (unaudited)
Revenues
Software Licenses ............................................... $ 1,105 $ 850 $ 3,255 $ 2,123
Software and audio services ..................................... 1,831 1,747 5,440 5,158
Maintenance and professional services ........................... 715 677 2,012 1,671
-------- -------- -------- --------
Total revenues .............................................. $ 3,651 $ 3,274 $ 10,707 $ 8,952
-------- -------- -------- --------
Cost of revenues
Software Licenses ............................................... 51 40 132 72
Software and audio services ..................................... 884 959 2,727 2,838
Maintenance and professional services ........................... 310 237 710 535
Amortization of acquired developed technology ................... 68 82 202 309
-------- -------- -------- --------
Total cost of revenues ...................................... 1,313 1,318 3,771 3,754
-------- -------- -------- --------
Gross profit ....................................................... 2,338 1,956 6,936 5,198
-------- -------- -------- --------
Operating expenses
Research and development ........................................ 307 351 905 1,055
Sales and marketing ............................................. 924 701 2,538 2,255
General and administrative ...................................... 588 485 1,887 1,615
-------- -------- -------- --------
Total operating expenses .................................... 1,819 1,537 5,330 4,925
-------- -------- -------- --------
Income from operations ........................................... 519 419 1,606 273
Interest expense ................................................ (244) (246) (741) (773)
Amortization of beneficial debt conversion ...................... (150) (213) (451) (705)
-------- -------- -------- --------
Total interest expense ...................................... (394) (459) (1,192) (1,478)
Loss on extinguishment of debt .................................. (160) -- (160) --
Net gain (loss) on settlement of debt and other obligations ..... -- -- 8 (287)
Interest income (charges) and other ............................. -- 177 (20) 171
Gain on sale of assets .......................................... -- -- 3 40
-------- -------- -------- --------
(Loss) income from continuing operations before income taxes .... (35) 137 245 (1,281)
Income taxes .................................................... -- -- -- --
-------- -------- -------- --------
Loss (income) from continuing operations ........................ (35) 137 245 (1,281)
Income from discontinued operations ............................ -- 70 10 82
-------- -------- -------- --------
Net loss (income) ................................................. (35) 207 255 (1,199)
Series A and B preferred stock dividends .......................... (38) (40) (117) (91)
Imputed preferred stock dividends ................................. -- -- -- (55)
-------- -------- -------- --------
Loss (income) available to common shareholders .................... (73) 167 138 (1,345)
======== ======== ======== ========
Loss (income) per common share, basic and diluted
From continuing operations ...................................... $ (0.00) $ 0.01 $ 0.00 $ (0.05)
From discontinued operations .................................... -- -- -- --
-------- -------- -------- --------
Loss (income) per common share .............................. $ (0.00) $ 0.01 $ 0.00 $ (0.05)
======== ======== ======== ========
Number of shares used in calculation of loss (income) per share:
Basic .......................................................... 33,190 27,114 31,676 25,705
======== ======== ======== ========
Diluted ........................................................ 33,190 27,115 31,991 25,705
======== ======== ======== ========
-4-
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, MARCH 31,
2006 2006
-------- --------
(UNAUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents .................................................. $ 772 $ 466
Certificates of deposit and marketable securities .......................... 768 --
Accounts receivable, net of allowance for doubtful accounts of
$96 and $120, respectively ............................................... 2,128 2,207
Note receivable ............................................................ 52 12
Prepaid and other current assets ........................................... 788 30
-------- --------
Total current assets ..................................................... 4,508 2,715
Property and equipment, net ................................................... 448 336
Goodwill ...................................................................... 11,206 11,206
Intangible assets, net ........................................................ 1,632 1,731
Other assets ................................................................. 14 12
Assets of discontinued operations ............................................ -- --
-------- --------
Total assets ............................................................. $ 17,808 $ 16,000
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt .......................................... $ 483 $ 199
Accounts payable trade ..................................................... 1,099 1,257
Accrued liabilities ........................................................ 1,277 2,213
Current portion of capital lease liabilities ............................... -- 70
Deferred revenue ........................................................... 1,091 917
-------- --------
Total current liabilities ................................................ 3,950 4,656
Long term debt, less current maturities, net of discount and beneficial
conversion feature of $1,043 and $1,493, respectively ...................... 7,020 6,974
Capital lease liabilities, less current maturities ............................ -- --
-------- --------
Total liabilities ........................................................ 10,970 11,630
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value 10,000,000 shares authorized, Series A,
115,000 and 127,500 shares issued and outstanding, liquidation preference of
$1,150,000 and $1,275,000, respectively and Series B, 64,000 and 70,000
shares issued and outstanding, liquidation preference of $640,000 and
$700,000, respectively ..................................................... -- --
Common stock, $.001 par value 100,000,000 shares authorized, 34,837,843 and
28,923,168 issued, respectively ............................................ 35 29
Additional paid-in capital ................................................. 46,552 44,228
Accumulated deficit ........................................................ (38,341) (38,479)
Less: 1,432,412 treasury shares at cost ................................... (1,408) (1,408)
-------- --------
Total shareholders' equity ............................................... 6,838 4,370
-------- --------
Total liabilities and shareholders' equity ............................... $ 17,808 $ 16,000
======== ========
-End-