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| 8-K - IntraLinks Holdings, Inc. | v303782_8-k.htm |
IntraLinks Announces Fourth Quarter and Full Year 2011 Results
NEW YORK, NY – February 27, 2012 – IntraLinks Holdings, Inc. (NYSE: IL), a leading provider of critical information exchange solutions, today announced results for its fourth quarter and full year 2011.
“I am excited to have recently joined IntraLinks to lead the company in its next stage of growth,” said Ron Hovsepian, IntraLinks’ President and CEO. “In the short time I have been with the company, I have confirmed that IntraLinks has a robust technology platform, a leadership position in several markets and a compelling market opportunity. In addition, I believe our strong financial position and positive cash flow enable us to increase investments in the business that are focused on accelerating long-term revenue growth and creating shareholder value.”
Fourth Quarter 2011
Total revenue was $52.9 million, compared to $52.1 million for the corresponding quarter last year.
| · | Enterprise revenue was $23.5 million, compared to $23.0 million for the corresponding quarter last year. |
| · | M&A revenue was $21.0 million, compared to $20.0 million for the corresponding quarter last year. |
| · | DCM revenue was $8.4 million, compared to $9.1 million for the corresponding quarter last year. |
GAAP gross margin was 73.2%, compared to 75.9% for the corresponding quarter last year. Non-GAAP gross margin was 79.6%, compared to 82.4% for the corresponding quarter last year.
GAAP operating income was $2.4 million, compared to $6.3 million for the corresponding quarter last year. Non-GAAP adjusted operating income was $11.5 million, compared to $15.0 million for the corresponding quarter last year.
GAAP net loss was ($2.5) million, compared to a GAAP net income of $1.0 million for the corresponding quarter last year. GAAP net loss per share for the fourth quarter was ($0.05) on the basis of 54,096,215 shares outstanding. In the prior year comparable period, diluted GAAP net income per share was $0.02 on the basis of 51,797,179 shares outstanding.
Non-GAAP adjusted net income was $5.7 million, compared to $7.4 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.11 on the basis of 54,617,121 shares outstanding. In the corresponding quarter for the prior year, non-GAAP net income per share was $0.14 on the basis of 53,361,489 shares outstanding. Shares outstanding for the prior period are on a pro forma basis, assuming that the conversion of outstanding preferred stock to common stock and the initial and follow-on offerings of common stock occurred at the beginning of the period.
Non-GAAP adjusted EBITDA was $16.1 million, compared to $19.9 million for the corresponding quarter last year.
Cash flow from operations was $19.6 million, compared to $19.6 million in the corresponding quarter last year.
Full Year 2011
Total revenue was $213.5 million, compared to $184.3 million in the prior year.
| · | Enterprise revenue was $94.5 million, compared to $82.8 million last year |
| · | M&A revenue was $83.8 million, compared to $68.6 million last year |
| · | DCM revenue was $34.6 million, compared to $32.9 million last year |
| · | Other revenue of $0.6 million consisted of an insurance recovery for actual lost revenue under a business interruption policy. |
GAAP operating income was $8.9 million, compared to $11.2 million in the prior year. Non-GAAP adjusted operating income was $46.3 million, compared to $45.6 million in the prior year.
GAAP net loss was ($1.2) million, compared to a GAAP net loss of ($12.4) million in the prior year. GAAP net loss per share for the year was ($0.02) on the basis of 53,381,655 shares outstanding. In the prior year comparable period, GAAP net loss per share was ($0.58) on the basis of 21,310,284 shares outstanding.
Non-GAAP adjusted net income of $23.5 million, compared to $13.7 million last year. Non-GAAP adjusted net income per share was $0.43 on the basis of 54,463,080 shares outstanding. In the corresponding period for the prior year, non-GAAP net income per share was $0.26 on the basis of 52,953,642 shares outstanding. Shares outstanding for the prior period are on a pro forma basis, assuming that the conversion of outstanding preferred stock to common stock and the initial and follow-on offerings of common stock occurred at the beginning of the period.
Non-GAAP adjusted EBITDA was $66.3 million, compared to non-GAAP adjusted EBITDA of $62.6 million in the prior year.
Cash flow from operations was $54.7 million, compared to $35.6 million in the prior year.
Deferred revenue on the balance sheet at December 31, 2011 was $40.3 million, compared to $38.0 million at the end of 2010.
First Quarter 2012 Revenue Guidance
IntraLinks anticipates revenue for the first quarter of 2012 to be in the range of $46 million to $49 million.
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 2011 financial results, insights into 2012 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 March 5, 2012, at877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10009371. 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 (NYSE: IL) is a leading global provider of Software-as-a-Service solutions for securely managing content, exchanging critical business information and collaborating within and among organizations. More than 1 million professionals in industries including financial services, pharmaceutical, biotechnology, consumer, energy, industrial, legal, insurance, real estate and technology, as well as government agencies, have utilized IntraLinks' easy-to-use, cloud-based solutions. IntraLinks users can accelerate information-intensive business processes and workflows, meet regulatory and risk management requirements and collaborate with customers, partners and counterparties in a secure, auditable and compliant manner. Professionals at more than 800 of the Fortune 1000 companies have used IntraLinks’ solutions. For more information, visit www.intralinks.com or http://blog.intralinks.com. You can also follow IntraLinks on Twitter at http://twitter.com/intralinks and Facebook at www.facebook.com/IntraLinks.
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, and (3) 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) costs related to public stock offerings, and (4) costs related to debt repayments. 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. Shares outstanding for the prior period are on a pro forma basis, assuming that the conversion of outstanding preferred stock to common stock and the initial and follow-on offerings of common stock occurred at the beginning of the period. |
| · | Non-GAAP adjusted EBITDA represents net income (loss) adjusted to exclude (1) interest expense, net of interest income, (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) loss on extinguishment of our debt, (8) other expense (income), net and (9) costs related to public stock offerings. |
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, 2010 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 Holdings, Inc. All rights reserved.
Investor Contact:
David Roy
IntraLinks Holdings, Inc.
212-342-7690
droy@intralinks.com
Media Contact:
Anthony Piniella
IntraLinks Holdings, Inc.
212-342-7508
apiniella@intralinks.com
IntraLinks | 150 East 42nd Street | New York, NY 10017 | + 1 212 342 7684 | Fax +1 212 208 2600
INTRALINKS HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and per Share Data)
(unaudited)
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 46,694 | $ | 50,467 | ||||
| Accounts receivable, net of allowances of $2,149 and $2,418, respectively | 38,895 | 37,137 | ||||||
| Investments | 36,120 | - | ||||||
| Deferred taxes | 12,711 | 18,264 | ||||||
| Prepaid expenses | 4,238 | 5,916 | ||||||
| Other current assets | 4,567 | 2,457 | ||||||
| Total current assets | 143,225 | 114,241 | ||||||
| Fixed assets, net | 7,635 | 8,075 | ||||||
| Capitalized software, net | 30,287 | 25,676 | ||||||
| Goodwill | 215,478 | 215,478 | ||||||
| Other intangibles, net | 132,233 | 160,863 | ||||||
| Other assets | 1,483 | 2,022 | ||||||
| Total assets | $ | 530,341 | $ | 526,355 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,934 | $ | 4,191 | ||||
| Accrued expenses and other current liabilities | 19,846 | 22,444 | ||||||
| Deferred revenue | 40,309 | 38,043 | ||||||
| Total current liabilities | 65,089 | 64,678 | ||||||
| Long term debt | 91,164 | 125,886 | ||||||
| Deferred taxes | 39,384 | 46,103 | ||||||
| Other long term liabilities | 2,874 | 2,244 | ||||||
| Total liabilities | 198,511 | 238,911 | ||||||
| Stockholders' equity: | ||||||||
| Undesignated Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2011 and December 31, 2010 | - | - | ||||||
| Common stock, $0.001 par value; 300,000,000 shares authorized; 54,248,178 and 52,387,374 shares issued and outstanding as of December 31, 2011 and December 31, 2010, respectively | 54 | 52 | ||||||
| Additional paid-in capital | 411,781 | 365,962 | ||||||
| Accumulated deficit | (80,056 | ) | (78,813 | ) | ||||
| Accumulated other comprehensive income | 51 | 243 | ||||||
| Total stockholders' equity | 331,830 | 287,444 | ||||||
| Total liabilities and stockholders' equity | $ | 530,341 | $ | 526,355 | ||||
INTRALINKS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Share and per Share Data)
(unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue | $ | 52,935 | $ | 52,118 | $ | 212,890 | $ | 184,332 | ||||||||
| Other revenue | - | - | 614 | - | ||||||||||||
| Total revenue | 52,935 | 52,118 | 213,504 | 184,332 | ||||||||||||
| Cost of revenue | 14,193 | 12,549 | 56,385 | 47,496 | ||||||||||||
| Gross profit | 38,742 | 39,569 | 157,119 | 136,836 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Product development | 3,887 | 4,179 | 18,579 | 17,953 | ||||||||||||
| Sales and marketing | 21,411 | 20,995 | 88,872 | 79,251 | ||||||||||||
| General and administrative | 11,073 | 8,096 | 40,808 | 28,435 | ||||||||||||
| Total operating expenses | 36,371 | 33,270 | 148,259 | 125,639 | ||||||||||||
| Income from operations | 2,371 | 6,299 | 8,860 | 11,197 | ||||||||||||
| Interest expense, net | 2,499 | 4,725 | 10,645 | 24,724 | ||||||||||||
| Amortization of debt issuance costs | 214 | 1,059 | 1,369 | 3,084 | ||||||||||||
| Loss on extinguishment of debt | - | - | - | 4,974 | ||||||||||||
| Other income, net | (576 | ) | (1,515 | ) | (3,123 | ) | (2,722 | ) | ||||||||
| Net income (loss) before income tax | 234 | 2,030 | (31 | ) | (18,863 | ) | ||||||||||
| Income tax provision (benefit) | 2,731 | 1,012 | 1,212 | (6,427 | ) | |||||||||||
| Net (loss) income | $ | (2,497 | ) | $ | 1,018 | $ | (1,243 | ) | $ | (12,436 | ) | |||||
| Net (loss) income per common share | ||||||||||||||||
| Basic | $ | (0.05 | ) | $ | 0.02 | $ | (0.02 | ) | $ | (0.58 | ) | |||||
| Diluted | $ | (0.05 | ) | $ | 0.02 | $ | (0.02 | ) | $ | (0.58 | ) | |||||
| Weighted average number of shares used in | ||||||||||||||||
| calculating net (loss) income per share | ||||||||||||||||
| Basic | 54,096,215 | 50,083,596 | 53,381,655 | 21,310,284 | ||||||||||||
| Diluted | 54,096,215 | 51,797,179 | 53,381,655 | 21,310,284 | ||||||||||||
INTRALINKS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(unaudited)
| Years Ended December 31, | ||||||||
| 2011 | 2010 | |||||||
| Net loss | $ | (1,243 | ) | $ | (12,436 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 19,999 | 16,982 | ||||||
| Stock-based compensation expense | 8,708 | 4,215 | ||||||
| Amortization of intangible assets | 28,630 | 28,741 | ||||||
| Amortization of deferred costs | 1,472 | 3,084 | ||||||
| Provision for bad debts and customer credits | 931 | 508 | ||||||
| Loss (gain) on disposal of fixed assets | 228 | (224 | ) | |||||
| Change in deferred taxes | (1,166 | ) | (7,901 | ) | ||||
| Gain on interest rate swap | (4,193 | ) | (2,778 | ) | ||||
| Currency remeasurement gain | (318 | ) | - | |||||
| Loss on extinguishment of debt | - | 4,974 | ||||||
| Non-cash interest expense | - | 5,648 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (2,692 | ) | (11,662 | ) | ||||
| Prepaid expenses and other current assets | (1,804 | ) | (2,479 | ) | ||||
| Other assets | 1,092 | (558 | ) | |||||
| Accounts payable | 765 | (4,673 | ) | |||||
| Accrued expenses and other liabilities | 1,928 | 2,728 | ||||||
| Deferred revenue | 2,389 | 11,395 | ||||||
| Net cash provided by operating activities | 54,726 | 35,564 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (5,115 | ) | (6,863 | ) | ||||
| Capitalized software development costs | (18,718 | ) | (16,128 | ) | ||||
| Purchase of short-term investments | (40,120 | ) | (4,320 | ) | ||||
| Sale and maturity of short-term investments | 4,000 | 7,770 | ||||||
| Net cash used in investing activities | (59,953 | ) | (19,541 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 1,374 | 306 | ||||||
| Proceeds from issuance of common stock | 1,251 | 210 | ||||||
| Offering costs paid in connection with initial public offering and follow-on offerings | (517 | ) | (2,365 | ) | ||||
| Capital lease payments | - | (27 | ) | |||||
| Payment of financing costs | - | (1,663 | ) | |||||
| Proceeds from follow-on offering, net of underwriting discounts and commissions | 35,003 | 182,838 | ||||||
| Repayments of outstanding principal on long-term debt | (35,656 | ) | (171,456 | ) | ||||
| Prepayment penalty on PIK loan | - | (4,092 | ) | |||||
| Net cash provided by financing activities | 1,455 | 3,751 | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (1 | ) | 212 | |||||
| Net (decrease) increase in cash and cash equivalents | (3,773 | ) | 19,986 | |||||
| Cash and cash equivalents at beginning of period | 50,467 | 30,481 | ||||||
| Cash and cash equivalents at end of period | $ | 46,694 | $ | 50,467 | ||||
INTRALINKS HOLDINGS, INC.
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
(In Thousands)
(unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Gross profit | $ | 38,742 | $ | 39,569 | $ | 157,119 | $ | 136,836 | ||||||||
| Gross margin | 73.2 | % | 75.9 | % | 73.6 | % | 74.2 | % | ||||||||
| Cost of revenue - stock based compensation expense | 92 | 41 | 310 | 105 | ||||||||||||
| Cost of revenue - amortization of intangible assets | 3,310 | 3,310 | 13,237 | 13,237 | ||||||||||||
| Non-GAAP gross profit | $ | 42,144 | $ | 42,920 | $ | 170,666 | $ | 150,178 | ||||||||
| Non-GAAP gross margin | 79.6 | % | 82.4 | % | 79.9 | % | 81.5 | % | ||||||||
| Income from operations | $ | 2,371 | $ | 6,299 | $ | 8,860 | $ | 11,197 | ||||||||
| Stock-based compensation expense | 1,943 | 1,369 | 8,708 | 4,215 | ||||||||||||
| Amortization of intangible assets | 7,158 | 7,158 | 28,630 | 28,741 | ||||||||||||
| Costs related to public stock offerings | - | 195 | 57 | 1,416 | ||||||||||||
| Non-GAAP adjusted operating income | $ | 11,472 | $ | 15,021 | $ | 46,255 | $ | 45,569 | ||||||||
| Net income (loss) before income tax | $ | 234 | $ | 2,030 | $ | (31 | ) | $ | (18,863 | ) | ||||||
| Stock-based compensation expense | 1,943 | 1,369 | 8,708 | 4,215 | ||||||||||||
| Amortization of intangible assets | 7,158 | 7,158 | 28,630 | 28,741 | ||||||||||||
| Costs related to public stock offerings | - | 195 | 57 | 1,416 | ||||||||||||
| Costs related to debt repayments | - | 1,402 | - | 7,011 | ||||||||||||
| Non-GAAP net income before income tax | 9,335 | 12,154 | 37,364 | 22,520 | ||||||||||||
| Non-GAAP income tax provision | 3,594 | 4,740 | 13,825 | 8,783 | ||||||||||||
| Non-GAAP adjusted net income | $ | 5,741 | $ | 7,414 | $ | 23,539 | $ | 13,737 | ||||||||
| Net (loss) income | $ | (2,497 | ) | $ | 1,018 | $ | (1,243 | ) | $ | (12,436 | ) | |||||
| Interest expense, net | 2,499 | 4,725 | 10,645 | 24,724 | ||||||||||||
| Income tax provision (benefit) | 2,731 | 1,012 | 1,212 | (6,427 | ) | |||||||||||
| Depreciation and amortization | 4,598 | 4,844 | 19,999 | 16,982 | ||||||||||||
| Amortization of intangible assets | 7,158 | 7,158 | 28,630 | 28,741 | ||||||||||||
| Stock-based compensation expense | 1,943 | 1,369 | 8,708 | 4,215 | ||||||||||||
| Amortization of debt issuance costs | 214 | 1,059 | 1,369 | 3,084 | ||||||||||||
| Loss on extinguishment of debt | - | - | - | 4,974 | ||||||||||||
| Other income, net | (576 | ) | (1,515 | ) | (3,123 | ) | (2,722 | ) | ||||||||
| Costs related to public stock offerings | - | 195 | 57 | 1,416 | ||||||||||||
| Non-GAAP adjusted EBITDA | $ | 16,070 | $ | 19,865 | $ | 66,254 | $ | 62,551 | ||||||||
| Non-GAAP adjusted EBITDA margin | 30.4 | % | 38.1 | % | 31.0 | % | 33.9 | % | ||||||||
| Cash flow provided by operations | $ | 19,611 | $ | 19,592 | $ | 54,726 | $ | 35,564 | ||||||||
| Capital expenditures | (4,900 | ) | (3,971 | ) | (23,833 | ) | (22,991 | ) | ||||||||
| Free cash flow | $ | 14,711 | $ | 15,621 | $ | 30,893 | $ | 12,573 | ||||||||