Exhibit 99.1
PRESS RELEASE
Globix Corporation Reports Second Fiscal Quarter 2004 Results
NEW YORK, May 6, 2004 -- Globix Corporation (OTCBB:GBXX) today reported
financial results for its second quarter of fiscal year 2004, which ended March
31, 2004, citing continued progress in its operations. During the second quarter
of fiscal 2004, Globix made significant strides to further reduce its operating
costs and debt load. It completed the sale of its property at 415 Greenwich
Street in New York City in January for net cash proceeds of approximately $48.7
million. In March, Globix completed its tender offer for its 11 percent Senior
Notes holders and repurchased $40.3 million of principal amount at par value
plus accrued interest of $3.7 million.
Revenues for the quarter were $15.0 million, which was $339,000, or 2.2 percent
less than the same period in 2003. Additionally, Globix increased its revenue in
2Q of 2004 compared to Q1 of 2004, by $644,000, or 4.5percent. The company also
reported that in the second fiscal quarter of 2004 cost of revenues was reduced
$300,000, or by 5.7 percent to $5 million from the same period in 2003, and that
sales, general and administrative costs were reduced by $1.8 million, or by 14.6
percent to $10.7 million compared to the same period in 2003.
Loss from operations was $4.8 million for 2Q of 2004, compared to a loss of $6.2
million for the same period a year earlier. This was due primarily to Globix's
cost savings efforts. Net loss for the quarter was $6.9 million, or 42 cents
basic and diluted loss per share, based on 16,460,000 common shares outstanding
at the end of the quarter.
On a non-GAAP basis, adjusted EBITDA loss was $436,000, an improvement of
approximately $1 million, or 69.4 percent from the same period in 2003. Globix
also improved its EBITDA loss over 1Q of 2004 by $825,000 or by 65.4 percent.
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) Other operating income resulting from the sale of
the DSL Business in fiscal 2003, (ii) non-cash stock based compensation, (iii)
impairment charges and (iv) 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.
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GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
March 31, September 30,
2004 2003
-------------- ---------------
(Unaudited)
--------------
Assets
Current assets:
Cash and cash equivalents ............................................................... $ 10,718 $ 24,503
Short-term investments .................................................................. 10,656 7,226
Marketable securities ................................................................... 643 1,531
Accounts receivable, net of allowance for doubtful accounts of $2,050 and
$2,646, respectively .................................................................... 6,058 6,012
Prepaid expenses and other current assets ............................................... 6,260 4,497
Restricted cash ......................................................................... 2,308 2,195
-------------- ---------------
Total current assets .......................................................... 36,643 45,964
Investments.............................................................................. 2,244 697
Investments, restricted ................................................................. 4,959 4,733
Property, plant and equipment, net ...................................................... 94,410 162,630
Intangible assets, net of accumulated amortization of $2,835 and $1,997, respectively ... 8,520 8,158
Other assets ............................................................................ 378 100
-------------- ---------------
Total assets .................................................................. $ 147,154 $ 222,282
============== ===============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of capital lease obligation and mortgage payable ........................ $ 611 $ 1,510
Accounts payable ........................................................................ 4,423 5,846
Accrued liabilities ..................................................................... 10,870 10,159
-------------- ---------------
Total current liabilities ..................................................... 15,904 17,515
Capital lease obligations, net of current portion ....................................... 351 374
Mortgage payable ........................................................................ 19,755 19,912
11% Senior Notes ........................................................................ 65,047 112,321
Accrued interest - 11% Senior Notes ..................................................... 6,587 5,182
Other long term liabilities ............................................................. 10,882 10,659
Put-option liability..................................................................... -- 2,968
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Total liabilities.............................................................. 118,526 168,931
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Commitments and contingencies (Note 5)
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 .............................................................. 100,018 97,191
Deferred compensation ................................................................... (23) --
Accumulated other comprehensive income................................................... 5,097 2,401
Accumulated deficit...................................................................... (76,629) (46,406)
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Total stockholders' equity..................................................... 28,628 53,351
-------------- ---------------
Total liabilities and stockholders' equity..................................... $ 147,154 $ 222,282
============== ===============
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GLOBIX CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
------------------------------------ -----------------------------------
March 31, 2004 March 31, 2003 March 31, 2004 March 31, 2003
---------------- ---------------- ---------------- ---------------
Revenue, net ...................................... $ 15,029 $ 15,368 $ 29,414 $ 31,848
Operating costs and expenses:
Cost of revenue (excluding depreciation,
amortization, certain payroll and occupancy
shown below) ................................ 4,974 5,274 9,850 10,898
Selling, general and administrative ........... 10,740 12,570 21,684 24,461
Loss on impairment of assets .................. 659 -- 17,972 --
Depreciation and amortization .................
3,473 4,116 6,844 7,843
---------------- ---------------- ---------------- ---------------
Total operating costs and expenses........ 19,846 21,960 56,350 43,202
Other operating income ....................... -- 345 -- 345
---------------- ---------------- ---------------- ---------------
Loss from operations .............................. (4,817) (6,247) (26,936) (11,009)
Interest and financing expense ................ (3,058) (3,561) (6,511) (7,465)
Interest income ............................... 137 347 316 735
Other (expense) income, net ................... 899 204 1,196 386
Gain on discharge of debt...................... -- 2,044 1,747 4,771
Minority interest in subsidiary ............... -- 120 -- 228
---------------- ---------------- ---------------- ---------------
Loss before income taxes........................... (6,839) (7,093) (30,188) (12,354)
Income tax expense................................. 35 -- 35 --
---------------- ---------------- ---------------- ---------------
Net loss .......................................... $ (6,874) $ (7,093) $ (30,223) $ (12,354)
================ ================ ================ ===============
Basic and diluted loss per share................... $ (0.42) $ (0.43) $ (1.84) $ (0.75)
================ ================ ================ ===============
Weighted average common shares outstanding--basic
and diluted.................................... 16,460,000 16,460,000 16,460,000 16,460,000
================ ================ ================ ===============
Reconciliation of Loss From Operation to Adjusted EBITDA
(Amounts in Thousands)
(Unaudited)
For the Three Months Ended
--------------------------------------------------------
March 31, 2004 March 31, 2003 December 31, 2003
---------------- ---------------- ----------------
Loss from operations .............................. $ (4,817) $ (6,247) $ (22,119)
Add Back:
Depreciation and amortization .................
3,473 4,116 3,371
Loss on impairment of assets .................. 659 -- 17,313
Amortization of deferred compensation ......... -- 1,050 34
Rental income ................................. 270 -- 140
Deduct:
Amortization of deferred compensation ........ 21 -- --
Other operating income ............................ -- 345 --
---------------- ---------------- ----------------
Adjusted EBITDA loss .............................. $ (436) $ (1,426) $ (1,261)
================ ================ ================
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Investor Call
Globix will host a conference call today at 2:00 p.m. EST that can be accessed
through (800) 665-0669. In addition, a replay of the call will be available
through the Globix website for one week after the call. Transcripts of the call
will also be made available upon request.
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.
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.
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