IntraLinks Holdings, Inc.

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IntraLinks Announces Fourth Quarter and Full Year 2012 Results

NEW YORK, Feb. 21, 2013 /PRNewswire/ -- IntraLinks Holdings, Inc. (NYSE: IL), a leading, global technology provider of inter-enterprise content management and collaboration solutions, today announced results for its fourth quarter and full year 2012.

"The financial results for 2012 reflect the stability of our company as well as good momentum in our core strategic transactions business, where we continue to gain share," said Ron Hovsepian, IntraLinks' President and CEO.  "We made significant progress that I believe will position us well for long-term growth. We strengthened our senior management team, and began to implement our strategy of leveraging the leadership position we have in our core business while investing in developing solutions that squarely address what we see as the unmet needs of the enterprise market for secure, beyond-the-firewall content collaboration."

Fourth Quarter 2012

Total revenue was $57.4 million, compared to $52.9 million for the corresponding quarter last year.

  • Enterprise revenue was $24.2 million, compared to $23.5 million for the corresponding quarter last year.
  • M&A revenue was $26.2 million, compared to $20.9 million for the corresponding quarter last year.
  • DCM revenue was $7.0 million, compared to $8.5 million for the corresponding quarter last year.

GAAP gross margin was 73.1%, compared to 73.2% for the corresponding quarter last year. Non-GAAP gross margin was 76.8%, compared to 79.6% for the corresponding quarter last year.

GAAP operating loss was ($1.7) million, compared to operating income of $2.4 million for the corresponding quarter last year.  Non-GAAP adjusted operating income was $6.2 million, compared to $11.5 million for the corresponding quarter last year.

GAAP net loss was ($1.5) million, compared to a GAAP net loss of ($2.5) million for the corresponding quarter last year.  GAAP net loss per share for the fourth quarter was ($0.03) on the basis of 54.5 million shares outstanding. In the prior year comparable period, diluted GAAP net loss per share was ($0.05) on the basis of 54.1 million shares outstanding.

Non-GAAP adjusted net income was $3.2 million, compared to $5.7 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.06 on the basis of 55.1 million shares outstanding. In the corresponding quarter for the prior year, non-GAAP net income per share was $0.11 on the basis of 54.6 million shares outstanding.

Non-GAAP adjusted EBITDA was $11.2 million, compared to $16.1 million for the corresponding quarter last year.

Cash flow from operations was $14.0 million, compared to $19.6 million in the corresponding quarter last year.

Full Year 2012

Total revenue was $216.7 million, compared to $213.5 million in the prior year.

  • Enterprise revenue was $94.6 million, compared to $94.6 million last year
  • M&A revenue was $91.6 million, compared to $83.8 million last year
  • DCM revenue was $30.4 million, compared to $34.5 million last year
  • In the prior year, other revenue of $0.6 million came from an insurance recovery.

GAAP gross margin was 71.2%, compared to 73.6% for the corresponding quarter last year. Non-GAAP gross margin was 76.2%, compared to 79.9% in the prior year.

GAAP operating loss was ($22.3) million, compared to operating income of $8.9 million in the prior year.  Non-GAAP adjusted operating income was $18.8 million, compared to $46.3 million in the prior year.

GAAP net loss was ($17.4) million, compared to a GAAP net loss of ($1.2) million in the prior year.  GAAP net loss per share for the year was ($0.32) on the basis of 54.4 million shares outstanding. In the prior year comparable period, GAAP net loss per share was ($0.02) on the basis of 53.4 million shares outstanding.  

Non-GAAP adjusted net income was $8.4 million, compared to $23.5 million last year.  Non-GAAP adjusted net income per share was $0.15 on the basis of 54.9 million shares outstanding. In the corresponding period for the prior year, non-GAAP net income per share was $0.43 on the basis of 54.5 million shares outstanding. Shares outstanding for the prior period are on a pro forma basis, assuming that the 2011 follow-on offering of common stock occurred at the beginning of the period.

Non-GAAP adjusted EBITDA was $37.3 million, compared to non-GAAP adjusted EBITDA of $66.3 million in the prior year.

Cash flow from operations was $35.2 million, compared to $54.7 million in the prior year.

Deferred revenue on the balance sheet at December 31, 2012 was $40.7 million, compared to $40.3 million at the end of 2011.

Business Outlook:

Based on information available as of February 21, 2013, IntraLinks is providing guidance for 2013 as follows:

First Quarter 2013

Revenue: $50 million to $53 million 
GAAP operating loss: ($5.0) million to ($7.0) million  
Non-GAAP adjusted operating income: $1.0 million to $3.0 million 
Non-GAAP adjusted EBITDA: $6.0 million to $8.0 million 
GAAP net loss per share: ($0.07) to ($0.09
Non-GAAP net income per share: $0.00 to $0.02

Full Year 2013

Revenue: $214 million to $224 million 
GAAP operating loss: ($14.8) million to ($18.8) million   
Non-GAAP adjusted operating income: $13.0 million to $17.0 million 
Non-GAAP adjusted EBITDA: $33 million to $37 million
GAAP net loss per share: ($0.22) to ($0.26
Non-GAAP net income per share: $0.10 to $0.14

Quarterly Conference Call

IntraLinks will host a conference call today at 5:00 p.m. Eastern Time (ET) to discuss the company's fourth quarter and full year 2012 financial results and other corporate developments. To access this call, dial 866-524-3160 (domestic) or 412-317-6760 (international). A passcode is not required. This presentation will also be webcast live on the investor relations section on the IntraLinks website at www.intralinks.com/ir.  In conjunction with this call, there will also be accompanying slides with supplemental information available at the same website location.

Following the conference call, a replay will be available until February 28, 2013, at 877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10023811. An archived webcast of this conference call will also be available on the investor relations section on the IntraLinks website at www.intralinks.com/ir.

About IntraLinks

IntraLinks Holdings, Inc. (IL) is a leading, global technology provider of inter-enterprise content management and collaboration solutions. The innovative Software-as-a-Service solutions of IntraLinks enable the exchange, control, and management of information between organizations securely and compliantly when working through the firewall. More than 2 million professionals at 800 of the Fortune 1000 companies depend on IntraLinks' experience. With a track record of enabling high-stakes transactions and business collaborations valued at more than $19 trillion, IntraLinks is a trusted provider of easy-to-use, enterprise strength, cloud-based collaboration solutions. For more information, visit www.intralinks.com.

Non-GAAP Financial Measures

The Press Release includes information about certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP"), including non-GAAP gross profit and gross margin, non-GAAP adjusted operating income and margin, non-GAAP adjusted net income, non-GAAP adjusted net income per share, and non-GAAP adjusted EBITDA. These non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies.

Management defines its non-GAAP financial measures as follows:

  • Non-GAAP gross margin represents the corresponding GAAP measure adjusted to exclude (1) stock-based compensation expense, and (2) amortization of intangible assets.
  • Non-GAAP adjusted operating income represents the corresponding GAAP measure adjusted to exclude (1) stock-based compensation expense, (2) amortization of intangible assets, (3) impairment charges or asset write-offs, and (4) costs related to public stock offerings.
  • Non-GAAP adjusted net income represents the corresponding GAAP measure adjusted to exclude (1) stock-based compensation expense, (2) amortization of intangible assets, (3) impairment charges or asset write-offs, (4) costs related to debt repayments, and (5) costs related to public stock offerings.  Non-GAAP adjusted net income is calculated using an estimated long-term effective tax rate.
  • Non-GAAP net income per share represents non-GAAP adjusted net income defined above divided by shares outstanding.
  • Non-GAAP adjusted EBITDA represents net income (loss) adjusted to exclude (1) interest expense, (2) income tax provision (benefit), (3) depreciation and amortization, (4) amortization of intangible assets, (5) stock-based compensation expense, (6) amortization of debt issuance costs, (7) other expense (income), (8) net impairment charges or asset write-offs, and (9) costs related to public stock offerings.
  • Free cash flow represents cash flow from operations less capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under U.S. GAAP and the accompanying reconciliations, provide useful information about our period-over-period growth and provide additional information that is useful for evaluating our operating performance and manage the cash needs of our business.  Additionally, management believes that these non-GAAP financial measures provide a more meaningful comparison of our operating results against those of other companies in our industry, as well as on a period-to-period basis, because these measures exclude items that are not representative of our operating performance, such as amortization of intangible assets, interest expense and fair value adjustments to the interest rate swap. Management believes that including these costs in our results of operations results in a lack of comparability between our operating results and those of our peers in the industry, the majority of which are not highly leveraged and do not have comparable amortization costs related to intangible assets. However, non-GAAP gross margin, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share and non-GAAP adjusted EBITDA are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered as alternatives to gross margin, operating income, net income (loss), and cash flows provided by operations as indicators of operating performance.

A reconciliation of GAAP to Non-GAAP financial measures has been provided in the financial statement tables included in the Press Release.

Forward Looking Statements

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  This press release contains express or implied forward-looking statements that are not based on historical information relating to, among other things, expectations and assumptions concerning management's forecast of financial performance, future business growth, and management's plans, objectives, and strategies. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things:  the uncertainty of our future profitability; our ability to sustain positive cash flow; periodic fluctuations in our operating results; risks related to our substantial debt balances; our ability to maintain the security and integrity of our systems; our ability to increase our penetration in our principal existing markets and expand into additional markets; our dependence on the volume of financial and strategic business transactions; our dependence on customer referrals; our ability to maintain and expand our direct sales capabilities; our ability to develop and maintain strategic relationships to sell and deliver our solutions; customer renewal rates; our ability to maintain the compatibility of our services with third-party applications; competition and our ability to maintain our average sales prices; our ability to adapt to changing technologies; interruptions or delays in our service; international risks; our ability to protect our intellectual property; costs of being a public company; and risks related to changes in laws, regulations or governmental policy including tax regulations. Further information on these and other factors that could affect our financial results is contained in our public filings with the Securities and Exchange Commission (the "SEC") from time to time, including our Annual Report on Form 10-K for the year-ended December 31, 2011 and subsequent reports.  Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

IntraLinks undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise.

"IntraLinks" and the IntraLinks logo are registered trademarks of IntraLinks, Inc. © 2013. All rights reserved.

 


IntraLinks Holdings, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share and per Share Data)
(unaudited)








December 31, 2012


December 31, 2011

ASSETS





Current assets:





Cash and cash equivalents


$

43,798



$

46,694


Accounts receivable, net of allowances of $2,927 and $2,149, respectively


37,667



38,895


Investments


31,549



36,120


Deferred taxes


7,469



12,711


Prepaid expenses


5,474



4,238


Other current assets


3,518



4,567


Total current assets


129,475



143,225


Fixed assets, net


10,645



7,635


Capitalized software, net


26,295



30,287


Goodwill


215,478



215,478


Other intangibles, net


106,750



132,233


Other assets


1,111



1,483


Total assets


$

489,754



$

530,341


LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable and other current liabilities


$

25,801



$

24,780


Deferred revenue


40,719



40,309


Total current liabilities


66,520



65,089


Long term debt


75,238



91,164


Deferred taxes


21,135



39,384


Other long term liabilities


4,809



2,874


Total liabilities


167,702



198,511







Stockholders' equity:





Undesignated Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares
issued and outstanding as December 31, 2012 and 2011





Common Stock, $0.001 par value; 300,000,000 shares authorized; 55,486,651 and 54,248,178 shares issued and outstanding as of December 31, 2012 and 2011, respectively


55



54


Additional paid-in capital


419,618



411,781


Accumulated deficit


(97,436)



(80,056)


Accumulated other comprehensive (loss) income


(185)



51


Total stockholders' equity


322,052



331,830


Total liabilities and stockholders' equity


$

489,754



$

530,341


 


IntraLinks Holdings, Inc.
Consolidated Statements of Operations
(In Thousands, Except Share and per Share Data)
(unaudited)








Three Months Ended
December 31,


Years Ended
December 31,



2012


2011


2012


2011

Revenue


$

57,364



$

52,935



$

216,667



$

212,890


Other Revenue








614


Total Revenue


57,364



52,935



216,667



213,504


Cost of revenue


15,419



14,193



62,354



56,385


Gross profit


41,945



38,742



154,313



157,119


Operating expenses:









Product development


6,019



3,888



21,092



18,579


Sales and marketing


25,539



21,411



96,198



88,872


General and administrative


11,796



11,073



50,608



40,808


Impairment of capitalized software


338





8,715




Total operating expenses


43,692



36,372



176,613



148,259


(Loss) income from operations


(1,747)



2,370



(22,300)



8,860


Interest expense


1,190



2,498



6,435



10,645


Amortization of debt issuance costs


149



214



740



1,369


Other (income), net


(392)



(576)



(1,870)



(3,123)


Net (loss) income before income tax


(2,694)



234



(27,605)



(31)


Income tax (benefit) expense


(1,185)



2,731



(10,225)



1,212


Net (loss)


$

(1,509)



$

(2,497)



$

(17,380)



$

(1,243)


Net (loss) per common share









Basic


$

(0.03)



$

(0.05)



$

(0.32)



$

(0.02)


Diluted


$

(0.03)



$

(0.05)



$

(0.32)



$

(0.02)


Weighted average number of shares used in
calculating net (loss) per share









Basic


54,533,774



54,096,215



54,352,536



53,381,655


Diluted


54,533,774



54,096,215



54,352,536



53,381,655


 


IntraLinks Holdings, Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(unaudited)






Years Ended  December 31,



2012


2011

Net (loss)


$

(17,380)



$

(1,243)


Adjustments to reconcile net (loss) to net cash provided by operating activities:





Depreciation and amortization


18,567



19,999


Stock-based compensation expense


6,561



8,708


Amortization of intangible assets


25,774



28,630


Amortization of deferred costs


1,808



1,472


Provision for bad debts and customer credits


1,713



931


Loss on disposal of fixed assets


15



228


Impairment of capitalized software


8,715




Change in deferred taxes


(13,007)



(1,166)


Gain on interest rate swap


(1,455)



(4,193)


Currency remeasurement loss (gain)


388



(318)


Changes in operating assets and liabilities:





Accounts receivable


(690)



(2,692)


Prepaid expenses and other current assets


(1,213)



(1,804)


Other assets


340



1,092


Accounts payable and other liabilities


4,303



2,693


Deferred revenue


747



2,389


Net cash provided by operating activities


$

35,186



$

54,726


Cash flows from investing activities:





Business acquisition


(300)




Capital expenditures


(6,174)



(5,115)


Reimbursable leasehold improvements


(1,840)




Capitalized software development costs


(18,013)



(18,718)


Purchase of short-term investments


(37,445)



(40,120)


Maturity of short-term investments


41,220



4,000


Net cash used in investing activities


$

(22,552)



$

(59,953)


Cash flows from financing activities:





Proceeds from exercise of stock options


481



1,374


Proceeds from issuance of common stock


795



1,251


Offering costs paid in connection with follow-on offerings




(516)


Proceeds from follow-on offering, net of underwriting discounts and commissions




35,003


Repayments of outstanding financing arrangements


(641)




Repayments of outstanding principal on long-term debt


(15,861)



(35,657)


Net cash (used in) provided by financing activities


$

(15,226)



$

1,455


Effect of foreign exchange rate changes on cash and cash equivalents


(304)



(1)


Net (decrease) in cash and cash equivalents


(2,896)



(3,773)


Cash and cash equivalents at beginning of period


46,694



50,467


Cash and cash equivalents at end of period


$

43,798



$

46,694


 

 

IntraLinks Holdings, Inc.
Reconciliation of Non-GAAP to GAAP Financial Measures
(In Thousands, Except Share and per Share Data)
(unaudited)

 








Three Months Ended
December 31,


Year Ended
December 31,



2012


2011


2012


2011

Gross profit


$

41,945



$

38,742



$

154,313



$

157,119


Gross margin


73.1

%


73.2

%


71.2

%


73.6

%

Cost of revenue – stock-based compensation expense


124



92



445



310


Cost of revenue – amortization of intangible assets


1,986



3,309



10,369



13,237


Non-GAAP Gross profit


$

44,055



$

42,143



$

165,127



$

170,666


Non-GAAP Gross margin


76.8

%


79.6

%


76.2

%


79.9

%










(Loss ) Income from operations


$

(1,747)



$

2,370



$

(22,300)



$

8,860


Stock-based compensation expense


1,729



1,943



6,561



8,708


Amortization of intangible assets


5,846



7,158



25,774



28,630


Impairment on capitalized software


338





8,715




Costs related to public stock offerings








57


Non-GAAP adjusted Operating income


$

6,166



$

11,471



$

18,750



$

46,255











Net (loss ) income before income tax


$

(2,694)



$

234



$

(27,605)



$

(31)


Stock-based compensation expense


1,729



1,943



6,561



8,708


Amortization of intangible assets


5,846



7,158



25,774



28,630


Impairment on capitalized software


338





8,715




Costs related to public stock offerings








57


Costs related to debt repayments






47




Non-GAAP adjusted Net Income before tax


5,219



9,335



13,492



37,364


Non-GAAP Income tax expense


1,983



3,594



5,127



13,825


Non-GAAP adjusted Net income


$

3,236



$

5,741



$

8,365



$

23,539











Net (loss)


$

(1,509)



$

(2,497)



$

(17,380)



$

(1,243)


Interest expense


1,190



2,498



6,435



10,645


Income tax (benefit) expense


(1,185)



2,731



(10,225)



1,212


Depreciation and amortization


5,065



4,598



18,567



19,999


Amortization of intangible assets


5,846



7,158



25,774



28,630


Stock-based compensation expense


1,729



1,943



6,561



8,708


Impairment on capitalized software


338





8,715




Amortization of debt issuance costs


149



214



740



1,369


Other (income), net


(392)



(576)



(1,870)



(3,123)


Costs related to public stock offerings








57


Non-GAAP adjusted EBITDA


$

11,231



$

16,069



$

37,317



$

66,254


Non-GAAP adjusted EBITDA margin


19.6

%


30.4

%


17.2

%


31.0

%










Cash flow provided by operations


$

14,004



$

19,611



$

35,186



$

54,726


Capital expenditures


(4,469)



(4,900)



(26,027)



(23,833)


Free cash flow


$

9,535



$

14,711



$

9,159



$

30,893


 

 

IntraLinks Holdings, Inc.
Reconciliation of Non-GAAP to GAAP Financial Measures - Guidance
(In Thousands)
(unaudited)

 








Three Months Ending

March 31,

2013


Year Ending

December 31,

2013

Gross profit


$

35,503



$

155,778


Gross margin


68.9

%


71.1

%

Cost of revenue - stock-based compensation expense


146



569


Cost of revenue - amortization of intangible assets


2,351



9,405


Non-GAAP gross profit


$

38,000



$

165,752


Non-GAAP gross margin


73.8

%


75.7

%






Loss from operations


(6,000)



(16,800)


Stock-based compensation expense


2,156



8,382


Amortization of intangible assets


5,844



23,377


Non-GAAP adjusted operating income


$

2,000



$

14,959







Net loss before income tax


$

(7,152)



$

(21,202)


Stock-based compensation expense


2,156



8,382


Amortization of intangible assets


5,844



23,377


Non-GAAP adjusted net income before tax


848



10,557


Non-GAAP income tax expense


322



4,012


Non-GAAP adjusted net income


$

526



$

6,545







Net loss


$

(4,219)



$

(13,958)


Interest expense


1,141



4,610


Income tax benefit


(2,718)



(8,057)


Depreciation and amortization


4,774



20,814


Amortization of intangible assets


5,844



23,377


Stock-based compensation expense


2,156



8,382


Amortization of debt issuance costs


112



192


Other (income), net


(90)



(360)


Non-GAAP adjusted EBITDA


$

7,000



$

35,000


Non-GAAP adjusted EBITDA margin


13.6

%


16.0

%

Note: All forward-looking figures presented in this table are stated at the mid-point of the estimated range.

 

 

SOURCE IntraLinks Holdings, Inc.

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