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Global Crossing Reports GCUK's First Quarter Results
London -- Global Crossing Limited (NASDAQ: GLBC), a leading global IP solutions provider, today announced first quarter results for its subsidiary, Global Crossing (UK) Telecommunications Limited (GCUK).
Business Highlights
GCUK generated 79 million pounds of revenue in the first quarter and Operating Income Before Depreciation and Amortization (OIBDA) of 17 million pounds. (OIBDA is a non-GAAP measure that is defined and reconciled below.) Net cash provided by operating activities in the quarter was 3 million pounds.
"In a challenging economic environment, GCUK continues to deliver value-added products and services to customers seeking rapid efficiency gains through the deployment of advanced networking solutions," said John Legere, Global Crossing's chief executive officer. "As compared with the year-ago period, we have effectively replaced revenue lost through attrition of our Camelot contract, demonstrating positive sales momentum and setting a new foundation for growth."
First Quarter Results
The results discussed below are prepared in accordance with International Financial Reporting Standards (IFRS) and presented in U.S. Generally Accepted Accounting Principles (U.S. GAAP) format.
GCUK generated revenue of 79 million pounds, a decrease of 3 million pounds or 4 percent, sequentially and essentially flat on a year-over-year basis. The sequential decrease in revenue was primarily due to the remaining attrition of the Camelot contract, partially offset by continued growth in enterprise, carrier data and indirect channel services. The year-over-year impact of the Camelot attrition was offset by growth in enterprise, carrier data and indirect channel services, as well as growth in carrier voice revenue.
Cost of revenue, which includes cost of access, technical real estate, network and operations, third party maintenance and cost of equipment sales, was 52 million pounds for the quarter, compared with 51 million pounds in the prior quarter and 50 million pounds in the first quarter of 2008. The year-over-year increase was primarily driven by higher equipment and professional services costs in the period.
Sales, general and administrative expenses (SG&A) were 9 million pounds for the quarter, declining by 5 million pounds from the prior quarter and essentially flat on a year-over-year basis. The sequential decrease in these costs was primarily due to lower allocated corporate overhead expenses and lower restructuring provisions for real estate.
GCUK's OIBDA for the first quarter was 17 million pounds, compared with 16 million pounds in the fourth quarter of 2008 and 20 million pounds in the first quarter of 2008. The sequential increase in OIBDA was primarily due to lower allocated corporate overhead costs, a decrease in the restructuring provision, and lower access costs. The beneficial impact of these items in the quarter was somewhat offset by lower revenue, primarily due to the remaining attrition of the Camelot contract, and higher equipment and professional services costs. The year-over-year decrease in OIBDA was primarily due to higher equipment and professional services costs in the period.
GCUK recorded a net loss of 2 million pounds for the first quarter of 2009, compared with a net loss of 25 million pounds in the fourth quarter of 2008 and net income of 1 million pounds in the first quarter of 2008. In addition to the variances described above, the sequential decrease in net loss was primarily due to lower foreign exchange translation losses on the GCUK's US dollar-denominated Senior Secured Notes in the first quarter of 2009 compared with the prior quarter.
Cash and Liquidity
As of March 31, 2009, GCUK had cash and cash equivalents of 33 million pounds compared with 36 million pounds at December 31, 2008, and 33 million pounds at March 31, 2008.
Net cash provided by operating activities during the first quarter totaled 3 million pounds after operating working capital use of 9 million pounds. GCUK's cash and cash equivalents decreased by 3 million pounds in the first quarter, after purchases of property, plant and equipment of 3 million pounds and principal payments on finance leases and other debt obligations of 4 million pounds.
Non-GAAP Financial Measures
Consistent with the U.S. Securities and Exchange Commission's (SEC's) Regulation G, the attached tables include a definition of OIBDA, as well as a reconciliation of such measure to the most directly comparable financial measure calculated in accordance with IFRS and presented in the US GAAP reporting format.
International Financial Reporting Standards
GCUK's results reported here include unaudited consolidated financial results for the three months ended March 31, 2009, December 31, 2008 and March 31, 2008; the unaudited consolidated balance sheet as of March 31, 2009; and the audited consolidated balance sheet as of December 31, 2008, all in accordance with IFRS, as published by the International Accounting Standards Board (IASB). GCUK's results for the first quarters of 2009 and 2008 and the fourth quarter of 2008 were included in Global Crossing's consolidated results previously reported on May 4, 2009, in accordance with US GAAP and in U.S. dollars.
Conference Call
Management has scheduled a conference call for Thursday, June 11, 2009, at 9:00 a.m. EDT/2:00 p.m. BST to discuss GCUK's financial results. The call may be accessed by dialing +1 212 231 2901 or +44 (0) 20 3300 0096. Callers are advised to dial in 15 minutes prior to the 9:00 a.m. EDT start time. The call will also be Webcast at http://investors.globalcrossing.com/results.cfm.
A replay of the call will be available on Thursday, June 11, 2009, beginning at 11:00 a.m. EDT/4:00 p.m. BST and will be accessible until Thursday, June 18, 2009, at 11:00 a.m. EDT/4:00 p.m. BST. To access the replay, dial +1 402 977 9140 or +1 800 633 8284 and enter reservation number 21424980. UK callers may access the replay by dialing +44 (0) 87 0000 3081 or +44 (0) 80 0692 0831 and entering reservation number 21424980.
ABOUT GLOBAL CROSSING (UK) TELECOMMUNICATIONS LIMITED
Global Crossing (UK) Telecommunications Limited provides a full range of managed telecommunications services in a secure environment ideally suited for IP-based business applications. The company provides managed voice, data, Internet and e-commerce solutions to a strong and established commercial customer base, including more than 100 UK government departments, as well as systems integrators, rail sector customers and major corporate clients. In addition, GCUK provides carrier services to national and international communications service providers.
ABOUT GLOBAL CROSSING
Global Crossing Limited (NASDAQ: GLBC) is a leading global IP solutions provider with the world's first integrated global IP-based network. The company offers a full range of secure data, voice, and video products to approximately 40 percent of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs. It delivers services to more than 690 cities in more than 60 countries and six continents around the globe.
Website Access to Company Information
Global Crossing maintains a corporate website at www.globalcrossing.com, and you can find additional information about the company through the Investors pages on that website at investors.globalcrossing.com. Global Crossing utilizes its website as a channel of distribution of important information about the company. Global Crossing routinely posts financial and other important information regarding the company and its business, financial condition and operations on the Investors web pages.
Visitors to the Investors web pages can view and print copies of Global Crossing's SEC filings, including periodic and current reports on Forms 10-K, 10-Q, 8-K, and in respect of GCUK's Forms 20-F and 6-K, as soon as reasonably practicable after those filings are made with the SEC. Copies of the charters for each of the standing committees of Global Crossing's Board of Directors, its Corporate Governance Guidelines, Ethics Policy, press releases and analysts presentations are all available through the Investors web pages.
Please note that the information contained on any of Global Crossing's websites is not incorporated by reference in, or considered to be a part of, any document unless expressly incorporated by reference therein.
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This press release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties that could cause the actual results to differ materially, including; the impact on the business of current global economic conditions and the severe tightening in global credit markets; increased competition and pricing pressures resulting from technology advances and regulatory changes; competitive disadvantages relative to competitors with superior resources; the impact on the business of an economic downturn or recession; dependence on a number of key personnel; potential weaknesses in internal controls of acquired businesses, and difficulties in integrating internal controls of those businesses with GCUK's internal controls; the concentration of revenue in a limited number of customers, and the rights of such customers to terminate their contracts or to simply cease purchasing services thereunder; the influence of the company's parent, and possible conflicts of interest of the parent or of certain of GCUK's directors and officers; our ability to raise capital through financing activities; exposure to contingent liabilities; and other risks referenced from time to time in GCUK's filings with the Securities and Exchange Commission. Global Crossing undertakes no duty to update information contained in this press release or in other public disclosures at any time.
CONTACT GLOBAL CROSSING:
Press Contacts
Michael Schneider
+ 1 973 937 0146
michael.schneider@globalcrossing.com
Analysts/Investors Contact
Mark Gottlieb
+ 1 800 836 0342
glbc@globalcrossing.com
Gino Mathew
United Kingdom
+ 1 973 937 0133
gino.mathew@globalcrossing.com
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