Glowpoint Reports First Quarter 2013 Results

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May 09, 2013, 04:10 ET

MURRAY HILL, N.J., May 9, 2013 /PRNewswire/ -- Glowpoint, Inc. (NYSE MKT: GLOW), a leading global provider of cloud and managed video services, today reported its financial results for the first quarter ended March 31, 2013.

Revenue for the first quarter of 2013 was $8.5 million, an increase of $1.8 million compared to $6.7 million for the first quarter of 2012. This increase is attributable to the impact of the October 2012 acquisition of Affinity VideoNet ("Affinity").

Adjusted EBITDA (as defined and reconciled to GAAP below) for the first quarter of 2013 was $837,000, an increase of 17% over the same period last year. The Company generated cash from operations of $264,000 for the first quarter of 2013.

"We achieved quarterly revenue growth year-over-year through the acquisition of Affinity and are pleased to report positive Adjusted EBITDA and cash flow from operations for the first quarter," stated David Clark, CFO of Glowpoint. "With respect to our balance sheet, we ended the quarter with positive working capital and $2.2 million of cash."

"Since becoming Glowpoint's CEO in January, we have been conducting a strategic market analysis and internal review, with the aim of identifying business improvements that would directly address the evolving video market," said Peter Holst, CEO and President of Glowpoint. "As a result of these efforts, a company transition is now underway that will continue through 2013."

"Several key initiatives are in place. First, we are continuing to develop a diversified sales model that mixes OEMs with emerging partners, enterprises, and non-traditional end user customers. Second, we are also working with partners in the existing channel to increase the availability of our services worldwide. Third, based on the changing needs of medium to large enterprises, we are continuing to enhance our products to better address buyer requirements. Our customers are asking for solutions that include core video infrastructure (on premise or in the cloud) and video devices, the ability to extend video reach beyond the enterprise, and business-focused support services to ensure a quality video experience."

Added Holst, "Our objective is to increase sales traction with medium to large enterprises, with revenue increasingly derived from a healthy mix of traditional OEM, enterprise, and channel accounts. We also believe that the size of our addressable market will increase and our sales cycles will decrease as a result of our strategy."

Revenue for cloud and managed video services ("Managed Services Combined" as reported), which accounted for 60% of total revenue, was $5.1 million for the first quarter of 2013, an increase of 56% compared to $3.3 million for the same period last year. This increase in revenue was attributable to the Affinity acquisition. Network services revenue for the first quarter of 2013 was $3.07 million, relatively unchanged from $3.14 million for the same period last year. Professional and other services revenue was $300,000 for the first quarter of 2013, relatively unchanged from $309,000 for the same period last year.

Net loss for the first quarter of 2013 was $2.0 million as compared to net income of $172,000 for the same period last year. The increase in net loss was primarily attributable to an increase in non-cash expenses (including depreciation and amortization, stock-based compensation and asset impairment) and severance and acquisition costs, as summarized in the net income (loss) to Adjusted EBITDA reconciliation below.

Teleconference

Glowpoint will host a conference call at 4:30 p.m. EDT today to discuss the financial results for the first quarter of 2013, along with updates on the business. To view the webcast, please visit: https://glowpoint.webcasts.com. To participate in the teleconference, callers may dial the toll free number +1 877-407-1869 (U.S. callers only) or +1 201-689-8044 (from outside the U.S.) For those unable to view or participate in the live call, a recording of the call will be archived for viewing two hours following the call at www.glowpoint.com/investor-relations.

Supporting Link

Glowpoint Investor Information

About Glowpoint

Glowpoint, Inc. (NYSE MKT: GLOW) provides cloud and managed video services that make video meetings simple, reliable, and the standard for bringing people together for business meetings. Through our OpenVideo® cloud, we make video meetings the replacement for in person and audio conferencing with our suite of cloud and managed services that permit any device to connect across any network, simply and reliably. Glowpoint supports hundreds of clients located in 68 countries and is the trusted partner for leading unified communications providers, telepresence manufacturers, global carriers and A/V integration firms. In addition, Glowpoint offers access to thousands of public videoconferencing facilities to extend businesses reach and provide the ability to meet face to face across the globe without boundaries. To learn more please visit www.glowpoint.com.

Non-GAAP Financial Information

Adjusted EBITDA is defined as net income (loss) before depreciation, amortization, interest expense, interest income, taxes, stock-based compensation, asset impairment charges, acquisition costs and severance. Adjusted EBITDA is not intended to replace operating income, net income, cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles. Rather, Adjusted EBITDA is an important measure used by management to assess the operating performance of the company. Adjusted EBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies. Additionally, Adjusted EBITDA as defined here does not have the same meaning as EBITDA as defined in our Securities and Exchange Commission filings prior to this date. A reconciliation of Adjusted EBITDA to net income (loss) is shown below.

Forward Looking and Cautionary Statements

The information in this release may contain statements that are or may be deemed to be forward-looking statements and involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. These factors, risks, and uncertainties include market acceptance and availability of new video communications services; the non-exclusive and terminable-at-will nature of sales agreements; rapid technological change affecting demand for our services; competition from other video communication service providers; and the availability of sufficient financial resources to enable us to expand our operations, as well as other risks detailed from time to time in our filings with the Securities and Exchange Commission. We make no representation or warranty that the information contained herein is complete and accurate; we have no duty to correct or update any information.

INVESTOR CONTACT:
Investor Relations
Glowpoint, Inc.
+1 973-855-3411
[email protected]
www.glowpoint.com

GLOWPOINT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)

	March 31,		December 31,
	2013		2012
ASSETS
Current assets:
Cash	$	2,166	$	2,218
Accounts receivable, net (including related party amounts of $26 and $32, respectively)	3,633		4,047
Prepaid expenses and other current assets	806		897
Total current assets	6,605		7,162
Property and equipment, net	3,502		4,256
Goodwill	9,649		9,900
Intangibles, net	6,941		7,256
Other assets	671		742
Total assets	$	27,368	$	29,316

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	1,197	$	1,397
Current portion of capital lease	243		240
Accounts payable (including related party amounts of $13 and $13, respectively)	2,091		2,384
Accrued expenses (including related party amounts of $6 and $15, respectively)	1,743		1,672
Accrued dividends	105		-
Accrued sales taxes and regulatory fees	353		398
Customer deposits	194		205
Deferred revenue	131		155
Total current liabilities	6,057		6,451
Noncurrent liabilities:
Capital lease, less current portion	169		231
Long term debt, net of current portion	9,474		9,631
Total noncurrent liabilities	9,643		9,862
Total liabilities	15,700		16,313

Commitments and contingencies

Stockholders' equity:
Preferred stock Series B-1, non-convertible; $.0001 par value	$	10,000	$	10,000
Preferred stock Series A-2, convertible; $.0001 par value	167		167
Common stock, $.0001 par value	3		3
Additional paid-in capital	167,131		166,481
Accumulated deficit	(165,633)		(163,648)
Total stockholders' equity	11,668		13,003
Total liabilities and stockholders' equity	$	27,368	$	29,316

GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
and GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,
	2013		2012

Managed Services Combined	$	5,136	$	3,297
Network services	3,068		3,140
Professional and other services	300		309
Total revenue	8,504		6,746

Network and infrastructure	2,002		2,076
Global managed services	3,190		1,696
Sales and marketing	1,069		986
General and administrative	3,087		1,350
Depreciation and amortization	758		440
Total operating expenses	10,106		6,548

Income (loss) from operations	(1,602)		198
Interest/Financing	383		26
Net income (loss)	(1,985)		172

Preferred stock dividends	105		-
Net income (loss) attributable to common stockholders	$	(2,090)	$	172

Net income (loss) per share:
Basic net income (loss) per share	$	(0.07)	$	0.01
Diluted net income (loss) per share	$	(0.07)	$	0.01

Weighted average number of common shares:
Basic	27,703		24,354
Diluted	27,703		25,718

ADJUSTED EBITDA - GAAP to Non GAAP Reconciliation
Net income (loss)	$	(1,985)	$	172

Interest/Financing	383		26
Depreciation and amortization	758		440
Stock-based compensation	608		79
Severance	399		-
Acquisition costs	239		-
Asset impairment	435		-
Adjusted EBITDA	$	837	$	717

GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

						Three Months Ended
						March 31,
						2013	2012
Cash flows from Operating Activities:
	Net income (loss)					$ (1,985)	$ 172
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation and amortization				758	440
		Amortization of deferred financing costs				61	15
		Amortization of debt discount				30	-
		Bad debt expense				26	21
		Loss on impairment/disposal of equipment				435	11
		Stock-based compensation				608	79
		Increase (decrease) attributable to changes in assets
			and liabilities:
				Accounts receivable		388	(64)
				Other current assets		93	49
				Other assets		10	12
				Accounts payable		(293)	(259)
				Customer deposits		(11)	28
				Accrued expenses, sales taxes and regulatory fees		168	(57)
				Deferred revenue		(24)	(32)
					Net cash provided by continuing operating activities	264	415
					Net cash used in discontinuing operating activities	-	(50)
					Net cash provided by operating activities	264	365

Cash flows from Investing Activities:
	Proceeds from sale of equipment					-	11
	Purchases of property and equipment					(124)	(109)
					Net cash used in investing activities	(124)	(98)

Cash flows from Financing Activities:
	Proceeds from exercise of stock options					-	7
	Principal payments for capital lease					(59)	(43)
	Payments related to debt issuance					(133)	-
					Net cash used in financing activities	(192)	(36)

Increase (decrease) in cash						(52)	231

Cash at beginning of period						2,218	1,818

Cash at end of period						$ 2,166	$ 2,049