Strong Fiber and Data Growth, Debt Reduced, Strategic Investments for Growth
MANKATO, Minn., Mar 01, 2010-- HickoryTech Corporation (Nasdaq: HTCO) today reported fourth quarter revenue of $38.3 million, up 2 percent from the $37.7 million a year ago and up $3.4 million sequentially. Net income for the fourth quarter totaled $1.4 million, or 11 cents per diluted share, a 15 percent decrease from the $1.7 million, or 13 cents per diluted share, reported in the comparable quarter in 2008.
"The economic recovery has been slow; however, we are pleased with our strong growth in Enventis fiber and data services and encouraged by the increases in the past two consecutive quarters of Enventis equipment sales and three consecutive quarters of increases in Enventis services," said John Finke, HickoryTech's president and chief executive officer. "Our Telecom Sector continues to produce steady revenue and cash flow, with virtually no decline in net cash flow during the year. We are a strong, competitive company focused on expanding our network and growing our business-to-business services."
The Company's debt position as of Dec. 31, 2009 was $120.5 million, down $4.4 million from Sept. 30, 2009 and $6.5 million from Jan. 1, 2009.
Capital expenditures in the fourth quarter totaled $6.6 million, of which $3.8 million was invested in the Enventis Sector and $2.7 million in the Telecom Sector. Additionally, HickoryTech has added sales staff and plans to operate in several new markets in 2010.
"We have the financial resources and a strategic plan for growth, particularly in our Enventis Sector," Finke said. "We have been able to pursue these growth opportunities while maintaining a stable level of operating metrics on a year-over-year basis."
Enventis Sector (before inter-segment eliminations)
Enventis Sector revenue before eliminations totaled $20.9 million, an increase of $1.3 million, or 7 percent, compared to the same quarter in 2008. Costs and expenses in the Enventis Sector totaled $19.7 million, an increase of 6 percent from the comparable quarter of 2008. Enventis Sector net income totaled $800,000 in the fourth quarter 2009, versus $900,000 in the fourth quarter in 2008. The decrease in 2009 net income of the Enventis Sector from 2008 was the result of decreases in the segment's income tax reserve in the fourth quarter of 2008; operating income was relatively flat between 2008 and 2009.
- Fiber and Data services (formerly ETS services) revenue for the fourth quarter 2009 totaled $9.5 million, up $3.0 million, or 45 percent, over the comparable quarter last year. The increase in revenue was the result of strong sales of transport services and the addition of CP Telecom, which HickoryTech acquired in August 2009. Excluding the CP Telecom business, fiber and data services revenue would have increased 14 percent as a result of organic growth initiatives.
- Equipment (formerly ENS equipment) sales for the fourth quarter of 2009 totaled $9.1 million, an increase of $200,000, or 2 percent from the comparable quarter last year.
- Equipment Services (formerly ENS services) revenue, which includes professional services and maintenance contracts, totaled $2.3 million, down $1.8 million, or 44 percent compared to one year ago. The fourth quarter of 2008 included a higher level of professional services and large maintenance contracts, adding to service revenues in that period. Equipment services revenue was up 6 percent on a sequential basis from the third quarter 2009.
- Enventis product lines were profitable on an operating basis for the years ended Dec. 31 in 2009 and 2008. Fiber and Data operating income increased 59 percent in the fourth quarter and 26 percent in fiscal 2009. Equipment and Services generated an operating profit for the year ended Dec. 31, 2009, although in the fourth quarter Equipment and Services did experience a small operating loss due to the economic slowdown.
Telecom Sector (before inter-segment eliminations)
Telecom Sector revenue totaled $17.9 million, a decrease of $400,000 or 2 percent. Telecom Sector results continue to be affected by declines in network access and local service revenue, partially offset by broadband growth. Costs and expenses totaled $14.8 million for the fourth quarter, down 3 percent year-over-year. Telecom Sector net income for the fourth quarter totaled $1.9 million, a 17 percent decrease versus the comparable quarter in 2008. Net income was down from 2008 as a result of decreases in income tax reserves in the fourth quarter 2008. Operating income for the sector was relatively unchanged comparing 2009 to 2008.
- Broadband revenue totaled $3.2 million, up 10 percent versus $2.9 million in the fourth quarter of 2008. Broadband revenue includes DSL, Data and Digital TV services. DSL subscribers increased 3 percent from a year ago, totaling 19,346, and Digital TV subscribers increased 15 percent to 9,663.
- Network access revenue was $6.0 million, down 5 percent from the comparable period in 2008.
- Local service revenue totaled $3.8 million, down 6 percent, and local access lines declined 6 percent, both the result of competition in our telecom markets.
Consolidated results for fiscal 2009
- Revenue for fiscal 2009 totaled $139.1 million, down 9 percent from the previous year.
- Net Income for fiscal 2009 totaled $11.3 million, up 40 percent. Excluding the income tax reserve release, which added $4.4 million of net income in third quarter 2009, net income would have declined 15 percent from the previous year. This decline is driven by lower Equipment and Services revenue related to the economy, and due to this reason is not a source of concern for management.
- Operating income for fiscal 2009 was $18.6 million, down 8 percent from the previous year.
- Enventis Sector revenue totaled $68.7 million in fiscal 2009, down 14 percent. Enventis Fiber and Data services revenue grew 30 percent in fiscal 2009, and Equipment sales were down 36 percent due to the economic slowdown.
- Telecom Sector revenue totaled $70.4 million in fiscal 2009, down 4 percent from the previous year. Telecom Broadband services grew 10 percent year over year, and Local Service and Network Access revenues declined 6 percent and 7 percent, respectively.
Capital Expenditures, Debt and Cash Position
Capital expenditures totaled $6.6 million for the fourth quarter of 2009 and $17.9 million for fiscal 2009. Capital expenditures in the fourth quarter were $1.3 million more than the comparable period in 2008 and essentially the same as fiscal 2008. HickoryTech reduced its long-term and current debt balance by $4.4 million from Sept. 30, 2009. Debt totaled $120.5 million as of Dec. 31, 2009, down $6.5 million year-over-year. The Company's cash position as of Dec. 31, 2009 totaled $2.4 million versus $1.6 million at Jan. 1, 2009.
"We're especially pleased with our balance sheet and cash generation performance in 2009," Finke said. "We were able to both reduce debt and increase cash while also launching new growth initiatives and funding capital expenditures. In addition, during the year we acquired CP Telecom in an all-cash transaction."
2010 Expectations
HickoryTech announced the following fiscal 2010 consolidated expectations:
- Revenue is targeted in the range of $150 million to $158 million.
- Net Income is targeted in the range of $8.2 million to $9.1 million.
- Capital spending is targeted in the range of $22 million to $26 million.
- EBITDA is targeted in the range of $40.5 million to $43 million.
- A year-end debt balance is targeted in the range of $117 million to $119 million.
"Despite the slow economic recovery, we have been able to continue to grow our Enventis Fiber and Data services and our Telecom broadband services," Finke said. "We are investing in additional growth opportunities and in expanding our network. We remain confident our business plan will deliver long-term shareholder value."
Conference Call and Webcast
HickoryTech will host a conference call and webcast on Tuesday, March 2, 2010 at 9 a.m. CT. The dial-in number for the call is 877-774-2369 (U.S. and Canada) and the participant pass code is 51854327. A simultaneous webcast of the call and downloadable presentation will be available through a link on the Investor Relations page at http://investor.hickorytech.com.
About HickoryTech
HickoryTech Corporation (dba HickoryTech and Enventis) is a leading integrated communications provider in the markets it serves. With headquarters in Mankato, Minn., the corporation has approximately 450 employees and a regional fiber network with facilities-based operations in Minnesota and Iowa. Enventis serves businesses of all sizes across a five-state region with IP-based voice, data and network solutions. HickoryTech provides bundled residential and business services including high-speed Internet, Digital TV and voice services in its legacy telecom markets. The Company trades on the Nasdaq Stock Exchange (symbol: HTCO) and is a member of the Russell 2000 index. For more information, visit www.hickorytech.com.
Non-GAAP Measures
To supplement the Company's financial statements presented in accordance with GAAP, the Company provides certain non-GAAP financial measures of financial performance. These non-GAAP measures include earnings before interest, income taxes, depreciation and amortization, and net income without release of income tax reserve. The Company's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance and ability to generate cash flows. In many cases non-GAAP financial measures are used by analysts and investors to evaluate the Company's performance. Reconciliation to the nearest GAAP measure included in this press release can be found in the financial table included below.
Forward looking statement
Certain statements included in this press release that are not historical facts are "forward-looking statements." Such forward-looking statements are based on current expectations, estimates and projections about the industry in which HickoryTech operates and management's beliefs and assumptions. The forward-looking statements are subject to uncertainties. These statements are not guarantees of future performance and involve certain risks, uncertainties and probabilities. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. HickoryTech undertakes no obligation to update any of its forward-looking statements, except as required by law.
|
Consolidated Statement of Operations
|
|
(unaudited)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
| |
|
December 31 |
% |
|
December 31 |
% |
| (Dollars in thousands, except share data) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
| Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
| Enventis Sector |
|
|
|
|
|
|
|
|
|
|
|
|
| Equipment |
|
$ |
9,069 |
|
|
$ |
8,912 |
|
|
2 |
% |
|
$ |
27,857 |
|
|
$ |
43,514 |
|
|
-36 |
% |
| Services |
|
|
11,741 |
|
|
|
10,610 |
|
|
11 |
% |
|
|
40,826 |
|
|
|
36,462 |
|
|
12 |
% |
| Total Enventis Sector |
|
|
20,810 |
|
|
|
19,522 |
|
|
7 |
% |
|
|
68,683 |
|
|
|
79,976 |
|
|
-14 |
% |
| Telecom Sector |
|
|
17,520 |
|
|
|
18,148 |
|
|
-3 |
% |
|
|
70,419 |
|
|
|
73,199 |
|
|
-4 |
% |
| Total revenue |
|
|
38,330 |
|
|
|
37,670 |
|
|
2 |
% |
|
|
139,102 |
|
|
|
153,175 |
|
|
-9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales, excluding depreciation and amortization |
|
|
8,500 |
|
|
|
7,750 |
|
|
10 |
% |
|
|
24,869 |
|
|
|
37,355 |
|
|
-33 |
% |
| Cost of services, excluding depreciation and amortization |
|
|
14,394 |
|
|
|
14,244 |
|
|
1 |
% |
|
|
52,211 |
|
|
|
52,004 |
|
|
0 |
% |
| Selling, general and administrative expenses |
|
|
5,881 |
|
|
|
6,198 |
|
|
-5 |
% |
|
|
22,260 |
|
|
|
22,984 |
|
|
-3 |
% |
| Depreciation |
|
|
5,209 |
|
|
|
5,108 |
|
|
2 |
% |
|
|
20,176 |
|
|
|
19,479 |
|
|
4 |
% |
| Amortization of intangibles |
|
|
302 |
|
|
|
264 |
|
|
14 |
% |
|
|
1,001 |
|
|
|
1,127 |
|
|
-11 |
% |
| Total costs and expenses |
|
|
34,286 |
|
|
|
33,564 |
|
|
2 |
% |
|
|
120,517 |
|
|
|
132,949 |
|
|
-9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
|
4,044 |
|
|
|
4,106 |
|
|
-2 |
% |
|
|
18,585 |
|
|
|
20,226 |
|
|
-8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest and other income |
|
|
50 |
|
|
|
12 |
|
|
317 |
% |
|
|
105 |
|
|
|
93 |
|
|
13 |
% |
| Interest expense |
|
|
(1,763 |
) |
|
|
(1,821 |
) |
|
-3 |
% |
|
|
(6,918 |
) |
|
|
(6,870 |
) |
|
1 |
% |
| Income before income taxes |
|
|
2,331 |
|
|
|
2,297 |
|
|
1 |
% |
|
|
11,772 |
|
|
|
13,449 |
|
|
-12 |
% |
| Income taxes |
|
|
907 |
|
|
|
618 |
|
|
47 |
% |
|
|
499 |
|
|
|
5,420 |
|
|
-91 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
1,424 |
|
|
$ |
1,679 |
|
|
-15 |
% |
|
$ |
11,273 |
|
|
$ |
8,029 |
|
|
40 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
$ |
0.11 |
|
|
$ |
0.13 |
|
|
-15 |
% |
|
$ |
0.86 |
|
|
$ |
0.61 |
|
|
41 |
% |
| Basic weighted average common shares outstanding |
|
|
13,095,628 |
|
|
|
13,012,619 |
|
|
|
|
|
13,061,266 |
|
|
|
13,248,731 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
|
$ |
0.11 |
|
|
$ |
0.13 |
|
|
-15 |
% |
|
$ |
0.86 |
|
|
$ |
0.61 |
|
|
41 |
% |
| Diluted weighted average common and equivalent shares outstanding |
|
|
13,100,015 |
|
|
|
13,015,211 |
|
|
|
|
|
13,061,861 |
|
|
|
13,259,933 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends per share |
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
0 |
% |
|
$ |
0.52 |
|
|
$ |
0.49 |
|
|
6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet
|
|
(unaudited)
|
| |
|
|
|
|
| (Dollars and Share Data in Thousands) |
|
December 31, 2009 |
|
December 31, 2008 |
| ASSETS |
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$ |
2,420 |
|
|
$ |
1,626 |
|
| Receivables, net of allowance for doubtful accounts of $643and $905 |
|
|
19,729 |
|
|
|
26,292 |
|
| Inventories |
|
|
5,069 |
|
|
|
8,674 |
|
| Income tax receivable |
|
|
- |
|
|
|
566 |
|
| Deferred income taxes |
|
|
2,423 |
|
|
|
2,064 |
|
| Prepaid expenses |
|
|
1,751 |
|
|
|
1,409 |
|
| Other |
|
|
1,039 |
|
|
|
1,114 |
|
| Total current assets |
|
|
32,431 |
|
|
|
41,745 |
|
| |
|
|
|
|
| Investments |
|
|
4,306 |
|
|
|
4,066 |
|
| |
|
|
|
|
| Property, plant and equipment |
|
|
357,607 |
|
|
|
338,510 |
|
| Accumulated depreciation |
|
|
(204,129 |
) |
|
|
(187,157 |
) |
| Property, plant and equipment, net |
|
|
153,478 |
|
|
|
151,353 |
|
| |
|
|
|
|
| Other assets: |
|
|
|
|
| Goodwill |
|
|
27,423 |
|
|
|
25,239 |
|
| Intangible assets, net |
|
|
3,025 |
|
|
|
856 |
|
| Deferred costs and other |
|
|
1,820 |
|
|
|
2,249 |
|
| Total other assets |
|
|
32,268 |
|
|
|
28,344 |
|
| |
|
|
|
|
| Total assets |
|
$ |
222,483 |
|
|
$ |
225,508 |
|
| |
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
| Current liabilities: |
|
|
|
|
| Extended term payable |
|
$ |
6,788 |
|
|
$ |
10,474 |
|
| Accounts payable |
|
|
2,883 |
|
|
|
3,133 |
|
| Accrued expenses and other |
|
|
7,792 |
|
|
|
8,001 |
|
| Accrued income taxes |
|
|
642 |
|
|
|
- |
|
| Deferred revenue |
|
|
6,016 |
|
|
|
6,205 |
|
| Current maturities of long-term obligations |
|
|
620 |
|
|
|
1,621 |
|
| Total current liabilities |
|
|
24,741 |
|
|
|
29,434 |
|
| |
|
|
|
|
| Long-term liabilities: |
|
|
|
|
| Debt obligations, net of current maturities |
|
|
119,871 |
|
|
|
125,384 |
|
| Financial derivative instruments |
|
|
1,908 |
|
|
|
3,286 |
|
| Accrued income taxes |
|
|
3,218 |
|
|
|
7,517 |
|
| Deferred income taxes |
|
|
21,895 |
|
|
|
18,282 |
|
| Deferred revenue |
|
|
2,095 |
|
|
|
1,646 |
|
| Accrued employee benefits and deferred compensation |
|
|
14,209 |
|
|
|
10,210 |
|
| Total long-term liabilities |
|
|
163,196 |
|
|
|
166,325 |
|
| |
|
|
|
|
| Total liabilities |
|
|
187,937 |
|
|
|
195,759 |
|
| |
|
|
|
|
| Commitments and contingencies |
|
|
|
|
| |
|
|
|
|
| Shareholders' equity: |
|
|
|
|
| Common stock, no par value, $.10 stated value |
|
|
|
|
| shares authorized: 100,000 |
|
|
|
|
| Shares issued and outstanding: 13,101 in 2009 and 12,992 in 2008 |
|
|
1,310 |
|
|
|
1,299 |
|
| Additional paid-in capital |
|
|
12,975 |
|
|
|
11,504 |
|
| Retained earnings |
|
|
24,687 |
|
|
|
20,199 |
|
| Accumulated other comprehensive (loss) |
|
|
(4,426 |
) |
|
|
(3,253 |
) |
| Total shareholders' equity |
|
|
34,546 |
|
|
|
29,749 |
|
| |
|
|
|
|
| Total liabilities and shareholders' equity |
|
$ |
222,483 |
|
|
$ |
225,508 |
|
| |
|
|
|
|
|
|
|
|
|
Enventis Sector Recap
|
|
(unaudited)
|
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
December 31
|
|
% |
|
Twelve Months Ended
December 31
|
|
% |
| (Dollars In thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
| Revenue before intersegment eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
| Equipment |
|
$ |
9,069 |
|
$ |
8,912 |
|
2 |
% |
|
$ |
27,857 |
|
$ |
43,514 |
|
-36 |
% |
| Services |
|
|
2,306 |
|
|
4,152 |
|
-44 |
% |
|
|
9,579 |
|
|
12,387 |
|
-23 |
% |
| Equipment and Services |
|
|
11,375 |
|
|
13,064 |
|
|
|
|
37,436 |
|
|
55,901 |
|
|
| Fiber and Data |
|
|
9,435 |
|
|
6,458 |
|
46 |
% |
|
|
31,247 |
|
|
24,075 |
|
30 |
% |
| Intersegment |
|
|
111 |
|
|
111 |
|
0 |
% |
|
|
500 |
|
|
515 |
|
-3 |
% |
| Total Enventis Revenue |
|
$ |
20,921 |
|
$ |
19,633 |
|
7 |
% |
|
$ |
69,183 |
|
$ |
80,491 |
|
-14 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Enventis revenue before intersegment eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
| Unaffiliated customers |
|
$ |
20,810 |
|
$ |
19,522 |
|
|
|
$ |
68,683 |
|
$ |
79,976 |
|
|
| Intersegment |
|
|
111 |
|
|
111 |
|
|
|
|
500 |
|
|
515 |
|
|
| |
|
$ |
20,921 |
|
$ |
19,633 |
|
|
|
$ |
69,183 |
|
$ |
80,491 |
|
|
| Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
8,500 |
|
|
7,750 |
|
10 |
% |
|
|
24,869 |
|
|
37,355 |
|
-33 |
% |
| Cost of services |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
6,786 |
|
|
6,877 |
|
-1 |
% |
|
|
23,050 |
|
|
21,894 |
|
5 |
% |
| Selling, general and administrative expenses |
|
|
2,785 |
|
|
2,650 |
|
5 |
% |
|
|
10,224 |
|
|
9,801 |
|
4 |
% |
| Depreciation and amortization |
|
|
1,604 |
|
|
1,214 |
|
32 |
% |
|
|
5,413 |
|
|
4,417 |
|
23 |
% |
| Total costs and expenses |
|
|
19,675 |
|
|
18,491 |
|
6 |
% |
|
|
63,556 |
|
|
73,467 |
|
-13 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
1,246 |
|
$ |
1,142 |
|
9 |
% |
|
$ |
5,627 |
|
$ |
7,024 |
|
-20 |
% |
| Net income |
|
$ |
762 |
|
$ |
916 |
|
-17 |
% |
|
$ |
3,362 |
|
$ |
4,369 |
|
-23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
|
$ |
3,847 |
|
$ |
2,093 |
|
84 |
% |
|
$ |
8,738 |
|
$ |
6,408 |
|
36 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enventis Equipment and Services Product Line
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31 |
|
Twelve Months Ended December 31 |
| (Dollars in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
| Revenue before intersegment eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
| Equipment |
|
$ |
9,069 |
|
|
$ |
8,912 |
|
2 |
% |
|
$ |
27,857 |
|
$ |
43,514 |
|
-36 |
% |
| Services |
|
|
2,306 |
|
|
|
4,152 |
|
-44 |
% |
|
|
9,579 |
|
|
12,387 |
|
-23 |
% |
| Total revenue |
|
$ |
11,375 |
|
|
$ |
13,064 |
|
-13 |
% |
|
$ |
37,436 |
|
$ |
55,901 |
|
-33 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
8,496 |
|
|
|
7,749 |
|
10 |
% |
|
|
24,923 |
|
|
37,342 |
|
-33 |
% |
| Cost of services |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
1,817 |
|
|
|
3,429 |
|
-47 |
% |
|
|
7,082 |
|
|
10,102 |
|
-30 |
% |
| Selling, general and administrative expenses |
|
1,046 |
|
|
|
1,437 |
|
-27 |
% |
|
|
4,848 |
|
|
5,264 |
|
-8 |
% |
| Depreciation and amortization |
|
|
107 |
|
|
|
149 |
|
-28 |
% |
|
|
414 |
|
|
515 |
|
-20 |
% |
| Total costs and expenses |
|
|
11,466 |
|
|
|
12,764 |
|
-10 |
% |
|
|
37,267 |
|
|
53,223 |
|
-30 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
(91 |
) |
|
$ |
300 |
|
-130 |
% |
|
$ |
169 |
|
$ |
2,678 |
|
-94 |
% |
| Net income |
|
$ |
(34 |
) |
|
$ |
276 |
|
-112 |
% |
|
$ |
122 |
|
$ |
1,670 |
|
-93 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
|
$ |
204 |
|
|
$ |
16 |
|
1175 |
% |
|
$ |
528 |
|
$ |
468 |
|
13 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enventis Fiber and Data Product Line
|
| |
|
|
|
|
| |
|
Three Months Ended December 31 |
|
Twelve Months Ended December 31 |
| (Dollars in thousands) |
|
2009 |
|
2008 |
|
% Change |
|
2009 |
|
2008 |
|
% Change |
| Revenue before intersegment eliminations: |
|
|
|
|
|
|
|
|
|
|
|
|
| Services |
|
$ |
9,435 |
|
$ |
6,458 |
|
46 |
% |
|
$ |
31,247 |
|
|
$ |
24,075 |
|
30 |
% |
| Intersegment |
|
|
111 |
|
|
111 |
|
0 |
% |
|
|
500 |
|
|
|
515 |
|
-3 |
% |
| Total revenue |
|
$ |
9,546 |
|
$ |
6,569 |
|
45 |
% |
|
$ |
31,747 |
|
|
$ |
24,590 |
|
29 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
4 |
|
|
1 |
|
300 |
% |
|
|
(54 |
) |
|
|
13 |
|
-515 |
% |
| Cost of services |
|
|
|
|
|
|
|
|
|
|
|
|
| (excluding depreciation and amortization) |
|
|
4,969 |
|
|
3,448 |
|
44 |
% |
|
|
15,968 |
|
|
|
11,792 |
|
35 |
% |
| Selling, general and administrative expenses |
|
|
1,739 |
|
|
1,213 |
|
43 |
% |
|
|
5,376 |
|
|
|
4,537 |
|
18 |
% |
| Depreciation and amortization |
|
|
1,497 |
|
|
1,065 |
|
41 |
% |
|
|
4,999 |
|
|
|
3,902 |
|
28 |
% |
| Total costs and expenses |
|
|
8,209 |
|
|
5,727 |
|
43 |
% |
|
|
26,289 |
|
|
|
20,244 |
|
30 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
$ |
1,337 |
|
$ |
842 |
|
59 |
% |
|
$ |
5,458 |
|
|
$ |
4,346 |
|
26 |
% |
| Net income |
|
$ |
796 |
|
$ |
640 |
|
24 |
% |
|
$ |
3,240 |
|
|
$ |
2,699 |
|
20 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
|
$ |
3,643 |
|
$ |
2,077 |
|
75 |
% |
|
$ |
8,210 |
|
|
$ |
5,940 |
|
38 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Sector Recap
|
|
(unaudited)
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three Months Ended
December 31
|
|
% |
|
Twelve Months Ended
December 31
|
|
% |
| (Dollars in thousands) |
|
2009 |
|
2008 |
|
Change |
|
2009 |
|
2008 |
|
Change |
| |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Local Service |
|
$ |
3,763 |
|
$ |
4,000 |
|
-6 |
% |
|
$ |
15,322 |
|
$ |
16,296 |
|
-6 |
% |
| |
|
Network Access |
|
|
5,999 |
|
|
6,330 |
|
-5 |
% |
|
|
24,157 |
|
|
25,859 |
|
-7 |
% |
| |
|
Long Distance |
|
|
861 |
|
|
1,079 |
|
-20 |
% |
|
|
3,791 |
|
|
4,563 |
|
-17 |
% |
| |
|
Broadband |
|
|
3,174 |
|
|
2,882 |
|
10 |
% |
|
|
12,114 |
|
|
10,983 |
|
10 |
% |
| |
|
Internet |
|
|
1,236 |
|
|
1,245 |
|
-1 |
% |
|
|
4,975 |
|
|
4,723 |
|
5 |
% |
| |
|
Directory |
|
|
929 |
|
|
1,034 |
|
-10 |
% |
|
|
4,000 |
|
|
4,119 |
|
-3 |
% |
| |
|
Bill Processing |
|
|
872 |
|
|
768 |
|
14 |
% |
|
|
3,351 |
|
|
3,325 |
|
1 |
% |
| |
|
Intersegment |
|
|
373 |
|
|
179 |
|
108 |
% |
|
|
1,217 |
|
|
644 |
|
89 |
% |
| |
|
Other |
|
|
686 |
|
|
810 |
|
-15 |
% |
|
|
2,709 |
|
|
3,331 |
|
-19 |
% |
| |
|
Total Telecom Revenue |
|
$ |
17,893 |
|
$ |
18,327 |
|
-2 |
% |
|
$ |
71,636 |
|
$ |
73,843 |
|
-3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Telecom revenue before intersegment eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Unaffiliated Customers |
|
$ |
17,520 |
|
$ |
18,148 |
|
|
|
$ |
70,419 |
|
$ |
73,199 |
|
|
| |
Intersegment |
|
|
373 |
|
|
179 |
|
|
|
|
1,217 |
|
|
644 |
|
|
| |
|
|
|
|
17,893 |
|
|
18,327 |
|
|
|
|
71,636 |
|
|
73,843 |
|
|
| |
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of services, excluding depreciation and amortization |
|
|
8,046 |
|
|
7,691 |
|
5 |
% |
|
|
30,730 |
|
|
31,141 |
|
-1 |
% |
| |
|
Selling, general and administrative expenses |
|
|
2,883 |
|
|
3,446 |
|
-16 |
% |
|
|
11,639 |
|
|
13,521 |
|
-14 |
% |
| |
|
Depreciation and amortization |
|
|
3,877 |
|
|
4,143 |
|
-6 |
% |
|
|
15,680 |
|
|
16,136 |
|
-3 |
% |
| |
|
Total costs and expenses |
|
|
14,806 |
|
|
15,280 |
|
-3 |
% |
|
|
58,049 |
|
|
60,798 |
|
-5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Operating income |
|
$ |
3,087 |
|
$ |
3,047 |
|
1 |
% |
|
$ |
13,587 |
|
$ |
13,045 |
|
4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net income |
|
$ |
1,869 |
|
$ |
2,256 |
|
-17 |
% |
|
$ |
8,068 |
|
$ |
8,104 |
|
0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Capital expenditures |
|
$ |
2,693 |
|
$ |
3,020 |
|
-11 |
% |
|
$ |
9,068 |
|
$ |
11,102 |
|
-18 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Business access lines |
|
|
25,133 |
|
|
25,274 |
|
-1 |
% |
|
|
|
|
|
|
| |
Residential access lines |
|
|
30,197 |
|
|
33,757 |
|
-11 |
% |
|
|
|
|
|
|
| |
Total access lines |
|
|
55,330 |
|
|
59,031 |
|
-6 |
% |
|
|
|
|
|
|
| |
Long distance customers |
|
|
36,107 |
|
|
38,458 |
|
-6 |
% |
|
|
|
|
|
|
| |
DSL customers |
|
|
19,346 |
|
|
18,696 |
|
3 |
% |
|
|
|
|
|
|
| |
Digital TV customers |
|
|
9,663 |
|
|
8,368 |
|
15 |
% |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
|
| |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
Three Months Ended
December 31
|
|
Twelve Months Ended
December 31
|
| (Dollars in thousands) |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
| Reconciliation of net income to EBITDA: |
|
|
|
|
|
|
|
|
| |
Net income |
|
$ |
1,424 |
|
$ |
1,679 |
|
$ |
11,273 |
|
$ |
8,029 |
| |
Add: |
|
|
|
|
|
|
|
|
| |
Depreciation |
|
|
5,209 |
|
|
5,108 |
|
|
20,176 |
|
|
19,479 |
| |
Amortization of intangibles |
|
|
302 |
|
|
264 |
|
|
1,001 |
|
|
1,127 |
| |
Interest expense |
|
|
1,763 |
|
|
1,821 |
|
|
6,918 |
|
|
6,870 |
| |
Income tax expense |
|
|
907 |
|
|
618 |
|
|
499 |
|
|
5,420 |
| |
EBITDA1 |
|
$ |
9,605 |
|
$ |
9,490 |
|
$ |
39,867 |
|
$ |
40,925 |
| |
|
|
|
|
|
|
|
|
|
| Reconciliation of net income to net income without |
|
|
|
|
|
|
|
|
| release of income tax reserve: |
|
|
|
|
|
|
|
|
| |
Net income |
|
$ |
1,424 |
|
$ |
1,679 |
|
$ |
11,273 |
|
$ |
8,029 |
| |
Deduct: Income tax reserve release |
|
|
- |
|
|
- |
|
|
4,454 |
|
|
- |
| |
Net income excluding income tax reserve release |
|
$ |
1,424 |
|
$ |
1,679 |
|
$ |
6,819 |
|
$ |
8,029 |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
Year Ending |
|
|
|
|
| |
|
|
December 31, 2010 |
|
|
|
|
| (Dollars in thousands) |
|
Guidance Range |
|
|
|
|
| Reconciliation of net income to 2010 EBITDA guidance: |
|
Low |
|
High |
|
|
|
|
| |
Projected net income |
|
$ |
8,200 |
|
$ |
9,100 |
|
|
|
|
| |
Add back: |
|
|
|
|
|
|
|
|
| |
Depreciation and amortization |
|
|
21,300 |
|
|
21,900 |
|
|
|
|
| |
Interest expense |
|
|
5,100 |
|
|
5,400 |
|
|
|
|
| |
Income tax expense |
|
|
5,900 |
|
|
6,600 |
|
|
|
|
| |
Projected EBITDA1 Guidance |
|
$ |
40,500 |
|
$ |
43,000 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
1 EBITDA, as defined by our debt agreement
|
|