-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PfJgl34WsY+AFaoEsTiIbex6ZVOudnjrLr2KnqWRg+n+m9vJZ7HTFAfHXPvN/IfN MW51eG8hMJ37mTEEweTETQ== 0001019687-04-001669.txt : 20040803 0001019687-04-001669.hdr.sgml : 20040803 20040803093820 ACCESSION NUMBER: 0001019687-04-001669 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040728 ITEM INFORMATION: ITEM INFORMATION: Other events FILED AS OF DATE: 20040803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBIX CORP CENTRAL INDEX KEY: 0001003111 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 133781263 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14168 FILM NUMBER: 04946763 BUSINESS ADDRESS: STREET 1: 139 CENTRE STREET CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2125945300 FORMER COMPANY: FORMER CONFORMED NAME: BELL TECHNOLOGY GROUP LTD DATE OF NAME CHANGE: 19951106 8-K 1 globix_8k-072804.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) July 28, 2004 Globix Corporation (Exact name of registrant as specified in its charter) Delaware 1-14168 13-3781263 (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 139 Centre Street, New York, New York 10013 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 334-8500 Form 8-K, Current Report Globix Corporation Commission File No. 001-14168 Item 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE. --------------------------------------- On July 28, 2004, Globix Corporation issued a press release disclosing additional information about its proposed merger with NEON Communications, Inc. The press release, which was previously filed under Rule 425 under the Securities Act of 1933 (the "Securities Act"), is attached hereto as Exhibit 99.1. Item 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. ----------------------------------------------------------- On August 2, 2004, Globix Corporation issued a press release announcing its financial results for its third fiscal quarter ended June 30, 2004. A copy of the press release relating to such announcement is attached hereto as Exhibit 99.2. The information provided under this Item 12 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: August 2, 2004 Globix Corporation By: /S/ ROBERT DENNERLEIN ------------------------------ Name: Robert Dennerlein Title: Chief Financial Officer -2- EX-99.2 2 globix_8kex99-2.txt Exhibit 99.1 GLOBIX CORPORATION RELEASES ADDITIONAL INFORMATION REGARDING MERGER WITH NEON COMMUNICATIONS, INC. REMAINS CONSISTENT WITH ITS COMMITMENT TO COMMUNICATE WITH ITS CLIENTS, INVESTORS AND EMPLOYEES. NEW YORK, JULY 28, 2004 -- Globix Corporation (OTCBB:GBXX), a provider of managed applications and hosting services, today released additional information regarding its merger with NEON Communications, Inc ("NEON"). The additional information provides insight into NEON's historical business performance and outlines the motivation behind the merger, an equity transaction that has a purchase price of approximately $110 million. "NEON has been focused on growth through investments in its fiber network and collocation facilities," said Pete Stevenson, Globix CEO. "This focus is consistent with our objectives. We believe the combined organization will be well-positioned to become a market leader in providing a broad range of application services, web infrastructure management and a robust suite of network services to enterprise clients and carrier customers. We anticipate that this acquisition will add approximately $11.5 million to our quarterly revenue. Additionally, by leveraging our operational infrastructure and systems over time, we expect to generate between $5 million and $8 million in annualized profit improvements due to the anticipated synergies for the combined companies." For the year ending December 31, 2003 NEON's revenue was $41.6 million, compared to $33.7 million in 2002, an increase of $7.9 million or 23.4% more than the same period a year earlier. Quarterly revenue for 2003 was $9.5, $10.4, $10.9, and $10.8 million for quarters ending March 31, June 30, September 30 and December 31, respectively. For the quarter ending March 31, 2004 NEON's unaudited revenue was $11.6 million, an increase of $2.1 million or 22.1% over the same period a year earlier. NEON's assets were $167.0 million for the year ending December 31, 2003, of which $14.9 million were cash and investments, $8.3 million were restricted cash and $136.6 million were plant and equipment. NEON's assets were $166.9 million as of March 31, 2004 of which $14.1 million were cash and investments. $8.3 million were restricted cash and $136.9 million were plant and equipment. NEON's non-GAAP, EBITDA was $4.2 million for the year ending December 31, 2003. This represents a $5.9 million improvement compared to the year ending December 31, 2002. NEON's non-GAAP EBITDA for the quarter ending March 31, 2004 was $0.7 million. EBITDA is defined as loss from operations plus depreciation and amortization. A reconciliation to loss from operations in accordance with GAAP is provided below. In September 2003 NEON acquired Columbia Transmission Communications Corporation and assumed responsibility for the operational expenses required to support their diverse dark fiber route and collocation facilities covering markets between New York and Washington, D.C. NEON COMMUNICATIONS, INC. RECONCILIATION OF LOSS FROM OPERATIONS TO EBITDA (AMOUNT IN THOUSANDS) (Unaudited) Year Ended Year Ended Quarter Ended 12/31/2003 12/31/2002 3/31/2004 Loss from Operations $ (4,821) $ (25,083) $ (1,839) Add Back: Depreciation and amortization 8,999 23,319 2,508 - -------------------------------------------------------------------------------- EBITDA 4,178 (1,764) 669 ABOUT NEON: NEON Communications, Inc. (http://www.neoninc.com) is a privately held facilities-based wholesale provider of high bandwidth, advanced optical networking solutions and services to communications companies and enterprise customers on intercity, regional, and metro networks in the Northeast and mid-Atlantic markets. The Company's corporate headquarters is located at 2200 West Park Drive, Westborough, Massachusetts 01581. ABOUT GLOBIX: Globix (http://www.globix.com) (OTCBB:GBXX) is a leading provider of application, media and infrastructure management services. Globix provides flexible business solutions which combine skills, support, technology and experience to enable our customers to use the Internet as a way to provide business benefits and sustain a competitive advantage. By managing complex application, media and infrastructure environments, we help our clients protect Internet revenue streams, improve user satisfaction and reduce technology operating costs and risks. Our clients include operating divisions of Fortune 100 companies as well as mid-sized enterprises in a number of vertical markets including media and publishing, technology, financial services, health care and government. Globix and its subsidiaries have operations in New York NY, London UK, Santa Clara CA, Fairfield NJ, Fairfax VA and Atlanta GA. -2- WHERE TO FIND ADDITIONAL INFORMATION ABOUT THE TRANSACTION This announcement is not a recommendation, an offer to purchase or a solicitation of an offer to sell Globix shares. Globix will file with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4, including a proxy statement/prospectus relating to the NEON stockholders meeting and the issuance of the Globix common stock in connection with the merger. Investors and stockholders of NEON and Globix are urged to read these documents carefully when they become available because they will contain important information about Globix, NEON and the proposed transaction. Investors and stockholders of NEON and Globix can obtain these documents when they are filed and become available free of charge from the SEC's website at www.sec.gov. A free copy of these documents (when they become available), and any other document filed by Globix with the SEC, may also be obtained from Globix upon written request or from Globix's website at www.globix.com. Globix, NEON and their respective directors and officers may be deemed participants in the solicitation of proxies from stockholders of NEON with respect to the transactions contemplated by the merger agreement. A description of any interests that they may have in transaction will be included in the proxy statement/prospectus. RISK FACTORS AND FORWARD-LOOKING INFORMATION This press release contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. These statements are based on current information and expectations and are subject to risks and uncertainties that could cause the company's actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include: the company's ability to retain existing customers and attract new customers; its ability to match its operating cost structure with revenue to achieve positive cash flow; the sufficiency of existing cash and cash flow to complete the company's business plan and fund its working capital requirements; the insolvency of vendors and other parties critical to the company's business; the company's existing debt obligations and history of operating losses; its ability to integrate, operate and upgrade or downgrade its network; the company's ability to recruit and retain qualified personnel needed to staff its operations; potential market or technological changes that could render the company's products or services obsolete; changes in the regulatory environment; and other changes that are discussed in the company's Annual Report on Form 10-K and other documents that the company files with the SEC. Media Contacts: Chris Capra / Paul Del Colle Lotus Public Relations 212-922-5885 -3- EX-99.1 3 globix_8kex99-1.txt Exhibit 99.2 GLOBIX CORPORATION REPORTS THIRD FISCAL QUARTER 2004 RESULTS THIRD CONSECUTIVE QUARTER OF REVENUE GROWTH AND ATTAINED POSITIVE ADJUSTED EBITDA NEW YORK, August 2, 2004 -- Globix Corporation (OTCBB:GBXX) today reported financial results for its Q3 of fiscal year 2004, which ended June 30, 2004. During the quarter, Globix continued to make improvements to its financial position, remaining committed to its goal of sustained positive cash flow and growing its business. A major highlight of the quarter was the achievement of a positive adjusted EBITDA. Revenue for the quarter was $15.7 million, which was $1.2 million or 8.3 percent higher than the same period in 2003. Additionally, Globix realized an increase in its revenue quarter over quarter. Compared to the quarter ended March 31, 2004, revenue increased $700 thousand, or 4.7 percent from $15.0 million. Loss from operations was $3.6 million for Q3 of 2004, compared to a loss of $3.4 million for the same period a year earlier. Net loss for the quarter was $5.6 million or 34 cents basic and diluted loss per share, based on 16,460,000 common shares outstanding at the end of the quarter. During this quarter, Globix increased its recurring service contracts by an average of 1.0 percent per month, compared to an average decrease of 1.7 percent per month for the same period in the prior year. Globix ended the third quarter with approximately 1,390 customers with average Monthly Recurring Revenue per customer (ARPU) of $3,375. This represents an increase in ARPU of 3.8 percent over Q2, despite a 2.0 percent decrease in total customers. Globix is continuing to attract customers to its higher priced services while successfully providing additional services to its current customer base. Globix attributes this to the greater utilization of its bundled services offerings and the ability to offer the market a suite of managed services, overall addressing a wider range of customer needs. On a non-GAAP basis, Adjusted EBITDA was $135 thousand, an improvement of $571 thousand and $1,396 thousand from the quarters ended March 31, 2004 and December 31, 2003, respectively. EBITDA is defined as net loss plus interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to include or exclude as appropriate (i) non-cash stock based compensation, (ii) impairment charges and (iii) rental income. EBITDA and Adjusted EBITDA are not recognized financial measures under GAAP and do not purport to be alternatives to operating loss as indicators of operating performance. Globix provides information on EBITDA and Adjusted EBITDA because it believes adjusted EBITDA is an indicator of its operating profitability since it excludes items which are not directly attributable to its ongoing business operations and as such, is subjective in nature. Reconciliation between Globix's adjusted EBITDA loss and operating loss is provided later in this press release. As previously announced, Globix has entered into a merger agreement pursuant to which Globix has agreed to issue stock in exchange for shares of NEON Communications, Inc., a privately held provider of optical networking services for customers in the Northeast and mid-Atlantic markets. Globix intends to schedule its next investor conference call to occur following the effective date of the registration statement that will be filed in connection with the merger. GLOBIX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in Thousands, Except Share and Per Share Data) June 30, September 30, 2004 2003 --------- ------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 10,954 $ 24,503 Short-term investments 8,501 7,226 Marketable securities 507 1,531 Accounts receivable, net of allowance for doubtful accounts of $2,163 and $2,646, respectively 5,964 6,012 Prepaid expenses and other current assets 6,083 4,497 Restricted cash 2,068 2,195 --------- --------- Total current assets 34,077 45,964 Investments 2,233 697 Investments, restricted 2,335 4,733 Property, plant and equipment, net 92,450 162,630 Intangible assets, net of accumulated amortization of $3,267 and $1,997, respectively 8,088 8,158 Other assets 426 100 --------- --------- Total assets $ 139,609 $ 222,282 ========= ========= -2- Liabilities and Stockholders' Equity Current liabilities: Current portion of capital lease obligation and mortgage payable $ 562 $ 1,510 Accounts payable 5,203 5,846 Accrued liabilities 9,957 10,159 ---------- ---------- Total current liabilities 15,422 17,515 Capital lease obligations, net of current portion 185 374 Mortgage payable 19,681 19,912 11% Senior Notes 72,202 112,321 Accrued interest - 11% Senior Notes 1,347 5,182 Other long term liabilities 8,153 10,659 Put-option liability -- 2,968 ---------- ---------- Total liabilities 116,990 168,931 ---------- ---------- Commitments and contingencies Stockholders' Equity: Common stock, $.01 par value; 500,000,000 shares authorized; 16,460,000 issued and outstanding, for all periods presented 165 165 Additional paid-in capital 99,981 97,191 Accumulated other comprehensive income 4,672 2,401 Accumulated deficit (82,199) (46,406) ---------- ---------- Total stockholders' equity 22,619 53,351 ---------- ---------- Total liabilities and stockholders' equity $ 139,609 $ 222,282 ========== ========== -3- GLOBIX CORPORATION AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in Thousands, Except Share and Per Share Data) (Unaudited) For the Three For the Nine Months Ended Months Ended ----------------------- ----------------------- June 30, June 30, June 30, June 30, 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Revenue, net $ 15,729 $ 14,519 $ 45,143 $ 46,367 Operating costs and expenses: Cost of revenue (excluding depreciation, amortization, certain payroll and occupancy shown below) 4,935 4,601 14,785 15,499 Selling, general and administrative 10,870 9,253 32,554 33,714 Loss on impairment of assets -- -- 17,972 -- Depreciation and amortization 3,519 4,057 10,363 11,900 ----------- ----------- ----------- ----------- Total operating costs and expenses 19,324 17,911 75,674 61,113 Other operating income -- -- -- 345 ----------- ----------- ----------- ----------- Loss from operations (3,595) (3,392) (30,531) (14,401) Interest and financing expense (2,466) (3,758) (8,975) (11,223) Interest income 100 295 415 1,030 Other (expense) income, net 412 220 1,607 606 Gain on discharge of debt -- 1,154 1,747 5,925 Minority interest in subsidiary -- 105 -- 333 ----------- ----------- ----------- ----------- Loss before income taxes (5,549) (5,376) (35,737) (17,730) Income tax expense 21 -- 56 -- ----------- ----------- ----------- ----------- Net loss $ (5,570) $ (5,376) $ (35,793) $ (17,730) =========== =========== =========== =========== Basic and diluted loss per share $ (0.34) $ (0.33) $ (2.17) $ (1.08) =========== =========== =========== =========== Weighted average common shares outstanding--basic and diluted 16,460,000 16,460,000 16,460,000 16,460,000 =========== =========== =========== =========== -4- Reconciliation of Loss From Operation to Adjusted EBITDA (Amounts in Thousands) (Unaudited) For the Three Months Ended ------------------------------------- June 30, March 31, December 31, 2004 2004 2003 ---------- ---------- ---------- Loss from operations $ (3,595) $ (4,817) $ (22,119) Add Back: Depreciation and amortization 3,519 3,473 3,371 Loss on impairment of assets 0 659 17,313 Amortization of deferred compensation (13) (21) 34 Rental income 224 270 140 ---------- ---------- ---------- ADJUSTED EBITDA(LOSS) $ 135 $ (436) $ (1,261) ========== ========== ========== ABOUT GLOBIX: Globix (http://www.globix.com)(GBXX) is a leading provider of managed Internet applications and infrastructure services for enterprises. Globix delivers and supports mission-critical applications and services via its secure Data Centers, high-performance global Tier 1 IP backbone, and content delivery network. Through Aptegrity, its managed services group, Globix provides remote management of custom and off-the-shelf Web-based applications on any server, anywhere, at any time. By managing such complex e-commerce, database, content management and customer relationship management software for its clients, Globix helps them to protect Internet revenue streams, reduce technology operating costs and operating risk, and improve user satisfaction. Globix's clients are companies which use the Internet as a way to provide business benefits and sustain a competitive advantage in their markets. Our clients include operating divisions of Fortune 100 companies as well as mid-sized enterprises in a number of vertical markets including health care, media and publishing, technology and financial services. Globix and its subsidiaries have operations in New York, London, Santa Clara, Fairfield, New Jersey and Atlanta. -5- RISK FACTORS AND FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements are based on current information and expectations and are subject to risks and uncertainties that could cause the company's actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include: the company's ability to retain existing customers and attract new customers; its ability to match its operating cost structure with revenue to achieve positive cash flow; the sufficiency of existing cash and cash flow to complete the company's business plan and fund its working capital requirements; the insolvency of vendors and other parties critical to the company's business; the company's existing debt obligations and history of operating losses; its ability to integrate, operate and upgrade or downgrade its network; the company's ability to recruit and retain qualified personnel needed to staff its operations; potential market or technological changes that could render the company's products or services obsolete; changes in the regulatory environment; and other changes that are discussed in the company's Annual Report on Form 10-K and other documents that the company files with the Securities and Exchange Commission. The Globix Corporation logo is available at: http://media.primezone.com/prs/single/?pkgid=487 - ------------------------------------------------ CONTACT: Lotus Public Relations Chris Capra 212-922-5885 chris.capra@lotus-pr.com - ------------------------ -6- -----END PRIVACY-ENHANCED MESSAGE-----