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Glowpoint Reports Second Quarter 2014 Results

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DENVER, Aug. 6, 2014 (GLOBE NEWSWIRE) -- Glowpoint, Inc. (NYSE MKT:GLOW), a leading provider of cloud-based video collaboration services and network solutions, reported financial results for the quarter ended June 30, 2014.

"We posted sequential revenue growth for the second consecutive quarter driven by increased demand for business class collaboration and event services, while reporting the highest quarterly operating income since 2009," said Peter Holst, President and Chief Executive Officer. "The growing demand for unified communications and specifically the ability to produce successful meeting experiences efficiently will drive our future growth in key markets as the industry migrates from legacy, lower margin services. This year, we've substantially increased our focus on product development and optimizing service delivery for our customers. Looking ahead into the second half of 2014, we are preparing to launch both our next generation of video services platform as well as a broad suite of service management and analytics tools while continuing to build channels and further develop our sales organization," concluded Holst.

Second Quarter 2014 Financial Highlights

  • Revenue was $8.5 million in the second quarter of 2014, a 6% sequential increase compared to $8.0 million in the first quarter of 2014, and a 3% decrease compared to $8.7 million in the second quarter of last year.
  • Income from operations for the second quarter of 2014 was $357,000 compared with a loss from operations of $478,000 for the first quarter of 2014 and income from operations of $269,000 for the second quarter of last year.
  • Adjusted EBITDA (as defined and reconciled to GAAP below) was $1.2 million in the second quarter of 2014, a 32% sequential increase compared with $0.9 million for the first quarter of 2014, and level with $1.2 million for the second quarter of last year.
  • Net cash provided by operating activities was $1.2 million for the first half of 2014. Capital expenditures totaled $1.1 million for the first half of 2014. The company's cash position was $2.1 million as of June 30, 2014 as compared with $2.3 million at December 31, 2013.

Second Quarter 2014 Company Highlights

  • Glowpoint was added to the Russell Microcap® Index effective at the close of the market on June 27, 2014.
  • Added key channel partners including one global system integrator and two global communication service providers.
  • Completed initial phase of development across all key next generation applications including service management, call control, automated scheduling and browser-based video connectivity.
  • In May 2014, Glowpoint's shareholders elected new board members James H. Cohen, an experienced public company executive with a background in investment banking, corporate law and private equity, and Patrick J. Lombardi, an executive with broad experience in the communications industry, mergers and acquisitions and directorships with public companies.

The results of Glowpoint's operations and financial condition for the three and six months ended June 30, 2014 are more fully discussed in the company's Form 10-Q for the quarter ended June 30, 2014, filed with the Securities and Exchange Commission (SEC) on August 6, 2014. Investors are encouraged to carefully review the Form 10-Q for the quarter ended June 30, 2014 for a complete analysis of Glowpoint's results from operations and financial condition.

Conference Call

Glowpoint will host a conference call at 4:30 p.m. EDT today to discuss the financial results for the second quarter of 2014 and provide updates regarding the business. To view the webcast, please visit http://glowpoint.com/investor-relations. To participate in the teleconference, callers may dial the toll-free number +1 (888) 669-0684 (U.S. callers only) or +1 (862) 255-5361 (from outside the U.S.). For those unable to participate in the live call, a recording of the call will be archived for viewing two hours after the call at http://glowpoint.com/investor-relations.

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 1,000 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, a non-GAAP financial measure, is defined as net income (loss) before depreciation, amortization, interest and other expense, net, taxes, stock-based compensation, impairment charges, acquisition costs, 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 (GAAP). Rather, Adjusted EBITDA is an important measure used by management to assess the operating performance of the Company and is used in the calculation of financial covenants in the company's loan agreements. Adjusted EBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies. 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 expectations regarding long-term revenue growth, continued progress in onboarding partners, plans to make investments in our systems, product development and partner enablement 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 SEC. We make no representation or warranty that the information contained herein is complete and accurate and we have no duty to correct or update any information contained herein.

INVESTOR CONTACT:
Investor Relations
Glowpoint, Inc.
+1 303-640-3840
investorrelations@glowpoint.com
www.glowpoint.com
GLOWPOINT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
(Unaudited)
June 30, December 31,
2014 2013
ASSETS
Current assets:
Cash $ 2,101 $ 2,294
Accounts receivable, net 3,603 4,077
Prepaid expenses and other current assets 582 404
Total current assets 6,286 6,775
Property and equipment, net 3,192 2,867
Goodwill 9,825 9,825
Intangibles, net 5,369 5,998
Other assets 327 421
Total assets $ 24,999 $ 25,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 197 $ 950
Current portion of capital lease obligations 116 217
Accounts payable 2,190 1,885
Accrued expenses and other liabilities 1,906 2,277
Accrued dividends 30 20
Accrued sales taxes and regulatory fees 452 590
Total current liabilities 4,891 5,939
Long term liabilities:
Capital lease obligations, net of current portion 13 43
Long term debt, net of current portion 10,885 10,235
Total long term liabilities 10,898 10,278
Total liabilities 15,789 16,217
Commitments and contingencies
Stockholders' equity:
Preferred stock, Series A-2, convertible; $.0001 par value 167 167
Common stock, $.0001 par value 4 4
Treasury stock (66) --
Additional paid-in capital 177,797 177,357
Accumulated deficit (168,692) (167,859)
Total stockholders' equity 9,210 9,669
Total liabilities and stockholders' equity $ 24,999 $ 25,886
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,
2014 2013 2014 2013
Video collaboration services $ 9,520 $ 10,134 $ 4,895 $ 4,998
Network services 6,168 6,089 3,140 3,021
Professional and other services 761 1,017 433 717
Total revenue 16,449 17,240 8,468 8,736
Cost of revenue (exclusive of depreciation and amortization) 9,694 9,843 4,824 4,886
Research and development 459 408 293 173
Sales and marketing 1,743 2,066 918 997
General and administrative 3,320 4,798 1,410 1,711
Depreciation and amortization 1,354 1,458 666 700
Total operating expenses 16,570 18,573 8,111 8,467
Income (loss) from operations (121) (1,333) 357 269
Interest and other expense, net 712 802 356 419
Income (loss) before income taxes $ (833) $ (2,135) $ 1 $ (150)
Income tax expense (benefit) -- -- -- --
Net income (loss) $ (833) $ (2,135) $ 1 $ (150)
Preferred stock dividends 10 210 5 105
Net loss attributable to common stockholders $ (843) $ (2,345) $ (4) $ (255)
Net loss attributable to common stockholders per share:
Basic and diluted net loss per share $ (0.02) $ (0.08) $ 0.00 $ (0.01)
Weighted average number of common shares:
Basic and diluted 34,912 27,786 34,958 27,868
ADJUSTED EBITDA - GAAP to Non-GAAP Reconciliation
Net income (loss) $ (833) $ (2,135) $ 1 $ (150)
Depreciation and amortization 1,354 1,458 666 700
Interest and other expense, net 712 802 356 419
EBITDA 1,233 125 1,023 969
Stock-based compensation 290 690 57 83
Severance 133 407 13 8
Operating lease impairment 225 -- -- --
Acquisition costs -- 238 -- (1)
Asset impairment 178 539 77 104
Adjusted EBITDA $ 2,059 $ 1,999 $ 1,170 $ 1,163
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2014 2013
Cash flows from Operating Activities:
Net loss $ (833) $ (2,135)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 1,354 1,458
Bad debt (recovery) expense (107) 119
Amortization of deferred financing costs 44 121
Amortization of debt discount -- 69
Loss on impairment/disposal of equipment 178 539
Stock-based compensation 290 690
Increase (decrease) attributable to changes in assets and liabilities:
Accounts receivable 581 739
Prepaid expenses and other current assets (178) 153
Other assets 50 15
Accounts payable 304 (336)
Accrued expenses and other liabilities (437) (78)
Net cash provided by operating activities 1,246 1,354
Cash flows from Investing Activities:
Purchases of property and equipment (1,081) (235)
Proceeds from sale of equipment 4 2
Net cash used in investing activities (1,077) (233)
Cash flows from Financing Activities:
Costs of preferred stock exchange (5) --
Principal payments for capital lease obligations (131) (122)
Principal payments under borrowing arrangements (102) (280)
Proceeds (payments) related to equity 1 --
Payment of debt issuance costs (59) (133)
Purchase of treasury stock (66) --
Net cash used in financing activities (362) (535)
Increase (decrease) in cash (193) 586
Cash at beginning of period 2,294 2,218
Cash at end of period $ 2,101 $ 2,804

Source:Glowpoint Inc.