2014

Glowpoint Announces Third Quarter 2013 Results Glowpoint Completes Transformational Debt Refinancing and Preferred Stock Exchange to Simplify Capital Structure and Improve Long-Term Liquidity

DENVER, Nov. 6, 2013 /PRNewswire/ -- Glowpoint, Inc. (NYSE MKT: GLOW), a leading provider of cloud-based video collaboration services, today announced financial results for the third quarter ended September 30, 2013.

Financial Highlights:

  • Revenue increased 27 percent year over year to $8.3 million in the third quarter of 2013 from $6.6 million in the third quarter of 2012. This increase is attributable to the third quarter 2013 revenue contribution from the October 2012 acquisition of Affinity VideoNet.
  • Adjusted EBITDA (as defined below and reconciled to GAAP in the attached schedule) was $1.2 million in the third quarter of 2013, compared with $0.6 million for the same period last year and $1.2 million for the second quarter of 2013.
  • Loss from operations was $0.1 million in the third quarter of 2013, compared with $0.6 million for the same period last year.
  • Net cash provided by operating activities was $0.5 million for the third quarter of 2013. The Company paid down $0.5 million on its line of credit during the quarter, resulting in no outstanding balance at the end of the third quarter.
  • The Company ended the third quarter with $2.1 million of cash compared with $2.2 million at the end of 2012, while paying down $0.8 million on its line of credit during the nine months ended September 30, 2013.
  • During the third and fourth quarters, the Company retired all outstanding shares of Series B-1 preferred stock in exchange for common stock, which retired a total of $10.2 million of liquidation preference and eliminated any future dividends related to the exchanged shares of preferred stock.
  • In October 2013, the Company refinanced its debt facilities by securing a new credit facility consisting of a term loan commitment of $11.0 million and a line of credit up to $2.0 million. At closing, the Company borrowed $9.0 million on the term loan and $0.2 million on the revolver, and used the proceeds of such borrowings to repay existing term loans of $8.5 million in addition to the payment of facility fees and expenses.

"Adjusted EBITDA of $1.2 million for the third quarter more than doubled from the third quarter of last year and slightly improved from the second quarter of 2013," stated David Clark, CFO of Glowpoint. "We generated $1.8 million of cash flow from operations and paid down $0.8 million on our revolver to $0 during the first nine months of 2013, while ending the quarter with $2.1 million in cash.  We were very pleased to complete the preferred stock exchange and debt refinancing as these transactions simplify our capital structure and provide us with greater liquidity and financial flexibility."

"We've made great strides this year in capital restructuring, organizational and personnel enhancements, and re-positioning our services for the next wave of video collaboration. I'm pleased with the progress we've made through this phase of the journey. We're producing tangible results, strengthening our balance sheet, and gradually showing improvement in our core services. Moving forward, we'll continue to focus on implementing changes needed to support our transformation, enhancing the leadership team, and creating new services with a sustainable goal to increase value for customers as well as for our shareholders," said Peter Holst, President and CEO of Glowpoint. 

The results of our operations and financial condition for the three and nine months ended September 30, 2013 and 2012, are more fully discussed in our Form 10-Q for the quarter ended September 30, 2013, filed with the Securities and Exchange Commission on November 6, 2013. Investors are encouraged to carefully review the Form 10-Q for the quarter ended September 30, 2013, for a complete analysis of our results from operations and financial condition.

Teleconference

Glowpoint will host a conference call at 4:30 p.m. EST today to discuss the financial results for the third 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 +1 877-485-3103 (U.S. callers only) or +1 201-689-8890 (from outside the U.S.). For those unable to participate during 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:

About Glowpoint

Glowpoint, Inc. (NYSE MKT: GLOW) provides video collaboration, network, and support services to large enterprises and mid-sized companies to support their unified communications (UC) strategies and business goals. More than 600 organizations in 96 countries rely on our unmatched experience, business-class support, and cloud-based services to collaborate with colleagues, business partners, and customers more effectively. 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 a non-GAAP financial measure and 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 in the attached schedules.

Forward-Looking and Cautionary Statements

Forward-looking statements in this press release regarding our liquidity, financial flexibility, creation of new services, increasing value for our shareholders, and all other statements that are not historical facts are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements 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

investorrelations@glowpoint.com

www.glowpoint.com

 




GLOWPOINT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

 


September 30,

December 31,


2013


2012

ASSETS




Current assets:




Cash

$ 2,051


$ 2,218

Accounts receivable, net (including related party amounts of $26 and $32, respectively)

3,905


4,047

Prepaid expenses and other current assets

591


897

       Total current assets

6,547


7,162

Property and equipment, net

3,155


4,256

Goodwill

9,825


9,900

Intangibles, net

6,316


7,256

Other assets

778


742

      Total assets

$ 26,621


$ 29,316





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Current portion of long-term debt

$ 917


$ 1,397

Current portion of capital lease

263


240

Accounts payable (including related party amounts of $13 and $13, respectively)

2,475


2,384

Accrued expenses (including related party amounts of $6 and $15, respectively)

1,913


1,672

Accrued dividends

25


-

Accrued sales taxes and regulatory fees

618


398

Customer deposits

163


205

Deferred revenue

122


155

Total current liabilities

6,496


6,451

Noncurrent liabilities:




Capital lease, less current portion

62


231

Long term debt, net of current portion

9,052


9,631

      Total noncurrent liabilities

9,114


9,862

      Total liabilities

15,610


16,313





Commitments and contingencies








Stockholders' equity:




Preferred stock Series B-1, non-convertible; $.0001 par value

$ 500


$ 10,000

Preferred stock Series A-2, convertible; $.0001 par value

167


167

Common stock, $.0001 par value

3


3

Additional paid-in capital

176,675


166,481

Accumulated deficit

(166,334)


(163,648)

      Total stockholders' equity

11,011


13,003

      Total liabilities and stockholders' equity

$ 26,621


$ 29,316





 











GLOWPOINT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

and GAAP to Non-GAAP Reconciliation

(In thousands, except per share data)

(Unaudited)

 








Nine Months Ended


Three Months Ended



September 30,


September 30,



2013


2012


2013


2012










Managed Services Combined


$ 14,955


$ 9,705


$ 4,821


$ 3,204

Network services


9,144


9,168


3,055


2,998

Professional and other services


1,454


1,234


437


359

Total revenue


25,553


20,107


8,313


6,561










Network and infrastructure


6,261


6,297


2,153


2,076

Global managed services


9,101


5,262


2,958


1,801

Sales and marketing


2,934


2,954


868


1,090

General and administrative


6,544


4,384


1,746


1,732

Depreciation and amortization


2,151


1,301


693


436

Total operating expenses


26,991


20,198


8,418


7,135










Income (loss) from operations


(1,438)


(91)


(105)


(574)

Interest/Financing


1,248


76


446


18

Income (loss) before provision for income taxes


$ (2,686)


$ (167)


$ (551)


$ (592)










Provision for income taxes


-


5


-


-

Net income (loss)


$ (2,686)


$ (172)


$ (551)


$ (592)










Preferred stock dividends


25


-


(185)


-

Net income (loss) attributable to common stockholders

$ (2,711)


$ (172)


$ (366)


$ (592)










Net income (loss) per share:









Basic net income (loss) per share


$ (0.09)


$ (0.01)


$ (0.01)


$ (0.02)

Diluted net income (loss) per share


$ (0.09)


$ (0.01)


$ (0.01)


$ (0.02)










Weighted average number of common shares:









Basic


29,094


24,441


31,692


24,556

Diluted


29,094


24,441


31,692


24,556










ADJUSTED EBITDA - GAAP to Non GAAP Reconciliation








Net income (loss) before provision for income taxes


$ (2,686)


$ (167)


$ (551)


$ (592)










Interest/Financing


1,248


76


446


18

Depreciation and amortization


2,151


1,301


693


436

Stock-based compensation


861


448


171


229

Severance


696


-


289


-

Acquisition costs


278


480


40


480

Asset impairment


680


-


141



Adjusted EBITDA


$ 3,228


$ 2,138


$ 1,229


$ 571












GLOWPOINT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 


















 Nine Months Ended 









 September 30, 









2013


2012

Cash flows from Operating Activities:






Net income (loss)


$    (2,686)


$       (172)


Adjustments to reconcile net income (loss) to net cash provided by (used in)







operating activities:








Depreciation and amortization


2,151


1,301




Amortization of deferred financing costs


242


33




Amortization of debt discount


108


-




Bad debt expense


104


122




Loss on disposal of equipment


680


12




Stock-based compensation


861


448




Increase (decrease) attributable to changes in assets









and liabilities:










 Accounts receivable 


39


(498)






 Other current assets 


306


(37)






 Other assets 


(278)


(22)






 Accounts payable 


91


(21)






 Customer deposits 


(42)


25






 Accrued expenses, sales taxes and regulatory fees 


269


(352)






 Deferred revenue 


(33)


(82)







 Net cash provided by (used in) continuing operating activities 


1,812


757







 Net cash (used in) provided by discontinuing operating activities 


-


(50)







 Net cash provided by operating activities 


1,812


707












Cash flows from Investing Activities:






 Proceeds from sale of equipment 


2


11


 Purchases of property and equipment  


(753)


(547)







 Net cash used in investing activities 


(751)


(536)












Cash flows from Financing Activities:






Proceeds from exercise of stock options


-


7


Payments related to preferred stock exchange


(106)


-


Principal payments for capital lease


(185)


(147)


Payments related to debt issuance


(157)


(199)


Proceeds from revolving loan facility


(780)


-







 Net cash used in financing activities 


(1,228)


(339)












Increase (decrease) in cash 


(167)


(168)












Cash at beginning of period


2,218


1,818












Cash at end of period


$     2,051


$     1,650












 

(Logo:  http://photos.prnewswire.com/prnh/20111222/LA26621LOGO)

 

 

SOURCE Glowpoint, Inc.



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