EX-99.1 2 exhibit99-1ilx20160331.htm EXHIBIT 99.1 Exhibit



Intralinks Announces First Quarter 2016 Results

NEW YORK, NY - May 3, 2016 - 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.

Investor Contact
Dean Ridlon
Intralinks Holdings, Inc.
617-607-3957
dridlon@intralinks.com

Media Contact:
Ian Bruce
Intralinks Holdings, Inc.
(Cell) 508-574-2016
ibruce@intralinks.com








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.