WESTBOROUGH, Mass., May 9, 2007 (PRIME NEWSWIRE) -- NEON Communications Group (AMEX:NGI) today announced financial results for its fiscal 2007 second quarter ended March 31, 2007. For the quarter, the Company posted revenue from continuing operations of $18.7 million and a net quarterly loss of $0.7 million. Absent approximately $0.7 million of corporate transition costs associated with the move of the corporate headquarters from New York City, NY to Westborough, MA and approximately $0.1 million of losses from discontinued operations, the company would have had positive net income for the quarter. These results compare to revenue from continuing operations of $16.2 million and a net loss of $4.1 million in the year-ago quarter. "This is the first quarter where we are reporting solely on the accomplishments of NEON as a stand alone transport company and it reflects yet another quarter of continued revenue growth," said Eric Sandman, Chief Financial Officer.
Recent Developments
Corporate Name Change
Effective February 27, 2007, the Company changed its name to NEON Communications Group, Inc. from Globix Corporation. The name change was made to reflect the transformation of the Company to solely a regional fiber optic transport network service provider operating in the Northeast and mid-Atlantic regions of the United States.
Transition of Corporate Functions
The Company's principal executive offices are now located in Westborough, MA. During the first six months of fiscal year 2007, the Company transitioned its corporate functions from its New York City, NY location to its Westborough, MA location. During this transition period, the Company has been hiring replacement staff as well as personnel to staff new Finance roles. The hiring process has been focused on recruiting employees with expertise in Sarbanes Oxley compliance, financial reporting and internal auditing. "We now believe that the transition is complete and that the team is fully staffed," concluded Sandman.
Forward-Looking and Cautionary Statements
Any statements contained in this press release that are not statements of historical fact, including statements about management's beliefs and expectations, are forward-looking statements and should be evaluated as such. The words "anticipates", "believes", "expects", "intends", "plans", "estimates", "targets", "projects", "should", "may", "will", and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, the Company's current expectations, plans, strategies, and anticipated financial results and involve a number of known and unknown risks, uncertainties, and factors that may cause actual results of the Company to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to the following: its history of operating losses and capital requirements; its ability to retain existing customers and attract new customers; its ability to achieve cost-savings and generate positive cash flow; risks associated with potential acquisitions and divestitures; and the other risks identified in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended September 30, 2006, as well as in the other documents that the Company files from time to time with the Securities and Exchange Commission.
Many of these risks are beyond management's ability to control or predict. All forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements and risk factors contained in this press release and the Company's filings with the Securities and Exchange Commission. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, the Company does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.
About NEON:
NEON Communications, Inc., a subsidiary of NEON Communications Group Corporation (AMEX:NGI), is a facilities-based wholesale communications provider, supplying high bandwidth fiber optic capacity and comprehensive end-to-end telecom services to communications companies and enterprise customers on an intercity, regional and metro network in the 12-state Northeast and mid-Atlantic region, with 4,800 route miles and over 230,000 fiber miles from Maine to Virginia. For more information, visit www.neoninc.com.
The NEON Communications logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3426
NEON COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly GLOBIX CORPORATION)
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
March 31, September 30,
2007 2006
--------- ---------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 23,507 $ 88,127
Accounts receivable, net allowance for
doubtful accounts of $946 and $865,
respectively 5,276 3,441
Prepaid expenses and other current assets 1,446 1,721
Restricted cash 5,616 447
Current portion of assets held for sale -- 6,763
--------- ---------
Total current assets 35,845 100,499
Restricted Cash 7,090 10,190
Property, plant and equipment, net 124,458 125,455
Intangible assets, net of accumulated
amortization of $1,162 and $884,
respectively 3,338 3,616
Assets held for sale, net of current portion -- 16,364
Other assets 2,646 3,096
--------- ---------
Total assets $ 173,377 $ 259,220
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,106 $ 5,113
Accrued liabilities 14,161 12,525
Current portion of deferred revenue 2,653 2,544
Current portion of liabilities held for sale -- 6,923
--------- ---------
Total current liabilities 19,920 27,105
11% Senior Notes 2,992 74,875
9% Senior Notes -- 5,000
Accrued interest - Senior Notes 300 3,565
Deferred revenue 12,931 13,791
Other long term liabilities 2,256 2,191
Liabilities held for sale, net of current
portion -- 3,196
--------- ---------
Total liabilities 38,399 129,723
--------- ---------
Cumulative Convertible Preferred Stock 14,026 13,676
--------- ---------
Commitments and contingencies:
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 500,000,000
shares authorized; 48,881,655 and
48,725,246 issued and outstanding at
March 31, 2007 and September 30, 2006,
respectively 489 487
Additional paid-in capital 211,013 210,161
Accumulated other comprehensive income 110 105
Accumulated deficit (90,660) (94,932)
--------- ---------
Total stockholders' equity 120,952 115,821
--------- ---------
Total liabilities and stockholders' equity $ 173,377 $ 259,220
========= =========
NEON COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
(formerly GLOBIX CORPORATION)
CONSOLIDATED INCOME STATEMENT
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
------------------------
3 MONTHS ENDED
March 31, March 31,
2007 2006
----------- -----------
Revenue, net $ 18,721 $ 16,166
Operating costs and expenses:
Cost of revenue (excluding depreciation,
amortization, occupancy and certain
payroll) 9,812 8,277
Selling, general and administrative 5,783 6,685
Depreciation and amortization 3,887 3,443
----------- -----------
Total operating costs and expenses 19,482 18,405
----------- -----------
Loss from operations (761) (2,239)
Interest and financing expense (432) (2,265)
Interest income 364 86
Other income, net 357 327
----------- -----------
Loss from continuing operations before
income taxes (472) (4,091)
Tax provision -- --
----------- -----------
Loss from continuing operations (472) (4,091)
Income (loss) from discontinued operations,
net of income taxes (81) 187
----------- -----------
Net loss (553) (3,904)
Dividends and accretion on preferred stock 176 166
----------- -----------
Net loss attributable to common
stockholders $ (729) $ (4,070)
=========== ===========
Loss per common share, from continuing
operations:
Basic $ (0.01) $ (0.08)
=========== ===========
Diluted $ (0.01) $ (0.08)
=========== ===========
Loss per common share, from discontinued
operations:
Basic $ -- $ --
=========== ===========
Diluted $ -- $ --
=========== ===========
Loss per common share, attributable to
common stockholders:
Basic $ (0.01) $ (0.08)
=========== ===========
Diluted $ (0.01) $ (0.08)
=========== ===========
Weighted average number of common and common
equivalent shares:
Basic 48,775,123 48,697,465
Diluted 48,775,123 48,697,465