The business services carrier reports a 7.1% year over year revenue increase, and $9.8 million net income

May 7, 2014

2 Min Read

Littleton, Colo. – tw telecom inc. (NASDAQ: TWTC), a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions to enterprises across the U.S. and to their global locations, today announced its first quarter 2014 financial results, including $408.3 million of revenue, $9.8 million of net income, $136.8 million of Modified EBITDA1 (“M-EBITDA”), $115.2 million of net cash provided by operating activities and $10.8 million of levered free cash flow.

“We delivered strong revenue results for the quarter as we returned value to shareholders and advanced our growth initiatives,” said Larissa Herda, tw telecom’s Chairman and CEO. “We achieved substantial progress on the integration of our strategic market expansion and our ongoing product innovation. We launched several powerful new product capabilities, including extending Dynamic Capacity® across our entire data and Internet portfolio, which is a unique offering in the marketplace. Additionally, we recently announced several new alliances with industry leading cloud and data center providers to position ourselves to win greater market share, as we continue to enable enterprises to efficiently access their cloud applications and help their networks run better, faster and easier,” said Herda.

Highlights for the First Quarter 2014

  • Grew total revenue at a higher rate, including 2.1% sequentially and 7.1% year over year

  • Grew enterprise revenue 2.3% sequentially and 9.2% year over year

  • Grew data and Internet revenue 3.6% sequentially and 15.1% year over year

  • Delivered net income of $9.8 million, or $0.07 basic earnings per share

  • Delivered M-EBITDA of $136.8 million, representing a 33.5% M-EBITDA margin1

  • Delivered $115.2 million of net cash provided by operating activities

  • Reported $10.8 million of levered free cash flow

  • Executed $112.6 million of share repurchases

Revenue Reclassification

Effective January 1, 2014, the Company is classifying revenue from certain taxes and fees into a separate revenue line item. It’s also classifying certain high capacity dedicated Ethernet services to data and Internet revenue from network services revenue to better align the reporting of these services. The Company’s total reported revenue is not impacted by these changes, and prior period amounts have been reclassified for comparability.

Business Trends

“We demonstrated the initial success of our growth initiatives by delivering an accelerated revenue growth rate this quarter,” said Mark Peters, tw telecom’s Executive Vice President and Chief Financial Officer. “We also completed $113 million of share repurchases during the quarter, or nearly $500 million over the past year, representing a significant return of cash to shareholders, as we invested in our growth initiatives,” said Peters.

The Company’s growth initiatives have resulted in strong first quarter bookings, or sales, which grew compared to the same period in the prior year. As a result of its sales momentum, the Company continues to expect that its 2014 revenue growth rate will be greater than that of 2013.

tw telecom inc. (Nasdaq: TWTC)

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