Century Achieves Excellent Third Quarter Results Supported by Strong Cellular Performance.MONROE, La.--(BUSINESS WIRE)--Oct. 23, 1997--Century Telephone Enterprises, Inc. (NYSE Symbol: CTL) announces operating results for third quarter 1997. -- Revenues increased 13.1% to $218,351,000. -- Net income rose 15.6% to $41,433,000, exclusive of gain on sales of assets in the prior year period. -- Earnings per share advanced 13.6% to $.67, excluding gain on sales of assets. -- Telephone revenues rose 7.2% to $121,934,000, and cellular service revenues rose 20.1% to $78,839,000. -- Net cellular additions increased 38.3% to 16,744, while average monthly churn declined to 2.2%. -- Average monthly cellular service revenue per subscriber decreased only 3% to $64.
Third Quarter Highlights
(Dollars, except per share data, and shares in thousands)
Quarter Quarter
Ended Ended %
9/30/97 9/30/96 Change
Revenues $218,351 $193,096 13.1%
EBITDA/a $114,617 $101,429 13.0%
Net income $ 41,433 $ 36,350 14.0%
Fully diluted
earnings per share $ .67 $ .60 11.7%
Average fully
diluted shares
outstanding 61,615 60,881 1.2%
Net income,
excluding gain on
sales of assets $ 41,433 $ 35,837 15.6%
Fully diluted
earnings per share,
excluding gain on
sales of asset $ .67 $ .59 13.6%
Telephone revenues $121,934 $113,785 7.2%
Mobile communications
revenues $ 80,163 $ 66,694 20.2%
Other operations
revenues $ 16,254 $ 12,617 28.8%
Telephone
access lines 530,936 500,647 6.0% (1)
Cellular units in
majority-owned
markets 429,599 337,151 27.4% (2)
(a) Earnings Before Interest, Taxes, Depreciation, Amortization and
gain on sales of assets
(1) 4.4% exclusive of the effect of acquisitions
(2) 23.1% exclusive of the effect of the acquisition of majority
interest in Michigan RSA 7
"Century experienced another quarter of excellent revenue, cash flow and earnings growth," Glen F. Post, III, Century's President and Chief Executive Officer, said. "We are pleased with the strong growth in telephone revenues combined with the excellent performance of our cellular operations reflected in accelerated customer growth, lower churn rate and higher operating margins. As we near the closing of the Pacific Telecom acquisition, Century is positioned to capitalize on additional growth opportunities provided by a larger, rapidly growing customer base." For third quarter 1997, net income increased 15.6% to $41,433,000 from $35,837,000, excluding gain on sales of assets, and fully diluted earnings per share increased 13.6% to $.67 from $.59. Century's revenues increased 13.1% to $218,351,000 from $193,096,000. Earnings before interest, taxes, depreciation, amortization and gain on sales of assets (EBITDA) grew to $114,617,000 from $101,429,000, a 13.0% increase. The value of Century's 12% ownership of Brooks Fiber has increased substantially as a result of the announced merger of Brooks and WorldCom. Century's position in Brooks Fiber is worth $243 million pre-tax based on Brooks Fiber's recent stock price of $56.06. Telephone revenues grew 7.2% to $121,934,000 during the quarter, compared with $113,785,000 in third quarter 1996. Telephone operating income increased 3.0% reaching $40,114,000, and operating cash flow increased 5.8% to $66,353,000. Telephone revenue growth was strong in spite of Louisiana rate reductions which had an impact of $1,000,000. Internal access line growth for the quarter was 4.4% on an annualized basis. Mobile communications revenues grew 20.2% to $80,163,000 in third quarter 1997, compared with $66,694,000 in third quarter 1996. Mobile communications operating income increased 36.0%, reaching $27,403,000, and operating cash flow increased 30.1% to $37,619,000. During the quarter, Century added a majority-owned market by acquiring additional ownership interest in Michigan RSA #7. The market was previously operated by Century but not consolidated as a majority-owned market. Century's third quarter cellular operating cash flow margin was 46.9% (47.7% based on service revenues) and operating income margin was 34.2%. Average monthly cellular service revenue per user (ARPU) was $64 during third quarter 1997, representing only a 3.0% decrease from $66 a year ago. "These cellular cash flow and operating income margins are some of the highest Century has achieved in a quarter and are among the highest in the industry. They reflect our focused efforts to lower sales and marketing costs per subscriber, reduce customer churn and leverage network infrastructure for additional cost efficiencies," Post said. Revenues from other operations grew 28.8% to $16,254,000 during third quarter 1997, compared with $12,617,000 in third quarter 1996. Operating income increased to $2,298,000 from an operating loss of $70,000 and operating cash flow increased 324.6% to $2,917,000 from $687,000 a year ago. The third quarter 1996 included an operating loss of $1.7 million attributable to the company's CLEC operations. Century's call center revenues increased 48.1% and long distance revenues increased 27.1% during the quarter as compared with the same quarter last year. Century now serves approximately 164,800 long distance customers, adding 7,000 during the quarter. During the first nine months of 1997, net income, excluding gain on sales of assets, increased 13.9% to $112,165,000 from $98,443,000 and fully diluted earnings per share increased 12.9% to $1.84 from $1.63. Consolidated revenues increased 13.0% to $627,912,000 from $555,448,000 and EBITDA increased 11.6% to $320,153,000 from $286,922,000. As previously announced, Century will nearly double the size of its operations with the acquisition of Pacific Telecom, Inc. Century expects to gain approximately 640,000 telephone access lines in 12 states bringing Century's total access lines to 1.2 million. Century will increase the size of its midwest cluster and form a new western market cluster. The Company will acquire nearly 1.9 million cellular pops (the portion of the population of the service areas based on ownership interest) bringing cellular ownership to more than 10 million pops and will operate 10 additional cellular markets which currently serve more than 100,000 subscribers. Century will also double its PCS pops to more than 8 million. Century anticipates closing the transaction during fourth quarter 1997. In addition to historical information, this release includes certain forward-looking statements that are subject to uncertainties that could cause the Company's actual results to differ materially from such statements. Such uncertainties include but are not limited to: the effects of ongoing deregulation in the telecommunications industry; the effects of greater than anticipated competition in the Company's telephone and cellular markets; possible changes in the demand for the Company's products and services; the Company's ability to successfully introduce new offerings on a timely and cost-effective basis; the risks inherent in rapid technological change; the Company's ability to effectively manage its growth, whether through acquisitions or otherwise; and the effects of more general factors such as changes in overall market or economic conditions or in legislation, regulation or public policy. These and other uncertainties related to the Company's business are described in greater detail in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997. Century Telephone Enterprises, Inc. provides a range of communications services including local exchange, wireless, long distance and Internet access to more than one million customers in 14 states. The company, headquartered in Monroe, Louisiana, is publicly traded on the New York Stock Exchange under the symbol CTL. Century is the 14th largest local exchange telephone company, based on access lines, and the 12th largest cellular company, based on population equivalents owned, in the United States. Visit Century's corporate website at www.centurytel.com . -0-
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
In thousands, except INCREASE
per share amounts 1997 1996 (DECREASE)
TELEPHONE OPERATIONS
Operating revenues
Local service $ 33,443 31,248 7.0%
Network access 73,385 68,433 7.2%
Other 15,106 14,104 7.1%
----------- -----------
121,934 113,785 7.2%
----------- -----------
Operating expenses
Plant operations 24,971 22,885 9.1%
Customer operations 11,931 10,936 9.1%
Corporate and other 18,679 17,252 8.3%
Depreciation and
amortization 26,239 23,779 10.3%
----------- -----------
81,820 74,852 9.3%
----------- -----------
----------- -----------
Telephone operating income 40,114 38,933 3.0%
----------- -----------
MOBILE COMMUNICATIONS
OPERATIONS
Operating revenues
Cellular service 78,839 65,621 20.1%
Equipment sales 1,324 1,073 23.4%
----------- -----------
80,163 66,694 20.2%
----------- -----------
Operating expenses
Cost of equipment sold 2,987 3,167 (5.7%)
System operations 12,549 10,279 22.1%
General, administrative and
customer service 15,090 13,529 11.5%
Sales and marketing 11,918 10,805 10.3%
Depreciation and
amortization 10,216 8,761 16.6%
----------- -----------
52,760 46,541 13.4%
----------- -----------
Mobile communications
operating income 27,403 20,153 36.0%
----------- -----------
OTHER OPERATIONS
Operating revenues 16,254 12,617 28.8%
----------- -----------
Operating expenses
Cost of sales and other 13,337 11,930 11.8%
Depreciation and
amortization 619 757 (18.2%)
----------- -----------
13,956 12,687 10.0%
----------- -----------
Other operating income (loss) 2,298 (70) -
----------- -----------
TOTAL OPERATING INCOME 69,815 59,016 18.3%
OTHER INCOME (EXPENSE)
Gain on sales of assets - 815 (100.0%)
Interest expense (11,175) (11,023) 1.4%
Income from unconsolidated
cellular entities 8,371 8,990 (6.9%)
Minority interest (1,817) (1,418) 28.1%
Other income and expense 1,174 1,544 (24.0%)
Income tax expense (24,935) (21,574) 15.6%
----------- -----------
NET INCOME $ 41,433 36,350 14.0%
=========== ===========
EARNINGS PER SHARE
Primary $ 0.68 0.60 13.3%
Fully diluted $ 0.67 0.60 11.7%
SHARES OUTSTANDING
Primary 60,887 60,111 1.3%
Fully diluted 61,615 60,881 1.2%
DIVIDENDS PER COMMON SHARE $ .0925 .09 2.8%
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
In thousands, except INCREASE
per share amounts 1997 1996 (DECREASE)
TELEPHONE OPERATIONS
Operating revenues
Local service $ 98,749 90,542 9.1%
Network access 217,407 205,134 6.0%
Other 43,298 40,143 7.9%
----------- -----------
359,454 335,819 7.0%
----------- -----------
Operating expenses
Plant operations 73,013 67,582 8.0%
Customer operations 34,674 31,761 9.2%
Corporate and other 54,916 50,669 8.4%
Depreciation and
amortization 77,241 70,459 9.6%
----------- -----------
239,844 220,471 8.8%
----------- -----------
----------- -----------
Telephone operating income 119,610 115,348 3.7%
----------- -----------
MOBILE COMMUNICATIONS
OPERATIONS
Operating revenues
Cellular service 216,476 182,218 18.8%
Equipment sales 3,996 3,068 30.2%
----------- -----------
220,472 185,286 19.0%
----------- -----------
Operating expenses
Cost of equipment sold 10,373 8,889 16.7%
System operations 33,946 26,632 27.5%
General, administrative and
customer service 43,568 38,626 12.8%
Sales and marketing 37,345 31,012 20.4%
Depreciation and
amortization 29,488 24,022 22.8%
----------- -----------
154,720 129,181 19.8%
----------- -----------
Mobile communications
operating income 65,752 56,105 17.2%
----------- -----------
OTHER OPERATIONS
Operating revenues 47,986 34,343 39.7%
----------- -----------
Operating expenses
Cost of sales and other 41,419 31,593 31.1%
Depreciation and
amortization 2,011 1,975 1.8%
----------- -----------
43,430 33,568 29.4%
----------- -----------
Other operating income 4,556 775 487.9%
----------- -----------
TOTAL OPERATING INCOME 189,918 172,228 10.3%
OTHER INCOME (EXPENSE)
Gain on sales of assets 70,121 815 8,503.8%
Interest expense (33,539) (33,972) (1.3%)
Income from unconsolidated
cellular entities 21,750 21,584 0.8%
Minority interest (3,722) (5,947) (37.4%)
Other income and expense 3,467 2,601 33.3%
Income tax expense (90,251) (58,353) 54.7%
----------- -----------
NET INCOME $ 157,744 98,956 59.4%
=========== ===========
EARNINGS PER SHARE
Primary $ 2.61 1.65 58.2%
Fully diluted $ 2.58 1.64 57.3%
SHARES OUTSTANDING
Primary 60,510 59,853 1.1%
Fully diluted 61,198 60,593 1.0%
DIVIDENDS PER COMMON SHARE $ .2775 .27 2.8%
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
SEPT. 30, DEC. 31,
1997 1996
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,283 8,402
Other current assets 112,630 100,832
----------- ----------
Total current assets 123,913 109,234
----------- ----------
PROPERTY, PLANT AND EQUIPMENT
Telephone 1,372,946 1,290,289
Mobile communications 304,178 269,389
Other 104,046 126,015
Accumulated depreciation (635,613) (536,681)
----------- ----------
Net property, plant and equipment 1,145,557 1,149,012
----------- ----------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 545,683 532,410
Other 458,551 237,849
----------- ----------
Total investments and other assets 1,004,234 770,259
----------- ----------
TOTAL ASSETS $ 2,273,704 2,028,505
=========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 19,013 19,919
Other current liabilities 133,270 124,225
----------- ----------
Total current liabilities 152,283 144,144
LONG-TERM DEBT 565,633 625,930
DEFERRED CREDITS AND OTHER LIABILITIES 308,173 230,278
STOCKHOLDERS' EQUITY 1,247,615 1,028,153
----------- ----------
TOTAL LIABILITIES AND EQUITY $ 2,273,704 2,028,505
=========== ==========
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
INC
1997 1996 (DEC)
(in thousands)
Telephone $ 77,333 79,952 (3.3%)
Mobile communications 30,451 56,783 (46.4%)
Corporate and other 15,560 17,157 (9.3%)
----------- ----------
Total capital expenditures $ 123,344 153,892 (19.9%)
=========== ==========
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
INC
1997 1996 (DEC)
(in thousands)
Telephone $ 28,106 30,493 (7.8%)
Mobile communications 5,639 15,375 (63.3%)
Corporate and other 2,180 8,703 (75.0%)
----------- ----------
Total capital expenditures $ 35,925 54,571 (34.2%)
=========== ==========
CONTACT: Century Telephone Enterprises Inc., Monroe Jeffrey S. Glover, 318/388-9648 jglover@iamerica.net |
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