D&E Communications Reports Second Quarter Results.Business Editors/High-Tech Writers EPHRATA Ephrata (ĕf`rətə), borough (1990 pop. 12,133), Lancaster co., SE Pa., in a prosperous farm area; inc. 1891. There is varied manufacturing. A noted semimonastic religious community was founded (c. , Pa.--(BUSINESS WIRE)--Aug. 12, 2003 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 central and eastern 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 , today announced the following operating results:
(Unaudited)
(in thousands except per share amounts)
Quarter Ended June 30, Six Months Ended June 30,
2003 2002 Change 2003 2002 Change
------------------------- -------------------------
Operating revenues $43,287 $26,830 $16,457 $85,372 $46,407 $38,975
Operating expenses 36,820 27,521 9,299 73,702 46,861 26,841
------------------------- -------------------------
Operating income
(loss) 6,467 (691) 7,158 11,670 (454) 12,124
Total other income
(expense) (5,212) (5,555) 343 (9,629) (6,731) (2,898)
Income taxes
(benefit) 428 (2,288) 2,716 743 (2,437) 3,180
Dividends on
utility
preferred stock 17 17 -- 33 33 --
------------------------- -------------------------
Income (loss) from
continuing
operations 810 (3,975) 4,785 1,265 (4,781) 6,046
Discontinued
operations (46) 55,779 (55,825) (53) 55,776 (55,829)
Cumulative effect
of
accounting changes -- -- -- 260 -- 260
------------------------- -------------------------
Net income $764 $51,804 $(51,040) $1,472 $50,995 $(49,523)
========================= =========================
Basic and Diluted
Earnings Per
Common Share $ 0.05 $ 4.83 $ (4.78) $ 0.10 $ 5.64 $ (5.54)
Net income in the quarter and six months ended June June: see month. 30, 2002, was affected by the sale of our D&E Wireless joint venture interest in April 2002, which resulted in a gain of $55,785 after taxes with no similar transaction in 2003. The sale of our Paging business in May of 2003 was reported with minor discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: losses in each period presented. "During the second quarter of 2003 we completed the sale of our paging businesses and have begun focusing our attention on expanding other products that we believe will generate better growth opportunities in the future," said G. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack Ruhl, 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. of D&E. "Growth in our edge-out market access lines was over 13% in the six months of 2003, more than four times the number of lost access lines we - and the industry in general - are experiencing in the regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. RLEC RLEC Rural Local Exchange Carrier RLEC Report Log Exception Condition areas. We also have made significant progress in combining our billing systems into one enhanced package. As we pursue these initiatives, it is our goal to continue to deliver the excellent service our customers have come to know and expect from us." "We were also pleased to end the second quarter by reaching a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. when we became part of the Russell 3000 Index The Russell 3000 Index is a stock market index of US stocks. The ticker is "RUA" or similar. See Russell Indexes page for main discussion. See also the iShares Russell 3000. ," Ruhl said. Results of Operations The following table is a summary of our operating results by segment for the three months ended June 30, 2003 and 2002:
Internet Systems
RLEC CLEC Services Integration
-------------------------------------
June 30, 2003 (1)
---------------------------------
Revenues - External $25,982 $8,697 $1,328 $6,227
Revenues - Intercompany 1,869 175 169 4
-------------------------------------
Total Revenues 27,851 8,872 1,497 6,231
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Depreciation and Amortization 7,784 994 182 416
Other Operating Expense 11,479 8,784 1,458 6,966
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Total Operating Expenses 19,263 9,778 1,640 7,382
-------------------------------------
Operating Income (Loss) $8,588 $(906) $(143) $(1,151)
=====================================
June 30, 2002 (1)
---------------------------------
Revenues - External $14,867 $3,903 $981 $5,996
Revenues - Intercompany 955 120 37 18
-------------------------------------
Total Revenues 15,822 4,023 1,018 6,014
-------------------------------------
Depreciation and Amortization 4,740 479 113 359
Other Operating Expenses 9,951 4,612 1,087 6,313
-------------------------------------
Total Operating Expenses 14,691 5,091 1,200 6,672
-------------------------------------
Operating Income (Loss) $1,131 $(1,068) $(182) $(658)
=====================================
Corporate,
Conestoga Other and Total
Wireless Eliminations Company
------------------------------
June 30, 2003 (1)
---------------------------------
Revenues - External $-- $1,053 $43,287
Revenues - Intercompany -- (2,217) --
------------------------------
Total Revenues -- (1,164) 43,287
------------------------------
Depreciation and Amortization -- 200 9,576
Other Operating Expense -- (1,448) 27,244
------------------------------
Total Operating Expenses -- (1,243) 36,820
------------------------------
Operating Income (Loss) $-- $79 $6,467
==============================
June 30, 2002 (1)
---------------------------------
Revenues - External $765 $318 $26,830
Revenues - Intercompany 6 (1,136) --
------------------------------
Total Revenues 771 (818) 26,830
------------------------------
Depreciation and Amortization -- 156 5,847
Other Operating Expenses 1,175 (1,464) 21,674
------------------------------
Total Operating Expenses 1,175 (1,308) 27,521
------------------------------
Operating Income (Loss) $(404) $490 $(691)
==============================
(1) We acquired Conestoga Enterprises, Inc. on May 24, 2002.
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: operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased $16,457, or 61.3%, to $43,287 for the second quarter ended June 30, 2003, from $26,830 in the same period of 2002. The revenue increase was primarily due to the inclusion of Conestoga's revenues for a full quarter in 2003, compared to only one month in 2002, after the May 24, 2002 acquisition. Two notable offsets to the increase were, (i) the sale of Conestoga Wireless in January January: see month. 2003 resulted in decreased revenue of $771, and (ii) a decrease of $1,621 in the Systems Integration Segment attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the slow economy. 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. from continuing operations increased $7,158, to $6,467, for the second quarter of 2003, from a loss of $691 in the same period of 2002. Operating income as a percentage of revenue increased to 14.9% in the second quarter of 2003 compared to a negative 2.6% in the same period of 2002. Other income and expense was a net expense of $5,212 in the second quarter of 2003 compared to a net expense of $5,555 in the same period of 2002. Interest expense increased to $4,602 in the second quarter of 2003, compared to $2,048 in the same period of 2002, primarily as a result of increased borrowings to complete the Conestoga acquisition on May 24, 2002. In the second quarter of 2002 a loss of $2,999 was recognized on an other-than-temporary loss on investments. Income taxes were $428 in the second quarter of 2003 compared to a benefit of $2,288 in the same period of 2002. In April 2002, we sold our D&E Wireless joint venture interest for a gain of $55,785 after taxes with no similar transaction in 2003. Discontinued paging operations resulted in a loss of $46 after taxes in the second quarter of 2003 versus a loss of $6 in the second quarter of 2002, which did not include Conestoga's paging business before the acquisition. Our net income was $764, or $0.05 per share, in the second quarter of 2003 compared to $51,804, or $4.83 per share, in the second quarter of 2002. The $4.83 per share amount is made up of a loss from continuing operations of $0.37 and an income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $5.20. Second Quarter Segment Results Total RLEC revenues grew 76.0%, to $27.9 million, in the second quarter of 2003, from $15.8 million in the same period last year. The Conestoga acquisition added $11.4 million of revenue, while the D&E RLEC revenues increased $0.6 million from the same period of 2002. D&E's RLEC local telephone service revenues increased 6.5%, to $3.7 million, in the second quarter of 2003 from $3.5 million in the same period of 2002, driven by rate increases effective in July July: see month. 2002. D&E's RLEC network access revenues increased 7.4%, to $6.0 million, in the quarter, from $5.6 million recorded in the same period last year, as a result of higher call volumes partially offset by a decrease in certain rate elements of access revenues. Total RLEC operating income increased to $8.6 million for the quarter from $1.1 million in the same period last year. The Conestoga acquisition added $4.5 million to RLEC operating income while D&E's RLEC operating income increased $3.0 million. 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 120.5% for the second quarter of 2003, to $8.9 million from $4.0 million in the same period last year, driven by new customer additions and the Conestoga acquisition, which acquisition accounted for $4.0 million of the increase. 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 $4.7 million, to $9.8 million, over the same period, and 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. improved 15.2% to a $0.9 million loss (negative 10.2% of revenue), in the second quarter of 2003 compared to a $1.1 million loss (negative 26.5% of revenue) in the same period last year. The 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 segment revenues grew 47.1% for the second quarter of 2003, to $1.5 million in revenues, from $1.0 million in the same period of last year. The Conestoga acquisition accounted for 55%, or $0.3 million, of this increase while the remainder of the growth was primarily from increases in the subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. base. Internet Services' operating loss for the second quarter of 2003 decreased to $0.1 million (negative 9.6% of revenue) from an operating loss of $0.2 million (negative 17.9% of revenue) in the same period last year. Systems Integration revenues increased 3.6% for the second quarter of 2003 to $6.2 million from $6.0 million in the first quarter 2002. The change included $1.8 million from Conestoga businesses offset by decreased D&E product sales of $1.4 million and service related revenues of $0.2 million. We believe the decrease primarily related to reductions in customer spending for communications related infrastructure and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . Systems Integration operating loss increased to $1.2 million in the second quarter of 2002 from a loss of $0.7 million in the same period last year. The Conestoga Wireless segment was sold on January 14, 2003 and therefore shows no activity in the second quarter of 2003 versus revenues of $0.8 million after the May 24, 2002 Conestoga Acquisition in 2002. The results of the Conestoga wireless segment held for sale are not reported in discontinued operations because D&E has continuing involvement after the sale as a result of D&E's continued guarantees on wireless tower site leases and D&E's responsibilities under a Build-to-Suit Agreement. Selected Operating Statistics
June 30, December 31, Change
2003 2002
------------ ------------ ------
RLEC Lines 144,374 145,310 -0.6%
CLEC Lines 34,212 30,200 +13.3%
DSL Subscribers 6,385 5,615 +13.7%
Dial-up Subscribers 13,022 12,652 +2.9%
Web Hosting Customers 759 651 +16.6%
Other Matters On May 24, 2002, D&E completed its acquisition of 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. The integration process has progressed on plan through the second quarter of 2003. This press release contains 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. . These forward-looking statements are found in various places throughout this press release and include, without limitation, statements regarding 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, 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 risk that Conestoga's business will not be successfully integrated into D&E; the costs related to the transaction; the significant indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of the combined company; 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 Communications, Inc. is a provider of integrated communications services to residential and business customers in markets throughout central and eastern Pennsylvania. D&E offers its customers a comprehensive package of communications services including local and long distance telephone service, high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data services and Internet access See how to access the Internet. service. D&E also provides business customers with systems integration services including voice and data network solutions. |
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