CTE Reports 2006 Third Quarter Results.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. Reports Third Quarter 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 of $0.72 Net New 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 Subscribers Increase 57% Versus Year Ago Quarter End DALLAS, Pa. -- Michael J. Mahoney, CTE president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , will host a conference call and simultaneous webcast at 9:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) today. Mr. Mahoney will review CTE's 2006 third quarter results. The call is expected to last approximately 30 minutes. To access today's conference call, please call 1-877-277-1088. The conference call passcode is 8175825. The simultaneous webcast can be accessed via the Internet at www.ct-enterprises.com. The conference call will be archived and available for replay for 48 hours following the call. To access the replay, please call 1-800-642-1687, passcode 8175825. The webcast will also be available for replay for 48 hours at www.ct-enterprises.com. Commonwealth Telephone Enterprises, Inc. ("CTE") [Nasdaq:CTCO CTCO Chicago Transportation Coordination Office ], today announced financial results for the 2006 third quarter. CTE 2006 Third Quarter Consolidated Results For the 2006 third quarter, CTE reported consolidated diluted earnings per share ("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 $0.72, versus 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 of $0.62 in the 2005 third quarter. CTE's 2006 third quarter reported diluted EPS of $0.72 includes a $0.15 favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effect resulting from a July 8, 2006, change in the Commonwealth of Pennsylvania tax law. The tax law change primarily increased the annual allowable Net Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. ("NOL NOL - Never Offline ") deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. . The third quarter reported diluted EPS also reflects an unfavorable effect of $0.08 related to advisory, legal and other fees in connection with the September 18, 2006, announcement of CTE's agreement to be acquired by Citizens Communications Citizens Communications is the parent company of Frontier Telephone, providing telephone and internet access in 24 states. The company headquarters are located at 3 High Ridge Park in Stamford, Connecticut. Company [NYSE NYSE See: New York Stock Exchange :CZN]. CTE's 2006 third quarter reported diluted EPS, versus last year's third quarter, also includes the effect of including additional shares in the diluted EPS calculation due to the conversion rate adjustments made under CTE's Convertible Notes in connection with CTE's dividend strategy. Specifically, the 2006 third quarter average fully diluted share count includes an additional 0.4 million shares in connection with the payment of our dividends and their effect on our convertible debt, versus the prior year's comparable period. The additional shares had a $0.01 unfavorable impact on CTE's 2006 third quarter reported diluted EPS. Excluding the $0.06 net favorable effect of the items discussed above, CTE's 2006 third quarter diluted EPS was above the high end of its previous guidance, and above the First Call mean of $0.62. CTE's 2005 third quarter reported diluted EPS of $0.62 includes a $0.02 favorable effect resulting from certain access revenue settlements and network costs settlements included in the 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 , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("CTSI"), results. CTE ended the 2006 third quarter with a total of 451,182 switched access lines in service, reflecting a reduction of 3% versus the end of last year's third quarter. Over the same period, CTE added a record 14,962 net new DSL subscribers, which reflected a growth rate of 57%. In the 2006 third quarter, CTE installed 3,973 net new DSL subscribers and ended the quarter with 41,099 consolidated DSL subscribers. CTE's reported consolidated revenues in the 2006 third quarter were $83.7 million, versus 2005 third quarter reported revenues of $83.8 million. CTE's 2005 third quarter revenues would have been $83.3 million without the effect of the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. access revenue settlements. CTE's reported consolidated 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. in the 2006 third quarter was $25.9 million, versus reported consolidated operating income of $27.9 million in last year's third quarter. CTE's 2006 third quarter reported operating income includes $3.7 million of expenses in connection with its assessment of strategic alternatives. Excluding the effect of the previously mentioned access revenue and network costs settlements, CTE's 2005 third quarter operating income would have been $27.1 million. For the 2006 third quarter, CTE reported net income of $18.8 million, versus reported net income of $16.3 million in the 2005 third quarter. CTE's 2006 third quarter reported net income includes a $4.3 million favorable effect resulting from the aforementioned change in the Commonwealth of Pennsylvania tax law. Consolidated capital expenditures ("CAPEX") were $12.1 million in the 2006 third quarter, versus CAPEX of $11.8 million in the year ago quarter. This year-over-year increase in CAPEX was due to investments in 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). deployment. The table below sets forth highlights of CTE's 2006 third quarter reported consolidated results, versus the 2005 third quarter: [TABLE OMITTED] "We have completed a solid 2006 third quarter," said Michael J. Mahoney, CTE's president and chief executive officer. "I am particularly pleased with our continued strong DSL performance, where we added a record 14,962 net new subscribers since the end of last year's third quarter, reflecting a growth rate of 57%. Another bright spot in the quarter was the growth achieved by CTSI in its general business access line and revenue base, which increased by 5% and 6%, respectively. We maintained our strong balance sheet and cash position in the quarter, and we continue to be well positioned, both operationally and financially, as we move forward in the fourth quarter." Commonwealth Telephone Company Results Commonwealth Telephone Company ("CT") had a total of 312,376 switched access lines in service at the end of the 2006 third quarter - reflecting a reduction of 4% versus last year's third quarter. CT's primary residential access lines in service declined 2% versus the end of the 2005 third quarter. CT's residential additional line penetration was 31% at the end of the quarter, down from 35% in the year ago quarter, and just below the 32% penetration level at the end of the 2006 second quarter. In the 2006 third quarter, CT installed 3,516 net new DSL subscribers. CT had 36,102 DSL subscribers in service at the end of the 2006 third quarter, having added a record total of 13,387 net new subscribers over the past four quarters, which reflected a growth rate of 59% versus the end of last year's third quarter. CT's 2006 third quarter reported revenues were $57.6 million, reflecting a 1% increase versus CT's reported revenues of $57.3 million in the 2005 third quarter. CT's 2006 third quarter reported operating income was $30.2 million, versus $27.9 million in the 2005 third quarter, or an increase of 8%. CT's 2006 third quarter CAPEX were $8.5 million, versus $7.7 million in the 2005 third quarter. The increase in CAPEX versus last year was attributable to CT's DSL expansion. CTSI Results CTSI had a total of 138,806 switched access lines in service at the end of the 2006 third quarter - reflecting a 2% increase versus the 136,443 switched access lines in service at the end of the 2005 third quarter. CTSI's general business access lines in service increased 5% over the past year, while CTSI's access lines in service to ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. customers continued to decline, as the dial-up ISP business continued to weaken. At the end of the 2006 third quarter, 99% of CTSI's access lines were "on-switch," and 53% were "on-net" (defined as 100% on CTSI's owned network). CTSI's business/residential line split at the end of the 2006 third quarter was 92%/8%, reflecting a slightly higher business component versus the end of the 2005 third quarter. In the 2006 third quarter, CTSI installed 457 net new DSL subscribers. CTSI had 4,997 DSL subscribers in service at the end of the 2006 third quarter, having added a record total of 1,575 net new subscribers over the past four quarters, which reflected a growth rate of 46% versus the end of last year's third quarter. CTSI's 2006 third quarter reported revenues were $20.7 million, versus reported revenues of $21.3 million in the 2005 third quarter. CTSI's 2005 third quarter revenues included a favorable effect of $0.5 million resulting from certain access revenue settlements. CTSI's reported operating income in the 2006 third quarter was $2.6 million, versus reported operating income of $3.0 million in the 2005 third quarter. CTSI's 2005 third quarter reported operating income included a $0.9 million favorable effect resulting from certain access revenue settlements and network costs settlements. CTSI's 2006 third quarter capital expenditures were $3.3 million, versus $3.8 million in the year ago quarter. 2006 Guidance Outlined The table below sets forth CTE's consolidated 2006 full year guidance and 2006 fourth quarter EPS guidance, which Mr. Mahoney will review on this morning's conference call and webcast: [TABLE OMITTED] About CTE Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., serves business and residential customers with a 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 seventh largest publicly held independent local exchange carrier, which has been operating in various rural Pennsylvania markets since 1897; and, CTSI, LLC ("CTSI"), a local exchange carrier operating in competitive markets outside CT's territory, that formally commenced operations in 1997. CTE deploys broadband DSL technology to offer high-speed Internet access in the CT and CTSI service territories. CTE's support businesses include epix([R]) Internet Services (www.epix.net), a rural dial-up Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. ("ISP"), and 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. A web site featuring current information regarding Commonwealth Telephone Enterprises, Inc., can be found on the Internet at www.ct-enterprises.com. However, the information on this web site does not form a part of this release. 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. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and CTE intends that such forward-looking statements be subject to these safe harbors 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. . Such forward-looking statements involve risks and uncertainties that could significantly affect expected results in the future differently than expressed in any forward-looking statements made by CTE. These risks and uncertainties include, but are not limited to, uncertainties related to CTE's ability to further penetrate its markets and the related costs of that effort, economic conditions, acquisitions and divestitures, government and regulatory policies, the pricing and availability of equipment, materials and inventories, technological developments, reductions in rates or traffic that are subject to access charges, changes in the competitive environment in which CTE operates and receipt of necessary regulatory approvals. Important Information for Investors and Stockholders CTE and Citizens Communications Company ("Citizens") will file a proxy statement/prospectus with the Securities and Exchange Commission (the "SEC") in connection with the proposed merger. Investors and stockholders of CTE and Citizens are urged to read the proxy statement/prospectus when it becomes available and any other relevant documents filed with the SEC because they will contain important information about the proposed merger. Investors and stockholders may obtain these documents free of charge at the web site maintained by the SEC at www.sec.gov. In addition, documents filed with the SEC by CTE are available free of charge by directing a request to Commonwealth Telephone Enterprises, Inc., 100 CTE Drive, Dallas, Pennsylvania Dallas is a borough in Luzerne County, Pennsylvania, USA. The population was 2,557 at the 2000 census. It was named for George Dallas, the vice president of James Polk. The local government describes the borough as the "heart" of The Back Mountain, a census-designated place 18612, Attention: Investor Relations Investor relations The process by which the corporation communicates with its investors. , and documents filed with the SEC by Citizens are available free of charge by directing a request to Citizens Communications Company, 3 High Ridge Park, Stamford, CT 06905, Attention: Investor Relations. The final proxy statement/prospectus will be mailed to stockholders of CTE. This communication shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. CTE, Citizens and certain of their respective directors and executive officers and other members of management and employees are participants in the solicitation of proxies from the stockholders of CTE in connection with the merger. Information about CTE's directors and executive officers is set forth in the proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for CTE's 2006 annual meeting of stockholders, which was filed with the SEC on April 19, 2006, and information about Citizens' directors and executive officers is set forth in the proxy statement for Citizens' 2006 annual meeting of stockholders, which was filed with the SEC on April 17, 2006. Additional information regarding the interests of such participants will be included in the proxy statement/prospectus and the other relevant documents filed with the SEC when they become available. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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