WESTBOROUGH, Mass., Feb. 8, 2007 (PRIME NEWSWIRE) -- Globix (AMEX:GEX) today announced financial results for its fiscal 2007 first quarter ended December 31, 2006. For the quarter the Company posted revenue from continuing operations of $18.1 million and net quarterly profit of $5.2 million, including the gain of $6.4 million on the sale of our U.S. hosting division. These results compare to revenue from continuing operations of $15.3 million and a net loss of $6.0 million in the year-ago quarter. "Globix continues to grow its revenue and improve its financial position. Revenue from continuing operations was up 18% from the previous year-ago quarter," said Eric Sandman, Chief Financial Officer.
Recent Developments
During 2006, we conducted a review of strategic alternatives related to our businesses and properties. With the sale of our U.S. Hosting Division in this latest quarter and paying down of substantially all outstanding debt, we are now a transport-only company focused on our NEON business. Prior to this quarter, we completed the sale of our UK Hosting Division and our former corporate headquarters building in New York City. Further information concerning these developments and our results for the quarter ended December 31, 2006 is available in the Company's Quarterly Report on Form 10-Q, which was filed today.
"As a result of the transactions completed in the last twelve months, we have significantly improved the Company's liquidity and financial position, although we continue to post an operating loss. We are coming off a year where we have had very good revenue growth in the transport business, and we are positioned well to take advantage of opportunities going forward," said Kurt Van Wagenen, CEO and President of Globix.
Corporate Functions
The Company is in the process of transitioning corporate functions from its New York City location to its Westborough location. "One area where we have focused our efforts recently is in strengthening our Finance organization. We have added several new people to the team," said Sandman. In December 2006, John Stack joined Globix and became the Chief Accounting Officer in early January 2007. Prior to Globix, Mr. Stack was the Vice President and Controller at a Fortune 500 utility company. In that role, Mr. Stack served as the Chief Accounting Officer and was responsible for all company accounting, tax, financial planning, and financial reporting activities. "Once the entire team is in place, the transition to a Westborough-based transport-focused company will be complete," added Sandman.
The Globix Corporation logo is available at http://media.primezone.com/prs/single/?pkgid=487
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, Globix' 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 Globix 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 Globix Annual Report on Form 10-K for the year ended September 30, 2006, as well as in the other documents that Globix 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 Globix or persons acting on behalf of Globix are expressly qualified in their entirety by the cautionary statements and risk factors contained in this press release and Globix' 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, Globix 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 Globix Corporation (AMEX:GEX), 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.
GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
---------- ----------
3 MONTHS 3 MONTHS
ENDED ENDED
DEC. 31, DEC. 31,
2006 2005
---------- ----------
Revenue, net $18,139 $15,314
Operating costs and expenses:
Cost of revenue (excluding
depreciation, amortization,
occupancy and certain payroll) 9,359 8,355
Selling, general and administrative 6,198 8,066
Depreciation and amortization 3,812 3,486
---------- ----------
Total operating costs and expenses 19,369 19,907
---------- ----------
Loss from operations (1,230) (4,593)
Interest and financing expense (1,322) (2,504)
Interest income 644 46
Other income, net 346 169
---------- ----------
Loss from continuing operations
before income taxes (1,562) (6,882)
Tax provision - -
---------- ----------
Loss from continuing operations
(1,562) (6,882)
Income from discontinued operations,
net of income taxes (includes
gain on sale of US hosting of
$6,430 in 2006) 6,737 836
---------- ----------
Net income (loss) 5,175 (6,046)
---------- ----------
Dividends and accretion on
preferred stock 174 164
---------- ----------
Net loss attributable to common
stockholders $ 5,001 $ (6,210)
========== ==========
Loss per common share, from
continuing operations:
Basic (0.03) (0.13)
========== ==========
Diluted (0.03) (0.13)
========== ==========
Earnings per common share, from
discontinued operations:
Basic 0.13 0.02
========== ==========
Diluted
0.13 0.02
========== ==========
Earnings (loss) per common share,
attributable to common stockholders:
Basic 0.10 (0.13)
========== ==========
Diluted
0.10 (0.13)
========== ==========
Weighted average number of common
and common equivalent shares:
Basic 48,725,644 48,697,465
Diluted 48,725,644 48,697,465
CONSOLIDATED FINANCIAL SUMMARY, Continued
Dec. 31, Sept. 30,
2006 2006
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 22,541 $ 88,127
Accounts receivable, net allowance for
doubtful accounts of $727 and $865,
respectively 6,574 3,441
Prepaid expenses and other current
assets 1,762 1,721
Restricted cash 4,141 447
Current portion of assets held for sale -- 6,763
-------- --------
Total current assets
35,018 100,499
Restricted Cash 10,190 10,190
Property, plant and equipment, net 124,926 125,455
Intangible assets, net of accumulated
amortization of $1,023 and $884,
respectively 3,477 3,616
Assets held for sale, net of current
portion -- 16,364
Other assets 2,801 3,096
-------- --------
Total assets $176,412 $259,220
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,361 $ 5,113
Accrued liabilities 14,449 12,525
Current portion of deferred revenue 2,639 2,544
Current portion of liabilities held
for sale -- 6,923
-------- --------
Total current liabilities 22,449 27,105
11% Senior Notes 2,992 74,875
9% Senior Notes -- 5,000
Accrued interest - Senior Notes 222 3,565
Deferred revenue 13,605 13,791
Other long term liabilities 2,227 2,191
Liabilities held for sale, net of
current portion -- 3,196
-------- --------
Total liabilities 41,495 129,723
-------- --------
Cumulative Convertible Preferred Stock 13,850 13,676
-------- --------
Commitments and contingencies:
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value;
500,000,000 shares authorized;
48,727,511 and 48,725,246 issued and
outstanding at December 31, 2006 and
September 30, 2006, respectively 487 487
Additional paid-in capital 210,402 210,161
Accumulated other comprehensive income 109 105
Accumulated deficit (89,931) (94,932)
-------- --------
Total stockholders' equity 121,067 115,821
-------- --------
Total liabilities and stockholders'
equity $176,412 $259,220
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