D&E Communications, Inc. ("D&E" or the "Company") (NASDAQ:
DECC)
-- Operating income of $8.7 million
-- Net income attributable to common shareholders of $4.0 million and
earnings per share of $0.28
D&E Communications, Inc. ("D&E" or the "Company")
(NASDAQ: DECC), a leading provider of integrated communications
services in central and eastern Pennsylvania, today announced the
results of its operations for the first quarter ended March 31,
2009.
For the first quarter of 2009, the Company reported a net income
attributable to common shareholders of $4.0 million, or $0.28 per
share, compared to $5.1 million, or $0.35 per share, for the same
period last year. Operating income for the first quarter of 2009
was $8.7 million, compared to $8.1 million in the first quarter of
2008. Total operating revenue for the first quarter of 2009 was
$35.9 million, compared to $37.8 million in the first quarter of
2008.
Operating income increased $0.6 million due to a reduction in
operating expenses of $2.5 million, partially offset by a decline
in operating revenue of $1.9 million. Operating expenses declined
as a result of a pension curtailment gain of $1.0 million, of which
$0.9 million ($0.5 million, or $0.03 per share, after tax) was
recorded as a reduction of operating expenses and the remaining
$0.1 million was capitalized. Wireline depreciation expense
decreased $0.8 million ($0.5 million, or $0.04 per share, after
tax) due to certain fixed assets becoming fully depreciated in June
and July 2008 and other operating expenses decreased $0.8 million.
In the first quarter of 2009, the Company offered a one-time
payment to non-union employees who were eligible and elected to
retire by December 31, 2009. The Company recorded an expense of
$0.2 million ($0.1 million, or $0.01 per share, after tax) in the
first quarter of 2009 for those employees who elected to retire.
The revenue decrease of $1.9 million for the first quarter of 2009
was the result of decreases in Wireline and Systems Integration
segment revenues of $1.7 million and $0.2 million,
respectively.
The first quarter 2008 results included income of $2.9 million
($1.7 million, or $0.12 per common share, after tax) from the
termination of a lease guarantee and a reserve of $0.2 million
($0.1 million, or $0.01 per share, after tax) recognized on a note
receivable from the sale of assets in 2006. Adjusted net income
attributable to common shareholders for the first quarter of 2009
before the items described above was $3.1 million, or $0.22 per
share. Adjusted net income attributable to common shareholders for
the first quarter of 2008 before the items described above was $3.5
million, or $0.24 per share.
"Even in light of the current economic conditions, we continue
to see growth in both our DSL/High-Speed Internet subscribers and
our CLEC access lines, albeit at a slower rate than this time last
year. We're especially pleased to see our total revenue from
private line circuits, dedicated circuits, Ethernet and IP VPN
services grow by $0.4 million, or 10.7%, over the first quarter of
2008. This is a reflection of our business customers continuing to
place high value on D&E's advanced data networking services,"
stated James W. Morozzi, D&E's President and Chief Executive
Officer. "During the first quarter of 2009, D&E's operating
income increased $0.6 million, mainly due to a pension curtailment
gain of $0.9 million as a result of a hard freeze to our non-union
pension plan and a reduction in depreciation expense of $0.8
million. Net income decreased $1.1 million in comparison to the
2008 period primarily due to a one-time after-tax gain of $1.7
million in the first quarter of 2008."
Mr. Morozzi continued, "On April 23, 2009, the D&E board of
directors declared a quarterly dividend of $0.125 per common share,
continuing our long-standing practice of paying quarterly dividends
from operating cash flows of the business."
The following table provides a reconciliation of reported and
adjusted net income attributable to common shareholders and
earnings per share:
Three Months Ended
(Dollar amounts in millions, except March 31,
per-share amounts) 2009 2008
---------------- ----------------
Per- Per-
Amount Share Amount Share
------- ------- ------- -------
Reported net income attributable to
common shareholders $ 4.0 $ 0.28 $ 5.1 $ 0.35
Items impacting comparability:
Retirement payments, net of tax 0.1 0.01 -- --
Decrease in depreciation, net of tax,
compared to 2008 (0.5) (0.04) -- --
Pension curtailment gain, net of tax (0.5) (0.03) -- --
Note receivable reserve, net of tax -- -- 0.1 0.01
Lease guarantee termination, net
of tax -- -- (1.7) (0.12)
------- ------- ------- -------
Adjusted net income attributable to
common shareholders $ 3.1 $ 0.22 $ 3.5 $ 0.24
======= ======= ======= =======
Summary Statistics
March 31, 2009 March 31, 2008 Change % Change
-------------- -------------- ------- --------
RLEC access lines 117,872 123,563 (5,691) (4.6%)
CLEC access lines 46,747 46,021 726 1.6%
DSL/High-Speed Internet
Subscribers 44,216 39,970 4,246 10.6%
Dial-up Internet
subscribers 1,986 2,984 (998) (33.4%)
Video subscribers 8,528 8,099 429 5.3%
Web-hosting customers 985 1,013 (28) (2.8%)
-------------- -------------- -------
Total customer connections 220,334 221,650 (1,316) (0.6%)
============== ============== =======
On a segment by segment basis, the Company reported the
following information:
Wireline
First quarter 2009 Wireline segment revenues were $34.8 million
compared to $36.5 million for the first quarter of 2008. The
decrease was due in large part to lower network access revenue of
$1.4 million primarily due to a decline in NECA revenue and minutes
of use. Local telephone service revenue decreased $0.3 million
primarily due to a decrease in RLEC access lines. Long distance
revenue declined $0.2 million primarily due to a decline in the
average rate per minute of use. Communication services revenue
increased $0.2 million primarily due to increased DSL/high-speed
Internet subscribers.
Wireline operating expenses for the first quarter of 2009 were
$25.7 million compared to $27.9 million during the same period last
year. Depreciation expense decreased $0.8 million primarily due to
certain fixed assets that became fully depreciated in June and July
of 2008. Employee benefits expense decreased $0.9 million primarily
due to a pension plan curtailment gain as a result of the amendment
to one of the Company's pension plans to discontinue future benefit
accruals to all active participants effective January 2010.
Corporate overhead expenses decreased $0.3 million.
Operating income was $9.1 million for the first quarter of 2009
compared to operating income of $8.6 million for the first quarter
of 2008.
Systems Integration
System Integration revenue for the first quarter of 2009 was
$0.7 million compared to $0.9 million for the same period last
year. The primary reason for the decline was lower communication
services revenue.
First quarter 2009 operating expenses were $0.8 million compared
to $1.1 million in the first quarter of 2008. Labor and benefits
costs declined approximately $0.2 million primarily due to a
reduction in the number of employees.
The operating loss for the first quarter of 2009 was $0.1
million compared to an operating loss of $0.2 million in the first
quarter of 2008.
Adjusted EBITDA
We present the non-GAAP (generally accepted accounting
principles) measure Adjusted EBITDA (as defined herein) below and
anticipate referring to this measure in the conference call
referenced below. Presentation of Adjusted EBITDA is consistent
with how we evaluate performance of our business segments and
Adjusted EBITDA is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in our industry. Adjusted EBITDA is a non-GAAP operating
measure under Regulation G of the Securities and Exchange
Commission. We compute Adjusted EBITDA by adding depreciation,
amortization and goodwill and intangible asset impairments to
operating income. Each of these GAAP financial measures is a line
item in our income statement and thus Adjusted EBITDA can be
reconciled to net income attributable to common shareholders, the
most comparable GAAP financial measure to it. However, other
companies in our industry may calculate Adjusted EBITDA differently
than we do. Adjusted EBITDA is not a measurement of financial
performance under GAAP and should not be considered as a substitute
for cash flow from operating activities as a measure of liquidity
or a substitute for net income as an indicator of operating
performance or any other measure of performance derived in
accordance with GAAP. Net income attributable to common
shareholders is reconciled to consolidated Adjusted EBITDA for the
three months ended March 31, 2009 and 2008, respectively, in the
following table:
Three months ended
(Dollar amounts in thousands) March 31,
------------------
2009 2008
-------- --------
Consolidated Adjusted EBITDA $ 15,764 $ 15,970
Depreciation and amortization (7,058) (7,848)
-------- --------
Operating income 8,706 8,122
Interest expense, net of interest capitalized (2,902) (3,349)
Other income (expense), net 593 3,418
Income taxes (2,345) (3,043)
Dividends on utility preferred stock (16) (16)
-------- --------
Net income attributable to common shareholders $ 4,036 $ 5,132
======== ========
Operating income is reconciled to segment and consolidated
Adjusted EBITDA for the quarters ended March 31, 2009 and 2008,
respectively, in the following table:
(Dollar amounts in Systems Corporate
thousands) Wireline Integration & Other Consolidated
-------- ----------- --------- ------------
Quarter ended March 31, 2009
----------------------------
Adjusted EBITDA $ 15,914 $ (55) $ (95) $ 15,764
Depreciation and
amortization (6,809) (24) (225) (7,058)
-------- ----------- --------- ------------
Operating income (loss) $ 9,105 $ (79) $ (320) $ 8,706
======== =========== ========= ============
Quarter ended March 31, 2008
----------------------------
Adjusted EBITDA $ 16,246 $ (116) $ (160) $ 15,970
Depreciation and
amortization (7,614) (45) (189) (7,848)
-------- ----------- --------- ------------
Operating income (loss) $ 8,632 $ (161) $ (349) $ 8,122
======== =========== ========= ============
Conference Call
The Company will host a conference call and live webcast Friday,
May 8, 2009 at 11:00 a.m. Eastern Time. Parties in the United
States and Canada can call 877-852-6581 to access the conference
call. Parties outside the United States and Canada can access the
call at 719-325-4784. The live webcast of the conference call will
be accessible from the "Investors" section of the Company's website
(www.decommunications.com). The webcast will be archived for a
period of 90 days.
About D&E Communications
D&E is a leading integrated communications provider offering
high-speed data, Internet access, local and long distance
telephone, business continuity and co-location services, data and
professional IT services, network monitoring, security solutions
and video services. Based in Lancaster County, D&E has been
serving communities in central and eastern Pennsylvania for more
than 100 years. For more information, visit
www.decommunications.com.
This press release contains forward-looking statements. These
forward-looking statements are found in various places throughout
this press release and include, without limitation, statements
regarding financial and other information. These statements are
based upon the current beliefs and expectations of D&E's
management concerning the development of our business, are not
guarantees of future performance and involve a number of risks,
uncertainties, and other important factors that could cause actual
developments and results to differ materially from our
expectations. Those factors include, but are not limited to:
changes in the competitive and technological environment in which
we operate; our ability to further penetrate our markets and the
related cost of that effort; reductions in rates or call volume
that generate network access revenues; government and regulatory
policies at both the federal and state levels, including potential
intercarrier compensation reform; current economic conditions; a
decline in value of our pension fund assets; our current level of
debt financing; potential future goodwill or intangible asset
impairment charges; and our ability to fund necessary investment in
plant and equipment and other key factors that we have indicated
could adversely affect our business and financial performance
contained in our past and future filings and reports, including
those filed with the United States Securities and Exchange
Commission. D&E undertakes no obligation to revise or update
its forward-looking statements whether as a result of new
information, future events, or otherwise.
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, expect per share amounts)
(Unaudited)
Three Months Ended
------------------
March 31,
------------------
OPERATING REVENUES 2009 2008
-------- --------
Communication service revenues $ 34,773 $ 36,613
Communication products sold 344 459
Other 822 725
-------- --------
Total operating revenues 35,939 37,797
-------- --------
OPERATING EXPENSES
Communication service expenses (exclusive of
depreciation and amortization below) 11,268 12,256
Cost of communication products sold 260 372
Depreciation and amortization 7,058 7,848
Marketing and customer services 3,273 3,540
General and administrative services 5,374 5,659
-------- --------
Total operating expenses 27,233 29,675
-------- --------
Operating income 8,706 8,122
-------- --------
OTHER INCOME (EXPENSE)
Interest expense, net of interest capitalized (2,902) (3,349)
Other, net 593 3,418
-------- --------
Total other income (expense) (2,309) 69
-------- --------
Income before income taxes 6,397 8,191
INCOME TAXES 2,345 3,043
-------- --------
NET INCOME 4,052 5,148
NONCONTROLLING INTERESTS
Dividends on utility preferred stock 16 16
-------- --------
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 4,036 $ 5,132
======== ========
Weighted average common shares outstanding (basic) 14,403 14,462
Weighted average common shares outstanding (diluted) 14,418 14,514
BASIC AND DILUTED EARNINGS PER COMMON SHARE
Earnings per common share $ 0.28 $ 0.35
======== ========
Dividends per common share $ 0.13 $ 0.13
======== ========
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31, December 31,
ASSETS 2009 2008
----------- ------------
CURRENT ASSETS
Cash and cash equivalents $ 15,052 $ 18,280
Accounts receivable, net of reserves of $507
and $466 12,492 13,086
Inventories-materials and supplies 2,536 2,651
Prepaid expenses 5,206 9,367
Other 2,177 2,500
----------- ------------
TOTAL CURRENT ASSETS 37,463 45,884
----------- ------------
PROPERTY, PLANT AND EQUIPMENT
In service 419,292 417,209
Under construction 7,307 5,235
----------- ------------
426,599 422,444
Less accumulated depreciation 263,073 258,642
----------- ------------
163,526 163,802
----------- ------------
OTHER ASSETS
Goodwill 138,441 138,441
Intangible assets, net of accumulated
amortization 96,018 97,344
Other 7,898 7,449
----------- ------------
242,357 243,234
----------- ------------
TOTAL ASSETS $ 443,346 $ 452,920
=========== ============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Long-term debt maturing within one year $ 7,077 $ 7,076
Accounts payable and accrued liabilities 12,213 10,690
Accrued taxes 393 543
Accrued interest and dividends 1,082 1,178
Advance billings, customer deposits and other 4,023 4,706
Derivative financial instruments 2,505 3,091
----------- ------------
TOTAL CURRENT LIABILITIES 27,293 27,284
----------- ------------
LONG-TERM DEBT 177,284 179,054
----------- ------------
OTHER LIABILITIES
Deferred income taxes 50,794 50,071
Defined benefit plans 22,925 34,749
Other 5,648 5,181
----------- ------------
79,367 90,001
----------- ------------
COMMITMENTS AND CONTINGENCIES
EQUITY
Common shareholders? equity:
Common stock, par value $0.16, authorized
shares-100,000; issued shares-16,285 at
March 31, 2009 and 16,187 at December 31,
2008; outstanding shares-14,412 at March 31,
2009 and 14,410 at December 31, 2008 2,605 2,590
Additional paid-in capital 164,684 164,526
Accumulated other comprehensive loss (20,875) (21,908)
Retained earnings 32,143 29,917
Treasury stock at cost, 1,873 shares at
March 31, 2009 and 1,777 shares at
December 31, 2008 (20,601) (19,990)
----------- ------------
Total common shareholders? equity 157,956 155,135
Noncontrolling interests:
Preferred stock of utility subsidiary,
Series A 4 1/2%, par value $100,
cumulative, callable at par at the option
of the Company, authorized 20,000 shares,
outstanding 14 shares 1,446 1,446
----------- ------------
TOTAL EQUITY 159,402 156,581
----------- ------------
TOTAL LIABILITIES AND EQUITY $ 443,346 $ 452,920
=========== ============
D&E COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,052 $ 5,148
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,058 7,848
Bad debt expense 126 38
Deferred income taxes 83 456
Stock-based compensation expense 142 106
Gain on retirement of property, plant and equipment -- (11)
Termination of lease guarantee -- (2,904)
Note receivable reserve -- 200
Changes in operating assets and liabilities:
Accounts receivable 468 1,213
Inventories 115 134
Prepaid expenses 4,119 (2,608)
Accounts payable and accrued liabilities 865 (1,586)
Accrued taxes and accrued interest (246) 958
Advance billings, customer deposits and other (683) (145)
Defined benefit plans (10,724) (928)
Other, net 297 (403)
-------- --------
Net Cash Provided by Operating Activities 5,672 7,516
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (4,957) (7,599)
Proceeds from sales of property, plant and equipment 158 288
Collection of note receivable -- 34
-------- --------
Net Cash Used In Investing Activities (4,799) (7,277)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends on common stock (1,726) (1,736)
Preferred dividends on noncontrolling interests (16) (16)
Payments on long-term debt (1,768) (2,517)
Proceeds from issuance of common stock and stock
options exercised 20 22
Excess tax benefits from stock compensation plans -- 37
Purchase of treasury stock (611) --
-------- --------
Net Cash Used In Financing Activities (4,101) (4,210)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (3,228) (3,971)
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 18,280 17,845
-------- --------
END OF PERIOD $ 15,052 $ 13,874
======== ========
CONTACT: Thomas E. Morell Sr. Vice President, Chief Financial
Officer, Secretary and Treasurer (717) 738-8315
Grafico Azioni D & E Communications (NASDAQ:DECC)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni D & E Communications (NASDAQ:DECC)
Storico
Da Giu 2023 a Giu 2024
