EXHIBIT 99.1
[GOAMERICA LOGO]
Filed by:
GoAmerica, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
Pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: GoAmerica, Inc.
Commission File No.: 0-29359
CONTACT: Investor Relations
201-996-1717
investors@goamerica.com
GOAMERICA ANNOUNCES SECOND QUARTER 2005 RESULTS
Balance sheet remains strong as Company prepares for Hands On merger
HACKENSACK, NJ, -- August 11, 2005 -- GoAmerica, Inc. (NASDAQ: GOAM) today
announced results for the second quarter ended June 30, 2005.
Total revenue for the three months ended June 30, 2005 was approximately $1.9
million, compared to total revenue in the previous quarter of approximately $2.0
million and total revenue of approximately $1.6 million in the second quarter of
2004. During the second quarter, the Company refined its approach to its prepaid
services segment by focusing on higher margin opportunities, the resulting
impact of which was lower quarterly revenues for that business segment. The
Company expects the benefits of these structural adjustments to be reflected in
third quarter results.
Net loss for the second quarter was approximately $1 million, or $0.49 per
diluted common share, compared with a net loss of $1 million, or $0.49 per
diluted common share, during the previous quarter, and a net loss of $1.4
million, or $.68 per diluted common share, during the second quarter of 2004.
As of June 30, 2005, GoAmerica had approximately $6.4 million in cash and cash
equivalents, including $300,000 in restricted cash, compared to $7.4 million as
of March 31, 2005 and $9.7 million as of June 30, 2004. During the quarter, the
Company used approximately $1.1 million in cash to fund operating activities, of
which approximately $193,000 was used to acquire inventory on favorable terms in
conjunction with the expansion of the wireless business segment. The Company
retains a strong balance sheet with $7.3 million in working capital.
As previously announced, on July 6, 2005, GoAmerica entered into an agreement
and plan of reorganization with a private company known as Hands On, a leading
provider of video relay and interpreter services for the deaf and
hard-of-hearing market. The merger, expected to close in the fourth quarter, has
been approved by the companies' boards of directors and is subject to
shareholder approval of each company. At closing, the Hands On shareholders will
receive a number of shares of the Company's common stock approximately equal to
the number of shares of the Company's common stock outstanding immediately prior
to the closing.
"While recent inventory acquisition and merger related expenses increased our
use of cash, the Company's balance sheet remains strong and the number and
quality of our revenue sources are increasing due to new product and service
launches and acquisitions," said Dan Luis, GoAmerica's CEO. "Due to the
complementary nature of the company's businesses, upon the completion of our
merger with Hands On, we anticipate that the combined company will realize
significant strategic and financial benefits."
About GoAmerica
GoAmerica provides a wide range of wireless, relay and prepaid communications
services, customized for people who are deaf, hard of hearing or speech
impaired. The Company's vision is to improve the quality of life of its
customers by being their premier provider of innovative communication services.
For more information on the Company or its services, visit www.goamerica.com or
contact GoAmerica directly at TTY 201-527-1520, voice 201-996-1717 or via
Internet relay by visiting www.i711.com.
Safe Harbor
The statements contained in this news release that are not based on historical
fact (particularly those concerning what we hope to achieve by the merger with
Hands On) are "forward-looking statements" that are made in reliance upon the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
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 those of GoAmerica including: (i) our limited
operating history; (ii) our ability to successfully manage our relationship 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, including Hands On
(if the merger is completed); (viii) our ability to generate revenue growth;
(ix) our ability to increase or maintain gross margins, profitability, liquidity
and capital resources; (x) difficulties inherent in predicting the outcome of
regulatory processes; (xi) our limited experience in offering prepaid calling
cards; and (xii) difficulty in predicting the consequences of our entering into
a merger agreement with Hands On. 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. GoAmerica is not
obligated to update and does not undertake to update any of its forward looking
statements made in this press release. 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" and "WyndTell" are registered
trademarks of GoAmerica. "i711", "i711.com", and "Clear Mobile" are trademarks,
and "Relay and Beyond" is a service mark of GoAmerica. Other names may be
trademarks of their respective owners.
Additional Information
GoAmerica, Inc. plans to file a Registration Statement on SEC Form S-4 in
connection with the merger with Hands On and the parties expect to mail a Proxy
Statement/Prospectus to their shareholders containing information about the
merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND THE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN THEY ARE AVAILABLE.
THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS WILL CONTAIN
IMPORTANT INFORMATION ABOUT GOAMERICA, HANDS ON, THE MERGER AND RELATED MATTERS.
Investors and security holders will be able to obtain free copies of these
documents through the web site maintained by the U.S. Securities and Exchange
Commission at http//www.sec.gov. In addition to the Registration Statement and
the Proxy Statement/Prospectus, GoAmerica files annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements and other information
filed by GoAmerica at the SEC public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at the SEC's other public reference rooms. Please call
the SEC at 1-800-SEC-0330 for further information on public reference rooms.
GoAmerica's filings with the SEC also are available to the public at the web
site maintained by the SEC at http//www.sec.gov. Hands On, its directors,
executive officers and certain members of management and employees may be
soliciting proxies from Hands On's shareholders in favor of the adoption of the
merger and the merger agreement. GoAmerica, its directors, executive officers,
and certain members of management and employees may be soliciting proxies from
GoAmerica's shareholders to authorize the issuance of the shares of GoAmerica
common stock issuable pursuant to the merger agreement. A description of any
interests that Hands On's directors and executive officers, or that GoAmerica's
directors and executive officers, have in the merger will be available in the
Proxy Statement/Prospectus. This press release does not constitute an offer of
any securities for sale.
GOAMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2005 2004
----------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents.............................................. $ 6,077 $ 7,098
Accounts receivable, net............................................... 1,717 1,530
Other receivables..................................................... -- 732
Merchandise inventories, net........................................... 316 123
Prepaid expenses and other current assets.............................. 347 219
------------- -------------
Total current assets......................................................... 8,457 9,702
Other assets................................................................. 7,469 8,284
------------- -------------
Total assets................................................................. $ 15,926 $ 17,986
============= =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable....................................................... $ 456 $ 348
Accrued expenses....................................................... 565 538
Deferred revenue....................................................... 132 285
Other current liabilities.............................................. -- 1
------------- -------------
Total current liabilities.................................................... 1,153 1,172
Stockholders' equity ........................................................ 14,773 16,814
------------- -------------
$ 15,926 $ 17,986
============= =============
GOAMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- -------------------------------
2005 2004 2005 2004
-------------- --------------- -------------- --------------
Revenues:
Subscriber................................ $ 632 $ 1,523 $ 1,419 $ 3,389
Prepaid services.......................... 534 -- 1,425 --
Relay services............................ 312 -- 445 --
Equipment................................. 139 70 241 106
Other..................................... 291 4 406 50
-------------- --------------- -------------- --------------
1,908 1,597 3,936 3,545
Costs and expenses:
Cost of subscriber airtime................ 234 739 519 1,607
Cost of network operations................ 71 155 165 448
Cost of equipment revenue................. 193 80 298 114
Cost of prepaid services.................. 581 -- 1,411 --
Sales and marketing, net.................. 342 209 453 378
General and administrative................ 1,108 1,325 2,352 2,830
Research and development.................. 105 117 159 308
Depreciation and amortization............. 126 216 256 496
Amortization of other intangibles......... 221 183 442 435
-------------- --------------- -------------- --------------
2,981 3,024 6,055 6,616
-------------- --------------- -------------- --------------
Loss from operations........................... (1,073) (1,427) (2,119) (3,071)
Other income (expense):
Settlement gains (losses), net................. -- -- -- 1,621
Interest income (expense), net................. 38 36 76 (1,029)
-------------- --------------- -------------- --------------
Total other income (expense), net.............. 38 36 76 592
-------------- --------------- -------------- --------------
Net loss....................................... $ (1,035) $ (1,391) $ (2,043) $ (2,479)
============== =============== ============== ==============
Basic net loss per share....................... $ (0.49) $ (0.68) $ (0.98) $ (1.62)
============== =============== ============== ==============
Diluted net loss per share..................... $ (0.49) $ (0.68) $ (0.98) $ (1.62)
============== =============== ============== ==============
Weighted average shares used in computation of
basic net loss per share.................... 2,093,451 2,056,271 2,093,441 1,526,219
Weighted average shares used in computation of
diluted net loss per share.................. 2,093,451 2,056,271 2,093,441 1,526,219
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