LONDON, Dec. 14, 2010 /PRNewswire-FirstCall/ -- Global Crossing Limited (NASDAQ: GLBC), a leading global IP solutions provider, today announced third quarter results for its subsidiary, Global Crossing (UK) Telecommunications Limited (GCUK).
For the third quarter of 2010, GCUK generated revenue of 75 million pounds and Operating Income Before Depreciation and Amortization (OIBDA) of 16 million pounds. (OIBDA is a non-GAAP measure defined and reconciled below.) The company also reported net cash provided by operations of 10 million pounds.
"The UK business continues to be an important contributor to our global strategy to offer advanced IP, Ethernet and data center services to customers with multi-regional requirements," said John Legere, chief executive officer of Global Crossing. "We are gaining traction in our efforts to expand and diversify our base of commercial enterprise customers while broadening our valuable market position with UK government customers."
Third Quarter Results
GCUK generated revenue of 75 million pounds, a sequential decrease of 3 percent and a year-over-year increase of 1 percent. The sequential decrease was primarily due to lower sales related to short-interval demand, such as purchases of equipment and professional services, and somewhat higher sales credits after lower than average sales credits in the prior quarter. The year-over-year increase was primarily due to increased sales to enterprise customers.
Gross profit was 28 million pounds for the quarter, a sequential decrease of less than 1 million pounds and a year-over-year decrease of 1 million pounds. The year-over-year decrease was due to a 4 million pound favorable regulatory ruling in the year-ago period, mostly offset by sales growth and lower depreciation and amortization.
GCUK's OIBDA for the third quarter was 16 million pounds, compared with 15 million pounds in the second quarter of 2010 and 20 million pounds in the third quarter of 2009. The sequential increase was principally driven by a reduction in accrued incentive compensation and sales commissions. The year-over-year decrease was primarily due to the previously mentioned favorable regulatory ruling in the year-ago period and higher real estate restructuring costs, partially offset by sales growth.
GCUK recorded a net profit of 3 million pounds for the third quarter, compared with a net loss of 3 million pounds in the second quarter of 2010 and a net loss of 2 million pounds in the third quarter of 2009. The sequential and year-over-year increase in net profit was primarily due to favorable foreign exchange impacts on net U.S. dollar-denominated debt in the third quarter of 2010 compared with unfavorable foreign exchange impacts in the prior quarter and prior year.
Cash and Liquidity
As of September 30, 2010, GCUK had cash and cash equivalents of 42 million pounds, compared with 38 million pounds on June 30, 2010, and 26 million pounds on September 30, 2009.
GCUK's cash and cash equivalents increased 4 million pounds in the third quarter. Net cash provided by operating activities during the third quarter totaled 10 million pounds, after 7 million pounds of cash used by operating working capital. During the quarter, GCUK recorded purchases of property, plant and equipment of 4 million pounds and principal payments on finance leases and other debt of 2 million pounds.
International Financial Reporting Standards
GCUK's results reported here include unaudited consolidated financial results for the three months ended September 30, 2009, June 30, 2010 and September 30, 2010; the unaudited consolidated balance sheet as of September 30, 2010; and the audited consolidated balance sheet as of December 31, 2009, all in accordance with IFRS and in pounds sterling, as published by the International Accounting Standards Board (IASB). GCUK's results for the third quarters of 2010 and 2009 and the second quarter of 2010 were included in Global Crossing's consolidated results previously reported on November 1, 2010, in accordance with U.S. GAAP and in U.S. dollars.
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.
Management has scheduled a conference call for Tuesday, December 14, 2010, at 9:00 a.m. EST/2:00 p.m. GMT to discuss GCUK's financial results. The call may be accessed by dialing +1 212 231 2905 or +44 (0) 20 8196 2883. Callers are advised to dial in 15 minutes prior to the 9:00 a.m. EST start time. The call will also be Webcast at http://investors.globalcrossing.com/results.cfm.
A replay of the call will be available on Tuesday, December 14, 2010, beginning at 11:00 a.m. EST/4:00 p.m. GMT and will be accessible until Tuesday, December 21, 2010, at 11:00 a.m. EST/4:00 p.m. GMT. To access the replay, dial +1 402 977 9140 or +1 800 633 8284 and enter reservation number 21489357. UK callers may access the replay by dialing +44 (0) 87 0000 3081 or (0) 80 0692 0831 and entering reservation number 21489357.
ABOUT GLOBAL CROSSING (UK) TELECOMMUNICATIONS LIMITED.
Global Crossing (UK) Telecommunications Limited ("GCUK") 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, security, Internet transport, and collaboration solutions to a strong and established 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 (NASDAQ: GLBC) is a leading global IP and Ethernet solutions provider with the world's first integrated global IP-based network. The company offers a full range of data, voice and collaboration services with an industry leading customer experience and delivers service to approximately 40 percent of the Fortune 500, as well as to 700 carriers, mobile operators and ISPs. It delivers converged IP services to more than 700 cities in more than 70 countries around the world.
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 http://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.
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 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 the tightening of budgets by UK government agencies, including significant customers of GCUK; dependence on a number of key personnel; 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 in an amount sufficient to pay our indebtedness and to fund our other liquidity needs; 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.
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