EXHIBIT 99.1
ILINC ANNOUNCES SECOND QUARTER FISCAL 2009 RESULTS
SECOND QUARTER AND FISCAL YTD HIGHLIGHTS
o Revenues of $1.6 million - with $1.2 million from recurring revenue
sources
o Increased Software-as-a-Service ("SaaS") revenue by 20% over same
three-month period last year and by 12% over the sequential June
quarter
o Added 150 new SaaS contracts with an average contract term of 22
months(1)
o Recorded quarterly sales bookings of $1.2 million and increased
contract backlog to $2.6 million(1)
o Gained traction in state government initiatives adding the states of
Vermont, Alaska and Iowa
o Nominated by the Arizona Technology Council for "Green Innovator of
Year" award
PHOENIX, Arizona (October 30, 2008) - iLinc (AMEX:ILC), a leader in web
conferencing, desktop video conferencing software and collaboration solutions,
today announced results for the second fiscal quarter ended September 30, 2008.
SIGNIFICANT CHANGE TO FINANCIAL STATEMENT PRESENTATION: WITH THE SALE OF THE
COMPANY'S AUDIO CONFERENCING ASSETS IN JUNE, 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 SIX MONTHS OF FISCAL 2009, AND ON A PROFORMA BASIS, FOR
THE SAME SIX MONTHS 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.
Total revenues from continuing operations for the three months ended September
30, 2008 were $1.6 million, a decrease of 39% or $1.0 million when compared to
total revenue of $2.6 million for the same three-month period last fiscal year.
Total revenues from continuing operations for the six months ended September 30,
2008 were $3.5 million, a decrease of 31% or $1.6 million when compared to
revenue of $5.1 million for the same six-month period last fiscal year.
The Company reported a net loss of $1.3 million or ($0.04) per basic and diluted
share during the second quarter ended September 30, 2008, as compared with a net
loss of $239,000, or ($0.01) per basic and diluted share, for the same
three-month period last fiscal year. The Company recorded a net loss of $117,000
for the six months ended September 30, 2008 as compared to a net loss of
$161,000 for the same six-month period last fiscal year.
The Company reported adjusted EBITDA(1) of ($615,000) from continuing and
discontinued operations for the second quarter, as compared to ($28,000) of
adjusted EBITDA(1) for the same three-month period last fiscal year. The Company
also reported adjusted EBITDA(1) of ($867,000) during the six months ended
September 30, 2008, as compared to adjusted EBITDA(1) of $44,000 for the same
six-month period last fiscal year.
James M. Powers, Jr., President and Chief Executive Officer of iLinc, said,
"iLinc shifted its sales focus in January to a software-as-a-service ("SaaS")
model. This shift will provide a more meaningful and valuable foundation for
recurring revenue upon which long-term success can be built, but it has reduced
our short-term revenue as anticipated. We are excited about the success we are
having with rapid customer growth, sales bookings, subscription contract backlog
and recurring revenue from our new SaaS model and recognize that traditional
revenue and income comparisons between current and prior periods under the
previous sales model may not be meaningful," continued Dr. Powers.
"We have seen continued growth in nearly all sales metrics from both new and
existing customers, in spite of current economic conditions that are causing a
global reduction in corporate spending," added Dr. Powers. "We believe that our
continued sales success is directly related to the value that our product brings
to enterprise and small-medium business customers alike. With shrinking travel
budgets, increasing hassles associated with travel and initiatives within many
organizations to be much more efficient with resources, we see increasing demand
for our web and video conferencing products. iLinc is well-positioned as an
independent provider focused intensely on web and video conferencing, and we
intend to grow our market share by taking advantage of these favorable market
drivers. We will provide additional sales metrics and details during the
earnings conference call later today so that you may judge for yourself the
results of our new SaaS sales efforts," concluded Dr. Powers.
James L. Dunn, Jr., Chief Financial Officer of iLinc, said, "The sale in June of
our audio conferencing assets provided needed cash that is being used to support
our shift from a purchase to a subscription sales strategy. With worsening
economic trends and difficult capital markets, we know how important retention
of that capital is when balanced against the investment in sales and marketing
activities. We have reshaped our organization with reductions in headcount and
expense where appropriate, while adding resources to foster sales of our
award-winning product line. We plan to maintain a cash balance that provides
sales growth while preserving investor and customer confidence," concluded Mr.
Dunn.
A webcast of iLinc Communications' fiscal 2009 second quarter conference call
will be hosted live at 11:00 a.m. Eastern time on October 30, 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 1-866-813-5647 and
provide the operator with the confirmation number of 22991306 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) EXPLANATION OF CERTAIN NON-GAAP FINANCIAL MEASURES
With our shift from a software purchase license model to a Software-as-a-Service
(SaaS) subscription model, we believe it important to report financial metrics
that are not defined by Generally Accepted Accounting Principles. These Non-GAAP
financial measures include sales bookings, subscription contract backlog and
adjusted EBITDA. We believe that sales bookings and subscription backlog provide
investors and other interested parties better insight into sales operations and
future performance. 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 and six months ended September 30, 2008 and 2007.
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------- ------- ------- -------
2008 2007 2008 2007
(in thousands) (in thousands)
(unaudited) (unaudited)
------- ------- ------- -------
Loss from continuing operations.... $(1,141) $ (546) $(1,911) $ (991)
Non-cash charges and credits:
Interest expense................... 338 337 675 681
Financing and late fees............ 5 2 14 15
Warrant expense.................... 7 -- 7 21
(Gain) loss on sale of assets...... -- (3) 1 (3)
Income tax......................... 22 22 43 43
Interest income.................... (20) (6) (32) (13)
Stock compensation expense......... 61 57 104 89
Depreciation....................... 61 57 127 105
Amortization....................... 52 52 105 97
------- ------- ------- -------
Adjusted EBITDA............. $ (615) $ (28) $ (867) $ 44
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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 SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues
Software licenses .................................. $ 335 $ 1,218 $ 920 $ 2,370
Subscription services .............................. 528 440 997 951
Software maintenance, hosting and other services ... 716 931 1,582 1,786
-------- -------- -------- --------
Total revenues ................................. 1,579 2,589 3,499 5,107
-------- -------- -------- --------
Cost of revenues
Software licenses .................................. 16 -- 61 67
Subscription services .............................. 74 78 140 181
Software maintenance, hosting and other services ... 81 240 208 451
Amortization of technology ......................... 52 52 105 52
-------- -------- -------- --------
Total cost of revenues ......................... 223 370 514 751
-------- -------- -------- --------
Gross profit .......................................... 1,356 2,219 2,985 4,356
-------- -------- -------- --------
Operating expenses
Research and development ........................... 558 547 1,089 909
Sales and marketing ................................ 941 1,279 1,841 2,451
General and administrative ......................... 647 579 1,260 1,242
-------- -------- -------- --------
Total operating expenses ....................... 2,146 2,405 4,190 4,602
-------- -------- -------- --------
Loss from operations .................................. (790) (186) (1,205) (246)
Interest expense ...................................... (259) (263) (517) (519)
Amortization of beneficial debt conversion ............ (79) (81) (158) (162)
-------- -------- -------- --------
Total interest expense ......................... (338) (344) (675) (681)
Interest income (charges) and other ................... 16 6 19 --
Warrant expense ....................................... (7) -- (7) (21)
-------- -------- -------- --------
Loss from continuing operations before income taxes ... (1,119) (524) (1,868) (948)
Income taxes .......................................... (22) (22) (43) (43)
-------- -------- -------- --------
Loss from continuing operations ....................... (1,141) (546) (1,911) (991)
(Loss) income from discontinued operations ............ (182) 307 1,794 830
-------- -------- -------- --------
Net loss .............................................. (1,323) (239) (117) (161)
Series A and B preferred stock dividends ........... (26) (34) (55) (69)
-------- -------- -------- --------
Loss available to common shareholders ................ $ (1,349) $ (273) $ (172) $ (230)
======== ======== ======== ========
Income (loss) per common share, basic and diluted
From continuing operations ......................... $ (0.03) $ (0.02) $ (0.06) $ (0.03)
From discontinued operations ....................... (0.01) 0.01 0.05 0.02
-------- -------- -------- --------
Net loss per common share ..................... $ (0.04) $ (0.01) $ (0.01) $ (0.01)
======== ======== ======== ========
Number of shares used in calculation of loss per share:
Basic ............................................. 34,647 33,724 34,452 33,655
======== ======== ======== ========
Diluted ........................................... 34,647 33,724 34,452 33,655
======== ======== ======== ========
ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, MARCH 31,
2008 2008
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ........................................................... $ 538 $ 669
Certificates of deposit ............................................................. 2,778 373
Accounts receivable, net of allowance for doubtful accounts of $25 and $30 at
September 30 and March 31, 2008, respectively ....................................... 818 627
Other receivables ................................................................... 128 --
Prepaid expenses and other current assets ........................................... 223 272
Assets related to discontinued operations ........................................... -- 3,145
-------- --------
Total current assets .............................................................. 4,485 5,086
Property and equipment, net ............................................................ 499 566
Goodwill ............................................................................... 9,229 9,520
Intangible assets, net ................................................................. 706 869
Other receivables ...................................................................... 100 --
Other assets .......................................................................... 14 14
-------- --------
Total assets ...................................................................... $ 15,033 $ 16,055
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt ................................................... $ 96 $ 95
Accounts payable trade .............................................................. 468 612
Accrued liabilities ................................................................. 849 751
Current portion of capital lease liabilities ........................................ 128 120
Deferred revenue .................................................................... 1,294 1,507
Liabilities related to discontinued operations ...................................... 89 778
-------- --------
Total current liabilities ......................................................... 2,924 3,863
Long term debt, less current maturities, net of discount and beneficial conversion
feature of $690 and $791, at September 30 and March 31, 2008, respectively ......... 7,595 7,535
Capital lease liabilities, less current maturities ..................................... 190 256
Deferred tax liability ................................................................. 427 384
-------- --------
Total liabilities ................................................................. 11,136 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 September 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 September 30 and March 31, 2008, respectively.. -- --
Common stock, $.001 par value 100,000,000 shares authorized, 34,840,777 and 35,456,228
issued at September 30 and March 31, 2008, respectively ............................. 34 35
Additional paid-in capital .......................................................... 45,289 46,498
Accumulated deficit ................................................................. (41,280) (41,108)
Less: 148,700 and 1,432,412 treasury shares at cost at September 30 and March 31,
2008, respectively ................................................................ (146) (1,408)
-------- --------
Total shareholders' equity ........................................................ 3,897 4,017
-------- --------
Total liabilities and shareholders' equity ........................................ $ 15,033 $ 16,055
======== ========