Glowpoint Reports First Quarter 2010 Results
HILLSIDE, N.J., May 13 /PRNewswire-FirstCall/ — Glowpoint, Inc. (OTC Bulletin Board: GLOW), a carrier-grade provider of managed services for telepresence and video conferencing, today announced financial results for the first quarter ended March 31, 2010.
(Logo: http://www.newscom.com/cgi-bin/prnh/20100420/GLOWPOINTLOGO)
Core revenue was $6.5 million for the quarter, an increase of 8.3% from the comparable period last year and a 2.9% sequential increase. Based on the current level of business activity, the Company is confident that its 2010 core revenue growth rate will continue to accelerate on a quarterly basis with continued improvement in operating margin in the second half of the year. These increases are primarily attributable to growth of the Company’s cloud-based managed video service offerings and expected return on recent expenditures that, despite having a short term impact on profitability, are expected to drive accelerated growth and improved operating leverage going forward.
In addition to the financing and related activity previously announced on March 30, 2010, key highlights for the first quarter include:
- Increased Revenue: Increased 4.3% to $6.7 million for the quarter from $6.4 million in the comparable quarter for 2009.
- Lower Operating Expenses: Quarterly operating expenses dropped 1.4% to $7.3 million in 2010 from $7.4 million for the same period in 2009.
- Improved Results from Operations: Loss from operations decreased 40% to $0.6 million in 2010 from $1.0 million in the comparable quarter in 2009.
- Compelling Industry Dynamics: Trends and outlook validated by numerous third-party sources all pointing to anticipated accelerated adoption and utilization of telepresence and high definition video conferencing solutions.
“The statistics associated with our current and new customer usage continues to validate industry adoption trends and projections,” said Joe Laezza, Glowpoint’s President and Co-CEO. “Over the last year, we have seen a 20% increase in managed conferences, and over 90% increases in business-to-business calling using Glowpoint’s exchange services and cloud-based infrastructure. This means our customers are using video more, and doing so beyond their business environments. Today, Glowpoint supports an average of over 5,000 conferences monthly and in the past 12 months more than 55,000 business-to-business calls traversed our infrastructure. Our continued growth is our primary focus as Glowpoint secures its position in this growing market.”
David Robinson, Co-CEO further commented, “We continue to prudently invest capital in order to maximize the longer term profitability of the Company. We are confident that these current expenditures will better position Glowpoint for an accelerating revenue growth rate in the second half of 2010 and beyond with improved operating leverage. Given the enormous addressable global market opportunity, we are as confident as ever that this approach will build sustainable long term profitability and enhanced shareholder value.”
The Company will continue to keep the financial community and the industry up to date on material corporate developments and invites existing and potential shareholders to meet with management, following Glowpoint’s annual meeting, which will be held on June 17, 2010 at the law offices of Gibbons P.C., One Gateway Center 21st Floor, Newark, New Jersey. The Company will post its investor presentation on the corporate website (www.glowpoint.com) prior to the June 17th meeting.
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About Glowpoint
Glowpoint, Inc. (OTCBB: GLOW) provides carrier-grade, managed telepresence and video communications services that are accessible via its cloud-based, hosted infrastructure and open architecture applications. Glowpoint’s suite of robust telepresence and video conferencing solutions empower enterprises to communicate with each other over disparate networks and technology platforms. Glowpoint supports thousands of video communications systems in more than 35 countries with its 24/7 video management services. Glowpoint also powers major broadcasters, Fortune 500 companies, as well as global carriers and video equipment manufacturers – and their customers – worldwide. To learn more, visit http://www.glowpoint.com.
The statements contained herein, other than historical information, 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 communication services; the nonexclusive and terminable-at-will nature of sales agent agreements; rapid technological change affecting demand for our services; competition from other video communications 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.
Contact:
Jonathan Brust
Glowpoint, Inc.
(312) 235-3888, ext. 2052
jbrust@glowpoint.com
www.glowpoint.com
GLOWPOINT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and shares)
December 31,
March 31, 2010 2009
-------------- -------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $2,985 $587
Accounts receivable, net of
allowance for doubtful accounts of
$210 and $262, respectively 3,426 3,323
Prepaid expenses and other current
assets 453 291
--- ---
Total current assets 6,864 4,201
Property and equipment, net 2,728 2,682
Other assets 31 31
--- ---
Total assets $9,623 $6,914
====== ======
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $3,513 $3,232
Accrued expenses 1,079 879
Accrued sales taxes and regulatory
fees 852 888
Customer deposits 326 308
Deferred revenue 269 259
--- ---
Total current liabilities 6,039 5,566
----- -----
Long term liabilities:
Accrued sales taxes and regulatory
fees, less current portion 148 195
--- ---
Total long term liabilities 148 195
--- ---
Total liabilities 6,187 5,761
----- -----
Commitments and contingencies
Stockholders' equity:
Preferred stock Series B, non-
convertible; $.0001 par value;
$100,000 stated value; 100 shares
authorized and 80 and 0 shares
issued and outstanding recorded at
liquidation value 8,000 -
Preferred stock Series A-2,
convertible; $.0001 par value;
$7,500 stated value; 7,500 shares
authorized and 1,630 and 4,509
shares issued and outstanding
recorded at fair value,
respectively (liquidation value of
$12,226 and $33,815, respectively)
(see Note 9 for information
related to Insider Purchasers -
related parties) 5,161 14,275
Common stock, $.0001 par value;
150,000,000 shares authorized;
80,606,232 and 66,531,087 shares
issued; 80,606,232 and 64,966,196
shares outstanding, respectively 8 7
Additional paid-in capital 153,283 150,659
Accumulated deficit (163,016) (162,405)
-------- --------
3,436 2,536
Less: Treasury stock, 0 and
1,564,891 shares at cost - (1,383)
--- ------
Total stockholders' equity 3,436 1,153
----- -----
Total liabilities and stockholders'
equity $9,623 $6,914
====== ======
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
------------------
March 31,
---------
2010 2009
---- ----
Revenue $6,721 $6,442
Operating expenses:
Network and Infrastructure 2,943 2,964
Global managed services 2,052 1,868
Sales and marketing 892 780
General and administrative 1,143 1,608
Depreciation and amortization 266 271
Sales taxes and regulatory fees - (90)
--- ---
Total operating expense 7,296 7,401
----- -----
Loss from operations (575) (959)
---- ----
Interest and other expense:
Interest expense 36 147
Loss on extinguishment of debt - 254
Increase in fair value of
derivative financial instruments'
liability, including $0 and $31,
respectively, for Insider
Purchasers - 1,125
--- -----
Total interest and other expense 36 1,526
--- -----
Net loss (611) (2,485)
Loss on redemption of preferred
stock (778) (1,999)
---- ------
Net loss attributable to common
stockholders $(1,389) $(4,484)
======= =======
Net loss attributable to common
stockholders per share:
Basic and diluted $(0.02) $(0.10)
====== ======
Weighted average number of common
shares:
Basic and diluted 64,241 45,700
====== ======
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Three Months Ended March 31, 2010
(In thousands except Series B Preferred Shares)
(Unaudited)
Series B Series A-2
Preferred Preferred
Stock Stock
--------- ----------
Shares Amount Shares Amount
------ ------ ------ ------
Balance at January 1, 2010 - $- 5 $14,275
Net loss - - - -
Stock-based compensation - stock
options - - - -
Stock-based compensation -
restricted stock - - - -
2010 Preferred Stock Exchange 50 5,000 (1) (4,222)
Warrants issued in connection with
2010 Private Placement - - - -
Conversion of Preferred Stock - - (2) (4,892)
Cashless exercise of warrants - - - -
Exercise of stock options - - - -
Sale of Series B Preferred Stock 30 3,000 - -
Cancellation of treasury stock - - - -
Costs related to 2010 Private Placement
and Preferred Stock exchange - - - -
--- --- --- ---
Balance at March 31, 2010 80 $8,000 2 $5,161
=== ====== === ======
Additional
Common Stock Paid In Accumulated
------------
Shares Amount Capital Deficit
------ ------ ------- -------
Balance at January 1, 2010 66,531 $7 $150,659 $(162,405)
Net loss - - - (611)
Stock-based compensation -
stock options - - 61 -
Stock-based compensation -
restricted stock 112 - 56 -
2010 Preferred Stock Exchange - - (778) -
Warrants issued in connection
with 2010 Private Placement - - 443 -
Conversion of Preferred Stock 15,452 1 4,891 -
Cashless exercise of warrants 56 - - -
Exercise of stock options 20 - 7 -
Sale of Series B Preferred
Stock - - - -
Cancellation of treasury stock (1,565) - (1,383) -
Costs related to 2010 Private
Placement and Preferred Stock
exchange - - (673) -
--- --- ---- ---
Balance at March 31, 2010 80,606 $8 $153,283 $(163,016)
====== === ======== =========
Treasury Stock
--------------
Shares Amount Total
------ ------ -----
Balance at January 1, 2010 1,565 $(1,383) $1,153
Net loss - - (611)
Stock-based compensation - stock options - - 61
Stock-based compensation - restricted
stock - - 56
2010 Preferred Stock Exchange - - -
Warrants issued in connection with 2010
Private Placement - - 443
Conversion of Preferred Stock - - -
Cashless exercise of warrants - - -
Exercise of stock options - - 7
Sale of Series B Preferred Stock - - 3,000
Cancellation of treasury stock (1,565) 1,383 -
Costs related to 2010 Private Placement
and Preferred Stock exchange - - (673)
--- --- ----
Balance at March 31, 2010 - $- $3,436
=== === ======
GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
------------------
2010 2009
---- ----
Cash flows from Operating Activities:
Net loss $(611) $(2,485)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization 266 271
Other expense recognized for the increase in the
estimated fair value of the derivative
financial instruments - 1,125
Bad debt expense 82 31
Accretion of discount on Senior Secured Notes - 23
Loss on disposal of equipment - 2
Loss on extinguishment of debt - 254
Stock-based compensation 117 174
Increase (decrease) attributable to changes in
assets and liabilities:
Accounts receivable (185) (432)
Prepaid expenses and other current assets (162) (55)
Accounts payable 281 859
Customer deposits 18 -
Accrued expenses, sales taxes and regulatory
fees 117 521
Deferred revenue 10 48
--- ---
Net cash (used in) provided by operating
activities (67) 336
--- ---
Cash flows from Investing Activities:
Purchases of property and equipment (312) (341)
---- ----
Net cash used in investing activities (312) (341)
---- ----
Cash flows from Financing Activities:
Proceeds from preferred stock offering 3,000 1,800
Proceeds from exercise of stock options 7 -
Principal payments for capital lease - (38)
Purchase of Senior Secured Notes - (750)
Costs related to private placement (230) (221)
---- ----
Net cash provided by financing activities 2,777 791
----- ---
Increase (decrease) in cash and cash equivalents 2,398 786
Cash and cash equivalents at beginning of period 587 1,227
--- -----
Cash and cash equivalents at end of period $2,985 $2,013
------ ------
Supplement disclosures of cash flow information:
Cash paid during the period for
Interest $108 $36
---- ---
Non-cash investing and financing activities:
Costs related to private placement incurred by
issuance of placement agent warrants 443 133
Exchange of Senior Secured Notes for Series A-1
Preferred Stock $- $1,076
Additional Senior Secured Notes issued as
payment for interest - 55
SOURCE Glowpoint, Inc.