CTE Achieves EBITDA of $140 Million for the 2001 Full Year, Reflecting 26% Growth, Versus 2000 Full Year EBITDA of $111 Million, Excluding CTSI's Expansion Markets.Business Editors DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Penn.--(BUSINESS WIRE)--Feb. 12, 2002 Commonwealth Telephone Enterprises, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTCO CTCO Chicago Transportation Coordination Office )(NASDAQ:CTCOB): -- Reports 2001 Fourth Quarter Diluted Earnings Per Share of $0.40, and Normalized Diluted Earnings Per Share of $0.48 -- Commonwealth Telephone Company Achieves 5% Access Line Growth and 65% EBITDA Margin in Fourth Quarter -- CTSI "Edge-Out" Markets Add 3,694 Net Access Lines, Achieve EBITDA of $6.6 million and 34% EBITDA Margin in Fourth Quarter ---------------------------------------------------------------------- Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Mahoney Mahoney could refer to:
EST abbr. electroshock therapy ) this morning. Mr. Mahoney will review CTE's 2001 fourth quarter and full year results, and provide 2002 full year guidance. The call is expected to last approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 30 minutes. To access today's conference call, please call 1-800-491-3127. The conference call passcode is 1446281. The simultaneous webcast can be accessed via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.ct-enterprises.com or www.nasdaq.com. The conference call will be archived and available for replay for 48 hours following the call. To access the replay, please call 1-800-625-5288, passcode 1446281. The webcast will also be available for replay for 48 hours at www.ct-enterprises.com and www.nasdaq.com. ---------------------------------------------------------------------- Commonwealth Telephone Enterprises, Inc. ("CTE") (NASDAQ: CTCO, CTCOB) today announced financial results for the 2001 fourth quarter and full year. For the 2001 fourth quarter, CTE reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") of $0.40, versus a reported diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS loss of $2.80 in the 2000 fourth quarter. For the 2001 fourth quarter, CTE's normalized diluted EPS were $0.48, versus normalized diluted EPS of $0.04 in the 2000 fourth quarter. For the 2001 full year, CTE reported diluted EPS of $1.83, versus a reported diluted EPS loss of $2.46 for the 2000 full year. For the 2001 full year, CTE's normalized diluted EPS were $1.39, versus normalized diluted EPS of $0.47 for the 2000 full year. (Note: A reconciliation of the 2001 fourth quarter and 2001 full year reported and normalized diluted EPS results, as well as the 2000 fourth quarter and 2000 full year reported and normalized diluted EPS results, is discussed later in this Earnings Release, and is also provided in an accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. unaudited table.) "We have completed a very solid fourth quarter and an excellent year overall in 2001," said Michael J. Mahoney, CTE's president and chief executive officer. "CTE is well positioned in its markets as we move forward in 2002. "For the 2001 full year, our financial and operating results were excellent," continued Mahoney. "Excluding the results of CTSI's former expansion markets, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues grew 8% and consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was just over $140 million, a growth rate of 26% versus last year. Excluding the impact of a severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charge recorded in the 2000 third quarter, Commonwealth Telephone Company's ("CT") EBITDA grew 8% to nearly $121 million, reflecting an annual EBITDA margin of 64%. CTSI's `edge-out' operation's EBITDA increased over six-fold Adj. 1. six-fold - having six units or components sextuple, sixfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple versus last year to more than $19 million, while its EBITDA margin expanded from 5% in 2000 to 27% in 2001. CTSI CTSI Census Tract Street Index (US Census Bureau) CTSI California Traffic Safety Institute CTSI Corbett Technology Solutions, Inc. (Chantilly, VA) CTSI Central Terminal Signaling Interface is one of the most successful RLEC RLEC Rural Local Exchange Carrier RLEC Report Log Exception Condition `edge-out' operations in the industry. "We began 2001 with our sights set on growing consolidated EBITDA, reducing our capital expenditures ("CAPEX") versus the recent past, and improving our financial strength overall," said Mahoney. "Across the board, we achieved these objectives. At CT and CTSI we set EBITDA and EBITDA margin records. By returning CTSI to its RLEC `edge-out' roots, we were able to substantially reduce our capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . The combination of EBITDA growth and reduced CAPEX allowed us to reduce our total debt by $74.0 million during 2001, ending the year with a debt level of $225.3 million, reflecting a reported Debt/EBITDA ratio of 1.6 times and a substantially enhanced position of financial strength." CTE Consolidated Results CTE's consolidated reported revenues in the 2001 fourth quarter were $77.0 million, a growth rate of 1% versus the 2000 fourth quarter, which included revenues in CTSI's expansion markets. Consolidated reported EBITDA was $38.0 million versus $24.2 million in last year's fourth quarter, an increase in reported EBITDA of 57%. Consolidated reported capital expenditures were $22.7 million, versus $22.2 million in the 2000 fourth quarter. Excluding the impact of the CTSI expansion markets (i.e., CTSI's non- non- word element [L.]not . non- pref. Not: noninvasive. "edge-out" markets) which CTSI has exited, CTE's 2001 fourth quarter consolidated revenue growth was 7%. Excluding the 2000 fourth quarter EBITDA impact of CTSI's expansion markets, CTE's 2001 fourth quarter EBITDA growth was 32%. CTE's consolidated 2001 fourth quarter CAPEX of $22.7 million compares to CAPEX of $19.3 million in the 2000 fourth quarter, which reflects the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of CAPEX in CTSI's expansion markets. CTE's consolidated reported revenues for the 2001 full year were $306.6 million, a growth rate of 5% versus the 2000 full year. Consolidated reported EBITDA was $137.4 million versus $95.1 million for the 2000 full year, an increase in reported EBITDA of 44%. Consolidated capital expenditures were $69.2 million, versus $137.0 million for the 2000 full year. Excluding the impact of the CTSI expansion markets, CTE's 2001 full year consolidated revenue growth was 8%. Excluding the impact of CTSI's expansion markets, CTE's 2001 full year EBITDA was $140.1 million, versus $111.3 million for the 2000 full year, a growth rate of 26%. CTE's consolidated 2001 full year CAPEX of $69.2 million compares to CAPEX of $93.6 million for the 2000 full year, which reflects the exclusion of CAPEX in CTSI's expansion markets. CTE Initiates Voluntary Retirement Program During 2001 Fourth Quarter On December December: see month. 12, 2001, CTE initiated a Voluntary Retirement Program ("VRP VRP Vehicle Routing Problem VRP Voyageur, Représentant, Placier (French) VRP Vehicle Recycling Partnership (USA) VRP Versatile Routing Platform VRP Vanuatu Republican Party VRP Vessel Response Plans "). The program was offered to certain eligible employees across all of CTE's operations. The VRP is largely being funded from pension assets and nearly 80% of the cost is non-cash. Since the deadline related to participation in this program extended into 2002, and because only a portion of the eligible employees had made a decision to avail themselves of this program prior to year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001, only 70% of the total VRP costs have been recorded in the 2001 fourth quarter. Specifically, CTE recorded an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $3.5 million, or $0.15 per diluted share in the 2001 fourth quarter. The remaining 30% of the VRP costs will be recorded in the 2002 first quarter. As a result of the VRP, CTE expects to reduce its headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. by roughly 100 employees, or approximately 7% of its overall workforce going forward. "CTE had an excellent year in 2001, thanks to the efforts of all of our employees," said Mahoney. "Our solid financial and operational results have enhanced the overall financial strength of our company, and put us in a sound financial position. We were pleased to have been able to offer this VRP to eligible employees who were interested in taking advantage of it. Going forward, the alignment Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.
Commonwealth Telephone Company ("CT") Results CT had a total of 330,666 access lines installed at the end of the 2001 fourth quarter - a growth rate of 5% versus last year. CT's solid growth in switched access lines resulted from a combination of continued residential additional line marketing success, as well as from steady growth in the number of business lines installed in CT's territory. CT's residential additional line penetration The successful unauthorized breach of a security perimeter. See penetration test. reached 39% at the end of the quarter, while business line growth was roughly 8% versus the 2000 fourth quarter. CT's 2001 fourth quarter revenues grew 4% to $48.9 million, versus revenues of $47.1 million in the 2000 fourth quarter. For the 2001 full year, revenues were $189.3 million, versus $182.2 million for the 2000 full year, a growth rate of 4%. CT's 2001 fourth quarter EBITDA was $31.7 million, an 11% increase over last year, resulting in a 65% EBITDA margin. For the 2001 full year, CT's reported EBITDA was $120.9 million, versus $110.0 million for the 2000 full year, a growth rate of 10%. Excluding the impact of a severance charge recorded in the 2000 third quarter, CT's full year 2000 EBITDA was $111.8 million, resulting in a 2001 full year EBITDA growth rate of 8%. CT's 2001 full year reported EBITDA margin expanded to 64% versus 60% for the 2000 full year. Adjusted for the severance charge, CT's full year 2000 EBITDA margin was 61%. CT's strong margin expansion in the 2001 full year versus the 2000 full year resulted primarily from growth in high-margin access revenues, as well as continued focus on cost control and productivity improvements. CT's 2001 fourth quarter CAPEX was $12.9 million versus $7.4 million in the 2000 fourth quarter. For the 2001 full year, CT's CAPEX was $40.4 million, versus $37.2 million for the 2000 full year. CTSI "Edge-Out" Market Results (Note: The results discussed below reflect only the performance of CTSI's "edge-out" markets.) During the 2001 fourth quarter, CTSI installed 3,694 net access lines. For the 2001 full year, CTSI installed 15,222 net access lines, ending the year with 112,396 net access lines installed - a growth rate of 16% versus year-end 2000. At year-end 2001, 96% of CTSI's access lines were "on-switch," and 50% were "on-net Connected to the Internet, or connected to a LAN or WAN. Contrast with off-net. " (defined as 100% on CTSI's owned network). CTSI's business/residential line split at year-end 2001 was 86%/14%. CTSI's 2001 fourth quarter revenues were $19.2 million, a growth rate of 28% versus revenues of $15.0 million in the 2000 fourth quarter. For the 2001 full year, CTSI's revenues increased 37% to $73.1 million. CTSI's EBITDA in the 2001 fourth quarter was $6.6 million, versus EBITDA of $1.6 million in the 2000 fourth quarter, reflecting an EBITDA margin of 34%. CTSI's full year 2001 EBITDA was $19.4 million compared to EBITDA of $2.8 million for the 2000 full year, reflecting a full year EBITDA margin of 27%. CTSI's impressive EBITDA growth and margin expansion in 2001 were primarily driven by high-margin access revenue growth, and by continued overall cost control, including reduced expenses resulting from an increase in "on-net" access lines during the year. CTSI's 2001 fourth quarter capital expenditures were $7.9 million, versus $10.8 million in the year ago quarter. For the 2001 full year, CTSI's CAPEX was $22.4 million, versus 2000 full year CAPEX of $42.4 million. The $22.4 million of CAPEX in 2001 was effectively all success-based in support of line growth. Jack Flash(R) DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary In the 2001 fourth quarter, CTE's DSL (digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and ) product, Jack Flash(R), installed 664 net new DSL subscribers. Jack Flash(R), which has been in operation for just over two years, had 7,031 installed DSL subscribers at year-end 2001. Jack Flash(R) is marketed in CTE's CT and CTSI geographies. Jack Flash(R) utilizes DSL technology to provide broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. over standard telephone lines at speeds over 50 times faster than today's traditional dial-up Refers to using the regular "dial-up" telephone network to send data from a computer to a remote network or to a remote device. The computer's digital data are converted to analog signals in the same frequency range as human voice by a modem. modems. Reported Versus Normalized Consolidated Diluted EPS Reconciliation CTE's 2001 fourth quarter reported consolidated net income was $9.6 million, or $0.40 per diluted share, versus a reported consolidated loss of $63.9 million in the 2000 fourth quarter, or a loss of $2.80 per diluted share. CTE's reported consolidated net income for the 2001 full year was $43.1 million, or $1.83 per diluted share, versus a reported consolidated loss of $55.4 million for the 2000 full year, or a loss of $2.46 per diluted share. As previously stated, CTE's 2001 fourth quarter normalized diluted EPS was $0.48 which, versus the 2001 fourth quarter reported diluted EPS of $0.40, excludes: -- A $0.15 per share charge, or $3.5 million after-tax (substantially non-cash), in connection with the Voluntary Retirement Program that was initiated in December 2001; -- $0.05 per share resulting from tax benefits which were recorded in connection with recently implemented tax strategies; and, -- $0.02 per share resulting from the recording of an after-tax positive settlement of $0.4 million in connection with certain restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. recorded in the 2000 fourth quarter. The comparable 2000 fourth quarter normalized diluted EPS of $0.04, versus the 2000 fourth quarter reported diluted EPS loss of $2.80 per share, excludes: -- A $2.84 per share loss resulting from a 2000 fourth quarter pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $99.7 million, or $64.8 million after-tax, recorded in connection with CTE's December 2000 announced restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of CTSI. The substantially non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. primarily reflected the costs associated with asset dispositions, certain lease terminations and the repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of CTE's work force. For the 2001 full year, as previously stated, CTE's normalized diluted EPS was $1.39, versus normalized diluted EPS of $0.47 for the 2000 full year. CTE's 2001 full year normalized diluted EPS of $1.39, versus 2001 full year reported diluted EPS of $1.83, reflects the exclusion of: -- $0.28 per share representing tax benefits that were recorded in connection with recently implemented tax strategies; -- $0.24 per share resulting from the recording of after-tax positive settlements in connection with certain restructuring charges recorded in the 2000 fourth quarter; -- A $0.15 per share charge in connection with the Voluntary Retirement Program that was initiated in December 2001; and, -- $0.07 per share reflecting the exclusion of certain non-recurring revenues and non-recurring loop credits that impacted CTSI's 2001 reported results. The comparable 2000 full year normalized diluted EPS of $0.47, versus 2000 full year reported diluted EPS loss of $2.46 per share, reflects the exclusion of: -- A loss of $2.87 per share resulting from a 2000 fourth quarter pre-tax charge of $99.7 million, or $64.8 million after-tax, recorded in connection with CTE's December 2000 announced restructuring of CTSI; and, -- $0.06 per share due to a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , substantially non-cash severance charge recorded in the 2000 third quarter. 2002 Guidance Outlined The table below sets forth CTE's 2002 full year guidance, which Mr. Mahoney will discuss on this morning's conference call and webcast:
Full Year 2002
Item Guidance
CT Access Line Growth 3% - 4%
Revenue Growth Rate 4% - 5%
EBITDA $125M - $128M
EBITDA Margin 63% - 65%
CAPEX $30M - $35M
CTSI Net Access Lines Installed - FY02 13,500 - 14,500
("Edge-Out" Net Access Lines Installed
Markets Only) - Per Quarter 2,500 - 3,500
Revenue Growth Rate 11% - 13%
EBITDA $24M - $26M
EBITDA Margin 30% - 35%
CAPEX $20M - $25M
DSL DSL Subscribers 8,500 - 9,000
EBITDA Breakeven
Consolidated CTE Reported Revenue Growth 3% - 4%
Pro Forma Revenue Growth(a) 4.5% - 5.5%
Reported EBITDA $148M - $153M
Effective Tax Rate Approx. 40%
Reported Diluted EPS - 1Q02(b) $0.41 - $0.43
Reported Diluted EPS - 2Q02 $0.48 - $0.50
Reported Diluted EPS - 3Q02 $0.45 - $0.47
Reported Diluted EPS - 4Q02 $0.51 - $0.53
Reported Diluted EPS - FY02 $1.85 - $1.93
CAPEX $65M - $70M
Year-End Total Debt $160M - $180M
(a) Excludes the impact of CTSI's Expansion Markets
(b) Excludes remaining Voluntary Retirement Program charge, and a
portion of any costs incurred in connection with CTE's
February 8, 2002, SEC S-3 registration statement
About CTE Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., serves a growing base of business and residential customers with the full array of technologically-advanced data and voice telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products and services, including broadband data services and high-speed Internet See broadband. access, delivered over its 100% digitally-switched, fiber-rich network. CTE's primary operating segments are: Commonwealth Telephone Company ("CT"), the nation's eighth largest publicly held independent rural local exchange carrier ("RLEC"), which has been operating in various rural Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York markets since 1897; and, CTSI, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("CTSI"), an RLEC "edge-out" local exchange carrier operating outside CT's territory that commenced operations in 1997. CTE's support businesses include epix(R) Internet Services (www.epix.net), one of the northeast's largest rural ISPs with over 46,000 dial-up Internet access See dial-up. subscribers; and, Jack Flash(R), a broadband data service that uses DSL technology to offer high-speed Internet access and digital connectivity solutions. Additionally, CTE operates two other support businesses that provide expertise to its CT and CTSI operations. These businesses are Commonwealth Communications, a provider of telecommunications equipment and facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. services; and, CLD CLD Called CLD Cloud CLD Cleared CLD Chronic Lung Disease CLD Council for Learning Disabilities CLD Cooled CLD Chronic Liver Disease CLD Clear Direction Flag CLD Certified LabVIEW Developer CLD Causal Loop Diagram , a switch-based long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. . A web site featuring current information regarding Commonwealth Telephone Enterprises, Inc. can be found on the Internet at www.ct-enterprises.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements. Certain information included in this press release is forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Such forward-looking information involves important risks and uncertainties that could significantly affect expected results in the future and cause them to be different from those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks and uncertainties include, but are not limited to, uncertainties related to the Company's ability to further penetrate its markets and the related costs of that effort, economic conditions, acquisitions and divestitures, government and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. policies, the pricing and availability of equipment, materials and inventories, technological developments and changes in the competitive environment in which the Company operates.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
4TH QUARTER 2001
----------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 48,894 $ 19,243 $ 8,841 $ 76,978
Costs & Expenses before
Corporate Management Fees
and Depreciation &
Amortization 16,929 12,540 9,253 38,722
Corporate Management Fees 300 99 (99) 300
-------- -------- ------- --------
EBITDA 31,665 6,604 (313) 37,956
Depreciation & Amortization 10,809 4,324 1,484 16,617
Restructuring (Reversals)
Charges - (609) - (609)
Voluntary Employee Retirement
Program - - 5,388 5,388
Operating Income (Loss) 20,856 2,889 (7,185) 16,560
Interest and Dividend Income 936 - 66 1,002
Interest Expense (1,533) - (2,159) (3,692)
Other Income (Expense), net (127) 210 (114) (31)
Income (Loss) before Income
Taxes 20,132 3,099 (9,392) 13,839
Provision (Benefit) for
Income Taxes 6,625 1,245 (3,134) 4,736
Income (Loss) before Equity
in Unconsolidated Entities 13,507 1,854 (6,258) 9,103
Equity in Unconsolidated
Entities - 480 - 480
Net Income (Loss) $ 13,507 $ 2,334 $ (6,258) $ 9,583
======== ======= ======== =======
4TH QUARTER 2000
----------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 47,076 $ 19,208 $ 10,199 $ 76,483
Costs & Expenses before
Corporate Management Fees
and Depreciation &
Amortization 18,272 22,110 11,383 51,765
Corporate Management Fees 300 82 118 500
-------- -------- ------- --------
EBITDA 28,504 (2,984) (1,302) 24,218
Depreciation & Amortization 9,738 5,306 1,373 16,417
Restructuring (Reversals)
Charges - 99,713 - 99,713
Voluntary Employee Retirement
Program - - - -
Operating Income (Loss) 18,766 (108,003) (2,675) (91,912)
Interest and Dividend Income 711 - 248 959
Interest Expense (2,041) - (4,022) (6,063)
Other Income (Expense), net (130) 9 188 67
Income (Loss) before Income
Taxes 17,306 (107,994) (6,261) (96,949)
Provision (Benefit) for
Income Taxes 7,308 (37,534) (2,175) (32,401)
Income (Loss) before Equity
in Unconsolidated Entities 9,998 (70,460) (4,086) (64,548)
Equity in Unconsolidated
Entities - 608 - 608
Net Income (Loss) $ 9,998 $(69,852) $ (4,086) $(63,940)
======== ======= ======== =======
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 2001
----------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 189,264 $ 78,624 $ 38,726 $ 306,614
Costs & Expenses before
Corporate Management
Fees and Depreciation &
Amortization 67,158 61,476 39,336 167,970
Corporate Management Fees 1,200 396 (396) 1,200
-------- -------- ------- --------
EBITDA 120,906 16,752 (214) 137,444
Depreciation & Amortization 42,193 16,862 5,527 64,582
Restructuring (Reversals)
Charges - (9,287) - (9,287)
Voluntary Employee Retirement
Program - - 5,388 5,388
Operating Income (Loss) 78,713 9,177 (11,129) 76,761
Interest and Dividend Income 2,726 - 496 3,222
Interest Expense (7,496) (1) (10,851) (18,348)
Other Income (Expense), net (267) 683 (113) 303
Income (Loss) before Income
Taxes 73,676 9,859 (21,597) 61,938
Provision (Benefit) for
Income Taxes 25,938 2,154 (7,197) 20,895
Income (Loss) before Equity
in Unconsolidated Entities 47,738 7,705 (14,400) 41,043
Equity in Unconsolidated
Entities - 2,089 - 2,089
Net Income (Loss) $ 47,738 $ 9,794 $(14,400) $ 43,132
======== ======= ======== =======
YEAR ENDED DECEMBER 31, 2000
----------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 182,223 $ 65,556 $ 43,270 $ 291,049
Costs & Expenses before
Corporate Management
Fees and Depreciation &
Amortization 70,974 78,585 44,369 193,928
Corporate Management Fees 1,200 325 475 2,000
-------- -------- ------- --------
EBITDA 110,049 (13,354) (1,574) 95,121
Depreciation & Amortization 37,028 16,547 4,853 58,428
Restructuring (Reversals)
Charges - 99,713 - 99,713
Voluntary Employee Retirement
Program - - - -
Operating Income (Loss) 73,021 (129,614) (6,427) (63,020)
Interest and Dividend Income 2,863 - 744 3,607
Interest Expense (8,256) (3) (12,712) (20,971)
Other Income (Expense), net (294) 545 338 589
Income (Loss) before Income
Taxes 67,334 (129,072) (18,057) (79,795)
Provision (Benefit) for
Income Taxes 28,385 (44,383) (6,328) (22,326)
Income (Loss) before Equity
in Unconsolidated Entities 38,949 (84,689) (11,729) (57,469)
Equity in Unconsolidated
Entities - 2,020 - 2,020
Net Income (Loss) $ 38,949 $(82,669) $(11,729) $(55,449)
======== ======= ======== =======
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CTSI SEGMENT
(UNAUDITED)
(Dollars in Thousands)
4th QUARTER 2001 4th QUARTER 2000
--------------------------- ----------------------------
CTSI CTSI TOTAL CTSI CTSI TOTAL
Edge-out Expansion CTSI Edge-out Expansion CTSI
-------- --------- ------- -------- --------- --------
Sales $19,243 $ - $19,243 $14,987 $ 4,221 $ 19,208
Costs &
Expenses
before
Corporate
Management
Fees and
Depreciation
&
Amortization 12,540 - 12,540 13,283 8,827 22,110
Corporate
Management
Fees 99 - 99 82 - 82
------- ------- ------- ------- -------- --------
EBITDA $ 6,604 $ - $ 6,604 $ 1,622 $ (4,606) $ (2,984)
======= ======= ======= ======= ======== ========
YEAR ENDED DEC 31, 2001 YEAR ENDED DEC 31, 2000
--------------------------- ----------------------------
CTSI CTSI TOTAL CTSI CTSI TOTAL
Edge-out Expansion CTSI Edge-out Expansion CTSI
-------- --------- ------- -------- --------- --------
Sales $73,061 $ 5,563 $78,624 $53,143 $ 12,413 $ 65,556
Costs &
Expenses
before
Corporate
Management
Fees and
Depreciation
&
Amortization 53,263 8,213 61,476 50,004 28,581 78,585
Corporate
Management
Fees 396 - 396 325 - 325
------- ------- ------- ------- -------- --------
EBITDA $19,402 $(2,650) $16,752 $ 2,814 $(16,168) $(13,354)
======= ======= ======= ======= ======== ========
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------- -----------------------
2001 2000 2001 2000
Basic Earnings per
Average Common Share:
Net Income (Loss) $0.41 ($2.80) $1.86 ($2.46)
====================== ======================
Weighted Average Common
Shares Outstanding 23,338,734 22,867,769 23,157,784 22,541,138
Diluted Earnings per
Average Common Share:
Net Income (Loss) $0.40 ($2.80) $1.83 ($2.46)
====================== ======================
Weighted Average
Common Shares and
Common Stock
Equivalents
Outstanding 23,743,997 22,867,769 23,575,757 22,541,138
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
REPORTED AND NORMALIZED DILUTED EARNINGS PER SHARE RECONCILIATION
(UNAUDITED)
4TH QUARTER YEAR ENDED DECEMBER 31,
----------- -----------------------
2001 2000 2001 2000
---- ---- ---- ----
Reported Diluted EPS $ 0.40 $ (2.80) $ 1.83 $ (2.46)
------ ------ ------ ------
Restructuring (Reversals) Charges (0.02) 2.84 (0.24) 2.87
Voluntary Retirement Program 0.15 - 0.15 -
Severance Charge - - - 0.06
Tax Strategies Impacting Prior
Periods (0.05) - (0.28) -
Non Recurring Revenues and Local
Loop Credits - - (0.07) -
------ ------ ------ ------
Normalized Diluted EPS $ 0.48 $ 0.04 $ 1.39 $ 0.47
------ ------ ------ ------
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
December 31, December 31,
2001 2000
-----------------------
ASSETS
CURRENT ASSETS:
Cash and Temporary Cash Investments $ 27,298 $ 37,046
Accounts Receivable from Related Parties 249 491
Other Current Assets 61,519 73,284
Deferred Income Taxes 20,115 16,126
-----------------------
Total Current Assets 109,181 126,947
-----------------------
PROPERTY PLANT AND EQUIPMENT (NET OF
ACCUMULATED DEPRECIATION OF $381,888 IN
2001 AND $331,128 IN 2000) 428,916 426,122
INVESTMENTS 9,428 9,367
DEFERRED CHARGES AND OTHER ASSETS 16,604 20,408
-----------------------
TOTAL ASSETS $ 564,129 $ 582,844
=======================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 65,000 $ 30,000
Current Maturities of Long Term Debt 9,010 9,010
Advance Billings and Customer Deposits 5,258 5,162
Accrued Interest 1,701 4,587
Accrued Income Taxes 1,076 -
Accrued Restructuring Expenses 7,381 21,825
Accounts Payable to Related Parties 1,424 780
Other Current Liabilities 92,985 88,570
-----------------------
Total Current Liabilities 183,835 159,934
-----------------------
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
December 31, December 31,
2001 2000
-----------------------
LONG TERM DEBT 151,309 260,319
CAPITAL LEASE OBLIGATION 317 -
DEFERRED INCOME TAXES 32,228 26,643
OTHER DEFERRED CREDITS 30,924 22,665
COMMON SHAREHOLDERS' EQUITY:
Common Stock 27,265 26,824
Additional Paid-in Capital 255,570 245,396
Deferred Compensation (4,306) (6,529)
Other Comprehensive Loss (2,879) -
Retained Earnings 20,845 (22,287)
Treasury Stock at Cost, 3,821,883 shares at
December 31, 2001 and 3,798,383 shares at
December 31, 2000 (130,979) (130,121)
-----------------------
Total Common Shareholders' Equity 165,516 113,283
-----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 564,129 $ 582,844
=======================
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