GTT Communications, Inc. (NYSE:GTT)

PLEASANTON, Calif.--(BUSINESS WIRE)--MegaPath Corporation, one of the leading providers of voice, data, security and cloud services in North America, today announces that the company is selling its managed services business division to GTT Communications, Inc. (NYSE: GTT), a leading global cloud networking provider to multinational clients. The parties expect to close on April 1, 2015, after obtaining regulatory approvals.

GTT will pay $144.8 million in cash and $7.5 million in GTT common stock to acquire MegaPath’s Managed Services division, which provides private networking, access services, and managed security services to over 500 large enterprise clients. With increasing demand for its unified communications and cloud services, MegaPath will devote its resources to revenue growth and product expansion by increasing investment in innovative value-added services that satisfy the current and future needs of business customers. This agreement will also enable MegaPath to leverage GTT’s global footprint to deliver ubiquitous network connectivity services worldwide and offer more high-capacity services at competitive price points.

“In 2014, MegaPath made the strategic decision to consolidate our business and place increased focus on high-growth, strategic opportunities. This agreement with GTT is the second of two strategic initiatives that further our strategy of becoming a leading global cloud communications provider,” said D. Craig Young, Executive Chairman, MegaPath. “This agreement will provide us with additional resources to drive further innovation in our unified communications and cloud offerings and leverage our existing leadership on the communications and security front to build a dominant cloud business. At the same time, it will enable us to expand our Internet connectivity offerings to meet the increasing demand for high-capacity access services to businesses worldwide.”

MegaPath will continue to offer its cloud-based services to customers and partners, as well as maintain wholesale relationships with service providers, including GTT, to continue offering Internet access, private networking and managed security services. This partnership with GTT will also enable MegaPath to expand its Internet service offerings to include international services, as well as more high-performance connectivity services.

MCLEAN, Va.--(BUSINESS WIRE)--GTT Communications, Inc. (NYSE MKT: GTT), the leading global cloud networking provider to multinational enterprises, announced it has closed, effective today, the acquisition of UNSi, a communications company providing data services to large enterprise and carrier clients.

Currently operating at an approximate $55 million annualized revenue run rate, UNSi delivers high capacity Ethernet and MPLS wide-area-network solutions, Internet services and a broad range of managed services to more than 2,000 clients headquartered in the United States.

“The UNSi acquisition complements GTT’s strategy to extend ubiquitous network connectivity, to expand our portfolio of cloud networking solutions, and to deliver outstanding client experience. We are adding a great team of employees throughout sales, service delivery, network engineering, operations and back-office support to ensure we deliver for our growing client base with simplicity, speed and agility,” said Rick Calder, President and CEO of GTT. “This transaction is another step toward our next financial objective of $400 million in revenue and $100 million in adjusted EBITDA.”

“We are excited about the opportunity and potential of the combined company on behalf of UNSi clients, and we look forward to a smooth transition and integration,” said Francis D. John, President and CEO of UNSi.

GTT acquired UNSi for $40 million comprised of a combination of cash and stock. “We financed the acquisition with cash-on-hand and a $15 million delayed draw term loan under our existing credit agreement,” said Michael Bauer, Chief Financial Officer of GTT. “In August, we completed a debt financing strengthening our balance sheet and providing the company with the flexibility to pursue accretive acquisitions, such as UNSi, which accelerate our growth strategy.”

Second Quarter 2014 Results

• Revenue increased 21 percent to $48.1 million compared to $39.7 million in the second quarter of 2013
• Non-GAAP EPS for Q2 2014 was $0.02 vs break even last year and ahead of analyst estimates of a loss of $0.05.

“We delivered another record quarter with strong revenue and EBITDA increases and incremental margin expansion,” stated Rick Calder, President and CEO. “We are winning new multinational clients and growing our existing client base, and expanding our sales organization within both our Americas and EMEA/APAC business units. We are executing our strategy to extend ubiquitous network connectivity worldwide, to expand our cloud networking service portfolio, and to deliver outstanding service to our clients with simplicity, speed and agility.”

“With the success of our debt refinancing and recent equity follow-on, we have significantly strengthened our balance sheet and financial flexibility,” added Mr. Calder. “We are well positioned for rapid growth in the second half of 2014 as we accelerate toward our next financial objective of $400 million in revenue and $100 million in Adjusted EBITDA.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT Communications, Inc. (“GTT”) (NYSE MKT: GTT), the leading global cloud networking provider to multinational enterprises announced today an agreement with Equinix to provide businesses with direct access to Amazon Web Services (AWS), Salesforce.com and other cloud services available on the Equinix Cloud Exchange inside Equinix International Business Exchange™ (IBX®) data centers in North America, Europe and Asia Pacific.

“The availability of GTT’s network on the Equinix Cloud Exchange, allows customers the ability to move their most demanding applications to the cloud while meeting high standards for security, scalability and performance.”

“GTT is excited to work with Equinix to bring businesses direct access to best-of-breed cloud services over our global network,” said Rick Calder, GTT President and CEO. “Our EtherCloud portfolio of wide-area-network services enables enterprises to seamlessly connect to any location around the world with direct access to any cloud service on the Equinix Cloud Exchange. This provides the security, performance and reliability many organizations need to fully adopt cloud services.”

The Equinix Cloud Exchange is an advanced interconnection solution that enables seamless, on-demand access to multiple cloud services hosted inside Equinix IBX data centers. By bringing together cloud service providers with enterprises and enabling them to establish private, high-performance connections, the Equinix Cloud Exchange gives cloud users direct access to the services they need to build sophisticated hybrid cloud solutions.

“Equinix sits at the intersection of cloud service providers, cloud network providers like GTT, and enterprise customers that want to use those services,” said Jim Poole, vice president, global service providers. “The availability of GTT’s network on the Equinix Cloud Exchange, allows customers the ability to move their most demanding applications to the cloud while meeting high standards for security, scalability and performance.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT Communications, Inc. (“GTT” or the “Company”) (NYSE MKT: GTT) announced today the pricing of a public offering of 3,000,000 shares of common stock at a purchase price of $7.75 per share. The net proceeds to GTT from this offering are expected to be approximately $21.5 million, after deducting underwriting discounts and other estimated offering expenses payable by GTT. GTT has also granted the underwriters an option to purchase up to 450,000 additional shares of common stock to cover over-allotments, if any. The offering is expected to close on May 28, 2014, subject to customary closing conditions. GTT will use the net proceeds from this offering of common stock for general corporate purposes.

First Quarter 2014 Results

• Revenue increased 80 percent to $47.5 million as compared to $26.4 million in the first quarter of 2013.
• Non Gaap loss per share of $0.04 vs loss of $0.08; The company exceeded analyst EPS estimates of a loss of $0.13.
• Adjusted EBITDA increased by 132 percent to $8.4 million compared to $3.6 million in the first quarter of 2013.

“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.”

Fourth Quarter 2013 Results

• Revenue increased by 67 percent to $46.1 million as compared to $27.6 million in the fourth quarter of 2012.
• The company reported a loss per share of $0.16, compared to a loss per share of $0.02 for the same quarter 2012.

“2013 was a pivotal year for GTT," stated Rick Calder, President and CEO. “We completed the integration of a transformative acquisition, and we surpassed our previously stated objective of $30 million in Adjusted EBITDA run rate. We broadened our ability to deliver complex, integrated cloud networking solutions to multinational customers worldwide, and we cemented a foundation on which we can scale the business to our next financial objectives of $400 million in revenue and $100 million in Adjusted EBITDA.”

“With a premier global network platform, an experienced management team, and a proven acquisition strategy, GTT is well positioned to accelerate revenue and EBITDA expansion through 2014. Our strategy is to extend the ubiquity of our network around the world, expand our portfolio of cloud networking services, and deliver exceptional client service with simplicity, speed and agility. GTT will emerge as the clear leader in meeting the unique cloud networking needs of our target multinational enterprise and carrier clients."

On a sequential basis, revenue, gross margin and Adjusted EBITDA all increased. Fourth quarter revenue increased 2.2% driven by new customer additions and new installations of on-net Ethernet and IP transit services. Gross margin expanded 170 basis points through sales growth in higher-margin on-net services, the migration of existing customers on-net, and further network cost efficiencies. Adjusted EBITDA increased 5.9% and the Adjusted EBITDA margin increased to 17.4% in the fourth quarter, up from 16.8% in the third quarter of 2013.

“GTT’s compelling business model of highly recurring revenue streams and low capital expenditures will continue to convert a very high percent of Adjusted EBITDA into unlevered free cash flow,” stated Michael R. Bauer, Chief Financial Officer. “In 2013, GTT spent less than 3 percent of revenue on capital, yielding $20.3 million in unlevered free cash flow. Coupled with our recently increased debt facility commitments, we continue to expand our financial flexibility to capitalize on new growth opportunities. We are focused on driving organic growth and extending our proven track record of successful, selected acquisitions. We are poised for a great start to 2014."

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a global cloud networking provider to multinational enterprises today announced that iNetworks Group, a provider of innovative, integrated and comprehensive communications solutions for organizations with complex networking requirements has selected GTT as a network partner.

“We selected GTT because of their highly reliable, scalable and secure global network infrastructure,” said David J. Smat, President and CEO of iNetworks Group. “The GTT solution helps us provide the highest level of quality and service reliability, as well as high speed bandwidth to our customers. The GTT global footprint, with a massive presence throughout the world, allows us to offer our customers a cost effective, state-of-the-art connectivity solution that will evolve with their ever changing business needs.”

“We are pleased that iNetworks Group chose to partner with GTT,” said Rick Calder, CEO and President of GTT. “The partnership with iNetworks Groups reinforces our position as an industry leader in delivering cloud networking solutions that provide the highest quality of service.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a global cloud networking provider to multinational enterprises today announced that Türk Telekom International, a leading telecommunication operator providing Internet/data services, infrastructure and wholesale voice services, has selected GTT for its global connectivity services.

“We selected GTT because of their highly reliable, scalable and secure global network infrastructure,” said Cengiz Oztelcan, CEO of Türk Telekom International. "The GTT solution helps us provide the highest level of quality and service reliability, as well high speed bandwidth to our customers. The GTT global footprint, with a massive presence in Europe, allows us to offer our customers a turnkey connectivity solution based on the highest level of performance and state-of- the-art technology.”

“We are pleased to strengthen our relationship with Türk Telecom International, one of the largest network operators in Central and Eastern Europe, Turkey, Middle East and the Caucasus,” said Rick Calder, CEO and President of GTT. “Türk Telecom fiber backbone re-enforces our presence in Europe while adding to the reliability of the GTT network. This guarantees our clients the highest Quality of Service.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a global cloud networking provider to multinational enterprises today announced it has won the Washington SmartCEO’s 2014 Future 50 Award. The award recognizes fast growing companies based on a combined three year average of revenue and employee growth.

GTT is experiencing tremendous growth. With over 2,000 clients in more than 100 countries, GTT’s revenue continues to grow at double-digit rates. The company is poised to continue its fast paced growth as it extends its network into new markets around the world and expands its service portfolio.

“GTT is honored to be recognized by SmartCEO for the second consecutive year. Our company continues to achieve steady year-over-year growth, and that’s driven by our outstanding team of worldwide, dedicated professionals who are committed to providing exceptional client service with simplicity, speed and agility,” said Rick Calder, CEO and President of GTT.

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT:GTT), a cloud networking service provider offering Tier 1 IP and Ethernet network solutions to multinational enterprises, announced today that it has expanded the line of credit in its senior credit facility from $7.5 million to $15 million and amended its mezzanine credit facility to allow for an additional $10 million of draw commitment. The mezzanine commitment has a draw termination date through December 31, 2014. All other terms of both credit facilities remain unchanged.

“These additional commitments allow GTT access to increased liquidity, affording us greater financial flexibility to capitalize on new growth opportunities,” stated Michael R. Bauer, Chief Financial Officer. “We appreciate our lending groups’ continued commitments and support.”

“We enter 2014 fully prepared to execute on our strategic growth plans with the goal of becoming the leading cloud networking service provider to multinational enterprises,” said Rick Calder, Chief Executive Officer and President. “We are focused on driving organic growth and extending our proven track record of successful, selected acquisitions. This increased support of our senior and mezzanine groups enables the execution of this strategy and we thank them for their partnership.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a cloud networking service provider offering Tier 1 IP and Ethernet network solutions to multinational enterprises today announced that Farlep-Invest, one of the leading representatives of Ukrainian fixed-line market, has partnered with GTT to deliver connectivity to their customers throughout the world.

“We selected GTT because of their highly reliable, scalable and secure network infrastructure,” said Nataliya Malay, acting Director of Carrier Relations. “The GTT solution helps us to provide the highest level of quality and service reliability, as well as extremely fast connectivity for our clients. This is consistent with our strategic direction of continuous development and improvement.”

“We are pleased to be partnering with Farlep-Invest in providing IP Transit services to their clients,” said Rick Calder, CEO and President of GTT. “GTT is committed to helping our client, Farlep-Invest achieve their business goals of offering their clients high quality, uninterrupted communications. The partnership with Farlep-Invest reinforces our position of being an industry leader in the delivery of cloud networking solutions and providing the highest quality of service to our client base.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a cloud networking service provider offering Tier 1 IP and Ethernet network solutions to multinational enterprises today announced that Telekom Serbia, the leading telecommunications company in Serbia, has partnered with GTT to deliver connectivity to their customers throughout Europe.

“We selected GTT because of their highly reliable, scalable and secure network infrastructure,” said Milutin Nikolic, Wholesale Director at Telekom Serbia. “The GTT solution helps us to provide the highest level of quality and service reliability, as well as a very fast connectivity for our clients.”

“We are pleased to be partnering with Telekom Serbia in providing IP Transit services to their clients,” said Rick Calder, CEO and President of GTT. “GTT is committed to helping our client, Telekom Serbia achieve their business goals of offering their clients high quality uninterrupted communications. The partnership with Telekom Serbia reinforces our position of being an industry leader in the delivery of cloud networking solutions and providing the highest quality of service to our client base.”

Third Quarter 2013 Results

• Revenue increased 59 percent to $45.1 million as compared to $28.4 million in the third quarter of 2012
• Adjusted EBITDA* more than doubled to $7.6 million compared to $3.7 million in the third quarter of 2012
• Non-GAAP loss per share of $0.04 vs a loss $0.03 in the prior year

Richard D. Calder Jr., President and Chief Executive Officer, stated, “GTT’s third quarter results demonstrate expanding profitability as the Tinet acquisition contributes expected deal economics and evidence builds that our organic growth efforts are beginning to take hold. Adjusted EBITDA as a percentage of revenue is expanding both from successful acquisitions and from growth in net installations, a rising proportion of on-net installs, and increased gross margins. Our acquisition integration is largely complete, again proving the success of our acquisition template, and we expect to see network expenses continue to decrease over time.”

“Having successfully digested our most recent acquisition, and armed with an expanded services portfolio, the right senior team in place, and a growing sales and marketing capability, GTT is well prepared to execute its growth strategy. We continue to focus on consistent execution toward our long-term financial objectives to more than double the third quarter’s annualized revenue run rate to $400 million and more than triple the quarter’s annualized Adjusted EBITDA run rate to $100 million over the next three years, through some organic growth and selected acquisitions. Our aim is to be the clear leader providing unparalleled solutions, reliability, and service to meet the unique needs of our expanding target customer segment, multinational enterprises and carriers.”

“GTT’s third quarter revenue grew 59% and Adjusted EBITDA more than doubled, reflecting successful acquisition integration and early stages of organic growth,” stated Michael R. Bauer, Chief Financial Officer. “As important, we achieved, during the quarter, the $30 million Adjusted EBITDA run rate objective that we set for ourselves in 2011. Gross margin in particular is expanding as we derive a higher percentage of revenue from on-net services and Ethernet and IP transit grow in our mix. Looking ahead, the recent expansion of our financing syndicate partners, securing of additional borrowing capacity and reduction in our cost of capital all support our future growth strategy and accelerate our ability to make acquisitions. We are on track to end the year well prepared to build momentum in 2014."

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a cloud networking service provider offering Tier 1 IP and Ethernet network solutions to multinational enterprises today announced it has completed an amendment to the $25 million mezzanine facility and the additional take-down of $3 million. The amendment reduces the 13.5% interest rate to 11% and waives the warrant issuance in connection with the $3 million draw.

“This 250 basis point lower borrowing rate results in annual interest savings of $700,000 and will significantly reduce our overall cost of capital. We want to thank our lenders for their continued support and increased commitment as we execute our strategic growth strategy.”

“We are proud to have completed this refinancing on the strength of our financial performance,” stated Michael Bauer, CFO of GTT. “This 250 basis point lower borrowing rate results in annual interest savings of $700,000 and will significantly reduce our overall cost of capital. We want to thank our lenders for their continued support and increased commitment as we execute our strategic growth strategy.”

BIA Digital Partners acted as a purchaser and as agent for the purchasers, which included Plexus Fund II and BNY Mellon-Alcentra.

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a Tier 1 IP and Ethernet network provider to multinational enterprises, announced today it has augmented its global Network Operations Center capabilities by opening a US-based client service center. This Iowa-based center will support the increasing number of multinational enterprise and service provider clients that utilize GTT’s global network.

“GTT has experienced rapid growth over the past few years with our client base more than doubling,” stated Richard D. Calder Jr., President and CEO of GTT. “As a result, we have opened a new U.S.-based center to support our Global Network Operations in continuing to deliver the superior service that our clients have come to expect from GTT.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT: GTT), a Tier 1 IP and Ethernet network provider to Enterprises, announced today that it has completed an expanded syndication of its senior credit facilities. GTT increased its revolving line-of-credit to $7.5 million from $5 million and the total amount of this financing to $72.5 million, increasing capital flexibility and supporting its growth objectives.

Webster Bank served as the lead arranger and administrative agent on the financing. As part of the syndication, Webster and GTT achieved broader-based commitments, expanding the syndicate to include: East West Bank, Fifth Third Bank, Brown Brothers Harriman and Co., BDCA Funding LLC, and Crescent Capital. The senior credit facilities now consist of a $65 million term loan and a $7.5 million revolving line-of-credit.

“With this strong bank group, we are well positioned to propel our growth, both organically and through acquisitions,” stated Richard D. Calder Jr., President and CEO of GTT. “We appreciate our lenders’ commitment as we extend our leadership position in the IP transit market and expand our service offerings for multinational enterprises.”

“Webster was delighted to be selected by GTT to underwrite its senior credit facility,” stated Andre Paquette, Senior Vice President of Webster Bank. “Exceptional lenders’ support led to an oversubscription and upsizing of the facility. Going forward, Webster and its lending partners are highly focused on providing the additional financing solutions necessary for GTT to execute its growth strategy.”

MCLEAN, Va.--(BUSINESS WIRE)--GTT (NYSE MKT:GTT), operating a global Tier 1 IP network with the most interconnected Ethernet service platform around the world, announced today it has established a Point of Presence (PoP) in Tokyo to provide multinational enterprises with extended global network service in Asia. The Tokyo PoP is located at 3-8-21 Higashi Shinagawa, Shinagawa-ku, Tokyo, Japan.

The new PoP can connect corporations around the world to Tokyo through GTT’s EtherCloud® services. EtherCloud provides multinational enterprises with private, public or hybrid cloud networking solutions built on the company’s highly reliable, scalable and secure global network infrastructure.

"As one of the most interconnected networks in the world, GTT is delighted to broaden our footprint in Asia by adding a PoP in Tokyo which complements our existing presence in Singapore and Hong Kong," said Rick Calder, CEO and President of GTT. "As the needs of multinational enterprises evolve, clients want a cloud networking provider that offers fast connectivity between their locations and the world’s largest and most popular data centers," added Mr. Calder.

Second Quarter 2013 Results

• Increased Revenue by 46 percent to $39.7 million as compared to $27.2 million in the second quarter of 2012
• Increased Adjusted EBITDA* by 55 percent to $5.1 million compared to $3.3 million in the second quarter of 2012
• Non-GAAP EPS for the seocnd quarter 2013 and 2012 were break even.

“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.”