MCLEAN, Va.--(BUSINESS WIRE)--GTT Communications, Inc. (NYSE: GTT), a leading global cloud networking provider to multinational clients, announced today its financial results for the year and quarter ended December 31, 2019.

Full year highlights:

• Revenue of $1,727.8 million grew 15.9% over 2018.
• Net loss was $105.9 million, compared to net loss of $243.4 million in 2018. 2019 net loss was primarily the result of several non-recurring costs, including $36.0 million in exit, transaction and integration costs and $31.4 million non-cash losses due to the change in fair value related to our interest rate swaps.
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) of $439.3 million grew 21.0% over 2018.
• Capital expenditures were $102.2 million (5.9% of revenue) compared to $77.7 million in 2018 (5.2% of revenue).
• Using constant currency 2019 revenue and Adjusted EBITDA would have been higher than reported by $45.0 million and $15.2 million, respectively, compared to 2018.

Fourth quarter highlights:

• Revenue of $423.9 million declined 6.8% compared to 4Q18 and increased 0.9% compared to 3Q19. The sequential revenue increase of 0.9% was attributable to a 0.4% increase in monthly recurring cash revenue and a 0.4% increase from foreign currency.
• Net install trends improved throughout 4Q19 and the trend is expected to continue in 1Q20.
• Net loss was $19.1 million compared to net loss of $53.0 million in 4Q18 and a net loss of $26.2 million in 3Q19. The net losses in all periods include non-recurring costs, including exit, transaction and integration costs of $7.5 million, $29.9 million, and $4.3 million in 4Q19, 4Q18, and 3Q19, respectively, and losses due to the change in fair value of exchange rate and interest rate hedges of $21.6 million and $6.6 million in 4Q18 and 3Q19, respectively. The 4Q19 period included a gain due to the change in fair value of exchange rate and interest rate hedges of $10.4 million.
• Adjusted EBITDA of $102.8 million declined 12.3% compared to 4Q18 and increased 0.4% compared to 3Q19. Adjusted EBITDA margin was 24.3% compared to 25.8% in 4Q18 and 24.4% in 3Q19. Adjusted EBITDA margins were negatively affected by an elevated level of revenue credits, the continued runoff of non-cash revenues and investments in support of organic growth.
• Free Cash Flow of $5.4 million compared to $15.4 million in 4Q18 and $19.6 million in 3Q19. Adjusted Unlevered Free Cash Flow of $67.4 million compared to $93.8 million in 4Q18 and $83.3 million in 3Q19.
• Capital expenditures were $24.9 million (5.9% of revenue) compared to $16.3 million in 4Q18 (3.6% of revenue) and $26.0 million in 3Q19 (6.2% of revenue).
• Using constant currency (i) 4Q19 revenue and Adjusted EBITDA would have been higher than reported by $4.6 million and $1.8 million, respectively, compared to 4Q18, and (ii) 4Q19 revenue and Adjusted EBITDA would have been lower than reported by $1.4 million and flat, respectively compared to 3Q19.

GTT continues to explore the divestiture of its Infrastructure Division that is expected to include the Company’s highly differentiated pan-European fiber assets, subsea transatlantic fiber and data center infrastructure, which the Company acquired as part of the Interoute and Hibernia acquisitions. The Company is in the process of separating out the income statement and assets and liabilities that would be included in the anticipated divestiture. The Infrastructure Division is expected to deliver revenue of $370 million to $390 million with EBITDA of $160 million to $180 million.

On February 28, 2020, the Company entered into an amendment to the 2018 Credit Agreement and funded $140 million of incremental EMEA term loans. Net proceeds were used to pay down substantially all of the revolver credit facility.

See “Annex A: Non-GAAP Financial Information” for more information regarding the computation of Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Unlevered Free Cash Flow and constant currency calculations.

About GTT

GTT connects 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. GTT owns and operates a global Tier 1 internet network and provides a comprehensive suite of cloud networking services. For more information on GTT (NYSE: GTT), please visit www.gtt.net.