Exhibit 99.1
[LOGO]
NEWS ANNOUNCEMENT FOR IMMEDIATE RELEASE
Contact:
Michael Wachs, CEOcast for GlowPoint
212-732-4300, ext. 225
investors@glowpoint.com
GlowPoint Reports First Quarter Results
45% Year-over-Year Revenue Growth
74% Year-over-Year Billable Subscriber Location Growth
and 177% Sequential Increase in Gross Margin Drive Improved Operating Results
HILLSIDE, N.J. -- April 28, 2004 -- Glowpoint, Inc. (NASDAQ: GLOW), the nation's
first and leading carrier-grade, IP-based video communications service provider,
today announced financial results from continuing operations for the first
quarter ended March 31, 2004.
Summary Financial Results From Continuing Operations
(in thousands, except per share data)
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Three Months Ended
March 31,
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2004 2003
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Net revenue $3,225 $2,227
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Gross margin 485 (67)
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Net loss (1) $(8,214) $(4,649)
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Net loss per share, basic & diluted $(0.25) $(0.12)
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EBITDA (2) $(1,929) $(1,158)
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(1) Net loss includes discontinued AV and VS operations.
(2) Earnings before interest, taxes, depreciation and amortization (EBITDA) is
not a standard financial measurement under accounting principles generally
accepted in the United States of America ("GAAP"). EBITDA should not be
considered as an alternative to net loss or cash flow from operating
activities as a measure of liquidity or as an indicator of operating
performance or any measure of performance derived in accordance with GAAP.
EBITDA has been provided to more clearly present the financial results that
management uses to internally evaluate its business. Management believes
that this non-GAAP financial measure allows investors and management to
evaluate and compare the Company's operating results from continuing
operations from period to period in a meaningful and consistent manner.
Reconciliation of the non-GAAP financial measure to the most directly
comparable financial measure reported in accordance with GAAP is presented
in a separate section at the end of this press release.
GlowPoint Reports First Quarter Results
For the quarter ended March 31, 2004, total revenue increased 44.8% to $3.2
million from $2.2 million in the quarter ended March 31, 2003. Subscription and
related revenue for the 2004 period rose 91.2% to $2.4 million from $1.3 million
in the year-ago first quarter and 14.2% from the 2003 fourth quarter level of
$2.1 million. Billable subscriber locations on the GlowPoint network during the
first quarter increased 73.7% to 1,211 up from 697 in the first quarter of 2003
and 5.4% from the fourth quarter 2003 level of 1,149. Average monthly
subscription and related revenue per subscriber location at $690 increased 5.5%
from the fourth quarter 2003 level of $654. This is the first time in four
quarters that this metric has increased, driven by the introduction in January
of GlowPoint's new "All You Can See" unlimited video calling plans and other
product enhancements previously announced.
Non-subscription revenue related to bridging, events and other one-time fees
fell 17.1% to $791,000 from $954,000 in the year-ago first quarter, but was up
13.8% from the 2003 fourth quarter level of $695,000 due to the reversal of the
seasonality influences of the fourth quarter holiday period.
"GlowPoint's focus on growing our core subscription-based video communications
business is beginning to drive positive operational results," said David C.
Trachtenberg, Chief Executive Officer and President of GlowPoint. "Our actions
over the past two quarters laid the foundation for GlowPoint to drive profitable
revenue through an expanded and diversified sales partner channel."
Operating expenses for the quarter ended March 31, 2004 rose 59% to $4.0 million
from $2.5 million in the quarter ended March 31, 2003, but declined 10% from the
2003 fourth quarter level of $4.4 million.
Trachtenberg continued, "With double digit revenue growth, we improved our gross
margin 177.4% from 5.4% during the fourth quarter of last year to 15% in our
first quarter of 2004. And, with GlowPoint's "All You Can See" unlimited video
calling plans and improvements to our operational efficiencies, we continue to
manage to a 35% gross margin target for our core subscription business by the
fourth quarter of 2004."
The following chart summarizes operating highlights of GlowPoint's core
subcription business:
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Q1 Q1 Y/Y Q4 Q/Q
2004 2003 % 2003 % Change
---- ---- Change ---- --------
------
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Billable Subscriber Locations (1) 1,211 697 73.7% 1,149 5.4%
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Average Billable Subscriber Locations (2) 1,176 576 104.3% 1,087 8.2%
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Subscription and Related Revenue (in 000s) $2,434 $1,273 91.2% $2,132 14.2%
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GlowPoint Reports First Quarter Results
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Non-Subscription Revenue (in 000s) $791 $954 (17.1%) $695 13.8%
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Total Revenue (in 000s) $3,225 $2,227 44.8% $2,827 14.1%
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Average Monthly Subscription Revenue Per
Location (3) $690 $737 (6.4%) $654 5.5%
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Number of Customers 285 194 46.9% 271 5.2%
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Billable Subscriber Locations per
Customer (4) 4.25 3.59 18.3% 4.24 0.2%
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Subscriber Location Backlog (5) 35 327 (89.3%) 91 (61.5%)
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Gross Margin 15.0% (3.0%) NA 5.4% 177.4%
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Variable Gross Margin (6) 54.1% 42.0% 28.9% 51.0% 6.1%
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(1) Total number subscriber locations that were generating revenue for the
Company, as of the last day in each period. Multiple endpoints or circuits
can be linked to a billable subscriber location.
(2) Calculated as a weighted average number of billable subscriber locations,
based on the number of days a location was on the network during each
respective period.
(3) Calculated as subscription and related revenue divided by average billable
subscriber locations, divided by three, then multiplied by 1,000.
(4) Calculated as billable subscriber locations divided by the number of
customers.
(5) Represents the Company's estimate of billable subscriber locations under
contract but not yet generating revenue for the Company, at the end of the
periods shown. This estimate assumes no material changes that would
precipitate a customer from canceling a contract. The Company can give no
assurance as to whether these contracts will be executed. While the Company
may, from time to time, issue updated guidance with respect to its
subscriber location backlog, it assumes no obligation to do so.
(6) Calculated by dividing revenues less variable costs of revenue by revenue.
The Company ended the first quarter of 2004 with $13.6 million in cash, cash
equivalents and escrowed cash. At the end of 2003, GlowPoint had $4.5 million in
cash, cash equivalents and escrowed cash. During the first quarter, the Company
completed a private placement, raising net proceeds of $12.5 million.
"The pieces are in place for us to achieve our objective of reaching our
cash-flow break-even run-rate by the end of the year," Trachtenberg said. "We
just announced our strategic alliance with TANDBERG and the acquisition of the
NuVision customer base which will positively impact both our top and bottom line
for the second quarter and beyond." Trachtenberg concluded, "New products,
distribution partners and an expanded customer base, combined with a strong
balance sheet, give us confidence in GlowPoint's future and our ability to
capitalize on profitable growth opportunities."
GlowPoint Reports First Quarter Results
The Company will hold a conference call later today to discuss these results.
The call will take place from 5:00 p.m. to 6:00 p.m. EST. Mr. Trachtenberg,
Christopher Zigmont, Chief Financial Officer and Mike Brandofino, Chief
Technology Officer will host the call. Interested participants should call (617)
801-9711 and use pass code 85537690. There will be a playback available until
May 5, 2004. To listen to the playback, please call 888-286-8010 and use pass
code 43525695.
This call is being webcast by CCBN and can be accessed at GlowPoint's website at
WWW.GLOWPOINT.COM. The webcast will also be distributed over CCBN's Investor
Distribution Network to both institutional and individual investors. Individual
investors can listen to the call through CCBN's individual investor center at
WWW.COMPANYBOARDROOM.COM or by visiting any of the investor sites in CCBN's
Individual Investor Network such as America Online's Personal Finance Channel,
Fidelity Investments(R) (Fidelity.com) and others. Institutional investors can
access the call via CCBN's password protected event management site,
StreetEvents (WWW.STREETEVENTS.COM). An online archive of the broadcast will be
available through these websites through 11:59 p.m. Tuesday, May 12, 2004.
About GlowPoint
Glowpoint, Inc. (NASDAQ: GLOW) is the nation's first and leading carrier-grade,
IP-based video communications service provider. GlowPoint is a member of the
Cisco Powered Network Program, and operates a video communications service
featuring broadcast quality images with telephone-like reliability, features and
ease-of-use. The GlowPoint network spans three continents and carries over 8,000
video calls per month through the United States, Canada, Europe and Asia. Since
the network was launched in 2000, GlowPoint has carried over 17.4 million video
conferencing minutes in video calls. GlowPoint is headquartered in Hillside, New
Jersey. To learn more about GlowPoint, visit us at WWW.GLOWPOINT.COM.
# # #
The statements contained herein, other than historical information, are or may
be deemed to be forward-looking statements and involve factors, risks and
uncertainties that may cause actual results in future periods to differ
materially from such statements. These factors, risks and uncertainties include
market acceptance and availability of new video communication services; the
nonexclusive and terminable-at-will nature of sales agent agreements; rapid
technological change affecting demand for the Company's services; competition
from other video communications service providers; and the availability of
sufficient financial resources to enable the Company to expand its operations,
as well as other risks detailed from time to time in the Company's filings with
the Securities and Exchange Commission.
GLOWPOINT, SCHEDULEPOINT PARTNERPOINT, CUSTOMERPOINT and GLOWPOINT WEBCASTING
are service marks of Glowpoint, Inc. All other marks are trademarks or service
marks of their respective owners.
TABLES TO FOLLOW
Glowpoint, Inc.
Consolidated Balance Sheets
March 31, 2004 December 31, 2003
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 13,312,698 $ 4,184,897
Escrowed cash........................................................ 335,644 335,188
Accounts receivable-net of allowance for doubtful accounts of
$108,021 and $71,620 respectively................................ 2,599,803 2,305,552
Other current assets................................................. 1,369,794 1,439,978
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Total current assets............................................. 17,617,939 8,265,615
Furniture, equipment and leasehold improvements-net....................... 13,074,274 13,024,055
Goodwill - net............................................................ 2,547,862 2,547,862
Other assets.............................................................. 274,163 149,574
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Total assets..................................................... $ 33,514,238 $ 23,987,106
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 1,707,316 $ 2,368,484
Accrued expenses..................................................... 1,161,190 900,690
Deferred revenue..................................................... 795,720 --
Current portion of capital lease obligations......................... 127,374 131,182
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Total current liabilities........................................ 3,791,600 3,400,356
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Noncurrent liabilities:
Capital lease obligations, less current portion...................... 756 34,972
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Total noncurrent liabilities..................................... 756 34,972
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Total liabilities................................................ 3,792,356 3,435,328
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Commitments and contingencies
Subordinated debentures................................................... -- 4,888,000
Discount on subordinated debentures....................................... -- (3,149,805)
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Subordinated debentures, net......................................... -- 1,738,195
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Stockholders' Equity:
Preferred stock, $.0001 par value; 5,000,000 shares authorized,
203,667 shares outstanding....................................... -- --
Common stock, $.0001 par value; 100,000,000 authorized; 37,166,262
and 30,543,672 shares outstanding, respectively.................. 3,717 3,054
Treasury stock, 39,891 shares at cost................................ (239,742) (239,742)
Deferred compensation................................................ (1,804,445) (1,650,607)
Additional paid-in capital........................................... 156,798,542 137,449,109
Accumulated deficit.................................................. (125,036,190) (116,748,231)
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Total stockholders' equity....................................... 29,721,882 18,813,583
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Total liabilities and stockholders' equity....................... $ 33,514,238 $ 23,987,106
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Glowpoint, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
------------------------------------
2004 2003
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Net revenues .......................................... $ 3,224,950 $ 2,226,858
Cost of revenues ...................................... 2,739,753 2,294,287
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Gross margin ....................................... 485,197 (67,429)
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Operating expenses
Research and development ........................... 326,646 301,538
Selling ............................................ 1,835,155 985,141
General and administrative ......................... 1,882,099 1,234,664
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Total operating expenses .............................. 4,043,900 2,521,343
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Loss from continuing operations ....................... (3,558,703) (2,588,772)
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Other (income) expense
Amortization of deferred financing costs ........... 84,796 45,509
Interest income .................................... (1,520) (5,189)
Interest expense ................................... 53,021 373,050
Amortization of discount on subordinated debentures 3,165,036 534,625
Loss on extinguishment of debt ..................... 1,354,000 --
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Total other expenses, net ............................. 4,655,333 947,995
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Net loss from continuing operations ................... (8,214,036) (3,536,767)
Loss from discontinued AV operations .................. -- (793,022)
Loss from discontinued VS operations .................. -- (319,478)
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Net loss attributable to common stockholders .......... $ (8,214,036) $ (4,649,267)
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Net loss from continuing operations per share:
Basic and diluted .................................. $ (0.25) $ (0.12)
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Loss from discontinued operations per share:
Basic and diluted .................................. $ -- $ (0.04)
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Net loss attributable to common stockholders per share:
Basic and diluted .................................. $ (0.25) $ (0.16)
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Weighted average number of common shares:
Basic and diluted .................................. 32,391,261 29,029,894
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Glowpoint, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
---------------------------------
2004 2003
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Cash flows from Operating Activities
Net loss........................................................... $ (8,214,036) $ (4,649,267)
Adjustments to reconcile net loss to net cash provided (used) by
operating activities:
Depreciation and amortization.................................. 1,340,458 1,756,285
Amortization of deferred financing costs....................... 84,796 45,509
Amortization of discount on subordinated debentures............ 3,165,036 534,625
Loss on extinguishment of debt................................. 1,354,000 --
Non-cash compensation.......................................... 288,786 243,543
Increase (decrease) in cash attributable to changes in assets
and liabilities, net of effects of acquisitions:
Escrowed cash.............................................. (456) --
Accounts receivable........................................ (294,251) 2,568,209
Inventory.................................................. -- 496,260
Net assets of discontinued AV operations................... -- 2,177,363
Other current assets....................................... (331,590) (995,185)
Other assets............................................... (209,385) (8,471)
Accounts payable........................................... (661,168) (903,793)
Accrued expenses........................................... 186,577 (465,182)
Deferred revenue........................................... 795,720 12,767
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Net cash provided (used) by operating activities...... (2,495,513) 812,663
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Cash flows from Investing Activities
Purchases of furniture, equipment and leasehold improvements....... (988,903) (515,275)
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Net cash used by investing activities.......................... (988,903) (515,275)
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Cash flows from Financing Activities
Proceeds from common stock offering................................ 12,543,737 --
Costs of exchange/issuance of subordinated debentures.............. (15,232) (36,316)
Exercise of warrants and options, net.............................. 121,735 41,214
Proceeds from bank loans........................................... -- 25,788,354
Payments on bank loans............................................. -- (28,112,292)
Deferred financing costs........................................... -- (5,774)
Payments on capital lease obligations.............................. (38,023) (78,082)
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Net cash provided (used) by financing activities............... 12,612,217 (2,402,896)
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Increase (decrease) in cash and cash equivalents...................... 9,127,801 (2,105,508)
Cash and cash equivalents at beginning of period...................... 4,184,897 2,762,215
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Cash and cash equivalents at end of period............................ $ 13,312,698 $ 656,707
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Supplement disclosures of cash flow information: Cash paid during the period
for:
Interest........................................................... $ 8,504 $ 72,873
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Taxes.............................................................. $ -- $ --
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Non-cash financing and investing activities:
Preferred stock dividends of $73,923 were accrued during the three months
ended March 31, 2004. Equipment with costs totaling $232,100 was acquired
under capital lease arrangements during the three months ended March 31,
2003.
Glowpoint, Inc.
EBITDA Reconciliation
(Unaudited)
Three Months Ended March 31,
---------------------------------
2004 2003
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Net loss from continuing operations........................................ $ (8,214,036) $ (3,536,767)
Depreciation and amortization....................................... 1,340,458 1,374,285
Amortization of deferred financing costs............................ 84,796 45,509
Amortization of discount on subordinated debentures................. 3,165,036 534,625
Loss on extinguishment of debt...................................... 1,354,000 --
Non-cash compensation............................................... 288,786 243,543
Interest expense, net............................................... 51,501 180,651
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EBITDA from continuing operations.......................................... (1,929,459) (1,158,154)
EBITDA loss from discontinued AV operations................................ -- (793,022)
EBITDA gain from discontinued VS operations................................ -- 62,522
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Total EBITDA............................................................... $ (1,929,459) $ (1,888,654)
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