Press Releases

Globix Reports Fourth Quarter and Fiscal 2001 Results;Company in Discussions with Bondholders

NEW YORK – December 27, 2001

NEW YORK – December 27, 2001 – Globix Corporation (NASDAQ: GBIX) today reported financial results for its fourth quarter and fiscal year ended September 30, 2001.

Revenue for the fourth quarter of 2001 was $25.0 million compared to $25.9 million in the prior year quarter. For the fiscal 2001 year, revenue was $104.2 million compared to $81.3 million in the previous year.

EBITDA loss (loss before net interest, income taxes, depreciation and amortization and restructuring charges) was $22.2 million for the fourth quarter of 2001 compared to $15.3 million in the same quarter last year and $15.5 million in the fiscal 2001 third quarter. As compared to the fiscal 2001 third quarter, the fiscal 2001 fourth quarter was adversely affected by a $3.5 million write-off of network assets impaired by the financial viability of a supplier and a $4.0 million increase in bad debt expense. For fiscal 2001, EBITDA loss was $64.7 million as compared with $59.3 million in the prior year.

During the fourth quarter of fiscal 2001, the Company recorded a restructuring charge of $18.0 million related to the estimated termination costs of certain leases, and the write-off of leasehold improvements, excess equipment and employee termination costs.

For the fourth quarter of 2001, net loss attributable to common stockholders was $73.6 million, or $1.89 per share based on 38.9 million common shares. For the fiscal year, net loss attributable to common stockholders was $220.1 million, or $5.72 per share.

“Cost reductions and the management of working capital remained a constant focus during the year,” said Brian Reach, Chief Financial Officer. “We ended the fiscal 2001 year with $111.5 million in cash, which was ahead of expectations.”

Globix also announced that it is in discussions with an informal committee of bondholders representing approximately 48% of the Company’s outstanding $600 million issuance of 12½% senior notes. The discussions concern a financial reorganization of the Company through a pre-packaged bankruptcy proceeding that would be aimed at significantly reducing the Company’s debt burden. The Company is in similar discussions with its preferred stockholders. While there can be no assurance that these discussions will lead to an agreement, it is likely that any such agreement would result in the bondholders and preferred stockholders owning nearly all of the equity in the reorganized company, resulting in a near total dilution of the existing common stockholders’ interest in the Company.

Peter Herzig, Chief Executive Officer, said, “We are encouraged by the overall results for the fiscal year and are optimistic that we will be able to reach agreement with our bondholders and preferred stockholders. This past year was a challenging one for our company and our industry in general. The events of September 11, coupled with turbulent market and economic conditions and the dot-com fall out, have affected all participants in our market. We are seeking to greatly reduce our debt burden so that we will have the necessary liquidity to focus on the competitive advantage Globix enjoys as a premium provider of complex hosting services. While I believe these most recent developments, along with the growth and operational accomplishments Globix achieved during this past fiscal year will provide a strong platform for our future, we do not believe we will meet the fiscal 2002 guidance previously provided. In light of ongoing discussions with our bondholders, we expect to provide new guidance when we release our financial results for the first quarter ended December 31, 2001.”


About Globix

Globix is a leading provider of advanced Internet hosting, network and applications solutions for business. Globix delivers services via its secure state-of-the-art Internet DATA Centers, its high-performance global backbone and content delivery network, and its world-class technical professionals. Globix provides businesses with cutting-edge Internet resources and the ability to deploy, manage and scale mission-critical Internet operations for optimum performance and cost efficiency.


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