EXHIBIT 99.2
CONTACT:
GoAmerica, Inc.
Josh Rochlin
SVP, Strategy and Corporate Development
jrochlin@corp.goamerica.net
201-996-1717
GOAMERICA UNVEILS STRATEGIC DIRECTION
New Financing to Enable Broader Efforts in Deaf and Hard of Hearing Markets
HACKENSACK, NJ - December 19, 2003 - GoAmerica, Inc. (NASDAQ: GOAM) today
outlined plans for a strategic refocusing to be facilitated by $14.5 million in
proposed financing announced earlier today. The new financing, which is subject
to certain conditions (including shareholder approval), is intended to enable a
strategic expansion of the Company's focus on communications solutions for
people who are deaf or hard of hearing.
"The fresh start afforded to GoAmerica should enable us to improve the service
for our current customers and to develop and deliver innovative new products and
offerings for people who are deaf or hard of hearing," said Dan Luis, CEO of
GoAmerica. "I know our shareholders, customers, employees and partners have
waited patiently for the day that we'd signal our new direction and it is
rewarding to share these plans along with news of a significant pending
investment."
Luis continued, "In 2003, we focused on reducing financial constraints
associated with debt, maintaining the listing of our common stock on The NASDAQ
SmallCap Market and obtaining the commitments of necessary funding for future
operations. We will now devote the same energy to improving our business and
executing our growth plans. Our strategy, to be facilitated by the anticipated
funding, is centered on the pursuit of three priorities, focused on our Wynd
Communications subsidiary: 1) growth of its core wireless services business; 2)
development and marketing of new communications services, including branded IP
and Video Relay services; and 3) streamlined operations to enable superior
customer support. This is an exciting moment for GoAmerica as we begin 2004 with
renewed strength and enthusiasm."
Growth of Core Wynd Business
According to the American
Speech-Language Hearing Association (ASHA), there are an estimated 28 million
people who are deaf or hard of hearing, in the United States. GoAmerica's
subsidiary, Wynd Communications, markets to people who are profoundly deaf, the
smallest segment of this population. Management believes there is additional
growth potential in this market, beyond Wynd's current base of approximately
14,000 customers, as well as significant opportunity in the hard-of-hearing
market. GoAmerica plans to leverage these opportunities by implementing several
strategic marketing programs, developing communication technology enhancements
and expanding into the broader hard-of-hearing market with new wireless and
wireline communications solutions.
"We expect to deliver new benefits to our current customers while further
strengthening our position in the market," said Josh Rochlin, SVP of strategy
and corporate development. "With a strengthened balance sheet and an aggressive
yet realistic strategy, GoAmerica is poised to realize the potential of its core
business and pursue exciting opportunities including partnerships, acquisitions
and technological innovations."
Development and Marketing of new IP and Video Relay Services
Many consumers who have difficulty hearing or speaking rely on the nation's
Telecommunications Relay Service infrastructure that was created as a by-product
of the Americans with Disabilities Act in 1990 ("ADA"). Under the ADA, the
federal government provides reimbursement to telecommunications companies which
offer `functionally equivalent' services to people with hearing or speech
disabilities. Internet Protocol Relay (IP Relay) and Video Relay, two
enhancements to the Telecommunications Relay Service, have further improved the
communication experience for deaf consumers by providing easier, quicker
connections and enabling visual communication using sign language. Together, IP
and Video relay are quickly changing the way deaf Americans communicate.
"The ubiquity of computing technologies, the expanded adoption of broadband, and
the ongoing need of people with hearing loss for accessible communication, have
created an opportunity for GoAmerica to enter this market of federally
reimbursable services and develop new lines of revenue," said Joe Karp, director
of marketing for GoAmerica. "We believe that by enhancing the customer
experience for relay services and partnering with carriers seeking to increase
usage of their relay platforms, we can position ourselves to tap this new
revenue opportunity. We hope to develop the opportunity in this area through a
combination of partnerships and organically developed products such as a
WyndRelay.com portal and an innovative software client."
Streamlined Operations
GoAmerica operations will be focused on providing high quality, accessible
support to its customers. Operational improvements in the areas of customer
support, billing and service solutions are expected to further enhance the
overall customer experience while streamlining the Company's cost structure. As
part of this initiative, GoAmerica recently entered into an outsourcing
relationship with Communications Services for the Deaf in Sioux Falls, South
Dakota, which now enables support on a 7 X 24 basis. Additionally, the Company
will be relocating its Wynd Communications subsidiary from its present location
in San Luis Obispo, California to GoAmerica headquarters in Hackensack, New
Jersey. This site consolidation is expected to provide better access to the
Company's target market as well as provide the benefit of economies of scale and
is projected for completion in April 2004.
Status of Go.Web(TM)
GoAmerica previously disclosed that it has suspended divestiture efforts with
respect to its Go.Web technology and has developed an operating plan to retain
the intellectual property and revenue stream for the Go.Web software while
reorganizing the Company's human and financial resources around the new mission.
"We received offers for the Go.Web technology; however, the expected margin
contribution associated with maintaining Go.Web exceeds the one-time proceeds we
would have garnered through a sale. Our analysis indicated that if we could
restructure our creditor obligations while retaining our intellectual property
and the associated revenue stream, the Company's intellectual property portfolio
and financial position would be stronger," said Josh Rochlin, SVP of strategy
and corporate development for GoAmerica.
Financial Information and Revenue Expectations
The following financial information is being made available in conjunction with
disclosure obligations associated with the Company's financing activities.
Overall, GoAmerica, Inc. expects to post revenues for fiscal 2003 of
approximately $12 million, with operating losses and one-time charges associated
with restructuring. As a result of the financing, the Company's revenue
objective for 2004 is currently $12-13 million, with a goal of quarterly net
income profitability by the end of that year. The revenue objective for 2005 is
currently $16-18 million, with a goal of net income as a percent of revenues in
excess of 10%. The revenue contribution expected from the Company's Go.Web
technology is expected to decline from approximately 30% of revenues in 2003 to
approximately 14% and 4% in 2004 and 2005, respectively.
As it relates to subscriber metrics, Wynd's historical subscriber acquisition
costs have ranged between $110-130, with average monthly revenues per subscriber
between $40-44. Historical subscriber gross margin has been approximately 50%.
Churn among these subscribers, during the past 12 months, was approximately 2%
per month. The Company is continuing to examine its subscriber base in order to
improve payment profiles; as a result, overall revenues and subscriber counts
may decline through the end of the first quarter of 2004.
About GoAmerica
GoAmerica, Inc.'s aim is to improve the quality of life for people who are deaf
or hard of hearing by being their premier provider of innovative communication
services. These technology-based services are delivered through GoAmerica's
wholly owned subsidiaries, including Wynd Communications Corporation, the
leading provider of wireless telecommunications services for people with hearing
loss. Wynd Communications is a winner of the California Governor's Award for
Excellence in Universal Design and Technology and has been recognized by both
the Clinton and Bush Administrations for its commitment to Americans with
disabilities. For more information, visit www.goamerica.com or contact GoAmerica
directly at TTY 800-549-2800, voice 805-781-6000.
The statements contained in this news release that are not based on historical
fact -including the statements regarding 2003, 2004 and 2005 revenues and
profitability, subscriber metrics, the Company's plans and strategies, market
opportunities, anticipated service offerings and other future plans and
objectives, are "forward-looking statements" within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. Forward-looking statements
may be identified by the use of forward-looking terminology such as "may",
"will", "expect", "estimate", "anticipate", "continue", or similar terms,
variations of such terms or the negative of those terms. Such forward-looking
statements involve risks and uncertainties, including, but not limited to: (i)
our limited operating history; (ii) our reduced capital resources and need for
additional liquidity; (iii) our ability to fund our operating needs through
available cash reserves; (iv) our ability to raise additional equity and
renegotiate liabilities before our cash resources are fully depleted; (v) the
impact on our business from our receiving a "going concern" opinion from our
independent auditors; (vi) our ability to successfully implement our strategic
alliance with EarthLink; (vii) our dependence on EarthLink to provide billing,
customer and technical support to our subscribers; (viii) our ability to respond
to the rapid technological change of the wireless data industry and offer new
services; (ix) our dependence on wireless carrier networks; (x) our ability to
respond to increased competition in the wireless data industry; (xi) our ability
to integrate acquired businesses and technologies; (xii) our ability to leverage
strategic alliances to generate revenue growth; (xiii) our ability to increase
or maintain gross margins, profitability, liquidity and capital resources; and
(xiv) our ability to manage our remaining operations; and (xv) difficulties
inherent in predicting the outcome of regulatory processes. Such risks and
others are more fully described in the Risk Factors set forth in our filings
with the Securities and Exchange Commission. Our actual results could differ
materially from the results expressed in, or implied by, such forward-looking
statements. Each reference in this news release to "GoAmerica", the "Company" or
"We", or any variation thereof, is a reference to GoAmerica, Inc. and its
subsidiaries. "GoAmerica", "Go.Web", "Go.Web Enterprise Server", "Mobile
Office", and "OnPrem" are trademarks or service marks of GoAmerica, Inc.
"WyndTell", "Deafwireless", and "Deafwireless Superstore" are trademarks or
service marks of Wynd Communications Corporation. Other names may be trademarks
of their respective owners.
This press release is not a proxy statement and the Board of Directors of the
Company is not soliciting any proxy pursuant to this press release. The Board of
Directors presently intends to solicit proxies from the Company's stockholders,
by filing a proxy statement with the SEC and delivering the proxy statement to
the stockholders. If the Board of Directors does so, please read it carefully,
because it will contain important information about the Company and the matters
that the Board will ask the stockholders to consider and act upon. A description
of the interests of the members of the Board of Directors in the Company is set
forth in the proxy statement filed by the Company in connection with its
December 19, 2003 annual meeting of stockholders.
GoAmerica files reports, proxy statements and other information with the SEC
under the Securities Exchange Act of 1934, as amended. The SEC maintains an
Internet world wide web site at http://www.sec.gov, that provides access,
without charge, to such reports, proxy statements and other information. You can
also obtain such reports, proxy statements and other information, without
charge, from GoAmerica, by contacting Investor Relations, telephone:
201-996-1717, facsimile: 201-996-1772.
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