EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 exhibit99-1.htm
Exhibit 99.1
MEDIA CONTACT:
INVESTOR RELATIONS CONTACT:
Cheryl Cink, for Glowpoint
Jonathan Brust
 
Glowpoint, Inc.
+1 530-756-4630
+1 312-235-3888, ext. 2052
ccink@comunicano.com
jbrust@glowpoint.com
www.glowpoint.com
www.glowpoint.com
 
 
   
MEDIA CONTACT:
INVESTOR RELATIONS CONTACT:
Cheryl Cink, for Glowpoint
Jonathan Brust
 
Glowpoint, Inc.
+1 530-756-4630
+1 312-235-3888, ext. 2052
ccink@comunicano.com
jbrust@glowpoint.com
www.glowpoint.com
www.glowpoint.com
 
Glowpoint Reports Second Quarter 2010 Results

HILLSIDE, N.J., Aug. 11, 2010 – Glowpoint, Inc. (OTCBB: GLOW), a global provider of managed services for telepresence and video conferencing, today announced financial results for the second quarter ended June 30, 2010.

Combined core revenue for the six months ended June 30, 2010 was $13.60 million, an increase of 7.9 percent from the comparable six-month period of 2009. The Company also had a 7.5 percent increase in quarterly core revenue from the comparable quarter of 2009. Core revenue is made up of recurring subscription and related revenues and non-subscription, usage-based conferencing services.

Given the current level of business activity, the Company sees its 2010 core revenue continuing to grow on a sequential quarterly basis, with the higher margin, managed services revenue accounting for the largest component of this growth. The Company’s investments in sales, marketing, service development, and operations, despite having a short-term impact on profitability, are expected to be the basis for accelerating growth and improved operating leverage during the second half of 2010 and the following year.

Highlights for the Six-Month Period and Second Quarter
 
·  
Increased Core Revenue: Driven by continued growth in managed video services revenue, which increased by more than 74 percent from the comparable six-month period of 2009, overall core revenue increased 7.9 percent to $13.60 million, for the six-month period, from $12.6 million in the comparable period for 2009, and increased 7.5 percent to $7.08 million, from $6.59 million in the comparable quarter of 2009.
 
·  
Enhanced Global Strategic Partnerships: Glowpoint continues to expand and enhance its partnerships with firms such as TATA Communications and Polycom. These relationships support the go-to-market strategy and product enhancements of Glowpoint’s cloud-based suite of managed services.
 
·  
Improved Operating Liquidity: The Company secured a credit facility of $5 million with Silicon Valley Bank to further fund its growth.
 
·  
Continued Investments in Product Development and Sales and Operating Efficiencies: The Company’s investments in sales, marketing, product development, and operations are anticipated to drive continued growth and improved operating margins in the coming quarters. The Company had an adjusted loss from operations of approximately $421,000, which excludes one-time charges, depreciation, and stock-based compensation.
 
 
 

 
 
·  
Compelling Industry Dynamics: Published industry trends and forecasts indicated accelerated adoption and utilization of telepresence and high-definition video conferencing solutions across the corporate enterprise. The Company is the only publicly traded “pure play” exclusively targeting this growing market.

“Our focus continues to be investing in product, sales and marketing, strategic partnerships, and operating efficiencies, and we look forward to seeing a return on these investments in the very near future,” said Joe Laezza, Glowpoint’s president and chief executive officer. “Glowpoint’s services are recognized globally, and we will continue to work to capitalize on our unique position in a dynamic market of unified communications.”
 
Ed Heinen, Glowpoint’s chief financial officer and executive vice president of finance, further commented, “We are well capitalized, and confident in our cash position and ability to achieve top and bottom line growth, as we enter the second half of this year. We are focused on accelerating our growth rate in the second half of 2010, and beyond, with improved operating leverage. Given the growing, addressable global market opportunity, we believe that our defined approach will build sustainable long-term profitability and enhanced shareholder value.”
 
As reported, Glowpoint will host a conference call at 4:30 p.m. EDT today to discuss the financial results of the three- and six-months ended June 30, 2010, and to review plans for the remainder of 2010. To listen and participate, please visit: http://www.glowpoint.com/about/investors.asp.
 
Supporting Resources
 
·  
Glowpoint Investor Information
 
·  
Recent Glowpoint News and Events
 
·  
Glowpoint on Twitter
 
About Glowpoint
 
Glowpoint, Inc. (OTCBB: GLOW) provides carrier-grade, managed telepresence and video communications services that are accessible via its cloud-based, hosted infrastructure and open architecture applications. Glowpoint's suite of robust telepresence and video conferencing solutions empowers enterprises to communicate with each other over disparate networks and technology platforms. Glowpoint supports thousands of video communications systems, in more than 53 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 http://www.glowpoint.com.
 
Financial Information and Forward Looking Statements

This partial discussion of the statements of financial condition and operations of the Company should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s annual report on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on March 31, 2010.

Various remarks about the Company’s future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Such remarks are valid only as of today, and the Company disclaims any obligation to update this information. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
 
 
 

 

GLOWPOINT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and shares)

   
June 30,
2010
   
December 31, 2009
 
ASSETS
 
(Unaudited)
       
Current assets:
           
Cash and cash equivalents
  $ 1,877     $ 587  
Accounts receivable, net of allowance for doubtful accounts of $269 and $262, respectively
    3,639       3,323  
Prepaid expenses and other current assets
    546       291  
Total current assets
    6,062       4,201  
Property and equipment, net
    2,766       2,682  
Other assets
    112       31  
Total assets
  $ 8,940     $ 6,914  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 2,858     $ 3,232  
Accrued expenses
    1,298       879  
Revolving loan facility
    750        
Accrued sales taxes and regulatory fees
    703       888  
Customer deposits
    260       308  
Deferred revenue
    220       259  
Total current liabilities
    6,089       5,566  
Long term liabilities:
               
Accrued sales taxes and regulatory fees, less current portion
    65       195  
Total long term liabilities
    65       195  
Total liabilities
    6,154       5,761  
                 
Commitments and contingencies
               
                 
Stockholders’ equity:
               
Preferred stock Series B, non-convertible; $.0001 par value; $100,000 stated value; 100 shares authorized and 80 and 0 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively,  liquidation value of $8,000
    8,000        
Preferred stock Series A-2, convertible; $.0001 par value; $7,500 stated value; 7,500 shares authorized and 1,630 and 4,509 shares issued and outstanding at June 30, 2010 and December 31, 2009 recorded at fair value, respectively (liquidation value of $12,226 and $33,815, respectively) (see Note 9 for information related to Insider Purchasers)
    5,161       14,275  
Common stock, $.0001 par value;150,000,000 shares authorized; 81,733,401 and 66,531,087 shares issued at June 30, 2010 and December 31, 2009, respectively; 81,733,401 and 64,966,196 shares outstanding, at June 30, 2010 and December 31, 2009, respectively
    8       7  
Additional paid-in capital
    153,397       150,659  
Accumulated deficit
    (163,780 )     (162,405 )
      2,786       2,536  
Less: Treasury stock, 0 and 1,564,891 shares at cost
          (1,383 )
Total stockholders’ equity
    2,786       1,153  
Total liabilities and stockholders’ equity
  $ 8,940     $ 6,914  
                 

 
 

 

GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 (Unaudited)
 
 
 
Six Months Ended
June 30,
   
Three Months Ended
June 30,
 
   
2010
   
2009
   
2010
   
2009
 
                         
Revenue
  $ 13,985     $ 13,387     $ 7,264     $ 6,945  
                                 
Operating expenses:
                               
Network and Infrastructure
    6,114       5,963       3,171       2,999  
Global managed services
    4,154       3,748       2,102       1,880  
Sales and marketing
    2,101       1,702       1,209       922  
General and administrative
    2,393       2,536       1,250       928  
Depreciation and amortization
    542       537       276       266  
Sales taxes and regulatory fees
          (178 )           (88 )
Total operating expenses
    15,304       14,308       8,008       6,907  
(Loss) income from operations
    (1,319 )     (921 )     (744 )     38  
                                 
Interest and other expense:
                               
Interest expense
    54       213       18       66  
Loss on extinguishment of debt
          254              
Increase (decrease) in fair value of derivative financial instruments’ liability, including $0, $20, $0 and $(11), respectively, for Insider Purchasers
          691             (434 )
Amortization of financing costs
    2             2        
Total interest and other expense
    56       1,158       20       (368 )
Net (loss) income
    (1,375 )     (2,079 )     (764 )     406  
Loss on redemption of preferred stock
    (778 )     (1,999 )            
Net (loss) income attributable to common stockholders
  $ (2,153 )   $ (4,078 )   $ (764 )   $ 406  
                                 
Net (loss) income attributable to common stockholders per share:
                               
Basic
  $ (0.03 )   $ (0.09 )   $ (0.01 )   $ 0.01  
Diluted
  $ (0.03 )   $ (0.09 )   $ (0.01 )   $ 0.00  
                                 
Weighted average number of common shares:
                               
Basic
    71,941       45,959       79,472       46,212  
Diluted
    71,941       45,959       79,472       92,717  
                                 
 
 
 

 

 GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Six Months Ended June 30, 2010
(In thousands except shares of Series B and A-2 Preferred Stock)

(Unaudited)
 
   
Series B
   
Series A-2
         
Additional
             
   
Preferred Stock
   
Preferred Stock
   
Common Stock
   
Paid In
   
Accum-ulated
   
Treasury Stock
       
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
   
Shares
   
Amount
   
Total
 
Balance at January 1, 2010
        $       5     $ 14,275       66,531     $ 7     $ 150,659     $ (162,405 )     1,565     $ (1,383 )   $ 1,153  
Net loss
                                              (1,375 )                 (1,375 )
Stock-based compensation  - stock options
                                        126                         126  
Stock-based compensation  - restricted stock
                            1,229             105                         105  
2010 Preferred Stock Exchange
    50       5,000       (1 )     (4,222 )                 (778 )                        
Warrants issued in connection  with 2010 Private Placement
                                        443                         443  
Conversion of Preferred Stock
                (2 )     (4,892 )     15,452       1       4,891                          
Cashless exercise of warrants
                            66                                      
Exercise of stock options
                            20             7                         7  
Sale of Series B Preferred Stock
    30       3,000                                                       3,000  
Cancellation of treasury stock
                            (1,565 )           (1,383 )           (1,565 )     1,383        
Costs related to 2010 Private Placement and Preferred Stock exchange
                                        (673 )                       (673 )
Balance at June 30, 2010
    80     $ 8,000       2     $ 5,161       81,733     $ 8     $ 153,397     $ (163,780 )         $     $ 2,786  
                                                                                         
 
 
 

 

GLOWPOINT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
   
Six Months Ended
June 30,
 
   
2010
   
2009
 
Cash flows from Operating Activities:
           
Net loss
  $ (1,375 )   $ (2,079 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization
    542       537  
Amortization of deferred financing costs
    2        
Other expense recognized for the increase in the estimated fair value of the derivative financial instruments
          691  
Bad debt expense
    184       122  
Accretion of discount on Senior Secured Notes
          23  
Loss on disposal of equipment
    (19 )     10  
Loss on extinguishment of debt
          254  
Stock-based compensation
    231       322  
Increase (decrease) attributable to changes in assets and liabilities:
               
Accounts receivable
    (500 )     (509 )
Prepaid expenses and other current assets
    (255 )     (120 )
Other assets
    (83 )     2  
Accounts payable
    (374 )     442  
Customer deposits
    (48 )     (80 )
Accrued expenses, sales taxes and regulatory fees
    104       39  
Deferred revenue
    (39 )     (61 )
Net cash used in operating activities
    (1,630 )     (407 )
                 
Cash flows from Investing Activities:
               
Purchases of property and equipment
    (607 )     (647 )
Net cash used in investing activities
    (607 )     (647 )
                 
Cash flows from Financing Activities:
               
Proceeds from preferred stock offering
    3,000       1,800  
Proceeds from revolving loan facility, net
    750        
Proceeds from exercise of stock options
    7        
Principal payments for capital lease
          (77 )
Purchase of Senior Secured Notes
          (750 )
Costs related to private placement
    (230 )     (221 )
Net cash provided by financing activities
    3,527       752  
                 
Increase (decrease) in cash and cash equivalents
    1,290       (302 )
Cash and cash equivalents at beginning of period
    587       1,227  
Cash and cash equivalents at end of period
  $ 1,877     $ 925  
                 
Supplement disclosures of cash flow information:
               
Cash paid during the period for
               
    Interest
  $ 54     $ 43  
                 
Non-cash investing and financing activities:                
                 
    Costs related to private placement incurred by issuance of placement agent warrants   $ 443     $ 133  
    Exchange of Senior Secured Notes for Series A-1 Preferred Stock           1,076  
    Additional Senior Secured Notes issued as payment for interest           55