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Glowpoint Reports Third Quarter 2012 Results
Company Closes Affinity VideoNet Acquisition and Sees Increased Sales Bookings
By: PR Newswire
Nov. 8, 2012 04:10 PM
MURRAY HILL, N.J., Nov. 8, 2012 /PRNewswire/ -- Glowpoint, Inc. (NYSE MKT: GLOW), a leading global provider of cloud and managed visual communication services, today reported its financial results for the third quarter ended September 30, 2012.
Third quarter revenues for cloud and managed visual communication services ("Managed Services Combined" as reported) were $3.2 million, an increase of 1.3% over the same period last year. Managed Services Combined represents 49% of total revenues in the quarter, up from 46% in the prior year period. Network services revenues for the quarter were $3.0 million, a decrease of 8.7% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $359,000 for the quarter, compared to $383,000 in the same period last year.
Adjusted EBITDA (as defined and reconciled to GAAP) for the third quarter was $571,000, a decrease of $266,000 over the same period last year. Adjusted EBITDA margin was 8.7% compared to 12.3% in the same period last year. Net loss for the third quarter was $592,000, a decrease of $628,000 in net income over the same period last year, primarily attributed to one time expenses associated with the acquisition of Affinity VideoNet that closed in the beginning of fourth quarter.
"Adjusted EBITDA declined in Q3 as a result of the investments we've made in bringing on new sales resources combined with slower usage revenues," said Joe Laezza, Glowpoint's President and CEO. "We added additional sales resources in Q3, which is beginning to already have a positive impact on sales bookings that will increase growth levels in the coming quarters."
For the nine months ended September 30, 2012, cloud and managed visual communication services revenues ("Managed Services Combined" as reported) were $9.7 million, an increase of 3.9% as compared to the same period last year. Network services revenues for the nine-month period were $9.2 million, a decrease of 9.8% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $1.2 million for the nine-month period, compared to $1.3 million in the same period last year.
Adjusted EBITDA for the nine-month period ended September 30, 2012 was $2.1 million, an increase of $476,000, or 29% over the same period last year. Net loss for the nine months ended September 30, 2012 was $172,000, a decrease in income of $257,000 over the same period last year.
"Sales bookings have increased in the quarter and we expect to begin to see the benefit of this in the Q4 period and heading into the new year. We are still seeing some delays in highly qualified sales opportunities. However, there are positive indications that the buying decision-making process is taking shape to the benefit of Glowpoint and the shift from on-premise deployment of appliance-based devices to cloud consumption of software-based services is accelerating," added Laezza.
"Our operating results in Q3 slowed, although we generated cash from operating activities despite heavy investments associated with sales and the acquisition of Affinity VideoNet," said Tolga Sakman, Glowpoint's CFO and SVP of Corporate Development. "With the positive trends in sales bookings and momentum with the recent acquisition, we believe there is good evidence of strong operating results into the coming periods."
Key business metrics
"Usage volumes were slower than usual during the summer months this year, although we are seeing a return to normal levels, and in fact progressively increasing to high growth levels. Our service offerings on the OpenVideo® cloud platform provides self use cloud services and the most diverse set of managed services which allow our customers to migrate from on premise fixed appliance solutions to a more managed and cloud service providing expanded use of video beyond conference rooms to desktops and mobile devices," added Laezza.
For the nine-month period ended September 30, 2012, capital expenditures were $547,000, and as of November 8, 2012 there were 28,795,296 shares of common stock outstanding.
Closed Acquisition of Affinity VideoNet
As previously announced (http://www.glowpoint.com/press-releases/86/glowpoint-completes-acquisition-of-affinity-videonet), the Company completed the acquisition of privately held Affinity VideoNet on October 1, 2012.
The acquisition expands the customer base of Glowpoint while adding the public videoconferencing room business that Affinity is known for. Affinity's customer base in the professional services verticals such as executive search and legal can now take advantage of the expanded cloud and managed services offerings from OpenVideo. Integration activities are on pace and expected to be finalized by Q1 2013.
In addition, Glowpoint has entered into a multi-year global managed video services agreement with Regus (http://www.regus.com), the world's largest provider of flexible workspaces.
"This agreement represents a key component of our differentiating value, since we now deliver the world's largest uniform network of public video conferencing suites as an extension of the OpenVideo® cloud suite of offerings," said Laezza. With Affinity, Regus and our existing partnerships with Tata Communications and Sabre, our customers will have unique access to the broadest network of public video conference and Telepresence suites in the market today."
Glowpoint will host a conference call at 4:30 p.m. EST today to discuss the financial results for Q3 2012. To view the webcast, please visit: http://video.webcasts.com/events/glow001/44576/. 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 and managed video services that make video meetings simple, reliable, and the standard for bringing people together for business meetings. Through our OpenVideo® cloud, we make video meetings the replacement for in person and audio conferencing with our suite of cloud and managed services that permit any device to connect across any network, simply and reliably. Glowpoint supports hundreds of clients located in 68 countries and is the trusted partner for leading unified communications providers, telepresence manufacturers, global carriers and A/V integration firms. In addition, Glowpoint offers access to thousands of public videoconferencing facilities to extend businesses reach and provide the ability to meet face to face across the globe without boundaries. To learn more please visit www.glowpoint.com.
Non-GAAP Financial Information
Adjusted EBITDA is defined as income (loss) from continuing operations before depreciation, amortization, interest expense, interest income, taxes, stock-based compensation, acquisition costs 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.
SOURCE Glowpoint, Inc.
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