HILLSIDE, N.J., Dec 9, 2003 (BUSINESS WIRE) -- Glowpoint, Inc. (NASDAQ: GLOW),
the nation's first and leading carrier-grade, IP-based video communications
service provider, announced that it is implementing a series of initiatives
designed to improve operations. The actions to increase operating efficiencies
include focus on network cost containment, reduction in non-revenue generating
subscriber locations and changes to subscription plans to align Glowpoint's
underlying cost structure with its revenue stream.
"With the sale of the Wire One hardware business that closed at the end of last
quarter, Glowpoint is a new company exclusively focused on delivering video
communications services," said David Trachtenberg, President and CEO of
Glowpoint. "Since my arrival at Glowpoint approximately two months ago, the
management team has been doing a systematic review of all areas where we will be
able to improve the operating results for our core business. After this
top-to-bottom review, we are confident that short-term initiatives in several
operational areas will yield tangible results."
For example, Glowpoint has already begun reducing install cycle times and
decreasing costs associated with delays in customer billing. As a result of
simple changes in its provisioning process and implementing industry standard
practices, the Company will be able to eliminate non-reimbursed costs by
initiating billing of subscription fees within 48 hours of Glowpoint service
availability. Glowpoint is also reducing overall network costs by actively
eliminating non-revenue producing locations, such as tests, trials and other
locations that are driving last-mile costs with no associated subscription
revenue plans.
Also, beginning January 1, 2004, Glowpoint will no longer absorb the federally
mandated Universal Service Fee (USF). Customer payment of USF is standard
industry practice and customer notification of this change has already been sent
in December invoices.
Finally, Glowpoint also plans to announce new subscription pricing and products
in early January that will reflect additional operational changes and a better
alignment with the Company's service capabilities and cost structure.
"The net result of these tactical changes and others that have yet to be
implemented will be positive to operating performance," Trachtenberg continued.
"Glowpoint currently has a 50% contribution margin on each new dollar of
revenue. I'm confident that these results will improve with a 'back-to-basics'
focus on operational efficiencies in the shorter-term and with scale benefits
over time." |
