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Global Telecom & Technology Reports Second Quarter 2010 Results

^{Published on 2010-08-12 13:10:55 - Market Wire}
 

MCLEAN, Va.--([ BUSINESS WIRE ])--Global Telecom & Technology, Inc. (aGTTa), (OTCBB: GTLT), a leading global network integrator that provides its clients with a broad portfolio of wide-area network, dedicated Internet access and managed data services, announced today financial results for the second quarter ended June 30, 2010. Highlights for the quarter include:

"Our efforts to refinance the seller debt are well underway and we are negotiating terms which give us confidence that we will close a favorable facility in a timely fashion. Our annualized EBITDA run rate, compared with our debt load, generates improving credit and valuation statistics."

• Revenue increased by 22 percent to $19.7 million as compared to $16.1 million for the second quarter 2009.
• Gross margin of 30.1 percent increased compared to 29.1 percent in the second quarter of 2009.
• Selling, general and administrative (aSG&Aa) expenses, excluding non-cash compensation, decreased to 21.8 percent of revenue, compared to 22.5 percent in the second quarter of 2009.
• Adjusted Earnings Before Interest Taxes Depreciation and Amortization (aEBITDAa)* increased 54 percent to $1.6 million compared to $1.1 million in the second quarter of 2009.
• Net income of $0.3 million, or $0.02 earnings per share, decreased slightly compared to $0.4 million, or earnings per share of $0.03 in the second quarter of 2009.

* See aAnnex A: Non-GAAP Financial Informationa"Adjusted EBITDAa for more information regarding the computation of Adjusted EBITDA.

aThe year-over-year improvement in gross margin and substantial growth in Adjusted EBITDA attest to the success of our efforts to streamline costs while scaling our business,a stated Richard D. Calder Jr., president and chief executive officer. aIn completing the final integration of our WBS Connect acquisition, we made significant progress in improving the efficiency of our network and the quality of our customer base. Careful pruning of unprofitable customer contracts and an intensive network grooming effort resulted in higher second quarter churn, but also expanded gross profit and a solid customer base from which to drive growth.

Demand has been improving and we are encouraged by our sales pipeline. As we continue to scale our business and leverage our operational platform, we are well positioned to deliver increased profitability.a

aOur strong Adjusted EBITDA results support our plans to refinance our debt and strengthen our balance sheet,a said Eric Swank, chief financial officer. aOur efforts to refinance the seller debt are well underway and we are negotiating terms which give us confidence that we will close a favorable facility in a timely fashion. Our annualized EBITDA run rate, compared with our debt load, generates improving credit and valuation statistics.a

Conference Call Information

GTT will hold a conference call on Friday, August 13, 2010 at 10:00 a.m. Eastern Time (7:00 a.m. PT) to discuss its results for the second quarter ended June 30, 2010. To participate in the live conference call, interested parties may dial 1.877.681.3372 or +1.719.325.4837 and enter passcode 5441748. 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 call replay by dialing 1.888.203.1112 or +1.719.457.0820 and using the passcode 5441748. In addition, a replay of the webcast will be available on GTTa™s website at [ www.gt-t.net ].

About GTT

GTT is a global network integrator providing a broad portfolio of wide-area network services, dedicated internet access, and managed data services. With over 800 supplier relationships worldwide, GTT combines multiple networks and technologies such as private line, Ethernet, and MPLS to deliver cost-effective solutions specifically designed for each clienta™s unique requirements. GTT enhances customer performance through its proprietary Client Management Database (CMD), which provides a comprehensive client support system for service design and quotation, rapid service implementation, and 24x7 global operations support. Headquartered in McLean, Virginia, GTT has offices in London, Dusseldorf, and Denver and provides services to more than 700 enterprise, government, and carrier clients in over 80 countries worldwide. For more information, visit the GTT website at [ www.gt-t.net ].

Forward-Looking Statements

This release includes certain aforward-looking statementsa 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 amay,a awill,a aexpect,a aintend,a aanticipate,a abelieve,a aestimate,a aplan,a acould,a ashould,a and acontinuea 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 awea, ausa or aoura and in some cases, aGTTa or the aCompanya, also provides forward-looking statements in other materials GTT releases to the public or files with the United States Securities & Exchange Commission (aSECa), 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 GTTa™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.

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 GTTa™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. GTTa™s presentation of Adjusted EBITDA should not be construed as an inference that GTTa™s future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is not a measurement of GTTa™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):