Exhibit 99.1
[LETTERHEAD OF GLOBIX CORPORATION]
FOR IMMEDIATE RELEASE
GLOBIX REPORTS FOURTH QUARTER AND FISCAL 2001 RESULTS
COMPANY IN DISCUSSIONS WITH BONDHOLDERS
NEW YORK - December 27, 2001 - Globix Corporation (NASDAQ: GBIX) today reported
financial results for its fourth quarter and fiscal year ended September 30,
2001.
Revenue for the fourth quarter of 2001 was $25.0 million compared to $25.9
million in the prior year quarter. For the fiscal 2001 year, revenue was $104.2
million compared to $81.3 million in the previous year.
EBITDA loss (loss before net interest, income taxes, depreciation and
amortization and restructuring charges) was $22.2 million for the fourth quarter
of 2001 compared to $15.3 million in the same quarter last year and $15.5
million in the fiscal 2001 third quarter. As compared to the fiscal 2001 third
quarter, the fiscal 2001 fourth quarter was adversely affected by a $3.5 million
write-off of network assets impaired by the financial viability of a supplier
and a $4.0 million increase in bad debt expense. For fiscal 2001, EBITDA loss
was $64.7 million as compared with $59.3 million in the prior year.
During the fourth quarter of fiscal 2001, the Company recorded a restructuring
charge of $18.0 million related to the estimated termination costs of certain
leases, and the write-off of leasehold improvements, excess equipment and
employee termination costs.
For the fourth quarter of 2001, net loss attributable to common stockholders was
$73.6 million, or $1.89 per share based on 38.9 million common shares. For the
fiscal year, net loss attributable to common stockholders was $220.1 million, or
$5.72 per share.
"Cost reductions and the management of working capital remained a constant focus
during the year," said Brian Reach, Chief Financial Officer. "We ended the
fiscal 2001 year with $111.5 million in cash, which was ahead of expectations."
Globix also announced that it is in discussions with an informal committee of
bondholders representing approximately 48% of the Company's outstanding $600
million issuance of 12 1/2% senior notes. The discussions concern a financial
reorganization of the Company through a pre-packaged bankruptcy proceeding that
would be aimed at significantly reducing the Company's debt burden. The Company
is in similar discussions with its preferred stockholders. While there can be no
assurance that these discussions will lead to an agreement, it is likely that
any such agreement would result in the bondholders and preferred stockholders
owning nearly all of the equity in the reorganized company, resulting in a near
total dilution of the existing common stockholders' interest in the Company.
GLOBIX CORPORATION 139 CENTRE STREET, NEW YORK, NY 10013-4408
PHONE: 212 334-8500 FAX: 212 334-8603 WWW.GLOBIX.COM
Peter Herzig, Chief Executive Officer, said, "We are encouraged by the overall
results for the fiscal year and are optimistic that we will be able to reach
agreement with our bondholders and preferred stockholders. This past year was a
challenging one for our company and our industry in general. The events of
September 11, coupled with turbulent market and economic conditions and the
dot-com fall out, have affected all participants in our market. We are seeking
to greatly reduce our debt burden so that we will have the necessary liquidity
to focus on the competitive advantage Globix enjoys as a premium provider of
complex hosting services. While I believe these most recent developments, along
with the growth and operational accomplishments Globix achieved during this past
fiscal year will provide a strong platform for our future, we do not believe we
will meet the fiscal 2002 guidance previously provided. In light of ongoing
discussions with our bondholders, we expect to provide new guidance when we
release our financial results for the first quarter ended December 31, 2001."
About Globix
Globix is a leading provider of advanced Internet hosting, network and
applications solutions for business. Globix delivers services via its secure
state-of-the-art Internet Data Centers, its high-performance global backbone and
content delivery network, and its world-class technical professionals. Globix
provides businesses with cutting-edge Internet resources and the ability to
deploy, manage and scale mission-critical Internet operations for optimum
performance and cost efficiency.
This press release contains forward-looking statements relating to the
Company's or management's intentions, beliefs, expectations or
predictions for the future. Such forward-looking statements are subject
to a number of risks, assumptions and uncertainties that could cause the
Company's actual results to differ materially from those projected in the
forward-looking statements. These risks, assumptions and uncertainties
include the ability to finance the operations and complete the planned
expansion of our facilities and network; our reliance on the growth of
the Internet and e-commerce; our success against competitors with
significantly greater resources; our ability to develop, pursue, confirm
and consummate a plan of reorganization and to achieve its expected
benefits; and other risks listed under the heading of Risk Factors in the
Company's filings with the Securities and Exchange Commission.
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Globix Corporation and Subsidiaries
Consolidated Statements of Operations
( In thousands, except share and per share data )
Three months ended Year ended
September 30, September 30,
2001 2000 2001 2000
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(Unaudited)
Revenue $ 24,952 $ 25,853 $ 104,210 $ 81,287
Cost of revenue 9,889 11,649 40,609 42,513
Gross profit 15,063 14,204 63,601 38,774
Selling, general and administrative 37,253 29,469 128,321 98,113
Restructuring charges 18,000 -- 56,109 --
Depreciation and amortization 12,583 5,582 36,657 18,228
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Loss from operations (52,773) (20,847) (157,486) (77,567)
Interest and financing expense, net (18,698) (8,729) (51,846) (33,082)
Other income 236 1,238 2,147 2,816
Other expense (558) (60) (3,526) (1,037)
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Loss before extraordinary loss on early extinguishment of debt
and cumulative effect of a change in accounting principle (71,793) (28,398) (210,711) (108,870)
Extraordinary loss on early extinguishment of debt -- -- -- (17,577)
Cumulative effect of a change in accounting principle -- -- (2,332) --
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Net loss (71,793) (28,398) (213,043) (126,447)
Dividends and accretion on preferred stock (1,818) (1,738) (7,104) (5,768)
------------- ------------- ------------- -------------
Net loss attributable to common stockholders $ (73,611) $ (30,136) $ (220,147) $ (132,215)
============= ============= ============= =============
EBITDA (a) $ (22,190) $ (15,265) $ (64,720) $ (59,339)
============= ============= ============= =============
Basic and diluted loss per share attributable to common
stockholders before extraordinary loss on early extinguishment
of debt and cumulative effect of a change in accounting principle $ (1.89) $ (0.81) $ (5.66) $ (3.23)
Extraordinary loss per share -- -- -- --
Extraordinary loss on early extinguishment of debt -- -- -- (0.50)
Cumulative effect of a change in accounting principle -- -- (0.06) --
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Basic and diluted loss per share attributable to
common stockholders $ (1.89) $ (0.81) $ (5.72) $ (3.73)
============= ============= ============= =============
Basic and diluted loss per share attributable to
common stockholders excluding certain items (b) $ (1.43) $ (0.81) $ (4.20) $ (3.24)
============= ============= ============= =============
Weighted average common shares outstanding 38,946,043 37,085,711 38,476,909 35,484,040
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(a) EBITDA is used in the Internet services industry as one measure of a
company's operating performance and historical ability to service debt.
Globix defines EBITDA as losses before interest expense and interest
income, income taxes, depreciation and amortization and other non-operating
expenses including restructuring charges.
(b) For the year ended September 30, 2001, excludes $56.1 million of
restructuring charges and $2.3 million from the cumulative effect of a
change in accounting principle. For the three months ended September 30,
2001, excludes $18.0 million of restructuring charge.
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Globix Corporation and Subsidiaries
Consolidated Balance Sheets
( In thousands, except share and per share data )
September 30, September 30,
2001 2000
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Assets
Current assets:
Cash and cash equivalents $ 111,502 $ 363,877
Short term investments -- 9,948
Marketable securities 1,610 4,685
Accounts receivable, net 13,809 21,403
Prepaid expenses and other current assets 7,785 4,441
Restricted cash 6,984 7,093
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Total current assets 141,690 411,447
Investments, restricted 26,886 36,085
Property, plant and equipment, net 356,149 248,424
Debt issuance costs, net 19,006 20,217
Intangible assets, net 4,362 6,650
Other assets 4,895 6,768
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Total assets $ 552,988 $ 729,591
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Liabilities and Stockholders' Deficit
Current liabilities:
Capital lease and other obligations $ 6,687 $ 2,173
Accounts payable 14,022 16,964
Accrued liabilities 30,141 13,669
Accrued interest 12,500 12,502
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Total current liabilities 63,350 45,308
Capital lease obligations, net of current portion 10,309 1,135
Mortgage payable 20,441 20,674
Senior notes 600,000 600,000
Other long term liabilities 7,577 4,462
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Total liabilities 701,677 671,579
Minority interest in Subsidiary 5,406 --
Redeemable Convertible Preferred Stock 83,230 76,042
Stockholders' Deficit:
Common stock, $0.01 par value; 500,000,000 shares
authorized; 41,920,229 and 37,307,315 shares issued and
outstanding, respectively 419 373
Additional paid-in capital 171,176 165,890
Deferred compensation (7,097) --
Accumulated other comprehensive income (2,703) 1,784
Accumulated deficit (399,120) (186,077)
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Total stockholders' deficit (237,325) (18,030)
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Total liabilities and stockholders' deficit $ 552,988 $ 729,591
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