NEW YORK, Aug. 2, 2004 (PRIMEZONE) -- Globix Corporation (OTCBB:GBXX) today reported financial results for its Q3 of fiscal year 2004, which ended June 30, 2004. During the quarter, Globix continued to make improvements to its financial position, remaining committed to its goal of sustained positive cash flow and growing its business. A major highlight of the quarter was the achievement of a positive adjusted EBITDA.
Revenue for the quarter was $15.7 million, which was $1.2 million or 8.3 percent higher than the same period in 2003. Additionally, Globix realized an increase in its revenue quarter over quarter. Compared to the quarter ended March 31, 2004, revenue increased $700 thousand, or 4.7 percent from $15.0 million.
Loss from operations was $3.6 million for Q3 of 2004, compared to a loss of $3.4 million for the same period a year earlier. Net loss for the quarter was $5.6 million or 34 cents basic and diluted loss per share, based on 16,460,000 common shares outstanding at the end of the quarter.
During this quarter, Globix increased its recurring service contracts by an average of 1.0 percent per month, compared to an average decrease of 1.7 percent per month for the same period in the prior year.
Globix ended the third quarter with approximately 1,390 customers with average Monthly Recurring Revenue per customer (ARPU) of $3,375. This represents an increase in ARPU of 3.8 percent over Q2, despite a 2.0 percent decrease in total customers. Globix is continuing to attract customers to its higher priced services while successfully providing additional services to its current customer base. Globix attributes this to the greater utilization of its bundled services offerings and the ability to offer the market a suite of managed services, overall addressing a wider range of customer needs.
On a non-GAAP basis, Adjusted EBITDA was $135 thousand, an improvement of $571 thousand and $1,396 thousand from the quarters ended March 31, 2004 and December 31, 2003, respectively. EBITDA is defined as net loss plus interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to include or exclude as appropriate (i) non-cash stock based compensation, (ii) impairment charges and (iii) rental income. EBITDA and Adjusted EBITDA are not recognized financial measures under GAAP and do not purport to be alternatives to operating loss as indicators of operating performance. Globix provides information on EBITDA and Adjusted EBITDA because it believes adjusted EBITDA is an indicator of its operating profitability since it excludes items which are not directly attributable to its ongoing business operations and as such, is subjective in nature. Reconciliation between Globix's adjusted EBITDA (loss) and operating loss is provided later in this press release.
As previously announced, Globix has entered into a merger agreement pursuant to which Globix has agreed to issue stock in exchange for shares of NEON Communications, Inc., a privately held provider of optical networking services for customers in the Northeast and mid-Atlantic markets. Globix intends to schedule its next investor conference call to occur following the effective date of the registration statement that will be filed in connection with the merger.
GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
June 30, September 30,
2004 2003
--------- -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10,954 $ 24,503
Short-term investments 8,501 7,226
Marketable securities 507 1,531
Accounts receivable, net
of allowance for
doubtful accounts of
$2,163 and $2,646,
respectively 5,964 6,012
Prepaid expenses and
other current assets 6,083 4,497
Restricted cash 2,068 2,195
--------- ---------
Total current assets 34,077 45,964
Investments 2,233 697
Investments, restricted 2,335 4,733
Property, plant and
equipment, net 92,450 162,630
Intangible assets, net
of accumulated amortization
of $3,267 and $1,997,
respectively 8,088 8,158
Other assets 426 100
--------- ---------
Total assets $ 139,609 $ 222,282
========= =========
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of capital
lease obligation and
mortgage payable $ 562 $ 1,510
Accounts payable 5,203 5,846
Accrued liabilities 9,957 10,159
--------- ---------
Total current liabilities 15,422 17,515
Capital lease obligations,
net of current portion 185 374
Mortgage payable 19,681 19,912
11% Senior Notes 72,202 112,321
Accrued interest - 11%
Senior Notes 1,347 5,182
Other long term liabilities 8,153 10,659
Put-option liability -- 2,968
--------- ---------
Total liabilities 116,990 168,931
--------- ---------
Commitments and contingencies
Stockholders' Equity:
Common stock, $.01 par
value; 500,000,000
shares authorized;
16,460,000 issued and
outstanding, for all
periods presented 165 165
Additional paid-in capital 99,981 97,191
Accumulated other
comprehensive income 4,672 2,401
Accumulated deficit (82,199) (46,406)
--------- ---------
Total stockholders' equity 22,619 53,351
--------- ---------
Total liabilities and
stockholders' equity $ 139,609 $ 222,282
========= =========
GLOBIX CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
---------------------- ----------------------
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenue, net $ 15,729 $ 14,519 $ 45,143 $ 46,367
Operating costs
and expenses:
Cost of revenue
(excluding
depreciation,
amortization,
certain payroll
and occupancy
shown below) 4,935 4,601 14,785 15,499
Selling, general
and administrative 10,870 9,253 32,554 33,714
Loss on impairment
of assets -- -- 17,972 --
Depreciation and
amortization
3,519 4,057 10,363 11,900
---------- ---------- ---------- ----------
Total operating
costs and
expenses 19,324 17,911 75,674 61,113
Other operating
income -- -- -- 345
---------- ---------- ---------- ----------
Loss from operations (3,595) (3,392) (30,531) (14,401)
Interest and
financing expense (2,466) (3,758) (8,975) (11,223)
Interest income 100 295 415 1,030
Other (expense)
income, net 412 220 1,607 606
Gain on discharge
of debt -- 1,154 1,747 5,925
Minority interest
in subsidiary -- 105 -- 333
---------- ---------- ---------- ----------
Loss before income
taxes (5,549) (5,376) (35,737) (17,730)
Income tax expense 21 -- 56 --
---------- ---------- ---------- ----------
Net loss $ (5,570) $ (5,376) $ (35,793) $ (17,730)
========== ========== ========== ==========
Basic and diluted
loss per share $ (0.34) $ (0.33) $ (2.17) $ (1.08)
========== ========== ========== ==========
Weighted average
common shares
outstanding--basic
and diluted 16,460,000 16,460,000 16,460,000 16,460,000
========== ========== ========== ==========
Reconciliation of Loss From Operation to Adjusted EBITDA
(Amounts in Thousands)
(Unaudited)
For the Three Months Ended
-------------------------------------
June 30, March 31, December 31,
2004 2004 2003
--------- --------- -----------
Loss from operations $ (3,595) $ (4,817) $ (22,119)
Add Back:
Depreciation and
amortization 3,519 3,473 3,371
Loss on impairment
of assets 0 659 17,313
Amortization of deferred
compensation (13) (21) 34
Rental income 224 270 140
--------- --------- ---------
Adjusted EBITDA(loss) $ 135 $ (436) $ (1,261)
========= ========= =========
About Globix:
Globix (http://www.globix.com)(GBXX) is a leading provider of managed Internet applications and infrastructure services for enterprises. Globix delivers and supports mission-critical applications and services via its secure Data Centers, high-performance global Tier 1 IP backbone, and content delivery network. Through Aptegrity, its managed services group, Globix provides remote management of custom and off-the-shelf Web-based applications on any server, anywhere, at any time. By managing such complex e-commerce, database, content management and customer relationship management software for its clients, Globix helps them to protect Internet revenue streams, reduce technology operating costs and operating risk, and improve user satisfaction. Globix's clients are companies which use the Internet as a way to provide business benefits and sustain a competitive advantage in their markets. Our clients include operating divisions of Fortune 100 companies as well as mid-sized enterprises in a number of vertical markets including health care, media and publishing, technology and financial services. Globix and its subsidiaries have operations in New York, London, Santa Clara, Fairfield, New Jersey and Atlanta.
Risk Factors and Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements are based on current information and expectations and are subject to risks and uncertainties that could cause the company's actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include: the company's ability to retain existing customers and attract new customers; its ability to match its operating cost structure with revenue to achieve positive cash flow; the sufficiency of existing cash and cash flow to complete the company's business plan and fund its working capital requirements; the insolvency of vendors and other parties critical to the company's business; the company's existing debt obligations and history of operating losses; its ability to integrate, operate and upgrade or downgrade its network; the company's ability to recruit and retain qualified personnel needed to staff its operations; potential market or technological changes that could render the company's products or services obsolete; changes in the regulatory environment; and other changes that are discussed in the company's Annual Report on Form 10-K and other documents that the company files with the Securities and Exchange Commission.
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