HILLSIDE, N.J., Nov. 11, 2010 /PRNewswire-FirstCall/ -- Glowpoint, Inc. (OTC Bulletin Board: GLOW), a global provider of managed services for telepresence and video conferencing, today announced financial results for the third quarter ended September 30, 2010.
Total revenues for the third quarter increased by 11% to $6.9 million, and 8.6% to $20.5 million, year-to-date, as compared to the same periods in 2009. Recurring subscription revenues for the three and nine month periods increased 6.5% to $5.4 million and 7.0% to $15.8 million, respectively, as compared to the same periods in 2009. Usage and event-based revenues for the three and nine month periods increased 29.8% to $1.6 million and 14.3% to $4.7 million, respectively, as compared to the same periods in 2009. These results exclude discontinued operations associated with non- core Integrated Services Digital Network (ISDN) resale revenues reported in the quarter.
Beginning in this quarter the Company will also include in its financial results a non-GAAP measurement of Adjusted EBITDA (as defined) in order to enhance the overall understanding of our financial performance. For the three and nine month periods ended September 30, 2010, Adjusted EBITDA (as defined) was $(307,000) and $(852,000), respectively. (Note that these results include severance related charges of $398,000 and $523,000, respectively, for such periods.) Net loss for the three and nine month periods ended September 30, 2010 was $0.8 million and $2.2 million, respectively.
Based on the current level of business activity, the Company expects that its revenue and Adjusted EBITDA (as defined) will grow at an accelerated rate into 2011, with revenue from VNOC managed services accounting for the largest component of this growth.
Highlights
- Increased Revenues: Driven by continued growth in managed video services, revenue increases of 11.0% and 8.6% were achieved in the quarter and nine month period, respectively, as compared to the same periods in 2009.
- Adjusted EBITDA: The Company's Adjusted EBITDA (as defined) improved on a sequential quarterly basis.
- New Global Strategic Partnerships: Glowpoint continues to expand its global partnerships as highlighted in three recent announcements with Equinix, Broadsoft, and Acme Packet. These partnerships are a key part of the strategy for Glowpoint as video communications continue to become a part of unified communications.
- Continued Investments in Product Development and Sales and Operating Efficiencies: The Company's investments in sales, marketing, product development, and operations are anticipated to drive continued growth and improved operating margins in the coming quarters. The Company launched its automated Notify™ service along with various cloud-based applications, which highlights its Open Video™ strategy to expand services on a global basis to the business community.
"Our focus continues to be on investing in product initiatives, sales and marketing, strategic partnerships, and operating efficiencies, and we look forward to seeing continued returns on these investments on a quarterly basis," said Joe Laezza, Glowpoint's president and chief executive officer. "We are making significant progress in our strategy to get the Company aligned with the right global partners and drive profitability based on accelerated growth and operating leverage."
Ed Heinen, Glowpoint's chief financial officer and executive vice president of finance, further commented, "We are well capitalized and have solid operating momentum, and I am confident that we have sustainable profitability in our sights."
Teleconference
As reported, Glowpoint will host a conference call at 4:30 p.m. EST today to discuss the financial results of the three and nine months ended September 30, 2010, and to review plans for the remainder of 2010. To listen and participate, please visit: http://www.glowpoint.com/about/investors.asp.
Supporting Resources
About Glowpoint
Glowpoint, Inc. (OTCBB: GLOW) provides carrier-grade, managed telepresence and video communications services that are accessible via its cloud-based, hosted infrastructure and open architecture applications. Glowpoint's suite of robust telepresence and video conferencing solutions empowers enterprises to communicate with each other over disparate networks and technology platforms. Glowpoint supports thousands of video communications systems, in more than 53 countries, with its 24/7 video management services. Glowpoint also powers major broadcasters, Fortune 500 companies, as well as global carriers and video equipment manufacturers – and their customers – worldwide. To learn more, visit http://www.glowpoint.com.
Non-GAAP Financial Information
Adjusted EBITDA is defined as net income or loss before depreciation, amortization, interest expense, interest income, sales taxes and regulatory fee expense or benefit, loss on extinguishment of debt, changes in fair value of derivative financial instruments and stock-based compensation, in accordance with our revolving credit facility with Silicon Valley Bank. Adjusted EBITDA is not intended to replace operating income (loss), net income (loss), 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 and is the basis for one of the Silicon Valley Bank covenants. 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 SEC filings prior to this date. A reconciliation of Adjusted EBITDA to net loss is shown below.
Forward Looking Statements
This partial discussion of the statements of financial condition and operations of the Company should be read in conjunction with the consolidated financial statements and related notes contained in the Company's annual report on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on March 31, 2010.
Various remarks about the Company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Such remarks are valid only as of today, and the Company disclaims any obligation to update this information. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
INVESTOR RELATIONS CONTACT: |
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Jonathan Brust |
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Glowpoint, Inc. |
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+1 312-235-3888, ext. 2052 |
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www.glowpoint.com |
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GLOWPOINT, INC. GAAP to Non-GAAP Reconciliation (In thousands, except per share amounts) (Unaudited) |
|||||
Nine Months Ended September 30, |
Three Months Ended September 30, |
||||
2010 |
2009 |
2010 |
2009 |
||
Net loss |
$ (2,216) |
$ (3,158) |
$ (844) |
$ (1,079) |
|
Depreciation and amortization |
812 |
790 |
270 |
253 |
|
Amortization of financing costs |
18 |
— |
16 |
— |
|
Interest expense |
89 |
273 |
35 |
60 |
|
Sales taxes and regulatory fees |
— |
(377) |
— |
(199) |
|
EBITDA |
(1,297) |
(2,472) |
(523) |
(965) |
|
Stock-based compensation |
445 |
438 |
216 |
116 |
|
Loss on extinguishment of debt |
— |
254 |
— |
— |
|
Increase in fair value of derivative financial |
|||||
instruments' liability |
— |
1,848 |
— |
1,157 |
|
Adjusted EBITDA |
$ (852) |
$ 68 |
$ (307) |
$ 308 |
|
GLOWPOINT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value and shares) |
|||
September 30, |
December 31, |
||
ASSETS |
(Unaudited) |
||
Current assets: |
|||
Cash and cash equivalents |
$ 1,516 |
$ 587 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|||
$324 and $227, respectively |
3,424 |
3,063 |
|
Net current assets of discontinued operations |
169 |
257 |
|
Receivable from sale of Series B Preferred Stock |
1,000 |
— |
|
Prepaid expenses and other current assets |
488 |
291 |
|
Total current assets |
6,597 |
4,198 |
|
Property and equipment, net |
2,840 |
2,682 |
|
Other assets |
99 |
31 |
|
Total assets |
$ 9,536 |
$ 6,911 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 3,014 |
$ 3,207 |
|
Accrued expenses |
1,327 |
901 |
|
Accrued sales taxes and regulatory fees |
882 |
888 |
|
Revolving loan facility |
750 |
— |
|
Customer deposits |
256 |
308 |
|
Deferred revenue |
224 |
259 |
|
Total current liabilities |
6,453 |
5,563 |
|
Long term liabilities: |
|||
Accrued sales taxes and regulatory fees, less current portion |
— |
195 |
|
Total long term liabilities |
— |
195 |
|
Total liabilities |
6,453 |
5,758 |
|
Commitments and contingencies |
|||
Stockholders' equity: |
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Preferred stock Series B, non-convertible; $.0001 par value; |
|||
$100,000 stated value; 100 shares authorized and |
|||
100 and 0 shares issued and outstanding at September 30, 2010 |
|||
and December 31, 2009, respectively, liquidation value of $10,000 |
10,000 |
— |
|
Preferred stock Series A-2, convertible; $.0001 par value; $7,500 stated value; |
|||
7,500 shares authorized and 1,097 and 4,509 shares issued and |
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outstanding at September 30, 2010 and December 31, 2009 |
|||
recorded at fair value, respectively (liquidation value of $8,226 and $33,815, |
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respectively) (see Note 9 for information related to Insider Purchasers) |
3,473 |
14,275 |
|
Common stock, $.0001 par value;150,000,000 shares authorized; 84,639,416 |
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and 66,531,087 shares issued at September 30, 2010 and |
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December 31, 2009, respectively; 84,639,416 and 64,966,196 shares |
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outstanding, at September 30, 2010 and December 31, 2009, respectively |
8 |
7 |
|
Additional paid-in capital |
154,223 |
150,659 |
|
Accumulated deficit |
(164,621) |
(162,405) |
|
3,083 |
2,536 |
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Less: Treasury stock, 0 and 1,564,891 shares at cost |
— |
(1,383) |
|
Total stockholders' equity |
3,083 |
1,153 |
|
Total liabilities and stockholders' equity |
$ 9,536 |
$ 6,911 |
|
GLOWPOINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
|||||
Nine Months Ended September 30, |
Three Months Ended September 30, |
||||
2010 |
2009 |
2010 |
2009 |
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Revenue |
$ 20,541 |
$ 18,921 |
$ 6,944 |
$ 6,255 |
|
Operating expenses: |
|||||
Network and Infrastructure |
8,768 |
8,218 |
2,896 |
2,719 |
|
Global managed services |
6,203 |
5,530 |
2,049 |
1,782 |
|
Sales and marketing |
3,187 |
2,412 |
1,086 |
710 |
|
General and administrative |
3,860 |
3,418 |
1,504 |
918 |
|
Depreciation and amortization |
812 |
790 |
270 |
253 |
|
Sales taxes and regulatory fees |
— |
(377) |
— |
(199) |
|
Total operating expenses |
22,830 |
19,991 |
7,805 |
6,183 |
|
(Loss) income from operations |
(2,289) |
(1,070) |
(861) |
72 |
|
Interest and other expense: |
|||||
Interest expense |
89 |
273 |
35 |
60 |
|
Increase in fair value of derivative financial |
|||||
instruments' liability, including $51 and |
|||||
$31, respectively, for Insider Purchasers |
— |
1,848 |
— |
1,157 |
|
Loss on extinguishment of debt |
— |
254 |
— |
— |
|
Amortization of financing costs |
18 |
— |
16 |
— |
|
Total interest and other expense |
107 |
2,375 |
51 |
1,217 |
|
Net loss from continuing operations |
(2,396) |
(3,445) |
(912) |
(1,145) |
|
Income from discontinued operations |
180 |
287 |
68 |
66 |
|
Net loss |
(2,216) |
(3,158) |
(844) |
(1,079) |
|
(Loss) Gain on redemption of preferred stock |
(934) |
(64) |
(156) |
1,935 |
|
Net (loss) income attributable to common stockholders |
$ (3,150) |
$ (3,222) |
$ (1,000) |
$ 856 |
|
Net (loss) income attributable to common |
|||||
stockholders per share: |
|||||
Continuing operations |
$ (0.04) |
$ (0.07) |
$ (0.01) |
$ 0.02 |
|
Discontinued operations |
$ 0.00 |
$ 0.00 |
$ 0.00 |
$ 0.00 |
|
Basic net (loss) income per share |
$ (0.04) |
$ (0.07) |
$ (0.01) |
$ 0.02 |
|
Continuing operations |
$ (0.04) |
$ (0.07) |
$ (0.01) |
$ 0.01 |
|
Discontinued operations |
$ 0.00 |
$ 0.00 |
$ 0.00 |
$ 0.00 |
|
Diluted net (loss) income per share |
$ (0.04) |
$ (0.07) |
$ (0.01) |
$ 0.01 |
|
Weighted average number of common shares: |
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Basic |
74,519 |
49,273 |
79,562 |
55,861 |
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Diluted |
74,519 |
49,273 |
79,562 |
102,901 |
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GLOWPOINT, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY Nine Months Ended September 30, 2010 (In thousands except shares of Series B Preferred Stock) (Unaudited) |
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Series B |
Series A-2 |
Additional |
||||||||||
Preferred Stock |
Preferred Stock |
Common Stock |
Paid In |
Accumulated |
Treasury Stock |
|||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Shares |
Amount |
Total |
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Balance at January 1, 2010 |
— |
$ — |
5 |
$14,275 |
66,531 |
$ 7 |
$ 150,659 |
$ (162,405) |
1,565 |
$(1,383) |
$ 1,153 |
|
Net loss |
— |
— |
— |
— |
— |
— |
— |
(2,216) |
— |
— |
(2,216) |
|
Stock-based compensation - stock options |
— |
— |
— |
— |
— |
— |
194 |
— |
— |
— |
194 |
|
Stock-based compensation - restricted stock |
— |
— |
— |
— |
1,462 |
— |
251 |
— |
— |
— |
251 |
|
2010 Preferred Stock Exchange |
60 |
6,000 |
(2) |
(5,066) |
— |
— |
(934) |
— |
— |
— |
— |
|
Warrants issued in connection with 2010 Private Placement |
— |
— |
— |
— |
— |
— |
443 |
— |
— |
— |
443 |
|
Conversion of Preferred Stock |
— |
— |
(2) |
(5,736) |
18,119 |
1 |
5,735 |
— |
— |
— |
— |
|
Cashless exercise of warrants |
— |
— |
— |
— |
66 |
— |
— |
— |
— |
— |
— |
|
Exercise of stock options |
— |
— |
— |
— |
26 |
— |
8 |
— |
— |
— |
8 |
|
Sale of Series B Preferred Stock |
40 |
4,000 |
— |
— |
— |
— |
— |
— |
— |
— |
4,000 |
|
Cancellation of treasury stock |
— |
— |
— |
— |
(1,565) |
— |
(1,383) |
— |
(1,565) |
1,383 |
— |
|
Costs related to 2010 Private Placements |
— |
— |
— |
— |
— |
— |
(750) |
— |
— |
— |
(750) |
|
Balance at September 30, 2010 |
100 |
$10,000 |
1 |
$ 3,473 |
84,639 |
$ 8 |
$ 154,223 |
$ (164,621) |
— |
$ — |
$ 3,083 |
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GLOWPOINT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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Nine Months Ended |
||||
2010 |
2009 |
|||
Cash flows from Operating Activities: |
||||
Net loss |
$ (2,216) |
$ (3,158) |
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Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
||||
Depreciation and amortization |
812 |
790 |
||
Amortization of deferred financing costs |
18 |
— |
||
Other expense recognized for the increase in the estimated fair value of the |
||||
derivative financial instruments |
— |
1,848 |
||
Bad debt expense |
345 |
185 |
||
Accretion of discount on Senior Secured Notes |
— |
23 |
||
(Gain) Loss on disposal of equipment |
(11) |
8 |
||
Loss on extinguishment of debt |
— |
254 |
||
Stock-based compensation |
445 |
438 |
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Increase (decrease) attributable to changes in assets and liabilities: |
||||
Accounts receivable |
(706) |
(16) |
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Prepaid expenses and other current assets |
(197) |
(109) |
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Other assets |
(86) |
2 |
||
Accounts payable |
(193) |
505 |
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Customer deposits |
(52) |
(134) |
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Accrued expenses, sales taxes and regulatory fees |
225 |
(232) |
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Deferred revenue |
(35) |
(68) |
||
Net cash (used in) provided by operating activities – continuing operations |
(1,651) |
336 |
||
Net cash provided by operating activities - discontinued operations |
88 |
9 |
||
Net cash (used in) provided by operating activities |
(1,563) |
345 |
||
Cash flows from Investing Activities: |
||||
Purchases of property and equipment |
(959) |
(1,004) |
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Net cash used in investing activities |
(959) |
(1,004) |
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Cash flows from Financing Activities: |
||||
Proceeds from preferred stock offering |
4,000 |
1,800 |
||
Receivable from sale of Series A Preferred Stock |
(1,000) |
— |
||
Proceeds from exercise of stock options |
8 |
8 |
||
Proceeds from revolving loan facility, net |
750 |
— |
||
Principal payments for capital lease |
— |
(118) |
||
Purchase of Senior Secured Notes |
— |
(750) |
||
Costs related to private placement |
(307) |
(384) |
||
Net cash provided by financing activities |
3,451 |
556 |
||
Increase (decrease) in cash and cash equivalents |
929 |
(103) |
||
Cash and cash equivalents at beginning of period |
587 |
1,227 |
||
Cash and cash equivalents at end of period |
$ 1,516 |
$ 1,124 |
||
Supplement disclosures of cash flow information: |
||||
Cash paid during the period for |
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Interest |
$ 89 |
$ 108 |
||
Non-cash investing and financing activities: |
||||
Costs related to private placement incurred by issuance of placement agent warrants |
$ 443 |
$ 142 |
||
Exchange of Senior Secured Notes for Series A-1 Preferred Stock |
— |
1,076 |
||
Additional Senior Secured Notes issued as payment for interest |
— |
55 |
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SOURCE Glowpoint, Inc.
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