NEW YORK, Aug. 15, 2005 (PRIMEZONE) -- Globix Corporation (AMEX:GEX), a leading provider of application, media, IP infrastructure and network transport services, today reported financial results for its third quarter which ended June 30, 2005. The results reflect the recent merger with NEON Communications for the period of March 7, 2005, the date of the merger close, through June 30, 2005.
Revenue for the quarter was $29.2 million, which, on a pro forma (combined company) basis, was $1.5 million or 5.3% higher than the same period in 2004. NEON's revenue for the quarter ended June 30, 2005 was $13.2 million, an increase of 10% from $12.0 million for the same period in 2004. Over the same periods, Globix division revenue was up $0.3 million.
"We continue to see strong lit services demand, with long term contracts, from the growing wireless carrier segment along with demand from existing customers as a result of our expanding network footprint," stated Pete Stevenson, CEO of Globix. Mr. Stevenson further stated, "We are responding to the market demand with increased sales in our valued hosting and managed services offerings."
Below is a pro-forma revenue table (showing revenues from each of the companies and the service lines for the periods indicated and the aggregate of such revenues in those periods) and a breakdown by major service line:
PRO FORMA REVENUE BREAKDOWN
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
----------------- -----------------
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Globix $15,973 $15,729 $49,310 $45,143
NEON 13,242 12,005 37,810 34,313
------- ------- ------- -------
Total Pro Forma Revenue 29,215 27,734 87,120 79,456
======= ======= ======= =======
REVENUE BY SERVICE LINE
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
----------------- -----------------
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Internet Hosting and
Co-Location $ 7,072 $ 6,106 $19,579 $17,854
Managed Services 5,239 4,917 16,211 13,721
IP Network Services and
Internet Access 3,809 4,465 11,823 13,197
Lit Fiber Services 11,439 -- 14,216 --
Dark Fiber Services 1,382 -- 1,726 --
Hardware and Software
Sales and Other 274 241 2,221 371
------- ------- ------- -------
Total Revenue 29,215 15,729 65,776 45,143
======= ======= ======= =======
On a non-GAAP basis, Adjusted EBITDA for the quarter was $2.2 million compared to $135 thousand for the same period last year. EBITDA is defined as net loss plus interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to exclude non-cash stock based compensation and impairment charges and to include 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. We provide information as to Adjusted EBITDA because we believe that it is useful to investors as a performance measure and may help investors understand the Company's cash resources and requirements.
In addition, the Company uses Adjusted EBITDA in its internal business planning process, in setting performance goals for the Company and for incentive compensation purposes. Adjusted EBITDA does not represent cash flow from operations, as defined under U.S. generally accepted accounting principles, and is not a measure of operating profitability or net income. Adjusted EBITDA should not be considered a substitute for financial measures that are computed in accordance with U.S. generally accepted accounting principles. Moreover, our computation of Adjusted EBITDA may differ from those used by other companies and should not be considered comparable. A reconciliation between Globix's Adjusted EBITDA(loss) and operating loss is provided below:
RECONCILIATION OF LOSS FROM OPERATIONS TO ADJUSTED EBITDA
(Amounts in Thousands)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
------------------ --------------------
June 30, June 30,
2005 2004 2005 2004
------- ------- -------- --------
Loss from Operations ($4,011) ($3,595) ($13,089) ($30,531)
Adjusted for
Depreciation/Amortization 5,985 3,519 14,000 10,363
Loss on impairment
of assets -- -- -- 17,972
Rental Income 213 224 632 634
Non cash comp (stock
options & warrants) 29 (13) 55 --
------- ------- -------- --------
Adjusted EBITDA 2,216(a) 135 1,598(a) (1,562)
======= ======= ======== ========
(a) 2005 adjusted EBITDA for the nine months ended June 30, 2005
includes approximately $800 thousand of a one-time litigation
expense. In addition 2005 adjusted EBITDA includes the results
for NEON (March 7 - June 30, 2005)
Globix (excluding the NEON division) ended the third quarter with approximately 1,308 enterprise customers with an average Monthly Recurring Revenue per customer (ARPU) of $3.7 thousand. The ARPU represents an increase of 12.1% over the same quarter last year despite a 6% decrease in total customers. This is a result of the company's consistent strategy of focusing on value added services, such as Managed Security Services, for both existing and current clients.
"Our most recent financial results demonstrate that both divisions are growing their base of business by delivering market relevant products. Of equal importance, is that our integration activities are mostly complete and we are recognizing and seizing new growth opportunities resulting from the combined services and assets of both divisions," commented Stevenson.
Globix filed a Form 10Q for the quarter ended June 30, 2005 on Monday, August 15th. The company will hold an investor conference call on Wednesday, the 24th of August at 4:00p.m. (EDT). Further details regarding the call will be forthcoming.
GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
June 30, September 30,
2005 2004
--------- ---------
Assets (Unaudited)
--------- ---------
Current assets:
Cash and cash equivalents $ 4,427 $ 12,075
Short-term investments 4,589 7,625
Marketable securities 1 458
Accounts receivable, net of allowance
for doubtful accounts of $1,834 and
$2,248, respectively 11,983 6,157
Prepaid expenses and other current assets 5,433 5,101
Restricted cash 2,165 2,413
--------- ---------
Total current assets 28,598 33,829
Investments 985 1,988
Investments, restricted 9,858 2,324
Property, plant and equipment, net 207,695 90,822
Intangible assets, net of accumulated
amortization of $5,181 and
$3,699, respectively 10,673 7,656
Other assets 4,305 1,923
--------- ---------
Total assets $ 262,114 $ 138,542
========= =========
Liabilities and Stockholders' Equity
-------------------------------------
Current liabilities:
Current portion of capital lease
obligation and mortgage payable $ 628 $ 555
Accounts payable 10,687 6,599
Accrued liabilities 17,706 8,357
Deferred revenue 5,430 2,852
--------- ---------
Total current liabilities 34,451 18,363
Capital lease obligations, net of
current portion 173 121
Mortgage payable 19,353 19,606
11% Senior Notes 67,455 72,202
Accrued interest - 11% Senior Notes 1,240 3,349
Other long term liabilities 24,795 8,026
--------- ---------
Total liabilities 147,467 121,667
--------- ---------
Commitments and contingencies
Cumulative Convertible Preferred
Stock (Note 9) 12,841 --
Stockholders' Equity:
Common stock, $.01 par value; 500,000,000
shares authorized; 48,678,461 and
16,460,000 issued and outstanding, as of
June 30, 2005 and September 30, 2004 487 165
Additional paid-in capital 207,214 100,012
Deferred compensation -- (8)
Accumulated other comprehensive income 5,718 4,498
Accumulated deficit (111,613) (87,792)
--------- ---------
Total stockholders' equity 101,806 16,875
--------- ---------
Total liabilities, cumulative convertible
preferred stock and stockholders' equity $ 262,114 $ 138,542
========= =========
GLOBIX CORPORATION AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
For the For the
Three Months Ended Nine Months Ended
---------------------- ----------------------
June 30, June 30,
2005 2004(b) 2005 2004(b)
---------- ---------- ---------- ----------
Revenue, net $ 29,215 $ 15,729 $ 65,776 $ 45,143
Operating costs and
expenses:
Cost of revenue (ex-
cluding depreciation
and amortization
shown below) 16,751 8,554 37,869 25,681
Selling, general and
administrative 10,490 7,251 26,996 21,658
Loss on impairment of
assets -- -- -- 17,972
Depreciation and
amortization 5,985 3,519 14,000 10,363
---------- ---------- ---------- ----------
Total operating
costs and expenses 33,226 19,324 78,865 75,674
---------- ---------- ---------- ----------
Loss from operations (4,011) (3,595) (13,089) (30,531)
Interest and
financing expense (2,282) (2,466) (7,126) (8,975)
Interest income 111 100 339 415
Other (expense)
income, net 111 412 (561) 1,607
Gain (loss) on
discharge of debt -- -- (3,182) 1,747
---------- ---------- ---------- ----------
Loss before income
taxes (6,071) (5,549) (23,619) (35,737)
Income tax expense -- 21 -- 56
---------- ---------- ---------- ----------
Net loss (6,071) (5,570) (23,619) (35,793)
Dividends on cumulative
convertible preferred
stock 202 -- 202 --
---------- ---------- ---------- ----------
Net loss attributable
to common stock $ (6,273) $ (5,570) $ (23,821) $ (35,793)
========== ========== ========== ==========
Basic and diluted
loss per share $ (0.13) $ (0.34) $ (0.79) $ (2.17)
========== ========== ========== ==========
Weighted average common
shares outstanding --
basic and diluted 48,678,296 16,460,000 30,030,850 16,460,000
========== ========== ========== ==========
(b) Restated
About Globix:
Globix Corporation (AMEX:GEX) is a leading provider of application, media, IP infrastructure and network services. Globix delivers tailored and scalable business solutions that are cost effective, helping clients optimize and protect revenue streams, improve user satisfaction and reduce technology operating costs and risks. NEON, a wholly owned subsidiary of Globix, provides advanced optical networking to carriers and large enterprise customers in the Northeast and mid-Atlantic. Globix and its subsidiaries have operations in New York, NY, Boston, MA, London, UK, Santa Clara, CA, Fairfield, NJ, Washington DC and Atlanta, GA. For more information visit www.globix.com
RISK FACTORS AND FORWARD-LOOKING INFORMATION
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; its ability to integrate the operations of NEON into its existing operations; 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 SEC.
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