Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

News Feed Item

GTT Reports First Quarter 2014 Financial Results

GTT Communications, Inc. (“GTT”) (NYSE MKT: GTT), a cloud networking service provider offering Tier 1 IP and Ethernet network solutions to multinational enterprises, today announced its financial results for the first quarter ended March 31, 2014. Highlights include:

Highlights

  • Revenue increased 80 percent to $47.5 million as compared to $26.4 million in the first quarter of 2013
  • Gross Margin increased 380 basis points to 37.0% compared to 33.2% in the first quarter of 2013
  • Adjusted Earnings before Interest Taxes Depreciation and Amortization (“EBITDA”)* increased by 132 percent to $8.4 million compared to $3.6 million in the first quarter of 2013
  • Adjusted EBITDA margin expanded 400 basis points to 17.7% from 13.7% in the first quarter of 2013
  • Net loss of $0.41 per share includes $0.37 per share loss related to other non-cash expense of $7.2 million for the mark-to-market of warrants and other non-cash expense of $1.6 million related to the final nLayer earn-out both due to significant stock price appreciation in the quarter

    * See “Annex A: Non-GAAP Financial Information-Adjusted EBITDA” for more information regarding the computation of Adjusted EBITDA.

“2014 is off to a terrific start," stated Rick Calder, President and CEO. “First quarter revenue and Adjusted EBITDA growth remained strong year-over-year and sequentially. GTT’s addressable market of multinational clients with needs for secure, scalable and burstable cloud networking solutions is undergoing rapid growth.”

“We are seeing significant client wins based on our proven strategy of extending ubiquitous network connectivity worldwide, expanding our cloud networking service portfolio, and delivering outstanding client experience with simplicity, speed and agility. We will continue to accelerate our growth toward our next financial objectives of $400 million in revenue and $100 million in Adjusted EBITDA. Our aim remains to be the clear leader in addressing the unique cloud networking needs of our target multinational clients.”

First quarter revenue, gross margin and Adjusted EBITDA all increased on a sequential basis. Revenue increased 3% driven by significant new services additions from the fourth quarter 2013. Gross margin expanded 80 basis points through sales growth in higher-margin service installations and further network cost efficiencies. Adjusted EBITDA increased 5% due to the strong flow through from gross margin.

“GTT’s operating leverage continues to expand as strong revenue growth and increasing gross margins generated another strong quarter in Adjusted EBITDA growth,” stated Michael Bauer, Chief Financial Officer. “Importantly, in our capex light business model we only spent $1.7 million in capital expenditures, or 3.6% of revenue, yielding $6.7 million in unlevered free cash flow. We expect to execute our growth strategy organically and through acquisition to extend our record of strong financial results. Supported by our high level of financial flexibility, GTT is excellently positioned for another strong year.”

Conference Call Information

GTT will hold a conference call today, on Friday, May 9, 2014 at 10:00 a.m. Eastern Time to discuss these results. To participate in the live conference call, interested parties may dial +1.888.437.9445 or +1.719.325.2428, entering passcode 2001639. A simultaneous live webcast of the call will be available over the Internet at www.gtt.net, under the Investor Relations section of the site. A telephonic replay of the conference call will be available for one month and may be accessed by calling +1.888.203.1112 or +1.719.457.0820 and using the passcode 2001639. The webcast will be archived in the investor relations section of the company's web site www.gtt.net.

Forward-Looking Statements

This release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect the current views of Global Telecom & Technology, Inc., with respect to current events and financial performance. From time to time, Global Telecom & Technology, Inc., which we refer to as “we”, “us” or “our” and in some cases, “GTT” or the “Company”, also provides forward-looking statements in other materials GTT releases to the public or files with the United States Securities & Exchange Commission (“SEC”), as well as oral forward-looking statements. You should consult any further disclosures on related subjects in our quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC. Such forward-looking statements are and will be subject to many risks, uncertainties and factors relating to our operations and the business environment that may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause GTT’s actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to obtain capital; our ability to develop and market new products and services that meet customer demands and generate acceptable margins; our reliance on several large customers; our ability to negotiate and enter into acceptable contract terms with our suppliers; our ability to attract and retain qualified management and other personnel; competition in the industry in which we do business; failure of the third-party communications networks on which we depend; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which we are engaged; our ability to maintain our databases, management systems and other intellectual property; our ability to maintain adequate liquidity and produce sufficient cash flow to fund our capital expenditures and debt service; technological developments and changes in the industry; our ability to complete acquisitions or divestitures and to integrate any business or operation acquired; our ability to overcome significant operating losses; and general economic conditions. Additional information concerning these and other important factors can be found under the heading "Risk Factors" in GTT's annual and quarterly reports filed with the Securities and Exchange Commission including, but not limited to, its Annual Report on Form 10-K. Statements in this release should be evaluated in light of these important factors.

About GTT

GTT operates a global Tier 1 IP network with the most interconnected Ethernet service platform around the world. We provide highly reliable, scalable and secure cloud networking services. Our clients trust us to deliver solutions with simplicity, speed, and agility that are unmatched by other network providers. For more information visit GTT www.gtt.net.

 

Condensed Consolidated Statements of Operations

(Amounts in thousands, except for share and per share data)

 
Three Months Ended
March 31, 2014   March 31, 2013
Revenue:
Telecommunications services sold $ 47,469 $ 26,433
 
Operating expenses:
Cost of telecommunications services provided 29,888 17,657
Selling, general and administrative expense 9,656 5,364
Restructuring costs, employee termination and other items 242
Depreciation and amortization   5,556     2,395  
   
Total operating expenses   45,100     25,658  
 
Operating income 2,369 775
 
Other expense:
Interest expense, net (2,410 ) (1,306 )
Loss on debt extinguishment (706 )
Other expense, net   (8,879 )   (1,093 )
   
Total other expense   (11,289 )   (3,105 )
 
Loss before income taxes (8,920 ) (2,330 )
   
Provision for income taxes   746     191  
   
Net loss $ (9,666 ) $ (2,521 )
 
Loss per share:
Basic $ (0.41 ) $ (0.13 )
Diluted $ (0.41 ) $ (0.13 )
 
Weighted average shares:
Basic 23,444,384 19,264,481
Diluted 23,444,384 19,264,481
 
   

GTT Communications, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except for share and per share data)

 
March 31, 2014 December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents $ 7,241 $ 5,785
Accounts receivable, net of allowances of $832 and $702, respectively 21,953 22,305
Deferred contract costs 2,830 1,975
Prepaid expenses and other current assets   2,180     2,878  
Total current assets 34,204 32,943
Property and equipment, net 18,589 20,450
Intangible assets, net 40,638 43,618
Other assets 8,081 7,726
Goodwill   67,019     67,019  
Total assets $ 168,531   $ 171,756  
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 23,002 $ 20,983
Accrued expenses and other current liabilities 22,772 26,999
Short-term debt 6,500 6,500
Deferred revenue   7,202     6,797  
Total current liabilities 59,476 61,279
Long-term debt 87,015 85,960
Deferred revenue 1,357 1,480
Warrant liability 19,511 12,295
Other long-term liabilities   1,223     1,232  
Total liabilities   168,582     162,246  
Commitments and contingencies

Stockholders' equity (deficit):

Common stock, par value $.0001 per share, 80,000,000 shares authorized, 23,789,875, and 23,311,023 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively 2 2
Additional paid-in capital 76,167 76,014
Accumulated deficit (75,892 ) (66,226 )
Accumulated other comprehensive loss   (328 )   (280 )
Total stockholders' equity (deficit)   (51 )   9,510  
Total liabilities and stockholders' equity (deficit) $ 168,531   $ 171,756  
 

ANNEX A: Non-GAAP Financial Information

Adjusted EBITDA

Adjusted EBITDA represents operating income before depreciation and amortization on a non-GAAP (accounting principles generally accepted in the United States of America) combined basis for the periods presented, and adjusted to exclude certain one-time expenses including costs associated with employee terminations and other non-recurring items and non-cash compensation. GTT presents Adjusted EBITDA as a supplemental measure of GTT’s performance. GTT also presents Adjusted EBITDA because GTT believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry and in measuring the ability of issuers to meet debt service obligations.

In evaluating Adjusted EBITDA, you should be aware that in the future GTT may incur expenses similar to the adjustments in this presentation. GTT’s presentation of Adjusted EBITDA should not be construed as an inference that GTT’s future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is not a measurement of GTT’s financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.

The following is a reconciliation of Adjusted EBITDA from net loss (amounts in thousands):

 
Three Months Ended
March 31, 2014   March 31, 2013
Net loss $ (9,666 ) $ (2,521 )
Provision for income taxes 746 191
Interest and other, net 11,289 3,105
Depreciation and amortization 5,556   2,395  
EBITDA 7,925 3,170
Restructuring costs, employee termination and other items 242
Non-cash compensation 489   215  
Adjusted EBITDA $ 8,414   $ 3,627  
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
As popularity of the smart home is growing and continues to go mainstream, technological factors play a greater role. The IoT protocol houses the interoperability battery consumption, security, and configuration of a smart home device, and it can be difficult for companies to choose the right kind for their product. For both DIY and professionally installed smart homes, developers need to consider each of these elements for their product to be successful in the market and current smart homes.
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant th...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
SYS-CON Events announced today that Suzuki Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Suzuki Inc. is a semiconductor-related business, including sales of consuming parts, parts repair, and maintenance for semiconductor manufacturing machines, etc. It is also a health care business providing experimental research for...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, will discuss how given the magnitude of today's applicati...