Steady Growth for Zayo to Close Fiscal 2013

September 23rd, 2013 by · 6 Comments

While they seem to have picked a rather inauspicious year to move to the now very wet city of Boulder, Zayo has finally turned in another quarter of steady growth.  EBITDA margins were down sequentially, but this was due to a one time hit from lease termination charges that derive from all the integration work.  Here’s a quick summary of Zayo’s numbers for their Fiscal Q4:

$ in millions Fiscal
 – Zayo Bandwidth 76.4 152.1 158.7 167.6 171.4
 – Zayo Fiber Solutions 22.7 65.9 71.5 74.9 77.1
 – zColo 11.7 15.3 15.4 15.9 16.7
Total Revenue  109.6 229.7 243.5 251.4 258.2
Adjusted EBITDA  57.5 122.6 137.5 146.1 141.7
Adj. EBITDA Margin 52.4% 53.4% 56.4% 58.1% 54.9%
Capex 21.4 66.7 58.9 95.7 101.9
Buildings on-net 6,055  10,258 11,104 11,740 12,222

Zayo has now split out Zayo Bandwidth into its component services, e.g. Ethernet, IP, Wavelength, SONET, Mobile infrastructure.  I’m still lumping together that information for brevity for the moment, you can find the details in the company’s earnings supplement, which I am still reading through.  Without the lease terminations, EBITDA margins would have kept marching upward past 59%.

Zayo added almost 500 on-net buildings during the quarter, and boosted capex above $100M for the first time.  The latter isn’t too suprising, as they have been quite busy rolling out 100G and expanding organically into several new markets.

Zayo also bought Core NAP during the quarter, and has since agreed to buy Access Communications up in Minneapolis.  The multiple for the latter was given as 11.7xEBITDA, with annual revenues of $5.5M.  However, as M&A activity goes it’s been a quiet year so far for Zayo in the wake of last year’s shopping binge.

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Categories: Fiber Networks · Financials · Metro fiber

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6 Comments So Far

  • schmuckinsurance says:

    nice to hear TR get a shout out on the conference call, congrats Rob.

  • Anonymous says:

    Do you believe Zayo is complete on the legendary Rollup they have been doing over the past 6 years or so. I beleive they have 1 crown jewel remaining in XO which would enhance meto assets and provide teh LH network albeit absent the dark fiber Zayo loves to sell, although XO does have condut rights. It would punish level 3 to merge with Xo and then pull a dark fiber in spare conduit and turn around and seel dark fiber on it.

  • I think Zayo has easier targets in mind than XO, which comes with more legacy baggage and other stuff that they probably don’t want. But I don’t think they’re done either, and from what I hear they are indeed looking harder at Europe now.

  • Anonymous says:

    By the way it is the recognition like Dan Caruso provided and the credibility of you and Telecom Ramblings across the industry which has me everyday reading your site. It is priceless to me as a Telecom person. Thank You

  • Dan Caruso says:

    Rob, I often give Telecom Ramblings a shot out when I am in convos with investors and analysts. You do a great job and you deserve the recognition.

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