IL Intralinks Holdings $0.001 Par Value (delisted)

Announces $20 Million Stock Repurchase Program

Intralinks Holdings, Inc. (NYSE:IL), a leading, global SaaS provider of secure content collaboration solutions, today announced its results for the fourth quarter and full-year ended December 31, 2015.

“We wrapped up 2015 with a solid fourth quarter. Revenue for the quarter increased 10% in constant currency year-over year, resulting in 13% constant currency growth for the full year,” said Ron Hovsepian, Intralinks’ president and CEO. “I’m pleased with the progress we made during 2015 as we continued to grow our enterprise backlog and make investments in the business to further position us to succeed. We are clear on what we need to accomplish during 2016 and are excited by the opportunities ahead of us. I am confident that the continued successful execution of our strategy will result in strong long-term performance.”

“With our expectations for the business and our current stock price, we believe that repurchasing shares of our outstanding common stock is a compelling use of our capital to further create shareholder value,” continued Mr. Hovsepian. “As a result, our Board of Directors has authorized a $20 million stock repurchase program.”

Fourth Quarter 2015

Total revenue was $71.3 million, compared to $67.4 million for the corresponding quarter last year, an increase of 6%, or 10% in constant currency.

• M&A revenue was $36.4 million, compared to $34.4 million for the corresponding quarter last year, an increase of 6%, or 12% in constant currency.
• Enterprise revenue was $27.0 million, compared to $25.7 million for the corresponding quarter last year, an increase of 5%, or 8% in constant currency.
• DCM revenue was $7.9 million, compared to $7.4 million for the corresponding quarter last year, an increase of 7%, or 8% in constant currency.

GAAP gross margin was 73.7%, compared to 73.0% for the corresponding quarter last year. Non-GAAP adjusted gross margin was 76.8%, compared to 76.3% for the corresponding quarter last year.

GAAP operating loss was $(4.7) million, compared to $(4.7) million for the corresponding quarter last year. Non-GAAP adjusted operating income was $3.9 million, compared to $4.0 million for the corresponding quarter last year.

GAAP net loss was $(6.0) million, compared to $(11.1) million for the corresponding quarter last year. GAAP net loss per share was $(0.10) on the basis of 57.8 million weighted average shares outstanding. In the corresponding quarter last year, GAAP net loss per share was $(0.20) on the basis of 56.3 million weighted average shares outstanding.

Non-GAAP adjusted net income was $1.4 million, compared to $1.1 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.02 on the basis of 59.6 million weighted average shares outstanding. In the corresponding quarter last year, non-GAAP adjusted net income per share was $0.02 on the basis of 58.2 million weighted average shares outstanding.

Non-GAAP adjusted EBITDA was $10.4 million, compared to $10.9 million for the corresponding quarter last year.

Cash, cash equivalents and investments were $60.3 million at December 31, 2015, compared to $56.9 million at September 30, 2015.

Full Year 2015

Total revenue was $276.2 million, compared to $255.8 million for 2014, an increase of 8%, or 13% in constant currency.

• M&A revenue was $139.9 million, compared to $130.5 million for 2014, an increase of 7%, or 14% in constant currency.
• Enterprise revenue was $106.7 million, compared to $96.7 million for 2014, an increase of 10%, or 14% in constant currency.
• DCM revenue was $29.6 million, compared to $28.6 million for 2014, an increase of 3%, or 4% in constant currency.

GAAP gross margin was 72.5%, compared to 72.9% for 2014. Non-GAAP adjusted gross margin was 75.7%, compared to 76.3% for 2014.

GAAP operating loss was $(23.2) million, compared to $(21.7) million for 2014. Non-GAAP adjusted operating income was $12.3 million, compared to $12.4 million for 2014.

GAAP net loss was $(30.4) million, compared to $(26.5) million for 2014. GAAP net loss per share was $(0.53) on the basis of 57.2 million weighted average shares outstanding. For 2014, GAAP net loss per share was $(0.47) on the basis of 55.9 million weighted average shares outstanding.

Non-GAAP adjusted net income was $3.7 million, compared to $3.7 million for 2014. Non-GAAP adjusted net income per share was $0.06 on the basis of 59.1 million weighted average shares outstanding. In 2014, non-GAAP adjusted net income per share was $0.06 on the basis of 57.7 million weighted average shares outstanding.

Non-GAAP adjusted EBITDA was $39.1 million, compared to $38.1 million for 2014.

Business Outlook:

Based on information available as of February 24, 2016, Intralinks is providing guidance for 2016 as follows:

First Quarter 2016

Revenue: $69.5 million to $70.0 million

GAAP operating loss: $(6.7) million to $(6.2) million

Non-GAAP operating income: $2.5 million to $3.0 million

GAAP net loss per share: $(0.15) to $(0.14)

Non-GAAP net income per share: $0.01 to $0.02

Full Year 2016

Revenue: $300.0 million to $306.0 million

GAAP operating loss: $(20.6) million to $(18.6) million

Non-GAAP operating income: $17.0 million to $19.0 million

GAAP net loss per share: $(0.48) to $(0.44)

Non-GAAP net income per share: $0.12 to $0.15

Our full-year guidance above is based on foreign currency exchange rates as of January 1, 2016. Excluding the impact of fluctuations in foreign currency exchange rates, our full-year guidance reflects 10 to 12% revenue growth.

Stock Repurchase Program

On February 19, 2016, Intralinks Holdings’ Board of Directors voted to authorize the purchase by the company of up to $20 million of shares of the company’s common stock. Repurchases under this program will be made in open market or privately-negotiated transactions. This authority may be exercised from time to time and in such amounts as market conditions warrant and is subject to regulatory considerations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. This stock repurchase program will extend for one year and may be suspended or terminated at any time without prior notice.

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 2015 financial results and 2016 business outlook. To access this call, dial 888-348-8637 (domestic) or 412-902-4244 (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.

Following the conference call, a replay will be available until March 2, 2016 at 877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10080852. 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. (NYSE: IL) is a leading, global technology provider of secure enterprise content collaboration solutions. Through innovative Software-as-a-Service solutions, Intralinks’ software is designed to enable the exchange, control and management of information between organizations securely and compliantly when working through the firewall. More than 3.1 million professionals at 99% of the Fortune 1000 companies have depended on Intralinks' experience. With a track record of enabling high-stakes transactions and business collaborations valued at more than $28.1 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

This 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”). 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 adjusted gross profit represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets and (2) stock-based compensation expense.
• Non-GAAP adjusted operating income represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets, (2) stock-based compensation expense and (3) impairment charges or asset write-offs.
• Non-GAAP adjusted net income represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets, (2) stock-based compensation expense and (3) impairment charges or asset write-offs. The income tax expense included in non-GAAP adjusted net income is calculated using an estimated long-term effective tax rate.
• Non-GAAP adjusted net income per share represents non-GAAP adjusted net income (which is defined above) divided by fully diluted weighted average shares outstanding.
• Non-GAAP adjusted EBITDA represents net loss adjusted to exclude, if applicable: (1) depreciation and amortization, (2) amortization of intangible assets, (3) stock-based compensation expense, (4) impairment charges or asset write-offs, (5) interest expense, (6) amortization of debt issuance costs, (7) other expense (income), net, and (8) income tax expense (benefit).
• Free cash flow represents net cash provided by operating activities less capitalized software development costs and capital expenditures.
• The Company refers to growth rates at constant currency so that the results can be viewed without the impact of fluctuations in foreign currency exchange rates to facilitate comparisons of the Company's performance from one period to another. Constant currency for revenue is calculated by retranslating current and prior period revenue at a consistent rate.

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. In addition, free cash flow provides management with useful information for managing the cash needs of our business. Management also 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-over-period basis, because these measures exclude items that are not representative of our operating performance, such as amortization of intangible assets, stock-based compensation expense and interest expense. 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. However, non-GAAP adjusted gross profit, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share, non-GAAP adjusted EBITDA and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to gross profit, loss from operations, net loss, net loss per share and net cash provided by operating activities as indicators of operating performance.

Reconciliations of GAAP to Non-GAAP financial measures are included in this 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 expressed 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, opportunities 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 or to attain our enterprise backlog objectives; periodic fluctuations in our operating results; fluctuations in currency exchange rates; our ability to manage our expected growth; risks related to our substantial debt balances and our ability to generate or obtain sufficient capital to service our debt and fund our business; our ability to maintain the security and integrity of our systems; risks associated with the privacy and protection of information in our possession; our ability to increase our penetration in our principal existing markets and expand into additional markets; our ability to expand into new geographic markets; delays in market adoption and penetration of our products and services; difficulties developing, integrating and introducing new products and services; our dependence on the volume of financial and strategic business transactions; our dependence on customer referrals and relationships; 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 and attrition; 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; uncertainties surrounding domestic and global economic conditions; 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 data privacy and tax regulations. Further information on these and other factors that could affect our financial and other results is contained in our public filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2014 and subsequent quarterly 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”, “Intralinks VIA” and the Intralinks stylized logo are registered trademarks of Intralinks, Inc. © 2016 Intralinks, Inc.

 

Intralinks Holdings, Inc.

Consolidated Balance Sheets

(In Thousands, Except Share Data)

(unaudited)

      December 31, 2015   December 31, 2014 ASSETS Current assets: Cash and cash equivalents $ 47,875 $ 40,682 Investments 12,425 11,825 Accounts receivable, net of allowances of $4,265 and $3,158, respectively 50,360 47,338 Prepaid expenses 8,595 6,602 Other current assets 3,881   3,626   Total current assets 123,136 110,073 Investments — 12,630 Fixed assets, net 20,789 16,245 Capitalized software, net 46,636 39,798 Goodwill 224,383 224,383 Other intangibles, net 38,106 62,055 Other non-current assets 8,663   6,676   Total assets $ 461,713   $ 471,860   LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,094 $ 10,624 Current portion of long-term debt 2,311 906 Deferred revenue 52,005 49,193 Accrued expenses and other current liabilities 29,856   26,974   Total current liabilities 94,266 87,697 Long-term debt 80,501 77,933 Other long-term liabilities 4,795 5,291 Commitments and contingencies Stockholders' equity: Undesignated Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding — — Common Stock, $0.001 par value; 300,000,000 shares authorized; 58,434,464 and 57,084,340 shares issued and outstanding, respectively 58 57 Additional paid-in capital 456,141 441,596 Accumulated deficit (169,594 ) (139,210 ) Accumulated other comprehensive loss (4,454 ) (1,504 ) Total stockholders' equity 282,151   300,939   Total liabilities and stockholders' equity $ 461,713   $ 471,860      

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,

2015   2014 2015   2014 Revenue $ 71,284 $ 67,418 $ 276,153 $ 255,821 Cost of revenue 18,777   18,181   75,966   69,348   Gross profit 52,507 49,237 200,187 186,473 Operating expenses: Sales and marketing 32,340 30,510 124,006 115,867 General and administrative 18,183 17,028 73,589 69,911 Product development 6,683   6,354   25,790   22,429   Total operating expenses 57,206   53,892   223,385   208,207   Loss from operations (4,699 ) (4,655 ) (23,198 ) (21,734 ) Interest expense 1,112 1,111 4,435 4,202 Amortization of debt issuance costs 142 143 571 579 Other expense, net 346   960   1,335   1,746   Net loss before income tax (6,299 ) (6,869 ) (29,539 ) (28,261 ) Income tax (benefit) expense (319 ) 4,224   845   (1,765 ) Net loss $ (5,980 ) $ (11,093 ) $ (30,384 ) $ (26,496 ) Net loss per common share Basic $ (0.10 ) $ (0.20 ) $ (0.53 ) $ (0.47 ) Diluted $ (0.10 ) $ (0.20 ) $ (0.53 ) $ (0.47 ) Weighted average number of shares Basic 57,772,500   56,327,704   57,172,659   55,932,641   Diluted 57,772,500   56,327,704   57,172,659   55,932,641      

Intralinks Holdings, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(unaudited)

      Years Ended December 31, 2015   2014 Net loss $ (30,384 ) $ (26,496 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 26,749 25,627 Amortization of intangible assets 23,949 23,791 Stock-based compensation expense 11,560 10,384 Amortization of deferred costs 909 1,316 Provision for bad debt and customer credits 2,837 1,802 Deferred income tax benefit (957 ) (4,708 ) Other, net (5 ) 572 Changes in operating assets and liabilities: Accounts receivable (5,950 ) (11,390 ) Prepaid expenses and other assets (3,733 ) 146 Accounts payable (846 ) 884 Accrued expenses and other liabilities 2,895 (499 ) Deferred revenue 3,678   4,344   Net cash provided by operating activities 30,702   25,773   Cash flows from investing activities: Capitalized software development costs (25,440 ) (27,076 ) Capital expenditures (12,703 ) (9,823 ) Purchases of investments — (27,062 ) Maturities of investments 11,750 36,879 Purchases of cost method investments (1,000 ) (3,499 ) Acquisitions, net of cash acquired — (8,843 ) Restricted cash —   2,443   Net cash used in investing activities (27,393 ) (36,981 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 4,719 79,200 Payments on long-term debt (800 ) (75,498 ) Payments of outstanding financing arrangements (228 ) (376 ) Debt issuance costs — (2,849 ) Exercise of stock options and issuance of common stock, net of withholding taxes 2,953 1,662 Other (1,531 ) (188 ) Net cash provided by financing activities 5,113 1,951 Effect of foreign exchange rate changes on cash and cash equivalents (1,229 ) (601 ) Net increase (decrease) in cash and cash equivalents 7,193 (9,858 ) Cash and cash equivalents at beginning of period 40,682   50,540   Cash and cash equivalents at end of period $ 47,875   $ 40,682      

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In Thousands)

(unaudited)

      Three Months Ended

December 31,

  Years Ended

December 31,

2015   2014 2015   2014 Gross profit $ 52,507 $ 49,237 $ 200,187 $ 186,473 Gross margin 73.7 % 73.0 % 72.5 % 72.9 % Cost of revenue – amortization of intangible assets 2,083 2,083 8,331 8,206 Cost of revenue – stock-based compensation 133   100   491   523   Non-GAAP adjusted gross profit $ 54,723   $ 51,420   $ 209,009   $ 195,202   Non-GAAP adjusted gross margin 76.8 % 76.3 % 75.7 % 76.3 %   Loss from operations $ (4,699 ) $ (4,655 ) $ (23,198 ) $ (21,734 ) Amortization of intangible assets 5,988 5,988 23,949 23,791 Stock-based compensation expense 2,628   2,700   11,560   10,384   Non-GAAP adjusted operating income $ 3,917   $ 4,033   $ 12,311   $ 12,441     Net loss before income tax $ (6,299 ) $ (6,869 ) $ (29,539 ) $ (28,261 ) Amortization of intangible assets 5,988 5,988 23,949 23,791 Stock-based compensation expense 2,628   2,700   11,560   10,384   Non-GAAP adjusted net income before tax 2,317 1,819 5,970 5,914 Non-GAAP income tax expense 881   691   2,269   2,247   Non-GAAP adjusted net income $ 1,436   $ 1,128   $ 3,701   $ 3,667     Net loss $ (5,980 ) $ (11,093 ) $ (30,384 ) $ (26,496 ) Depreciation and amortization 6,527 6,848 26,749 25,627 Amortization of intangible assets 5,988 5,988 23,949 23,791 Stock-based compensation expense 2,628 2,700 11,560 10,384 Interest expense 1,112 1,111 4,435 4,202 Amortization of debt issuance costs 142 143 571 579 Other expense, net 346 960 1,335 1,746 Income tax (benefit) expense (319 ) 4,224   845   (1,765 ) Non-GAAP adjusted EBITDA $ 10,444   $ 10,881   $ 39,060   $ 38,068   Non-GAAP adjusted EBITDA margin 14.7 % 16.1 % 14.1 % 14.9 %   Net cash provided by operating activities $ 8,548 $ 12,181 $ 30,702 $ 25,773 Capitalized software development costs (6,846 ) (7,424 ) (25,440 ) (27,076 ) Capital expenditures (2,114 ) (2,782 ) (12,703 ) (9,823 ) Free cash flow $ (412 ) $ 1,975   $ (7,441 ) $ (11,126 )    

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures - Guidance

(In Thousands)

(unaudited)

   

Three Months Ending

March 31, 2016

  Year Ending

December 31, 2016

Loss from operations $ (6,400 ) $ (19,557 ) Amortization of intangible assets 5,982 23,866 Stock-based compensation expense 3,168   13,691   Non-GAAP adjusted operating income $ 2,750   $ 18,000     Net loss $ (8,399 ) $ (27,056 ) Amortization of intangible assets 5,982 23,866 Stock-based compensation expense 3,168 13,691 Income tax expense 788   2,540   Non-GAAP adjusted net income before tax 1,539 13,041 Non-GAAP income tax expense 585   4,955   Non-GAAP adjusted net income $ 954   $ 8,086    

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

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Intralinks Holdings, Inc.Investor:Dean Ridlon, 617-607-3957dridlon@intralinks.comorMedia:Ian Bruce, 508-574-2016ibruce@intralinks.com