GTT Reports Second Quarter 2018 Financial Results
MCLEAN, Va.--(BUSINESS WIRE)--Aug 3, 2018--GTT Communications, Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today its financial results for the quarter ended June 30, 2018.
Second quarter highlights:Revenue of $326.8 million grew 71.9% over 2Q17 and grew 25.4% over 1Q18. Net loss was $136.3 million, compared to net income of $0.7 million in 2Q17 and net loss of $30.7 million in 1Q18. 2Q18 net loss was primarily the result of several non-recurring costs related to the Interoute acquisition, including $13.7 million in exit, transaction and integration costs, $13.8 million loss on extinguishment of debt and $88.6 million of expense related to a foreign currency hedge which was entered into at the time the Interoute acquisition was announced and subsequently settled at closing. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) of $74.9 million grew 39.2% over 2Q17 and grew 19.5% over 1Q18. Adjusted EBITDA margin was 22.9% compared to 28.3% in 2Q17 and 24.1% in 1Q18. Capital expenditures were $19.3 million (5.9% of revenue) compared to $9.3 million in 2Q17 (4.9% of revenue) and $13.2 million in 1Q18 (5.1% of revenue). Using constant currency, (i) 2Q18 revenue and Adjusted EBITDA would have been lower than reported by $7.9 million and $1.9 million, respectively, compared to 2Q17, and (ii) 2Q18 revenue and Adjusted EBITDA would have been higher than reported by $3.2 million and $0.7 million, respectively, compared to 1Q18.
On a pro forma basis, assuming (i) Interoute and Global Capacity’s historical results had been included for all periods presented, and (ii) constant currency:2Q18 revenue and Adjusted EBITDA grew 1.2% and 0.7%, respectively, over 2Q17. 2Q18 revenue and Adjusted EBITDA declined 0.6% and 3.1%, respectively, compared to 1Q18.
See “Annex A: Non-GAAP Financial Information” for more information regarding the computation of Adjusted EBITDA, constant currency and pro forma calculations.
Conference Call Information
GTT will hold a conference call on Friday, August 3, 2018, at 8:30 a.m. Eastern Time. To participate in the live conference call, interested parties may dial +1.844.875.6916 or +1.412.317.6714 and ask for the GTT call or view the webcast at GTT’s website.
A telephonic replay of the conference call will be available for one week and may be accessed by calling +1.877.344.7529 or +1.412.317.0088 and using the passcode 10121914. The webcast will be archived in the investor relations section of GTT’s website.
This release contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the current view of GTT Communications, Inc., with respect to its plans, objectives and strategies or future events or future financial performance. From time to time, GTT also provides forward-looking statements in other materials GTT releases to the public or files with the U.S. Securities and Exchange Commission (“SEC”), as well as oral forward-looking statements. You should consult any further disclosures on related subjects in our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our 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 SEC 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.
GTT is redefining global communications to serve a cloud-based future, connecting people across organizations, around the world and to every application in the cloud. Our clients benefit from an outstanding service experience built on our core values of simplicity, speed and agility. A Fortune Future 50 company, GTT owns and operates a global Tier 1 internet network and provides a comprehensive suite of cloud networking services to any location in the world. For more information on GTT, please visit www.gtt.net.
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