Intellinetics(US:INLX)2021-11-15 20:00Financial Performance - Revenues for Q3 2021 were $3,171,362, representing a 26% year-over-year growth, while revenues for the nine months ended September 30, 2021 were $8,716,227, reflecting a 57% increase year-over-year[139]. - Net income for the nine months ended September 30, 2021 was $1,331,656, with basic and diluted net income per share of $0.47 and $0.43, respectively, including a gain of $845,083 on PPP loan forgiveness[139]. - Operating cash flow for the nine months ended September 30, 2021 was $1,408,249, with capital expenditures amounting to $532,151[139]. - Software as a Service (SaaS) revenues increased by 25% in Q3 2021 compared to Q3 2020, and by 39% for the nine months ended September 30, 2021 compared to the same period last year[143]. - Professional services revenues increased by $549,585, or 34%, in Q3 2021 compared to Q3 2020, and increased by $2,494,119, or 77%, in the nine-month period 2021 compared to 2020[145]. - Storage and retrieval services revenues increased by $38,498, or 17%, in Q3 2021 compared to Q3 2020, and increased by $352,207, or 69%, during the nine-month period 2021 compared to 2020[146]. Segment Performance - Document Management segment revenues for Q3 2021 were $792,548, up from $780,834 in Q3 2020, and for the nine months ended September 30, 2021 were $2,319,370, compared to $2,018,208 in the same period last year[140]. - Document Conversion segment revenues for Q3 2021 were $2,378,814, an increase from $1,730,448 in Q3 2020, and for the nine months ended September 30, 2021 were $6,396,857, compared to $3,539,378 in the same period last year[140]. - Software maintenance services revenues decreased by $3,397, or 1%, in Q3 2021 compared to Q3 2020, but increased by $96,768, or 11%, in the nine-month period 2021 compared to 2020[144]. Expenses and Costs - Total cost of revenues increased by $234,653, or 23%, in Q3 2021 compared to Q3 2020, and increased by $1,230,880, or 57%, during the nine-month period 2021 compared to 2020[148]. - Overall gross profit decreased to 61% in Q3 2021 from 59% in Q3 2020, remaining stable at 61% for the nine-month period 2021 and 2020[149]. - General and administrative expenses increased by $183,746, or 22%, in Q3 2021 compared to Q3 2020, and increased by $591,973, or 23%, in the nine-month period 2021 compared to 2020[158]. - Sales and marketing expenses increased by $86,937, or 30%, in Q3 2021 compared to Q3 2020, and increased by $245,281, or 32%, during the nine-month period 2021 compared to 2020[162]. Cash Flow and Debt - Net cash provided by operating activities during the nine-month period of 2021 was $1,408,249, compared to a net cash used of $392,155 in the same period of 2020[175]. - Net cash used in investing activities in the nine-month period of 2021 was $532,151, primarily for purchases related to a new warehouse, compared to $4,074,701 in the same period of 2020 for acquiring Graphic Sciences and CEO Image[176]. - Net cash used by financing activities during the nine-month period of 2021 amounted to $954,733 due to earnout liabilities[177]. - The company raised approximately $18.6 million in cash through debt and equity securities since 2012[168]. - The only outstanding long-term indebtedness as of September 30, 2021, was $2,000,000 from 2020 notes issued to accredited investors[172]. - The company successfully reduced outstanding debt by approximately $3 million during 2020 and has not incurred new debt in 2021[169]. - The company expects its capital resources to be sufficient to meet anticipated cash needs for at least the next 12 months[171]. Employee and Operational Insights - As of September 30, 2021, the company had 135 employees, including 9 part-time employees[139]. - The company continues to focus on digital transformation and innovation in response to the ongoing impact of COVID-19 on its operations[136]. - The impact of COVID-19 on the Document Conversion segment was estimated at approximately $655,000 in reduced revenue for Q2 2020 due to stay-at-home orders[140]. - The acquisition of Graphic Sciences contributed $1,843,221 to revenues in Q1 2021, compared to $556,254 in Q1 2020, accounting for 91% of the revenue increase[140]. Tax and Interest - Income tax benefit was $0 during the nine-month period of 2021, compared to $188,300 in the same period of 2020[165]. - Interest expense decreased by $2,468, or 2%, in Q3 2021 compared to Q3 2020, and decreased by $183,379, or 35%, during the nine-month period of 2021 compared to the same period in 2020[166].