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  "docSlug": "5402c37b0a60",
  "documentTitle": "GTT Communications, Inc. (GTT)",
  "authorId": "60_Wolfpack_Research",
  "authorName": "Wolfpack Research",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-06-06 00:00:00",
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  "notes": "The chart shows a decline in OCF/Sales ratio following major acquisitions, while the text highlights the removal of transparency in financial reporting.",
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      "text": "-50% since Q3 2017",
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      "kind": "chart",
      "text": "GTT TTM OCF/Sales Ratio, Q1 2017 - Q1 2019",
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      "text": "OCF/Sales Ratio: -50%",
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      "kind": "paragraph",
      "text": "GTT used to present these pro forma financials in its investor presentations as well – until Q4 2018, when GTT removed the pro forma revenue and adjusted EBITDA slides from its investor presentation as the numbers continued to deteriorate.",
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      "kind": "paragraph",
      "text": "Pro forma financials and expected synergies are paramount for GTT, whose maximum leverage ratio covenant is based on pro forma adjusted EBITDA plus expected synergies. This affords GTT an great deal amount of flexibility when calculating its leverage ratio.",
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      "kind": "paragraph",
      "text": "Before the acquisition of Interoute in Q2 2018, GTT's quarterly investor presentation featured a slide presenting GTT's pro forma revenue and pro forma adjusted EBITDA numbers (without expected synergies), along with the calculations for both. Below is an example from Q1 2018:",
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      "kind": "paragraph",
      "text": "Somehow, GTT was able to customize a leverage ratio of only 5.0x at the end of Q1 2019. We say somehow because this leverage calculation is only presented in GTT's \"Private Lender Presentation,\" which is not available for GTT's shareholders to review.",
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      "text": "GTT's net debt to EBITDA is approximately 10.9x using standard EBITDA, or approximately 7.8x using GTT's definition of adjusted EBITDA. Both of these would violate GTT's maximum leverage covenant of 6.5x, which drops to 6.25x on the last day of Q3 2019.",
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      "kind": "title",
      "text": "4. Pro Forma Financials and Unrealized Synergies",
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