MURRAY HILL, N.J., March 16, 2011 /PRNewswire/ -- Glowpoint, Inc. (OTC Bulletin Board: GLOW), a leading global provider of cloud-based managed services for telepresence, video conferencing and collaboration, today reported its financial results for the fourth quarter and fiscal year ending December 31, 2010.
Total revenues for the fourth quarter and fiscal year increased by 11% to $7.0 million and 9% to $27.6 million, respectively, compared to the same periods in the previous year. Cloud-based managed services revenues, consisting of Open Video ("OV") Manage and Collaborate services, grew 46% in the quarter compared to the same period last year, and reached 41% of overall revenues in the quarter.
Loss from continuing operations showed an improvement of $530,000 from the third quarter, to $379,000 for the fourth quarter, which included severance charges in the amount of $459,000. The Company utilizes a non GAAP measurement of adjusted EBITDA as an important metric used by management to assess the operating performance of the Company which is defined and reconciled to GAAP results. Adjusted EBITDA (as defined and reconciled) for the fourth quarter was $486,000, representing a $580,000 increase over the previous quarter's earnings.
Based on the current operating trends and analysis, the Company reported that it expects revenue and Adjusted EBITDA (as defined and reconciled) will continue to grow in 2011, led by cloud-based managed services growth. The Company is setting long-term targets of 15-20% revenue growth and 20-25% Adjusted EBITDA margins.
- Revenue from Cloud-Based Managed Service Driving Growth: Fourth quarter revenues from managed services increased 46% year over year and now represent 41% of quarterly revenues.
- Positive cash flow: The Company's operating cash flow improved on a quarterly basis, resulting in positive cash flow contribution of $119,000 for the quarter.
- Strategic Partnerships: The Company continued its expansion of global partnerships in 2010, highlighted with core partners BroadSoft, Acme Packet, and Equinix, adding to its existing strategic partners and relationships with Polycom, Tata Communications and AVI-SPL.
- Continued Investments in Growth and Operating Efficiencies: The Company's investments in sales, marketing, product development and operating efficiencies are anticipated to drive continued growth and improved operating leverage. The Company launched its Open Video Cloud™ strategy to expand services on a global basis, and throughout 2010, announced several service rollouts targeted at the unified communications technology evolution and enhanced self-use services delivered via its cloud-based hosted infrastructure and applications.
- Management Team: In the second half of 2010, multiple executives from the unified communications space were added to the executive management team. John McGovern, an Avaya veteran, joined as EVP and CFO, Stephen Vobbe joined from Cisco to head sales and marketing, and Michael Hubner joined as General Counsel and Corporate Secretary. Also, Anil Balani now leads Glowpoint's product development group and Shane Bouslough joined to direct information systems.
- New Showcase HQ and R&D Operations Center: The Company moved its corporate headquarters and added a new showcase operations, R&D and executive briefing center at the end of 2010. This new facility is equipped with multiple telepresence rooms, its North America (East) operations center, and a fully equipped R&D lab.
"I am very pleased with the progress we've made this year and our continued focus on product initiatives, sales and marketing, strategic partnerships and operating efficiencies is paying off. I feel we are just beginning to scratch the surface for what is to come and expect we will continue to solidify our global go-to-market strategies with additional strategic partners in 2011," said Joe Laezza, Glowpoint's president and chief executive officer. "We remain committed to aligning the Company with the right partners and driving profitability based on accelerated growth and operating leverage."
John McGovern, Glowpoint's executive vice president and chief financial officer, further commented, "The growth of revenue in our managed service business reflects a continued trust by our customers and partners to manage their video communication needs within this growing market. This revenue growth, as well as the actions we have taken to align our cost structure with our business needs, has led to a dramatic improvement in our fourth quarter profitability."
As reported, Glowpoint will host a conference call at 4:30 p.m. EDT today to discuss the financial results for Q4 and Fiscal Year Ending 2010, along with updates on the business into 2011. To listen and participate, please visit: http://www.glowpoint.com/about/investors.asp. Interested participants should call (877) 407-1869. International participants should call +1 201-689-8044. No passcodes are required.
Glowpoint, Inc. (OTCBB: GLOW) enables video users to effortlessly and securely call one another regardless of their video technology or network. With unlimited, "open" access to Glowpoint's cloud-based, hosted-video infrastructure and services, video calling within – and between – companies is dramatically simplified. From full-featured telepresence and video conferencing suites to desktop video, Glowpoint supports customers around the world with 24/7 managed services that allow business professionals to enjoy "in-the-same-room" intimacy and cost savings. To see a video-in-the-cloud demonstration, and to learn more about how cost-effective and easy telepresence and video conferencing can be for your business, please visit http://www.glowpoint.com.
Non-GAAP Financial Information
Adjusted EBITDA is defined as net income or loss from continuing operations 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, and severance 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. 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
Some statements set forth in this release, other than historical information, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Statements that include words such as "anticipate," "believe," "estimate" or "expect" and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Certain factors that could cause our results to differ materially from our expectations are described in our filings with the Securities and Exchange Commission. We do not undertake, and specifically disclaim any obligation, to publicly release the results of any revisions that may be made to any forward-looking statements in order to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and shares)
Accounts receivable, net of allowance for doubtful accounts of $250 and $227, respectively
Net current assets of discontinued operations
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
LIABILITIES AND STOCKHOLDERS' EQUITY
Revolving loan facility
Accrued sales taxes and regulatory fees
Total current liabilities
Long term liabilities:
Accrued sales taxes and regulatory fees, less current portion
Total long term liabilities
Preferred stock Series B, non-convertible; $.0001 par value
Preferred stock Series A-2, convertible; $.0001 par value
Common stock, $.0001 par value
Additional paid-in capital
Less: Treasury stock, 0 and 391,223 shares at cost, after adjustments to reflect the reverse stock split of 1 for 4 effective January 14, 2011
Total stockholders' equity
Total liabilities and stockholders' equity
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
and GAAP to Non-GAAP Reconciliation
Three Months Ended
Managed Services Combined
OV Connect and other services
Network and infrastructure
Global managed services
Sales and marketing
General and administrative
Depreciation and amortization
Tax and regulatory fees
Total operating expenses
Net operating income(loss)
Net Income (Loss) from continuing operations
Income (loss) from discontinued operations
Net Income (Loss)
Net Income/(Loss) from continuing operations
Sales Taxes & Regulatory Fees
Stock-based comp Related to Severance
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
Cash flows from Operating Activities:
Net profit / (loss)
Adjustments to reconcile net loss to net cash provided (used) by
Depreciation and amortization
Amortization of deferred financing costs
Loss on extinguishment of debt
Accretion of Discount on Senior Secured Notes
Bad debt expense
(Gain) Loss on disposal of furniture, equipment and leasehold improvements
(Decrease) increase in estimated fair value of debenture
Increase (decrease) in cash attributable to changes in assets
and liabilities, net of effects of acquisitions:
Other current assets
Net cash provided (used) by continuing operating activities
Net cash provided (used) by discontinuing operating activities
Net cash provided (used) by operating activities
Cash flows from Investing Activities:
Proceeds from sale of equipment
Purchases of furniture, equipment and leasehold improvements
Net cash used by investing activities
Cash flows from Financing Activities:
Proceeds from preferred stock offerings
Proceeds from exercise of stock options
Proceeds from revolving loan
Receivable from sale of Series A Preferred Stock
Purchase of Senior Secured Notes
Costs of private placement
Net cash provided (used) by financing activities
Increase (decrease) in cash
Cash at beginning of period
Cash at end of period
SOURCE Glowpoint, Inc.