Exhibit 99.1
[GoAmerica letterhead]
CONTACT:
Investor Relations
GoAmerica
Voice: 201-996-1717
investors@goamerica.com
GOAMERICA(R) REPORTS SECOND QUARTER 2007 RESULTS
Integration Planning Underway in Anticipation of GoAmerica's Planned Acquisition
of Verizon's Telecommunications Relay Services Division
HACKENSACK, NJ, August 14, 2007 -- GoAmerica, Inc. (NASDAQ: GOAM), a provider of
relay and wireless communications services for deaf, hard-of-hearing, and
speech-impaired persons, today announced results for the second quarter ended
June 30, 2007.
Second quarter results and comparisons to prior periods are presented reflecting
the Company's prepaid calling card division as a discontinued operation. This
sale was completed on October 2, 2006.
Total revenue for the three months ended June 30, 2007 was approximately $4.3
million, which approximated total revenue in the previous quarter, and was an
increase of 80.3% compared to total revenue of approximately $2.4 million in the
second quarter of 2006.
Net loss from continuing operations for the second quarter was approximately
$786,000 or $0.36 per diluted common share, compared with a net loss from
continuing operations of $765,000, or $0.35 per diluted common share, in the
first quarter of 2007.
The change in year over year revenue comparisons resulted from a combination of
two factors: the Company's mid-2006 certification by the Federal Communications
Commission (FCC), which enabled GoAmerica to recognize the full revenues
associated with its relay services, and continued growth in the Company's
i711(R) relay divisions.
Prior to becoming certified, GoAmerica recognized only a portion of the revenue
it generated through its i711 relay service because it was submitting minutes
for payment through its business partner, Nordia, Inc. Nordia, which is also a
certified relay provider, would submit i711 relay service minutes to the
Interstate Telecommunications Relay Service (TRS) Fund on GoAmerica's behalf.
Under this arrangement, Nordia received the reimbursement and paid GoAmerica its
share of the revenue.
Included in the loss from continuing operations for the quarters ended June 30,
2007 and March 31, 2007 were non-cash charges of $245,000 and $301,000
respectively, reflecting depreciation, amortization, and non-cash employee
compensation charges for those periods. The first quarter net loss for 2007 also
includes a $162,000 settlement loss related to the settlement of the Hands On
litigation. The net loss from continuing operations in the second quarter of
2006 was $366,000, or $0.17 per diluted share, and included approximately
$12,000 in terminated merger costs related to the termination of the merger with
Hands On.
As of June 30, 2007, GoAmerica had approximately $3.1 million in cash and cash
equivalents, compared to $3.4 million as of March 31, 2007.
"As stated in our first quarter release, we continue to take steps to accelerate
the pace of our revenue growth, which includes broadening our distribution
channels, expanding our product portfolio and strengthening the sales force.
Additionally, we announced the Verizon TRS acquisition, which will significantly
increase the scale of GoAmerica's relay businesses. Upon close of the
transaction, we believe we will have a broader and more financially sound
platform for growth," said Dan Luis, chief executive officer of GoAmerica.
"Further, our recent expansion of i711 VRS for videophones provides an important
access point for users and should continue to drive new revenue to our
business."
GoAmerica filed its Quarterly Report on Form 10-Q for the period ended June 30,
2007 earlier today.
Summary of Recent Developments
o Verizon Relay Asset Purchase. On August 2, 2007, the Company
announced that it had entered a definitive agreement to purchase
Verizon's telecommunications relay service (TRS) assets,
accelerating GoAmerica's strategy to expand its presence in the
relay market. Subject to regulatory and stockholder approval, the
deal also stands to strengthen the Company's financial platform for
growth.
o New Financing and Financing Commitments. On August 2, 2007, in
connection with the announced Verizon transaction, the Company
entered into certain equity and debt funding arrangements with
Clearlake Capital Group. Upon the signing of the asset purchase
agreement with Verizon, Clearlake purchased 290,135 shares of a
newly created GoAmerica Series A preferred stock at a price of $5.17
per share and agreed to purchase an additional 6,479,691 shares of
Series A preferred stock at $5.17 per share, subject to certain
conditions, upon consummation of the Verizon transaction.
Additionally, Clearlake provided GoAmerica $1 million pursuant to a
bridge loan commitment that may increase up to $3.5 million, and
committed to $30 million of senior debt financing at the closing of
the Verizon transaction. GoAmerica and Clearlake also agreed to a
time-specific commitment for up to an additional $55 million for
mutually agreed upon investments, acquisitions, or combinations
approved by September 14, 2007.
The details of the Verizon transaction and the new financing
arrangements are contained in GoAmerica's Current Report on Form 8-K
filed on August 7, 2007.
o i711 VRS for Videophone. On June 27, 2007, the Company introduced
i711 VRS for videophone users. This service enables users of
D-Link(TM) i2eye or Sorenson Communications(TM)
VP-100(TM)/VP-200(TM) videophones to add "i711.tv" to their Speed
Dial or Contacts list. Once i711.tv has been added, users can begin
placing videophone calls through the i711 VRS service. Visit
www.i711.com/vp for more information.
o Channel i (TM) Vlog. On June 19, 2007, the Company introduced
Channel i, a weekly video blog ("vlog") featuring news and
information for the deaf community presented in American Sign
Language. Channel i is designed to increase traffic to i711.com as
well as underscore the Company's commitment to the deaf community.
Visit www.i711.com/vlogs for more information.
About GoAmerica
GoAmerica provides a wide range of wireless and relay communications services,
customized for people who are deaf, hard-of-hearing or speech impaired. The
Company's vision is to improve the quality of life of its customers by being
their premier provider of innovative communication services. 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 or via
Internet Relay by visiting http://www.i711.com.
Safe Harbor
The statements contained in this news release that are not based on historical
fact - including statements regarding the potential for growth in revenues, TRS
services and other aspects of its business, projected revenues and market
position - 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 limited operating history;
(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 integrate acquired businesses and
technologies; (vi) our ability to generate revenue growth; (vii) our ability to
increase or maintain gross margins, profitability, liquidity and capital
resources; and (viii) 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 are registered trademarks of GoAmerica.
"i711.com", "i711 Wireless", and "Channel i" are trademarks and service marks of
GoAmerica. Other names may be trademarks of their respective owners.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT:
In connection with the proposed acquisition of the assets of Verizon's TRS
Division and the proposed equity financings referred to herein, GoAmerica will
file a proxy statement with the Securities and Exchange Commission (the "SEC").
INVESTORS AND STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTIONS AND THE PARTIES TO THE PROPOSED TRANSACTIONS. Investors
and stockholders may obtain a free copy of the proxy statement (when available)
and other relevant documents filed with the SEC from the SEC's website at
www.sec.gov. GoAmerica's stockholders and other interested parties will also be
able to obtain, without charge, a copy of the proxy statement and other relevant
documents (when available) by directing a request by mail to the Company at 433
Hackensack Avenue, Hackensack, New Jersey 07601, or by telephone to (201)
996-1717.
GoAmerica and its directors and officers may be deemed to be participants in the
solicitation of proxies from GoAmerica's stockholders with respect to the
proposed transactions. Information about GoAmerica's directors and officers and
their ownership of GoAmerica common stock is set forth in the GoAmerica proxy
statements and Annual Reports on Form 10-K, previously filed with the SEC, and
will be set forth in the proxy statement relating to the proposed transactions
when it becomes available.
GOAMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2007 2006
-----------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents ..................................................... $ 3,053 $ 3,870
Accounts receivable, net ...................................................... 1,829 1,891
Other receivables, net ........................................................ 20 48
Merchandise inventories, net .................................................. 196 329
Prepaid expenses and other current assets ..................................... 209 185
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Total current assets ............................................................... 5,307 6,323
Other assets ....................................................................... 7,942 7,556
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Total assets ....................................................................... $13,249 $13,879
======= =======
Liabilities and stockholders' equity
Current liabilities:
Accounts payable .............................................................. $ 421 $ 559
Accrued expenses .............................................................. 2,668 1,982
Deferred revenue .............................................................. 102 100
Other current liabilities ..................................................... 83 65
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Total current liabilities .......................................................... 3,274 2,706
Other liabilities .................................................................. 82 112
Stockholders' equity ............................................................... 9,893 11,061
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$13,249 $13,879
======= =======
GOAMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2007 2006 2007 2006
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Revenues:
Relay services .................................... $ 3,834 $ 1,361 $ 7,494 $ 1,828
Subscriber ........................................ 284 316 600 606
Commissions ....................................... 74 659 261 1,486
Equipment ......................................... 111 51 217 101
Other ............................................. 2 1 40 3
----------- ----------- ----------- -----------
4,305 2,388 8,612 4,024
Costs and expenses:
Cost of relay services ............................ 2,670 647 5,075 692
Cost of subscriber airtime ........................ 257 166 567 305
Cost of equipment revenue ......................... 190 122 324 202
Cost of network operations ........................ 29 19 58 46
Sales and marketing ............................... 479 479 1,003 1,021
General and administrative ........................ 1,257 1,057 2,613 2,168
Research and development .......................... 143 100 257 233
Depreciation and amortization ..................... 90 126 163 270
----------- ----------- ----------- -----------
5,115 2,716 10,060 4,937
----------- ----------- ----------- -----------
Loss from operations ................................... (810) (328) (1,448) (913)
Other income (expense):
Settlement losses ................................ -- -- (162) --
Terminated merger costs .......................... -- (12) -- (431)
Interest income (expense), net ................... 24 55 59 100
----------- ----------- ----------- -----------
Total other income (expense), net ...................... 24 43 (103) (331)
----------- ----------- ----------- -----------
Loss from continuing operations ........................ (786) (285) (1,551) (1,244)
Loss from discontinued operations ...................... -- (81) -- (200)
----------- ----------- ----------- -----------
Net loss ............................................... $ (786) $ (366) $ (1,551) $ (1,444)
=========== =========== =========== ===========
Loss per share-Basic and Diluted:
Loss from continuing operations ................... $ (0.36) $ (0.13) $ (0.70) $ (0.59)
Loss from discontinued operations ................. -- (0.04) -- (0.10)
----------- ----------- ----------- -----------
Basic and Diluted net loss per share ................... $ (0.36) $ (0.17) $ (0.70) $ (0.69)
=========== =========== =========== ===========
Weighted average shares used in computation of
basic and diluted net loss per share ............... 2,204,097 2,093,451 2,203,793 2,093,451