[iLinc Communications logo]
ILINC ANNOUNCES FIRST QUARTER FISCAL 2008 RESULTS
FIRST QUARTER HIGHLIGHTS AND RECENT EVENTS
o Earned record revenue of $4.1 million, an increase of 14% over same
period prior year
o Improved profit margin and operating margin
o Fifth quarter of profitability out of past seven quarters
o Increased cash reserves to $1.7 million
o Added new Director with significant Web conferencing experience
PHOENIX, Arizona (July 31, 2007) - iLinc Communications, Inc. (AMEX:ILC), a
leading developer of Web conferencing software and audio conferencing services,
today announced results for the first quarter of fiscal year 2008 ended June 30,
2007.
For the three months ended June 30, 2007, total revenue increased 14% to $4.1
million, when compared with revenues of $3.6 million for the same three-month
period last year. For the three months ended June 30, 2007, total revenue
increased 18%, when compared with the previous quarter ended March 31, 2007.
Income from operations decreased slightly to $477,000, when compared to income
from operations of $551,000 for the same three-month period last year. However,
income from operations increased $262,000 when compared to income from
operations of $215,000 for the previous quarter ended March 31, 2007.
Net income was $78,000 or break-even per basic and diluted share for the three
months ended June 30, 2007, a slight decline from $134,000 in net income or
break-even per basic and diluted share, for the same three-month period last
year. Net income increased 139% for the three months ended June 30, 2007, when
compared to a net loss of $199,000 for the previous quarter ended March 31,
2007.
The Company also reported adjusted EBITDA(1) of $674,000 for the three-month
period ended June 30, 2007.
"We are very pleased to report increasing revenues and other operational
improvements that demonstrate that iLinc has regained its momentum," said James
M. Powers, Jr., President and Chief Executive Officer of iLinc Communications.
"The changes to the sales leadership and enhancements to the sales staff that
were implemented during the quarter are beginning to produce consistent revenue
trends," continued Dr. Powers. "We see a growing pipeline from increased
marketing activities that we believe will mature into sales bookings and revenue
gains in the coming quarters. Posting our largest sale in the history of iLinc
to a Fortune 100 customer this quarter is just one measure we would point to
when evaluating the impact of those sales changes.
Supporting that direct sales effort, we added ConferencePlus as a new indirect
distribution partner during the quarter and saw meaningful gains from Inter-Tel
and our overall indirect channel that bolster our confidence.
Lastly, we released iLinc 9, the most recent version of our award-winning Web
conferencing product. With iLinc 9 we add a fully native MAC client,
multi-window two-way video and a whole host of feature enhancements to an
already rock-solid product. iLinc 9 and our growing indirect channel will help
open new doors to customers and partners. We remain confident in the growth
plans we established for the 2008 fiscal year and expect continued gains in
revenue, net income and adjusted EBITDA," concluded Dr. Powers.
James L. Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc
Communications, said, "We are pleased to return to quarterly profitability in
this first quarter of fiscal 2008. We have achieved profitability in five of the
last seven quarters, and this is a trend that we expect to continue as we meet
our quarterly expectations and achieve the goals we have established for Fiscal
2008. As high margin software license sales continue to increase, we expect to
see improved gross profit and operating margins, resulting in more meaningful
net income. In addition, we have continued to strengthen our balance sheet and
overall capital structure as well as available operating cash. We remain
well-positioned in the marketplace from an operational and financial standpoint
to achieve the goals we established for the 2008 fiscal year," concluded Mr.
Dunn.
A Webcast of iLinc Communications' first quarter fiscal 2008 conference call
will be hosted live at 11:00 a.m. Eastern time on July 31, 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 to see the
presentation, please go to http://ir.ilinc.com/public/join and follow the login
instructions. To hear the audio portion of the meeting, call 1-800-621-2411 and
enter pin number 18531610# when prompted. A replay of the event will be
available online shortly after the call through the Company's Web site at
www.iLinc.com.
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
(1) EXPLANATION OF ADJUSTED EBITDA, A 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, cash flows, or other measures of financial
performance prepared in accordance with GAAP. A reconciliation of net income to
adjusted EBITDA is as follows for the three months ended June 30, 2007 and 2006.
THREE MONTHS ENDED
JUNE 30,
----------------------
2007 2006
(IN THOUSANDS)
Net income ..................................... $ 78 $ 134
Non-cash charges and credits:
Interest expense ............................... 351 401
Financing and late fees ........................ 13 16
Warrant expense ................................ 21 15
Interest income ................................ (7) (3)
Stock compensation expense ..................... 36 27
Income tax expense ............................. 21 --
Depreciation ................................... 66 171
Amortization ................................... 95 117
----- -----
Adjusted EBITDA ......................... $ 674 $ 878
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ABOUT ILINC COMMUNICATIONS, INC.
iLinc Communications, Inc. is a leading developer of Web conferencing software
and audio conferencing solutions for highly secure and cost-effective online
meetings, presentations, and training sessions. The Company's technology allows
people in diverse locations to communicate and collaborate online while avoiding
the expense, environmental damage, and productivity losses associated with
travel. iLinc provides an award-winning, enterprise-wide suite of Web, audio and
video conferencing solutions that can be scaled up or down to meet the needs of
any size organization. Offering the industry's most flexible pricing models,
iLinc gives organizations the power to choose an on-premise installed, on-demand
hosted, or hybrid solution--whichever model delivers the highest ROI for the
customer. iLinc is headquartered in Phoenix, Arizona with offices in New York
and Utah. 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, iReduce, iLinc Enterprise
Unlimited 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
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
JUNE 30,
--------------------
2007 2006
Revenues
Software licenses .................................... $ 1,152 $ 1,234
Subscription and audio services ...................... 2,324 1,768
Maintenance and professional services ................ 648 603
-------- --------
Total revenues ................................... $ 4,124 $ 3,605
-------- --------
Cost of revenues
Software licenses .................................... 67 45
Subscription and audio services ...................... 1,002 976
Maintenance and professional services ................ 184 170
Amortization of acquired developed software .......... 45 67
-------- --------
Total cost of revenues ........................... 1,298 1,258
-------- --------
Gross profit ............................................ 2,826 2,347
-------- --------
Operating expenses
Research and development ............................. 385 304
Sales and marketing .................................. 1,252 858
General and administrative ........................... 712 634
-------- --------
Total operating expenses ......................... 2,349 1,796
-------- --------
Income from operations .................................. 477 551
Interest expense ..................................... (270) (251)
Amortization of beneficial debt conversion ........... (81) (150)
-------- --------
Total interest expense ........................... (351) (401)
Interest income (charges) and other ................. (27) (27)
-------- --------
Income from continuing operations before income taxes 99 123
Income taxes ......................................... (21) --
-------- --------
Income from continuing operations .................... 78 123
Income from discontinued operations .................. -- 11
-------- --------
Net income ............................................. 78 134
Series A and B preferred stock dividends ............. (35) (39)
-------- --------
Income available to common shareholders ................ $ 43 $ 95
-------- --------
Income per common share, basic and diluted
From continuing operations ........................... $ -- $ --
From discontinued operations ......................... -- --
-------- --------
Income per common share .......................... $ -- $ --
-------- --------
Number of shares used in calculation of income per share:
Basic ............................................... 33,585 28,818
======== ========
Diluted ............................................. 34,343 28,944
======== ========
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, MARCH 31,
2007 2007
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ................................................. $ 1,174 $ 1,057
Certificates of deposit and marketable securities ......................... 510 504
Accounts receivable, net of allowance for doubtful accounts of
$127 and $117, at June 30, 2007 and March 31, 2007, respectively ........ 2,970 2,530
Note receivable ........................................................... -- 14
Prepaid and other current assets .......................................... 753 766
-------- --------
Total current assets .................................................... 5,407 4,871
Property and equipment, net .................................................. 732 691
Goodwill ..................................................................... 11,206 11,206
Intangible assets, net ....................................................... 1,694 1,556
Other assets ................................................................. 14 14
-------- --------
Total assets ............................................................ $ 19,053 $ 18,338
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ......................................... $ 130 $ 143
Accounts payable trade .................................................... 1,237 1,169
Accrued liabilities ....................................................... 1,323 1,119
Current portion of capital lease liabilities .............................. 73 45
Deferred revenue .......................................................... 1,724 1,483
-------- --------
Total current liabilities ............................................... 4,487 3,959
Long term debt, less current maturities, net of discount and beneficial
conversion feature of $942 and $993, at June 30, 2007 and March 31, 2007,
respectively ............................................................... 7,439 7,406
Capital lease liabilities, less current maturities ........................... 257 223
Deferred tax liability ....................................................... 320 299
-------- --------
Total liabilities ....................................................... 12,503 11,887
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value 10,000,000 shares authorized, Series A,
115,000 shares issued and outstanding, liquidation preference of $1,150,000
and Series B, 59,500 shares issued and outstanding, liquidation
preference of $595,000 .................................................... -- --
Common stock, $.001 par value 100,000,000 shares authorized, 35,017,843 and
28,923,168 issued at June 30, 2007 and March 31, 2007, respectively ....... 35 35
Additional paid-in capital ................................................ 46,670 46,614
Accumulated deficit ....................................................... (38,747) (38,790)
Less: 1,432,412 treasury shares at cost .................................. (1,408) (1,408)
-------- --------
Total shareholders' equity .............................................. 6,550 6,451
-------- --------
Total liabilities and shareholders' equity .............................. $ 19,053 $ 18,338
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