Exhibit 99.1
[GoAmerica letterhead ]
CONTACT: Investor Relations
201-996-1717
investors@goamerica.com
GOAMERICA ANNOUNCES RESULTS FOR THE FOURTH QUARTER OF 2003 AND YEAR
ENDED DECEMBER 31, 2003
Enters 2004 With a Renewed Focus and Business Opportunities
Hackensack, NJ--March 10, 2004--GoAmerica, Inc. (NASDAQ: GOAM) today announced
results for the fourth quarter and year ended December 31, 2003. The Company
also filed its Annual Report on Form 10-K for the fiscal year ended December 31,
2003 with the Securities and Exchange Commission, which included the opinion of
the Company's independent auditors, WithumSmith&Brown, without the "going
concern" language included in the previous year's 10-K. Earlier in the day, the
Company announced that it had closed on the equity portion of its $14.5 million
financing after receiving approval from its stockholders.
Total revenue for the three months ended December 31, 2003 was approximately
$2.3 million, compared to total revenue in the previous quarter of approximately
$3.1 million and total revenue of approximately $6.8 million in the fourth
quarter of 2002. As in past quarters, the sequential decrease in total revenue
was primarily due to the Company's alliance with Earthlink and its continuing
efforts to improve the payment profile of its subscriber base by eliminating
those subscribers with poor payment performance. During the fourth quarter,
revenue attributable to the Company's Wynd Communications subsidiary was $1.8
million.
The anticipated year-over-year decline in total revenue was primarily due to the
continued implementation of the Company's strategic alliance with EarthLink
(NASDAQ: ELNK), which commenced in the third quarter of 2002. As part of this
alliance, EarthLink acquired segments of GoAmerica's customer base and became
the Company's primary provider of network access, inventory fulfillment, billing
and support. By transferring these lower margin products and services and
administrative costs to EarthLink, GoAmerica was able to more than offset the
year-over-year decline in revenue through a sizable reduction in our costs of
subscriber airtime and other operating expenses. Accordingly, GoAmerica also
realizes a significant reduction of revenue that it generates from sales of
wireless airtime and equipment.
During the fourth quarter, GoAmerica executed definitive agreements with
multiple investors to sell an aggregate of 96,666,666 shares of the Company's
common stock, plus warrants to purchase additional shares of common stock, for
an aggregate purchase price of approximately $14.5 million. This financing
included a $1 million secured bridge financing received on December 19, 2003 and
the equity investment that closed earlier today. Also during the fourth quarter,
GoAmerica entered into settlement agreements with its largest creditors, which
relieved the Company of approximately $10 million in debt and contingent
liabilities as of December 31, 2003, and will relieve an additional $2 million
during the first quarter of 2004. As a condition of the equity financing, a
maximum of $900,000 of the new financing proceeds will be used to satisfy
certain historical liabilities and to support a letter of credit. GoAmerica also
took steps to reduce further the Company's cost structure, including workforce
reductions and office consolidation. Through these initiatives and other cost
savings associated with GoAmerica's alliance with EarthLink, the Company was
able to reduce selling, general and administrative (SG&A) expenses during the
fourth quarter by 71% over the fourth quarter of 2002.
Net loss for the fourth quarter was approximately $1.4 million, or $0.03 per
diluted common share, compared with a net loss of $1 million, or $0.02 per
diluted common share, during the previous quarter, and a net loss of $8.2
million, or $0.15 per diluted common share, during the fourth quarter of 2002.
Reported net loss for the fourth quarter of 2003 includes a $750,000 reduction
in accruals for certain subscriber revenue-related expenses and a $347,000
reduction in general and administrative expenses for one-time reductions of
deferred rent for certain long term lease related costs recorded in prior
periods.
As of December 31, 2003, GoAmerica had $568,000 in cash and cash equivalents,
which includes amounts received from the bridge financing, compared to $845,000
as of September 30, 2003 and $5.0 million as of December 31, 2002. Through the
fourth quarter of 2003, GoAmerica has reduced its overall use of cash for ten
consecutive quarters. As a result of the closing of the balance of the financing
today, the Company believes that has sufficient funds to execute its new
business plan, which focuses on providing differentiated communication services
to people with hearing loss.
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 201-527-1520, voice 201-996-1717.
The statements contained in this news release (including our estimate regarding
the availability of cash resources) that are not based on historical fact 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 ability to successfully manage our strategic alliance with
EarthLink; (iii) our dependence on EarthLink to provide billing, customer and
technical support to certain of our subscribers; (iv) our ability to respond to
the rapid technological change of the wireless data industry and offer new
services; (v) our dependence on wireless carrier networks; (vi) our ability to
respond to increased competition in the wireless data industry; (vii) our
ability to integrate acquired businesses and technologies; (viii) our ability to
generate revenue growth; (ix) our ability to increase or maintain gross margins,
profitability, liquidity and capital resources; and (x) our ability to manage
our remaining operations; and (xi) 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, and "Wynd" and
"WyndTell" are registered trademarks of Wynd Communications Corporation. Other
names may be trademarks of their respective owners.
- Tables to follow -
GOAMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2003 2002
------- -------
Assets
Current assets:
Cash and cash equivalents .................... $ 568 $ 4,982
Accounts receivable, net ..................... 1,737 5,780
Merchandise inventories, net ................. 213 1,046
Prepaid expenses and other current assets .... 649 520
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Total current assets .............................. 3,167 12,328
Other assets ...................................... 9,798 14,437
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Total assets ...................................... $12,965 $26,765
======= =======
Liabilities and stockholders' equity
Current liabilities:
Accounts payable ............................. $ 1,472 $ 4,694
Accrued expenses ............................. 3,040 5,917
Bridge note payable, net ..................... 625 --
Deferred revenue ............................. 673 2,406
Other current liabilities .................... 13 348
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Total current liabilities ......................... 5,823 13,365
Other liabilities ................................. -- 383
Stockholders' equity .............................. $ 7,142 13,017
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12,965 $26,765
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GOAMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three Months Ended December 31, Year Ended December 31,
------------------------------------------------------------
2003 2002
Unaudited Unaudited 2003 2002
------------ ------------ ------------ ------------
Revenues:
Subscriber .............................. $ 2,111 $ 5,756 $ 10,108 $ 29,017
Equipment ............................... 125 900 1,042 6,560
Other ................................... 85 133 728 335
------------ ------------ ------------ ------------
2,321 6,789 11,878 35,912
Costs and expenses:
Cost of subscriber airtime, net ......... 364 3,669 2,669 20,434
Cost of network operations .............. 167 665 1,828 3,074
Cost of equipment revenue ............... 129 1,728 1,152 8,537
Sales and marketing, net ............... 204 1,221 1,072 8,038
General and administrative .............. 2,025 6,281 9,617 29,082
Research and development ................ 93 593 1,209 3,456
Depreciation and amortization ........... 366 729 1,912 4,342
Amortization of goodwill and other
intangibles ............................. 288 184 1,081 1,483
Impairment of goodwill .................. -- -- 193 8,400
Impairment of other long-lived assets ... 150 287 1,202 5,582
------------ ------------ ------------ ------------
3,786 15,357 21,935 92,428
------------ ------------ ------------ ------------
Loss from operations ......................... (1,465) (8,568) (10,057) (56,516)
Other income (expense):
Gain on sale of subscribers .................. -- -- 1,756 --
Settlement gains, net ........................ 85 -- 85 --
Interest (expense) income, net ............... (262) (21) (275) 191
------------ ------------ ------------ ------------
Total other income ........................... (177) (21) 1,566 191
------------ ------------ ------------ ------------
Net loss before benefit from income taxes .... (1,642) (8,589) (8,491) (56,325)
Income tax benefit ........................... 284 436 284 436
------------ ------------ ------------ ------------
Net loss ..................................... $ (1,358) $ (8,153) $ (8,207) $ (55,889)
============ ============ ============ ============
Basic net loss per share ..................... $ (0.03) $ (0.15) $ (0.15) $ (1.04)
============ ============ ============ ============
Diluted net loss per share ................... $ (0.03) $ (0.15) $ (0.15) $ (1.04)
============ ============ ============ ============
Weighted average shares used in computation of
basic net loss per share .................. 54,531,751 53,969,660 54,259,237 53,845,787
Weighted average shares used in computation of
diluted net loss per share ................ 54,531,751 53,982,579 54,259,237 53,869,236