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Global Telecom & Technology, Inc. (GTT) (GTLT-OTC: BB) |
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June 26, 2009 Issue |
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The Most Powerful Name In Corporate News and Information |
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With A Value Proposition That Has Become Stronger Over The Past Year Providing Clients With A Broad Portfolio Of Wide Area Network And Wireless Mobility Services, Global Telecom & Technology Provides Cost Effective Solutions That Are Very Relevant In Today’s Economy |
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GTT is a global network integrator that provides its clients with a broad portfolio of wide-area network and wireless mobility services. With over 800 worldwide supplier relationships, GTT combines multiple networks and technologies to deliver cost-effective solutions specifically designed for each client’s unique requirements. GTT enhances client performance through our proprietary systems, comprehensive project management, and 24x7 operations support.
Mr. Swank most recently served as Senior Vice President, Finance at Mobile Satellite Ventures (now SkyTerra Communications), and has previously worked as Vice President, Corporate Planning & Investor Relations, for Motient Corporation / American Mobile Satellite. Before joining American Mobile Satellite, Mr. Swank served various positions of increasing responsibility at C-Tec Corporation, driving numerous business development and operational initiatives. Mr. Swank holds his Bachelor of Science degree in Finance, from King’s College.
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Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – June 26, 2009
Mr. Calder: “We believe that our value proposition has become stronger over the past year. GTT is a global network integrator that provides its clients with a broad portfolio of wide area network and wireless mobility services. We work with over 800 worldwide suppliers. What we do for our clients is combine multiple networks and technologies to deliver a cost effective solution specifically designed for their unique requirements. We find in this economic environment that our value proposition, which prioritizes cost effectiveness, is particularly important to our clients. As a result, we have seen our business continue to grow both top line and bottom line. We believe that we are uniquely positioned in the market and continue to provide our clients with superior telecom solutions.”
CEOCFO: How do you get around the inertia of many companies who are reluctant to make changes? Mr. Calder: “We always believe that there does need to be some catalyst for change and that can either be the need for more bandwidth, the need for better ways to manage an enterprise’s existing wide area network or mobility solutions or its dissatisfaction with an existing supplier’s solution. Our value proposition addresses all of these situations. Even in these times, we find that corporations around the globe continue to need more bandwidth, due to the adoption of bandwidth intensive applications. Most enterprises are looking for ways to increase their wide area network capabilities, and in particular enhancing their use of mobility applications. These drivers provide us with an opportunity to propose new wide-area network solutions to companies.”
CEOCFO: Give me an example of your typical customer; what you are actually providing? Mr. Calder: “We recently announced a major contract with the United Nations to implement a wide-area network across the Middle East and Europe. They had been relying on a low bandwidth satellite service, and were finding that there was just not enough available bandwidth. In response, we implemented a turnkey wide area network solution using MPLS technology to significantly increase their bandwidth to each location. We also seamlessly integrated the new network with their existing solution to provide them more connectivity. We also recently announced a contract with Pilkington who had significant issues managing their worldwide mobile workforce. They contracted with us to provide worldwide mobile data services to their entire mobile workforce. We have seen particular demand from enterprises to help equip their workforces with mobility solutions and integrate these solutions with their existing wide-area networks.”
CEOCFO: When working with other services companies, how do you ensure that all the pieces come together? Mr. Calder: “We enhance our performance for our clients by leveraging our proprietary systems. We also have a comprehensive project management and 24/7 operation support staff. Our ability to integrate and project manage the delivery of our solutions across multiple carriers has proven to be an important strength for our clients. Moreover, when faults occur and they do occur on large complex networks, we trouble manage simultaneously across all suppliers and drive quicker problem resolution for our clients. We have built, over the past decade, a series of proprietary systems to help enhance that performance and provide a real-time view to our clients of the ongoing health and maintenance of their networks.”
CEOCFO: What is the competitive landscape in terms of other global network integrators? Mr. Calder: “We are one of the larger global network integrators in the world market and we compete primarily against the facility-based carriers. We also have a significant portion of business servicing the needs of facility-based carriers as well, particularly to extend the reach of a carrier network to other locations. While the majority of our business is servicing the needs of large enterprise customers, we also extend carrier networks to meet the needs of enterprises that the carriers serve directly.”
CEOCFO: Please tell us about your newer services and what you might be adding as you go forward? Mr. Calder: “The growth area that we see in our business is in wireless mobility services. We believe today that enterprises spend more than 50% of their telecom expenses on wireless and mobility services. We also see significant demand from enterprise CIOs and IT managers in helping manage and deliver wireless mobility services. We believe it will be a growing part of our business over the next year to three years and we believe the market opportunity for that segment is potentially bigger the voice and data networking sides combined.”
CEOCFO: What is the financial picture like today for GTT? Mr. Swank: “We just reported our 1st Quarter 2009 several weeks ago and we are pleased to report our seventh consecutive quarter of positive EBITDA. For a company like ours with very low capital expenditures, other than for working capital fluctuations, this measure correlates closely our ability to generate cash flow. So we have a business that has been producing steady consistent operating results. We are also lightly levered, so we have reasonable if not modest debt with respect to that cash flow generation. Therefore, we are able to show current and potential investors a business plan and a story, as Rick has been articulating here, that is executing now and shows the promise to layer other product services and lines of business on top of a very efficient platform.”
CEOCFO: How do you continue to contain costs? Mr. Swank: “In response to your earlier question on ‘how we pull all of these pieces together’, Rick had mentioned our proprietary systems that we used to manage our customer solutions. We call that platform CMD, and it represents the central operating platform for our business. We have been able to successfully integrate our own internal processes around that platform and automate a number of functions, which has helped us quite a bit. As a result, our sales and general administration expense for the business is now roughly 22.4% of revenue, which is an all-time record for us. If we continue to automate and continue to leverage the tools that we have, we will continue to keep costs low and improve that metric even further.”
CEOCFO: GTT has fair amount of international business; how is that working for or against you in the current economy? Mr. Calder: “We have continued to demonstrate our ability to sell services to enterprises worldwide based on our significant presence in various locations around the world. About half of our business is sold in Europe and half of our business is sold in the United States, and we deliver services to over 300 clients in more than 70 countries worldwide. We believe the ability to serve the requirements of large multinational corporations regardless of where they are located is a key strength of our business.”
CEOCFO: There seems to be a new technology every time we blink; how do you stay up to date and incorporate all the advancements? Mr. Calder: “I will reinforce what Eric said. We have made significant investment in technology to manage the myriad suppliers that we use as well as to provide our clients with real time access to the health and well-being of the services that they purchase from us. We also take advantage of all of the network innovations of our supplier partners and integrate these innovations into the solution offerings to our clients. As such, we are not limited by any legacy network investment, and we can take advantage of the constant innovation of our more than 800 worldwide suppliers, which we see as a key advantage of our global network integrator approach.”
CEOCFO: So
GTT is prepared!
CEOCFO: What should investors look for ahead, and why should they look at GTT as a possible investment? Mr. Swank: “As I mentioned earlier, we recently reported another successful quarter with positive EBITDA which for us correlates closely to our ability to generate operating cash flow. I think investors should look for us to continue to execute. In addition, Rick had mentioned some of our activities in the wireless space. I believe that we have a sales and operating platform that easily allows us to layer other services on top of our current portfolio. I also think this platform provides us the ability to possibly layer other businesses like ours on top as well. Because of our central CMD system, we believe we can integrate acquisitions much more quickly and efficiently than other companies. So look for us to continue to execute, look for new products and services layered on top of this platform, and look for us to pursue other businesses like ours that we can integrate into our existing model.”
CEOCFO: Is there an industry trend towards consolidation, or is this a pro-active move on your part? Mr. Calder: “We believe the answer is yes on both counts. We believe there continues to be an active mergers and acquisitions environment in telecommunications. In our case, we believe our organic business is doing well, and we also believe it is an interesting time to look at M&A opportunities to grow our business.”
CEOCFO: Final thoughts, what should readers remember most about GTT?
Mr. Calder:
“Let me emphasis what Eric said, we have delivered over the past seven
quarters increasing revenue and increasing profitability for our business
and for our shareholders and we are working hard to continue those trends on
a going-forward basis. We continue to innovate in the marketplace and look
forward to expanding our product capability in the wireless and mobility
space for our enterprise clients. Lastly, we have the capability to look at
acquisitions that would make sense for our business and our shareholders.” |
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“We believe that our value proposition has become
stronger over the past year. GTT is a global network integrator that
provides its clients with a broad portfolio of wide area network and
wireless mobility services. We work with over 800 worldwide suppliers. What
we do for our clients is combine multiple networks and technologies to
deliver a cost effective solution specifically designed for their unique
requirements.” - Richard D. Calder Jr. |
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