LUBBOCK, Texas--(BUSINESS WIRE)--NTS, Inc., f/k/a Xfone, Inc. (NYSE MKT/TASE: NTS) (“NTS” or “the Company”) announces results for the three and six months ended June 30, 2012.
Revenues
Revenues from the Company’s Fiber-To-The-Premise (“FTTP”) business grew 48.4% to $4.5 million in the second quarter ended June 30, 2012, as compared to $3.0 million for the same prior year period. FTTP revenues represented 29.9% of consolidated revenues for the second quarter of 2012, as compared to 21.6% of consolidated revenues for the second quarter of 2011. Sequentially, FTTP revenues grew 10.8% in the second quarter of 2012 as compared to FTTP revenues of $4.1 million in the first quarter of 2012.
Consolidated revenues for the quarter ended June 30, 2012 were $15.1 million, a 7.0% increase compared to $14.1 million in the quarter ended June 30, 2011, mainly attributed to the growth of the Company’s FTTP business. Sequentially, consolidated revenues increased slightly from $14.9 million in the first quarter of 2012.
For the first six months of 2012, revenues from the Company’s FTTP business grew 43.4% to $8.6 million from $6.0 million in the first six months of 2011. Consolidated revenues for the six months ended June 30, 2012 were $30.0 million, an increase of 5.8% compared to consolidated revenues of $28.4 million for the six months ended June 30, 2011.
Customer Expansion
The Company’s total number of FTTP customers as of June 30, 2012 was 8,516 compared to 6,111 FTTP customers as of June 30, 2011, representing an increase of 39.4%.
Average Revenue Per User for all of the Company’s fiber markets is approximately $413 per month for business customers and approximately $100 per month for residential customers.
The construction of the NTS FTTP network has continued as scheduled. The FTTP network build out is financed by $99.9 million in funds from the Federal Broadband Stimulus Program, of which 45.9% is in the form of grants and 54.1% is in the form of low cost long-term loans.
New Market Progress
As previously announced, during the second quarter of 2012, NTS began construction on its FTTP network in southern Louisiana. As the build out progresses, the fiber network will eventually include the communities of Hammond, Ponchatoula, Natalbany, Tickfaw, Independence and Amite, Louisiana, adding approximately 11,500 FTTP passings. Additionally, during the second quarter, NTS began signing up fiber customers in Wilson, Meadow, Lamesa and Ropesville, Texas. The Company now has a fiber presence in 13 communities in Texas and continues to make solid progress marketing and signing up new subscribers in the communities it enters.
NTS also announced plans to expand its fiber network to select areas of Wichita Falls, Texas, targeting more than 1,000 potential business customers in that market.
Click Here to View FTTP Trendline Charts
EBITDAS
EBITDAS for the second quarter of 2012 was $2.9 million, a 36.7% increase over EBITDAS of $2.1 million in the same quarter last year and a 6.0% increase sequentially when compared to the first quarter of 2012. EBITDAS margin in the quarter ended June 30, 2012 was 19.0% compared to EBITDAS margin of 14.9% for the quarter ended June 30, 2011. This is mainly attributed to the increase in higher margin FTTP revenue. The Company uses EBITDAS to measure its profitability as the component of stock based compensation is a non-cash expense.
Net Income
For the quarter ended June 30, 2012, the Company reported net income from continued operations of $73 thousand or an insignificant amount per basic and diluted share, assuming 41,186,596 shares outstanding compared to a net loss of $818 thousand or a loss of $0.04 per diluted share, assuming 21,119,488 shares outstanding for the quarter ended June 30, 2011.
For the quarter ended June 30, 2012, NTS recorded a net financing expense of $1.1 million compared to a net financing expense of $1.7 million for the quarter ended June 30, 2011.
For the six months ended June 30, 2012, NTS reported a net loss of $266 thousand or a loss of $0.01 per basic and diluted share, assuming 41,186,596 shares outstanding compared to a net loss of $1.5 million or $0.07 per basic and diluted share, assuming 21,119,488 shares outstanding for the six months ended June 30, 2011.
Mr. Guy Nissenson, Chairman, President and CEO of NTS commented, “This was another strong quarter for our Company where we continue to make progress bringing our fiber network to new markets and adding new customers. Our consistent increase of high margin fiber revenue is offsetting the attrition in our legacy copper customers, resulting in both higher consolidated revenue and improved margins. To date, we have brought our fiber network to 13 communities in Texas and during the second quarter we began our fiber buildout in southern Louisiana.
“During the second quarter, we continued to strengthen our balance sheet with the refinancing of our short-term note with Burlingame Equity Investors with a long-term, $3.5 million loan facility. The refinancing also improved the Company’s working capital conditions and will help improve liquidity over the short term as we continue to expand our network. We also secured additional capital for the Wichita Falls ‘metro build’, a build that is targeting over 1,000 business customers. This project is especially attractive given its proximity to our existing network, and the scale and knowledge that NTS has acquired deploying its existing fiber network. We remain very excited about these opportunities and are eager to expand our network and bring it to new communities.”
Conference Call
The Company will host a conference call today, August 14, 2012 at 10:00 a.m. Eastern Time to discuss its financial results. The conference call may be accessed in the U.S. and Canada by dialing toll-free 1-877-407-8035. International callers may access the call by dialing 1-201-689-8035.
A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter account number 286 and conference number 398711.
To access the live webcast, log onto the NTS website at http://www.ntscom.com. The webcast can also be accessed at http://www.InvestorCalendar.com. An online replay will be available shortly after the call.
About NTS
NTS is a provider of high speed broadband services, including internet access, digital cable TV programming and local and long distance telephone service to residential and business customers in northern Texas and southeastern Louisiana. NTS' Fiber-To-The-Premise (FTTP) network provides one of the fastest internet connections available. For the Company's website, please visit: www.ntscom.com.
In addition to disclosing financial measures prepared in accordance with Accounting Principles Generally Accepted in the US (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP EBITDAS (non-GAAP earnings before interest, taxes, depreciation, amortization and stock-based compensation, other expenses, acquisition costs and non-recurring loss). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
There are a number of limitations related to the use of non-GAAP EBITDAS. First, these non-GAAP financial measures exclude depreciation and amortization expenses that are recurring and significant non-recurring expenses. First, Depreciation and amortization have been, and will continue to be for the foreseeable future, a significant recurring expense with an impact upon our company notwithstanding the lack of immediate impact upon cash. Second, there is no assurance the components of the costs that we exclude in our calculation of non-GAAP operating loss do not differ from the components that our peer companies exclude when they report their results of operations. Third, there is no assurance we will avoid further non-recurring costs associated with other balance sheet items. Our management compensates for these limitations by providing specific reconciliation of GAAP amounts to these non-GAAP financial EBITDAS and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. Readers should note the chart at the end of this release which sets forth how we calculate the non-GAAP EBITDAS.
This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." NTS' financial and operational results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.
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NTS, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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June 30, |
June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | ||||||||||||||||
| Services on Fiber-To-The-Premise network | $ | 4,513,105 | $ | 3,041,161 | $ | 8,585,772 | $ | 5,986,561 | ||||||||
| Leased local loop services and other | 10,571,454 | 11,057,995 | 21,422,616 | 22,369,813 | ||||||||||||
| Total Revenues | 15,084,559 | 14,099,156 | 30,008,388 | 28,356,374 | ||||||||||||
| Expenses | ||||||||||||||||
| Cost of services (excluding depreciation and amortization shown below) | 6,820,276 | 6,849,829 | 13,942,930 | 13,861,304 | ||||||||||||
| Selling, general and administrative | 5,436,522 | 5,210,519 | 10,573,283 | 10,527,967 | ||||||||||||
| Depreciation and amortization | 1,452,468 | 1,227,181 | 2,986,441 | 2,396,463 | ||||||||||||
| Financing expenses, net | 1,119,237 | 1,728,264 | 2,560,936 | 3,252,694 | ||||||||||||
| Other expenses | 179,207 | 143,114 | 377,876 | 289,846 | ||||||||||||
| Total Expenses | 15,007,710 | 15,158,907 | 30,441,466 | 30,328,274 | ||||||||||||
| Income (loss) before taxes | 76,849 | (1,059,751 | ) | (433,078 | ) | (1,971,900 | ) | |||||||||
| Income tax benefit (expense) | (4,104 | ) | 241,984 | 166,822 | 520,519 | |||||||||||
| Net income (loss) | $ | 72,745 | $ | (817,767 | ) | $ | (266,256 | ) | $ | (1,451,381 | ) | |||||
| Basic and diluted income (loss) per share | $ | 0.00 | * | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.07 | ) | ||||
| Basic and diluted weighted average number of shares outstanding | 41,186,596 | 21,119,488 | 41,186,596 | 21,119,488 | ||||||||||||
* Represents amount less than $0.01.
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Reconciliation of EBITDAS to Net income (loss) applicable to common stockholders as it is presented on the Condensed Consolidated Statements of Operations for NTS, Inc. |
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| June 30, |
June 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net income (loss) attributed to shareholders | $ | 72,745 | $ | (817,767 | ) | $ | (266,256 | ) | $ | (1,451,381 | ) | |||||
| Depreciation and amortization | 1,452,468 | 1,227,181 | 2,986,441 | 2,396,463 | ||||||||||||
| Compensation in connection with the issuance of warrants and options | 38,616 | 58,631 | 79,146 | 141,627 | ||||||||||||
| Financing expense , net | 1,119,237 | 1,728,264 | 2,560,936 | 3,252,694 | ||||||||||||
| Other expenses | 179,207 | 143,114 | 377,876 | 289,846 | ||||||||||||
| Income tax expense (benefit) | 4,104 | (241,984 | ) | (166,822 | ) | (520,519 | ) | |||||||||
| EBITDAS | $ | 2,866,377 | $ | 2,097,439 | $ | 5,571,321 | $ | 4,108,730 | ||||||||