HACKENSACK, N.J., March 31, 2008 -- GoAmerica, Inc. (Nasdaq:GOAM) , a provider of relay and wireless communications services for deaf, hard-of-hearing, and speech-impaired persons, today announced results for the fourth quarter and year ended December 31, 2007. Earlier today, the Company filed with the Securities and Exchange Commission ("SEC") its Annual Report on Form 10-K for the year ended December 31, 2007 earlier today.
"During the fourth quarter, the Company received stockholder approval for its purchase of the telecommunications relay services business of Verizon and for its merger with Hands On Video Relay Services, Inc.," said Dan Luis, CEO of GoAmerica. "These transactions were enabled by the financial commitment of $110 million provided by Clearlake Capital Group, Churchill Financial LLC and Ableco Finance LLC. We believe that these two transactions, which closed on January 10, 2008 after receiving all required regulatory approvals, will enable GoAmerica to enhance its position as a market leader in our sector."
Financial Review
Total revenue for the three months ended December 31, 2007 was $5.2 million, compared to $4.8 million in the third quarter of 2007 and to $4.2 million in the fourth quarter of 2006. Total revenue for 2007 was $18.6 million compared with $12.8 million for 2006.
Annual revenue growth was attributable to several factors including: continued growth in the Company's i711(R) relay and wireless divisions; mid-year 2006 certification by the Federal Communications Commission (FCC), which enabled GoAmerica to fully recognize revenues associated with its relay services; and the offering of our i711(R) Video Relay Service (VRS), which began in December of 2006.
Net loss from continuing operations for the fourth quarter of 2007 was approximately $1.3 million, or $0.56 per diluted common share, compared with a net loss from continuing operations of $861,000, or $0.41 per diluted common share, in the third quarter of 2007. Included in the loss from continuing operations for the quarters ended December 31, 2007 and September 30, 2007 were non-cash charges of $309,000 and $280,000 respectively, reflecting depreciation, amortization, and non-cash employee compensation charges for those periods. The net loss from continuing operations in the fourth quarter of 2006 was $24,000, or $0.00 per diluted share. Net loss from continuing operations for the year ended December 31, 2007 was approximately $3.7 million, or $1.68 per diluted common share, compared with a net loss from continuing operations of $1.4 million, or $0.65 per diluted common share, for the year ended December 31, 2006.
As of December 31, 2007, GoAmerica had approximately $2.4 million in cash and cash equivalents.
Summary of Recent Activities
-- Verizon TRS Asset Purchase: On January 10, 2008, the Company announced
that it had closed its acquisition of Verizon's telecommunications
relay services ("TRS") division for $46 million in cash and up to an
additional $8 million in contingent cash consideration. This
acquisition was financed with $35 million of equity financing and $30
million of senior debt financing, funded in each case by funds managed
by Clearlake Capital Group. The Company expects the transaction to
accelerate GoAmerica's strategy to expand its presence in the relay
market and strengthen the Company's financial platform for growth.
-- Hands On Merger: On January 10, 2008, the Company announced it had
closed its merger with Hands On Video Relay Services, Inc. for $35
million in cash and 6.7 million shares of the Company's common stock
for total consideration of approximately $69 million. The Hands On
transaction was funded through $5 million of committed equity financing
funded by Clearlake and $40 million of senior debt financing.
-- The foregoing transactions were financed through a $40 million first
lien credit facility provided by Churchill Financial LLC and Ableco
Finance LLC and a $30 million second lien credit facility provided by
Clearlake Capital Group, and by the sale of $38.5 million of
GoAmerica's Series A Preferred Stock to Clearlake and related entities.
The Company's first lien lenders also provided it with a $15 million
unfunded credit revolver creating additional liquidity for the Company
as needed.
-- On March 20, 2008, the Company entered into new employment agreements
with Daniel R. Luis, its Chief Executive Officer, and with Edmond
Routhier, its President and Vice Chairman of the Board (collectively,
the "Executives"). The terms of the employment agreements are
substantially the same.
-- On March 24, 2008, the Company announced the appointment of Chris
Gibbons to its Board of Directors. Chris is an experienced
technologist having held multiple executive positions at Microsoft,
including Chief Information Officer (CIO). Most recently, Chris was the
Chief Technology Officer (CTO) and a board member of eStara Corp, an
e-commerce optimization provider. Chris is also a Clearlake Executive
Council member.
About GoAmerica
As a result of its acquisitions, GoAmerica is the nation's largest and second largest provider of text relay and video relay services, respectively, and provides a wide range of communications services tailored to the needs of people who are deaf, hard-of-hearing, or speech-disabled. The Company's vision is to improve the quality of life of its customers by being their premier provider of high quality, innovative communication services that break down communications barriers. For more information on the Company or its services, visit http://www.goamerica.com or contact GoAmerica directly at TTY 201-527- 1520, voice 201-996-1717, Internet Relay by visiting http://www.i711.com, or video phone by connecting to hovrs.tv.
About Clearlake Capital Group
Clearlake Capital Group is a private investment firm integrating private equity, leveraged finance, and special situations in both private and public market opportunities. Clearlake Capital seeks to partner with world-class management teams to invest in businesses going through change or expansion with patient long-term capital. The firm has a flexible mandate to invest across the capital structure in corporate divestitures, recapitalizations, restructurings, going private buyouts and minority equity investments. Clearlake Capital's founding principals, Steven Chang, Behdad Eghbali, and Jose Feliciano, have led over 40 investments totaling more than $3 billion of capital in sectors including business services, communications and media, energy and power, healthcare, manufacturing, retail/consumer and technology.
Safe Harbor
The statements contained in this news release that are not based on historical fact -- including statements regarding the anticipated results of the transactions described in this press release -- constitute "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: (i) our ability to integrate the businesses and technologies we have acquired; (ii) our ability to respond to the rapid technological change of the wireless data industry and offer new services; (iii) our dependence on wireless carrier networks; (iv) our ability to respond to increased competition in the wireless data industry; (v) our ability to generate revenue growth; (vi) our ability to increase or maintain gross margins, profitability, liquidity and capital resources; and (vii) difficulties inherent in predicting the outcome of regulatory processes. 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", the "GoAmerica" logo, "i711", and the "i711.com" logo, and "Relay and Beyond" are registered trademarks of GoAmerica. "i711.com" and "i711 Wireless" are trademarks and service marks of GoAmerica. Other names may be trademarks of their respective owners.
GOAMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $2,368 $3,870
Accounts receivable, net 1,960 1,891
Merchandise inventories, net 206 329
Prepaid expenses and other current assets 220 233
Total current assets 4,754 6,323
Other assets 13,544 7,556
Total assets $18,298 $13,879
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,285 $559
Accrued expenses 3,623 1,982
Accrued preferred dividends 50 --
Deferred revenue 94 100
Loan payable 3,532 --
Other current liabilities 88 65
Total current liabilities 8,672 2,706
Other liabilities 74 112
Stockholders' equity 9,552 11,061
$18,298 $13,879
GOAMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Revenues:
Relay services $4,538 $3,370 $16,325 $8,695
Subscriber 239 256 1,106 1,190
Commissions 260 409 711 2,454
Equipment 131 163 431 429
Other 9 3 52 8
5,177 4,201 18,625 12,776
Costs and expenses:
Cost of relay services 2,464 2,293 10,538 5,320
Cost of subscriber airtime 257 276 1,068 845
Cost of equipment revenue 449 156 944 536
Cost of network operations 29 29 116 110
Sales and marketing 678 785 2,293 2,494
General and administrative 3,313 1,315 7,405 4,589
Research and development 231 88 547 359
Depreciation and amortization 99 (12) 356 362
7,520 4,930 23,267 14,615
Loss from operations (2,343) (729) (4,642) (1,839)
Other income (expense):
Settlement losses -- -- (162) --
Terminated merger costs -- (59) -- (490)
Interest income (expense),
net (155) 23 (106) 169
Total other income (expense),
net (155) (36) (268) (321)
Loss before benefit from
income taxes (2,498) (765) (4,910) (2,160)
Income tax benefit 1,210 789 1,210 789
Loss from continuing
operations (1,288) 24 (3,700) (1,371)
Loss from discontinued
operations -- (18) -- (589)
Net loss (1,288) 6 (3,700) (1,960)
Preferred dividends 30 -- 50 --
Net loss applicable to common
stockholders $(1,318) $6 $(3,750) $(1,960)
Loss per share-Basic and
Diluted:
Loss from continuing
operations $(0.56) $(0.00) $(1.68) $(0.65)
Loss from discontinued
operations -- (0.00) -- (0.28)
Basic and Diluted net loss
per share $(0.56) $(0.00) $(1.68) $(0.93)
Weighted average shares used
in computation of basic and
diluted net loss per share 2,298,917 2,140,696 2,239,080 2,105,184