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Intellinetics(INLX) - 2021 Q2 - Quarterly Report
IntellineticsIntellinetics(US:INLX)2021-08-16 12:31

Financial Performance - Revenues for Q2 2021 were $2,909,646, representing a 58% year-over-year growth, while revenues for the six-month period were $5,544,865, reflecting an 82% increase year-over-year [141]. - The Document Management segment generated $791,004 in Q2 2021 and $1,526,822 for the six-month period, while the Document Conversion segment contributed $2,118,642 in Q2 2021 and $4,018,043 for the six-month period [142]. - Software as a Service (SaaS) revenues increased by $127,461, or 51%, in Q2 2021 compared to Q2 2020, and by $225,093, or 47%, for the six-month period [145]. - The company reported a net income of $192,447 for Q2 2021, with basic and diluted net income per share of $0.07 and $0.06, respectively [141]. - Professional services revenues increased by $852,101, or 81%, in Q2 2021 compared to Q2 2020, and increased by $1,944,534, or 121%, in the six-month period 2021 compared to the same period in 2020 [147]. - Storage and retrieval services revenues increased by $77,016, or 35%, in Q2 2021 compared to Q1 2020, and increased by $313,709, or 108%, during the six-month period 2021 compared to the same period in 2020 [148]. - Total cost of revenues increased by $430,790, or 65%, in Q2 2021 compared to Q2 2020, and increased by $992,685, or 88%, during the six-month period 2021 compared to the same period in 2020 [150]. - Overall gross profit decreased to 62% in Q2 2021 from 63% in Q2 2020, and decreased to 62% for the six-month period 2021 from 63% during the same period in 2020 [151]. Expenses and Cash Flow - General and administrative expenses increased by $213,404, or 25%, in Q2 2021 compared to Q2 2020, and increased by $408,227, or 24%, in the six-month period 2021 compared to the same period in 2020 [159]. - Sales and marketing expenses increased by $111,722, or 49%, in Q2 2021 compared to Q2 2020, and increased by $158,344, or 33%, during the six-month period 2021 compared to the same period in 2020 [162]. - Operating cash flow for the six-month period 2021 was $587,120, with capital expenditures amounting to $399,638 [141]. - Net cash provided by operating activities during the first half of 2021 was $587,120, compared to a net cash used of $132,287 in the same period of 2020 [174]. - Net cash used in investing activities in the first half of 2021 was $399,638, primarily for purchases related to the new warehouse, compared to $4,039,743 in the same period of 2020 for acquisitions [175]. - Net cash used by financing activities during the first half of 2021 amounted to $954,733 due to earnout liabilities payments, compared to $5,644,681 provided in the same period of 2020 [176]. Debt and Capital Resources - The company reported a gain on extinguishment of debt of $845,083 during the six-month period 2021, reflecting the full forgiveness of the principal and interest on the PPP Note [164]. - Interest expense decreased by $3,525, or 3%, in Q2 2021 compared to Q2 2020, and decreased by $180,911, or 44% during the first half of 2021 compared to the same period in 2020 [166]. - The company reduced its outstanding debt by approximately $3 million during 2020 and has not incurred any new debt in 2021 [168]. - The only outstanding long-term indebtedness as of June 30, 2021, consisted of $2,000,000 in 2020 notes with no accrued interest [171]. - The company expects its capital resources will be sufficient to meet anticipated cash needs for at least the next 12 months [170]. - The company committed to purchase warehouse racking for $351,854 during the first half of 2021, with $300,276 purchased as of June 30, 2021 [172]. - The company received aggregate gross proceeds of $3.5 million from a private placement of common stock [173]. Employee and Operational Impact - The company had 115 employees as of June 30, 2021, including 10 part-time employees [141]. - The majority of employees in Ohio continue to work remotely, affecting client operations across various states [137]. - The impact of COVID-19 resulted in an estimated $655,000 reduction in revenue for the Document Conversion segment in Q2 2020 [142]. - The company expects continued weakened demand due to reduced governmental and small-business spending amid economic uncertainty [137]. - The acquisition of Graphic Sciences accounted for $1,843,221 of revenues in Q1 2021, compared to $556,254 in Q1 2020, constituting 91% of the revenue increase [142]. - Income tax benefit was $0 during the six-month period 2021 compared to $188,300 during the same period in 2020 [165].