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Glowpoint Reports Third Quarter 2014 Results

DENVER, Nov. 5, 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 September 30, 2014.

"We are pleased to report net income for the quarter and the highest quarterly operating income since 2009," said Peter Holst, President and Chief Executive Officer. "We remain laser focused on the near-term launch of our third generation video service platform encompassing a broad suite of service management, analytics and mobile video applications to drive future revenue growth. Through this investment cycle and evolution in our product mix, we have leveraged our positive cash flow from operations to develop our platform around growth markets in mobile video and unified communication services," concluded Holst.

Third Quarter 2014 Highlights

  • Revenue was $8.0 million in the third quarter of 2014, a 4% decrease compared to $8.3 million in the third quarter of last year.
  • Net income was $198,000 in the third quarter of 2014, compared with a net loss of $551,000 for the third quarter of last year.
  • Income from operations for the third quarter of 2014 was $556,000, compared with a loss from operations of $105,000 for the third quarter of last year.
  • Adjusted EBITDA (as defined and reconciled to GAAP below) was $1.4 million in the third quarter of 2014, an 11% increase compared with $1.2 million for the third quarter of last year.
  • Generated positive cash flow from operations of $1.6 million for the first nine months of 2014.
  • Invested $1.6 million in capital expenditures for the first nine months of 2014, mainly related to the development and build-out of our video service platform and infrastructure.
  • The company's cash position was $2.2 million as of September 30, 2014 as compared with $2.3 million at December 31, 2013.
  • Advanced our new Reservationless Video platform into Beta. Commercial launch scheduled for January 1st, 2015.
  • Advanced our Dynamic Video Meeting Room (VMR) into Beta. Dynamic VMR represents a new service offering and merges a scheduled, higher touch video experience with ad hoc demand. Commercial launch scheduled for Q1 2015.
  • Launched Phase 1 of our new IT Service Management platform, which will allow for greatly enhanced monitoring, system management, broader reporting and analytics for our customers' video environments.

The results of Glowpoint's operations and financial condition for the three and nine months ended September 30, 2014 are more fully discussed in the company's Form 10-Q for the quarter ended September 30, 2014, filed with the Securities and Exchange Commission (SEC) on November 5, 2014. Investors are encouraged to carefully review the Form 10-Q for the quarter ended September 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. EST today to discuss the financial results for the third 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 launch dates of new service offerings and future revenue growth, plans to make investments and improvements in our video service platform and systems, 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, 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)
September 30, December 31,
2014 2013
ASSETS
Current assets:
Cash $ 2,153 $ 2,294
Accounts receivable, net 3,709 4,077
Prepaid expenses and other current assets 937 404
Total current assets 6,799 6,775
Property and equipment, net 3,390 2,867
Goodwill 9,825 9,825
Intangibles, net 5,057 5,998
Other assets 315 421
Total assets $ 25,386 $ 25,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 400 $ 950
Current portion of capital lease obligations 57 217
Accounts payable 1,274 1,885
Accrued expenses and other liabilities 2,577 2,277
Accrued dividends 35 20
Accrued sales taxes and regulatory fees 486 590
Total current liabilities 4,829 5,939
Long term liabilities:
Capital lease obligations, net of current portion 5 43
Long term debt, net of current portion 10,885 10,235
Total long term liabilities 10,890 10,278
Total liabilities 15,719 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 178,056 177,357
Accumulated deficit (168,494) (167,859)
Total stockholders' equity 9,667 9,669
Total liabilities and stockholders' equity $ 25,386 $ 25,886
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
and GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Video collaboration services $ 4,645 $ 4,820 $ 14,165 $ 14,954
Network services 3,039 3,056 9,207 9,145
Professional and other services 274 437 1,035 1,454
Total revenue 7,958 8,313 24,407 25,553
Cost of revenue (exclusive of depreciation and amortization) 4,374 4,959 14,068 14,802
Research and development 273 152 732 560
Sales and marketing 785 868 2,528 2,934
General and administrative 1,347 1,746 4,667 6,544
Depreciation and amortization 623 693 1,977 2,151
Total operating expenses 7,402 8,418 23,972 26,991
Income (loss) from operations 556 (105) 435 (1,438)
Interest and other expense, net 358 446 1,070 1,248
Income (loss) before income taxes $ 198 $ (551) $ (635) $ (2,686)
Income tax expense (benefit) -- -- -- --
Net income (loss) $ 198 $ (551) $ (635) $ (2,686)
Preferred stock dividends 5 (185) 15 25
Net income (loss) attributable to common stockholders $ 193 $ (366) $ (650) $ (2,711)
Net income (loss) attributable to common stockholders per share:
Basic net income (loss) per share $ 0.01 $ (0.01) $ (0.02) $ (0.09)
Diluted net income (loss) per share $ 0.01 $ (0.01) $ (0.02) $ (0.09)
Weighted average number of common shares:
Basic 34,950 31,692 34,885 29,094
Diluted 35,769 31,692 34,885 29,094
ADJUSTED EBITDA - GAAP to Non-GAAP Reconciliation
Net income (loss) $ 198 $ (551) $ (635) $ (2,686)
Depreciation and amortization 623 693 1,977 2,151
Interest and other expense, net 358 446 1,070 1,248
EBITDA 1,179 588 2,412 713
Stock-based compensation 156 171 446 861
Severance 27 289 160 696
Operating lease impairment -- -- 225 --
Acquisition costs -- 40 -- 278
Asset impairment/disposal of equipment -- 141 178 680
Adjusted EBITDA $ 1,362 $ 1,229 $ 3,421 $ 3,228
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2014 2013
Cash flows from Operating Activities:
Net loss $ (635) $ (2,686)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 1,977 2,151
Bad debt (recovery) expense (136) 104
Amortization of deferred financing costs 67 242
Amortization of debt discount -- 108
Loss on impairment/disposal of equipment 178 680
Stock-based compensation expense 446 861
Increase (decrease) attributable to changes in assets and liabilities:
Accounts receivable 504 39
Prepaid expenses and other current assets (538) 306
Other assets 41 (278)
Accounts payable (611) 91
Accrued expenses and other liabilities 267 194
Net cash provided by operating activities 1,560 1,812
Cash flows from Investing Activities:
Purchases of property and equipment (1,591) (753)
Proceeds from sale of equipment 4 2
Net cash used in investing activities (1,587) (751)
Cash flows from Financing Activities:
Costs of preferred stock exchange (5) (106)
Principal payments for capital lease obligations (198) (185)
Principal payments under borrowing arrangements (149) (780)
Advances on borrowing arrangements 249 --
Proceeds from issuance of common stock 118 --
Payment of equity issuance costs (4) --
Payment of debt issuance costs (59) (157)
Purchase of treasury stock (66) --
Net cash used in financing activities (114) (1,228)
Decrease in cash and cash equivalents (141) (167)
Cash at beginning of period 2,294 2,218
Cash at end of period $ 2,153 $ 2,051

Source:Glowpoint Inc.