FTE Networks Reports Second Quarter 2018 Results

FTE Networks (NYSEA:FTNW), a leading provider of innovative technology oriented solutions for smart platforms, network infrastructure announced its financial results for the three-month period ended June 30, 2018.

The company reported total revenue of US$86.4 million, up 63.4 percent as compared to pro forma total revenue of US52.9 million for the quarter ended June 30, 2017.

As quoted in the press release:

“Our second quarter was highlighted by excellent execution overall, as we again experienced strong year-over-year revenue growth on a pro forma basis and posted positive cash flow from operations,” noted Michael Palleschi, President and Chief Executive Officer of FTE.  “Due to the strength of our infrastructure segment, led by Benchmark, we were able to simultaneously invest in the technology segment and comfortably service our debt. The infrastructure segment also plays an important role as it enables us to market the CrossLayer solution to a large and established client base.”

Palleschi also stated, “The technology segment, led by our CrossLayer solution, continued to gain momentum as the market realizes that this technology enables clients to share in the success of an owned or managed commercial building. It helps create additional revenue opportunities that were previously lost via a carrier-grade in-building technology solution.  Although the actual revenue impact in the 2^nd quarter may have been inconsequential in relation to the contribution made by the infrastructure segment, business is progressing well, and we should begin to experience accelerating growth throughout the 2^ndhalf of the year. We believe the Company will enjoy increasing operating margins as revenue ramps up in the technology segment.”

Operational Highlights

• Announced new infrastructure and technology expansion projects valued at approximately $240.5 million year-to-date, as of June 30, 2018, in the month of July the Company added $61.4 million.
• Achieved a combined backlog of approximately $322 million as of June 30, 2018.
• Backlog as of July 31, 2018 is $396 million.  The Company continues to add new contracts awards to the backlog month over month.
• Achieved positive cash flow from operations (CFO) during the second quarter of $2.7 million due to better management of working capital.
• Announced that one of the largest global commercial real estate firms has named CrossLayer as a key technology service provider to bring advanced network solutions to hundreds of commercial buildings across the United States.
• As a result of the above strategic partnership, as well as others, the Company’s technology segment continues to experience a large and growing pipeline.
• The Company’s infrastructure segment was awarded a contract expanding its Inside Plant (ISP) line of business footprint in five markets.  FTE was awarded the contract by a Fortune 100 global telecommunications company due to FTE’s consistent high-quality work performance.

Financial Highlights for the Second Quarter of 2018

• Total revenue of $86.4 million, up 63.4%, compared to pro forma total revenue of $52.9 million for the quarter ended June 30, 2017, as the Benchmark acquisition was not finalized until April 21, 2017.

• Gross margin was 16.2%, compared to 16.3% on a pro forma basis in the second quarter of 2017.

• Cash Flow from Operations (CFO) was a positive $2.7 million during the quarter, improving from a negative $1.3 million in the first quarter of this year

• Adjusted EBITDA of $7.6 million, representing an Adjusted EBITDA margin of 8.8%, compared to pro forma Adjusted EBITDA of $2.3 million in the second quarter of 2017.

• Adjusted EPS of ($0.22) per share. This compares to a pro forma adjusted EPS of ($0.04) per share in the second quarter of 2017.

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