Rye, NY – May 9, 2012 – LICT Corporation (Pink Sheets®: LICT) today announced its earnings for the fourth quarter of 2011 (see Exhibit A). Audited Financial Statements are expected to be available next week.
On March 13, 2012, the Company announced preliminary fourth quarter and full year earnings. Two significant adjustments were made to the preliminary results including a $3.1 million impairment of goodwill and a $1.4 million reduction in equity income.
The Company conducts annual tests of goodwill for impairment. In 2011, such test indicated on impairment at the Company’s Michigan subsidiary resulting in a charge of $3.1 million included in amortization expense. The reduction in net income, with no associated income tax benefit, was the entire $3.1 million, or $129 per share.
In May 2012, Verizon advised us that a technical problem in the operation of their traffic recording system for the Modoc Partnership, which provides cellular service in California RSA #2, had caused its original estimate of earnings and distributions to us in 2011 to exceed the amount actually due by approximately $1.4 million. Net of income tax, this reduced net income by $0.9 million or $37 per share. Verizon also advised us that it would not request a refund to correct this error but instead has proposed to reduce Modoc’s 2012 distributions to us by $1.4 million. Our financial statements reflect the equity in earnings of the partnership based on the revised estimate. We have reduced the distributions included in 2011 EBITDA by the $1.4 million, and will amortize that amount into EBITDA as it is earned in 2012.
* * * *
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 future financial results, anticipated 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 Pink Sheets® under the symbol LICT. Its World Wide Web address is: http://www.lictcorp.com.
Robert E. Dolan
Executive Vice President and Chief Financial Officer