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ACC CORP. REPORTS $1.54 PER SHARE IN THIRD QUARTER

 ROCHESTER, N.Y., Nov. 8 /PRNewswire/ -- ACC Corp. (NASDAQ-NMS: ACCC), today reported consolidated net income at $10.8 million, or $1.54 per share, for the quarter ended Sept. 30, 1993, versus $685,156, or 10 cents per share, for the third quarter of 1992.
 The third quarter 1993 results reflect non-operating gains, a non-recurring special charge and a consolidated loss from continuing operations, all further explained below.
 Highlights from continuing operating results include:
 -- Third quarter revenue was $25.9 million, an increase of 24 percent over third quarter 1992 revenue of $20.9 million.
 -- Third quarter billable minutes increased 34 percent to 168 million versus 125 million for the same quarter in 1992.
 -- The pre-tax operating loss from continuing operations, before the special charge was $2.38 million compared to operating income of $1.56 million for the third quarter 1992.
 Included in the third quarter 1993 results is a non-operating pre-tax gain of $19.9 million from the previously announced sale of the company's Kentucky cellular assets, the proceeds of which were received on Oct. 7, 1993, and a $9.3 million pre-tax gain from the Initial Public Offering sale of 30 percent ownership of ACC TelEnterprises Ltd., the company's Canadian subsidiary, completed in July.
 The third quarter results also reflect a one-time special charge of $12.8 million, $6.3 million from U.S. operations and $6.5 million from operations in Canada, for the write-off and write-down of certain intangibles and other assets to reflect their reduced ongoing value to the company. Included in the charges are: $3.0 million for the write-off of intangibles, primarily customer bases and goodwill, $3.9 million for the reduction in economic value of dialer and station equipment in preparation for equal access in Canada in 1994, $3.0 million for the writedown of ACC's technologically obsolete 180-mile microwave system, $1.9 million for reorganization costs of past acquisitions and obsolete computer and switching equipment and $1 million for uncollectable receivables associated with recent acquisitions in Canada.
 Commenting on the gain and one-time special charge, Richard T. Aab, chairman and chief executive officer, stated: "The non-operating gains initiated a review of the balance sheet by the company to ensure that the assets on the books represented their future value. The decision to take the special charge has given ACC a stronger balance sheet, and the capital provided from the cellular asset sale and Canadian IPO has eliminated all significant long-term debt, freed up $30 million in bank lines of credit, and provides $17 million in working capital for expansion."
 In addition to the special charge, the company also recognized a $1.07 million foreign exchange loss in the quarter, most of which was due to the repayment of subsidiary debt from the proceeds of the Canadian IPO.
 Before the special charges and non-operating gains, for the third quarter the U.S. continuing business reported pre-tax operating income of $386,000 on revenue of $11.1 million (excluding revenue from affiliates), Canada reported a $2.1 million pre-tax operating loss on revenue of $14.8 million (excluding revenue from affiliates), and the United Kingdom had a $624,175 pre-tax operating loss.
 "The U.S. business is growing but becoming more seasonal due to the university academic year. Third quarter revenue is actually lower than the second quarter due to this seasonality. However, we expect fourth quarter revenue will be higher as we realize the benefits of a number of new long-term university contracts," said Aab.
 The third quarter operating loss from Canadian operations, excluding the special charge, reflects higher than expected network carrier costs resulting in part from the timing delays in moving an acquired customer base, during the quarter, onto the company's network. During the third quarter, the company also experienced increased selling, general and administrative expenses related to customer base transition and the one-time investment cost associated with launching a number of new programs aimed at increasing and expanding university and residential customer bases of its Canadian subsidiary.
 "We have added more than 25,000 residential and student customers over the past few months which will increase fourth quarter revenue and improve margins in Canada," said Aab. "We expect the Canadian business to return to operating profitability and show strong revenue growth in the fourth quarter."
 The company's start-up operations in the United Kingdom continue as planned. The company has ordered an Ericsson toll switch and is planning to deliver the switch in London in December 1993.
 ACC Corp.'s consolidated income for the nine month period ended Sept. 30, 1993, was $11.7 million, or $l.66 per share, as compared with $1.5 million, or 22 cents per share, for the same period in 1992. Revenue for the nine month period increased 32 percent to $74.9 million in 1993 versus $56.9 million for the comparable period in 1992.
 ACC Corp. is a telecommunications holding company headquartered in Rochester. Through its U.S., Canadian and United Kingdom subsidiaries, the company provides domestic and international long-distance telephone services to corporate and residential customers, as well as specialized programs for colleges and universities. Its Canadian subsidiary is the second largest long-distance reseller in Canada and its U.K. subsidiary holds the first international simple resale license in the United Kingdom. ACC Corp. had 1992 revenues of $81.7 million.
 ACC CORP. AND SUBSIDIARIES
 Consolidated Statements Of Income
 (Unaudited)
 Three months ended Nine months ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Revenue:
 Toll revenue $24,402,905 $20,268,198 $71,534,973 $55,158,950
 Leased lines and
 other 1,546,055 643,174 3,333,894 1,766,306
 Total 25,948,960 20,911,372 74,868,867 56,925,256
 Operating expenses:
 Network costs 18,663,416 13,559,850 50,389,914 35,968,531
 Operator services
 and other costs 285,743 192,083 762,235 641,107
 Depreciation and
 amortization 1,820,641 848,049 4,328,815 2,617,911
 Selling, general
 & administrative 7,560,035 4,749,936 19,057,269 13,168,235
 Write-down of
 assets 12,806,761 -- 12,806,761 --
 Total 41,136,596 19,349,918 87,344,994 52,395,784
 Income (loss) from
 operations (15,187,636) 1,561,454 (12,476,127) 4,529,472
 Other income
 (expense)
 Interest income 65,227 183,885 125,255 208,836
 Interest expense (100,811) (71,773) (174,013) (144,784)
 Gain on sale of
 subsidiary stock 9,343,668 -- 9,343,668 --
 Foreign exchange
 loss (1,073,198) -- (1,073,198) --
 Total 8,234,886 112,112 8,221,712 64,052
 Income (loss) from
 continuing operations
 before provision for
 (benefit from) income
 taxes and minority
 interest (6,952,750) 1,673,566 (4,254,415) 4,593,524
 Provision for
 (benefit from)
 income taxes (4,977,512) 675,553 (3,986,717) 1,837,292
 Minority interest
 in loss of
 consolidated
 subsidiary 1,707,327 -- 1,707,327 --
 Income (loss)
 from continuing
 operations (267,911) 998,013 1,439,629 2,756,232
 Loss from discontinued
 operations (net of
 income tax benefit
 of $232,000 in 1993
 and $161,000 in
 1992, and $667,000
 in 1993 and
 $655,000 in 1992) (451,221) (312,857) (1,298,713) (1,227,109)
 Gain on disposal
 of discontinued
 operations, net
 of tax provision
 of $8,350,366 11,531,457 -- 11,531,457 --
 Net income $10,812,325 $685,156 $11,672,373 $1,529,123
 Net income (loss)
 per common & common
 equivalent share:
 Continuing
 operations ($0.04) $0.15 $0.21 $0.40
 Discontinued
 operations ($0.06) ($0.05) ($0.19) ($0.18)
 Gain on disposal
 of discontinued
 operations $1.64 -- $1.64 --
 Net income $1.54 $0.10 $1.66 $0.22
 Average number of
 common and common
 equivalent
 shares 7,010,803 6,882,837 7,015,762 6,852,300
 Business Segment Information
 (Unaudited)
 Three months ended Sept. 30, 1993
 North United
 America Kingdom Consolidated
 Revenue:
 Toll revenue $24,395,013 $7,892 $24,402,905
 Leased lines and other 1,546,055 -- 1,546,055
 Total 25,941,068 7,892 25,948,960
 Operating expenses:
 Network costs 18,557,953 105,463 18,663,416
 Operator services and
 other costs 285,743 -- 285,743
 Depreciation and amortization 1,718,435 102,206 1,820,641
 Selling, general & admin. 7,135,636 424,399 7,560,035
 Write-down of assets 12,806,761 -- 12,806,761
 Total 40,504,528 632,068 41,136,596
 Loss from operations (14,563,460) (624,176) (15,187,636)
 Other Income (expense):
 Interest income 65,227 -- 65,227
 Interest expense (100,811) -- (100,811)
 Gain on sale of subsidiary
 stock 9,343,668 -- 9,343,668
 Foreign exchange loss (1,050,705) (22,493) (1,073,198)
 Total 8,257,379 (22,493) 8,234,886
 Loss from continuing operations
 before provision for income
 taxes and minority interest (6,306,081) (646,669) (6,952,750)
 Benefit from income taxes (4,757,582) (219,930) (4,977,512)
 Minority interest in loss of
 consolidated subsidiary 1,707,327 -- 1,707,327
 Income (loss) from continuing
 operations 158,828 (426,739) (267,911)
 Income (loss) from continuing
 operations per common and
 common equivalent share $0.02 ($0.06) ($0.04)
 Nine months ended Sept. 30, 1993
 North United
 America Kingdom Consolidated
 Revenue:
 Toll revenue $71,478,655 $56,318 $71,534,973
 Leased lines and other 3,333,894 -- 3,333,894
 Total 74,812,549 56,318 74,868,867
 Operating expenses:
 Network costs 50,180,726 209,188 50,389,914
 Operator services and
 other costs 762,235 -- 762,235
 Depreciation and amortization 4,167,604 161,211 4,328,815
 Selling, general & admin. 18,292,001 765,268 19,057,269
 Write-down of assets 12,806,761 -- 12,806,761
 Total 86,209,327 1,135,667 87,344,994
 Loss from operations (11,396,778)(1,079,349) (12,476,127)
 Other Income (expense):
 Interest income 125,255 -- 125,255
 Interest expense (174,013) -- (174,013)
 Gain on sale of subsidiary
 stock 9,343,668 -- 9,343,668
 Foreign exchange loss (1,050,705) (22,493) (1,073,198)
 Total 8,244,205 (22,493) 8,221,712
 Loss from continuing operations
 before provision for income
 taxes and minority interest (3,152,573) (1,101,842) (4,254,415)
 Benefit from income taxes (3,612,027) (374,690) (3,986,717)
 Minority interest in loss of
 consolidated subsidiary (1,707,327) -- (1,707,327)
 Income (loss) from continuing
 operations 2,166,781 (727,152) 1,439,629
 Income (loss) from continuing
 operations per common and
 common equivalent share $0.31 ($0.10) $0.21
 Consolidated Balance Sheets
 (Unaudited)
 Periods ended Sept. 30, 1993 Dec. 31, 1992
 Current assets:
 Cash and cash equivalents $60,999 $353,392
 Accounts receivable, net of
 allowance for doubtful accounts
 of $894,561 in 1993 and $774,290
 in 1992 15,730,996 14,104,328
 Other receivables 45,058,634 628,584
 Prepaid and other assets 1,498,588 1,134,646
 Refundable taxes -- 30,000
 Total 62,349,217 16,250,950
 Current assets held for sale -- 1,591,755
 Total current assets 62,349,217 17,842,705
 Property, plant and equipment:
 At cost 35,416,221 36,921,658
 Less-accumulated depreciation
 and amortization (11,433,869) (14,970,701)
 Total 23,982,352 21,950,957
 Property, plant and equipment
 held for sale (net) -- 10,945,899
 Other assets:
 Notes receivable -- 228,425
 Goodwill -- 959,199
 Customer base 4,131,579 4,044,151
 Deferred installation costs, net 1,466,598 1,306,355
 Other 1,047,322 709,559
 Total 6,645,499 7,247,689
 Other assets held for sale -- 8,849,140
 Total assets $92,977,068 $66,836,390
 Current liabilities:
 Lines of credit $19,204,000 $10,036,500
 Current maturities of
 long-term debt 1,452,126 1,488,726
 Accounts payable 3,163,341 3,602,382
 Accrued network costs 8,902,921 8,250,322
 Other accrued expenses 5,850,861 4,511,300
 Accrued income taxes 8,350,366 --
 Total 46,923,615 27,889,230
 Current liabilities held for sale -- 527,121
 Total current liabilities 46,923,615 28,416,351
 Deferred income taxes (2,491,296) 2,962,232
 Long-term debt 10,092,951 12,746,991
 Minority interest 3,779,372 --
 Shareholders' equity
 Common stock, $0.15 par value
 authorized - 50,000,0000 shares
 issued - 7,530,370 in 1993 and
 7,450,120 in 1992 112,956 111,752
 Capital-in-excess of par 19,376,414 18,797,753
 Cumulative translation adjustment (633,283) (957,333)
 Retained earnings 17,099,615 6,041,920
 Total 35,955,702 23,994,092
 Less-
 Treasury stock, at cost
 (710,048 shares) (1,283,276) (1,283,276)
 Total shareholders' equity 34,672,426 22,710,816
 Total liabilities and
 shareholders' equity $92,977,068 $66,836,390
 -0- 11/8/93
 /CONTACT: Richard T. Aab of ACC Corp., 716-987-3150, or David Allan of Burson-Marsteller, 212-614-5163/
 (ACCC)


CO: ACC Corp. ST: New York IN: TLS SU: ERN

LW -- NY083 -- 1931 11/08/93 17:27 EST
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