Conestoga Enterprises, Inc. Announces 3rd Quarter Results.Business Editors BIRDSBORO, Pa.--(BUSINESS WIRE)--Nov. 2, 2001 Conestoga 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 :CENI CENI Certificados Negociables de Inversión (Banco Central de Nicaragua) ), at its monthly Board of Directors meeting on October 26, 2001 the Board of Directors announced the third quarter 2001 operating results are as follows (unaudited):
Third Quarter Year-To-Date
2001 2000 Change 2001 2000 Change
---- ---- ------ ---- ---- ------
(in thousands except per share data):
Operating
Revenues $24,121 $21,265 + 13% $69,496 $64,756 + 7%
Operating
Income 2,447 2,557 - 4% 8,327 6,890 + 21%
EBITDA 6,592 6,735 - 2% 21,346 19,219 + 11%
Net
Income 805 771 + 4% 2,342 2,512 - 7%
Basic
Earnings
per
Common
Share $ 0.09 $ 0.08 + 13% $0.25 $0.27 - 7%
The Company's operating revenues during the first nine months of 2001 were 7.3% greater than during the first nine months of 2000. Growth was reported in the telephone wireline segment as the result of continued growth in local service and access revenues generated by both of its local exchange carrier (ILEC (Incumbent Local Exchange Carrier) A traditional local telephone company such as one of the Regional Bell companies (RBOCs). Contrast with CLEC. See ELEC and TELRIC. ) subsidiaries, growth in the competitive local exchange and long distance service segment due to increased local service revenues generated by its competitive local exchange carrier (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) ) subsidiary, and growth in the telephone wireless service segment due to increased personal communications wireless service (PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. ) revenues generated by its wireless carrier subsidiary. 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. for the first nine months of 2001 increased by 21% compared to the first nine months of 2000. This increase was primarily generated by improvements in the financial performance of the ILEC subsidiaries. The continued expansion of the Company's CLEC, long distance (LD), and PCS businesses had a negative impact on operating income in both periods. The operating results for the first nine months of 2001 include one-time acquisition costs of $768 thousand associated with the proposed merger of CEI CEI Competitive Enterprise Institute CEI Conferenza Episcopale Italiana (Italian bishop conference) CEI Central European Initiative CEI Comitato Elettrotecnico Italiano (Italian Electrotechnical Committee) with NTELOS and for the first nine months of 2000 include one-time costs of $859 thousand associated with the acquisition of TeleBeam, Incorporated. Net income for the third quarter of 2001 was 4% greater than the third quarter of 2000, and for the first nine months of 2001 was 7% lower than the same period of 2000. Net income during the third quarter of 2001 and 2000 included pre tax gains from the sale of certain investment in marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $360 and $321 thousand respectively. Net income during the first nine months of 2001 and 2000 included pre tax gains from the sale of such securities of $360 thousand and $2.1 million respectively. Net income for the first nine months without the pre tax gains from the sale of those securities in 2001 and 2000 would have been $2.1 million and $1.1 million respectively. The Company's subscriber and access line data as of September 30, 2001, is as follows:
Sept. 30 Dec. 31
2001 2000 change
----------------------------------
LEC Lines 84,509 82,844 + 2%
CLEC Lines 16,635 10,928 + 52%
PCS Subscribers 18,976 15,405 + 23%
Long Distance Subscribers 40,545 36,754 + 10%
Paging Lines 5,475 5,904 - 7%
DSL Subscribers 1,214 567 + 114%
Cable Modem Subscribers 871 350 + 149%
Video Subscribers 2,906 2,561 + 14%
During the first nine months of 2001 the Company's telephone wireline services from the ILEC subsidiaries, Conestoga Telephone and Telegraph Company and Buffalo Valley Telephone Company, realized a combined operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 45% on operating revenues of $40 million and operating income of $18 million, and 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 of $26 million. The Company's wireless communication services include results from Conestoga Wireless Company (CWC CWC Chemical Weapons Convention CWC Cricket World Cup CWC Central Wyoming College CWC Ceylon Workers' Congress (trade union; Sri Lanka) CWC Ceylon Workers Congress (Sri Lanka) ), the Company's PCS wireless service provider, and Conestoga Mobile Systems (CMS (1) See content management system and color management system. (2) (Conversational Monitor System) Software that provides interactive communications for IBM's VM operating system. ) the Company's paging service provider. CWC added 3,571 PCS customers during the first nine months of 2001. Total wireless communication services operating revenues during the first nine months of 2001, totaling $5.1 million, were 87% greater than the first nine months of 2000, which resulted in a $6.0 million 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. and a negative EBITDA of $2.7 million during the first nine months of 2001. The loss was 6% less in the first nine months of 2001 when compared with the first nine months of 2000. On July 11, 2001, Conestoga Wireless announced the completion of the sale of communications towers to Mountain Union Telecom for approximately $21 million in cash. On August 28, 2001 the Company and NTELOS announced it had signed a definitive purchase agreement with VoiceStream Wireless to sell CWC's assets and operations to VoiceStream contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent the closing of the NTELOS /CEI merger. CEI Networks provides the Company's long distance and CLEC services. During the first nine months of 2001, it generated $17.1 million in operating revenues and realized $2.8 million in operating losses and negative EBITDA of $1.2 million. During that period, it generated $3.2 million in local service revenues, which was a substantial increase over its $1.0 million in local service revenues during the first nine months of 2000. During the third quarter of 2001, 2,683 CLEC lines were added. During the first nine months of 2001, its long distance IXC (1) (IntereXchange Carrier) An organization that provides interstate (long distance) communications services within the U.S., which includes AT&T, MCI, Sprint and more than 700 others. See LATA. (2) (IXC Communications Inc., Austin, TX, www. revenues declined 7% compared with the same period of 2000, mostly due to price competition in the long distance market. Infocore, Inc. operates primarily as an 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. provider. Its operating revenues at $7.1 million were 2% greater during the first nine months of 2001 compared to the first nine months of 2000. It provided an operating income of $158 thousand during the first nine months of 2001 compared with an operating loss of $309 thousand during the same period of 2000. Conestoga Enterprises, Inc. is a Birdsboro, Pennsylvania, based integrated communications provider with subsidiaries providing local and long distance services, wireless PCS service, cable television, paging, internet access and communications equipment solutions. The Company provides services in southeastern and central Pennsylvania. This news release may contain forward-looking statements. While the company believes they are expressed in good faith, there are no assurances that the actual outcome or results will not differ materially from any forward-looking statement contained within. |
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