DENVER, Nov. 14, 2017 (GLOBE NEWSWIRE) — Glowpoint, Inc. (NYSE American:GLOW), a leading provider of cloud-based video collaboration services and network solutions, reported financial results for the three and nine months ended September 30, 2017.
- Revenue of $11.4 million, net income of $5.8 million and adjusted EBITDA of $1.0 million for the nine months ended September 30, 2017, or 9% of revenue. Adjusted EBITDA is a non-GAAP financial measure, see GAAP to non-GAAP reconciliation later in this release.
- Generated cash flow from operations of $1.1 million for the nine months ended September 30, 2017.
- Completed recapitalization of the Company’s debt obligations on July 31, 2017, which reduced debt and accrued interest obligations by $9.4 million and lowered outstanding shares of common stock by 0.4 million.
- Cash of $1.4 million and working capital of $0.7 million as of September 30, 2017.
- Stockholders’ equity of $10.0 million as of September 30, 2017. The Company expects to meet the continued listing standards of the NYSE American Company Guide relating to a minimum stockholders’ equity balance of $6.0 million following filing of the Company’s 2017 Form 10-K in March 2018 (as the Company must report two consecutive quarters of being in compliance with such standards).
Closed October 2017 Series B Convertible Preferred Stock Offering
On October 24, 2017, the Company closed a registered direct offering of 2,800 shares of Series B convertible preferred stock for total gross proceeds to the Company of $2,800,000. The shares of Series B convertible preferred stock were sold at a price equal to their stated value of $1,000 per share and are convertible into shares of the Company’s common stock at a conversion price of $0.28 per share (the “Series B Offering”).
- The Company’s pro forma cash, working capital and stockholders’ equity as of September 30, 2017, when including the net proceeds of the Series B Offering, were $3.8 million, $3.0 million and $12.3 million, respectively.
“We are pleased to have significantly strengthened our balance sheet by completing both the recapitalization of our debt in July and then closing a preferred stock offering for gross proceeds of $2.8 million in October,” said Glowpoint CFO David Clark.
“The market for all forms of conferencing and collaboration is rapidly evolving. While demand for remote access to colleagues, clients and partners is clearly increasing, the means by which we do so is expanding and more diverse than ever,” said Glowpoint President and CEO Peter Holst. “With a strengthened balance sheet, the Company is now developing new services that extend its mastery of video conferencing into a broader support platform with the goal of accelerating end user adoption of UC1 applications. According to Wainhouse Research2, the 2016 UCaaS3 market was $6 billion, and is projected to grow to $14 billion in 2021 – a 5 year CAGR of 18%. There were 133 million UCaaS seats in 2016 – projected to grow to 343 million in 2021 but only an estimated 18% were actively used for UC. Given the growing market opportunity for end user adoption, the Company intends to release a subset of new services in the first half of 2018 to a select group of current and prospective customers who want to accelerate user transformation quickly and efficiently as they move to cloud services. We look forward to working with our customers and partners as they look to more effectively migrate and adopt next generation collaboration services.”
Glowpoint’s results from operations and financial condition are more fully discussed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 on file with the Securities and Exchange Commission. Investors are encouraged to carefully review this Form 10-Q for a complete analysis of our results from operations and financial condition.
1 The Term “UC” refers to Unified Communications – UC provides the user with a software client that unifies a specific set of features, including a presence enabled directory, instant messaging (IM), audio (VoIP), IP video, the ability to share an application or desktop, and the ability to conference with 3 or more participants.
2 Wainhouse Research – 2017 Unified Communications as a Service (UCaaS) Forecast” – Sept, 2017
3 Unified Communications as a Service (UCaaS) is a sophisticated solution unifying communications tools on a single platform and accessible through the cloud.
Glowpoint, Inc. (NYSE American: GLOW) is a managed service provider of video collaboration and network applications. Our services are designed to provide a comprehensive suite of automated and concierge applications to simplify the user experience and expedite the adoption of video as the primary means of collaboration. Our customers include Fortune 1000 companies, along with small and medium enterprises in a variety of industries. 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, taxes, stock-based compensation and stock-based expense, impairment charges, and interest and other income (expense), net. 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 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. A list and description of these and other risk factors can be found in the Company’s Annual Report on Form 10-K for the year ending December 31, 2016. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
|Accounts receivable, net||1,367||1,635|
|Prepaid expenses and other current assets||767||978|
|Total current assets||3,573||3,753|
|Property and equipment, net||1,339||2,203|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Current portion of long-term debt||$||1,298||$||10,660|
|Accrued expenses and other liabilities||846||1,165|
|Liability for common stock warrants||165||—|
|Accrued sales taxes and regulatory fees||310||395|
|Total current liabilities||2,877||12,342|
|Long term liabilities:|
|Deferred tax liability||—||230|
|Long term debt, net of current portion||490||—|
|Total long term liabilities||490||230|
|Preferred stock, Series A-2, convertible; $.0001 par value; $7,500 stated value; 7,500 shares authorized, 32 shares
issued and outstanding and liquidation preference of $237 at September 30, 2017 and December 31, 2016
|Common stock, $.0001 par value; 150,000,000 shares authorized; 36,782,000 issued and 36,130,000 outstanding at
September 30, 2017 and 36,659,000 issued and 36,455,000 outstanding at December 31, 2016
|Treasury stock, 652,000 and 204,000 shares at September 30, 2017 and December 31, 2016, respectively||(353||)||(219||)|
|Additional paid-in capital||180,656||180,333|
|Total stockholders’ equity||9,963||3,928|
|Total liabilities and stockholders’ equity||$||13,330||$||16,500|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Cost of revenue (exclusive of depreciation and amortization)||1,988||2,609||6,697||9,187|
|Research and development||296||229||875||817|
|Sales and marketing||69||70||369||576|
|General and administrative||970||1,664||2,843||4,009|
|Depreciation and amortization||451||455||1,370||1,509|
|Total operating expenses||5,481||5,632||13,866||16,728|
|Loss from operations||(2,000||)||(1,288||)||(2,449||)||(1,778||)|
|Interest expense and other, net||(197||)||(362||)||(916||)||(1,081||)|
|Gain on extinguishment of debt||9,045||—||9,045||—|
|Amortization of debt discount||(28||)||(18||)||(64||)||(54||)|
|Interest and other income (expense), net||8,820||(380||)||8,065||(1,135||)|
|Income (loss) before income taxes||6,820||(1,668||)||5,616||(2,913||)|
|Income tax benefit (expense)||284||(37||)||230||(108||)|
|Net income (loss)||7,104||(1,705||)||5,846||(3,021||)|
|Preferred stock dividends||3||3||9||9|
|Net income (loss) attributable to common stockholders||$||7,101||$||(1,708||)||$||5,837||$||(3,030||)|
|Net income (loss) attributable to common stockholders per share:|
|Basic net income (loss) per share||$||0.19||$||(0.05||)||$||0.16||$||(0.09||)|
|Diluted net income (loss) per share||$||0.19||$||(0.05||)||$||0.15||$||(0.09||)|
|GAAP to Non-GAAP Reconciliation:|
|Net income (loss)||$||7,104||$||(1,705||)||$||5,846||$||(3,021||)|
|Depreciation and amortization||451||455||1,370||1,509|
|Interest and other (income) expense, net||(8,820||)||380||(8,065||)||1,135|
|Income tax (benefit) expense||(284||)||37||(230||)||108|
|* Represents a loss|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|Nine Months Ended September 30,|
|Cash flows from operating activities:|
|Net income (loss)||$||5,846||$||(3,021||)|
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:|
|Depreciation and amortization||1,370||1,509|
|Bad debt expense (recovery)||(8||)||6|
|Amortization of debt discount||64||54|
|Non-cash interest expense||213||—|
|Stock-based compensation expense||377||748|
|Gain on debt extinguishment||(9,045||)||—|
|Accrued non-cash stock-based expense||—||168|
|Deferred tax provision (benefit)||(230||)||111|
|Changes in assets and liabilities:|
|Prepaid expenses and other current assets||211||(342||)|
|Accrued expenses and other liabilities||246||(281||)|
|Accrued sales taxes and regulatory fees||(85||)||—|
|Net cash provided by operating activities||1,073||265|
|Cash flows from investing activities:|
|Purchases of property and equipment||(93||)||(273||)|
|Net cash used in investing activities||(93||)||(273||)|
|Cash flows from financing activities:|
|Principal payments under borrowing arrangements||(341||)||(400||)|
|Proceeds from new loan agreements, net of expenses of $170||2,030||—|
|Payment of equity issuance costs||(45||)||—|
|Purchase of treasury stock||(2,325||)||(13||)|
|Net cash used in financing activities||(681||)||(413||)|
|Increase (decrease) in cash and cash equivalents||299||(421||)|
|Cash at beginning of period||1,140||1,764|
|Cash at end of period||$||1,439||$||1,343|
|Supplemental disclosures of cash flow information:|
|Cash paid during the period for interest||$||777||$||841|
|Non-cash investing and financing activities:|
|Accrued preferred stock dividends||$||9||$||9|
|Retired debt and accrued interest obligations in exchange for treasury stock||$||2,191||$||—|
|Recognition of prepaid equity issuance costs as additional paid-in capital||$||—||$||18|