- Revenue increased 15.5% quarter over quarter to $33.5 million.
- EBITDA increased 30% to $14.7 vs. $11.5 million in Q1 2023.
- Earnings were $295 Per Share compared to $228 last year.
- Capex increased to $16.4 million from $9.7 million to fund buildout requirements for E-ACAM and Federal and State grants, as well as our non-regulated markets.
2024-Unaudited First Quarter Results
Rye, NY – June 12, 2024 – LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports financial results for the quarter ended March 31, 2024. Data for all periods has been adjusted for the spin-off of MachTen on August 31, 2023, and 2023 results are presented as discontinued operations.
Total revenues in the first quarter of 2024 increased by $4.5 million to $33.5 million versus $29.0 million in the same quarter a year ago.
Regulated revenues were $15.0 million in the first quarter of 2024, an increase of $3.4 million versus the prior year’s first quarter of $11.6 million. The acceptance of Enhanced ACAM (E-ACAM) accounted for a $3.5 million increase in regulated revenues for the quarter.
Non-regulated revenues for the first quarter of 2024 increased 6.3% to $18.5 million from the prior year’s first quarter $17.4 million driven by sales of broadband services and high-speed data circuits. Further, our results for the first quarter of 2024 include revenues from the Manti Non-Regulated entities which were acquired on December 1, 2023.
Total EBITDA was $14.7 million in the first quarter of 2024 as compared to $11.4 million in 2023. The $3.3 million increase in EBITDA was driven by the election of E-ACAM as well as an increase in our non-regulated business, which was offset by higher operating expenses, including labor costs, professional and engineering expenses.
Regulated EBITDA in the first quarter of 2024 was $7.4 million compared to $4.4 million during the same period last year, driven by E-ACAM and offset by increases in operating expenses.
Non-regulated EBITDA in the first quarter was $7.3 million compared to $7.1 million last year. The increase was driven by increases in revenue from broadband services and high-speed data circuits, offset by increased expenses.
OTHER INCOME/(EXPENSES) – Other income/expenses decreased by $0.8 million in the first quarter of 2024, due to higher interest expense and the impact of an unrealized loss on our 20% interest in MachTen, Inc.
EARNINGS PER SHARE – Earnings per share from continuing operations for the first quarter of 2024 were $295 per share compared to $228 per share last year.
FCC Programs and Other Capital Expenditures
With the acceptance of E-ACAM, LICT now has buildout requirements to just under 20,000 locations to speeds of 100/20 which must be completed by December of 2028. The total gross Capital Expenditures to meet the buildout requirements for E-ACAM, along with Federal (ReConnect III & IV) and State grants are estimated at $511 million ($349 million net of grant funding).
I. ENHANCED ALTERNATIVE CONNECT AMERICA COST MODEL (E-ACAM) PROGRAM
- The Federal Communications Commission proposed an increase in ACAM funding through a program known as E-ACAM, which began January 1, 2024.
- In the new program LICT entities will receive an incremental $14 million per year or a total of $37.2 million annually through 2038 with minimum speed requirements of 100/20 Mbps.
II. RECONNECT III and RECONNECT IV-
- As previously announced, LICT has been awarded $157.5 million for seven United States Department of Agriculture (USDA) ReConnect III and ReConnect IV grants with a total project cost of $171.2 million, of which, our share of cost will be approximately $13.7 million. These grants require us to provide 1 Gig of fiber broadband speed. To date, six of the seven awards are still pending environmental clearance approval before construction can commence.
III. AFFORDABLE CONNECTIVITY PROGRAM (ACP)
- Under the ACP program (which was terminated in May of 2024) eligible customers received a broadband credit of up to $30 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan. During 2023, our approximately 1,900 eligible customers received just over a half million dollars in credits. LICT has informed its ACP customers that the company will continue an equivalent Extended Broadband Discount (EBD) through January 31, 2025, at LICT’s cost.
Strategic Initiatives
The spin-off of our Michigan entity, MachTen (OTC Pink: MACT), occurred on August 31, 2023. At the time of the spin-off each shareholder of LICT received 150 shares of MachTen per one share of LICT. We continue to own 20% of MachTen as well as holding a note receivable of $15 million.
LICT’s acquisition of Manti Telephone Communications Company (MTCC), and AFConnect (AFI) is complete, the non-regulated facet of the Manti transaction closed on December 1, 2023. The regulated facet, Manti Telephone Company (MTC) transaction is still pending regulatory approval.
As previously reported, during the fourth quarter of 2023, LICT completed the sale of 40% of its 20% ownership of Brick Skirt Holding Company (formerly DFT Communications) to CIBL, Inc. LICT’s sale of its remaining 12% ownership of Brick Skirt, is still pending regulatory approval. Bretton Woods continues to utilize Brick Skirt for certain administrative functions as it has since 2014.
FIXED WIRELESS – Sound Broadband LLC, LICT’s wireless company, has initiated the installation of 5G wireless broadband services in areas we serve in New Mexico, California, Oregon & Utah. Additional analysis continues in order to expand the implementation of 5G wireless broadband services in our other locations to efficiently provide increased broadband speeds to many of the communities we serve.
CAPITAL EXPENDITURES – For the first quarter of 2024, capital expenditures were $16.4 million versus $9.7 million in the first quarter of 2023. This increase in capital spending was driven by the build out requirements of E-ACAM.
SHARE REPURCHASES – During the three months ended March 31, 2024, the Company repurchased 92 shares for $1.5 million, with an average price of $16,758 per share. As of March 31, 2024, 16,879 shares were outstanding,
OPERATING STATISTICS/BROADBAND DEPLOYMENT – LICT owns and operates 6,664 miles of fiber optic cable, 9,040 miles of copper cable, 839 miles of coaxial cable and 95 towers.
Annual Meeting Date
The LICT annual meeting of Stockholders will be held at 10:30 am on June 25, 2024.
The meeting will be held 401 Theodore Fremd Avenue, Rye, NY 10580.