Sales of Mezzanine Products Increase 202%
Sequentially to $1.1 Million
Gross Margin Improves Sequentially from 40%
to 51%
Oblong, Inc. (NYSE American: OBLG) ("Oblong" or the "Company"),
the award-winning maker of multi-stream collaboration solutions,
today announced financial results for the three and nine months
ended September 30, 2020.
Financial Highlights
- Revenue of $3.3 million for the third quarter of 2020, compared
to $2.4 million for the third quarter of 2019 and compared
sequentially to $2.8 million for the second quarter of 2020.
- Gross profit margin of 51% for the third quarter of 2020,
compared to 33% for the third quarter of 2019 and compared
sequentially to 40% in the second quarter of 2020.
- Net loss of $2.1 million for the third quarter of 2020,
compared to a net loss of $0.6 million for the third quarter of
2019 and compared sequentially to a net loss of $3.4 million in the
second quarter of 2020.
- Adjusted EBITDA (“AEBITDA”) loss of $1.0 million for the third
quarter of 2020, compared to an AEBITDA loss of $0.1 million for
the third quarter of 2019 and compared sequentially to an AEBITDA
loss of $2.0 million for the second quarter of 2020. AEBITDA loss
is a non-GAAP financial measure. See “Non-GAAP Financial
Information” below for additional information regarding this
non-GAAP financial measure, and “GAAP to Non-GAAP Reconciliation”
later in this release for a reconciliation of this non-GAAP
financial measure to net loss.
- Cash balance of $2.7 million as of September 30, 2020.
- Subsequent to the end of the third quarter of 2020, in October
2020, the Company: (i) completed a private placement of common
stock for gross proceeds of $3.0 million, and (ii) completed an
agreement with Silicon Valley Bank ("SVB") satisfying all
outstanding obligations under the Loan Agreement with SVB, totaling
$5.6 million, in exchange for a one-time cash payment of $2.5
million.
“Our new Mezzanine™ pricing structure, which was implemented at
the end of our second quarter, has been a catalyst to more than a
three-fold sequential increase in Mezzanine product sales, and an
11% sequential improvement in gross margin, demonstrating strong
demand and increasing operating leverage in the business,”
commented Peter Holst, Chairman and CEO of Oblong. “We are
targeting sequential growth in Mezzanine revenue in the fourth
quarter, setting the stage for a strong 2021 as companies begin to
implement a hybrid in-office/remote approach to working. The strong
improvement in our gross margin, which includes a 63% gross margin
specific to Mezzanine products, is encouraging, positioning us for
sequential improvements in operating leverage and AEBITDA, as we
continue to grow our revenue.”
“Further, we reduced our AEBITDA loss by 48% on a sequential
basis, driven by the growth in revenue, expanded gross margins and
the elimination of 27% of our general and administrative costs,”
continued Holst. “Additionally, we continue to see our pipeline
grow and are encouraged by the level of new business opportunities.
We expect continued topline growth as we successfully convert our
growing pipeline into revenue.”
“Oblong continues to innovate, bolstering its position as a
collaboration leader,” added Holst. “We are breaking new ground in
both user interaction and interface design, applying our
human-centric design expertise and world-class engineering team to
tackle the collaboration needs of a new and more digitally
interactive workspace. This involves continually enhancing our
products with updated security and remote accessibility features,
while simultaneously developing new cloud-based offerings to extend
our Mezzanine™ platform beyond the physical workspace to support
remote participants. We anticipate launching new solutions and
feature sets in early 2021.”
Non-GAAP Financial Information
Adjusted EBITDA (“AEBITDA”) loss, a non-GAAP financial measure,
is defined as net loss before depreciation and amortization,
stock-based compensation, impairment charges, severance, merger
expenses and interest and other expense, net. AEBITDA loss is not
intended to replace operating loss, net loss, cash flow or other
measures of financial performance reported in accordance with
generally accepted accounting principles (GAAP). Rather, AEBITDA
loss is an important measure used by management to assess the
operating performance of the Company and to compare such
performance between periods. AEBITDA loss as defined here may not
be comparable to similarly titled measures reported by other
companies due to differences in accounting policies. Therefore,
AEBITDA loss should be considered in conjunction with net loss and
other performance measures prepared in accordance with GAAP, such
as operating loss or cash flow provided by (used in) operating
activities, and should not be considered in isolation or as a
substitute for GAAP measures, such as net loss, operating loss or
any other GAAP measure of liquidity or financial performance. A
GAAP to non-GAAP reconciliation of net loss to AEBITDA loss is
shown under “GAAP to Non-GAAP Reconciliation” later in this
release.
About Oblong, Inc.
Oblong’s innovative and patented technologies change the way
people work, create and communicate. Oblong's flagship product
Mezzanine™ is a remote meeting technology platform that offers
simultaneous content sharing to achieve situational awareness for
both in-room and remote collaborators. Oblong supplies Mezzanine
systems to Fortune 500 enterprise customers and is a Cisco
Solutions Plus integration partner. Learn more at
www.oblong.com.
Forward looking and cautionary statements
This press release and any oral statements made regarding the
subject of this release contain forward-looking statements as
defined under Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and are made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, that address activities
that Oblong assumes, plans, expects, believes, intends, projects,
estimates or anticipates (and other similar expressions) will,
should or may occur in the future are forward-looking statements.
Oblong’s actual results may differ materially from its
expectations, estimates and projections, and consequently you
should not rely on these forward-looking statements as predictions
of future events. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release include
statements relating to (i) the Company’s potential future growth
and financial performance and (ii) the success of the Company's
products and services. The forward-looking statements are based on
management’s current belief, based on currently available
information, as to the outcome and timing of future events, and
involve factors, risks, and uncertainties that may cause actual
results in future periods to differ materially from such
statements. A list and description of these and other risk factors
can be found in the Company’s Annual Report on Form 10-K for the
year ending December 31, 2019 and in other filings made by the
Company with the SEC from time to time, including the Company’s
Quarterly Report on Form 10-Q for the three and nine months ended
September 30, 2020, filed with the SEC on November 16, 2020 (the
“Quarterly Report”). Any of these factors could cause Oblong’s
actual results and plans to differ materially from those in the
forward-looking statements. Therefore, the Company can give no
assurance that its future results will be as estimated. The Company
does not intend to, and disclaims any obligation to, correct,
update, or revise any information contained herein. The Company’s
consolidated financial results for the three and nine months ended
September 30, 2019 do not reflect the financial results of its
wholly owned subsidiary, Oblong Industries, Inc., as the Company’s
acquisition of Oblong Industries closed on October 1, 2019. Please
see “Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations--Oblong’s Results of
Operations” in the Quarterly Report for more information regarding
the comparison of the Company’s financial results between
periods.
OBLONG, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
($ in thousands) (September
30, 2020 Unaudited)
September 30,
2020
December 31,
2019
(Unaudited)
ASSETS
Current assets:
Cash
$
2,670
$
4,602
Accounts receivable, net
2,207
2,543
Inventory
1,126
1,816
Prepaid expenses and other current
assets
725
965
Total current assets
6,728
9,926
Property and equipment, net
641
1,316
Goodwill
7,366
7,907
Intangibles, net
10,737
12,572
Operating lease - right of use asset,
net
1,665
3,117
Other assets
105
71
Total assets
$
27,242
$
34,909
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt, net of
discount
$
4,942
$
2,664
Accounts payable
662
647
Accrued expenses and other current
liabilities
1,489
1,752
Deferred revenue
1,973
1,901
Current portion of operating lease
liabilities
907
1,294
Total current liabilities
9,973
8,258
Long-term liabilities:
Long-term debt, net of current portion and
net of discount
3,035
2,843
Operating lease liabilities, net of
current portion
889
2,020
Other long-term liabilities
—
3
Total long-term liabilities
3,924
4,866
Total liabilities
13,897
13,124
Total stockholders’ equity
13,345
21,785
Total liabilities and stockholders’
equity
$
27,242
$
34,909
OBLONG, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data) (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenue
$
3,266
$
2,370
$
11,410
$
7,403
Cost of revenue (exclusive of depreciation
and amortization)
1,612
1,582
5,684
4,901
Gross profit
1,654
788
5,726
2,502
Operating expenses:
Research and development
747
190
3,062
652
Sales and marketing
668
38
2,708
111
General and administrative
1,332
1,035
5,173
2,917
Impairment charges
117
20
667
473
Depreciation and amortization
780
145
2,392
461
Total operating expenses
3,644
1,428
14,002
4,614
Loss from operations
(1,990
)
(640
)
(8,276
)
(2,112
)
Interest and other expense, net
95
—
322
1
Net loss
(2,085
)
(640
)
(8,598
)
(2,113
)
Preferred stock dividends
4
4
12
23
Net loss attributable to common
stockholders
$
(2,089
)
$
(644
)
$
(8,610
)
$
(2,136
)
Basic and diluted net loss per share
$
(0.40
)
$
(0.12
)
$
(1.64
)
$
(0.42
)
Q3 GAAP to Non-GAAP
Reconciliation:
Net loss
$
(2,085
)
$
(640
)
$
(8,598
)
$
(2,113
)
Depreciation and amortization
780
145
2,392
461
Interest and other expense, net
102
—
322
1
Impairment charges
117
20
667
473
Merger expenses
—
255
—
429
Severance
21
72
536
72
Stock-based compensation
28
14
89
67
Adjusted EBITDA Loss
$
(1,037
)
$
(134
)
$
(4,592
)
$
(610
)
Q2 GAAP to Non-GAAP
Reconciliation:
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Net loss
$
(3,385
)
$
(875
)
$
(6,514
)
$
(1,473
)
Depreciation and amortization
796
157
1,612
316
Interest and other expense, net
85
1
227
1
Impairment charges
—
453
550
453
Merger expenses
—
(87
)
—
174
Severance
475
—
515
—
Stock-based compensation
29
24
61
53
Adjusted EBITDA Loss
$
(2,000
)
$
(327
)
$
(3,549
)
$
(476
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201116005342/en/
Investor Relations Contact: Brett Maas Hayden IR, LLC
brett@haydenir.com 646-536-7331
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