Exhibit 99.1
GLOBIX CORPORATION RELEASES ADDITIONAL INFORMATION
REGARDING MERGER WITH NEON COMMUNICATIONS, INC.
REMAINS CONSISTENT WITH ITS COMMITMENT TO COMMUNICATE WITH ITS CLIENTS,
INVESTORS AND EMPLOYEES.
NEW YORK, JULY 28, 2004 -- Globix Corporation (OTCBB:GBXX), a provider of
managed applications and hosting services, today released additional information
regarding its merger with NEON Communications, Inc ("NEON"). The additional
information provides insight into NEON's historical business performance and
outlines the motivation behind the merger, an equity transaction that has a
purchase price of approximately $110 million.
"NEON has been focused on growth through investments in its fiber network and
collocation facilities," said Pete Stevenson, Globix CEO. "This focus is
consistent with our objectives. We believe the combined organization will be
well-positioned to become a market leader in providing a broad range of
application services, web infrastructure management and a robust suite of
network services to enterprise clients and carrier customers. We anticipate that
this acquisition will add approximately $11.5 million to our quarterly revenue.
Additionally, by leveraging our operational infrastructure and systems over
time, we expect to generate between $5 million and $8 million in annualized
profit improvements due to the anticipated synergies for the combined
companies."
For the year ending December 31, 2003 NEON's revenue was $41.6 million, compared
to $33.7 million in 2002, an increase of $7.9 million or 23.4% more than the
same period a year earlier. Quarterly revenue for 2003 was $9.5, $10.4, $10.9,
and $10.8 million for quarters ending March 31, June 30, September 30 and
December 31, respectively.
For the quarter ending March 31, 2004 NEON's unaudited revenue was $11.6
million, an increase of $2.1 million or 22.1% over the same period a year
earlier. NEON's assets were $167.0 million for the year ending December 31,
2003, of which $14.9 million were cash and investments, $8.3 million were
restricted cash and $136.6 million were plant and equipment. NEON's assets were
$166.9 million as of March 31, 2004 of which $14.1 million were cash and
investments. $8.3 million were restricted cash and $136.9 million were plant and
equipment.
NEON's non-GAAP, EBITDA was $4.2 million for the year ending December 31, 2003.
This represents a $5.9 million improvement compared to the year ending December
31, 2002. NEON's non-GAAP EBITDA for the quarter ending March 31, 2004 was $0.7
million. EBITDA is defined as loss from operations plus depreciation and
amortization. A reconciliation to loss from operations in accordance with GAAP
is provided below.
In September 2003 NEON acquired Columbia Transmission Communications Corporation
and assumed responsibility for the operational expenses required to support
their diverse dark fiber route and collocation facilities covering markets
between New York and Washington, D.C.
NEON COMMUNICATIONS, INC.
RECONCILIATION OF LOSS FROM OPERATIONS TO EBITDA
(AMOUNT IN THOUSANDS)
(Unaudited)
Year Ended Year Ended Quarter Ended
12/31/2003 12/31/2002 3/31/2004
Loss from Operations $ (4,821) $ (25,083) $ (1,839)
Add Back:
Depreciation and amortization 8,999 23,319 2,508
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EBITDA 4,178 (1,764) 669
ABOUT NEON:
NEON Communications, Inc. (http://www.neoninc.com) is a privately held
facilities-based wholesale provider of high bandwidth, advanced optical
networking solutions and services to communications companies and enterprise
customers on intercity, regional, and metro networks in the Northeast and
mid-Atlantic markets. The Company's corporate headquarters is located at 2200
West Park Drive, Westborough, Massachusetts 01581.
ABOUT GLOBIX:
Globix (http://www.globix.com) (OTCBB:GBXX) is a leading provider of
application, media and infrastructure management services. Globix provides
flexible business solutions which combine skills, support, technology and
experience to enable our customers to use the Internet as a way to provide
business benefits and sustain a competitive advantage. By managing complex
application, media and infrastructure environments, we help our clients protect
Internet revenue streams, improve user satisfaction and reduce technology
operating costs and risks. Our clients include operating divisions of Fortune
100 companies as well as mid-sized enterprises in a number of vertical markets
including media and publishing, technology, financial services, health care and
government. Globix and its subsidiaries have operations in New York NY, London
UK, Santa Clara CA, Fairfield NJ, Fairfax VA and Atlanta GA.
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WHERE TO FIND ADDITIONAL INFORMATION ABOUT THE TRANSACTION
This announcement is not a recommendation, an offer to purchase or a
solicitation of an offer to sell Globix shares. Globix will file with the
Securities and Exchange Commission (the "SEC") a registration statement on Form
S-4, including a proxy statement/prospectus relating to the NEON stockholders
meeting and the issuance of the Globix common stock in connection with the
merger. Investors and stockholders of NEON and Globix are urged to read these
documents carefully when they become available because they will contain
important information about Globix, NEON and the proposed transaction. Investors
and stockholders of NEON and Globix can obtain these documents when they are
filed and become available free of charge from the SEC's website at www.sec.gov.
A free copy of these documents (when they become available), and any other
document filed by Globix with the SEC, may also be obtained from Globix upon
written request or from Globix's website at www.globix.com.
Globix, NEON and their respective directors and officers may be deemed
participants in the solicitation of proxies from stockholders of NEON with
respect to the transactions contemplated by the merger agreement. A description
of any interests that they may have in transaction will be included in the proxy
statement/prospectus.
RISK FACTORS AND FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements within the meaning of
Section 21E of the Securities and 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 SEC.
Media Contacts:
Chris Capra / Paul Del Colle
Lotus Public Relations
212-922-5885
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