Press release

Oblong Announces 20% Sequential Revenue Increase for Fourth Quarter of 2020

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Oblong, Inc. (Nasdaq: OBLG) (“Oblong” or the “Company”), the award-winning maker of multi-stream collaboration solutions, today reported financial results for the fourth quarter and fiscal year 2020.

Q4 2020 Financial Highlights

The Company reported the following financial results for the fourth quarter 2020:

  • Fourth quarter 2020 product sales from our flagship Mezzanine™ collaboration suite increased more than 50% sequentially to over $1.6 million, versus $1.1 million for the third quarter of 2020.
  • Fourth quarter 2020 total revenue increased more than 20% sequentially to over $3.9 million, versus $3.3 million for the third quarter of 2020.
  • Gross profit margin increased to 59% for the fourth quarter of 2020, compared sequentially to 51% for the third quarter of 2020 and to 40% for the second quarter of 2020.
  • Cash balance at December 31, 2020 was $5.3 million. As of December 31, 2020, the Company has no debt outstanding other than the Company’s $2.4 million PPP Loan, of which approximately $2.2 million is expected to be forgiven.
  • Net income of $1.2 million for the fourth quarter of 2020, compared sequentially to a net loss of $2.1 million for the third quarter of 2020 and to a net loss of $3.4 million for the second quarter of 2020. During the fourth quarter of 2020, the Company recorded a non-cash gain on debt extinguishment of $3.1 million.
  • Adjusted EBITDA (“AEBITDA”) loss of $0.4 million for the fourth quarter of 2020, compared sequentially to an AEBITDA loss of $1.0 million for the third quarter of 2020 and 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” for a reconciliation of this non-GAAP financial measure to net income (loss).

Additionally, on February 12, 2021, Oblong began trading on the Nasdaq Capital Market and all Series D and Series E Preferred Stock converted to common stock. As of February 12, 2021, the Company has no remaining preferred stock outstanding.

“We enter 2021 with a strong balance sheet, a pipeline for our innovative Mezzanine™ collaboration suite that is growing in terms of quality and quantity, and the best internal and partner sales organization in our company’s history,” commented Pete Holst, Chairman and CEO of Oblong. “Increasingly, enterprises are evaluating technology to boost productivity in anticipation of employees returning to work, and our solution is being actively considered as part of this growing trend. This, coupled with the strong sequential growth we delivered in the second half of 2020, give us significant and expanding optimism for the future.”

Conference Call Details

Management will host a conference call with the investment community today to discuss the Company’s financial results.

Date:

 

Tuesday, March 30, 2021

Time:

 

4:30 p.m. Eastern Time (ET)

Dial in Number for U.S. Callers:

 

1-877-407-0792

Dial in Number for International Callers:

 

1-201-689-8263

Please Reference Conference ID:

 

13717766

The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=143996.

Participating on the call will be Peter Holst, CEO and David Clark, CFO. To join the live conference call, please dial in to the above referenced telephone numbers five to ten minutes prior to the scheduled conference call time.

A replay will be available for two weeks starting on March 30, 2021 at approximately 7:30 p.m. ET. To access the replay, please dial 1-844-512-2921 in the U.S. and 1-412-317-6671 for international callers. The conference ID# is 13717766.

Non-GAAP Financial Information

Adjusted EBITDA (“AEBITDA”) loss, a non-GAAP financial measure, is defined as net income (loss) before depreciation and amortization, stock-based compensation, impairment charges, severance, income tax expense, merger expenses, and interest and other (income) expense, net. AEBITDA loss is not intended to replace operating loss, net income (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 income (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 income (loss), operating loss or any other GAAP measure of liquidity or financial performance. A GAAP to non-GAAP reconciliation of net income (loss) to AEBITDA loss is shown under “GAAP to Non-GAAP Reconciliation” later in this release.

About Oblong, Inc.

Oblong (Nasdaq: OBLG) provides innovative and patented technologies that 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. For more information, visit Oblong’s website, Twitter and Facebook pages.

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) potential forgiveness of any portion of the PPP Loan, (ii) the Company’s potential future growth and financial performance and (iii) the success of its 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, including the volatility of market price for our securities, 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, 2020 and in other filings made by the Company with the SEC from time to time. 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.

OBLONG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands)

 

 

December 31,

2020

 

December 31,

2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash

$

5,058

 

$

4,602

Current portion of restricted cash

158

 

 

 

Accounts receivable, net

3,166

 

 

2,543

 

Inventory

920

 

 

1,816

 

Prepaid expenses and other current assets

691

 

 

965

 

Total current assets

9,993

 

 

9,926

 

Property and equipment, net

573

 

 

1,316

 

Goodwill

7,367

 

 

7,908

 

Intangibles, net

10,140

 

 

12,572

 

Operating lease – right of use asset, net

903

 

 

3,117

 

Other assets

167

 

 

70

 

Total assets

$

29,143

 

 

$

34,909

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt, net of discount

$

2,014

 

 

$

2,664

 

Accounts payable

313

 

 

647

 

Current portion deferred revenue

1,217

 

 

1,901

 

Accrued expenses and other liabilities

1,201

 

 

1,752

 

Current portion of operating lease liabilities

830

 

 

1,294

 

Total current liabilities

5,575

 

 

8,258

 

Long-term liabilities:

 

 

 

Long-term debt, net of current portion and net of discount

403

 

 

2,843

 

Operating lease liabilities, net of current portion

602

 

 

2,020

 

Deferred revenue, net of current portion

506

 

 

 

Other long-term liabilities

 

 

3

 

Total long-term liabilities

1,511

 

 

4,866

 

Total liabilities

7,086

 

 

13,124

 

Total stockholders’ equity

22,057

 

 

21,785

 

Total liabilities and stockholders’ equity

$

29,143

 

 

$

34,909

 

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

 

 

Year Ended

 

December 31,

 

2020

 

2019

Revenue

$

15,333

 

 

$

12,827

 

Cost of revenue (exclusive of depreciation and amortization)

7,280

 

 

7,427

 

Gross profit

8,053

 

 

5,400

 

Operating expenses:

 

 

 

Research and development

3,711

 

 

2,023

 

Sales and marketing

3,392

 

 

1,936

 

General and administrative

6,724

 

 

5,377

 

Impairment charges

1,150

 

 

2,317

 

Depreciation and amortization

3,140

 

 

1,321

 

Total operating expenses

18,117

 

 

12,974

 

Loss from operations

(10,064

)

 

(7,574

)

Interest and other expense, net

371

 

 

187

 

Gain on extinguishment of debt

(3,117

)

 

 

Net loss before taxes

(7,318

)

 

(7,761

)

Income tax expense

103

 

 

 

Net loss

(7,421

)

 

(7,761

)

Preferred stock dividends

17

 

 

27

 

Undeclared stock dividends

788

 

 

 

Net loss attributable to common stockholders

$

(8,226

)

 

$

(7,788

)

 

 

 

 

Basic and diluted net loss per share

$

(1.48

)

 

$

(1.52

)

GAAP to Non-GAAP Reconciliation:

 

Net income (loss)

$

(7,421

)

$

(7,761

)

Depreciation and amortization

3,140

 

1,321

 

Interest and other expense, net

371

 

187

 

Income tax expense

103

 

 

Impairment charges

1,150

 

2,317

 

Gain on extinguishment of debt

(3,117

)

 

Merger expenses

 

642

 

Severance

536

 

225

 

Stock-based compensation

198

 

110

 

Adjusted EBITDA Loss

$

(5,040

)

$

(2,959

)

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands)

 

 

Three Months Ended

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

2020

 

2020

 

2020

 

2020

Revenue

$

5,328

 

 

$

2,816

 

 

$

3,266

 

 

$

3,923

 

Cost of revenue (exclusive of depreciation and amortization)

2,374

 

 

1,683

 

 

1,612

 

 

1,611

 

Gross profit

2,954

 

 

1,133

 

 

1,654

 

 

2,312

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

1,327

 

 

988

 

 

747

 

 

649

 

Sales and marketing

1,220

 

 

834

 

 

668

 

 

670

 

General and administrative

2,028

 

 

1,815

 

 

1,332

 

 

1,549

 

Impairment charges

541

 

 

 

 

117

 

 

492

 

Depreciation and amortization

815

 

 

796

 

 

780

 

 

749

 

Total operating expenses

5,931

 

 

4,433

 

 

3,644

 

 

4,109

 

Loss from operations

(2,977

)

 

(3,300

)

 

(1,990

)

 

(1,797

)

Interest and other expense, net

152

 

 

85

 

 

95

 

 

39

 

Gain on extinguishment of debt

 

 

 

 

 

 

(3,117

)

Net income (loss) before taxes

(3,129

)

 

(3,385

)

 

(2,085

)

 

1,281

 

Income tax expense

 

 

 

 

 

 

103

 

Net income (loss)

$

(3,129

)

 

$

(3,385

)

 

$

(2,085

)

 

$

1,178

 

GAAP to Non-GAAP Reconciliation:

 

Net income (loss)

$

(3,129

)

 

$

(3,385

)

 

$

(2,085

)

 

$

1,178

 

Depreciation and amortization

815

 

 

796

 

 

780

 

 

749

 

Interest and other expense, net

152

 

 

85

 

 

102

 

 

32

 

Income tax expense

 

 

 

 

 

 

103

 

Impairment charges

541

 

 

 

 

117

 

 

492

 

Gain on extinguishment of debt

 

 

 

 

 

 

(3,117

)

Severance

40

 

 

475

 

 

21

 

 

 

Stock-based compensation

32

 

 

29

 

 

28

 

 

109

 

Adjusted EBITDA Loss

$

(1,549

)

 

$

(2,000

)

 

$

(1,037

)

 

$

(454

)