D&E Communications Reports First Quarter Results.Business Editors/Hi-Tech Writers EPHRATA, Pa.--(BUSINESS WIRE)--May 1, 2002 D&E Communications, Inc. ("D&E") (Nasdaq:DECC DECC Duluth Entertainment Convention Center (Duluth, MN) DECC Defense Enterprise Computing Centers DECC Distance Education Coordinating Council DECC Danish-Estonian Chamber of Commerce (Tallinn, Estonia) ), a leading provider of integrated communications services in south central Pennsylvania South Central Pennsylvania is a region of the U.S. state of Pennsylvania that includes the fourteen counties of Adams, Cumberland, Dauphin, Franklin, Huntingdon, Juniata, Lancaster, Lebanon, Mifflin, Northumberland, Perry, Schuylkill, Snyder, and York. , today announced the following operating results:
First Quarter
(Unaudited)
(in thousands except per share data)
2002 2001 Change
---- ---- ------
Operating Revenues $19,604 $18,155 + 8.0%
Operating Income 232 88 + 163.7%
EBITDA (1) 4,116 3,616 + 13.8%
Net Loss (808) (2,694) + 70.0%
Basic and Diluted Earnings
(Loss) per Common Share ($0.11) ($0.36) + 69.4%
(1) EBITDA is defined as operating income plus depreciation and
amortization.
G. William Ruhl, D&E 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. remarked, "We are pleased with our solid revenue growth despite the general economic slowdown. Our revenue growth and cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. measures in all of our business segments, resulted in our improved 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 ". Other Matters On April 1, 2002, D&E completed the sale of its investment in 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. ONE, which has been reported as a discontinued segment. In accordance with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , the results of our discontinued wireless segment are not included in our results of operations for the quarter ended March 31, 2002. In the corresponding quarter in 2001, D&E's net loss included a loss of $1.4 million from the wireless services segment. In addition, our share of losses from our European investments declined from a loss of $1.3 million in the first quarter of 2001 to a loss of $0.5 million in the quarter ended March 31, 2002. Segment Results Total RLEC RLEC Rural Local Exchange Carrier RLEC Report Log Exception Condition revenues grew 3.3% to $11.5 million in the first quarter of 2002, from $11.1 million in the same period last year. Local telephone service revenues increased 13.9% to $3.3 million in the first quarter of 2002, driven by access line growth and a rate increase effective December 1, 2001. RLEC network access revenues decreased 3.0% to $5.7 million in the quarter, from $5.9 million recorded in the same period last year, as a result of lower call volumes and a decrease in certain rate elements of access revenues. RLEC 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. increased 2.7% to $2.3 million for the quarter from $2.2 million in the same period last year. Total 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) revenues grew 23.6% for the first quarter of 2002 to approximately $1.8 million from approximately $1.5 million in the same period last year, driven by new customer additions. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased $0.5 million to $2.7 million over the same period, and operating income declined 0.7% to a 48.3% loss in the first quarter of 2002 compared to a 47.6% loss in the same period last year. CLEC 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. increased to approximately $0.9 million for the quarter ending March 31, 2002, from approximately $0.7 million in the same period last year, due to increased operating expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc commencement of operations in our Harrisburg, PA market. The Internet Services unit reported $0.8 million in revenues for the first quarter of 2002, more than double the revenue of $0.3 million in the same period of last year. Increases in the subscriber base contributed to revenue growth, adding 1,372 dial up access and 273 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 customers during the first quarter of 2002, and 7,176 dial up access and 1,364 DSL customers since the first quarter of 2001. Internet Services operating loss decreased 53.0% to approximately $0.3 million in the first quarter of 2002 from approximately $0.7 million in the same period last year. Systems Integration revenues declined 4.0% to $5.5 million from the first quarter 2001. The decrease was related to discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of a software fee income agreement with a vendor. Further, we believe the decrease relates to the effects of a slowing economy and reductions in customer spending for communications related infrastructure and consulting services. Systems Integration operating loss decreased to $0.7 million in the first quarter of 2002 from $0.8 million in the same period last year. Selected Operating Statistics
March 31 December 31
2002 2001 Change
-------- ------ ------
RLEC Lines 62,104 61,961 + 0.2%
CLEC Lines 8,420 7,535 + 11.7%
Dial-up Subscribers 11,533 10,161 + 13.5%
DSL Subscribers 2,482 2,209 + 12.4%
Web Hosting Customers 515 447 + 15.2%
Pending Acquisition of Conestoga Enterprises, Inc. As previously reported, on November 21, 2001, D&E agreed to acquire Conestoga Enterprises, Inc., a neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. rural local exchange carrier providing integrated communications services throughout the eastern half of Pennsylvania. Completion of the merger is subject to approval by both D&E's and Conestoga's shareholders and other customary closing conditions. All regulatory approvals for the merger have been received, including the Federal Communications Commission's consent to the merger, which has become final and non-appealable. Assuming we obtain the approvals of D&E's and Conestoga's shareholders at their respective shareholders meetings scheduled for May 23, 2002, we expect to complete the acquisition promptly thereafter. D&E Communications, Inc. is a provider of integrated communications services to residential and business customers in markets throughout south central Pennsylvania. D&E offers its customers a comprehensive package of communications services including local and long distance telephone service, high-speed data services and Internet access See how to access the Internet. service. D&E also provides business customers with integrated voice and data network solutions. This press release contains forward-looking statements. These forward-looking statements are found in various places throughout this press release and include, without limitation, statements regarding the acquisition of Conestoga Enterprises, Inc. and financial and other information. These statements are based upon the current beliefs and expectations of D&E's management concerning the development of our business and the benefits of the Conestoga acquisition, are not guarantees of future performance and involve a number of risks, uncertainties, and other important factors that could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, the timely completion of the Conestoga merger; the risk that Conestoga's business will not be successfully integrated into D&E; the costs related to the transaction; the significant indebtedness of the combined company; the risk that anticipated synergies of the merger will not be obtained; and other key factors that we have indicated could adversely affect our business and financial performance contained in our past and future filings and reports, including those filed with the 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. Securities and Exchange Commission. D&E undertakes no obligation to revise or update its forward-looking statements whether as a result of new information, future events, or otherwise. D&E and Conestoga filed an amended registration statement on Form S-4 with the Securities and Exchange Commission on April 23, 2002. This registration was declared effective on April 24, 2002. Investors and security holders may obtain a free copy of the registration statement at the Commission's web site at www.sec.gov. The documents filed with the Commission by D&E may also be obtained for free from D&E by directing a request to D&E, 124 East Main Street, Ephrata, Pennsylvania Ephrata is a borough in Lancaster County, Pennsylvania, 38 miles (61 km) south east of Harrisburg and about 57 miles (91 km) west by north of Philadelphia. It is named after Ephrath, a biblical town in what is now Israel. 17522, Attn: Investor Relations Investor relations The process by which the corporation communicates with its investors. . Certain of these documents may also be accessed on D&E's web site at www.decommunications.com when they become available. THE REGISTRATION STATEMENT AND THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS SHOULD BE READ CAREFULLY, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. |
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