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Glowpoint Reports Third Quarter 2012 Results

November 9, 2012 | David S. Maldow, Esq.
glowpoint_company_profile_montage.jpg
Company Closes Affinity VideoNet Acquisition and Sees Increased Sales Bookings

MURRAY HILL, N.J., Nov. 8, 2012 /PRNewswire/ - Glowpoint, Inc. (NYSE MKT: GLOW), a leading global provider of cloud and managed visual communication services, today reported its financial results for the third quarter ended September 30, 2012.

Third quarter revenues for cloud and managed visual communication services ("Managed Services Combined" as reported) were $3.2 million, an increase of 1.3% over the same period last year. Managed Services Combined represents 49% of total revenues in the quarter, up from 46% in the prior year period. Network services revenues for the quarter were $3.0 million, a decrease of 8.7% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $359,000 for the quarter, compared to $383,000 in the same period last year.

Adjusted EBITDA (as defined and reconciled to GAAP) for the third quarter was $571,000, a decrease of $266,000 over the same period last year. Adjusted EBITDA margin was 8.7% compared to 12.3% in the same period last year. Net loss for the third quarter was $592,000, a decrease of $628,000 in net income over the same period last year, primarily attributed to one time expenses associated with the acquisition of Affinity VideoNet that closed in the beginning of fourth quarter.

"Adjusted EBITDA declined in Q3 as a result of the investments we've made in bringing on new sales resources combined with slower usage revenues," said Joe Laezza, Glowpoint's President and CEO. "We added additional sales resources in Q3, which is beginning to already have a positive impact on sales bookings that will increase growth levels in the coming quarters."

For the nine months ended September 30, 2012, cloud and managed visual communication services revenues ("Managed Services Combined" as reported) were $9.7 million, an increase of 3.9% as compared to the same period last year. Network services revenues for the nine-month period were $9.2 million, a decrease of 9.8% over the same period last year. One-time and event-based revenues ("Professional and other services" as reported) were $1.2 million for the nine-month period, compared to $1.3 million in the same period last year.

Adjusted EBITDA for the nine-month period ended September 30, 2012 was $2.1 million, an increase of $476,000, or 29% over the same period last year. Net loss for the nine months ended September 30, 2012 was $172,000, a decrease in income of $257,000 over the same period last year.

"Sales bookings have increased in the quarter and we expect to begin to see the benefit of this in the Q4 period and heading into the new year. We are still seeing some delays in highly qualified sales opportunities. However, there are positive indications that the buying decision-making process is taking shape to the benefit of Glowpoint and the shift from on-premise deployment of appliance-based devices to cloud consumption of software-based services is accelerating," added Laezza.

"Our operating results in Q3 slowed, although we generated cash from operating activities despite heavy investments associated with sales and the acquisition of Affinity VideoNet," said Tolga Sakman, Glowpoint's CFO and SVP of Corporate Development. "With the positive trends in sales bookings and momentum with the recent acquisition, we believe there is good evidence of strong operating results into the coming periods."

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