Oblong Announces Financial Results for Second Quarter 2021

Rhea-AI Summary

Oblong (Nasdaq: OBLG) reported Q2 2021 results with total revenue of $2.0 million, down from $2.8 million in Q2 2020. Product sales from the Mezzanine™ suite grew to $0.5 million compared to $0.4 million last year. The company recorded a net loss of $2.2 million, improved from $3.4 million the previous year. Oblong raised $11.5 million from equity financing and had a cash balance of $13.1 million with no debt. The company plans to focus on the development of hybrid workspace solutions amid ongoing demand for collaboration tools.

Positive

• Secured $11.5 million from equity financing.
• Mezzanine™ product sales increased to $0.5 million.
• Improved net loss of $2.2 million, compared to $3.4 million last year.
• No debt as of July 31, 2021.

Negative

• Total revenue decreased from $2.8 million in Q2 2020 to $2.0 million in Q2 2021.
• Gross profit margin declined from 40% in Q2 2020 to 39% in Q2 2021.

Oblong, Inc. (Nasdaq: OBLG) (“Oblong” or the “Company”), the award-winning maker of multi-stream collaboration solutions, today reported financial results for the second quarter of 2021.

Q2 2021 and Recent Operational Highlights

• Mezzanine™ product was recently selected by one of the world’s leading entertainment companies as part of a global initiative to ‘re-invent the meeting space’ in preparation for a return to office of more 8,000 employees.
• Raised $11.5 million in net proceeds from an equity financing on June 30, 2021.
• $2.4 million PPP Loan was fully forgiven in July 2021; will record as other income in Q3 2021.
• The Company has no debt as of July 31, 2021.
• Appointed executive thought leaders and strategists Matt Blumberg and Debby Meredith to the Company's board of directors. Mr. Blumberg is the Co-Founder and CEO of Bolster, an on-demand executive talent marketplace. Ms. Meredith currently serves as a board member, advisor, and consultant to several high-tech companies with extensive experience in strategic roles with start-up companies such as Proofpoint, Aviatrix, Qventus, Alation, and Kinsa Health.

Pete Holst, Chairman and CEO of Oblong, commented, “The recent selection of Mezzanine by one of the world’s most prominent digital entertainment companies is incremental proof that reinforces the prioritization of hybrid collaboration and the importance of envisioning new types of workspaces as employees begin a measured return to corporate office environments. Beyond this initial engagement phase, we are managing a number of proposed and actual pilot implementations across a variety of industries that have incredible potential to scale in concert with our customers' vision of a redesigned workplace. As we build our next-generation of hybrid workspace solutions, investments in product development, design and customer engagement will be our core focus over the coming months.”

Holst continued, “In spite of recent dynamics related to Covid-19 variants across the world and a tempered return to commercial office spaces, we continue to see growing inquiries and requests to test and implement prototypes that address hybrid collaboration and, more importantly, increase engagement and accelerate productivity. Following the closure of many commercial spaces over the last 18 months, recent trends indicate that the 'full' return of employees is both unlikely and moving at a much more cautious pace than originally anticipated. While near-term employee engagement is likely to remain mostly remote, we believe there are growing indicators that applicability of our solutions and substantial domain expertise will have massive commercial appeal for the workforce of the future. Macro data continues to support significant growth for hybrid communications tools, and the market opportunity is highly compelling.”

Holst concluded, “Subsequent to the end of the second quarter, our board appointed two new independent directors, Mr. Matt Blumberg and Ms. Debby Meredith, to the board. They are dedicated, successful leaders with unique executive-level experience, strategic insights, and track records of success in technology that we are fortunate to leverage at Oblong. Elevating our corporate governance with these two talented professionals was timely as we continue to invest in engineering and product development for long-term growth.”

Q2 2021 Financial Highlights

The Company reported the following financial results for the second quarter of 2021:

• Second quarter 2021 product sales from its flagship Mezzanine™ collaboration suite of $0.5 million versus $0.4 million for the second quarter of 2020.
• Second quarter 2021 total revenue of $2.0 million compared to $2.8 million for the second quarter of 2020.
• Gross profit margin of 39% for the second quarter of 2021 compared to 40% for the second quarter of 2020.
• Net loss of $2.2 million for the second quarter of 2021 compared to net loss of $3.4 million for the second quarter of 2020.
• Adjusted EBITDA (“AEBITDA”) loss of $1.6 million for the second quarter of 2021, compared 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 loss.
• Total cash balance at June 30, 2021 was $13.1 million. The Company raised net proceeds of $11.5 million from an equity financing that closed on June 30, 2021.
• As of June 30, 2021, the Company had no debt outstanding other than the Company’s $2.4 million PPP Loan. The PPP Loan was entirely forgiven by the SBA in July 2021. Therefore, the Company will record other income in the third quarter of 2021 and has no debt as of July 31, 2021.

Conference Call Details

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

Date:		Wednesday, August 11, 2021
Time:		4:30 p.m. Eastern Time (ET)
Dial in Number for U.S. Callers:		1-888-394-8218
Dial in Number for International Callers:		1-856-344-9221
Please Reference Conference ID:		1130587

The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=146196.

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 August 11, 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 1130587.

Non-GAAP Financial Information

Adjusted EBITDA (“AEBITDA”) loss, a non-GAAP financial measure, is defined as net loss before depreciation and amortization, stock-based expense, impairment charges, severance, income tax expense, 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 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 (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) the Company’s potential future growth and financial performance and (ii) 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 under the heading "Updating Risk Factors" in the Company's Current Report on Form 8-K filed June 28, 2021, 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)
			June 30, 2021				December 31, 2020
			(Unaudited)
	ASSETS
	Current assets:
	Cash		$	13,033			$	5,058
	Current portion of restricted cash		61				158
	Accounts receivable, net		953				3,166
	Inventory		2,125				920
	Prepaid expenses and other current assets		1,393				691
	Total current assets		17,565				9,993
	Property and equipment, net		307				573
	Goodwill		7,367				7,367
	Intangibles, net		8,946				10,140
	Right-of-use assets, net		653				903
	Other assets		99				167
	Total assets		$	34,937			$	29,143
	LIABILITIES AND STOCKHOLDERS’ EQUITY
	Current liabilities:
	Current portion of long-term debt		$	—			$	2,014
	Accounts payable		518				313
	Current portion of deferred revenue		894				1,217
	Accrued expenses and other current liabilities		1,420				1,201
	Current portion of operating lease liabilities		734				830
	Total current liabilities		3,566				5,575
	Long-term liabilities:
	Long-term debt, net of current portion		2,417				403
	Operating lease liabilities, net of current portion		249				602
	Deferred revenue, net of current portion		400				506
	Total long-term liabilities		3,066				1,511
	Total liabilities		6,632				7,086
	Total stockholder's equity		28,305				22,057
	Total liabilities and stockholders’ equity		$	34,937			$	29,143

OBLONG, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2021				2020					2021				2020
Revenue		$	2,049			$	2,816			$	3,967			$	8,144
Cost of revenue (exclusive of depreciation and amortization)		1,249				1,683					2,539				4,072
Gross profit		800				1,133					1,428				4,072
Operating expenses:
Research and development		599				988					1,291				2,315
Sales and marketing		572				834					1,099				2,040
General and administrative		1,383				1,815					3,450				3,842
Impairment charges		17				—					48				550
Depreciation and amortization		707				796					1,429				1,612
Total operating expenses		3,278				4,433					7,317				10,359
Loss from operations		(2,478		)		(3,300		)			(5,889	)			(6,287	)
Interest and other expense (income), net		(232		)		85					(210	)			227
Net loss before taxes		(2,246		)		(3,385		)			(5,679	)			(6,514	)
Income tax expense		—				—					—				—
Net loss		(2,246		)		(3,385		)			(5,679	)			(6,514	)
Preferred stock dividends		—				4					1				8
Undeclared stock dividends		—				—					366				—
Induced conversion of Series A-2 Preferred Stock		—				—					300				—
Net loss attributable to common stockholders		$	(2,246	)		$	(3,389	)		$	(6,346	)		$	(6,522	)
Basic and diluted net loss per share		$	(0.08	)		$	(0.65	)		$	(0.29	)		$	(1.25	)

GAAP to Non-GAAP Reconciliation:

Net loss		$	(2,246	)		$	(3,385	)		$	(5,679	)		$	(6,514	)
Depreciation and amortization		707				796				1,429				1,612
Interest and other expense (income), net		(232		)		85				(210		)		227
Impairment charges		17				—				48				550
Severance		55				475				55				515
Stock issued for services		116				—				390				—
Stock-based expense		—				29				33				61
Adjusted EBITDA loss		$	(1,583	)		$	(2,000	)		$	(3,934	)		$	(3,549	)

 

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FAQ

What were Oblong's Q2 2021 revenue figures?

Oblong reported total revenue of $2.0 million for Q2 2021, down from $2.8 million in Q2 2020.

How much did Oblong lose in Q2 2021?

Oblong recorded a net loss of $2.2 million for Q2 2021, improved from a net loss of $3.4 million in the same quarter last year.

What is the cash position of Oblong as of June 30, 2021?

As of June 30, 2021, Oblong had a cash balance of $13.1 million and no debt.

Did Oblong raise any funds recently?

Yes, Oblong raised $11.5 million from an equity financing that closed on June 30, 2021.

How did Oblong's Mezzanine™ product perform in Q2 2021?

The Mezzanine™ product sales increased to $0.5 million in Q2 2021 from $0.4 million in Q2 2020.