EX-99.1 2 exhibit99-193014.htm EXHIBIT Exhibit 99-1 9.30.14


Intralinks Announces Third Quarter 2014 Results
    
NEW YORK, NY - November 5, 2014 - Intralinks Holdings, Inc. (NYSE: IL), a leading, global SaaS provider of inter-enterprise content collaboration solutions, today announced results for its third quarter of 2014.

“We achieved 11% revenue growth in the third quarter,” said Ron Hovsepian, Intralinks' president and CEO. “Double-digit percentage growth in total revenue, twelve month total backlog and twelve month Enterprise backlog led to the best quarter we have had in several years and gives us increased confidence we can achieve our long-term goals of 15% - 20% revenue growth and 15% - 20% operating margin.”

Third Quarter 2014

Total revenue was $65.6 million, compared to $59.1 million for the corresponding quarter last year.
M&A revenue was $33.9 million, compared to $28.7 million for the corresponding quarter last year.
Enterprise revenue was $25.1 million, compared to $23.2 million for the corresponding quarter last year.
DCM revenue was $6.6 million, compared to $7.2 million for the corresponding quarter last year.

GAAP gross margin was 74.0%, compared to 73.1% for the corresponding quarter last year. Non-GAAP adjusted gross margin was 77.4%, compared to 76.9% for the corresponding quarter last year.

GAAP operating loss was $(3.9) million, compared to $(2.6) million for the corresponding quarter last year. Non-GAAP adjusted operating income was $4.9 million, compared to $5.4 million for the corresponding quarter last year.

GAAP net loss was $(4.4) million, compared to $(2.5) million for the corresponding quarter last year. GAAP net loss per share was $(0.08) on the basis of 56.0 million shares outstanding. In the corresponding quarter last year, GAAP net loss per share was $(0.05) on the basis of 55.2 million shares outstanding.

Non-GAAP adjusted net income was $1.6 million, compared to $3.0 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.03 on the basis of 57.5 million shares outstanding. In the corresponding quarter last year, non-GAAP adjusted net income per share was $0.05 on the basis of 56.3 million shares outstanding.

Non-GAAP adjusted EBITDA was $11.4 million, compared to $10.7 million for the corresponding quarter last year.

Cash and investments was $63.2 million at the end of the quarter, down from $72.5 million at the end of the second quarter.

Business Outlook:

Based on information available as of November 5, 2014, Intralinks is providing guidance for the fourth quarter 2014 as follows:

Fourth Quarter 2014

Revenue: $65.0 million to $67.0 million
GAAP operating loss: $(6.1) million to $(5.1) million
Non-GAAP adjusted operating income: $2.6 million to $3.6 million
Non-GAAP adjusted EBITDA: $9.8 million to $10.8 million
GAAP net loss per share: $(0.08) to $(0.07)
Non-GAAP adjusted net income per share: $0.01 to $0.03

Quarterly Conference Call

In conjunction with this announcement, Intralinks will host a conference call on Wednesday, November 5, 2014 at 5:00 p.m. Eastern Time (ET) to discuss its third quarter financial results and business outlook. To access this call, dial 877-300-8521 (domestic) or 412-317-6026 (international). A passcode is not required. The call will also be webcast live on the investor relations section of the Intralinks website at www.Intralinks.com/ir.  In conjunction with this call, there will also be slides with supplemental information available at that same website location.






Following the conference call, a replay will be available until November 12, 2014, at 877-870-5176 (domestic) or 858-384-5517 (international). The passcode for the replay is 10053298. An archived webcast of the 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 inter-enterprise content collaboration solutions. Through innovative Software-as-a-Service solutions, Intralinks solutions are 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 $23.5 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 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 adjusted gross profit and non-GAAP adjusted gross margin, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share, non-GAAP adjusted EBITDA and non-GAAP adjusted EBITDA margin and free cash flow. 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 adjusted gross profit represents the corresponding GAAP measure adjusted to exclude, if applicable: (1) amortization of intangible assets and (2) stock-based compensation expense.
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, (3) impairment charges or asset write-offs and (4) costs related to public stock offerings.
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, (3) impairment charges or asset write-offs, (4) costs related to debt repayments and (5) costs related to public stock offerings. 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.
Non-GAAP adjusted EBITDA represents net loss adjusted to exclude, if applicable: (1) depreciation and amortization, (2) amortization of intangible assets, (3) stock-based compensation expense, (4) impairment charges or asset write-offs, (5) interest expense, (6) amortization of debt issuance costs, (7) other (income) expense, net, (8) costs related to public stock offerings and (9) income tax (benefit) expense.
Free cash flow represents net cash provided by operating activities less capitalized software development costs and capital expenditures.

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 interest 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, the majority of which are not highly leveraged and do not have comparable amortization expense related to intangible assets. However, non-GAAP adjusted gross profit, non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income per share, non-GAAP adjusted EBITDA and free cash flow are not measures of financial performance under U.S. GAAP and, accordingly, should not be considered substitutes for or superior to gross profit, loss from operations, net loss, net loss per share and net cash provided by operating activities as indicators of operating performance.

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, 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; 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 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, 2013 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” and the Intralinks logo are registered trademarks of Intralinks, Inc. © 2014. All rights reserved.

Investor Contact:
David Roy
Intralinks Holdings, Inc.
212-342-7690
droy@intralinks.com

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








Intralinks Holdings, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
(unaudited)
 
 
 
September 30,
2014
 
December 31,
2013
ASSETS
 
  

 
  

Current assets:
 
  

 
  

Cash and cash equivalents
 
$
30,883

 
$
50,540

Investments
 
14,499

 
34,886

Accounts receivable, net of allowances of $3,453 and $3,152, respectively
 
48,286

 
38,322

Deferred taxes
 
13,264

 
12,148

Prepaid expenses
 
7,649

 
6,036

Restricted cash
 

 
2,442

Other current assets
 
4,370

 
4,576

Total current assets
 
118,951

 
148,950

Investments
 
17,769

 

Fixed assets, net
 
17,128

 
14,100

Capitalized software, net
 
38,292

 
32,341

Goodwill
 
224,383

 
215,869

Other intangibles, net
 
68,043

 
83,648

Other assets
 
7,130

 
1,054

Total assets
 
$
491,696

 
$
495,962

LIABILITIES AND STOCKHOLDERS' EQUITY
 
  

 
  

Current liabilities:
 
  

 
  

Accounts payable
 
$
13,361

 
$
11,052

Current portion of long-term debt
 
940

 
209

Deferred revenue
 
49,447

 
44,651

Accrued expenses and other current liabilities
 
25,651

 
26,667

Total current liabilities
 
89,399

 
82,579

Long-term debt
 
78,093

 
75,004

Deferred taxes
 
9,196

 
16,989

Other long-term liabilities
 
6,346

 
5,289

Total liabilities
 
183,034

 
179,861

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; 300,000,000 shares authorized; 56,707,832 and 56,054,484 shares issued and outstanding, respectively
 
57

 
56

Additional paid-in capital
 
437,707

 
429,549

Accumulated deficit
 
(128,117
)
 
(112,714
)
Accumulated other comprehensive loss
 
(985
)
 
(790
)
Total stockholders' equity
 
308,662

 
316,101

Total liabilities and stockholders' equity
 
$
491,696

 
$
495,962

 





Intralinks Holdings, Inc.
Consolidated Statements of Operations
(In Thousands, Except Share Data)
(unaudited)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
  
 
2014
 
2013
 
2014
 
2013
Revenue
 
$
65,605

 
$
59,116

 
$
188,403

 
$
171,879

Cost of revenue
 
17,082

 
15,919

 
51,167

 
47,709

Gross profit
 
48,523

 
43,197

 
137,236

 
124,170

Operating expenses:
 
 
 
 
 
 
 
  

Sales and marketing
 
29,366

 
27,122

 
85,357

 
79,310

General and administrative
 
17,930

 
13,844

 
52,883

 
41,701

Product development
 
5,150

 
4,878

 
16,075

 
14,236

Total operating expenses
 
52,446

 
45,844

 
154,315

 
135,247

Loss from operations
 
(3,923
)
 
(2,647
)
 
(17,079
)
 
(11,077
)
Interest expense
 
1,126

 
1,242

 
3,091

 
3,516

Amortization of debt issuance costs
 
143

 
71

 
436

 
287

Other expense (income), net
 
995

 
(662
)
 
786

 
306

Net loss before income tax
 
(6,187
)
 
(3,298
)
 
(21,392
)
 
(15,186
)
Income tax benefit
 
(1,836
)
 
(782
)
 
(5,989
)
 
(3,757
)
Net loss
 
$
(4,351
)
 
$
(2,516
)
 
$
(15,403
)
 
$
(11,429
)
Net loss per common share
 
 
 
 
 
 
 
  

Basic
 
$
(0.08
)
 
$
(0.05
)
 
$
(0.28
)
 
$
(0.21
)
Diluted
 
$
(0.08
)
 
$
(0.05
)
 
$
(0.28
)
 
$
(0.21
)
Weighted average number of shares
 
 
 
 
 
 
 
 
Basic
 
56,001,583

 
55,191,868

 
55,799,506

 
55,042,305

Diluted
 
56,001,583

 
55,191,868

 
55,799,506

 
55,042,305


 





Intralinks Holdings, Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(unaudited)
 
 
Nine months ended September 30,
  
 
2014
 
2013
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(15,403
)
 
$
(11,429
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
18,779

 
15,142

Amortization of intangible assets
 
17,803

 
17,778

Stock-based compensation expense
 
7,684

 
6,225

Deferred income tax benefit
 
(9,100
)
 
(6,298
)
Other, net
 
3,206

 
2,111

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(12,070
)
 
(1,186
)
Prepaid expenses and other assets
 
(1,814
)
 
(2,430
)
Accounts payable
 
914

 
3,550

Accrued expenses and other liabilities
 
(929
)
 
710

Deferred revenue
 
4,522

 
5,960

Net cash provided by operating activities
 
13,592

 
30,133

Cash flows from investing activities:
 
 
 
 
Capitalized software development costs
 
(19,652
)
 
(16,575
)
Capital expenditures
 
(7,041
)
 
(5,432
)
Purchases of investments
 
(27,062
)
 
(36,477
)
Maturities of investments
 
29,179

 
32,596

Purchases of cost method investments
 
(3,499
)
 

Acquisitions, net of cash acquired
 
(8,632
)
 
(600
)
Restricted cash
 
2,443

 
(2,443
)
Net cash used in investing activities
 
(34,264
)
 
(28,931
)
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of long-term debt
 
79,200

 

Payments on long-term debt
 
(75,298
)
 
(616
)
Payments of outstanding financing arrangements
 
(300
)
 
(631
)
Deferred financing costs
 
(2,829
)
 

Exercise of stock options and issuance of common stock, net of withholding taxes
 
474

 
1,155

Other
 
(188
)
 

Net cash provided by (used in) financing activities
 
1,059

 
(92
)
Effect of foreign exchange rate changes on cash and cash equivalents
 
(44
)
 
(265
)
Net (decrease) increase in cash and cash equivalents
 
(19,657
)
 
845

Cash and cash equivalents at beginning of period
 
50,540

 
43,798

Cash and cash equivalents at end of period
 
$
30,883

 
$
44,643







Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In Thousands)
(unaudited)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
  
 
2014
 
2013
 
2014
 
2013
Gross profit
 
$
48,523

 
$
43,197

 
$
137,236

 
$
124,170

Gross margin
 
74.0
%
 
73.1
%
 
72.8
%
 
72.2
%
Cost of revenue – amortization of intangible assets
 
2,089

 
2,082

 
6,123

 
6,151

Cost of revenue – stock-based compensation expense
 
151

 
194

 
423

 
511

Non-GAAP adjusted gross profit
 
$
50,763

 
$
45,473

 
$
143,782

 
$
130,832

Non-GAAP adjusted gross margin
 
77.4
%
 
76.9
%
 
76.3
%
 
76.1
%
 
 
 
 
 
 
 
 
 
Loss from operations
 
$
(3,923
)
 
$
(2,647
)
 
$
(17,079
)
 
$
(11,077
)
Amortization of intangible assets
 
5,989

 
5,967

 
17,803

 
17,778

Stock-based compensation expense
 
2,787

 
2,097

 
7,684

 
6,225

Non-GAAP adjusted operating income
 
$
4,853

 
$
5,417

 
$
8,408

 
$
12,926

 
 
 
 
 
 
 
 
 
Net loss before income tax
 
$
(6,187
)
 
$
(3,298
)
 
$
(21,392
)
 
$
(15,186
)
Amortization of intangible assets
 
5,989

 
5,967

 
17,803

 
17,778

Stock-based compensation expense
 
2,787

 
2,097

 
7,684

 
6,225

Non-GAAP adjusted net income before tax
 
2,589

 
4,766

 
4,095

 
8,817

Non-GAAP income tax expense
 
984

 
1,811

 
1,556

 
3,350

Non-GAAP adjusted net income
 
$
1,605

 
$
2,955

 
$
2,539

 
$
5,467

 
 
 
 
 
 
 
 
 
Net loss
 
$
(4,351
)
 
$
(2,516
)
 
$
(15,403
)
 
$
(11,429
)
Depreciation and amortization
 
6,545

 
5,290

 
18,779

 
15,142

Amortization of intangible assets
 
5,989

 
5,967

 
17,803

 
17,778

Stock-based compensation expense
 
2,787

 
2,097

 
7,684

 
6,225

Interest expense
 
1,126

 
1,242

 
3,091

 
3,516

Amortization of debt issuance costs
 
143

 
71

 
436

 
287

Other expense (income), net
 
995

 
(662
)
 
786

 
306

Income tax benefit
 
(1,836
)
 
(782
)
 
(5,989
)
 
(3,757
)
Non-GAAP adjusted EBITDA
 
$
11,398

 
$
10,707

 
$
27,187

 
$
28,068

Non-GAAP adjusted EBITDA margin
 
17.4
%
 
18.1
%
 
14.4
%
 
16.3
%
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
2,705

 
$
10,376

 
$
13,592

 
$
30,133

Capitalized software development costs
 
(6,550
)
 
(5,739
)
 
(19,652
)
 
(16,575
)
Capital expenditures
 
(2,598
)
 
(2,143
)
 
(7,041
)
 
(5,432
)
Free cash flow
 
$
(6,443
)
 
$
2,494

 
$
(13,101
)
 
$
8,126

 





Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures - Guidance
(In Thousands)
(unaudited)
 
 
Three Months Ending
December 31, 2014
 
Year Ending
December 31, 2014
Gross profit
 
$
47,589

 
$
184,825

Gross margin
 
72.1
%
 
72.7
%
Cost of revenue - amortization of intangible assets
 
2,088

 
8,211

Cost of revenue - stock-based compensation expense
 
173

 
596

Non-GAAP adjusted gross profit
 
$
49,850

 
$
193,632

Non-GAAP adjusted gross margin
 
75.5
%
 
76.1
%
 
 
 
 
 
Loss from operations
 
$
(5,602
)
 
$
(22,681
)
Amortization of intangible assets
 
5,986

 
23,789

Stock-based compensation expense
 
2,716

 
10,400

Non-GAAP adjusted operating income
 
$
3,100

 
$
11,508

 
 
 
 
 
Net loss before income tax
 
$
(6,862
)
 
$
(28,254
)
Amortization of intangible assets
 
5,986

 
23,789

Stock-based compensation expense
 
2,716

 
10,400

Non-GAAP adjusted net income before tax
 
1,840

 
5,935

Non-GAAP income tax expense
 
699

 
2,255

Non-GAAP adjusted net income
 
$
1,141

 
$
3,680

 
 
 
 
 
Net loss
 
$
(4,435
)
 
$
(19,838
)
Depreciation and amortization
 
7,200

 
25,979

Amortization of intangible assets
 
5,986

 
23,789

Stock-based compensation expense
 
2,716

 
10,400

Interest expense
 
1,117

 
4,208

Amortization of debt issuance costs
 
143

 
579

Other (income) expense, net
 

 
786

Income tax benefit
 
(2,427
)
 
(8,416
)
Non-GAAP adjusted EBITDA
 
$
10,300

 
$
37,487

Non-GAAP adjusted EBITDA margin
 
15.6
%
 
14.7
%
 
Note: All forward-looking figures presented in these tables are stated at the mid-point of the estimated range.