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Glowpoint Reports Second Quarter 2011 Results
August 9, 2011 | William Zimmerman
MURRAY HILL, N.J., August 8, 2011 - Glowpoint, Inc. (OTCBB: GLOW), a leading global provider of cloud managed video services, today reported its financial results for the second quarter ending June 30, 2011.
Total revenues for the second quarter period were $7.0 million. Cloud-based managed video service (MVS) revenues for the quarter were $3.1 million, an increase of 19% over the same period last year. Cloud-based MVS revenues were 44% of total revenues in the quarter, up from 36% in the prior year period. Network and professional service related revenues for the quarter were $3.9 million, a decrease of 14% over the same period last year.
Adjusted EBITDA (as defined and reconciled to GAAP) for the second quarter was $401,000, an increase of $665,000 over the same period last year. Adjusted EBITDA margin was positive 6% compared to a negative 4% in the same period last year. Net income was $17,000, an increase of $781,000 over the same period last year.
For the six months ended June 30, 2011, total revenues were $14.0 million, an increase of 3% as compared to the same period last year. Cloud-based MVS revenues for the six month period were $6.2 million, an increase of 26% over the same period last year. Network and professional service-related revenues for the six month period were $7.8 million, a decrease of 11% over the same period last year.
"The network services component of our business has performed as anticipated, and as previously discussed we continue to expect revenue from this lower margin service to moderately decline for the remainder of the year."
"Our cloud-based managed video service business continues to gain momentum. This business continues to increase as a percentage of our overall revenue, and will improve our operating leverage in future quarters. We are pleased with the strong foundation now in place and believe we are exceedingly well positioned to accelerate revenue growth rate and capitalize on the increasing demand for our cloud-based managed video services," said Joe Laezza, Glowpoint's president and CEO.
Adjusted EBITDA for the six month period ended June 30, 2011 was $825,000, an increase of $1.36 million over the same period last year. Net income for the six months ended this period was $49,000, an increase of $1.43 million over the same period last year.
"We continue to see improvement in our operating results as represented by the growth of adjusted EBITDA and income year over year," commented John McGovern, Glowpoint's executive vice president and chief financial officer. "This is a very different company than it was a year ago and we are confident our operating results will strengthen with the upward trend in our cloud managed video service revenues."
Key business metrics
- Sales bookings (defined as new sales to be delivered over a current average contract term of 22 months) in Q2 were up 60% to $4.7 million in contract value compared to the same period last year. Year to date sales bookings increased 49% to $7.0 million in contract value compared to the same six-month period last year.
- Number of managed telepresence and video conferencing rooms increased 120% to 919 compared to 416 in the same period last year.
- Managed conferences on a trailing twelve-month basis increased 78% to 108,114, compared to 60,593 in the same period last year.
- Number of certified enterprise video systems on Open Video increased 31% to 39,230, compared to 29,664 in the same period last year.
"We have made progress in sales bookings, pipeline growth and see appreciation in usage, and the company has a solid foundation for the next stage of profitable growth. We maintain our position that annualized revenue growth rates for our cloud managed service business will be in the 20%-30% range," said Laezza.
- Expanded partnership to deliver managed video services for Avaya globally.
- Expanded and strengthened an already powerful partnership with Polycom by signing a strategic agreement to deliver managed video services to Polycom's global enterprise customers.
- Became founding member of Open Visual Collaboration Consortium "OVCC," led by Polycom to develop an open standard for service providers to provide business to business exchange services.
- Added key industry veterans to executive team with Tolga Sakman heading up Corporate Development and Strategy, and Darren Podrabsky heading up Marketing.
- Grew sales team by adding multiple new key sales veterans across the U.S. to work closely with the Glowpoint partner community.
- Announced the development initiatives for a next generation B2B registry engine that will become commercially available and part of Glowpoint Open Video™ platform by end of year 2011.
- Provided high profile event services for the broadcasting of the NBA draft that enabled remote live interviews and breaking news using Glowpoint's HD telepresence event services as an alternative to satellite truck rolls in multiple NBA sites throughout the U.S.
For the six months ended June 30, 2011, capital expenditures were $554,000 and as of August 3, 2011 there were 25,113,701 shares of common stock issued and outstanding.
"We remain focused on the growth opportunity in front of us and will benefit from this commitment. As the global macroeconomic environment seems to have entered into unstable ground, we believe that the mission-critical nature of visual communications for our customers will help Glowpoint expand our cloud managed video service revenue and increase our user base. Recent industry analyst reports point to an increased demand for hosted infrastructure and third party management of enterprise deployments. Analysts conclude that the overall market opportunity for services is growing faster than that of telepresence and video conferencing equipment. Our business model is perfectly positioned to capitalize on these trends," added Laezza.
In lieu of an earnings call, the company expects to announce a date for a management presentation webcast in the near future.
Glowpoint, Inc. (OTCBB: GLOW) provides cloud managed video services that make the delivery of consistently high-quality video conferencing and telepresence service as simple as using the internet, between any technology, network and business. Using our Open Video cloud architecture, Glowpoint enables organizations of all sizes to adopt business-class video easily, scale instantly and collaborate openly, yet securely across technology boundaries - to realize the full value of visual communications. To learn more please visit http://www.glowpoint.com.
Non-GAAP Financial Information
Adjusted EBITDA is defined as net income or loss from continuing operations before depreciation, amortization, interest expense, interest income, sales taxes and regulatory fee expense or benefit, loss on extinguishment of debt, changes in fair value of derivative financial instruments and stock-based compensation, and severance. Adjusted EBITDA is not intended to replace operating income (loss), net income (loss), cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles. Rather, Adjusted EBITDA is an important measure used by management to assess the operating performance of the company. Adjusted EBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies. Additionally, Adjusted EBITDA as defined here does not have the same meaning as EBITDA as defined in our SEC filings prior to this date. A reconciliation of Adjusted EBITDA to net loss is shown below.
Forward Looking Statements
Some statements set forth in this release, other than historical information, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Statements that include words such as "anticipate," "believe," "estimate" or "expect" and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Certain factors that could cause our results to differ materially from our expectations are described in our filings with the Securities and Exchange Commission. We do not undertake, and specifically disclaim any obligation, to publicly release the results of any revisions that may be made to any forward-looking statements in order to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
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