-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NaGR5hT+SDWyzHrVzSXR7Mg98C0artuylGFqk+6VVLEJMt7V78QmjV8Wx4EavHEM scQYWZL77Kc/YskUKDSsvA== 0001019687-08-000480.txt : 20080207 0001019687-08-000480.hdr.sgml : 20080207 20080207154140 ACCESSION NUMBER: 0001019687-08-000480 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080207 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080207 DATE AS OF CHANGE: 20080207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ILINC COMMUNICATIONS INC CENTRAL INDEX KEY: 0001042291 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 760545043 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13725 FILM NUMBER: 08585119 BUSINESS ADDRESS: STREET 1: 2999 NORTH 44TH STREET STREET 2: SUITE 650 CITY: PHOENIX STATE: AZ ZIP: 85018 BUSINESS PHONE: 6029521200 MAIL ADDRESS: STREET 1: 2999 N 44TH STREET STREET 2: SUITE 650 CITY: PHOENIX STATE: AZ ZIP: 85018 FORMER COMPANY: FORMER CONFORMED NAME: EDT LEARNING INC DATE OF NAME CHANGE: 20010814 FORMER COMPANY: FORMER CONFORMED NAME: E-DENTIST COM INC DATE OF NAME CHANGE: 20001114 FORMER COMPANY: FORMER CONFORMED NAME: PENTEGRA DENTAL GROUP INC DATE OF NAME CHANGE: 19970822 8-K 1 ilinc_8k-020708.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549 ______________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 7, 2008 ______________ ILINC COMMUNICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-13725 76-0545043 (State or Other Jurisdiction (Commission (I.R.S. Employer Of Incorporation or Organization) File Number) Identification No.) 2999 NORTH 44TH STREET, SUITE 650, PHOENIX, ARIZONA 85018 (Address of Principal Executive Offices) (Zip Code) (602) 952-1200 (Registrant's telephone number, including area code) ______________ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On February 7, 2008, iLinc Communications, Inc. ("the Company") reported its fiscal year 2008 third quarter results for the period ended December 31, 2007. A copy of the Company's press release is attached as Exhibit 99.1 to this current report. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. The following exhibit is filed herewith: EXHIBIT NUMBER DESCRIPTION - -------------------------------------- 99.1 Press release dated February 7, 2008 issued by iLinc Communications, Inc. Filed herewith. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. iLINC COMMUNICATIONS, INC. By:/s/James M. Powers Jr. ------------------------------------ President and Chief Executive Officer Date: February 7, 2008 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - ------ ----------------------- 99.1 Copy of press release issued by iLinc Communications, Inc. on February 7, 2008. EX-99.1 2 ilinc_8kex99-1.txt PRESS RELEASE EXHIBIT 99.1 ILINC ANNOUNCES THIRD QUARTER FISCAL 2008 RESULTS THIRD QUARTER HIGHLIGHTS o Total revenue of $3.4 million, a decrease of eight percent over the same three-month period last year o Increased subscription license revenue to $752,000, a 54 percent increase over the same three-month period last year, and to $2.1 million, a 41 percent increase over the same nine-month period last year o Maintained combined cash and certificate of deposit balance of $1.5 million o Audio conferencing revenue declined more than the seasonal average, but is expected to rebound in the March quarter o Changing market conditions and a change in vertical sales focus adds long-term subscription revenue o Net loss before tax of $558,000, the result of continued investment in research and development and sales and marketing activities intended to foster revenue growth o Continued positive cash flow with Adjusted EBITDA(1) of $1 million through first three quarters of fiscal year PHOENIX, Arizona (February 7, 2008) - iLinc Communications, Inc. (AMEX:ILC), a leading developer of Web conferencing software and audio conferencing services, today announced results for the third quarter of fiscal year 2008 ended December 31, 2007. For the three months ended December 31, 2007, total revenue decreased eight percent to $3.4 million, compared with revenues of $3.7 million for the same three-month period last year. Revenues increased six percent to $11.4 million for the nine months ended December 31, 2007, compared with revenues of $10.7 million for the same nine-month period last year. Gross profit decreased seven percent to $2.2 million for the three months ended December 31, 2007, compared to $2.3 million for the same three-month period last year. Gross profit increased ten percent to $7.6 million for the nine months ended December 31, 2007, compared to $6.9 million for the same nine-month period last year. "We are very disappointed that several large software license sales that had been expected to close in December were delayed to the March quarter," said James M. Powers, Jr., President and Chief Executive Officer of iLinc. "Four large contracts did not close in the third quarter as planned. While we make every attempt to close deals within a particular quarter, we continue to weather the lumpy quarterly results that are the hallmark of the traditional software license model. However, as we recently announced, we closed two of the deferred transactions using our SaaS ("Software-as-a-Service") or subscription license model, and we expect to close the remaining contracts during the March quarter," added Dr. Powers. "We previously announced our focus on four key verticals and that focus is building a sustainable foundation for long-term sales momentum," continued Dr. Powers. "Our market place continues to change with increased adoption of SaaS offerings, and we are expanding our offerings to accommodate that market dynamic. To be clear, while we expect to see growth in the number of SaaS transactions in the coming quarters, we will continue to promote our long standing and industry unique software purchase licensing model where appropriate. We remain committed to servicing our customers, offering enterprise-class Web conferencing solutions under a software purchase license model, whether it is being hosted by iLinc (in our hybrid model) or behind our customer's firewall. We will continue to strategically exploit that competitive advantage," concluded Dr. Powers. -1- The Company reported negative Adjusted EBITDA of $15,000 for the three-month period ended December 31, 2007, and Adjusted EBITDA of $1.0 million for the nine-month period ended December 31, 2007. For the three months ended December 31, 2007, we reported a net loss of $579,000, or ($0.02) per basic and diluted share, as compared to a net loss of $35,000, or break-even per basic and diluted share for the same three-month period last year. For the nine months ended December 31, 2007, we reported a net loss of $740,000 or ($0.02) per basic and diluted share as compared to net income of $255,000, or break-even per basic and diluted share for the nine months ended December 31, 2006. "The obvious upside to the increasing use of the more prevalent SaaS model is that we reap the long-term benefits of a more predictable and recurring revenue stream, yet retain the benefits of up-front payments," said James L. Dunn, Jr., iLinc's Chief Financial Officer. "We believe that offering a varied license model that fits each vertical is a better approach than attempting to force a purchase model for the short-term benefit of quarterly revenue growth," added Mr. Dunn. "That said, the addition, or even substitution in some cases, of a SaaS model will have the natural accounting consequence of shifting more immediate quarterly revenue to longer-term subscription revenue. Our revised annual guidance is a reflection of the recent shift in our revenue model and takes a longer-term view of revenue and bottom line improvements," continued Mr. Dunn. Addressing overhead and the recent losses incurred, Mr. Dunn continued, "In Fiscal 2008 we invested aggressively in sales and marketing activities that were designed to provide more short-term purchase license transactions. In doing so, expenditures outpaced sales success, a trend that we have taken steps to correct. Given the shift in focus and model of our sales organization, we can also adjust our marketing spend to adapt to new markets and a more focused vertical strategy. By doing so, we plan to reduce overhead where appropriate to be more targeted in our overall sales and marketing approach. We believe that it is important that we return as quickly as possible to a profitable status at the bottom line, to bolster investor and customer confidence. Therefore, we have already in January implemented adjustments to our overhead structure that are designed to reduce overhead while maintaining necessary product development for long-term sales success. We expect to see a more normalized overhead structure and a return to profitability in the March quarter and thereafter. We will provide more information about the December quarter and our expectations for the remainder of the 2008 fiscal year during our quarterly earnings conference call and online meeting later today," concluded Mr. Dunn. Guidance The following contains forward-looking guidance regarding iLinc's financial outlook. The following statements are based on current expectations: o For the fiscal year ending March 31, 2008, iLinc anticipates revenues in the range of $15 million to $15.5 million. o For the fiscal year ending March 31, 2008, with these projected revenues, we anticipate a range between break-even net income and a net loss of $500,000. A Webcast of iLinc Communications' third quarter fiscal 2008 conference call will be hosted live at 11:00 a.m. Eastern time on February 7, 2008. 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 to see the -2- presentation, please go to [http://ir.ilinc.com/public/join] and follow the login instructions. To hear the audio portion of the meeting, call 1-800-341-2312 and refer to confirmation number 40040461. A replay of the event will be available online shortly after the call through the Company's Web site at www.iLinc.com. 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 (1) EXPLANATION OF ADJUSTED EBITDA, A NON-GAAP FINANCIAL MEASURE We report adjusted EBITDA, a financial measure that is not defined by Generally Accepted Accounting Principles ("GAAP"). 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, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of net income to adjusted EBITDA is as follows for the three months and nine months ended December 31, 2007 and 2006. THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, 2007 2006 2007 2006 ---- ---- ---- ---- (IN THOUSANDS) (IN THOUSANDS) Net (loss) income ........... $ (579) $ (35) $ (740) $ 255 Non-cash charges and credits: Interest expense ............ 342 394 1,037 1,192 Financing and late fees ..... 4 9 19 32 Warrant expense ............. -- -- 21 15 Gain on debt extinguishment . -- 160 -- 160 Gain on debt settlement ..... -- -- -- (8) Gain on sale of assets ...... (17) -- (20) (3) Interest income ............. (3) (9) (16) (25) Stock compensation expense .. 41 33 136 106 Income tax expense .......... 21 -- 64 -- Depreciation ................ 73 54 209 280 Amortization ................ 103 117 300 351 ------- ------- ------- ------- Adjusted EBITDA ...... $ (15) $ 723 $ 1,010 $ 2,355 ======= ======= ======= =======
ABOUT ILINC COMMUNICATIONS, INC. iLinc Communications, Inc. is a leading developer of Web conferencing software and audio conferencing solutions for highly secure and cost-effective online meetings, presentations, and training sessions. The Company's technology allows people in diverse locations to communicate and collaborate online while avoiding the expense, environmental damage, and productivity losses associated with travel. iLinc provides an award-winning, enterprise-wide suite of Web, audio and video conferencing solutions that can be scaled up or down to meet the needs of any size organization. Offering the industry's most flexible pricing models, iLinc gives organizations the power to choose an on-premise installed, on-demand hosted, or hybrid solution--whichever model delivers the highest ROI for the customer. iLinc is headquartered in Phoenix, Ariz. with offices in Troy, New York and Salt Lake City, Utah. -3- 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, iReduce, iLinc Enterprise Unlimited 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. -4- ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 2007 2006 2007 2006 -------- -------- -------- -------- Revenues Software licenses ............................................ $ 659 $ 1,105 $ 3,029 $ 3,255 Subscription licenses ........................................ 752 488 2,140 1,515 Audio services ............................................... 1,230 1,343 4,153 3,925 Maintenance and professional services ........................ 724 715 2,071 2,012 -------- -------- -------- -------- Total revenues ........................................... 3,365 3,651 11,393 10,707 -------- -------- -------- -------- Cost of revenues Software licenses ............................................ 58 51 125 132 Subscription licenses ........................................ 84 77 284 227 Audio services ............................................... 803 807 2,593 2,500 Maintenance and professional services ........................ 201 310 593 710 Amortization of technology ................................... 53 68 150 202 -------- -------- -------- -------- Total cost of revenues ................................... 1,199 1,313 3,745 3,771 -------- -------- -------- -------- Gross profit .................................................... 2,166 2,338 7,648 6,936 -------- -------- -------- -------- Operating expenses Research and development ..................................... 645 307 1,596 905 Sales and marketing .......................................... 1,049 924 3,671 2,538 General and administrative ................................... 688 588 1,999 1,884 -------- -------- -------- -------- Total operating expenses ................................. 2,382 1,819 7,266 5,327 -------- -------- -------- -------- (Loss) income from operations .................................. (216) 519 382 1,609 Interest expense ............................................. (261) (244) (794) (741) Amortization of beneficial debt conversion ................... (81) (150) (243) (451) -------- -------- -------- -------- Total interest expense ................................... (342) (394) (1,037) (1,192) Loss on extinguishment of debt ............................... -- (160) -- (160) Interest income (charges) and other .......................... -- -- (21) (12) -------- -------- -------- -------- (Loss) income from continuing operations before income taxes .................................................... (558) (35) (676) 245 Income tax expense ........................................... (21) -- (64) -- -------- -------- -------- -------- (Loss) income from continuing operations ....................... (579) (35) (740) 245 Income from discontinued operations ............................ -- -- -- 10 -------- -------- -------- -------- Net (loss) income .............................................. (579) (35) (740) 255 Series A and B preferred stock dividends ..................... (32) (38) (101) (117) -------- -------- -------- -------- (Loss) income available to common shareholders ................. $ (611) $ (73) $ (841) $ 138 ======== ======== ======== ======== (Loss) income per common share, basic and diluted From continuing operations ................................... $ (0.02) $ -- $ (0.02) $ -- From discontinued operations ................................. -- -- -- -- -------- -------- -------- -------- (Loss) income per common share ........................... $ (0.02) $ -- $ (0.02) $ -- ======== ======== ======== ======== Number of shares used in calculation of (loss) income per share, Basic ........................................................ 33,841 33,190 33,717 31,676 ======== ======== ======== ======== Diluted ...................................................... 33,841 33,190 33,717 31,991 ======== ======== ======== ======== -5- ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) DECEMBER 31, MARCH 31, 2007 2007 -------- -------- ASSETS Current assets: Cash and cash equivalents ........................................................ $ 1,085 $ 1,057 Certificate of deposit ........................................................... 368 504 Accounts receivable, net of allowance for doubtful accounts of $119 and $117 at December 31 and March 31, 2007, respectively .................................... 2,415 2,530 Note receivable .................................................................. -- 14 Prepaid and other current assets ................................................. 592 766 -------- -------- Total current assets ........................................................... 4,460 4,871 Property and equipment, net ...................................................... 807 691 Goodwill ......................................................................... 11,206 11,206 Intangible assets, net ........................................................... 1,428 1,556 Other assets ..................................................................... 14 14 -------- -------- Total assets ................................................................... $ 17,915 $ 18,338 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long term debt ................................................ $ 95 $ 143 Accounts payable trade ........................................................... 1,270 1,169 Accrued liabilities .............................................................. 1,038 1,119 Current portion of capital lease liabilities ..................................... 117 45 Deferred revenue ................................................................. 1,572 1,483 -------- -------- Total current liabilities ...................................................... 4,092 3,959 Long term debt, less current maturities, net of discount and beneficial conversion feature of $842 and $993, at December 31 and March 31, 2007, respectively ........ 7,504 7,406 Capital lease liabilities, less current maturities .................................. 287 223 Deferred tax liability .............................................................. 363 299 -------- -------- Total liabilities .............................................................. 12,246 11,887 -------- -------- SHAREHOLDERS' EQUITY: Preferred stock series A & B, 10,000,000 shares authorized: Series A preferred stock, $.001 par value, 105,000 and 115,000 shares issued and outstanding, liquidation preference of $1,050,000 and $1,150,000 at December 31 and March 31, 2007 ................................................... -- -- Series B preferred stock, $.001 par value, 59,500 shares issued and outstanding, liquidation preference of $595,000 ............................................... -- -- Common stock, $.001 par value 100,000,000 shares authorized 35,276,228 and 35,017,843 issued at December 31 and March 31, 2007, respectively ................ 35 35 Additional paid-in capital ........................................................ 46,673 46,614 Accumulated deficit ............................................................... (39,631) (38,790) Less: 1,432,412 treasury shares at cost .......................................... (1,408) (1,408) -------- -------- Total shareholders' equity ..................................................... 5,669 6,451 -------- -------- Total liabilities and shareholders' equity ..................................... $ 17,915 $ 18,338 ======== ========
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