Glowpoint Announces Second Quarter 2013 Results

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Aug 08, 2013, 04:05 ET

MURRAY HILL, N.J., Aug. 8, 2013 /PRNewswire/ -- Glowpoint, Inc. (NYSE MKT: GLOW), a leading global provider of video collaboration, network and support services, today announced financial results for the second quarter ended June 30, 2013.

Second Quarter 2013 Financial Highlights:

Revenue increased 28% year over year to $8.7 million in the second quarter of 2013 from $6.8 million in the second quarter of 2012. This increase is attributable to the second quarter 2013 revenue contribution from the October 2012 acquisition of Affinity VideoNet.
Revenue increased 3% sequentially to $8.7 million in the second quarter of 2013 from $8.5 million in the first quarter of 2013.
Income from operations was $269,000 in the second quarter of 2013 compared with a loss from operations of $1.6 million for the first quarter of 2013.
Adjusted EBITDA (as defined and reconciled to GAAP below) was $1.2 million in the second quarter of 2013, compared with $850,000 for the same period last year and $837,000 for the first quarter of 2013.
Net cash provided by operating activities was $1.1 million for the second quarter of 2013, compared with $264,000 for the first quarter of 2013. The company paid down $280,000 on the line of credit during the second quarter.
The company ended the second quarter with $2.8 million of cash compared with $2.2 million at the end of the first quarter of 2013.

"We generated Adjusted EBITDA of $1.2 million and operating income of $0.3 million for the second quarter, representing significant improvement from the first quarter of 2013," stated David Clark, CFO of Glowpoint. "We generated $1.1 million of cash flow from operations and paid down $0.3 million on our revolver during the second quarter, and ended the quarter with positive working capital and $2.8 million in cash."

"While in the midst of strategically and operationally transitioning the business to better address customer demand in the rapidly evolving video market, we are pleased to report modest sequential revenue growth coupled with much-improved EBITDA and cash flow performance," said Peter Holst, CEO and President of Glowpoint. "As a result of improved product focus and discipline, we are beginning to realize significant operating efficiencies in our service model. We expect revenue for the second half of 2013 to remain fairly consistent with the first half and expect to make gradual gains in operating leverage through the remainder of 2013 and into 2014."

The results of Glowpoint's operations and financial condition for the three and six months ended June 30, 2013 and 2012 are more fully discussed in the company's Form 10-Q for the quarter ended June 30, 2013, filed with the Securities and Exchange Commission on August 8, 2013. Investors are encouraged to carefully review the Form 10-Q for the quarter ended June 30, 2013 for a complete analysis of Glowpoint's results from operations and financial condition.

Teleconference

Glowpoint will host a conference call at 4:30 p.m. Eastern Daylight Time (EDT) today to discuss the financial results for the second 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 participate in the live call, a recording of the call will be archived at www.glowpoint.com/investor-relations.

Supporting Link:

Glowpoint Investor Information

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 1000 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 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)

	June 30,	December 31,
	2013	2012
ASSETS
Current assets:
Cash	$ 2,804	$ 2,218
Accounts receivable, net (including related party amounts of $24 and $32, respectively)	3,189	4,047
Prepaid expenses and other current assets	745	897
Total current assets	6,738	7,162
Property and equipment, net	3,159	4,256
Goodwill	9,695	9,900
Intangibles, net	6,627	7,256
Other assets	605	742
Total assets	$ 26,824	$ 29,316

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$ 1,317	$ 1,397
Current portion of capital lease	259	240
Accounts payable (including related party amounts of $24 and $13, respectively)	2,048	2,384
Accrued expenses (including related party amounts of $6 and $15, respectively)	1,435	1,672
Accrued dividends	210	-
Accrued sales taxes and regulatory fees	499	398
Customer deposits	195	205
Deferred revenue	124	155
Total current liabilities	6,087	6,451
Noncurrent liabilities:
Capital lease, less current portion	129	231
Long term debt, net of current portion	9,113	9,631
Total noncurrent liabilities	9,242	9,862
Total liabilities	15,329	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	167,108	166,481
Accumulated deficit	(165,783)	(163,648)
Total stockholders' equity	11,495	13,003
Total liabilities and stockholders' equity	$ 26,824	$ 29,316

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

	Six Months Ended		Three Months Ended
	June 30,		June 30,
	2013	2012	2013	2012

Total revenue	17,240	13,546	8,736	6,800

Network and infrastructure	4,108	4,221	2,106	2,145
Global managed services	6,143	3,461	2,953	1,765
Sales and marketing	2,066	1,864	997	878
General and administrative	4,798	2,652	1,711	1,302
Depreciation and amortization	1,458	865	700	425
Total operating expenses	18,573	13,063	8,467	6,515

Income (loss) from operations	(1,333)	483	269	285
Interest and other expense, net	802	58	419	32
Income (loss) before provision for income taxes	$ (2,135)	$ 425	$ (150)	$ 253

Provision for income taxes	-	5	-	5
Net income (loss)	$ (2,135)	$ 420	$ (150)	$ 248

Preferred stock dividends	210	-	105	-
Net income (loss) attributable to common stockholders	$ (2,345)	$ 420	$ (255)	$ 248

Net income (loss) per share:
Basic net income (loss) per share	$ (0.08)	$ 0.02	$ (0.01)	$ 0.01
Diluted net income (loss) per share	$ (0.08)	$ 0.02	$ (0.01)	$ 0.01

Weighted average number of common shares:
Basic	27,786	24,440	27,868	24,525
Diluted	27,786	25,742	27,868	25,874

ADJUSTED EBITDA - GAAP to Non GAAP Reconciliation
Net income (loss)	$ (2,135)	$ 420	$ (150)	$ 248

Provision for income taxes	-	5	-	5
Interest and other expense, net	802	58	419	32
Depreciation and amortization	1,458	865	700	425
Stock-based compensation	690	219	83	140
Severance	407	-	8	-
Acquisition costs	238	-	(1)	-
Asset impairment	539	-	104	-
Adjusted EBITDA	$ 1,999	$ 1,567	$ 1,163	$ 850

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

					Six Months Ended
					June 30,
					2013	2012
Cash flows from Operating Activities:
	Net income (loss)				$ (2,135)	$ 420
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation and amortization			1,458	865
		Amortization of deferred financing costs			121	29
		Amortization of debt discount			69	-
		Bad debt expense			119	52
		Loss on disposal of equipment			539	10
		Stock-based compensation			690	219
		Increase (decrease) attributable to changes in assets and liabilities:
			Accounts receivable		739	(573)
			Other current assets		153	(52)
			Other assets		15	(38)
			Accounts payable		(336)	(13)
			Customer deposits		(9)	28
			Accrued expenses, sales taxes and regulatory fees		(38)	(539)
			Deferred revenue		(31)	(61)
				Net cash provided by (used in) continuing operating activities	1,354	347
				Net cash (used in) provided by discontinuing operating activities	-	(50)
				Net cash provided by operating activities	1,354	297

Cash flows from Investing Activities:
	Proceeds from sale of equipment				2	11
	Purchases of property and equipment				(235)	(353)
				Net cash used in investing activities	(233)	(342)

Cash flows from Financing Activities:
	Proceeds from exercise of stock options				-	7
	Principal payments for capital lease				(122)	(91)
	Payments related to debt issuance				(133)	-
	Proceeds from revolving loan facility				(280)	-
				Net cash used in financing activities	(535)	(84)

Increase (decrease) in cash					586	(129)

Cash at beginning of period					2,218	1,818

Cash at end of period					$ 2,804	$ 1,689