CONCORD, N.C., March 1 /PRNewswire-FirstCall/ -- Fourth Quarter
2006 Highlights - Net income increased 33.3% to $5.2 million, or
$0.26 per diluted share - Operating income increased 23.9% to $7.7
million - Operating revenue of $44.8 million - 32% increase in
Digital Subscriber Line "DSL" customers - Over 9,000 ILEC homes
passed with fiber facilities - 11% increase in Greenfield access
lines Total Year 2006 Highlights - Record profits with net income
of $71.7 million - Revenue increases to $176.9 million with
operating income up 10.5% Fourth Quarter 2006 Results CT
Communications, Inc. (NASDAQ:CTCI) announces net income of $5.2
million for the fourth quarter of 2006, a 33.3% increase over the
same period last year. Diluted earnings per common share increased
to $0.26 per share in the fourth quarter of 2006 from $0.20 per
share in the same quarter last year. Operating revenue for the
fourth quarter of 2006 was $44.8 million, an increase of $0.5
million when compared to the fourth quarter of 2005. The increase
in operating revenue was driven by a $1.5 million increase in
customer recurring revenue due to strong customer growth in several
of the Company's businesses. DSL customers increased 32%, Wireless
subscribers increased 7% and Greenfield access lines increased 11%
compared to the end of 2005. In addition to the growth in customer
recurring revenue, revenue associated with telephone system sales
and universal service each increased $0.3 million compared to the
prior year quarter. Access and interconnection revenue declined
from the fourth quarter of 2005, which included the recognition of
$1.4 million related to previously disputed carrier access and
interconnection billings. The fourth quarter of 2006 represented
the second quarter of cable company telephone service competition
in the Company's ILEC service territory. ILEC average monthly churn
during the fourth quarter was 1.3% compared to 1.1% in the same
period last year. ILEC access lines decreased 3.4% from the end of
the fourth quarter last year. Operating expense in the fourth
quarter of 2006 was $37.0 million, a decrease of $1.0 million, or
2.7%, compared to the fourth quarter of 2005. The decrease in
operating expense was attributable to a $0.4 million increase in
capitalized personnel costs associated with the Company's video
initiative, a $0.3 million decrease in personnel and benefits
expense, a $0.3 million decrease in access and interconnection
expense and a $0.3 million favorable settlement of disputed
franchise taxes. Partially offsetting these expense reductions was
a $0.3 million increase in selling expenses related to customer
retention and contract renewal efforts. Operating income increased
$1.5 million to $7.7 million in the fourth quarter of 2006, a 23.9%
increase compared to the fourth quarter of 2005. Operating margin
was 17.3% for the fourth quarter of 2006 and 14.1% for the fourth
quarter of 2005. Other income in the fourth quarter of 2006
increased to $0.6 million primarily due to a $0.3 million increase
in investment income and a $0.3 million decrease in interest
expense. Full Year 2006 Results Operating revenue for the year
ended December 31, 2006 increased 3.0% to $176.9 million compared
to $171.7 million for the year ended December 31, 2005. The $5.2
million increase in operating revenue was mainly due to a $3.8
million increase in customer recurring revenue, a $0.8 million
increase in universal service revenue and a $0.4 million increase
in Wireless roaming and settlement revenue. Operating expense
increased $2.9 million to $152.6 million for the year ended
December 31, 2006, compared to 2005. The increase in operating
expense was mainly attributable to a $1.6 million increase in
selling expense and a $0.6 million increase in Wireless handset and
accessory expense. The increase in selling expense was driven by an
increase in marketing expense associated with the Company's plans
to address cable telephone competition in the Company's ILEC
service territory, as well as commissions related to our Wireless
renewal and retention programs. The increase in Wireless handset
and accessory expense was primarily due to the Company's contract
renewal program. Operating income increased 10.5% to $24.3 million
for the year ended December 31, 2006, compared to the year ended
December 31, 2005. The increase in operating income was primarily
related to the growth in the Company's Internet and Data Services
segment, which recorded a 160% or $2.6 million increase in
operating income for 2006. Net income for the year ended December
31, 2006 was $71.7 million, or $3.62 per diluted common share,
compared to $14.5 million, or $0.77 per diluted common share for
the same period last year. Included in net income for the year
ending December 31, 2006 was $54.2 million, or $2.74 per diluted
common share, related to the sale of Palmetto MobileNet's ("PMN")
interests in ten wireless partnerships. Excluding the PMN
transaction, earnings per share increased 14.3% to $0.88 per
diluted common share from the same period last year. Fourth Quarter
2006 Results by Business Unit - ILEC -- ("Concord Telephone")
Concord Telephone's operating revenue decreased $0.9 million to
$23.7 million in the fourth quarter of 2006 compared to the same
quarter in 2005. The decrease in operating revenue was mainly due
to a $1.4 million decrease in access and interconnection revenue
that was partially offset by a $0.3 million increase in both
telephone system sales and universal service revenue. In the fourth
quarter last year the ILEC recorded revenue of $1.4 million from
the settlement and recovery of previously disputed carrier access
and interconnection billings. Operating expense decreased 1.9% to
$17.3 million in the fourth quarter of 2006 compared to the same
quarter in 2005. The $0.3 million decrease in operating expense was
primarily attributable to a $0.7 million decrease in cost of
service that was partially offset by a $0.5 million increase in
selling, general and administrative expense. The decrease in cost
of service was largely due to a $0.4 million decrease in personnel
expense and a $0.2 million decrease in access and interconnection
expense. Operating income decreased 8.7% to $6.4 million in the
fourth quarter of 2006 compared to the same period last year. This
resulted in an operating margin of 26.8% for the fourth quarter of
2006 compared to 28.2% for the fourth quarter of 2005. Concord
Telephone ended 2006 with 106,420 access lines in service, a 3.4%
decrease from the end of 2005. The Company is making final
preparations for the launch of a video trial to select customers in
the ILEC service territory during the first quarter of 2007. The
video service offered to customers participating in this trial will
include a fully competitive channel line-up, including high
definition programming and digital video recording ("DVR")
capabilities. The trial participants will have video, data and
voice services delivered through fiber optic facilities, which are
part of the fiber initiative that passed 9,000 ILEC homes at the
end of 2006. Initial broadband service download speeds for
customers in this trial will be up to 15 Mbps, but future product
capabilities will likely move well beyond this rate. - Wireless
Service -- ("Wireless") Wireless operating revenue increased 6.1%
to $10.0 million in the fourth quarter of 2006 compared to the same
period in 2005. The $0.6 million increase in operating revenue was
driven by a $0.8 million increase in customer recurring revenue
associated with a 7% growth in subscribers, but was partially
offset by a decrease in settlement and roaming revenue. Operating
expense increased $0.3 million, or 3.6%, from the same period last
year primarily due to a $0.2 million increase in network operations
expense related to higher minutes of use on the Company's wireless
network. Operating income increased $0.3 million to $1.2 million in
the fourth quarter of 2006 compared to the same period last year.
Wireless ended 2006 with 49,157 subscribers, an increase of 3,019,
or 7%, compared to the end of 2005. - CLEC -- ("CTC Exchange
Services") CTC Exchange Services' operating revenue increased 1.9%
to $4.7 million in the fourth quarter of 2006 compared to the same
quarter last year. The increase in operating revenue was due to a
$0.1 million increase in access and interconnection revenue related
to the growth in access lines. Operating expense decreased 5.5% to
$4.9 million in the fourth quarter of 2006 compared to the same
period last year. The decrease in operating expense was largely due
to a $0.4 million decrease in cost of service, which was
attributable to network efficiency initiatives and a decrease in
personnel expense. Operating loss for the fourth quarter of 2006
was $0.2 million compared to an operating loss of $0.6 million for
the fourth quarter of 2005. CTC Exchange Services ended 2006 with
35,615 access lines compared to 32,546 access lines at the end of
last year. - Greenfield Greenfield's operating revenue increased
9.0% to $2.7 million in the fourth quarter of 2006 compared to the
same period last year. The increase in operating revenue was driven
by a $0.2 million increase in customer recurring revenue associated
with an 11% increase in access lines. Operating expense decreased
2.0% to $3.3 million in the fourth quarter of 2006 compared to the
same period last year. Operating loss for the fourth quarter of
2006 declined to $0.6 million, a 31.5% improvement from the $0.9
million operating loss for the fourth quarter of 2005. Greenfield
ended 2006 with 16,619 access lines, which represented an increase
of 11% from the end of 2005. The Company continues to focus on
Greenfield opportunities that leverage Company- owned network
infrastructure to minimize the cost to serve additional customers.
As of December 31, 2006, the Company had 126 Greenfield projects,
which in total represent approximately 55,000 marketable lines at
the completion of the projects. - Internet & Data -- ("CTC
Internet Services") CTC Internet Services' operating revenue
increased 17.4% to $3.6 million in the fourth quarter of 2006
compared to the same period last year. DSL and High-Speed revenue
increased $0.6 million from the same quarter last year, driven by
the 32% and 21% growth in DSL and High-Speed customers,
respectively, and was partially offset by lower dial-up customer
revenue. In the fourth quarter of 2006, the Company continued to
experience strong demand for broadband services with over 1,100 net
DSL customers added in the quarter. CTC Internet Services ended the
year with 25,704 DSL customers, an increase of 6,197 customers
compared to the end of 2005. Operating expense decreased 8.4% to
$2.3 million in the fourth quarter of 2006 compared to the same
period last year. Operating income for the fourth quarter increased
$0.8 million, or 138.4%, to $1.3 million, compared to the same
period in 2005. Future Period Guidance We currently expect
operating results to approximate the following during these future
periods: - 1st Quarter 2007 - Revenue of $44.0 to $45.0 million -
Operating income of $6.3 to $6.7 million - Depreciation expense of
$7.9 to $8.1 million - Diluted earnings per share of $0.21 to $0.23
- Capital expenditures of $9.5 to $11.5 million - Full Year 2007 -
Revenue of $176.0 to $180.0 million - Operating income of $22.0 to
$26.0 million - Depreciation expense of $31.5 to $33.5 million -
Diluted earnings per share of $0.79 to $0.83 - Capital expenditures
of $32 to $35 million CT Communications will host a conference call
to discuss the results of the fourth quarter and full year 2006 on
Friday, March 2, 2007 at 10:00 AM ET. You are invited to listen
live to the conference call 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 March 31, 2007. Additionally, a replay of
the call will be available until 5:00 PM ET on Friday, March 9,
2007 at 800-633-8284. Enter access number 21330760. CT
Communications, Inc., headquartered in Concord, N.C., 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 broadband high-speed
Internet services, local and long distance telephone services, and
digital wireless voice and data 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, the
performance of our investments, rapid changes in technology, our
ability to manage capital expenditures related to changes in
technology, actions of our competitors, the impact of economic and
political events on our business, operating regions and customers,
including terrorist attacks and the finalization and completion of
the audit of the Company's financial statements and the assessment
of the effectiveness of the Company's internal control over
financial reporting as of December 31, 2006. 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 December
31, % 2006 2005 Change Operating Revenue ILEC Services $23,700
$24,649 (3.9%) Wireless Services 10,024 9,450 6.1% CLEC Services
4,721 4,631 1.9% Greenfield Services 2,677 2,455 9.0% Internet
& Data Services 3,647 3,107 17.4% Total Operating Revenue
44,769 44,292 1.1% Operating Expense ILEC Services 17,347 17,690
(1.9%) Wireless Services 8,871 8,562 3.6% CLEC Services 4,897 5,182
(5.5%) Greenfield Services 3,299 3,365 (2.0%) Internet & Data
Services 2,344 2,561 (8.5%) Other 279 694 (59.8%) Total Operating
Expense 37,037 38,054 (2.7%) Operating Income 7,732 6,238 23.9%
Other Income (Expense) Investment, Equity Method (1) 293 Gains,
Interest, Dividends 1,483 916 Impairment on Investments - (17)
Other Expenses, Principally Interest (856) (1,132) Total Other
Income (Expense) 626 60 Pre-Tax Income 8,358 6,298 Income Tax
Expense 3,199 2,427 Net Income $5,159 $3,871 Diluted Weighted
Average Shares 20,208 18,967 Diluted Earnings Per Share $0.26 $0.20
CT Communications, Inc. Consolidated Statements of Income
(Unaudited, in thousands, except per share amounts) Twelve Months
Ended December 31, % 2006 2005 Change Operating Revenue ILEC
Services $95,251 $94,561 0.7% Wireless Services 38,255 36,426 5.0%
CLEC Services 19,091 19,272 (0.9%) Greenfield Services 10,433 9,636
8.3% Internet & Data Services 13,841 11,770 17.6% Total
Operating Revenue 176,871 171,665 3.0% Operating Expense ILEC
Services 71,959 71,039 1.3% Wireless Services 35,424 33,194 6.7%
CLEC Services 20,227 20,538 (1.5%) Greenfield Services 13,200
12,417 6.3% Internet & Data Services 9,678 10,167 (4.8%) Other
2,122 2,346 (9.5%) Total Operating Expense 152,610 149,701 1.9%
Operating Income 24,261 21,964 10.5% Other Income (Expense)
Investment, Equity Method 90,102 4,275 Gains, Interest, Dividends
6,261 2,989 Impairment on Investments (876) (546) Other Expenses,
Principally Interest (3,449) (4,825) Total Other Income 92,038
1,893 Pre-Tax Income 116,299 23,857 Income Tax Expense 44,638 9,308
Net Income $71,661 $14,549 Diluted Weighted Average Shares 19,818
18,947 Diluted Earnings Per Share $3.62 $0.77 CT Communications,
Inc. Consolidated Balance Sheets (Unaudited, in thousands) December
31, December 31, 2006 2005 ASSETS Cash and Cash Equivalents $14,063
$23,011 Short-term Investments 86,741 - Accounts Receivable and
Unbilled Revenue, Net 16,419 16,336 Wireless Spectrum Held-for-Sale
- 15,646 Other Assets 11,775 7,220 Current Assets 128,998 62,213
Investment Securities 5,381 5,845 Investments in Unconsolidated
Companies 3,670 15,618 Property, Plant and Equipment, Net 209,908
200,179 Other Assets 39,401 37,565 TOTAL ASSETS $387,358 $321,420
LIABILITIES AND STOCKHOLDERS' EQUITY Current Portion of Long-Term
Debt $5,000 $15,000 Accounts Payable 12,553 8,482 Customer Deposits
and Advance Billings 4,618 2,538 Other Accrued Liabilities 12,714
13,921 Current Liabilities 34,885 39,941 Long-Term Debt 35,000
40,000 Deferred Credits and Other Liabilities 38,095 45,599
Stockholders' Equity 279,378 195,880 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $387,358 $321,420 CT Communications, Inc.
Customer Information December 31, December 31, % 2006 2005 Change
ILEC Access Lines Business Lines 28,122 28,263 (0.5%) Residential
Lines 78,298 81,854 (4.3%) Total ILEC Access Lines 106,420 110,117
(3.4%) CLEC Access Lines 35,615 32,546 9.4% Greenfield Access Lines
16,619 14,929 11.3% Total Wired Access Lines 158,654 157,592 0.7%
Wireless Subscribers 49,157 46,138 6.5% Long Distance Lines In ILEC
85,803 84,933 1.0% In CLEC 24,213 24,937 (2.9%) In Greenfield
10,424 8,603 21.2% Total Long Distance Lines 120,440 118,473 1.7%
Internet Access Customers Dial-Up 4,717 6,522 (27.7%) DSL 25,704
19,507 31.8% High Speed 835 693 20.5% Total Internet Access
Customers 31,256 26,722 17.0% Greenfield Projects Projected Lines
in Marketable Total Service Lines Projects By Year Signed Previous
Years 14,247 40,000 75 2003 1,113 5,000 18 2004 920 4,000 12 2005
160 4,000 13 2006 179 2,000 8 Total 16,619 55,000 126 By Type Mall
2,637 2,800 3 Single Family Homes 9,889 38,600 69 Multi-Dwelling
Units 2,849 11,900 42 Business 1,244 1,700 12 Total 16,619 55,000
126 CT Communications, Inc. Other Selected Financial Data
(Unaudited, in thousands) Capital Expenditures Three Months Twelve
Months Ended Ended December 31, December 31, 2006 2005 2006 2005
ILEC $12,932 $2,815 $25,299 $14,943 Wireless 658 518 1,789 2,210
CLEC 311 491 2,652 1,499 Greenfield 1,734 2,156 6,039 6,214
Internet 351 279 1,256 1,229 Other 1,899 260 4,999 999 Total
$17,885 $6,519 $42,034 $27,094 % of Revenue 39.9% 14.7% 23.8% 15.8%
Depreciation Three Months Twelve Months Ended Ended December 31,
December 31, 2006 2005 2006 2005 ILEC $4,988 $5,151 $20,353 $20,429
Wireless 669 697 2,596 2,378 CLEC 693 648 2,709 2,546 Greenfield
1,042 909 4,045 3,427 Internet 285 396 1,290 1,761 Other 225 334
954 1,342 Total $7,902 $8,135 $31,947 $31,883 Reconciliation of
Reported Results to Normalized Results For the year ended December
31, 2006 Palmetto GAAP MobileNet* Normalized Operating Revenue
$176,871 $- $176,871 Operating Expense 152,610 - 152,610 Operating
Income 24,261 - 24,261 Other Income (Expense) 92,038 (89,164) 2,874
Pre-Tax Income 116,299 (89,164) 27,135 Income Tax Expense 44,638
(34,943) 9,695 Net Income $71,661 $(54,221) $17,440 Diluted EPS
$3.62 $(2.74) $0.88 * Equity income related to the March 2006 sale
of PMN's ownership interests in ten wireless partnerships.
DATASOURCE: CT Communications, Inc. CONTACT: Jim Hausman,
+1-704-722-2410, or Ron Marino, +1-704-722-2212, both of CT
Communications, Inc. Web site: http://www.ctc.net/
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