LICT Reports Fourth Quarter Earnings

Rye, NY – May 15, 2014 – LICT Corporation (“LICT”; Pink Sheets®: LICT) today announced its 2013 fourth quarter and full year earnings. See attachment A.

FOURTH QUARTER RESULTS –During the fourth quarter of 2013, our revenues were $24.8 million, which is a $1.0 million increase from the 2012 fourth quarter. EBITDA before corporate costs was $9.8 million versus $9.7 million, or up by $0.1 million as compared to 2012.

Regulated revenues were $14.4 million in the 2013 quarter, versus $14.8 million in the prior year quarter. Non-regulated revenues increased to $10.5 million, up $1.5 million from $9.0 million, or 15.8%, during the fourth quarter. This was due primarily to increased broadband and competitive local exchange carrier (“CLEC”) sales. Operating costs, excluding depreciation, increased by $702,000, from $14.7 million to $15.4 million. Corporate expenses were $738,000, a decrease of $159,000 compared to the fourth quarter of 2012.

Earnings per share excluding unusual items, during the fourth quarter were $82.50 in 2013 versus $68.39 in 2012.

FULL YEAR RESULTS – LICT finished 2013 with revenues of $96.2 million compared to $95.1 million in 2012. Prior to corporate costs, EBITDA, including cash received from our equity affiliates, was $37.2 million in 2013, compared to $39.6 million in 2012. Earnings per share, excluding unusual items were $354.91 in 2013, as compared to $336.46 in 2012. The Company currently expects that 2014 revenues and EBITDA will be roughly $100 million and $41 million

CAPITAL EXPENDITURES AND DEPRECIATION EXPENSE – Capital expenditures were $19.8 million for the year compared to $13.9 million in 2012. This reflects our continued investment in the improvement of our products and investment in our network infrastructure, particularly our broadband networks. Through upgraded electronics and fiber extensions deeper into our networks, we have improved both the speed and capacity of our broadband service offerings. We will continue to review capital spending carefully throughout 2014.

BROADBAND REGULATION – In November 2011, the Federal Communications Commission (“FCC”) ordered significant 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 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 maintained at historical levels. Because of this and because of the opportunities created by new technologies, including the Internet, we have focused on developing non-regulated, high speed businesses, such as broadband DSL service, to supplement our traditional rural telephone services.

OPERATING STATISTICS – As of December 31, 2013, the company’s in-territory DSL penetration, based on total ILEC voice lines, was 69.0%, compared to 65.3% as of December 31, 2012.      Our summary operating statistics are as follows:

 12/31/201312/31/2012Increase
(Decrease)
Percent
Increase
(Decrease)
ILEC voice lines37,27639,078(1,802)(4.6%)
CLEC voice lines8,0027,1548481.9%
Total voice lines45,27846,232(954)(2.1%)
Broadband lines28,61827,1751,4435.3%
LD Resale lines26,22424,0772,1478.9%
Video Subscribers6,5757,399(824)a(1.1%)

(a) In February 2013, we sold a 500 subscriber CATV operation in Ely, Nevada.

BALANCE SHEET – As of December 31, 2013, the company had approximately $9.3 million in cash and $71.7 million in total debt, resulting in net debt of $62.4 million, compared to net debt of $69.2 million as of December 31, 2012. These amounts exclude a short term loan from an affiliate that was established to enable LICT to participate in the FCC Spectrum Auction 96 in early 2014 (see below). This auction has since been closed and the debt was repaid on March 7, 2014 along with $0.1 million in interest.

REFINANCING THE COMPANY – In May 2014, the Company secured a $25 million line of credit agreement, to replace its existing $ 17.5 million line of credit. This replacement line expires on June 30, 2015. The Company will continue to evaluate measures which will enhance its ability to take the financial and operational steps necessary for position the organization to future success.

H BLOCK AUCTION – On November 15, 2013, a wholly owned subsidiary of LICT applied to participate in FCC Auction Number 96 – H Block Auction. This Auction began on January 22, 2014, and was for 176 licenses of 10 MHz of spectrum in the 1.9 MHz band. LICT did participate in the Auction but did not acquire any licenses. The Auction closed in late February 2014.

SHARE REPURCHASES – During the year 2013, we repurchased 639 shares for $1.5 million at an average price of $2,398 per share. As of December 31, 2013, 22,486 shares were outstanding.

* * * *

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.

Contact: Robert E. Dolan
Executive Vice President and Chief Financial Officer
914/921-8821

Release: 14-5

Download PDF version for attachement A