GTT Reports Second Quarter 2013 Financial Results

GTT Reports Second Quarter 2013 Financial Results

Revenue Increased 46% to $39.7 Million

Adjusted EBITDA Increased 55% to $5.1 Million


MCLEAN, Va.--(BUSINESS WIRE)-- GTT (NYSE MKT: GTT), the premier cloud network provider to clients in 100 countries worldwide, announced today financial results for the quarter ended June 30, 2013. Highlights include:

  • Increased Revenue by 46 percent to $39.7 million as compared to $27.2 million in the second quarter of 2012; and
  • Increased Adjusted EBITDA* by 55 percent to $5.1 million compared to $3.3 million in the second quarter of 2012; and
  • Acquired Tinet in April 2013, further accelerating GTT's growth strategy to scale the business worldwide.

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

"GTT posted another strong quarter of financial results and closed on a strategic acquisition," said Richard D. Calder Jr., President and Chief Executive Officer. "Revenue grew 46 percent and Adjusted EBITDA grew 55 percent year-over-year."

"We are well along with the integration of our latest acquisition. We can leverage the combined strength of our expanded service portfolio and network assets to deliver high performance network services to our customers throughout North America, Europe and Asia. As a Tier 1 network provider, GTT is focused on delivering the fastest and most reliable Ethernet Wide-Area-Network (WAN), and IP Transit services to multinational enterprises and carriers around the world."

"GTT's second quarter results demonstrate the successful execution of our growth strategy," stated Michael R. Bauer, Chief Financial Officer. "Sequentially, Revenue grew 50 percent and Adjusted EBITDA grew 42 percent compared to the first quarter of this year. In the third quarter, we look forward to continued top- and bottom-line growth as we realize a full quarter of contribution from the Tinet acquisition and continue to execute our growth strategy."

Conference Call Information

GTT will hold a conference call on Wednesday, August 14, 2013 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended June 30, 2013. To participate in the live conference call, interested parties may dial +1.888.417.8533 or +1.719.325.2494 and enter passcode 7087722. A simultaneous live webcast of the call will be available over the Internet at www.gt-t.net, under the Investor Relations section of the site. A replay of the call will be available for one month. Interested parties can access the replay by dialing 1.888.203.1112 or +1.719.457.0820 and using the passcode 7087722. In addition, a replay of the webcast will be available on GTT's website at www.gt-t.net.

About GTT

GTT is the premier cloud network provider to the world. Powered by our global Ethernet and IP backbone, GTT operates the most interconnected network on the globe. With 15 years of proven experience, GTT delivers simplicity, speed and agility, with an absolute client focus. For more information visit the GTT website at www.gt-t.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. You can identify these statements by forward-looking words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" or similar words. These forward-looking statements may also use different phrases. 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.

  

Global Telecom & Technology, Inc.

Condensed Consolidated Statements of Operations

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

 
Three Months EndedSix Months Ended
June 30, 2013 June 30, 2012June 30, 2013 June 30, 2012
 
Revenue:
Telecommunications services sold$39,729$27,163$66,162$51,881
 
Operating expenses:
Cost of telecommunications services provided26,22619,04243,88336,509
Selling, general and administrative expense8,6534,95914,0189,687
Restructuring costs, employee termination and other items7,4357017,677701
Depreciation and amortization 4,350  1,590  6,745  2,728 
 
Total operating expenses 46,664  26,292  72,323  49,625 
 
Operating income(6,935)871(6,161)2,256
 
Other expense:
Interest expense, net(1,873)(1,155)(3,179)(2,005)
Debt extinguishment loss--(706)-
Other expense, net (1,647) (93) (2,739) (741)
Total other expense (3,520) (1,248) (6,624) (2,746)
 
Loss before income taxes(10,455)(377)(12,785)(490)
 
Provision for (benefit from) income taxes (170) 124  21  261 
 
Net loss$(10,285)$(501)$(12,806)$(751)
 
Loss per share:
Basic$(0.46)$(0.03)$(0.61)$(0.04)
Diluted$(0.46)$(0.03)$(0.61)$(0.04)
 
Weighted average shares:
Basic22,495,07118,949,66620,889,99218,853,013
Diluted22,495,07118,949,66620,889,99218,853,013
 
  
Global Telecom & Technology, Inc.
Condensed Consolidated Balance Sheets

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

 
June 30, 2013December 31, 2012
 
ASSETS
Current assets:
Cash and cash equivalents$5,593$4,726
Accounts receivable, net of allowances of $923 and $748, respectively23,85211,003
Deferred contract costs2,3161,346
Prepaid expenses and other current assets 2,447  1,877 
Total current assets34,20818,952
Property and equipment, net19,8805,494
Intangible assets, net47,04020,903
Other assets5,5702,614
Goodwill 74,604  49,793 
Total assets$181,302 $97,756 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$20,956$12,857
Accrued expenses and other current liabilities33,27813,301
Short-term debt6,5427,848
Deferred revenue 8,063  6,588 
Total current liabilities68,83940,594
Long-term debt81,35034,981
Deferred revenue1,729234
Other long-term liabilities 14,907  4,908 
Total liabilities 166,825  80,717 
 
Commitments and contingencies
 
Stockholders' equity:
Common stock, par value $.0001 per share, 80,000,000 shares authorized, 22,866,676, and 19,129,765 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively22
Additional paid-in capital73,58163,207
Accumulated deficit(58,243)(45,437)
Accumulated other comprehensive loss (863) (733)
Total stockholders' equity 14,477  17,039 
Total liabilities and stockholders' equity$181,302 $97,756 
 

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 to operating income (amounts in thousands):

    
Three Months EndedSix Months Ended
June 30, 2013June 30, 2012June 30, 2013June 30, 2012
Operating income$(6,935)$871$(6,161)$2,256
Depreciation and amortization4,3501,5906,7452,728
Restructuring costs, employee termination and other items7,4357017,677701
Non-cash compensation 292  148 445  292
Adjusted EBITDA$5,142 $3,310$8,706 $5,977
 

anImage


For GTT media inquiries, please contact:
Ann Rote, 1-703-677-9941
ann.rote@gt-t.net
or
For GTT investor relations inquiries, please contact:
Nazir Rostom, 1-703-442-5586
nazir.rostom@gt-t.net

KEYWORDS:   United States  North America  Virginia

INDUSTRY KEYWORDS:

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