LICT Corporation Reports Preliminary Fourth Quarter and Full Year 2018 Results and Gary L. Sugarman Rejoins Board of Directors

Fourth Quarter

  • Revenues increased to $28.8 million from $27.5 million.
  • EBITDA grew to $14.5 million from $13.0 million.
  • EPS rose to $269 per share from $210 per share, excluding a deferred tax adjustment of $388 in 2017. 

Full Year

  • Revenues climbed to $115.8 million from $106.7 million.
  • EBITDA was $57.9 million versus $49.2 million.
  • EPS rose to $1,262 per share from $666 per share, excluding a deferred tax adjustment of $383 in 2017.

Rye, NY – February 11, 2019 – LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports preliminary, unaudited, financial results for the year ended December 31, 2018.

FOURTH QUARTER RESULTS – In 2018, LICT’s reported fourth quarter revenues increased $1.4 million to $28.8 million compared to $27.5 million for the corresponding quarter in 2017.  Reported EBITDA was $14.5 million in the fourth quarter of 2018 as compared to $13.0 million in the fourth quarter of 2017.   

Non-regulated revenues gained 9.9%, to $13.1 million from the prior year’s $11.9 million due to increased broadband and competitive local exchange carrier (“CLEC”) revenues. Regulated revenues increased by 1.2%, to $15.7 million in the fourth quarter of 2018 from the prior year’s $15.5 million.  Non-regulated EBITDA, including affiliate distributions, rose 27.4% to $6.4 million, from $5.0 million, while regulated EBITDA increased to $8.1 million, from $8.0 million. 

EARNINGS PER SHARE – Diluted earnings per share, excluding charitable contributions, during the fourth quarter were $269 per share in 2018 as compared to $210 per share in 2017.  2017’s diluted earnings per share excluded a $388 deferred tax benefit related to the change in the federal income tax rates.  Shares outstanding at December 31, 2018 were 19,931 versus 20,509 at December 31, 2017.

GARY L. SUGARMAN – We are extremely pleased to report that on February 7, 2019, Mr. Sugarman rejoined our Board. He previously served from September 2006 to 2018.

ALTERNATIVE – CONNECT AMERICA COST MODEL (“A-CAM”) PROGRAM – Effective January 1, 2017, ten of LICT’s rural telephone companies elected to participate in the Federal Communications Commission’s (FCC) A-CAM program. The A-CAM program is designed to increase speed and expand the deployment of broadband capabilities throughout the nation’s rural areas and replaced two prior Universal Service Fund mechanisms for companies electing A-CAM. During 2018, the FCC expanded the A-CAM program retroactive to January 1, 2017. Accordingly, in 2018, LICT recorded additional A-CAM revenues of $5.8 million, of which $2.9 million related to the year ended December 31, 2017.

On December 13, 2018, the FCC announced an additional expansion of the A-CAM program.  While the FCC has not yet provided full details of the expanded program, it is expected that LICT companies, will receive additional funds on an annual basis and their revised funding will be extended two years, to 2028, in exchange for the provision of higher broadband speeds to designated locations. Also, LICT companies in two additional states, who were previously ineligible to participate in the A-CAM program, will be able to voluntarily elect into the Program as of January 1, 2019 for a ten-year period.  Once the FCC provides the full details of this expanded A-CAM program, LICT companies will review their funding and consider all provisions as they are detailed.

FULL YEAR RESULTS – The Company recorded revenues of $115.8 million for 2018 and EBITDA before corporate costs, charitable contributions and non-operating income, of $57.0 million. However, in 2018 the full year results included two significant out of period items: (a) recording of additional A-CAM revenues of $2.9 million which were retroactive to 2017, and (b) a prior year billing adjustment related to our California operations which reduced revenues by $0.4 million.  Adjusting for these items, on-going full year revenues were $113.4 million, and EBITDA was $55.5 million.  The company is forecasting, for 2019, full year revenues around $117 million, and EBITDA approximately at $54 million; these amounts do not include the potential additional A-CAM funding that was discussed above.

SHAREHOLDER DESIGNATED CHARITABLE CONTRIBUTION PROGRAM — In 2016, the Company adopted a Shareholder Designated Charitable Contribution Program. Under the Program, all registered shareholders are eligible to designate charities and the company will a make a contribution to that charity. In 2016, 2017 and 2018, the company made $100 per share contribution son behalf of its shareholders to their designated charities. In 2018 and 2017, total contributions, under this Program, amounted to $2.5 million and $1.1 million, respectively, and the after-tax earnings per share effect of these contributions was $90 per share in 2018 versus $35 per share in 2017.  The most recent contributions will be distributed in the first quarter of 2019. 

BALANCE SHEET – Our net debt was $3.3 million at December 31, 2018, as compared to $23.9 million on December 31, 2017.

CEO SEARCH – As previously announced, we are reviewing candidates to succeed Mario J. Gabelli as Chief Executive Officer of LICT.  The individual should have knowledge of broadband and, in particular, to serve our rural communities, as well as opportunities to serve colleges, universities, hospitals, and small businesses.  Mr. Gabelli will continue to serve as Executive Chairman upon the completion of the search.

FCC SPECTRUM AUCTIONS – LICT Wireless Broadband Company, LLC (“LICT Wireless”), a wholly owned subsidiary of the Company, is participating in two ongoing FCC auctions for spectrum, Auction 101 – 28 GHz and Auction 102 – 24 GHz.  These spectrum bands are designated to be used for provision of 5G wireless services.  Auction 101 began on November 14, 2018 and ended on January 28, 2019 and Auction 102 is scheduled to begin on March 14, 2019. Commensurate with previous spectrum auctions, LICT is making upfront deposits to participate in this Auctions.  FCC rules restrict information that bidders may disclose about their participation in these Auctions, including the amount of their upfront payment and any licenses acquired in Auction 101 until Auction 102 is completed.

TAX CUTS AND JOBS ACT – On December 22, 2017, the United States Congress passed the Tax Cuts and Jobs Act of 2017 (“Act”). Two aspects of this Act significantly impacted LICT: (a) reducing the Federal corporate income tax rate to 21%, from LICT’s 35% 2017 rate, (b) 100% expensing of capital expenditures through 2023.  As previously reported, the change in the Federal tax rate reduced our liability for deferred income taxes at the end of 2017 by $7.1 million and lowered our overall effective tax rate for 2018 to 26.4%, from 39.5% in the of 2017 period.

GROWING THE COMPANY – 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 continues to re-evaluate its acquisition activity and related refinancing alternatives.

CAPITAL EXPENDITURES – For 2018, capital expenditures were $22.9 million, of which $12.6 million was for non-regulated activities and $10.3 million for regulated activities. In order to expand the Company’s non-regulated fiber initiatives and provide a high level of broadband to our customers in the rural areas of the United States, our current plan calls for capital expenditures of $22 million in 2019. This capital enables us to offer enhanced broadband speeds and will increase the overall fiber route miles in our network. As of December 31, 2018, LICT operations deployed 4,669 miles of fiber optic cable, 11,832 miles of copper cable, and 701 miles of coaxial cable.

SHARE REPURCHASES – During the year ended December 31, 2018, the Company repurchased 613 shares for $8.3 million, with an average price of $13,574 per share.  In addition, in 2018, 35 shares were issued under the Company’s Restricted Stock Awards program.  As of December 31, 2018, 19,931 shares were outstanding. 

OPERATING STATISTICS – As of December 31, 2018, the Company’s DSL penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 80.3%, as compared to 79.5% at December 31, 2017. Our summary operating statistics are as follows:

 December 31, Percent
Broadband lines            33,65931,5212,1386.8%
Voice Lines    
  Total33,74734,201(454) (1.3%)
Video Subscribers5,6695,985(316)(5.3%)
Revenue Generating Units73,07571,7071,3681.9%

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,  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.  Such forward-looking 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

Contact:         Robert E. Dolan

                        Executive Vice President and Chief Financial Officer


                         Release 19-2