CTE Reports 15% Consolidated Revenue Growth for 1998 Fourth Quarter.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. , Pa.--(BUSINESS WIRE)--Feb. 17, 1999-- Commonwealth Telephone Company Achieves 7% Switched Access Line Growth; 9% Revenue Growth; and 13% 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 Growth 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 , Inc., Reports 21% Sequential One after the other in some consecutive order such as by name or number. Quarterly Switched Access Line Growth Commonwealth Telephone Enterprises, Inc. ("CTE (Coefficient of Thermal Expansion) The difference between the way two materials expand when heat is applied. This is very critical when chips are mounted to printed circuit boards, because the silicon chip expands at a different rate than the plastic board. ") (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 , CTCOB) today announced financial results for the 1998 fourth quarter and full year. CTE has two principal operating segments, Commonwealth Telephone Company, an Incumbent Local Exchange Carrier ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the break up of AT&T into the Regional Bell Operating Companies (RBOCs) also known as the "Baby Bells". ; and CTSI, Inc., a Competitive Local Exchange Carrier. Because of the vastly different nature of these two segments, CTE discusses their results separately. Commonwealth Telephone Company reported results for the 1998 fourth quarter vs. the 1997 fourth quarter that place it among the industry leaders, including: -- 7% switched access line growth; -- 9% revenue growth; -- 13% EBITDA growth; -- 57% EBITDA margin vs. 55% in 1997; -- 16% operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. growth; and -- 19% net income growth. CTSI, Inc., in its eighth quarter of existence, reported solid results for the 1998 fourth quarter, including: -- 21% switched access line growth vs. the 1998 third quarter; -- 15% revenue growth vs. the 1998 third quarter; -- 90% of access lines served by CTSI owned switches; and -- 30% of access lines served solely by CTSI owned network. "1998 was a terrific year for both Commonwealth Telephone Company and CTSI," said Michael I Michael I, Byzantine emperor Michael I (Michael Rangabe), d. c.845, Byzantine emperor (811–13), son-in-law of Nicephorus I. He supported orthodoxy against iconoclasm and recalled Theodore of Studium from exile. . Gottdenker, CTE's president and chief executive officer. "We continue to focus on our simple, straight-forward strategy of perfecting our base incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. telephone operation and executing our CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) business plan. Our results indicate near-flawless executions on both fronts." Commonwealth Telephone Company Achieves Excellent Full Year Results For the 1998 full year, Commonwealth Telephone Company's revenues increased 7% over 1997, driven by increased penetration The successful unauthorized breach of a security perimeter. See penetration test. of high-margin second lines and vertical services, particularly Caller ID A telephone company service that sends the caller's telephone number between the first and second ring of the call. If the calling number is not blocked, the calling number is displayed on the handset or base station of the called party. and Voice Mail. At 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. 1998, Commonwealth Telephone Company's residential second line penetration exceeded 20%, slightly below the current industry average but increasing at a rate significantly above the industry average. Three years ago, the company's second line penetration was 3% or one-third of the then industry average of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 9%. Commonwealth Telephone Company's EBITDA increased 10% over 1997 with an EBITDA margin of 57% versus 56% in 1997. Net income increased 14% with net income margin increasing to 20% versus 19% in 1997. "Our incumbent telephone business had a solid year in 1998 adding approximately three times the number of switched access lines this company typically added just a few years ago," said Gottdenker. "In terms of growth, profitability and efficiency, Commonwealth Telephone Company is among the industry leaders. We have been diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d focused on growing CTE's cash flow and maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: the value of this unique asset." CLEC Continues Successful Expansion - Achieves Solid Full Year Results Throughout 1998, CTSI continued to construct network, install lines and grow revenues at a vigorous pace. CTSI ended 1998 with 43,422 switched access lines installed - a full year growth rate of 141%. In each of the four quarters of 1998, CTSI added an accelerating number of switched access lines as detailed below: 1998 Switched Access Lines Installed ---- ------------------------------- First Quarter 5,193 Second Quarter 5,958 Third Quarter 6,764 Fourth Quarter 7,489 ----- Full Year 25,404 For the 1998 full year, CTSI's revenues increased 317% to $22.2 million, while its EBITDA loss decreased to $9.1 million from a loss of $10.0 million in the 1997 full year. As expected, CTSI's EBITDA losses widened slightly in the 1998 fourth quarter due to its entry into a fifth regional market which encompasses portions of Bucks Bucks: see Buckinghamshire. , Chester Chester, city and district, England Chester, city (1991 pop. 80,154) and district, Cheshire, W central England, on a sandstone height above the Dee River. It is a railroad junction. Manufactures include electrical equipment, paint, and window panes. and Montgomery counties Montgomery County may refer to:
n. 1. Abbr. SE The direction or point on the mariner's compass halfway between due south and due east, or 135° east of due north. 2. An area or region lying in the southeast. 3. PA. "CTSI's key metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. - including market share, revenue per line, EBITDA losses and CAPEX per line - are all tracking our plan," said Gottdenker. "In the CLEC business, execution is the key differentiator Dif`fer`en´ti`a`tor n. 1. One who, or that which, differentiates. Noun 1. differentiator - a person who (or that which) differentiates discriminator and CTSI has a proven record of execution - including engineering, constructing and installing networks; selling on-net Connected to the Internet, or connected to a LAN or WAN. Contrast with off-net. ; provisioning; billing and customer service." CTE 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: Results CTE's consolidated revenues for the 1998 fourth quarter were $59.1 million, an increase of 15%. CTE reported a fourth quarter consolidated loss per 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. average common share of $0.18 versus earnings of $0.13 in the 1997 fourth quarter. Excluding the $0.36 non-operating charge resulting from CTE's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. in connection with the Yee Family Trusts litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement (described more fully below), CTE's fourth quarter consolidated diluted earnings per average common share would have been $0.18. For the 1998 full year, CTE's consolidated revenues were $225.7 million, an increase of 15%. CTE reported full year consolidated earnings per diluted average common share of $0.36 versus earnings of $0.80 for the 1997 full year. Excluding the $0.36 non-operating charge resulting from CTE's preferred stock redemption, CTE's 1998 full year consolidated diluted earnings per average common share would have been $0.72. CTE Redeems Outstanding Preferred Stock On February February: see month. 8, 1999, CTE redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. the shares of its Preferred Stock Series A and Preferred Stock Series B at their stated value Stated Value A value that, instead of being par value, is assigned to a corporation's stock for accounting purposes. Stated value has no relation to market price. Notes: , an aggregate of $52.0 million, plus accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. dividends, in connection with the Yee Family Trusts litigation settlement. The redemption did not affect CTE's 1998 fourth quarter reported net income, but did reduce net income to common shareholders by increasing CTE's reported preferred stock dividend and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the for the 1998 fourth quarter by $8.1 million, or $0.36 per diluted average common share. The increase in this charge represents an acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of the accretion that would have been recognized over the remaining term of the Preferred Stock (which otherwise would have matured on May 15, 2003) and the accrued dividends through February 8, 1999. Under the terms of each series of Preferred Stock, CTE had the option to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the Preferred Stock at its stated value plus accrued dividends at any time after May 15, 1998. About CTE Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., is a diversified diversified (di·verˑ·s telecommunications company See telecom company. providing advanced solutions to deliver communications, information and entertainment services to business and residential users in a rapidly expanding set of select United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. markets. CTE is organized into two principal operating segments: Commonwealth Telephone Company, the nation's 10th largest independent Incumbent Local Exchange Carrier 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, Inc., a Competitive Local Exchange Carrier which formally commenced operations in 1997. Additionally, CTE operates three support businesses that provide expertise to its two principal operating segments. These businesses consist of Commonwealth Communications, a telecommunications engineering Telecommunications Engineers or Telecom Engineers come in a variety of different types from basic circuit designers to strategic mass developments. A Telecom Engineer is responsible for designing and overseeing the installation of telecommunications equipment and facilities, such and consulting business; epix(TM) 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 Services (www.epix.net); 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 facilities-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 CTE can be reached at www.ct-enterprises.com. -0-
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
4TH QUARTER 1998
------------------------------------
CT CTSI OTHER TOTAL
Sales $39,766 $7,153 $12,153 $59,072
Costs & Expenses before
Corporate Management
Fees and Depreciation &
Amortization 16,429 9,211 11,004 36,644
Corporate Management Fees 779 167 236 1,182
------ ------ ------ ------
EBITDA 22,558 (2,225) 913 21,246
Depreciation & Amortization 7,691 1,609 759 10,059
Operating Income (Loss) 14,867 (3,834) 154 11,187
Interest and Dividend Income 675 -- 227 902
Interest Expense (1,708) 1 (1,435) (3,142)
Other Income (Expense), net (107) 171 (116) (52)
Income (Loss) from Continuing
Operations
before Income Taxes 13,727 (3,662) (1,170) 8,895
Provision (Benefit) for Income
Taxes 5,829 (1,145) (401) 4,283
Income (Loss) from Continuing
Operations before Equity in
Unconsolidated Entities 7,898 (2,517) (769) 4,612
Equity in Unconsolidated Entities -- 373 -- 373
Income (Loss) from Continuing
Operations 7,898 (2,144) (769) 4,985
Discontinued Operations, net of tax -- -- 6 6
Net Income (Loss) 7,898 (2,144) (763) 4,991
Preferred Stock Dividend and
Accretion Requirements -- -- 9,178 9,178
Net Income (Loss) to Common
Shareholders $ 7,898 $(2,144) $(9,941) $(4,187)
====== ====== ====== ======
4TH QUARTER 1997
------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 36,595 $2,760 $11,916 $51,271
Costs & Expenses before Corporate
Management Fees and Depreciation
& Amortization 15,280 5,443 11,282 32,005
Corporate Management Fees 1,282 94 419 1,795
------ --- ---- -----
EBITDA 20,033 (2,777) 215 17,471
Depreciation & Amortization 7,201 543 658 8,402
Operating Income (Loss) 12,832 (3,320) (443) 9,069
Interest and Dividend Income 627 1 169 797
Interest Expense (1,944) -- (1,333) (3,277)
Other Income (Expense), net (94) 124 3 33
Income (Loss) from Continuing
Operations before Income Taxes 11,421 (3,195) (1,604) 6,622
Provision (Benefit) for Income
Taxes 4,805 (1,010) (1,031) 2,764
Income (Loss) from Continuing
Operations before Equity in
Unconsolidated Entities 6,616 (2,185) (573) 3,858
Equity in Unconsolidated Entities -- 293 1 294
Income (Loss) from Continuing
Operations 6,616 (1,892) (572) 4,152
Discontinued Operations,
net of tax -- -- 10 10
Net Income (Loss) 6,616 (1,892) (562) 4,162
Preferred Stock Dividend and
Accretion Requirements -- -- 1,062 1,062
Net Income (Loss) to Common
Shareholders $ 6,616 $(1,892) $(1,624) $3,100
======= ====== ======= =======
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 1998
----------------------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $ 155,266 $ 22,237 $48,231 $225,734
Costs & Expenses before
Corporate Management Fees
and Depreciation &
Amortization 61,659 30,645 44,802 137,106
Corporate Management Fees 4,822 695 1,499 7,016
------ ---- ------ -----
EBITDA 88,785 (9,103) 1,930 81,612
Depreciation & Amortization 29,702 4,873 2,807 37,382
Operating Income (Loss) 59,083 (13,976) (877) 44,230
Interest and Dividend Income 2,826 -- 371 3,197
Interest Expense (7,117) -- (5,597) (12,714)
Other Income (Expense), net (366) 674 (88) 220
Income (Loss) from Continuing
Operations before Income Taxes 54,426 (13,302) (6,191) 34,933
Provision (Benefit) for Income
Taxes 22,617 (4,008) (2,345) 16,264
Income (Loss) from Continuing
Operations before Equity in
Unconsolidated Entities 31,809 (9,294) (3,846) 18,669
Equity in Unconsolidated Entities -- 1,806 -- 1,806
Income (Loss) from Continuing
Operations 31,809 (7,488) (3,846) 20,475
Discontinued Operations,
net of tax -- -- (20) (20)
Net Income (Loss) 31,809 (7,488) (3,866) 20,455
Preferred Stock Dividend and
Accretion Requirements -- -- 12,365 12,365
Net Income (Loss) to Common
Shareholders $ 31,809 $(7,488) $(16,231) $ 8,090
======== ======= ======= =======
YEAR ENDED DECEMBER 31, 1997(a)
--------------------------
CT CTSI OTHER TOTAL
-- ---- ----- -----
Sales $144,538 $ 5,329 $ 46,729 $196,596
Costs & Expenses before
Corporate Management Fees and
Depreciation & Amortization 57,134 14,787 43,715 115,636
Corporate Management Fees 6,524 523 1,236 8,283
------ ---- ------ -----
EBITDA 80,880 (9,981) 1,778 72,677
Depreciation & Amortization 27,857 1,039 2,320 31,216
Operating Income (Loss) 53,023 (11,020) (542) 41,461
Interest and Dividend Income 3,075 177 170 3,422
Interest Expense (8,121) -- (1,812) (9,933)
Other Income (Expense), net (312) 114 1,239 1,041
Income (Loss) from Continuing
Operations before Income Taxes 47,665 (10,729) (945) 35,991
Provision (Benefit) for
Income Taxes 19,723 (3,645) (618) 15,460
Income (Loss) from Continuing
Operations before Equity in
Unconsolidated Entities 27,942 (7,084) (327) 20,531
Equity in Unconsolidated
Entities -- 293 1,360 1,653
Income (Loss) from Continuing
Operations 27,942 (6,791) 1,033 22,184
Discontinued Operations,
net of tax -- -- (36,149) (36,149)
Net Income (Loss) 27,942 (6,791) (35,116) (13,965)
Preferred Stock Dividend and
Accretion Requirements -- -- 4,249 4,249
Net Income (Loss) to Common
Shareholders $ 27,942 $(6,791) $(39,365) $(18,214)
========= ======== ======== ========
(a) CTE and CT Sales, EBITDA, Net Income and Diluted Earnings per
Share for the year ended December 31, 1998 include a favorable
one-time National Exchange Carrier Association (NECA) revenue
settlement for $763K, $763K, $446K and $.02, respectively.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
------------------ ----------------
Basic Earnings (Loss)
per Average Common Share
Income from
Continuing Operations ($0.19) $0.15 $0.37 $0.82
------------------ ----------------
Discontinued Operations -- -- -- ($1.65)
------------------ ----------------
Net Income (Loss) to
Common Shareholders ($0.19) $0.15 $0.37 ($0.83)
================== ================
Weighted Average Common
Shares Outstanding 22,075,811 22,004,099 22,058,101 22,000,625
Diluted Earnings
(Loss) per Average Common Share
Income from Continuing
Operations ($0.18) $0.13 $0.36 $0.80
------------------ ----------------
Discontinued Operations -- -- -- ($1.61)
------------------ ----------------
Net Income (Loss) to
Common Shareholders ($0.18) $0.13 $0.36 ($0.81)
================== ================
Weighted Average Common
Shares and Common
Stock Equivalents
Outstanding 22,678,212 22,642,459 22,664,264 22,374,367
Note: All share and per share data have been restated to reflect the
Common Stock Rights Offering in September, 1998.
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
December 31,
1998 1997
-----------------------------
ASSETS
CURRENT ASSETS
Cash and Temporary Cash Investments $ 16,968 $ 14,017
Accounts Receivable
from Related Parties 3,850 3,743
Other Current Assets 50,503 48,510
Deferred Income Taxes 7,816 5,170
--------- --------
Total Current Assets 79,137 71,440
PROPERTY PLANT AND EQUIPMENT
(NET OF ACCUMULATED DEPRECIATION
OF $251,226 IN 1998 AND $223,051
IN 1997) 338,947 287,956
INVESTMENTS 8,898 8,815
DEFERRED CHARGES AND OTHER ASSETS 5,960 5,456
TOTAL ASSETS $ 432,942 $373,667
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Maturities
of Long Term Debt $ 9,010 $ 9,010
Advance Billings
and Customer Deposits 4,516 3,540
Accrued Taxes 2,949 1,498
Accrued interest 556 638
Accounts Payable
to Related Parties 1,580 7,944
Other Current Liabilities 66,831 52,828
--------- --------
Total Current Liabilities 85,442 75,458
--------- --------
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
December 31,
1998 1997
-----------------------------
LONG TERM DEBT 116,838 167,347
DEFERRED INCOME TAXES
AND INVESTMENT TAX CREDITS 44,209 42,086
OTHER DEFERRED CREDITS 9,717 8,328
REDEEMABLE PREFERRED STOCK(b) 52,000 42,517
COMMON SHAREHOLDERS' EQUITY:
Common Stock 26,059 22,377
Additional Paid-in Capital 223,584 151,041
Retained Earnings 11,840 3,750
Treasury Stock at Cost,
3,979,983 shares at
December 31, 1998 and
4,048,218 shares at
December 31, 1997 (136,747) (139,237)
Total Common
Shareholders' Equity 124,736 37,931
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 432,942 $ 373,667
======= =======
(b) On February 8, 1999 CTE borrowed $52.5m against its revolving
credit facility at a LIBOR interest rate of 5.44% to redeem
outstanding preferred stock and accrued dividends associated with
the Yee Family Trusts litigation settlement.
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