Litecast
On December 31, 2012, the Company acquired 100% of the equity interest in Litecast, a provider of metro Bandwidth Infrastructure services in Baltimore, Maryland, for total consideration of $22.2 million, subject to certain post-closing adjustments. The acquisition was paid with cash on hand.
Litecast owns and operates a Baltimore metropolitan fiber network, connecting over 110 on-net buildings, including the city's major data centers and carrier hotel facilities. Litecast is focused on providing dark fiber and Ethernet-based services to a concentrated set of Baltimore enterprise and government customers, particularly within the healthcare and education segments.
Refinancing of Term Loan
On October 5, 2012, the Company amended the terms of its credit facilities. Among other changes, the interest rate was reduced by 187.5 basis points on both of the Company's $1,620.0 million term loan and $225.0 million revolving credit facility. On October 5, 2012, the effective rate on the Company's floating rate term loan was 5.25%. The Company paid a $16.2 million early call premium during the second quarter of Fiscal 2013 in order to consummate the amendment.
Second Fiscal Quarter Financial ResultsThree Months Ended December 31, 2012 and September 30, 2012Figure 1.0Zayo Group Summary Results($ in millions) Three months ended ---------------------------- December 31, September 30, 2012 2012 ------------- -------------Revenue $ 243.5 $ 229.7 Annualized revenue growth 24%Gross profit 208.6 197.0 Gross profit % 86% 86%Operating income 44.1 46.2Loss from continuing operations before taxes (14.0) (80.7)Provision/(benefit) for income taxes 6.0 (27.3) ------------- -------------Loss from continuing operations $ (20.0) $ (53.4) ============= =============Adjusted EBITDA from continuing operations $ 137.3 $ 122.6Purchases of property and equipment 58.9 66.7 ------------- -------------Unlevered free cash flow $ 78.4 $ 55.9 ============= ============= Annualized EBITDA growth 42% Adjusted EBITDA margin 56% 53%
Contributing to the sequential quarterly revenue increase of $13.8 million were the acquisitions of FiberGate, USCarrier and First Telecom Services. Also contributing to the revenue growth was positive net installations during the quarter. The Company generated additional monthly revenue of $4.7 million associated with gross installations accepted during the quarter ended December 31, 2012. This increase in revenue related to organic growth was partially offset by total customer churn of $3.3 million in monthly revenue during the quarter. Also contributing to the revenue growth was an increase of $2.2 million to other revenue recognized during the quarter ended December 31, 2012 as compared to the quarter ended September 30, 2012. Other revenue recognized during the quarter ended December 31, 2012 primarily related to construction services and early termination charges.
