Exhibit 99.1
GLOBIX REPORTS THIRD QUARTER RESULTS
QUARTER RESULTS INCLUDE MERGER WITH NEON
NEW YORK, August 15, 2005 -- Globix Corporation (AMEX:GEX), a leading provider
of application, media, IP infrastructure and network transport services, today
reported financial results for its third quarter which ended June 30, 2005. The
results reflect the recent merger with NEON Communications for the period of
March 7, 2005, the date of the merger close, through June 30, 2005.
Revenue for the quarter was $29.2 million, which, on a pro forma (combined
company) basis, was $1.5 million or 5.3% higher than the same period in 2004.
NEON's revenue for the quarter ended June 30, 2005 was $13.2 million, an
increase of 10% from $12.0 million for the same period in 2004. Over the same
periods, Globix division revenue was up $0.3 million.
"We continue to see strong lit services demand, with long term contracts, from
the growing wireless carrier segment along with demand from existing customers
as a result of our expanding network footprint," stated Pete Stevenson, CEO of
Globix. Mr. Stevenson further stated "we are responding to the market demand
with increased sales in our valued hosting and managed services offerings."
Below is a pro-forma revenue table (showing revenues from each of the companies
and the service lines for the periods indicated and the aggregate of such
revenues in those periods) and a breakdown by major service line:
PRO FORMA REVENUE BREAKDOWN
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
----------------- -----------------
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Globix $15,973 $15,729 $49,310 $45,143
NEON 13,242 12,005 37,810 34,313
------- ------- ------- -------
Total Pro Forma Revenue 29,215 27,734 87,120 79,456
======= ======= ======= =======
REVENUE BY SERVICE LINE
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
------------------ -----------------
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Internet Hosting and
Co-Location $ 7,072 $ 6,106 $19,579 $17,854
Managed Services 5,239 4,917 16,211 13,721
IP Network Services and
Internet Access 3,809 4,465 11,823 13,197
Lit Fiber Services 11,439 -- 14,216 --
Dark Fiber Services 1,382 -- 1,726 --
Hardware and Software
Sales and Other 274 241 2,221 371
------- ------- ------- -------
Total Revenue 29,215 15,729 65,776 45,143
======= ======= ======= =======
On a non-GAAP basis, Adjusted EBITDA for the quarter was $2.2 million compared
to $135 thousand for the same period last year. EBITDA is defined as net loss
plus interest, taxes, depreciation and amortization. Adjusted EBITDA is defined
as EBITDA further adjusted to exclude non-cash stock based compensation and
impairment charges and to include 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. We
provide information as to Adjusted EBITDA because we believe that it is useful
to investors as a performance measure and may help investors understand the
Company's cash resources and requirements.
In addition, the Company uses Adjusted EBITDA in its internal business planning
process, in setting performance goals for the Company and for incentive
compensation purposes. Adjusted EBITDA does not represent cash flow from
operations, as defined under U.S. generally accepted accounting principles, and
is not a measure of operating profitability or net income. Adjusted EBITDA
should not be considered a substitute for financial measures that are computed
in accordance with U.S. generally accepted accounting principles. Moreover, our
computation of Adjusted EBITDA may differ from those used by other companies and
should not be considered comparable. A reconciliation between Globix's Adjusted
EBITDA(loss) and operating loss is provided below:
RECONCILIATION OF LOSS FROM OPERATIONS TO ADJUSTED EBITDA
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
------------------- --------------------
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- --------
Loss from Operations ($4,011) ($3,595) ($13,089) ($30,531)
Adjusted for
Depreciation/Amortization 5,985 3,519 14,000 10,363
Loss on impairment
of assets -- -- -- 17,972
Rental Income 213 224 632 634
Non cash comp
(stock options & warrants) 29 (13) 55 --
------- ------- ------- --------
Adjusted EBITDA 2,216 (a) 135 1,598(a) (1,562)
======= ======= ======= ========
(a) 2005 adjusted EBITDA for the nine months ended June 30, 2005 includes
approximately $800 thousand of one-time litigation expense. In addition 2005
adjusted EBITDA includes the results for NEON (March 7 - June 30, 2005)
Globix (excluding the NEON division) ended the third quarter with approximately
1,308 enterprise customers with an average Monthly Recurring Revenue per
customer (ARPU) of $3.7 thousand. The ARPU represents an increase of 12.1% over
the same quarter last year despite a 6% decrease in total customers. This is a
result of the company's consistent strategy of focusing on value added services,
such as Managed Security Services, for both existing and current clients.
"Our most recent financial results demonstrate that both divisions are growing
their base of business by delivering market relevant products. Of equal
importance, is that our integration activities are mostly complete and we are
recognizing and seizing new growth opportunities resulting from the combined
services and assets of both divisions," commented Stevenson.
Globix filed a Form 10Q for the quarter ended June 30, 2005 on Monday, August
15th. The company will hold an investor conference call on Wednesday, the 24th
of August at 4:00 p.m. (EDT). Further details regarding the call will be
forthcoming.
GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
June 30, September 30,
2005 2004
--------- ---------
Assets (Unaudited)
------ ---------
Current assets:
Cash and cash equivalents $ 4,427 $ 12,075
Short-term investments 4,589 7,625
Marketable securities 1 458
Accounts receivable, net of allowance
for doubtful accounts of $1,834 and
$2,248, respectively 11,983 6,157
Prepaid expenses and other current assets 5,433 5,101
Restricted cash 2,165 2,413
--------- ---------
Total current assets 28,598 33,829
Investments 985 1,988
Investments, restricted 9,858 2,324
Property, plant and equipment, net 207,695 90,822
Intangible assets, net of accumulated
amortization of $5,181 and
$3,699, respectively 10,673 7,656
Other assets 4,305 1,923
--------- ---------
Total assets $ 262,114 $ 138,542
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of capital lease
obligation and mortgage payable $ 628 $ 555
Accounts payable 10,687 6,599
Accrued liabilities 17,706 8,357
Deferred revenue 5,430 2,852
--------- ---------
Total current liabilities 34,451 18,363
Capital lease obligations, net of
current portion 173 121
Mortgage payable 19,353 19,606
11% Senior Notes 67,455 72,202
Accrued interest - 11% Senior Notes 1,240 3,349
Other long term liabilities 24,795 8,026
--------- ---------
Total liabilities 147,467 121,667
--------- ---------
Commitments and contingencies
Cumulative Convertible Preferred
Stock (Note 9) 12,841 --
Stockholders' Equity:
Common stock, $.01 par value; 500,000,000
shares authorized; 48,678,461 and
16,460,000 issued and outstanding, as of
June 30, 2005 and September 30, 2004 487 165
Additional paid-in capital 207,214 100,012
Deferred compensation -- (8)
Accumulated other comprehensive income 5,718 4,498
Accumulated deficit (111,613) (87,792)
--------- ---------
Total stockholders' equity 101,806 16,875
--------- ---------
Total liabilities, cumulative convertible
preferred stock and stockholders' equity $ 262,114 $ 138,542
========= =========
GLOBIX CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
For the For the
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
June 30, June 30,
2005 2004(b) 2005 2004(b)
------------ ------------ ------------ ------------
Revenue, net $ 29,215 $ 15,729 $ 65,776 $ 45,143
Operating costs and
expenses:
Cost of revenue (ex-
cluding depreciation
and amortization
shown below) 16,751 8,554 37,869 25,681
Selling, general and
administrative 10,490 7,251 26,996 21,658
Loss on impairment of
assets -- -- -- 17,972
Depreciation and
amortization 5,985 3,519 14,000 10,363
------------ ------------ ------------ ------------
Total operating
costs and expenses 33,226 19,324 78,865 75,674
------------ ------------ ------------ ------------
Loss from operations (4,011) (3,595) (13,089) (30,531)
Interest and financing
expense (2,282) (2,466) (7,126) (8,975)
Interest income 111 100 339 415
Other (expense) income,
net 111 412 (561) 1,607
Gain (loss) on
discharge of debt -- -- (3,182) 1,747
------------ ------------ ------------ ------------
Loss before income
taxes (6,071) (5,549) (23,619) (35,737)
Income tax expense -- 21 -- 56
------------ ------------ ------------ ------------
Net loss (6,071) (5,570) (23,619) (35,793)
Dividends on cumulative
convertible preferred
stock 202 -- 202 --
------------ ------------ ------------ ------------
Net loss attributable
to common stock $ (6,273) $ (5,570) $ (23,821) $ (35,793)
============ ============ ============ ============
Basic and diluted loss
per share $ (0.13) $ (0.34) $ (0.79) $ (2.17)
============ ============ ============ ============
Weighted average common
shares outstanding --
basic and diluted 48,678,296 16,460,000 30,030,850 16,460,000
============ ============ ============ ============
(b) Restated
About Globix:
Globix Corporation (AMEX:GEX) is a leading provider of application, media, IP
infrastructure and network services. Globix delivers tailored and scalable
business solutions that are cost effective, helping clients optimize and protect
revenue streams, improve user satisfaction and reduce technology operating costs
and risks. NEON, a wholly owned subsidiary of Globix, provides advanced optical
networking to carriers and large enterprise customers in the Northeast and
mid-Atlantic. Globix and its subsidiaries have operations in New York, NY,
Boston, MA, London, UK, Santa Clara, CA, Fairfield, NJ, Washington DC and
Atlanta, GA. For more information visit www.globix.com
RISK FACTORS AND FORWARD-LOOKING INFORMATION
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; its ability to integrate the
operations of NEON into its existing operations; 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.
The Globix Corporation logo is available at:
http://media.primezone.com/prs/single/?pkgid=487
CONTACT:
Globix Corporation
Dan Ephraim
Director, Marketing
212-625-7414
dephraim@globix.com