CT Communications Increases Dividend and Announces Fourth Quarter
and Full Year 2004 Results CONCORD, N.C., March 17
/PRNewswire-FirstCall/ -- CT Communications, Inc. (NASDAQ:CTCI)
announced that it has increased its regular quarterly common stock
dividend 43% to $0.10 per share. The new dividend, payable on June
15, 2005 to all shareholders of record at the close of business on
June 1, 2005, returns to shareholders a portion of the profit
improvements realized through the continued growth and
profitability of the Company. "Our focus on expense control is
paying off with the gains we achieved in operating and net income
during 2004. This represents our second increase in dividends in
the last twelve months, and we are excited to provide our
shareholders a greater return on their investment in our Company.
Our recently announced broadband initiative is well underway, and
DSL demand is strong with over 2,000 new DSL subscribers added in
the fourth quarter," said Michael R. Coltrane, President and Chief
Executive Officer of CT Communications, Inc. Quarter and Full-year
Comparisons Results for the first three quarters of 2004 and for
the fourth quarter and total year 2003 included herein have been
restated as more fully discussed in the Company's Current Reports
on Form 8-K filed with the Securities and Exchange Commission on
February 24, 2005 and March 17, 2005. Results of Operations
Operating income for the year ended December 31, 2004 grew 10.3% to
$23.6 million. The increase in operating income was primarily due
to consistent revenue growth coupled with initiatives to contain
operating expense. Operating revenue in 2004 grew 1.7% or $2.7
million to $163.7 million, while operating expense was flat at
$140.0 million. Operating expense excluding depreciation for 2004
declined $1.4 million from last year. Net income for the year was
$14.8 million compared to $21.4 million in 2003, which included a
$9.7 million after tax gain on the sale of an investment. Excluding
this one-time gain, net income grew $3.1 million, or 27% from 2003.
Contributing to this increase in net income was a $0.9 million
decrease in interest expense primarily due to the reduction in debt
over the past two years. Full year earnings per share were $0.78
compared to $0.61 per share last year, excluding the one-time gain.
The Company achieved strong revenue growth of $1.6 million or 9.8%
in its competitive operations in the fourth quarter of 2004
compared to the same period last year. However, these gains were
substantially offset by decreased revenue in the incumbent
telephone company primarily driven by a reduction in access and
interconnection revenue. Total revenue for the quarter of $41.5
million was flat with the fourth quarter of 2003. During the fourth
quarter CT experienced significant customer growth in its Wireless
and Internet businesses. The Company added 1,984 net new Wireless
customers while adding 1,410 net new customers subscribing to
digital subscriber line ("DSL") service. This growth represented an
18% and 138% increase in net new Wireless and DSL customers,
respectively, from the same quarter last year. Total Wireless and
DSL customers increased 12% and 36%, respectively, from the fourth
quarter last year. In addition, the Company experienced 29% growth
in Greenfield customers and 8% growth in CLEC customers compared to
the fourth quarter of 2003. In the fourth quarter of 2004 the
Company held operating expense flat compared to the same period
last year due to the continued focus on leveraging owned network
infrastructure and expense control initiatives. The Company reduced
spending across several network and administrative categories,
achieved a reduction in medical benefits expense associated with a
decreasing rate of claims experience and successfully settled
certain Wireless lease obligations in the fourth quarter of 2004.
Though the Company was able to improve cost efficiencies throughout
the organization, the operating expense reductions were
substantially offset by a $0.3 million increase in depreciation
expense and $0.4 million in Sarbanes-Oxley Section 404 compliance
related expense in the fourth quarter of 2004. Total third party
fees incurred in 2004 associated with this compliance project
exceeded $1.0 million. Net income for the fourth quarter of 2004
was $4.1 million compared to $4.4 million in the same period last
year. The decrease in net income was primarily due to a reduction
in other income (expense) driven by a $0.3 million impairment on
certain investment securities and a $0.2 million reduction in
investment income. Offsetting these reductions was a $0.1 million
decrease in other expenses, principally interest. Fourth quarter
2004 earnings per share were $0.21 compared to $0.23 per share in
the fourth quarter of 2003. Income tax expense in the fourth
quarter of 2004 includes charges related to a tentative settlement
of North Carolina Department of Revenue tax audits for the 1998 -
2000 tax years, as well as certain other disputed state tax
matters. The Company advanced a payment of $4.5 million to settle
all matters and believes the final agreement will occur before
March 31, 2005. These charges were substantially offset in the
fourth quarter by previous tax accruals related to this settlement
and a federal deduction associated with the sale and disposal of
the Webserve product line. Webserve was acquired in December 2000
and later combined into the Internet business unit to enhance the
Company's suite of data products by providing Web design and
development services. The Web design and development product line
was sold in the fourth quarter, which had no material impact on
reported pre-tax income from continuing operations. Results by
business unit: - ILEC - ("Concord Telephone") Concord Telephone's
operating revenue and income decreased to $23.1 million and $6.3
million, respectively, in the fourth quarter of 2004 compared to
the same quarter in 2003. The decline in operating results was
primarily due to a decrease in access and interconnection revenue
of $1.3 million, a reduction in phone system sales of $0.3 million
and lower line-related revenue of $0.4 million. Offsetting these
revenue decreases was a $0.4 million increase in certain regulatory
settlements. Concord Telephone ended the fourth quarter of 2004
with 112,916 access lines in service, a 2% decrease from the fourth
quarter of 2003, and 84,773 long distance lines, a 75% penetration
of access lines. - Wireless Service - ("CTC Wireless") CTC Wireless
operating revenue increased 22.4% to $9.0 million for the fourth
quarter of 2004 compared to $7.3 million in the fourth quarter of
2003. Contributing to the increase in wireless revenue was a 0.4
million increase in customer recurring revenue primarily due to a
12% growth in subscribers and a $1.2 million increase in settlement
and roaming revenue. Operating income for the quarter grew to $1.2
million with operating margin increasing to 13.7% compared to $0.3
million last year and a margin of 3.6%. Driving the increase in
operating margin were the significant increases in settlement and
roaming revenue coupled with the increasing scale of this business
that held increases in expense to 9.6%. For the total year revenue
grew 14.1% while expenses increased 7.8% with operating margin
growing to 12.5% from 7.3% in 2003. CTC Wireless ended the fourth
quarter with 43,213 subscribers. - CLEC - ("CTC Exchange Services")
CTC Exchange Services' operating revenue decreased 7.8% to $4.5
million for the fourth quarter of 2004 compared to the same quarter
last year. The decrease in operating revenue was due to a $0.6
million decline in access and interconnection revenue primarily
resulting from an FCC mandated rate reduction in June 2004.
Partially offsetting the reduction in access revenue was a $0.2
million increase in line revenue associated with the 8% growth in
customer access lines to 31,718 at December 31, 2004. Operating
loss for the fourth quarter of 2004 was $0.2 million compared to an
operating loss of $0.3 million for the fourth quarter of 2003. CTC
Exchange Services ended the fourth quarter of 2004 with 23,723 long
distance lines compared with 20,916 lines at the end of 2003. -
Greenfield Greenfield's operating revenue increased 24.0% to $2.2
million for the fourth quarter of 2004 compared to the fourth
quarter of 2003. Operating loss for the fourth quarter of 2004
declined to $1.0 million, an 12.0% improvement from the $1.1
million operating loss for the fourth quarter of 2003. Depreciation
expense for the quarter was $1.0 million compared to $0.7 million
in the fourth quarter last year. Greenfield ended the fourth
quarter of 2004 with 12,975 access lines and 6,877 long distance
lines in service, which represented increases of 29% and 43%,
respectively, from the end of 2003. For the total year 2004
Greenfield revenue increased 30.3% to $8.1 million while operating
expense excluding depreciation increased only 3.9% to $8.7 million.
The Company continued to focus on Greenfield opportunities that
leverage Company owned network infrastructure to minimize the cost
to add additional customers. As of December 31, 2004, the Company
had signed 105 agreements, which in total represent a potential of
more than 48,000 lines at the completion of the projects. -
Internet & Data - ("CTC Internet Services") CTC Internet
Services' operating revenue decreased 1.5% to $2.7 million for the
fourth quarter of 2004 compared to $2.8 million in the fourth
quarter last year. DSL revenue increased $0.4 million, but was
substantially offset by decreases in revenue primarily from a
continued decline in dial-up customers and a reduction in
high-speed revenue associated with lower priced data solutions for
business customers. Operating income for the fourth quarter was
$0.2 million with a 7.9% operating margin. Total year 2004 revenue
growth was held to 4.1% due to the continuing churn of low speed
dial-up customers that somewhat offset the growth in DSL product
sales; however, operating income before depreciation expense
increased to $2.6 million, a 259.3% increase due in part to network
efficiencies and lower personnel expense. CTC Internet Services
ended the year with 13,887 DSL lines compared to 10,183 lines at
the end of 2003, with over 1,400 net lines added in the fourth
quarter. Dial-up accounts decreased 17% to 9,041 and high-speed
accounts increased 11% to 606 at December 31, 2004 compared to
December 31, 2003. Future Period Guidance Results for 2005 may be
impacted, among other matters, by the timing and success of the
introduction of cable telephony competition in the Company's ILEC
service area. In addition, the extent and impact that certain
regulatory actions may have on the pricing of certain network
elements that the Company purchases are difficult to forecast at
this time. We currently expect operating results to approximate the
following during these future periods: - 1st Quarter 2005 - Revenue
of $41 to $42 million - Operating income of $5.2 to $5.7 million -
Depreciation expense of $7.9 to $8.0 million - Consolidated
earnings per share of $0.16 to $0.18 - Capital expenditures of $6
to $7 million - Full Year 2005 - Revenue of $164 to $168 million -
Operating income of $20.0 to $23.0 million - Depreciation expense
of $31.5 to $33.0 million - Consolidated earnings per share of
$0.70 to $0.75 - Capital expenditures of $29 to $32 million CT
Communications will host a conference call to discuss the results
of the fourth quarter and full year 2004 on Friday, March 18, 2005
at 10:00 AM ET. You are invited to listen to the conference call
that will be broadcast live over the Internet at
http://www.ctc.net/. If you are unable to listen during the live
webcast, the call will be archived on the web site at
http://www.ctc.net/ until March 31, 2005. Additionally, a replay of
the call will be available until 6:00 PM ET on Tuesday, March 22,
2005 at 800-633-8284. Enter access number 21236029. CT
Communications, Inc. is headquartered in Concord, N.C. and is a
growing provider of integrated telecommunications and related
services to residential and business customers located primarily in
North Carolina. CT Communications, Inc. offers a comprehensive
package of telecommunications services, including local and long
distance telephone services, Internet and data services and
wireless services. Certain statements contained in this press
release are "forward-looking statements," within the meaning of
federal securities laws. We intend these forward-looking statements
to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks,
uncertainties and assumptions made by management about us,
including, among other things, changes in industry conditions
created by the Telecommunications Act of 1996 and related state and
federal legislation and regulations, the impact of economic
conditions related to financial performance of customers, business
partners, competitors and peers within the telecommunications
industry, the recovery of the substantial costs incurred over the
past few years in connection with our expansion into new
businesses, retention of our existing customer base and our ability
to attract new customers, our ability to control pricing and
product offerings in a highly competitive industry, the performance
of our investments, rapid changes in technology, our ability to
manage capital expenditures related to changes in technology,
actions of our competitors, the impact of economic and political
events on our business, operating regions and customers, including
terrorist attacks and the finalization and completion of the audit
of the Company's financial statements and the assessment of the
effectiveness of the Company's internal control over financial
reporting as of December 31, 2004. In some cases, these forward-
looking statements can be identified by the use of words such as
"may," "will," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "project," "intend" or "potential" or the
negative of those words or other comparable words. These
forward-looking statements may differ materially from actual events
or results because they involve estimates, assumptions and
uncertainties and should be viewed with caution. We undertake no
obligation to update or revise any forward-looking statements,
whether as the result of new information, future events or
otherwise. Readers are also directed to consider the risks,
uncertainties and other factors discussed in documents filed by us
with the Securities and Exchange Commission, including those
matters summarized under the caption "Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2003. CT
Communications, Inc. Consolidated Statements of Income (unaudited,
in thousands, except per share amounts) (Restated) Three Months
Ended Three Months Ended % December 31, 2004 December 31, 2003
Change Operating Revenue ILEC Services $23,061 $24,884 (7.3%) CLEC
Services 4,538 4,922 (7.8%) Greenfield Services 2,239 1,806 24.0%
Wireless Services 8,957 7,319 22.4% Internet & Data Services
2,724 2,766 (1.5%) Total Operating Revenue 41,519 41,697 (0.4%)
Operating Expense ILEC Services 16,784 16,808 (0.1%) CLEC Services
4,716 5,199 (9.3%) Greenfield Services 3,229 2,931 10.2% Wireless
Services 7,726 7,052 9.6% Internet & Data Services 2,508 2,771
(9.5%) Other 620 844 (26.5%) Total Operating Expense 35,583 35,605
(0.1%) Operating Income 5,936 6,092 (2.6%) Other Income (Expense)
Investment, Equity Method 1,222 1,595 (23.4%) Gains, Interest,
Dividends 529 391 35.3% Impairment On Investments (340) - (100.0%)
Other Expenses, Principally Interest (1,149) (1,235) (7.0%) Total
Other Income (Expense) 262 751 (65.1%) Pre-Tax Income From
Continuing Operations 6,198 6,843 (9.4%) Income Tax Expense 2,129
2,458 (13.4%) Net Income $4,069 $4,385 (7.2%) Weighted Average
Diluted Shares 19,006 18,859 Earnings Per Diluted Common Share
$0.21 $0.23 CT Communications, Inc. Consolidated Statements of
Income (unaudited, in thousands, except per share amounts)
(Restated) Twelve Months Ended Twelve Months Ended % December 31,
2004 December 31, 2003 Change Operating Revenue ILEC Services
$93,016 $96,079 (3.2%) CLEC Services 19,123 19,681 (2.8%)
Greenfield Services 8,108 6,223 30.3% Wireless Services 32,548
28,517 14.1% Internet & Data Services 10,885 10,461 4.1% Total
Operating Revenue 163,680 160,961 1.7% Operating Expense ILEC
Services 65,856 65,830 0.0% CLEC Services 19,969 21,354 (6.5%)
Greenfield Services 12,004 10,919 9.9% Wireless Services 28,472
26,423 7.8% Internet & Data Services 11,288 11,302 (0.1%) Other
2,448 3,696 (33.8%) Total Operating Expense 140,037 139,524 0.4%
Operating Income 23,643 21,437 10.3% Other Income (Expense)
Investment, Equity Method 5,771 5,829 (1.0%) Gains, Interest,
Dividends 1,463 16,269 (91.0%) Impairment On Investments (1,834)
(1,744) 5.2% Other Expenses, Principally Interest (4,806) (6,443)
(25.4%) Total Other Income (Expense) 594 13,911 (95.7%) Pre-Tax
Income From Continuing Operations 24,237 35,348 (31.4%) Income Tax
Expense 9,480 13,570 (30.1%) Income From Continuing Operations
14,757 21,778 (32.2%) (Loss) From Discontinued Operations, Net Of
Tax - (424) (100.0%) Net Income $14,757 $21,354 (30.9%) Weighted
Average Diluted Shares 19,007 18,808 Earnings Per Diluted Common
Share $0.78 $1.13 CT Communications, Inc. Consolidated Balance
Sheets (unaudited, in thousands) (Restated) December 31, December
31, 2004 2003 ASSETS Cash and Cash Equivalents $28,358 $16,957
Accounts Receivable and Unbilled Revenue, Net 17,371 20,662 Other
Assets 5,367 5,372 Current Assets 51,096 42,991 Investment
Securities 5,190 7,518 Investments in Unconsolidated Companies
16,002 13,034 Property, Plant and Equipment, Net 207,949 211,521
Other Assets 50,395 47,621 TOTAL ASSETS $330,632 $322,685
LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of Long-Term
Debt $5,000 $- Accounts Payable 6,822 6,250 Customer Deposits and
Advance Billings 3,307 2,840 Other Accrued Liabilities 18,474
17,589 Liabilities of Discontinued Operations 604 1,072 Current
Liabilities 34,207 27,751 Long-Term Debt 65,000 80,000 Deferred
Credits and Other Liabilities 42,953 37,350 Stockholders' Equity
188,472 177,584 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $330,632
$322,685 CT Communications, Inc. Customer Information December 31,
2004 December 31, 2003 % Change ILEC Access Lines Business Lines
28,710 29,137 (1.5%) Residential Lines 84,206 86,401 (2.5%) Total
ILEC Lines 112,916 115,538 (2.3%) CLEC Access Lines 31,718 29,490
7.6% Greenfield Access Lines 12,975 10,095 28.5% Total Wired Access
Lines 157,609 155,123 1.6% Wireless Subscribers 43,213 38,458 12.4%
Long Distance Lines In ILEC 84,773 84,714 0.1% In CLEC 23,723
20,916 13.4% In Greenfield 6,877 4,806 43.1% Total Long Distance
Lines 115,373 110,436 4.5% Internet Access Customers Dial-Up 9,041
10,838 (16.6%) DSL Lines 13,887 10,183 36.4% High Speed 606 545
11.2% Total Internet Access Customers 23,534 21,566 9.1% Greenfield
Projects # Of Potential Lines # Of Lines In Service At Completion
Projects By Year Signed 1999 1,451 1,536 2 2000 4,397 11,906 17
2001 3,296 13,577 32 2002 3,177 12,694 24 2003 525 4,846 18 2004
129 3,864 12 Totals 12,975 48,423 105 By Type Mall 2,601 2,800 3
Single Family Homes 6,843 33,403 55 Multi-Dwelling Units 2,954
10,974 39 Business 577 1,246 8 Totals 12,975 48,423 105 CT
Communications, Inc. Other Selected Financial Data (unaudited, in
thousands) Capital Expenditures (Restated) (Restated) Three Months
Three Months Year Year Ended Ended Ended Ended December 31,
December 31, December 31, December 31, 2004 2003 2004 2003 ILEC
$6,431 $3,407 $16,204 $13,280 CLEC 244 297 784 1,004 Greenfield
2,174 1,532 5,315 4,680 Wireless 325 142 2,229 757 Internet 296 480
1,380 2,434 Other 433 981 1,285 2,243 Total $9,903 $6,839 $27,197
$24,398 % of Revenue 23.9% 16.4% 16.6% 15.2% Depreciation Expense
(Restated) (Restated) Three Months Three Months Year Year Ended
Ended Ended Ended December 31, December 31, December 31, December
31, 2004 2003 2004 2003 ILEC $4,766 $4,750 $18,925 $19,157 CLEC 421
629 2,309 2,550 Greenfield 1,035 689 3,274 2,515 Wireless 494 457
1,930 1,689 Internet 617 412 2,954 1,551 Other 339 412 1,378 1,404
Total $7,672 $7,349 $30,770 $28,866 DATASOURCE: CT Communications,
Inc. CONTACT: Jim Hausman, +1-704-722-2410, or Duane Johnson,
+1-704-722-3231, both of CT Communications, Inc. Web site:
http://www.ctc.net/
Copyright
CT Communications (NASDAQ:CTCI)
Historical Stock Chart
From May 2024 to Jun 2024
CT Communications (NASDAQ:CTCI)
Historical Stock Chart
From Jun 2023 to Jun 2024