Rye, NY – November 30, 2022 – LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports unaudited, financial results for the quarter ended September 30, 2022.
Non-regulated revenues for the third quarter of 2022 increased 6.0%, to $18.1 million from the prior year’s third quarter $17.1 million. Non-regulated EBITDA was $7.9 million, versus the $7.4 million earned in the same period last year.
Regulated revenues were $14.8 million in the third quarter of 2022 versus the prior year’s third quarter of $15.2 million. Regulated EBITDA was $6.5 million compared to $7.3 million last year.
Total revenues in the third quarter of 2022 were $32.9 million compared to $32.3 million for the corresponding quarter in 2021. EBITDA was $14.4 million in the third quarter of 2022 as compared to $14.7 million in 2021.
BALANCE SHEET – During the third quarter of 2022, $2.0 million was returned to LICT from its 2022 deposit of $7.5 million related to FCC Spectrum Auction 108. Additionally, our Utah operation borrowed $1.9 million to purchase a building facility in Provo, Utah that it had previously leased.
EARNINGS PER SHARE – Earnings per share from operations for the third quarter of 2022 were $356 per share as compared to $353 per share in 2021.
BROADBAND INITIATIVES-
ReConnect Loan and Grant Program – The ReConnect Loan and Grant Program of the US Department of Agriculture, furnishes loans and grants to provide funds for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas. As previously announced, the Company has applied and been considered for several grants in this program.
Affordable Connectivity Program – LICT continues its participation in the FCC Affordable Connectivity Program (“ACP”) to support the Company’s ongoing commitment to provide affordable broadband to the rural communities we serve and help close the digital divide. This program provides consumers who are eligible, a broadband credit of up to $30 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan. We offer a variety of broadband options that qualify under the ACP.
Alternative – Connect America Cost Model (“A-CAM”) Program – The A-CAM program is designed to increase broadband speed and expand the deployment of broadband capabilities throughout the nation’s rural areas with mandatory build-out requirements for receipt of support. LICT received $8.0 million in each of the third quarters of 2022 and 2021 for A-CAM and A-CAM II revenues. LICT is actively building and expanding broadband facilities.
FCC SPECTRUM AUCTIONS – Auction 108 – 2.5 GHz band licenses concluded on August 29, 2022, and established LICT Wireless Broadband Company, LLC (“LICT Wireless”), a wholly owned subsidiary, as the winning bidder of 46 licenses in 9 states for $5.5 million. These newly acquired licenses, along with the various other licenses we have won in past auctions, will further the Company’s efforts to expand our network reach.
2022 PROJECTION –Revenues and EBITDA projections for 2022 remain unchanged at approximately $131 million and $58 million respectively. In addition, capital expenditures through September have exceeded the $32 million of 2021. Full year earnings per share are estimated to be about $1,350 per share in 2022.
AUREON INVESTMENT – YTD investment income includes a dividend of $0.5 million from a minority investment in Aureon versus $0.2 million in the prior year. We carry this investment at the historical cost of $3.0 million, however, LICT’s share of the book value of the investment is estimated to be closer to $9.0 million.
CAPITAL EXPENDITURES – In the third quarter of 2022, capital expenditures were $16.1 million as compared to $8.1 million in the third quarter of 2021. Our capital spending enables us to offer enhanced broadband speeds, increase the overall fiber route miles in our network and meet and exceed our A-CAM requirements.
OPERATING STATISTICS/BROADBAND DEPLOYMENT – LICT owns and operates 6,285 miles of fiber optic cable, 11,359 miles of copper cable, 825 miles of coaxial cable and 84 towers. The Company’s broadband penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 98.6%, as compared to 93.3% at December 31, 2021. During the third quarter, the Company’s broadband lines grew by 3% to 45,250 units
SHARE REPURCHASES – During the nine months ended September 30, 2022, the Company repurchased 434 shares for $10.3 million, with an average price of $23,316 per share. On September 30, 2022, 17,436 shares were outstanding.
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| Sept. 30, | Dec. 31, | Percent | ||
| Increase | Increase | |||
| 2022 | 2021 | (Decrease) | (Decrease) | |
| Broadband lines | 45,375 | 43,939 | 1,796 | 4.1% |
| Voice Lines | ||||
| ILEC | 23,013 | 23,644 | (631) | (2.7%) |
| Out of franchise | 6,940 | 7,043 | (103) | (1.5%) |
| Total | 29,953 | 30,687 | (734) | (2.4%) |
| Video Subscribers | 3,787 | 4,117 | (330) | (3.3%) |
| Revenue Generating Units | 79,475 | 78,743 | 732 | 0.9% |
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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. 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 http://www.lictcorp.com.
| LICT CORPORATION | |||||
| Statements of Operations | |||||
| (In Thousands, Except Per Share Data) | |||||
| STATEMENTS OF OPERATIONS | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
| 2022 | 2021 | 2022 | 2021 | ||
| Revenues | $32,969 | $32,314 | $98,162 | $96,616 | |
| Cost and Expenses: | |||||
| Cost of revenue | 15,542 | 14,624 | 45,891 | 43,622 | |
| General and administrative costs at operations | 2,942 | 2,960 | 9,135 | 9,149 | |
| Corporate office expenses | 1,180 | 880 | 3,533 | 2,743 | |
| Charitable contributions | – | – | 141 | 183 | |
| Depreciation and amortization | 4,581 | 4,919 | 14,654 | 14,210 | |
| Total Costs and Expenses | $24,245 | $23,383 | $73,354 | $69,907 | |
| Operating profit | 8,724 | 8,931 | 24,808 | 26,709 | |
| Other Income (Expense) | |||||
| Investment income | 97 | 7 | 1,020 | 791 | |
| Interest expense | (440) | (277) | (1,016) | (981) | |
| Equity in earnings of affiliated companies | 29 | 48 | 102 | 254 | |
| Other | 12 | (50) | (99) | (14) | |
| (302) | (272) | 7 | 50 | ||
| Income Before Income Tax Provision | 8,422 | 8,659 | 24,815 | 26,759 | |
| Provision for Income Taxes | (2,210) | (2,303) | (6,537) | (7,143) | |
| Net Income | $6,212 | $6,356 | $18,278 | $19,616 | |
| Capital Expenditures | $16,131 | $8,135 | $32,675 | $23,081 | |
| Weighted Average Shares- Basic and Diluted | 17,466 | 18,026 | 17,603 | 18,214 | |
| Actual shares outstanding at end of period | 17,436 | 17,960 | 17,436 | 17,960 | |
| Earnings Per Share | $356 | $353 | $1,038 | $1,077 | |
| LICT CORPORATION | ||
| Balance Sheet | ||
| (In Thousands) | ||
| September 30, 2022 | December 31, 2021 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $32,836 | $42,466 |
| Accounts receivable, less allowances of $157 and $165, respectively | 6,479 | 7,180 |
| Material and supplies | 10,940 | 8,212 |
| Prepaid expenses, and other current assets | 4,257 | 24,068 |
| Total current assets | 54,512 | 81,926 |
| Property, plant, and equipment | 141,597 | 123,473 |
| Goodwill | 48,048 | 48,048 |
| Other intangibles | 29,712 | 16,392 |
| Investments in and advances to affiliated entities | 2,689 | 3,822 |
| Other assets | 10,543 | 10,476 |
| Total assets | $287,101 | $284,137 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Trade accounts payable | $5,079 | $4,388 |
| Accrued interest payable | 11 | 154 |
| Accrued liabilities | 11,215 | 7,720 |
| Current maturities of long-term debt | 372 | 25,577 |
| Total current liabilities | 16,677 | 37,839 |
| Long-term debt | 38,276 | 21,748 |
| Deferred income taxes | 24,315 | 25,025 |
| Other liabilities | 9,639 | 9,323 |
| Total liabilities | 88,907 | 93,935 |
| Total shareholders’ equity | 198,194 | 190,202 |
| Total liabilities and shareholders’ equity | $287,101 | $284,137 |
LICT Corporation
Statements of Operations and Selected Balance Sheet Data-Continued
(In Thousands, Except Per Share Data)
| SELECTED BALANCE SHEET DATA | September 30, | December 31, |
| 2022 | 2021 | |
| Cash and Cash Equivalents | $32,836 | $42,466 |
| Other short-term investments | – | 20,000 |
| Long-Term Debt (including current portion) | (38,648) | (47,325) |
| Net (Debt)Cash | $(5,812) | $15,141 |
| Shares Outstanding | 17,436 | 17,960 |
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. We believe that EBITDA trends are a valuable indicator of whether our operations can produce sufficient operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.
EBITDA is calculated as Operating Profit from Continuing Operations plus depreciation and amortization expense and charitable contributions.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
| 2022 | 2021 | 2022 | 2021 | ||
| EBITDA Reconciliation: | |||||
| Operating Profit from Continuing Operations | $8,724 | $8,931 | $24,808 | $26,709 | |
| Additions: | |||||
| Corporate expenses | 1,180 | 880 | 3,533 | 2,743 | |
| Charitable contributions | – | – | 141 | 183 | |
| Depreciation and amortization | 4,581 | 4,919 | 14,654 | 14,210 | |
| EBITDA from Operations Before Corporate Expenses | 14,485 | 14,730 | 43,136 | 43,845 | |
| Corporate Expenses | (1,180) | (880) | (3,533) | (2,743) | |
| Charitable contributions | – | – | (141) | (183) | |
| EBITDA | $13,305 | $13,850 | $39,462 | $40,919 |