CONCORD, N.C., April 27 /PRNewswire-FirstCall/ -- First Quarter
2006 Highlights - Company receives $97.4 million from Palmetto
MobileNet transaction - Net income grows to $57.2 million,
including $54.1 million from Palmetto transaction - Operating
revenue increases 4.2% to $43.1 million vs. year ago quarter - Best
ever quarter for net DSL additions; 35% higher than previous record
- Wireless customer churn improves to 1.4% while subscribers
increase 7% First Quarter 2006 Consolidated Results CT
Communications, Inc. (NASDAQ:CTCI) announces net income of $57.2
million and earnings per diluted common share of $2.98 for the
first quarter of 2006. The first quarter diluted earnings per share
include CTC's share of Palmetto MobileNet's sale of its interests
in several wireless partnerships to Alltel, which contributed $2.82
to the quarter results. Asset impairment charges related to certain
fixed wireless broadband equipment and certain investment
securities totaled $0.03 per share. Diluted earnings per share,
excluding the effect of these items, was $0.19 in the first quarter
of 2006. Consolidated operating revenue for the quarter ended March
31, 2006 increased 4.2% to $43.1 million from $41.4 million in the
first quarter of 2005. The increase resulted primarily from a $0.5
million increase in customer recurring revenue, a $0.5 million
increase in Wireless roaming revenue and a $0.5 million increase in
access and interconnection revenue. The growth in customer
recurring revenue was driven by a 40% increase in DSL customers, a
14% increase in Greenfield access lines and a 7% increase in
Wireless subscribers. Partially offsetting the growth in these
business units was a 2.6% decline in ILEC access lines. The
increase in Wireless roaming revenue was driven by higher roaming
minutes of use on the Company's wireless network, while the
increase in access and interconnection revenue was primarily due to
an increase in facility billings. Operating expense in the first
quarter of 2006 increased 4.7% to $38.0 million from $36.3 million
in the first quarter of 2005. The increase in operating expense was
primarily attributable to a $0.7 million increase in cost of
service, a $0.6 million increase in administrative expense, a $0.3
million increase in depreciation expense and an asset impairment
charge of $0.2 million. The increase in cost of service was
primarily related to a $0.5 million increase in Wireless handset
and accessories expense associated with retention and contract
renewal programs targeted to improve customer churn. Also
contributing to the increase in cost of service was a $0.2 million
increase in Wireless roaming and settlement expense related to CTC
Wireless customers' higher minutes of use on other carriers'
networks. The increase in administrative expense was largely due to
increases in medical claims and to changes made during 2005 to
certain incentive programs for stock based compensation. The asset
impairment charge relates to certain fixed wireless broadband
equipment. First Quarter 2006 Results by Business Unit * ILEC -
("Concord Telephone") Concord Telephone's operating revenue in the
first quarter of 2006 increased 4.0% to $23.6 million from $22.7
million in the same quarter last year. The $0.9 million increase in
operating revenue was primarily due to a $0.8 million increase in
access and interconnection revenue associated with higher facility
billings. Operating expense for the first quarter of 2006 increased
3.0% to $17.8 million from $17.3 million in the first quarter of
2005. The increase in operating expense was mainly due to a $0.4
million increase in personnel expense due to an increase in medical
benefit costs and to changes made during 2005 to certain incentive
programs for stock based compensation. Operating income for the
first quarter of 2006 increased 7.2% to $5.8 million from $5.4
million in the same period last year. Operating margin for the
first quarter of 2006 was 24.6% compared to 23.9% for the first
quarter of 2005. Concord Telephone ended the first quarter of 2006
with 109,871 access lines in service, a 2.6% decrease from the
first quarter of 2005. * Wireless Service - ("Wireless") Wireless'
operating revenue in the first quarter of 2006 increased 7.5% to
$9.1 million from $8.5 million in the first quarter of 2005. The
increase was attributable to a $0.5 million increase in roaming and
settlement revenue and a $0.2 million increase in customer
recurring revenue driven by a 7% increase in Wireless subscribers.
Operating expense in the first quarter of 2006 increased $0.9
million to $8.6 million compared to the first quarter of 2005. The
increase in operating expense was primarily attributable to a $0.5
million increase in Wireless handset and accessories expense
associated with retention and contract renewal programs targeted to
reduce customer churn and to a $0.2 million increase in roaming and
settlement expense. Operating income in the first quarter of 2006
decreased to $0.5 million from $0.8 million in the same period last
year. Wireless ended the first quarter of 2006 with 47,145
subscribers, a 7% increase in customers compared to the first
quarter of 2005. Customer churn in the first quarter of 2006
improved to 1.4% from 1.6% in the first quarter of 2005. * CLEC
CLEC operating revenue in the first quarter of 2006 decreased $0.5
million to $4.6 million compared to the same period last year. The
decline in operating revenue was due to a $0.3 million decrease in
access and interconnection revenue and a $0.2 million decrease in
customer recurring revenue. Access and interconnection revenue in
the first quarter of 2005 included $0.5 million in recoveries of
previously disputed billings, while the decline in customer
recurring revenue was attributable to lower average rates for
customer contract renewals. Operating loss for the first quarter of
2006 was $0.6 million compared to an operating loss of $0.1 million
in the first quarter of 2005. CLEC ended the first quarter of 2006
with 33,390 access lines compared to 31,861 access lines for the
same quarter last year. * Greenfield Greenfield's operating revenue
in the first quarter of 2006 increased 9.6% to $2.5 million from
$2.3 million in the first quarter of 2005. The increase in
operating revenue was attributable to growth in customer recurring
revenue driven by a 14% increase in access lines. Operating expense
in the first quarter of 2006 increased $0.3 million to $3.3 million
compared to the same period last year, due primarily to a $0.2
million increase in depreciation expense. Operating loss for the
first quarter of 2006 was $0.8 million compared to $0.7 million in
the first quarter of 2005. Greenfield ended the first quarter of
2006 with 15,324 access lines compared to 13,451 access lines in
the first quarter of 2005. As of March 31, 2006 the Company had 122
Greenfield projects, which represent a potential of more than
54,000 marketable lines at the completion of the projects. *
Internet & Data - ("CTC Internet Services") CTC Internet
Services' operating revenue in the first quarter of 2006 increased
17.3% to $3.3 million from $2.8 million in the same period last
year. DSL revenue increased $0.6 million, or 32.0% to $2.3 million,
while operating expense decreased 5.1% to $2.5 million from the
same quarter last year. Operating income in the first quarter of
2006 increased to $0.8 million from $0.2 million in the same
quarter last year. CTC Internet Services ended the first quarter of
2006 with 21,710 DSL customers, an increase of 6,187 customers
compared to the first quarter of 2005. Dial-up customers declined
to 6,031, while high-speed customers increased to 716 at March 31,
2006. Future Period Guidance We currently expect operating results
to approximate the following during these future periods: - 2nd
Quarter 2006 -- Revenue of $41.5 to $43.5 million -- Operating
income of $4.9 to $5.3 million -- Depreciation expense of $8.1 to
$8.3 million -- Diluted earnings per share of $0.16 to $0.18 --
Capital expenditures of $7.0 to $9.0 million - Full Year 2006 --
Revenue of $168.0 to $172.0 million -- Operating income of $17.0 to
$21.0 million -- Depreciation expense of $32.0 to $34.0 million --
Diluted earnings per share of $3.44 to $3.50 -- Capital
expenditures of $35.5 to $39.5 million CT Communications will host
a conference call to discuss the results of the first quarter on
Friday, April 28, 2006 at 10:00 AM ET. You are invited to listen to
the conference call that will be broadcast live over the Internet
at http://www.ctc.net/. If you are unable to listen during the live
webcast, the call will be archived on the web site at
http://www.ctc.net/ until May 31, 2006. Additionally, a replay of
the call will be available until 5:00 PM ET on Friday, May 5, 2006
at 800-633-8284. Enter access number 21290420. CT Communications,
Inc. is headquartered in Concord, N.C. and is a growing provider of
integrated telecommunications and related services to residential
and business customers located primarily in North Carolina. CT
Communications, Inc. offers a comprehensive package of
telecommunications services, including local and long distance
telephone services, Internet and data services and wireless
services. Certain statements contained in this press release are
"forward-looking statements," within the meaning of federal
securities laws. We intend these forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks,
uncertainties and assumptions made by management about us,
including, among other things, changes in industry conditions
created by the Telecommunications Act of 1996 and related state and
federal legislation and regulations, the impact of economic
conditions related to financial performance of customers, business
partners, competitors and peers within the telecommunications
industry, the recovery of the substantial costs incurred over the
past few years in connection with our expansion into new
businesses, retention of our existing customer base and our ability
to attract new customers, our ability to control pricing and
product offerings in a highly competitive industry, our ability to
attract and retain key personnel, the performance of our
investments, rapid changes in technology, our ability to manage
capital expenditures related to changes in technology, actions of
our competitors, and the impact of economic and political events on
our business, operating regions and customers, including terrorist
attacks. In some cases, these forward- looking statements can be
identified by the use of words such as "may," "will," "should,"
"expect," "plan," "anticipate," "believe," "estimate," "predict,"
"project," "intend" or "potential" or the negative of those words
or other comparable words. These forward-looking statements may
differ materially from actual events or results because they
involve estimates, assumptions and uncertainties and should be
viewed with caution. We undertake no obligation to update or revise
any forward-looking statements, whether as the result of new
information, future events or otherwise. Readers are also directed
to consider the risks, uncertainties and other factors discussed in
documents filed by us with the Securities and Exchange Commission,
including those matters summarized under the caption "Risk Factors"
in our Annual Report on Form 10-K for the year ended December 31,
2005. CT Communications, Inc. Consolidated Statements of Income
(Unaudited, in thousands, except per share amounts) Three Months
Ended March 31, % 2006 2005 Change Operating Revenue ILEC Services
$23,587 $22,679 4.0% Wireless Services 9,127 8,492 7.5% CLEC
Services 4,630 5,135 (9.8%) Greenfield Services 2,511 2,291 9.6%
Internet & Data Services 3,284 2,800 17.3% Total Operating
Revenue 43,139 41,397 4.2% Operating Expense ILEC Services 17,777
17,261 3.0% Wireless Services 8,606 7,687 12.0% CLEC Services 5,207
5,251 (0.8%) Greenfield Services 3,277 2,963 10.6% Internet &
Data Services 2,469 2,603 (5.1%) Other 684 532 28.6% Total
Operating Expense 38,020 36,297 4.7% Operating Income 5,119 5,100
0.4% Other Income (Expense) Investment, Equity Method 89,840 1,243
Gains, Interest, Dividends 812 148 Impairment on Investments (876)
(418) Other Expenses, Principally Interest (1,034) (1,175) Total
Other Income (Expense) 88,742 (202) Pre-Tax Income 93,861 4,898
Income Tax Expense 36,705 1,909 Net Income $57,156 $2,989 Diluted
Weighted Average Shares 19,187 18,980 Diluted Earnings Per Share
$2.98 $0.16 CT Communications, Inc. Consolidated Balance Sheets
(Unaudited, in thousands) March 31, December 31, 2006 2005 ASSETS
Cash and Cash Equivalents $46,555 $23,011 Temporary Investments
61,704 - Accounts Receivable and Unbilled Revenue, Net 15,058
16,336 Wireless Spectrum Held-for-Sale 15,646 15,646 Other Assets
8,739 7,220 Current Assets 147,702 62,213 Investment Securities
5,584 5,845 Investments in Unconsolidated Companies 7,324 15,618
Property, Plant and Equipment, Net 198,827 200,179 Other Assets
37,949 37,565 TOTAL ASSETS $397,386 $321,420 LIABILITIES AND
STOCKHOLDERS' EQUITY Current Portion of Long-Term Debt $5,000
$15,000 Accounts Payable 7,490 8,482 Customer Deposits and Advance
Billings 2,507 2,538 Income Taxes Payable 36,847 2,107 Other
Accrued Liabilities 6,707 11,814 Current Liabilities 58,551 39,941
Long-Term Debt 38,750 40,000 Deferred Credits and Other Liabilities
46,446 45,599 Stockholders' Equity 253,639 195,880 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $397,386 $321,420 CT
Communications, Inc. Customer Information March 31, March 31, %
2006 2005 Change ILEC Access Lines Business Lines 28,241 28,647
(1.4%) Residential Lines 81,630 84,174 (3.0%) Total ILEC Access
Lines 109,871 112,821 (2.6%) CLEC Access Lines 33,390 31,861 4.8%
Greenfield Access Lines 15,324 13,451 13.9% Total Wired Access
Lines 158,585 158,133 0.3% Wireless Subscribers 47,145 44,091 6.9%
Long Distance Lines In ILEC 85,999 84,900 1.3% In CLEC 23,485
24,443 (3.9%) In Greenfield 9,088 7,326 24.1% Total Long Distance
Lines 118,572 116,669 1.6% Internet Access Customers Dial-Up 6,031
8,494 (29.0%) DSL 21,710 15,523 39.9% High Speed 716 617 16.0%
Total Internet Access Customers 28,457 24,634 15.5% Greenfield
Projects Projected Lines in Marketable Total Service Lines Projects
By Year Signed Previous Years 13,622 40,000 75 2003 1,003 5,000 18
2004 614 4,000 12 2005 85 4,000 13 2006 - 1,000 4 Total 15,324
54,000 122 By Type Mall 2,551 3,000 3 Single Family Homes 9,014
38,000 67 Multi-Dwelling Units 2,867 11,000 41 Business 892 2,000
11 Total 15,324 54,000 122 CT Communications, Inc. Other Selected
Financial Data (Unaudited, in thousands) Capital Expenditures Three
Months Ended March 31, 2006 2005 ILEC $3,558 $4,459 Wireless 196
1,093 CLEC 1,242 223 Greenfield 1,592 1,348 Internet 250 428 Other
149 207 Total $6,987 $7,758 % of Revenue 16.2% 18.7% Depreciation
Three Months Ended March 31, 2006 2005 ILEC $5,202 $5,109 Wireless
635 504 CLEC 658 629 Greenfield 973 810 Internet 374 479 Other 278
335 Total $8,120 $7,866 Reconciliation of Reported Results to
Normalized Results Three Months Ended March 31, 2006 Fixed
Investment Palmetto Asset Securities GAAP MobileNet Impairment
Impairment Normalized Operating Revenue $43,139 $ - $- $- $43,139
Operating Expense 38,020 - (190) - 37,830 Operating Income 5,119 -
190 - 5,309 Other Income (Expense) 88,742 (88,939) - 876 679
Pre-Tax Income 93,861 (88,939) 190 876 5,988 Income Tax Expense
36,705 (34,817) 74 343 2,305 Net Income $57,156 $(54,122) $116 $533
$3,683 Diluted EPS $2.98 $(2.82) $0.01 $0.03 $0.19 DATASOURCE: CT
Communications, Inc. CONTACT: Jim Hausman, +1-704-722-2410, or
Duane Johnson, +1-704-722-3231, both of CT Communications, Inc. Web
site: http://www.ctc.net/
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