NEW YORK, May 6, 2004 (PRIMEZONE) -- Globix Corporation (OTCBB:GBXX) today reported financial results for its Q2 of fiscal year 2004, which ended March 31, 2004, citing continued progress in its operations. During the quarter, Globix made significant strides to further reduce its operating costs and debt load. It completed the sale of its property at 415 Greenwich Street in New York City in January for net cash proceeds of approximately $48.7 million. In March, Globix completed its tender offer for its 11 percent Senior Notes holders and repurchased $40.3 million of principal amount at par value plus accrued interest of $3.7 million.
Revenues for the quarter were $15.0 million, which was $339 thousand, or 2.2 percent less than the same period in 2003. Additionally, Globix increased its revenue in Q2 of 2004 compared to Q1 of 2004, by $644 thousand or 4.5 percent. The company also reported that in the quarter cost of revenues was reduced $300 thousand or by 5.7 percent to $5.0 million from the same period in 2003, and that sales, general and administrative costs were reduced by $1.8 million, or by 14.6 percent to $10.7 million compared to the same period in 2003.
Loss from operations was $4.8 million for Q2 of 2004, compared to a loss of $6.2 million for the same period a year earlier. This was due primarily to our cost savings efforts. Net loss for the quarter was $6.9 million, or 42 cents basic and diluted loss per share, based on 16,460,000 common shares outstanding at the end of the quarter.
On a non-GAAP basis, adjusted EBITDA loss was $436 thousand, an improvement of approximately $1.0 million, or 69.4 percent from the same period in 2003. Globix also improved its EBITDA loss over Q1 of 2004 by $825 thousand or by 65.4 percent. 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) Other operating income resulting from the sale of the DSL Business in fiscal 2003, (ii) non-cash stock based compensation, (iii) impairment charges and (iv) 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.
GLOBIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
March 31, September 30,
2004 2003
--------- -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10,718 $ 24,503
Short-term investments 10,656 7,226
Marketable securities 643 1,531
Accounts receivable, net
of allowance for
doubtful accounts of
$2,050 and $2,646,
respectively 6,058 6,012
Prepaid expenses and
other current assets 6,260 4,497
Restricted cash 2,308 2,195
--------- ---------
Total current assets 36,643 45,964
Investments 2,244 697
Investments, restricted 4,959 4,733
Property, plant and
equipment, net 94,410 162,630
Intangible assets, net
of accumulated amortization
of $2,835 and $1,997,
respectively 8,520 8,158
Other assets 378 100
--------- ---------
Total assets $ 147,154 $ 222,282
========= =========
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of capital
lease obligation and
mortgage payable $ 611 $ 1,510
Accounts payable 4,423 5,846
Accrued liabilities 10,870 10,159
--------- ---------
Total current liabilities 15,904 17,515
Capital lease obligations,
net of current portion 351 374
Mortgage payable 19,755 19,912
11% Senior Notes 65,047 112,321
Accrued interest - 11%
Senior Notes 6,587 5,182
Other long term liabilities 10,882 10,659
Put-option liability -- 2,968
--------- ---------
Total liabilities 118,526 168,931
--------- ---------
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 100,018 97,191
Deferred compensation (23) --
Accumulated other
comprehensive income 5,097 2,401
Accumulated deficit (76,629) (46,406)
--------- ---------
Total stockholders' equity 28,628 53,351
--------- ---------
Total liabilities and
stockholders' equity $ 147,154 $ 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 Six
Months Ended Months Ended
---------------------- ----------------------
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenue, net $ 15,029 $ 15,368 $ 29,414 $ 31,848
Operating costs
and expenses:
Cost of revenue
(excluding
depreciation,
amortization,
certain payroll
and occupancy
shown below) 4,974 5,274 9,850 10,898
Selling, general
and administrative 10,740 12,570 21,684 24,461
Loss on impairment
of assets 659 -- 17,972 --
Depreciation and
amortization
3,473 4,116 6,844 7,843
---------- ---------- ---------- ----------
Total operating
costs and
expenses 19,846 21,960 56,350 43,202
Other operating
income -- 345 -- 345
---------- ---------- ---------- ----------
Loss from operations (4,817) (6,247) (26,936) (11,009)
Interest and
financing expense (3,058) (3,561) (6,511) (7,465)
Interest income 137 347 316 735
Other (expense)
income, net 899 204 1,196 386
Gain on discharge
of debt -- 2,044 1,747 4,771
Minority interest
in subsidiary -- 120 -- 228
---------- ---------- ---------- ----------
Loss before income
taxes (6,839) (7,093) (30,188) (12,354)
Income tax expense 35 -- 35 --
---------- ---------- ---------- ----------
Net loss $ (6,874) $ (7,093) $ (30,223) $ (12,354)
========== ========== ========== ==========
Basic and diluted
loss per share $ (0.42) $ (0.43) $ (1.84) $ (0.75)
========== ========== ========== ==========
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
-------------------------------------
March 31, March 31, December 31,
2004 2003 2003
--------- --------- -----------
Loss from operations $ (4,817) $ (6,247) $ (22,119)
Add Back:
Depreciation and
amortization 3,473 4,116 3,371
Loss on impairment
of assets 659 -- 17,313
Amortization of deferred
compensation -- 1,050 34
Rental income 270 -- 140
Deduct:
Amortization of
deferred compensation 21 -- --
Other operating income -- 345 --
--------- --------- ---------
Adjusted EBITDA loss $ (436) $ (1,426) $ (1,261)
========= ========= =========
Investor Call
Globix will host a conference call today at 2:00 p.m. EST that can be accessed through (800) 665-0669. In addition, a replay of the call will be available through the Globix website for one week after the call. Transcripts of the call will also be made available upon request.
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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