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Intralinks Announces Fourth Quarter and Full Year 2014 Results

NEW YORK, Feb. 25, 2015 /PRNewswire/ -- Intralinks Holdings, Inc. (NYSE: IL), a leading, global SaaS provider of secure enterprise content collaboration solutions, today announced results for its fourth quarter and full year 2014.

"We enjoyed record revenue in 2014, driven by a double-digit increase in M&A revenue and growing demand for our Intralinks VIA® solution," said Ron Hovsepian, Intralinks' President and CEO. "This was the fastest revenue growth we have had in three years, and keeps us solidly on the path to achieving our long-term financial targets of 15% - 20% revenue growth and 15% - 20% operating margins."

Fourth Quarter 2014

Total revenue was $67.4 million, compared to $62.6 million for the corresponding quarter last year.

  • M&A revenue was $34.4 million, compared to $31.2 million for the corresponding quarter last year.
  • Enterprise revenue was $25.7 million, compared to $24.5 million for the corresponding quarter last year.
  • DCM revenue was $7.4 million, compared to $7.0 million for the corresponding quarter last year.

GAAP gross margin was 73.0%, compared to 72.6% for the corresponding quarter last year. Non-GAAP adjusted gross margin was 76.3%, compared to 76.0% for the corresponding quarter last year.

GAAP operating loss was $(4.7) million, compared to $(4.8) million for the corresponding quarter last year.  Non-GAAP adjusted operating income was $4.0 million, compared to $3.1 million for the corresponding quarter last year.

GAAP net loss was $(11.1) million, compared to $(3.8) million for the corresponding quarter last year.  GAAP net loss per share was $(0.20) on the basis of 56.3 million shares outstanding. In the corresponding quarter last year, GAAP net loss per share was $(0.07) on the basis of 55.4 million shares outstanding.

Non-GAAP adjusted net income was $1.1 million, compared to $1.5 million for the corresponding quarter last year. Non-GAAP adjusted net income per share was $0.02 on the basis of 58.2 million shares outstanding. In the corresponding quarter last year, non-GAAP adjusted net income per share was $0.03 on the basis of 57.3 million shares outstanding.

Non-GAAP adjusted EBITDA was $10.9 million, compared to $8.8 million for the corresponding quarter last year.

Full Year 2014

Total revenue was $255.8 million, compared to $234.5 million for the prior year.

  • M&A revenue was $130.5 million, compared to $110.5 million for the prior year.
  • Enterprise revenue was $96.7 million, compared to $95.2 million for the prior year.
  • DCM revenue was $28.6 million, compared to $28.8 million for the prior year.

GAAP gross margin was 72.9%, compared to 72.3% for the prior year.  Non-GAAP adjusted gross margin was 76.3%, compared to 76.1% for the prior year.

GAAP operating loss was $(21.7) million, compared to $(15.9) million for the prior year.  Non-GAAP adjusted operating income was $12.4 million, compared to $16.0 million for the prior year.

GAAP net loss was $(26.5) million, compared to $(15.3) million for the prior year.  GAAP net loss per share for the year was $(0.47) on the basis of 55.9 million shares outstanding.  GAAP net loss per share for the prior year was $(0.28) on the basis of 55.1 million shares outstanding.

Non-GAAP adjusted net income was $3.7 million, compared to $7.0 million for the prior year.  Non-GAAP adjusted net income per share was $0.06 on the basis of 57.7 million shares outstanding.  Non-GAAP adjusted net income per share for the prior year was $0.12 on the basis of 56.3 million shares outstanding.

Non-GAAP adjusted EBITDA was $38.1 million, compared to non-GAAP adjusted EBITDA of $36.9 million for the prior year.

Cash flow from operations was $25.8 million, compared to $42.0 million for the prior year.

Cash and cash equivalents, restricted cash and investments were $65.1 million at December 31, 2014 compared to $87.9 million at the end of 2013.

Business Outlook:

Based on information available as of February 25, 2015, Intralinks is providing guidance for 2015 as follows:

First Quarter 2015

Revenue: $62.5 million to $64.0 million
GAAP operating loss: $(10.9) million to $(9.4) million
Non-GAAP adjusted operating loss: $(2.0) million to $(0.5) million
Non-GAAP adjusted EBITDA: $4.5 million to $6.0 million
GAAP net loss per share: $(0.18) to $(0.16)
Non-GAAP adjusted net loss per share: $(0.03) to $(0.02)

Full Year 2015

Revenue: $266 million to $272 million
GAAP operating loss: $(28.1) million to $(24.1) million
Non-GAAP adjusted operating income: $8.0 million to $12.0 million
Non-GAAP adjusted EBITDA: $36.0 million to $40.0 million
GAAP net loss per share: $(0.49) to $(0.43)
Non-GAAP adjusted net income per share: $0.04 to $0.08

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 2014 financial results and other corporate developments. 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.  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 4, 2015 at 877-870-5176 (domestic) or 858-384-5517 (international).  The passcode for the replay is 10058913.  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 offerings 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 $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 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"). 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 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 and (4) costs related to debt repayments. 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, and (8) 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, stock-based compensation expense 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. 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; 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 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", "Intralinks VIA" and the Intralinks logo are registered trademarks of Intralinks, Inc. © 2015 all rights reserved.

 

Intralinks Holdings, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
(unaudited)




December 31,
 2014


December 31,
 2013

ASSETS







Current assets:







Cash and cash equivalents


$

40,682



$

50,540


Investments


11,825



34,886


Accounts receivable, net of allowances of $3,158 and $3,152, respectively


47,338



38,322


Deferred taxes


9,578



12,148


Prepaid expenses


6,602



6,036


Restricted cash




2,442


Other current assets


3,626



4,576


Total current assets


119,651



148,950


Investments


12,630




Fixed assets, net


16,245



14,100


Capitalized software, net


39,798



32,341


Goodwill


224,383



215,869


Other intangibles, net


62,055



83,648


Other assets


6,676



1,054


Total assets


$

481,438



$

495,962


LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:







Accounts payable


$

10,624



$

11,052


Current portion of long-term debt


906



209


Deferred revenue


49,193



44,651


Accrued expenses and other current liabilities


26,974



26,667


Total current liabilities


87,697



82,579


Long-term debt


77,933



75,004


Deferred taxes


9,578



16,989


Other long-term liabilities


5,291



5,289


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; 57,084,340 and 56,054,484 shares issued and outstanding, respectively


57



56


Additional paid-in capital


441,596



429,549


Accumulated deficit


(139,210)



(112,714)


Accumulated other comprehensive loss


(1,504)



(790)


Total stockholders' equity


300,939



316,101


Total liabilities and stockholders' equity


$

481,438



$

495,962


 

 

Intralinks Holdings, Inc.

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

(unaudited)








Three Months Ended

December 31,


Years Ended

December 31,



2014



2013



2014



2013


Revenue


$

67,418



$

62,617



$

255,821



$

234,496


Cost of revenue


18,181



17,176



69,348



64,885


Gross profit


49,237



45,441



186,473



169,611


Operating expenses:













Sales and marketing


30,510



29,118



115,867



108,428


General and administrative


17,028



15,362



69,911



57,063


Product development


6,354



5,778



22,429



20,014


Total operating expenses


53,892



50,258



208,207



185,505


Loss from operations


(4,655)



(4,817)



(21,734)



(15,894)


Interest expense


1,111



620



4,202



4,136


Amortization of debt issuance costs


143



71



579



358


Other expense (income), net


960



(67)



1,746



239


Net loss before income tax


(6,869)



(5,441)



(28,261)



(20,627)


Income tax expense (benefit)


4,224



(1,592)



(1,765)



(5,349)


Net loss


$

(11,093)



$

(3,849)



$

(26,496)



$

(15,278)


Net loss per common share













Basic


$

(0.20)



$

(0.07)



$

(0.47)



$

(0.28)


Diluted


$

(0.20)



$

(0.07)



$

(0.47)



$

(0.28)


Weighted average number of shares













Basic


56,327,704



55,412,671



55,932,641



55,135,657


Diluted


56,327,704



55,412,671



55,932,641



55,135,657


 

 

Intralinks Holdings, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(unaudited)






Years Ended December 31,



2014



2013


Net loss


$

(26,496)



$

(15,278)


Adjustments to reconcile net loss to net cash provided by operating activities:







Depreciation and amortization


25,627



20,864


Amortization of intangible assets


23,791



23,644


Stock-based compensation expense


10,384



8,286


Amortization of deferred costs


1,316



1,517


Provision for bad debt and customer credits


1,802



1,594


Deferred income tax benefit


(4,708)



(8,338)


Other, net


572



(18)


Changes in operating assets and liabilities:







Accounts receivable


(11,390)



(2,363)


Prepaid expenses and other assets


146



(1,181)


Accounts payable


884



5,142


Accrued expenses and other liabilities


(499)



4,132


Deferred revenue


4,344



4,008


Net cash provided by operating activities


25,773



42,009


Cash flows from investing activities:







Capitalized software development costs


(27,076)



(20,495)


Capital expenditures


(9,823)



(6,976)


Purchases of investments


(27,062)



(47,604)


Maturities of investments


36,879



43,326


Purchases of cost method investments


(3,499)




Acquisitions, net of cash acquired


(8,843)



(600)


Restricted cash


2,443



(2,443)


Net cash used in investing activities


(36,981)



(34,792)


Cash flows from financing activities:







Proceeds from issuance of long-term debt


79,200




Payments on long-term debt


(75,498)



(821)


Payments of outstanding financing arrangements


(376)



(708)


Debt issuance costs


(2,849)



(284)


Proceeds from exercise of stock options and issuance of common stock, net of withholding taxes


1,662



1,645


Other


(188)




Net cash provided by (used in) financing activities


1,951



(168)


Effect of foreign exchange rate changes on cash and cash equivalents


(601)



(307)


Net (decrease) increase in cash and cash equivalents


(9,858)



6,742


Cash and cash equivalents at beginning of period


50,540



43,798


Cash and cash equivalents at end of period


$

40,682



$

50,540


 

 

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(In Thousands)

(unaudited)








Three Months Ended

December 31,


Years Ended

December 31,



2014



2013



2014



2013


Gross profit


$

49,237



$

45,441



$

186,473



$

169,611


Gross margin


73.0

%


72.6

%


72.9

%


72.3

%

Cost of revenue – amortization of intangible assets


2,083



1,985



8,206



8,136


Cost of revenue – stock-based compensation expense


100



181



523



692


Non-GAAP adjusted gross profit


$

51,420



$

47,607



$

195,202



$

178,439


Non-GAAP adjusted gross margin


76.3

%


76.0

%


76.3

%


76.1

%














Loss from operations


$

(4,655)



$

(4,817)



$

(21,734)



$

(15,894)


Amortization of intangible assets


5,988



5,866



23,791



23,644


Stock-based compensation expense


2,700



2,061



10,384



8,286


Non-GAAP adjusted operating income


$

4,033



$

3,110



$

12,441



$

16,036















Net loss before income tax


$

(6,869)



$

(5,441)



$

(28,261)



$

(20,627)


Amortization of intangible assets


5,988



5,866



23,791



23,644


Stock-based compensation expense


2,700



2,061



10,384



8,286


Non-GAAP adjusted net income before tax


1,819



2,486



5,914



11,303


Non-GAAP income tax expense


691



945



2,247



4,295


Non-GAAP adjusted net income


$

1,128



$

1,541



$

3,667



$

7,008















Net loss


$

(11,093)



$

(3,849)



$

(26,496)



$

(15,278)


Depreciation and amortization


6,848



5,722



25,627



20,864


Amortization of intangible assets


5,988



5,866



23,791



23,644


Stock-based compensation expense


2,700



2,061



10,384



8,286


Interest expense


1,111



620



4,202



4,136


Amortization of debt issuance costs


143



71



579



358


Other expense (income), net


960



(67)



1,746



239


Income tax expense (benefit)


4,224



(1,592)



(1,765)



(5,349)


Non-GAAP adjusted EBITDA


$

10,881



$

8,832



$

38,068



$

36,900


Non-GAAP adjusted EBITDA margin


16.1

%


14.1

%


14.9

%


15.7

%














Net cash provided by operating activities


$

12,181



$

11,876



$

25,773



$

42,009


Capitalized software development costs


(7,424)



(3,920)



(27,076)



(20,495)


Capital expenditures


(2,782)



(1,544)



(9,823)



(6,976)


Free cash flow


$

1,975



$

6,412



$

(11,126)



$

14,538


 

 

Intralinks Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures - Guidance

(In Thousands)

(unaudited)








Three Months Ending

March 31, 2015


Year Ending

December 31, 2015

Gross profit


$

44,161



$

189,477


Gross margin


69.8

%


70.4

%

Cost of revenue - amortization of intangible assets


2,083



8,331


Cost of revenue - stock-based compensation expense


145



610


Non-GAAP adjusted gross profit


$

46,389



$

198,418


Non-GAAP adjusted gross margin


73.3

%


73.8

%








Loss from operations


$

(10,137)



$

(26,149)


Amortization of intangible assets


5,987



23,949


Stock-based compensation expense


2,900



12,200


Non-GAAP adjusted operating (loss) income


$

(1,250)



$

10,000









Net loss before income tax


$

(11,232)



$

(30,752)


Amortization of intangible assets


5,987



23,949


Stock-based compensation expense


2,900



12,200


Non-GAAP adjusted net (loss) income before tax


(2,345)



5,397


Non-GAAP income tax (benefit) expense


(891)



2,051


Non-GAAP adjusted net (loss) income


$

(1,454)



$

3,346









Net loss


$

(9,660)



$

(26,447)


Depreciation and amortization


6,500



28,000


Amortization of intangible assets


5,987



23,949


Stock-based compensation expense


2,900



12,200


Interest expense


987



4,171


Amortization of debt issuance costs


143



572


Other (income) expense, net


(35)



(140)


Income tax benefit


(1,572)



(4,305)


Non-GAAP adjusted EBITDA


$

5,250



$

38,000


Non-GAAP adjusted EBITDA margin


8.3

%


14.1

%

Note: All forward-looking figures presented in these tables are stated at the mid-point of the estimated range.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/intralinks-announces-fourth-quarter-and-full-year-2014-results-300041389.html

SOURCE Intralinks Holdings, Inc.

Investor Contact: David Roy, Intralinks Holdings, Inc., 212-342-7690, droy@intralinks.com; or Media Contact: Ian Bruce, Intralinks Holdings, Inc., (Cell) 508-574-2016, ibruce@intralinks.com