Rye, NY – October 23, 2015 – LICT Corporation (“LICT”; OTC Pink®: LICT) THIRD QUARTER RESULTS – Revenues for the third quarter ended September 30, 2015 were $21.6 million compared to $21.9 million in the corresponding quarter in 2014. EBITDA before corporate costs was $8.6 million, as compared to $9.4 million in the previous year’s third quarter.
Non-regulated revenues grew by 18.0% to $9.7 million from the prior year’s $8.2 million due to increased broadband and competitive local exchange carrier (“CLEC”) revenues. Regulated revenues were $11.9 million in the third quarter of 2015, off $1.7 million from $13.6 million 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 and the absence of last year’s favorable out of period adjustment of $0.3 million.
Non-regulated EBITDA for the third quarter, including the cash received from our equity in affiliates, grew 23.1% to $4.4 million, from the prior year’s $3.6 million. Regulated EBITDA fell $1.7 million to $4.2 million reflecting the decline in non-regulated revenues.
Earnings per share from continuing operations during the third quarter were $73 per share in 2015 versus $101 per share in 2014. Shares outstanding at September 30, 2015, were 22,090 versus 22,272 at December 31, 2014 and 22,327 at September 30, 2014.
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.
FULL YEAR RESULTS – For the year ending December 31, 2015, LICT expects revenues to be approximately $86 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 $36 million, as compared to $37.8 million in 2014. These forecasts have been reduced by $2 million each, from previous expectations primarily due to lower regulated revenues.
CAPITAL EXPENDITURES AND DEPRECIATION EXPENSE – In 2015, capital expenditures were $4.4 million for the third quarter as compared to $4.8 million in the third quarter of 2014. LICT is expecting capital expenditures for the full year 2015 of $17 million as compared to $16.5 million for the full year 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.
ACQUISITION–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 has been approved by its shareholders and closing is awaiting approval by regulatory authorities. Financial terms of the transaction are not provided 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
| Sept. 30, 2015 | Sept. 30, 2014 | Dec. 31, 2014 | YTD Increase (Decrease) | % Increase (Decrease) | |
| ILEC voice lines | 27,761 | 28,495 | 28,110 | (349) | (1.2)% |
| CLEC voice lines | 5,254 | 4,852 | 5,019 | 235 | 4.7% |
| Total voice lines | 33,015 | 33,347 | 33,129 | 114 | (0.3)% |
| Broadband lines | 27,872 | 26,085 | 26,072 | 1,800 | 6.9% |
| LD Resale lines | 16,942 | 15,596 | 15,531 | 1,411 | 9.1% |
| Video Subscribers | 6,075 | 6,307 | 6,117 | (42) | (0.7)% |
BALANCE SHEET – As of September 30, 2015, the company had $17.1 million in cash and $45.9 million in debt, or $28.8 million in net debt, as compared to $36.3 million at December 31, 2014. The net debt at September 30, 2014 totaled $35.0 million. As part of the DFT transaction, LICT retains a note receivable of $3.25 million and has a 20% on-going equity interest in those operations.
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 $643,000 in
the third quarter of 2015 as compared to $921,000 in the third quarter of 2014, reflecting lower borrowings and reduced rates.
SHARE REPURCHASES – During the nine months ended September 30, 2015, the Company repurchased 271 shares for $1.4 million at an average price of $5,201 per share. At that date, we had 784 shares left in our 1,300 share buyback authorization, including the additional 300 shares authorized by the Board of Directors in July 2015. As of September 30, 2015, 22,090 shares were outstanding. Of note, since September 30, 2015, the Company purchased an additional 60 shares or roughly $0.3 million in total.
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 operations in broadband and telecommunications.
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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 www.lictcorp.com.
Contact: Robert E. Dolan
Executive Vice President and Chief Financial Officer 914/921-8821
Release: 15-5