Glowpoint Reports Third Quarter Results
Posts Record Subscription Revenue and Increase in Positive Operating Income
- Press Release
- Source: Glowpoint, Inc.
- On 4:18 pm EST, Tuesday November 10, 2009
HILLSIDE, N.J.--(BUSINESS WIRE)--Glowpoint, Inc. (OTCBB: GLOW - News), a leading provider of advanced video communications solutions, today announced financial results for the third quarter and nine months ended September 30, 2009, yielding record subscription related revenues and a continuance of positive operating income.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| GLOW.OB | 0.61 | +0.04 |
Total revenue for the quarter was $6.54 million, an increase of more than 7.8% from the same period a year ago. Monthly recurring subscription and related revenue for the quarter was $5.03 million of such amount, up 16.2% year-over-year. Gross margin for the quarter increased to $3.22 million, a year-over-year increase of 32.2%. Total operating expenses were only 47.1% of revenues versus 50.8% in the same period a year ago and 50.2% last quarter. The third quarter income from operations was $0.14 million, which was an improvement from last quarter’s income of $0.04 million and a loss of $0.64 million from the year ago period. The income from operations was primarily attributable to increased revenue from VNOC managed services and Telepresence interExchange Network (TEN) related services, improved gross margins, and containment of operating expenses.
Key highlights for the third quarter of 2009 include:
- Positive Operating Income: Glowpoint reported an increase in income from operations following its posting of positive operating income for the first time the previous quarter.
- Record Recurring Revenue from Subscription: Record quarterly subscription revenue of $5.03 million in the third quarter, driven by continued growth of its managed service solutions which is billed on a monthly recurring basis. Recurring revenue sources accounted for nearly 77% of total revenue in the quarter.
- Strong Gross Margin: Gross margin of $3.22 million and gross margin percentage of 49.2%, driven by continued operating scale and efficiency with optimization of costs.
- Elimination of Preferred Stock Dividends: Dividends on Glowpoint’s preferred stock, which were to begin in the fourth quarter of 2009, have been eliminated until January 2013, thereby avoiding payments of more than $5.2 million.
- Warrant Exchange: Glowpoint completed an exchange transaction that cancelled warrants to acquire 39.1 million shares by issuing 17.4 million shares of common stock.
“The video industry is undergoing a massive transformation, and Glowpoint continues to be recognized as a leader in developing and distributing the applications that are driving many of the innovations behind it. Leading market analysts are now increasing the telepresence and video conferencing industry’s growth projections, Gartner recently reported, "The value of the videoconferencing market as a whole is set to post a compound annual growth rate (CAGR) of 17.8% between 2008 and 2013, rising from $3.8 billion to $8.6 Billion…. Services revenue will grow stronger than revenue from endpoints or infrastructure…"1. Telepresence and video conferencing are now being discussed as components of the unified communications and cloud computing markets. When combining these projections with the consolidation and strategies within the Unified Communications market, we see great opportunities not only in the overall market size, but also a specific opportunity for Glowpoint to achieve broad market share for our cloud based video services,” said Joe Laezza, Glowpoint’s President and Co-CEO.
“Our continuation of generating positive income from operations is a result of Glowpoint’s steady focus and successful execution of our business plan. We are proud of what we have achieved, and are very excited to have moved the company to generating income for the second consecutive quarter,” said Dave Robinson, Glowpoint’s Co-CEO. “We’re also pleased to report record subscription revenue, which is the core of our recurring revenue business model, and report year-over-year revenue growth. We believe progress will continue in the fourth quarter of 2009, with year-over-year and sequential margin improvement and year-over-year subscription revenue growth of at least 10%, setting up a strong 2010, when economic conditions are forecasted to improve and industry analysts project that the growth for managed video services and B2B exchange services will begin to accelerate significantly.”
Teleconference
Glowpoint will host a conference call at 4:30 pm EST today to discuss the results and field questions from investors. Interested participants should call (877) 407-1869 and use passcode 200973. International participants should call (201) 689-8044 and use the same passcode.
This call is being audio webcast by TalkPoint and can be accessed at Glowpoint’s website at http://www.glowpoint.com or by linking directly to http://video.webcasts.com/events/glow001/32830. Institutional investors can also access the call via Thomson Reuters’ password-protected event management site, StreetEvents: http://www.streetevents.com.
A recording of the webcast will be available beginning November 10, 2009 and will remain archived through November 10, 2010. To listen to the audio webcast, go to www.glowpoint.com or directly at http://video.webcasts.com/events/glow001/32830.
About Glowpoint
Glowpoint, Inc. (OTCBB: GLOW - News) is a leading provider of advanced video communications solutions. Glowpoint’s suite of robust telepresence and video communications solutions enables organizations 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 www.glowpoint.com.
1) Gartner, Inc. "Dataquest Insight: Videoconferencing Products and Services Market Forecast, Worldwide, 2007-2013" by Scott Morrison, September 28, 2009
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.
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GLOWPOINT, INC. |
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September 30, 2009 |
December 31, 2008 |
|||||||
| ASSETS | (Unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,124 | $ | 1,227 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $260 and $301, respectively | 2,895 | 3,090 | ||||||
| Prepaid expenses and other current assets | 403 | 294 | ||||||
| Total current assets | 4,422 | 4,611 | ||||||
| Property and equipment, net | 2,739 | 2,533 | ||||||
| Other assets | 31 | 33 | ||||||
| Total assets | $ | 7,192 | $ | 7,177 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,855 | $ | 2,367 | ||||
| Accrued expenses | 989 | 842 | ||||||
| Accrued sales taxes and regulatory fees | 4,088 | 4,535 | ||||||
| Customer deposits | 472 | 606 | ||||||
| Deferred revenue | 257 | 325 | ||||||
| Current portion of capital lease | 116 | 161 | ||||||
| Total current liabilities | 8,777 | 8,836 | ||||||
| Long term liabilities: | ||||||||
| Senior Secured Notes, net of discount of $240 | — | 1,482 | ||||||
| Capital lease, less current portion | — | 72 | ||||||
| Total long term liabilities | — | 1,554 | ||||||
| Total liabilities | 8,777 | 10,390 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $.0001 par value 7,500 shares authorized and convertible; and 4,509 and 3,790 shares issued and outstanding recorded at fair value, respectively (liquidation value of $33,815 and $28,423, respectively) (see Note 14 for information related to Insider Purchasers – related parties) | 14,275 | 11,574 | ||||||
| Common stock, $.0001 par value;150,000,000 shares authorized; 66,542,353 and 48,374,954 shares issued; 64,977,462 and 46,810,063 shares outstanding, respectively | 7 | 5 | ||||||
| Additional paid-in capital | 150,532 | 172,000 | ||||||
| Accumulated deficit | (165,016 | ) | (185,409 | ) | ||||
| (202 | ) | (1,830 | ) | |||||
| Less: Treasury stock, 1,564,891 shares at cost | (1,383 | ) | (1,383 | ) | ||||
| Total stockholders’ deficit | (1,585 | ) | (3,213 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 7,192 | $ | 7,177 | ||||
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GLOWPOINT, INC. |
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Nine Months Ended |
Three Months Ended |
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| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Revenue | $ | 19,928 | $ | 18,557 | $ | 6,541 | $ | 6,066 | ||||||||
| Cost of revenue | 10,157 | 10,757 | 3,321 | 3,630 | ||||||||||||
| Gross margin | 9,771 | 7,800 | 3,220 | 2,436 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,656 | 2,717 | 791 | 811 | ||||||||||||
| General and administrative | 7,898 | 6,565 | 2,291 | 2,269 | ||||||||||||
| Total operating expense | 10,554 | 9,282 | 3,082 | 3,080 | ||||||||||||
| Income (loss) from operations | (783 | ) | (1,482 | ) | 138 | (644 | ) | |||||||||
| Interest and other expense (income): | ||||||||||||||||
| Interest expense, including $0, $111, $0 and $44, respectively, for Insider Purchasers | 273 | 3,425 | 60 | 1,293 | ||||||||||||
| Loss on extinguishment of debt | 254 | — | — | — | ||||||||||||
| Interest income | — | (19 | ) | — | (3 | ) | ||||||||||
| Increase (decrease) in fair value of derivative financial instruments | 1,848 | (153 | ) | 1,157 | (211 | ) | ||||||||||
| Amortization of deferred financing costs, including $37 and $13, respectively, for Insider Purchasers | — | 368 | — | 130 | ||||||||||||
| Total interest and other expense, net | 2,375 | 3,621 | 1,217 | 1,209 | ||||||||||||
| Net loss | (3,158 | ) | (5,103 | ) | (1,079 | ) | (1,853 | ) | ||||||||
| Gain (loss) on redemption of preferred stock | (64 | ) | — | 1,935 | — | |||||||||||
| Net income (loss) attributable to common stockholders | $ | (3,222 | ) | $ | (5,103 | ) | $ | 856 | $ | (1,853 | ) | |||||
| Net income (loss) attributable to common stockholders per share: | ||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.11 | ) | $ | 0.02 | $ | (0.04 | ) | |||||
| Diluted | $ | (0.07 | ) | $ | (0.11 | ) | $ | 0.01 | $ | (0.04 | ) | |||||
| Weighted average number of common shares: | ||||||||||||||||
| Basic | 49,273 | 45,440 | 55,861 | 45,590 | ||||||||||||
| Diluted | 49,273 | 45,440 | 102,901 | 45,590 | ||||||||||||
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GLOWPOINT, INC. |
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Additional Paid In Capital |
Series A-2 (Note A) Preferred Stock |
|||||||||||||||||||||||||||||||||||
| Common Stock |
Accumulated Deficit |
Treasury Stock |
||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||||
| Balance at January 1, 2009 |
|
48,375 |
|
$ |
5 |
|
$ | 172,000 | $ | (185,409 | ) |
|
4 |
|
$ |
11,574 |
|
$ |
1,565 |
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$ | (1,383 | ) | $ | (3,213 | ) | ||||||||||
| Cumulative effect of reclassification of warrants (ASC Topic 815) | — | — | (26,173 | ) | 23,551 | — | — | — | — | (2,622 | ) | |||||||||||||||||||||||||
| Balance at January 1, 2009, as adjusted | 48,375 | 5 | 145,827 | (161,858 | ) | 4 | 11,574 | 1,565 | (1,383 | ) | (5,835 | ) | ||||||||||||||||||||||||
| Net loss | — | — | — | (3,158 | ) | — | — | — | — | (3,158 | ) | |||||||||||||||||||||||||
| Stock-based compensation - stock options | — | — | 213 | — | — | — | — | — | 213 | |||||||||||||||||||||||||||
| Stock-based compensation - restricted stock | 775 | — | 225 | — | — | — | — | — | 225 | |||||||||||||||||||||||||||
| August 2009 Warrant Exchange | 17,372 | 2 | (2 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Exercise of stock options | 20 | — | 8 | — | — | — | — | — | 8 | |||||||||||||||||||||||||||
| Series A-1 Preferred Stock issued in connection with the 2009 Private Placement | — |
— |
— | — | 1 | 2,637 | — | — | 2,637 | |||||||||||||||||||||||||||
| Elimination of derivative liabilities | — | — | 4,751 | — | — | — | — | — | 4,751 | |||||||||||||||||||||||||||
| Loss on redemption of Series A Preferred Stock | — | — | (1,999 | ) | — | — | 1,999 | — | — | — | ||||||||||||||||||||||||||
| Gain on redemption of Series A-1 Preferred Stock | — | — | 1,935 | — | — | (1,935 | ) | — | — | — | ||||||||||||||||||||||||||
| Costs related to 2009 Private Placement, warrant and Preferred Stock exchange | — | — | (426 | ) | — | — | — | — | — | (426 | ) | |||||||||||||||||||||||||
| Balance at September 30, 2009 | 66,542 | $ | 7 | $ | 150,532 | $ | (165,016 | ) | 5 | $ | 14,275 | 1,565 | $ | (1,383 | ) | $ | (1,585 | ) | ||||||||||||||||||
Note A – In March 2009 the shares of Series A Preferred Stock outstanding at December 31, 2008 were exchanged for an equal number of shares of newly-created Series A-1 Convertible Preferred Stock (“Series A-1 Preferred Stock”). In August 2009 the shares of Series A-1 Preferred Stock then outstanding were exchanged for an equal number of shares of newly-created Series A-2 Convertible Preferred Stock (“Series A-2 Preferred Stock”)
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GLOWPOINT, INC. |
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Nine Months Ended |
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| 2009 | 2008 | |||||||
| Cash flows from Operating Activities: | ||||||||
| Net loss | $ | (3,158 | ) | $ | (5,103 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 790 | 959 | ||||||
| Other expense recognized for the increase in the estimated fair value of the derivative financial instruments | 1,848 | (153 | ) | |||||
| Amortization of deferred financing costs | — | 368 | ||||||
| Bad debt expense | 191 | 85 | ||||||
| Accretion of discount on Senior Secured Notes | 23 | 2,158 | ||||||
| Loss on disposal of equipment | 8 | 17 | ||||||
| Loss on extinguishment of debt | 254 | — | ||||||
| Stock-based compensation | 438 | 436 | ||||||
| Increase (decrease) attributable to changes in assets and liabilities: | ||||||||
| Accounts receivable | 4 | (442 | ) | |||||
| Prepaid expenses and other current assets | (109 | ) | (18 | ) | ||||
| Other assets | 2 | 3 | ||||||
| Accounts payable | 488 | 1,293 | ||||||
| Customer deposits | (134 | ) | (114 | ) | ||||
| Accrued expenses, sales taxes and regulatory fees | (232 | ) | 842 | |||||
| Deferred revenue | (68 | ) | 10 | |||||
| Net cash provided by operating activities | 345 | 341 | ||||||
| Cash flows from Investing Activities: | ||||||||
| Purchases of property and equipment | (1,004 | ) | (847 | ) | ||||
| Net cash used in investing activities | (1,004 | ) | (847 | ) | ||||
| Cash flows from Financing Activities: | ||||||||
| Proceeds from preferred stock offering | 1,800 | — | ||||||
| Proceeds from exercise of stock options | 8 | — | ||||||
| Principal payments for capital lease | (118 | ) | (91 | ) | ||||
| Purchase of Senior Secured Notes | (750 | ) | — | |||||
| Costs related to private placement | (384 | ) | — | |||||
| Net cash provided by (used in) financing activities | 556 | (91 | ) | |||||
| Decrease in cash and cash equivalents | (103 | ) | (597 | ) | ||||
| Cash and cash equivalents at beginning of period | 1,227 | 2,312 | ||||||
| Cash and cash equivalents at end of period | $ | 1,124 | $ | 1,715 | ||||
| Supplement disclosures of cash flow information: | ||||||||
| Cash paid during the period for | ||||||||
| Interest | $ | 108 | $ | 91 | ||||
| Non-cash investing and financing activities: | ||||||||
| Exchange of Senior Secured Notes for Series A-1 Preferred Stock | $ | 1,076 | $ | — | ||||
| Additional Senior Secured Notes issued as payment for interest | 55 | 1,020 | ||||||
| Costs related to private placement incurred by issuance of placement agent warrants | 42 | — | ||||||
| Settlement of accrued 2007 management bonus with restricted stock | — | 179 | ||||||
Contact:
Glowpoint, Inc.
Jonathan Brust, 312-235-3888, ext. 2052
jbrust@glowpoint.com
www.glowpoint.com
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