EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

CONTACTS:

John Ferron

GoAmerica

CFO and COO

jferron@goamerica.com

415-408-2340

Laura Kowalcyk

CJP Communications

lkowalcyk@cjpcom.com

212-279-3115 x209

GOAMERICA® ANNOUNCES THIRD QUARTER 2008 RESULTS

Continued Growth in Revenue, Margins, and Operating Profitability

[NOVATO, CA], November 14, 2008 — GoAmerica, Inc. (NASDAQ: GOAM), a provider of relay and wireless communications and professional interpreter services for deaf, hard-of-hearing, and speech-impaired persons, today announced unaudited results for the quarter ended September 30, 2008 and the filing of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”).

Total revenue for the three months ended September 30, 2008 was $35.7 million, compared to $4.8 million for the three months ended September 30, 2007. Total revenue for the nine months ended September 30, 2008 was $95.4 million, compared to $13.4 million for the nine months ended September 30, 2007. The revenue growth is primarily attributable to the Company’s first quarter purchase of the telecommunications relay services business of Verizon and its merger with Hands on Video Relay Services, Inc., its third quarter purchases of Sign Language Associates (SLA) and Visual Language Interpreting (VLI), as well as organic growth in the Company’s video relay services business.

Income from operations for the three months ended September 30, 2008 was approximately $828,000 compared with a loss from operations of $851,000 for the three months ended September 30, 2007. Income from operations for the nine months ended September 30, 2008 was approximately $4.2 million, compared with a loss from operations of $2.3 million for the nine months ended September 30, 2007.

Net loss for the three months ended September 30, 2008 was approximately $1.3 million compared with a net loss of $861,000 for the three months ended September 30, 2007. Net loss available to common stockholders, when taking into account the $840,000 of accrued preferred stock dividends, was $2.2 million, or $0.24 per common share, for the three months ended September 30, 2008 compared with a net loss $881,000, or $0.39 per common share, for the three months ended September 30, 2007. Net loss for the nine months ended September 30, 2008 was approximately $1.0 million compared with a net loss of $2.4 million for the nine months ended September 30, 2007.


Earnings before interest, taxes, depreciation and amortization (“EBITDA”), which is a non-GAAP measure, for the three months ended September 30, 2008 was $5.8 million, when adjusting for approximately $0.6 million of non-cash employee compensation charges, $0.7 million of restructuring charges and $1.7 million of integration costs related to the acquisitions as measured under the terms of the Company’s Credit Agreement. EBITDA, when taking into account these adjustments, for the nine months ended September 30, 2008 was $17.6 million.

Cash provided from operations for the nine months ended September 30, 2008 was $7.6 million, principally resulting from income from operations. Capital expenditures for the nine months ended September 30, 2008 were $3.0 million, used primarily to fund capacity expansion and call center operations, including telecommunications infrastructure.

GoAmerica had approximately $18.9 million in unrestricted cash and cash equivalents as well as $0.5 million in restricted cash. Additionally, the Company has $15.0 million of borrowing capacity under its revolving line of credit. The Company receives a significant majority of its payments from federal and state government agencies and as a result experiences a favorable cash collection cycle.

On July 1, 2008, the Company announced it had merged with two of the nation’s premier sign language interpreting services firms: Sign Language Associates (SLA) and Visual Language Interpreting (VLI), both of which are based in the Washington, D.C. metro area. The SLA and VLI transactions made GoAmerica the nation’s leading provider of on-site sign language interpreting services, and will provide broader access to Video Remote Interpreting (VRI) services for its customers. The transactions also expand the availability of certified, high-quality interpreters and transcriptionists for the Company’s other products and services.

“With the addition of SLA and VLI we are now bringing together five operations into one and we are making significant strides,” said John Ferron, CFO/COO of GoAmerica. “We have redefined our organizational structure, moved our headquarters to California, and have filled key positions in the organization as well as focused on the more traditional integration activities. There’s more to be achieved through the balance of the fourth quarter and we expect full integration to be complete by the end of the first quarter of 2009. During this timeframe, we remain keenly focused on operational performance as well as implementing initiatives to improve our cost structure post integration.”

“As part of the overall integration activities, we have unified our service brands underneath the umbrella brand Purple ™ further tying our end-to-end service solutions to one brand promise, and an easily recognizable graphical connection. All of our service brands will now have elements of Purple in their execution, and will be supported by the shared slogan “Powered by Purple™.” This new brand platform provides us with reach and flexibility needed to continue to add to our portfolio of service brands, as we continue to look for ways to expand our service offerings.” said Ed Routhier, President and Vice-Chairman of GoAmerica.

“Strategically we are in a strong position given our favorable liquidity and that our three sources of revenue, text relay, video relay and community interpreting, are non-cyclical and do not heavily rely on discretionary consumer spending to grow,” said Dan Luis, CEO of GoAmerica. “We continue to invest in our people, infrastructure, and product development initiatives as we position ourselves for growth and remaining the employer of choice. I am optimistic that our new products and services will result in enhanced growth opportunities in 2009.”


About GoAmerica

GoAmerica is one of the nation’s largest providers of communication services for the deaf, hard of hearing, and speech-disabled communities. As a leading provider of onsite interpreting services, video relay and text relay services, and video remote interpreting, the Company delivers a wide array of options designed to meet the varied communication needs of its customers. The Company’s vision is to improve the quality of life of its customers by being their premier provider of high quality, innovative communication services that break down communications barriers. For more information on the Company or its services, visit http://www.goamerica.com or contact GoAmerica directly at TTY 201-527-1520, voice 201-996-1717, Internet Relay by visiting http://www.i711.com or http://www.ip-relay.com, or video phone by connecting to hovrs.tv.

Safe Harbor

The statements contained in this news release that are not based on historical fact — including statements regarding the anticipated results of the transactions described in this press release — constitute “forward-looking statements” that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve risks and uncertainties, including, but not limited to: (i) our ability to integrate the businesses and technologies we have acquired; (ii) our ability to respond to the rapid technological change of the wireless data industry and offer new services; (iii) our dependence on wireless carrier networks; (iv) our ability to respond to increased competition in the wireless data industry; (v) our ability to generate revenue growth; (vi) our ability to increase or maintain gross margins, profitability, liquidity and capital resources; and (vii) difficulties inherent in predicting the outcome of regulatory processes. Such risks and others are more fully described in the Risk Factors set forth in our filings with the Securities and Exchange Commission. Our actual results could differ materially from the results expressed in, or implied by, such forward-looking statements. GoAmerica is not obligated to update and does not undertake to update any of its forward looking statements made in this press release. Each reference in this news release to “GoAmerica”, the “Company” or “We”, or any variation thereof, is a reference to GoAmerica, Inc. and its subsidiaries.

“GoAmerica”, the “GoAmerica” logo, “i711”, and the “i711.com” logo, “Relay and Beyond”, and “Hands On VRS” are registered trademarks of GoAmerica. “i711.com”, “i711 Wireless”, “Mobile Video Phone”, and “MVP” are trademarks and service marks of GoAmerica. Other names may be trademarks of their respective owners.


GOAMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     September 30,
2008
   December 31,
2007

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 18,889    $ 2,368

Accounts receivable, net

     15,005      1,960

Merchandise inventories, net

     370      206

Prepaid expenses and other current assets

     1,559      220
             

Total current assets

     35,823      4,754

Goodwill

     75,473      6,000

Identifiable intangible assets, net

     58,162      —  

Other assets

     9,303      7,544
             

Total assets

   $ 178,761    $ 18,298
             

Liabilities and stockholders’ equity

     

Current liabilities:

     

Accounts payable

   $ 3,888    $ 1,285

Accrued expenses

     11,507      3,623

Deferred revenue

     —        94

Loan payable

     —        3,532

Current portion of long term debt

     400      —  

Other current liabilities

     132      88
             

Total current liabilities

     15,927      8,622

Long term debt less current portion, net of discount of $2,080 at September 30, 2008

     67,220      —  

Other liabilities

     2,780      124

Deferred tax liability

     12,048   

Stockholders’ equity

     80,786      9,552
             
   $ 178,761    $ 18,298
             


GOAMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2008     2007     2008     2007  

Revenues:

        

Relay services

   $ 30,644     $ 4,293     $ 88,348     $ 11,787  

Interpreting

     5,024       —         6,285       —    

Other

     67       543       814       1,661  
                                
     35,735       4,836       95,447       13,448  

Costs and expenses:

        

Cost of relay services

     15,972       2,999       47,607       8,074  

Cost of interpreting

     3,996       —         5,235       —    

Cost of other

     65       444       959       1,393  

Sales and marketing

     2,990       612       8,702       1,615  

General and administrative

     8,721       1,479       20,693       4,092  

Research and development

     1,068       59       2,479       316  

Depreciation and amortization

     284       94       714       257  

Amortization of intangible assets

     1,811       —         4,841       —    
                                
     34,907       5,687       91,230       15,747  
                                

Income (loss) from operations

     828       (851 )     4,217       (2,299 )

Other income (expense):

        

Settlement losses

     —         —         —         (162 )

Gain on interest rate cap agreement

     (130 )     —         111       —    

Interest income (expense), net

     (1,819 )     (10 )     (5,092 )     49  
                                

Total other income (expense), net

     (1,949 )     (10 )     (4,981 )     (113 )
                                

Income (loss) before income taxes

     (1,121 )     (861 )     (764 )     (2,412 )

Income tax provision

     202       —         202       —    
                                

Net income (loss)

     (1,323 )     (861 )     (966 )     (2,412 )

Preferred dividends

     (840 )     (20 )     (2,367 )     (20 )
                                

Net loss applicable to common stockholders

   $ (2,163 )   $ (881 )   $ (3,333 )   $ (2,432 )
                                

Loss per common share:

        

Basic

   $ (0.24 )   $ (0.39 )   $ (0.36 )   $ (1.10 )
                                

Diluted

   $ (0.24 )   $ (0.39 )   $ (0.36 )   $ (1.10 )
                                

Weighted average shares outstanding

        

Basic and Diluted

     9,159,452       2,239,966       9,154,637       2,216,349