EX-99.1 2 ilinc_8k-ex9901.txt PRESS RELEASE EXHIBIT 99.1 [iLinc Communications logo] CONTACT: JAMES M. POWERS, JR. PRESIDENT AND CHIEF EXECUTIVE OFFICER (602) 952-1200 JAMES L. DUNN, JR. SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (602) 952-1200 ILINC ANNOUNCES FISCAL 2007 THIRD QUARTER RESULTS THIRD FISCAL QUARTER HIGHLIGHTS o Earned revenues of $3.65 million, an increase of 12% over the same three-month period last year o Pro Forma Net Income(1) of $125,000 results in Fifth Consecutive Quarter of Profitability o Achieved Adjusted EBITDA(1) of $723,000 o New Significant Partnership with InterTel o Senior Debt Extended to July, 2010 PHOENIX, Arizona (January 25, 2007) - iLinc Communications, Inc. (AMEX:ILC), developers of Web conferencing software and audio conferencing solutions, today announced results for fiscal 2007 third quarter ended December 31, 2006. Revenues increased 12% to $3.65 million for the three months ended December 31, 2006, when compared with revenues of $3.3 million for the same three-month period last year. Revenues increased 20% to $10.7 million for the nine months ended December 31, 2006, when compared with revenues of $9.0 million for the same nine-month period last year. The Company reported a pro forma net income(1) of $125,000 or breakeven per basic and diluted share for the three months ended December 31, 2006, as compared with a net income of $207,000, or $0.01 per basic and diluted share, for the same three-month period last year. The pro forma net income is net income before a one-time charge of $160,000 recorded as a loss on debt extinguishment as a result of the extension of the Company's senior debt to 2010. The Company reported a pro forma net income(1) of $415,000 or $0.01 per basic and diluted share for the nine months ended December 31, 2006, as compared with a net loss of $1.2 million, or $0.05 per basic and diluted share, for the same nine-month period last year, an improvement at the bottom line of over $1.6 million. For the three months ended December 31, 2006, income from operations was $519,000, compared to $419,000 for the same three-month period last year. For the nine months ended December 31, 2006, income from operations was $1.6 million compared to income from operations of $273,000 for the same nine-month period last year. The Company also reported Adjusted EBITDA(1) of $723,000 for the three months ended December 31, 2006, an improvement of $282,000 over the same three-month period last year. The Company also reported Adjusted EBITDA(1) of $2.4 million for the nine months ended December 31, 2006, an improvement of $1.2 million over the same nine-month period last year. James M. Powers, Jr., President and Chief Executive Officer of iLinc Communications, said "Our revenues returned to the upward growth trend that we have come to expect. We remain confident in the growth plans established for this fiscal year and expect to continue to post quarter over quarter revenue growth. To that end, we anticipate a significant increase in revenue for our fourth fiscal quarter and we anticipate continued gains in net income and EBITDA." James Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc Communications, said, "We were pleased to have extended our senior debt for an additional three years on what we view as favorable terms, further strengthening our balance sheet and overall capital structure. We continue to seek ways to grow top-line revenue while maintaining profitability. We remain well-positioned from an operational and financial standpoint to achieve the goals we established for the 2007 fiscal year." "Notably in the Quarter we executed a reseller agreement with Inter-Tel, a new and significant reseller that advances our announced indirect sales distribution strategy. We look to aggressively grow market share and sales by leveraging our new indirect channels and expect to see meaningful sales from those efforts in the March quarter," concluded Dr. Powers. A Webcast of iLinc Communications' third quarter fiscal year 2007 conference call will be hosted live at 11:00 a.m. Eastern time on January 25, 2007. 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/join/rmscrf and follow the login instructions. To hear the audio portion of the meeting, call 1-800-282-9233 and enter pin number 3494# when prompted. A replay of the event will be available after the call and accessible online through the Company's Web site at www.iLinc.com. (1) EXPLANATION OF ADJUSTED EBITDA AND PRO FORMA NET INCOME, NON-GAAP FINANCIAL MEASURES We report adjusted EBITDA, a financial measure that is not defined by Generally Accepted Accounting Principles. 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. The net loss for the three months ended December 31, 2006 was primarily attributed to the non-recurring loss of $160,000 on extinguishment of debt resulting from the extension of the Company's senior debt. This was a one-time charge to accelerate the interest expense accounted for as debt discount and deferred offering costs under the original terms of the senior debt and accounted for as an "extinguishment of debt for accounting purposes" under the Guidance of EITF 96-19. Excluding this one-time charge, pro forma net income for the three months ended December 31, 2006 was $125,000. A reconciliation of net loss to Adjusted EBITDA is as follows for the three and nine months ended December 31, 2006 and 2005. THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ------------------- ------------------- 2006 2005 2006 2005 (IN THOUSANDS) (IN THOUSANDS) Net loss (income) ............................ $ (35) $ 207 $ 255 $(1,199) Loss on extinguishment of debt ............... 160 -- 160 -- ------- ------- ------- ------- Pro forma net income (loss) .............. 125 207 415 (1,199) Non-cash charges and credits: Interest expense ............................. 394 459 1,192 1,478 Financing and late fees ...................... 9 11 32 27 Debt conversion expense ...................... -- -- -- 329 Warrant expense .............................. -- -- 15 7 Gain on debt settlement ...................... -- -- (8) (42) Gain on sale of assets ....................... -- -- (3) (40) Adjustment of acquisition liabilities to cost of sales .............................. -- (355) -- (355) Adjustment of acquisition liabilities to general and administrative expenses ........ -- (89) -- (89) Adjustment of acquisition liabilities to other income ............................... -- (167) -- (167) Interest income .............................. (9) (1) (25) (5) Stock Compensation Expense ................... 33 10 106 30 Depreciation ................................. 54 236 280 707 Amortization ................................. 117 130 351 458 ------- ------- ------- ------- Adjusted EBITDA ....................... $ 723 $ 441 $ 2,355 $ 1,139 ======= ======= ======= =======
-2- ABOUT ILINC COMMUNICATIONS, INC. iLinc Communications, Inc. is a leading developer of Web conferencing software and audio conferencing services for highly secure and cost-effective collaborative meetings, presentations, and training sessions. The Company enables customers to purchase and own iLinc Web conferencing software, which can be installed inside of a customer's network or hosted by iLinc. Our products and services include the iLinc Suite of Web Conferencing software (MeetingLinc, LearnLinc, ConferenceLinc, and SupportLinc); Audio Conferencing Services; On-Demand Conferencing; and EventPlus, a service for professionally managed online and audio conferencing events. iLinc's products and services are used by organizations worldwide in sales, HR and training, marketing, and customer support. More information about the Phoenix-based Company may be found on the Web at www.ilinc.com. 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, On-Demand, Web Presenter and its logos are trademarks or registered trademarks of iLinc Communications, Inc. All other company names and products may be trademarks of their respective companies. -3- ILINC COMMUNICATIONS, INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, --------------------- --------------------- 2006 2005 2006 2005 (unaudited) (unaudited) Revenues Software Licenses ............................................... $ 1,105 $ 850 $ 3,255 $ 2,123 Software and audio services ..................................... 1,831 1,747 5,440 5,158 Maintenance and professional services ........................... 715 677 2,012 1,671 -------- -------- -------- -------- Total revenues .............................................. $ 3,651 $ 3,274 $ 10,707 $ 8,952 -------- -------- -------- -------- Cost of revenues Software Licenses ............................................... 51 40 132 72 Software and audio services ..................................... 884 959 2,727 2,838 Maintenance and professional services ........................... 310 237 710 535 Amortization of acquired developed technology ................... 68 82 202 309 -------- -------- -------- -------- Total cost of revenues ...................................... 1,313 1,318 3,771 3,754 -------- -------- -------- -------- Gross profit ....................................................... 2,338 1,956 6,936 5,198 -------- -------- -------- -------- Operating expenses Research and development ........................................ 307 351 905 1,055 Sales and marketing ............................................. 924 701 2,538 2,255 General and administrative ...................................... 588 485 1,887 1,615 -------- -------- -------- -------- Total operating expenses .................................... 1,819 1,537 5,330 4,925 -------- -------- -------- -------- Income from operations ........................................... 519 419 1,606 273 Interest expense ................................................ (244) (246) (741) (773) Amortization of beneficial debt conversion ...................... (150) (213) (451) (705) -------- -------- -------- -------- Total interest expense ...................................... (394) (459) (1,192) (1,478) Loss on extinguishment of debt .................................. (160) -- (160) -- Net gain (loss) on settlement of debt and other obligations ..... -- -- 8 (287) Interest income (charges) and other ............................. -- 177 (20) 171 Gain on sale of assets .......................................... -- -- 3 40 -------- -------- -------- -------- (Loss) income from continuing operations before income taxes .... (35) 137 245 (1,281) Income taxes .................................................... -- -- -- -- -------- -------- -------- -------- Loss (income) from continuing operations ........................ (35) 137 245 (1,281) Income from discontinued operations ............................ -- 70 10 82 -------- -------- -------- -------- Net loss (income) ................................................. (35) 207 255 (1,199) Series A and B preferred stock dividends .......................... (38) (40) (117) (91) Imputed preferred stock dividends ................................. -- -- -- (55) -------- -------- -------- -------- Loss (income) available to common shareholders .................... (73) 167 138 (1,345) ======== ======== ======== ======== Loss (income) per common share, basic and diluted From continuing operations ...................................... $ (0.00) $ 0.01 $ 0.00 $ (0.05) From discontinued operations .................................... -- -- -- -- -------- -------- -------- -------- Loss (income) per common share .............................. $ (0.00) $ 0.01 $ 0.00 $ (0.05) ======== ======== ======== ======== Number of shares used in calculation of loss (income) per share: Basic .......................................................... 33,190 27,114 31,676 25,705 ======== ======== ======== ======== Diluted ........................................................ 33,190 27,115 31,991 25,705 ======== ======== ======== ======== -4- ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) DECEMBER 31, MARCH 31, 2006 2006 -------- -------- (UNAUDITED) (AUDITED) ASSETS Current assets: Cash and cash equivalents .................................................. $ 772 $ 466 Certificates of deposit and marketable securities .......................... 768 -- Accounts receivable, net of allowance for doubtful accounts of $96 and $120, respectively ............................................... 2,128 2,207 Note receivable ............................................................ 52 12 Prepaid and other current assets ........................................... 788 30 -------- -------- Total current assets ..................................................... 4,508 2,715 Property and equipment, net ................................................... 448 336 Goodwill ...................................................................... 11,206 11,206 Intangible assets, net ........................................................ 1,632 1,731 Other assets ................................................................. 14 12 Assets of discontinued operations ............................................ -- -- -------- -------- Total assets ............................................................. $ 17,808 $ 16,000 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long term debt .......................................... $ 483 $ 199 Accounts payable trade ..................................................... 1,099 1,257 Accrued liabilities ........................................................ 1,277 2,213 Current portion of capital lease liabilities ............................... -- 70 Deferred revenue ........................................................... 1,091 917 -------- -------- Total current liabilities ................................................ 3,950 4,656 Long term debt, less current maturities, net of discount and beneficial conversion feature of $1,043 and $1,493, respectively ...................... 7,020 6,974 Capital lease liabilities, less current maturities ............................ -- -- -------- -------- Total liabilities ........................................................ 10,970 11,630 -------- -------- SHAREHOLDERS' EQUITY: Preferred stock, $.001 par value 10,000,000 shares authorized, Series A, 115,000 and 127,500 shares issued and outstanding, liquidation preference of $1,150,000 and $1,275,000, respectively and Series B, 64,000 and 70,000 shares issued and outstanding, liquidation preference of $640,000 and $700,000, respectively ..................................................... -- -- Common stock, $.001 par value 100,000,000 shares authorized, 34,837,843 and 28,923,168 issued, respectively ............................................ 35 29 Additional paid-in capital ................................................. 46,552 44,228 Accumulated deficit ........................................................ (38,341) (38,479) Less: 1,432,412 treasury shares at cost ................................... (1,408) (1,408) -------- -------- Total shareholders' equity ............................................... 6,838 4,370 -------- -------- Total liabilities and shareholders' equity ............................... $ 17,808 $ 16,000 ======== ======== -End-