LICT CORPORATION RYE, N.Y., July 30, 2015 /PRNewswire/ -- LICT Corporation ("LICT"; OTC Pink(®): LICT) is reporting results for the second quarter ended June 30, 2015.
SECOND QUARTER RESULTS - Revenues increased by $0.6 million, or 2.9%, to $21.7 million compared to the corresponding quarter in 2014. EBITDA before corporate costs was $9.4 million, as compared to $9.3 million in the previous year's second quarter. All 2014 amounts have been restated to reflect the sale of the Company's New York operations, DFT Communications Corporation, which closed in December 2014. As part of that transaction, LICT retains a note receivable of $3.25 million and has a 20% on-going equity interest in those operations.
Non-regulated revenues grew by 16.7% to $9.2 million from the prior year's $7.8 million due to increased broadband and competitive local exchange carrier ("CLEC") revenues. Regulated revenues were $12.5 million in the 2015 second quarter, off $0.7 million from the prior year's quarter, reflecting lower intra-state revenues, primarily at our New Mexico operation, and lower interstate revenues across almost all of our operations.
Non-regulated EBITDA for the second quarter, including the cash received from our equity in affiliates, grew 26.0% to $4.3 million, from the prior year's $3.4 million. Regulated EBITDA fell $0.7 million to $5.2 million reflecting the revenue drop noted above.
Earnings per share from continuing operations during the second quarter were $90 per share in 2015 versus $89 per share in 2014. Shares outstanding at June 30, 2015, were 22,156 versus 22,272 at December 31, 2014 and 22,327 at June 30, 2014.
FULL YEAR RESULTS - For the year ending December 31, 2015, LICT continues to expect revenues to be approximately $87 million, as compared to $85.9 million in 2014. LICT is expecting EBITDA, prior to corporate costs but including cash received from our equity affiliates, of approximately $38 million, as compared to $37.8 million in 2014.
CAPITAL EXPENDITURES AND DEPRECIATION EXPENSE - In 2015, capital expenditures were $4.7 million for the second quarter as compared to $3.3 million in the second quarter of 2014. This reflects our commitment to provide the communities we serve with enhanced communication capabilities. Those capabilities are being developed through our continued investment in the improvement of our products and in our network infrastructure, particularly our broadband networks. Through upgraded electronics and fiber extensions deeper into our networks, we have improved the speed, the capacity and the reliability of our broadband service offerings.
IOWA EXPANSION - The Company is also announcing that Dixon Acquisition, LLC ("Dixon Acquisition"), a single-member limited liability company owned by Central Scott Telephone Company ("Central Scott"), a wholly-owned subsidiary of LICT, is acquiring the assets and operations of Dixon Telephone Company ("Dixon") in eastern Iowa. Dixon provides broadband data, video and voice communications to four communities that are geographically adjacent to Central Scott's franchised service territory. The transaction must be approved by a majority vote of Dixon's shareholders and by regulatory authorities before it can close. Financial terms of the transaction are not being disclosed at this time.
BROADBAND REGULATION - In April 2014, continuing a lengthy and ongoing process, the FCC ordered further modifications to Intercarrier Compensation ('ICC') and the Universal Service Fund ("USF"), and issued a Further Notice of Proposed Rulemaking ("FNPRM"). Due to the many unresolved items in the FNPRM, which may impact "rate-of-return carriers" including many of our companies, it is not possible to predict the impact that the FCC's ICC and USF reforms will have on LICT's future revenues at this time. ICC and USF programs generate, on a combined basis, approximately 40% of our revenues. We believe that government policy will continue to encourage and support communication services in rural areas, but there is no certainty that such support will be continued at historical levels or through the current mechanisms. As a result of this, as well as opportunities created from new technologies and the internet, we have focused on developing non-regulated, high speed businesses, such as broadband service by fiber optic and advanced DSL technologies, to supplement our traditional rural telephone services.
OPERATING STATISTICS - As of June 30, 2015, the Company's DSL penetration in its franchised telephone service territories, based on total RLEC voice lines, was 73.2%, compared to 71.6% as of December 31, 2014. Our summary operating statistics, restated for the sale of the Company's New York operations, are as follows:
Year to Date Percent
June 30, June 30, Dec. 31, Increase Increase
2015 2014 2014 (Decrease) (Decrease)
---- ---- ---- --------- ---------
ILEC voice lines 28,065 28,888 28,110 (45) (0.2)%
CLEC voice lines 5,348 4,563 5,019 329 6.6%
----- ----- ----- --- ---
Total voice
lines 33,413 33,451 33,129 284 0.9%
------ ------ ------ --- ---
Broadband lines 27,571 25,572 26,072 1,499 5.7%
LD Resale lines 15,974 15,263 15,531 443 2.9%
Video
Subscribers 6,148 6,365 6,117 31 0.5%
BALANCE SHEET - As of June 30, 2015, the company had approximately $18.1 million in cash and $49.2 million in total debt, or $31.1 million in net debt, as compared to $36.3 million at December 31, 2014. The net debt at December 31, 2014 includes the Auction 97 deposit of $19.0 million, and associated short-term borrowing of $15.0 million, which was returned in February 2015. The net debt at June 30, 2014 totaled $57.9 million.
REFINANCING THE COMPANY - In December 2014, the Company secured a $30 million line of credit agreement to replace its existing $25 million line of credit. This replacement line expires in December 2017. The line provides the company with increased financial flexibility for expanded business initiatives, higher borrowing capacity, shareholder compensation, and a lower interest rate. Interest expense was $754,000 in the second quarter of 2015 as compared to $911,000 in the second quarter of 2014, reflecting lower borrowings and reduced rates.
SHARE REPURCHASES - During the six months ended June 30, 2015, the Company repurchased 205 shares for $1.1 million at an average price of $5,204 per share. We have 550 shares left in our 1,000 share buyback authorization. As of June 30, 2015, 22,156 shares were outstanding. We note that 89 shares were issued in March 2015 under the Company's Restricted Stock Plan. In addition, the Company is currently considering the possibility of an offer to repurchase stock on a no transaction fee basis from shareholders owning, for example, 5 shares or less.
BUSINESS INITIATIVES -The Board of Directors and management have implemented measures which have improved liquidity and reduced the Company's debt position. At this time, the Board is considering whether the Company should acquire additional leverage which would enable us to explore broader opportunities both within and outside our current industry segments.
This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation anticipated financial results, financing, capital expenditures and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by LICT on its website, www.lictcorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful or that financial targets will be met, and such information is subject to uncertainties, risks and inaccuracies, which could be material.
LICT Corporation is a holding company with subsidiaries in broadband and other telecommunications services that actively seeks acquisitions, principally in its existing business areas.
LICT Corporation is listed on the OTC Pink(®) under the symbol LICT. For further information visit our website at http://www.lictcorp.com.
Release: 15-3
Exhibit A
LICT CORPORATION
Statements of Operations and Selected Balance Sheet Data Page 1 of 2
(In Thousands, Except Per Share Data)
STATEMENTS OF OPERATIONS
Three Months Ended (a) Six Months Ended (a)
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Revenues $21,696 $21,093 $42,783 $42,345
Cost and Expenses:
Cost of revenue, excluding depreciation 9,946 9,508 19,704 18,428
Selling, general and administration 2,838 2,683 5,626 5,545
Corporate office expense 790 831 1,506 1,590
Depreciation and amortization 4,488 4,578 8,961 8,833
-----
Operating profit (a) 3,634 3,493 6,986 7,949
Other Income(Expense)
Investment income 17 7 279 398
Interest expense (754) (911) (1,498) (1,956)
Equity in earnings of affiliated companies 377 505 811 860
Other gains/(losses) - net (59) (66) 22 52
---
(419) (465) (386) (646)
---- ---- ---- ----
Income Before Income Tax Provision 3,215 3,028 6,600 7,303
Provision For Income Taxes (1,222) (1,236) (2,518) (2,872)
------
Net Income before discontinued operations 1,993 1,792 4,082 4,431
Net Income from discontinued operations 117 109 117 219
---
Net Income $2,110 $1,901 $4,199 $4,650
====== ====== ====== ======
Capital Expenditures $4,777 $3,301 $8,481 $6,601
Weighted Average Shares Used In Earnings
Per Share Computations 22,202 22,418 22,203 22,358
Actual shares outstanding at end of period 22,242 22,327 22,242 22,327
Basic and Diluted Earnings Per Share
Net income before discontinued operations $89.77 $79.94 $183.85 $198.18
Net income from discontinued operations 5.27 4.89 5.27 9.80
----
Net income $95.04 $84.80 $189.12 $207.98
====== ====== ======= =======
(a) The Second Quarter
and Year to Date
results of 2014 are
restated to reflect
the sale of the
Company's New York
operations as a
discontinued
operation, which
occurred on December
24, 2014.
(b) see EBITDA on page 2
LICT Corporation Exhibit A
Page 2 of 2
Statements of Operations and Selected Balance Sheet Data-Continued
(in thousands, Except Per Share Data)
June 30, Dec. 31, June 30,
SELECTED BALANCE SHEET DATA
2015 2014 2014
---- ---- ----
Cash and Cash Equivalents $18,103 $18,155 $13,142
Auction 97 Deposits -- 19,000 --
Note receivable - Sale of New York operations 3,250 3,250 --
Short-Term Loan from Affiliate -Auction 97 -- 15,000 --
Long-Term Debt (including current portion) 49,187 58,466 71,079
Liabilities, including taxes, other than debt $31,900 $30,956 $35.478
Shareholders' Equity attributable to LICT $101,714 $98,727 $93,700
Shares Outstanding at Date 22,152 22,272 22,327
EBITDA
EBITDA is an established measure of operating performance
and liquidity that is commonly reported and widely used by
analysts, investors, and other interested parties in the
telecommunications industry because it eliminates many
differences in financial, capitalization, and tax
structures, as well as non-cash and non-operating
charges to earnings. We believe that EBITDA trends are a
valuable indicator of whether our operations are able to
produce sufficient operating cash flow to fund working
capital needs, service debt obligations, and fund capital
expenditures.
EBITDA equals net income (loss), before interest expense,
income tax expense (benefit), depreciation and
amortization expense, investment income, equity in
earnings of affiliated companies, gain (loss) on sale of
investment, impairment charges, and net income from
discontinued operations. EBITDA also now includes the cash
distributions we receive from the equity in earnings of
affiliated companies. Although we do not have majority
voting control of such companies, we have the ability to
significantly influence financial and accounting policies.
The inclusion of cash received from equity companies is a
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
EBITDA
Operating Subsidiaries $8,912 $8,902 $17,453 $18,372
Cash received from equity affiliates 450 313 1,075 625
----- ---
9,362 9,215 18,528 18,997
Corporate Office Expense (790) (831) (1,506) (1,590)
------ ------
Total EBITDA 8,572 8,384 17,022 17,407
Depreciation and amortization (4,488) (4,578) (8,961) (8,833)
Less Cash received from equity affiliates, above (450) (313) (1,075) (625)
------ ----
Operating profit $3,634 $3,493 $6,986 $7,949
====== ====== ====== ======
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SOURCE LICT Corporation
