EXHIBIT 99.1
[GRAPHIC OMITTED] LOGO
ILINC ANNOUNCES FIRST QUARTER FISCAL 2009 RESULTS
FIRST QUARTER HIGHLIGHTS AND RECENT EVENTS
o Sold audio conferencing assets for $4.5 million in cash
o Recorded net income of $1.2 million or $0.04 per basic share(1)
o Increased Software-as-a-Service ("SaaS") revenue by almost 10% over
previous quarter adding 129 new customer contracts
o Earned revenues of $1.9 million(1), an increase of 23% over the March
quarter
o Reported adjusted EBITDA(2) of $1.7 million
PHOENIX, Arizona (August 14, 2008) - iLinc (AMEX:ILC), a leader in web
conferencing, desktop video conferencing software and collaboration solutions,
today announced results for the first fiscal quarter ended June 30, 2008.
SIGNIFICANT CHANGE TO FINANCIAL STATEMENT PRESENTATION: With the sale of the
Company's audio conferencing assets(1) the Company has reclassified the results
of its audio conferencing business operations into discontinued operations. With
that reclassification, audio conferencing revenue and associated audio
conferencing expenses were netted into income from discontinued operations for
the first quarter of fiscal 2009, and on a proforma basis, for the same quarter
last fiscal year, respectively. Likewise, the gain on the sale of audio
conferencing assets is included in discontinued operations. Therefore, all
comparisons to prior periods take into account the reclassification of audio
conferencing operations and the gain on sale into discontinued operations.
First quarter total revenues from continuing operations were $1.9 million, a
decrease of 24% when compared to total revenue of $2.5 million for the same
quarter last fiscal year. Total revenues increased by $353,000 or 23% when
compared to the March quarter.
The Company reported a net income from continuing and discontinued operations of
$1.2 million or $0.04 per basic and $0.04 per diluted share during the first
quarter, as compared with net income of $78,000, or break-even per basic and
diluted share, for the same quarter last fiscal year. The Company recorded a
gain of $2 million on the sale of its audio conferencing business.
The Company reported adjusted EBITDA(2) of $1.7 million from continuing and
discontinued operations for the first quarter, as compared to $687,000 of
adjusted EBITDA(2) for the same quarter last fiscal year. The Company also
reported adjusted EBITDA(2) from continuing operations of ($254,000) during the
first quarter, as compared to adjusted EBITDA(2) of $30,000 from continuing
operations for the same quarter last fiscal year.
James M. Powers, Jr., President and Chief Executive Officer of iLinc, said,
"iLinc has undergone some significant changes in the past six months and is very
well positioned in this high growth web and video conferencing market. First, we
redirected our sales strategy toward the more prevalent Software-as-a-Service
model in early 2008. Our goal is to grow long-term subscription revenue while
continuing to sell software in those vertical markets where advantageous. We are
well underway with that effort and have begun to see the results in the form of
shortened sales cycles, increased transaction counts and continued enthusiasm in
the market for our products. Sales this quarter provided a record number of
subscription transactions, monthly recurring revenue and growing backlog. To
further our transition to a SaaS provider of award-winning collaboration
software, we successfully sold our audio conferencing assets. That sale resulted
in almost $4.5 million in cash and a $2 million gain from an asset that
customers and investors alike perceived as increasingly commoditized," added Dr.
Powers.
"The transition to the SaaS model reduced our short-term quarterly revenue and
we planned for this impact, but we believe over time it will provide long-term
compounding subscription revenue that will greatly enhance the value of our
company. After only four months, we see increasing rates of adoption that should
provide recurring monthly revenue well into the future. As an early indicator of
that forward-looking trend, our total subscription revenues were up almost 10%
when compared to the March quarter. We look forward to further describing the
sales trends that give us confidence about our future on the earnings call
today," concluded Dr. Powers.
James L. Dunn, Jr., Chief Financial Officer of iLinc, said, "Because of the
reclassification from the sale of audio and the shift from software to SaaS
revenue, we felt it important to provide not only comparisons to the same period
last fiscal year but also to the more relevant March quarter (Q4 of FY2008). We
are pleased to have raised capital in difficult capital markets and plan to
judiciously deploy that capital to foster the growth of our increasingly popular
SaaS model," concluded Mr. Dunn.
A webcast of iLinc Communications' fiscal 2009 first quarter conference call
will be hosted live at 11:00 a.m. Eastern time on August 14, 2008. 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/public/join and follow the login
instructions. To hear the audio portion of the meeting, call 1-800-447-0521 and
provide the operator with the confirmation number of 22369731 when requested. A
replay of the event will be available after the call and accessible online
through the Company's web site at www.iLinc.com.
CONTACT: JAMES L. DUNN, JR.
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(602) 952-1200
(1) ADJUSTMENT FOR AUDIO ASSET SALE iLinc sold its audio conferencing assets in
the June quarter of fiscal 2009. Pursuant to the criteria established by
Statement of Financial Accounting Standard (SFAS) No. 144, ACCOUNTING FOR THE
IMPAIRMENT OF DISPOSAL OF LONG-LIVED ASSETS, iLinc had characterized its audio
assets as "assets held-for-sale" as of March 31, 2008 and the results of the
audio conferencing operations as discontinued operations. With the consummation
of the sale of those assets in June, iLinc has reclassified audio conferencing
assets and liabilities as "related to discontinued operations" on the Balance
Sheet and all audio conferencing income and expense as discontinued operations
on the Statement of Operations. The results of prior periods have been
reclassified to provide proforma comparisons to current periods after taking
into effect the reclassification required by SFAS 144.
(2) 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 (loss), 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, 2008 and 2007.
THREE MONTHS ENDED
JUNE 30,
------------------------
2008 2007
---------- ----------
(in thousands)
Net Income ......................... $ 1,206 $ 78
Non-cash charges and credits:
Interest expense ................... 337 364
Financing and late fees ............ 9 13
Warrant expense .................... -- 21
Gain on sale of assets ............. 1 --
Income tax ......................... 21 21
Interest income .................... (12) (7)
Stock compensation expense ......... 43 36
Depreciation ....................... 66 66
Amortization ....................... 53 95
---------- ----------
Adjusted EBITDA ............ $ 1,724 $ 687
========== ==========
ABOUT ILINC COMMUNICATIONS, INC.
iLinc, a recognized leader in web conferencing, desktop video conferencing
software and collaboration solutions, aims to revolutionize the way
organizations meet and communicate. Through its software and services, iLinc
liberates people by enabling them to get more done, travel less, achieve
work-life balance while preserving the environment. iLinc offers the only
enterprise-class web and video conferencing software that allows customers to
choose between a software-as-a-service (SaaS) rental model or a traditional
software purchase model, in combination with hosting by iLinc or on-premise
installation. iLinc is headquartered in Phoenix, Arizona. For more visit
www.ilinc.com/investors.
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, iReduce, iLinc Enterprise, iLinc
Essentials and their respective logos are trademarks or registered trademarks of
iLinc Communications, Inc.
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
JUNE 30,
------------------------
2008 2007
---------- ----------
Revenues
Software licenses ....................................... $ 585 $ 1,152
Subscription services ................................... 469 511
Software maintenance, hosting and other services ........ 866 855
---------- ----------
Total revenues ..................................... 1,920 2,518
---------- ----------
Cost of revenues
Software licenses ....................................... 45 67
Subscription services ................................... 66 103
Software maintenance, hosting and other services ........ 127 211
Amortization of technology .............................. 53 --
---------- ----------
Total cost of revenues ............................. 291 381
---------- ----------
Gross profit ............................................... 1,629 2,137
---------- ----------
Operating expenses
Research and development ................................ 531 362
Sales and marketing ..................................... 900 1,172
General and administrative .............................. 613 663
---------- ----------
Total operating expenses ........................... 2,044 2,197
---------- ----------
(Loss) from operations ..................................... (415) (60)
Interest expense ........................................... (258) (256)
Amortization of beneficial debt conversion ................. (79) (81)
---------- ----------
Total interest expense ............................. (337) (337)
Interest income (charges) and other ........................ 3 (27)
---------- ----------
Loss from continuing operations before income taxes ........ (749) (424)
Income taxes ............................................... (21) (21)
---------- ----------
Loss from continuing operations ............................ (770) (445)
Income from discontinued operations ....................... 1,976 523
---------- ----------
Net income ................................................ 1,206 78
Series A and B preferred stock dividends ................ (29) (35)
---------- ----------
Income available to common shareholders ................... $ 1,177 $ 43
========== ==========
Income per common share, basic
From continuing operations .............................. $ (0.02) $ (0.01)
From discontinued operations ............................ 0.06 0.01
---------- ----------
Net income per common share, basic ................. $ 0.04 $ --
========== ==========
Income per common share, diluted
From continuing operations .............................. $ (0.02) $ (0.01)
From discontinued operations ............................ 0.06 0.01
---------- ----------
Net income per common share, diluted ............... $ 0.04 $ --
========== ==========
Number of shares used in calculation of income per share:
Basic .................................................. 34,256 33,585
========== ==========
Diluted ................................................ 34,256 33,585
========== ==========
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, MARCH 31,
2008 2008
---------- ----------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents ..................................................... $ 1,232 $ 669
Certificates of deposit ....................................................... 2,760 373
Accounts receivable, net of allowance for doubtful accounts of $25
and $30 at June 30 and March 31, 2008, respectively .......................... 785 627
Other receivables ............................................................. 953 --
Prepaid expenses and other current assets ..................................... 301 272
Assets related to discontinued operations ..................................... 594 3,145
---------- ----------
Total current assets ........................................................ 6,625 5,086
Property and equipment, net ...................................................... 521 566
Goodwill ......................................................................... 9,229 9,520
Intangible assets, net ........................................................... 788 869
Other receivables ................................................................ 120 --
Other assets .................................................................... 14 14
---------- ----------
Total assets ................................................................ $ 17,297 $ 16,055
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ............................................. $ 95 $ 95
Accounts payable trade ........................................................ 458 612
Accrued liabilities ........................................................... 993 751
Current portion of capital lease liabilities .................................. 124 120
Deferred revenue .............................................................. 1,509 1,507
Liabilities related to discontinued operations ................................ 707 778
---------- ----------
Total current liabilities ................................................... 3,886 3,863
Long term debt, less current maturities, net of discount and beneficial
conversion feature of $741 and $791, at June 30 and March 31, 2008, respectively . 7,566 7,535
Capital lease liabilities, less current maturities ............................... 224 256
Deferred tax liability ........................................................... 406 384
---------- ----------
Total liabilities ........................................................... 12,082 12,038
---------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock series A & B, 10,000,000 shares authorized:
Series A preferred stock, $.001 par value, 75,000 and 105,000 shares
issued and outstanding, liquidation preference of $750,000 and $1,050,000
at June 30 and March 31, 2008, respectively. ................................. -- --
Series B preferred stock, $.001 par value, 55,000 shares issued and
outstanding, liquidation preference of $550,000 at June 30 and
March 31, 2008, respectively ................................................. -- --
Common stock, $.001 par value 100,000,000 shares authorized 36,056,228
and 35,456,228 issued at June 30 and March 31, 2008, respectively ............ 35 35
Additional paid-in capital .................................................... 46,519 46,498
Accumulated deficit ........................................................... (39,931) (41,108)
Less: 1,432,412 treasury shares at cost ...................................... (1,408) (1,408)
---------- ----------
Total shareholders' equity .................................................. 5,215 4,017
---------- ----------
Total liabilities and shareholders' equity .................................. $ 17,297 $ 16,055
========== ==========
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