Intralinks Holdings, Inc. (NYSE: IL), a leading, global SaaS
provider of secure content collaboration solutions, today announced
its results for the first quarter ended March 31, 2016.
“During the first quarter of 2016, we made great progress in two
important areas - the expansion of our sales organization and the
continued evolution of our differentiated platform," said Ron
Hovsepian, Intralinks’ president and chief executive officer. “We
continued to add new clients and expand relationships within
existing clients during the quarter. In addition, we aggressively
added sales capacity in light of the significant market opportunity
in front of us. With the sales investment and the latest
enhancements to our platform, I am excited about how we are
positioned to deliver strong long-term performance.”
First Quarter 2016 Financial Highlights
- Revenue for the first quarter of 2016
was $70.7 million, compared to $66.3 million in the first quarter
of 2015, an increase of 7%, or 9% in constant currency.
- Enterprise revenue was $28.2 million,
compared to $26.0 million in the first quarter of 2015, an increase
of 8%, or 10% in constant currency.
- M&A revenue was $35.4 million,
compared to $33.2 million in the first quarter of 2015, an increase
of 7%, or 10% in constant currency.
- DCM revenue was $7.2 million, compared
to $7.1 million in the first quarter of 2015, an increase of 1% in
both actual and constant currency.
- GAAP operating loss was $4.0 million,
compared to $6.4 million in the first quarter of 2015. Non-GAAP
adjusted operating income was $4.6 million, compared to $2.5
million in the first quarter of 2015.
- GAAP operating margin was (5.7)%
compared to (9.7)% in the first quarter of 2015, an improvement of
400 basis points. Non-GAAP operating margin was 6.5% compared to
3.7% in the first quarter of 2015, an increase of 280 basis
points.
- During the quarter, Intralinks
repurchased approximately 324,000 shares of its common stock at a
total cost of $2.7 million. In addition, during the month of April,
the company repurchased approximately 338,000 shares at a total
cost of $3.0 million.
Business Highlights
- Expanded the sales organization with a
focus on sales executives selling into the enterprise.
- Forrester Research, Inc. named
Intralinks VIA® a “Leader” in its latest report, The
Forrester WaveTM: Enterprise File Sync and Share Platforms, Cloud
Solutions, Q1 2016.
- Gartner ranked Intralinks the number
one vendor by market share in the collaboration and social software
suites market for the tenth consecutive year. Intralinks leads the
category with 17.4% market share based on worldwide revenues in
2015.
- Launched off-line information rights
management (IRM), an industry first, to provide users with
increased freedom to work remotely without compromising
security.
- Launched Web Forms to improve
collaboration through the secure collection of data directly in the
platform.
- Completed the acquisition of Verilume,
which builds on the company’s strategy to provide its clients with
business solutions for high-value content collaboration across
boundaries, while also meeting stringent global data governance and
security requirements. The acquisition of Verilume will enhance the
execution of the company’s efforts to reduce the complexity of
deploying and managing distributed cloud environments to deliver
in-country and regional data locality and processing.
Business Outlook
Commenting on the company's outlook, Chris Lafond, Intralinks'
chief financial officer said, "Our first quarter results highlight
the effective execution of our strategy to invest in the expansion
of our sales capacity while also improving operating margins. We
expect to deliver double digit revenue growth again in 2016, as
well as significantly improve margins and cash flow. The
combination of our proven business model, sales investment, cost
reduction efforts and share repurchase program provide us with the
platform to accelerate our financial performance and continue to
build shareholder value in 2016 and beyond."
Based on information available as of May 3, 2016, Intralinks is
providing guidance for 2016 as follows:
Second Quarter 2016
Revenue: $72.0 million to $73.0 million
GAAP operating loss: $(5.5) million to $(5.0) million
Non-GAAP operating income: $4.0 million to $4.5 million
GAAP net loss per share: $(0.13) to $(0.12)
Non-GAAP net income per share: $0.03 to $0.04
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 2016. Excluding the impact of
fluctuations in foreign currency exchange rates, our full-year
guidance reflects 10% to 12% revenue growth.
Quarterly Conference Call
Intralinks will host a conference call today at 4:30 p.m.
Eastern Time (ET) to discuss the company's first quarter 2016
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
May 10, 2016 at 877-870-5176 (domestic) or 858-384-5517
(international). The passcode for the replay is 10084325. 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 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 should be considered in addition to the company's
results prepared in accordance with U.S. GAAP and should not be
considered substitutes for or superior to the company's U.S. GAAP
results. We endeavor to compensate for the limitations of the
non-GAAP measures presented in this release by providing the
comparable GAAP measures with equal or greater prominence. We
encourage investors to examine the reconciling adjustments between
the GAAP and non-GAAP measures, which are included in this
release.
Management defines its non-GAAP financial measures as
follows:
- 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.
- 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 and stock-based compensation 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.
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; when
and on what terms we enter into contracts with customers
subscribing to the Intralinks service and the impact thereof on the
amount of our annualized recurring revenue at any point in time;
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, 2015
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)
March 31, 2016 December 31,
2015 ASSETS Current assets: Cash and cash equivalents $
34,491 $ 47,875 Investments 3,205 12,425 Accounts receivable, net
of allowances of $4,693 and $4,265, respectively 57,712 50,360
Prepaid expenses 7,449 8,595 Other current assets 3,289
3,399 Total current assets 106,146 122,654 Fixed assets, net
19,555 20,789 Capitalized software, net 48,828 46,636 Goodwill
231,542 224,383 Other intangibles, net 32,124 38,106 Other
non-current assets 7,605 7,619 Total assets $ 445,800
$ 460,187 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 7,936 $ 10,094 Current
portion of long-term debt, net of debt issuance costs 1,854 1,829
Deferred revenue 51,672 52,005 Accrued expenses and other current
liabilities 23,208 29,856 Total current liabilities
84,670 93,784 Long-term debt, net of debt issuance costs 79,021
79,457 Other long-term liabilities 4,807 4,795 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; authorized
300,000,000 shares; issued 58,562,669 and 58,434,464 shares;
outstanding 58,238,249 and 58,434,464 shares, respectively 59 58
Additional paid-in capital 458,659 456,141 Accumulated deficit
(174,467 ) (169,594 ) Accumulated other comprehensive loss (4,261 )
(4,454 ) Treasury Stock, 324,420 and 0 shares of common stock at
cost (2,688 ) — Total stockholders' equity 277,302
282,151 Total liabilities and stockholders' equity $ 445,800
$ 460,187
Intralinks Holdings, Inc.
Consolidated Statements of
Operations
(In Thousands, Except Share and Per
Share Data)
(unaudited)
Three months ended March 31, 2016
2015 Revenue $ 70,723 $ 66,306 Cost of revenue 19,873
18,553 Gross profit 50,850 47,753 Operating expenses: Sales
and marketing 30,353 29,972 General and administrative 17,928
18,149 Product development 6,590 6,033 Total
operating expenses 54,871 54,154 Loss from operations
(4,021 ) (6,401 ) Interest expense 1,117 1,130 Amortization of debt
issuance costs 143 143 Other (income) expense, net (543 ) 1,496
Net loss before income tax (4,738 ) (9,170 ) Income tax
expense 135 182 Net loss $ (4,873 ) $ (9,352 ) Net
loss per common share: Basic $ (0.08 ) $ (0.17 ) Diluted $ (0.08 )
$ (0.17 ) Weighted average number of shares: Basic 57,857,057
56,592,517 Diluted 57,857,057 56,592,517
Intralinks Holdings, Inc.
Consolidated Statements of Cash
Flows
(In Thousands)
(unaudited)
Three months ended March 31, 2016
2015 Cash flows from operating activities: Net loss $
(4,873 ) $ (9,352 ) Adjustments to reconcile net loss to net cash
used in operating activities: Depreciation and amortization 6,599
6,693 Amortization of intangible assets 5,982 5,987 Stock-based
compensation expense 2,615 2,884 Other, net 48 1,103 Changes in
operating assets and liabilities: Accounts receivable (7,446 )
(5,170 ) Prepaid expenses and other assets 1,311 (1,140 ) Accounts
payable (1,161 ) (1,075 ) Accrued expenses and other liabilities
(8,297 ) (7,595 ) Deferred revenue (115 ) (507 ) Net cash used in
operating activities (5,337 ) (8,172 )
Cash flows from investing
activities: Capitalized software development costs (6,658 )
(5,103 ) Capital expenditures (1,156 ) (433 ) Maturities of
investments 9,184 4,550 Acquisitions, net of cash acquired (6,359 )
— Net cash used in investing activities (4,989 ) (986 )
Cash flows from financing activities: Payments on long-term
debt (572 ) (200 ) Purchases of treasury stock (2,688 ) — Other (96
) (147 ) Net cash used in financing activities (3,356 ) (347 )
Effect of foreign exchange rate changes on cash and cash
equivalents 298 (750 ) Net decrease in cash and cash
equivalents (13,384 ) (10,255 ) Cash and cash equivalents at
beginning of period 47,875 40,682 Cash and cash
equivalents at end of period $ 34,491 $ 30,427
Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(In Thousands)
(unaudited)
Three Months Ended March 31, 2016
2015 Loss from operations $ (4,021 ) $ (6,401 ) Amortization
of intangible assets 5,982 5,987 Stock-based compensation expense
2,615 2,884 Non-GAAP adjusted operating income $
4,576 $ 2,470 Net loss $ (4,873 ) $ (9,352 )
Amortization of intangible assets 5,982 5,987 Stock-based
compensation expense 2,615 2,884 Income tax expense 135 182
Non-GAAP adjusted net income before tax 3,859 (299 )
Non-GAAP income tax expense (benefit) 1,467 (114 ) Non-GAAP
adjusted net income $ 2,392 $ (185 ) Net cash used in
operating activities $ (5,337 ) $ (8,172 ) Capitalized software
development costs (6,658 ) (5,103 ) Capital expenditures (1,156 )
(433 ) Free cash flow $ (13,151 ) $ (13,708 )
Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures - Guidance
(In Thousands)
(unaudited)
Three Months Ending
June 30, 2016
Year Ending
December 31, 2016
Loss from operations $ (5,202 ) $ (19,557 ) Amortization of
intangible assets 5,962 23,866 Stock-based compensation expense
3,490 13,691 Non-GAAP adjusted operating income $
4,250 $ 18,000 Net loss $ (7,063 ) $ (27,056 )
Amortization of intangible assets 5,962 23,866 Stock-based
compensation expense 3,490 13,691 Income tax expense 663
2,540 Non-GAAP adjusted net income before tax 3,052 13,041
Non-GAAP income tax expense 1,160 4,955 Non-GAAP
adjusted net income $ 1,892 $ 8,086
Note: All forward-looking figures presented in
these tables are stated at the mid-point of the estimated
range.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160503006776/en/
Intralinks Holdings, Inc.Investor: Dean Ridlon,
617-607-3957dridlon@intralinks.comMedia: Ian Bruce,
(Cell) 508-574-2016ibruce@intralinks.com
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