GTT Communications, Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today its financial results for the quarter ended March 31, 2019.
First quarter highlights:
- Revenue of $450.2 million grew 72.7% compared to 1Q18 and declined 1.0% compared to 4Q18.
- Net loss was $27.3 million compared to net loss of $30.7 million in 1Q18 and net loss of $53.0 million in 4Q18. The net losses in all periods are primarily the result of non-recurring costs, including exit, transaction and integration costs of $12.0 million, $7.8 million and $29.9 million in 1Q19, 1Q18 and 4Q18, respectively, and change in fair value of exchange rate and interest rate hedges of $15.3 million, $17.2 million and $21.7 million in 1Q19, 1Q18 and 4Q18, respectively.
- Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) of $122.2 million grew 95.0% compared to 1Q18 and grew 4.3% compared to 4Q18. Adjusted EBITDA margin was 27.2% compared to 24.1% in 1Q18 and 25.8% in 4Q18.
- Capital expenditures were $32.1 million (7.1% of revenue) compared to $13.2 million in 1Q18 (5.1% of revenue) and $16.3 million in 4Q18 (3.6% of revenue).
- Using constant currency (i) 1Q19 revenue and Adjusted EBITDA would have been higher than reported by $18.1 million and $7.0 million, respectively, compared to 1Q18, and (ii) 1Q19 revenue and Adjusted EBITDA would have been higher than reported by $0.1 million and $0.3 million compared to 4Q18.
On a pro forma basis, assuming (i) Interoute’s historical results had been included for all periods presented, and (ii) constant currency:
- 1Q19 revenue and Adjusted EBITDA declined 0.7% and grew 13.7%, respectively, compared to1Q18.
- 1Q19 revenue and Adjusted EBITDA declined 1.0% and grew 4.5%, respectively, compared to 4Q18.
See “Annex A: Non-GAAP Financial Information” for more information regarding the computation of Adjusted EBITDA, Adjusted Free Cash Flow, constant currency and pro forma calculations.
Conference Call Information
GTT will hold a conference call on Wednesday, May 8, 2019 at 10 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 10130620. 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.