MURRAY HILL, N.J., Aug. 14, 2012 /PRNewswire/ -- Glowpoint, Inc. (NYSE MKT: GLOW), a leading global provider of cloud managed video services, today reported its financial results for the second quarter ended June 30, 2012.
Second quarter revenues for cloud managed video services ("Managed Services Combined" as reported) were $3.2 million, an increase of 5% over the same period last year. Managed Services Combined represents 47% of total revenues in the quarter, up from 44% in the prior year period. Network services revenues for the quarter were $3.0 million, a decrease of 10% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $566,000 for the quarter, compared to $542,000 in the same period last year.
Adjusted EBITDA (as defined and reconciled to GAAP) for the second quarter was $850,000, an increase of $449,000 or 112% over the same period last year. Adjusted EBITDA margin was 13% compared to 6% in the same period last year. Net income for the second quarter was $248,000, an increase of $231,000 over the same period last year.
For the six months ended June 30, 2012, cloud managed video services revenues ("Managed Services Combined" as reported) were $6.5 million, an increase of 5% as compared to the same period last year. Network services revenues for the six-month period were $6.2 million, a decrease of 10% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $875,000 for the six-month period, compared to $876,000 in the same period last year.
Adjusted EBITDA for the six-month period ended June 30, 2012 was $1.6 million, an increase of $742,000 over the same period last year. Net income for the six months ended June 30, 2012 was $420,000, an increase of $371,000 over the same period last year.
"The sales pipeline for our suite of cloud managed video services is expanding, although elongated sales cycles continues to impact immediate growth levels," said Joe Laezza, Glowpoint's president and CEO. "We are seeing delays in highly qualified sales opportunities and attribute this to changes in the buying decision making process during the rapid shift in enterprise needs for video communications moving from on premise and appliance devices to cloud and software based services."
"We believe these conditions and trends in the buying process are very advantageous to Glowpoint's long term operating model as our OpenVideo® cloud and managed services are specifically designed to deliver on these shifting demands. We have begun to close the new significant contracts referenced in previous periods and see these deals beginning to positively impact our growth levels by year end," added Laezza.
"Adjusted EBITDA results and trends remain strong, and in fact continue to grow," said Tolga Sakman, Glowpoint's acting CFO. "We believe this is evidence of the good operating leverage in our business model and we've now delivered seven consecutive quarters of positive Adjusted EBITDA while EPS continues to grow. We are getting more aggressive with our investments in product development and sales and marketing, and we are confident that we will begin to see the benefits of these crucial investments and meet our long-term 20% EBITDA margin objectives as our revenue growth picks up."
Key business metrics
Number of managed telepresence and video conferencing rooms increased 38% to 1,270 as compared with the same period a year ago.
Number of managed conferences increased 41% to 39,000 as compared with the same six-month year to date period a year ago.
Number of certified enterprise video systems on OpenVideo® increased 18% to 46,400 as compared with the same period a year ago.
Usage on OpenVideo® cloud increased 4% to more than 8.9 million minutes as compared to the same six month period a year ago.
"The volume of managed conferences for our managed service contracted clients on unlimited plans continues to grow, which validates the reliability and levels of service we deliver and our customers expect. Usage on the OpenVideo® cloud platform is driven by the most diverse set of collaboration needs and applications of video communication from traditional conference calls over video to business-to-business communication for business meetings," added Laezza.
For the six-month period ended June 30, 2012, capital expenditures were $353,000, and as of August 14, 2012 there were 25,593,967 shares of common stock outstanding.
"We are excited about the opportunity to deliver our broad suite of cloud and managed services for the Affinity VideoNet customer base," commented Laezza. "This is a big step in the evolution of Glowpoint and we expect this acquisition to represent considerable top and bottom line contribution," added Sakman.
Glowpoint will host a conference call at 4:30 p.m. EDT today to discuss the financial results for Q2 2012. To view the webcast, please visit: http://video.webcasts.com/events/glow001/43579. To participate in the teleconference, callers may dial the toll free number (877) 407-1869 (U.S. callers only) or (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.
Glowpoint, Inc. (NYSE MKT: GLOW) provides cloud managed video services that make the delivery of consistently high-quality video conferencing and telepresence service as simple as using the internet, between any technology, network and business. Using our OpenVideo® cloud architecture, Glowpoint enables organizations of all sizes to adopt business-class video easily, scale instantly and collaborate openly, yet securely across technology boundaries – to realize the full value of visual communications. To learn more please visit www.glowpoint.com.
Non-GAAP Financial Information
Adjusted EBITDA is defined as income from continuing operations before depreciation, amortization, interest expense, interest income, taxes, stock-based compensation, and severance. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total revenues. 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 from continuing operations 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.