WAYNESBORO, Va., Feb. 27, 2014 /PRNewswire/ — NTELOS Holdings Corp. (the “Company,” NASDAQ: NTLS), a leading regional provider of nationwide wireless voice and data communications and home to the “best value in wireless,” announced today operating and financial results for its fourth quarter and year ended December 31, 2013. These results supplement the preliminary information released on January 14, 2014.
Financial Highlights
- Operating revenues increased 4% to $121.8 million for the fourth quarter 2013, compared to $117.4 million for the fourth quarter 2012. Operating revenues for the year 2013 increased 8% to $491.9 million, compared to $454.0 million for the year 2012;
- Retail revenues, which include subscriber and equipment revenue, increased 8% to $80.8 million for the fourth quarter 2013, compared to $75.1 million for the fourth quarter 2012. Retail revenues for the year 2013 increased 11% to $317.1 million, compared to $285.1 million for the year 2012;
- Wholesale and other revenues derived primarily from the Company’s Strategic Network Alliance with Sprint were $41.0 million for the fourth quarter 2013, compared to $42.2 million for the fourth quarter 2012. Wholesale and other revenues for the year 2013 were $174.8 million (inclusive of $9.0 million related to the Sprint settlement), compared to $168.9 million for the year 2012; and
- Adjusted EBITDA was $26.7 million for the fourth quarter 2013, compared to $33.0 million for the fourth quarter 2012. Adjusted EBITDA for the year 2013 was $150.9 million (inclusive of $9.6 million related to the Sprint settlement), up 12% from $134.7 million for the year 2012.
“During the fourth quarter, we continued to execute on our retail/wholesale strategy. Our operating results reflect the continued strength of our service offerings, resulting in the tenth consecutive quarter of positive net ports and an ending subscriber base approximately 6% above year ago levels,” said James A. Hyde, CEO of NTELOS Holdings Corp. “This performance in our retail business enabled us to post a third consecutive year of strong growth in operating revenues.”
Subscriber Highlights (previously released on January 14, 2014)
Total Subscribers
- Total subscribers were 464,600 as of December 31, 2013, compared to 439,600 for the same period of 2012;
- Total subscriber gross additions for the fourth quarter 2013 were 50,800, compared to 46,200 for the same period of 2012. Total net subscriber additions for the fourth quarter 2013 were 7,500, compared to 9,300 for the same period of 2012; and
- Total subscriber gross additions for the year 2013 were 183,900 compared to 171,300 for the year 2012. Total net subscriber additions for the year 2013 were 25,000, compared to 25,100 for the year 2012.
Postpay Subscribers
- Postpay subscriber gross additions for the fourth quarter 2013 were 28,700, compared to 25,100 for the fourth quarter 2012 and 20,000 for the third quarter 2013;
- Net postpay subscriber additions were 8,900 for the fourth quarter 2013, compared to 9,200 for the fourth quarter 2012 and 400 for the third quarter 2013;
- Postpay churn for the fourth quarter 2013 was 2.2%, compared to 1.8% for the fourth quarter 2012; and
- As of December 31, 2013, total postpay subscribers were 306,700.
Prepay Subscribers
- Prepay subscriber gross additions for the fourth quarter 2013 were 22,100, compared to 21,100 for the fourth quarter 2012 and 24,500 for the third quarter 2013;
- Net prepay subscriber additions (losses) were (1,400) for the fourth quarter 2013, compared to 100 for the fourth quarter 2012 and 1,900 for the third quarter 2013;
- Prepay churn for the fourth quarter 2013 was 4.9%, compared to 4.9% for the fourth quarter 2012; and
- As of December 31, 2013, total prepay subscribers were 157,900.
Mr. Hyde concluded, “We expect the wireless environment to remain very dynamic. As a result, we will continue to take decisive actions to be competitive, including the introduction of nControl—our new and innovative service offering—to attract new and retain existing customers. We believe that these actions, combined with the further rollout of our LTE network and the recently completed and successful refinancing of our bank loans, will allow us to continue to drive value for all of our key stakeholders.”
Net Income
Net income after net income attributable to noncontrolling interests was $24.7 million, or $1.13 per diluted share, for the year 2013, compared to $18.4 million, or $0.86 per diluted share, for the year 2012.
Declaration of Dividend
On February 24, 2014, the Company’s Board of Directors declared a quarterly cash dividend on its common stock in the amount of $0.42 per share to be paid on April 11, 2014 to stockholders of record on March 14, 2014.
Business Outlook
As previously released, for the year ending December 31, 2014, the Company expects full year 2014 Adjusted EBITDA to be between $140.0 million and $150.0 million. In addition, the Company expects its full year 2013 capital expenditures to be between $85.0 million and $95.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its fourth quarter and year-end 2013 results this morning, February 27, 2014, at 10:00 a.m. ET. To participate, please dial 1-888-317-6016, 1-855-669-9657 in Canada and 1-412-317-6016 for international, approximately 10 minutes before the scheduled start of the call. The conference call and accompanying presentation will also be accessible live on the Investor Relations section of the Company’s website at http://ir.ntelos.com.
An archive of the conference call will be available online at http://ir.ntelos.com beginning approximately one hour after the call. A replay will also be available via telephone by dialing 1-877-344-7529, 1-855-669-9658 in Canada or 1-412-317-0088 internationally and entering access code 10039912 beginning approximately one hour after the call and continuing until March 14, 2014.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to NTELOS Holdings Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, gain/loss on sale of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, business separation charges, secondary offering cost, net loss from discontinued operations and acquisition related charges.
ARPU, or average monthly revenue per user, is computed by dividing service revenues per period by the average number of subscribers during that period. Please see the footnotes in the exhibits for a complete definition of this measure.
Adjusted EBITDA is a key metric used by investors to determine if the Company is generating sufficient cash flows to continue to produce shareholder value, provide liquidity for future growth and continue to fund dividends. ARPU provides management with useful information concerning the appeal of the Company’s rate plans and service offerings and the Company’s performance in attracting and retaining high value customers.
Adjusted EBITDA and ARPU are non-GAAP financial performance measures. They should not be considered in isolation or as an alternative to measures determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Please refer to the exhibits and materials posted on the Company’s website for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.
About NTELOS
NTELOS Holdings Corp. (NASDAQ: NTLS), operating through its subsidiaries as “nTelos Wireless,” is headquartered in Waynesboro, VA, and provides high-speed, dependable nationwide voice and data coverage for over 464,600 retail subscribers based in Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company’s licensed territories have a total population of approximately 8.0 million residents, of which its wireless network covers approximately 6.0 million residents. The Company is also the exclusive wholesale provider of wireless digital PCS services to Sprint Corporation in the Company’s western Virginia and West Virginia service area for all Sprint CDMA wireless customers.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. There are important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements. We advise the reader to review in detail the cautionary statements and risk factors included in our SEC filings, including our most recent Annual Report filed on Form 10-K.
Exhibits:
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Operations
- Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
- Key Metrics
- ARPU Reconciliation
| NTELOS Holdings Corp. | |||||
| Condensed Consolidated Balance Sheets | (Unaudited) | (Unaudited) | |||
| December 31, 2013 | December 31, 2012 | ||||
| (In thousands) | |||||
| ASSETS | |||||
| Current Assets | |||||
| Cash | $ 88,441 | $ 76,197 | |||
| Restricted cash | 2,167 | – | |||
| Accounts receivable, net | 37,740 | 51,301 | |||
| Inventories and supplies | 23,962 | 9,581 | |||
| Deferred income taxes | 10,650 | 4,297 | |||
| Prepaid expenses and other current assets | 20,808 | 17,695 | |||
| 183,768 | 159,071 | ||||
| Securities and Investments | 1,499 | 1,499 | |||
| Property, Plant and Equipment, net | 319,376 | 303,103 | |||
| Intangible Assets | |||||
| Goodwill | 63,700 | 63,700 | |||
| Radio spectrum licenses | 131,834 | 132,033 | |||
| Customer relationships and trademarks, net | 6,985 | 9,996 | |||
| Deferred Charges and Other Assets | 9,089 | 10,712 | |||
| Total Assets | $ 716,251 | $ 680,114 | |||
| LIABILITIES AND EQUITY | |||||
| Current Liabilities | |||||
| Current portion of long-term debt | $ 5,410 | $ 5,429 | |||
| Accounts payable | 33,677 | 23,445 | |||
| Dividends payable | 9,034 | – | |||
| Accrued expenses and other current liabilities | 31,389 | 34,457 | |||
| 79,510 | 63,331 | ||||
| Long-Term Debt | 484,956 | 488,650 | |||
| Other Long-Term Liabilities | 107,992 | 83,598 | |||
| Equity | 43,793 | 44,535 | |||
| Total Liabilities and Equity | $ 716,251 | $ 680,114 | |||
| NTELOS Holdings Corp. | ||||||
| Condensed Consolidated Statements of Operations | Three Months Ended | Twelve Months Ended | ||||
| (Unaudited) | (Unaudited) | |||||
| (In thousands, except per share amounts) | December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||
| Operating Revenues | $ 121,766 | $ 117,398 | $ 491,882 | $ 453,989 | ||
| Operating Expenses | ||||||
| Cost of sales and services | 50,977 | 47,420 | 184,590 | 174,683 | ||
| Customer operations | 37,513 | 30,691 | 130,650 | 120,150 | ||
| Corporate operations | 8,426 | 7,848 | 32,304 | 32,756 | ||
| Depreciation and amortization | 17,486 | 17,440 | 72,944 | 63,258 | ||
| Gain on sale of intangible assets | – | – | (4,442) | – | ||
| 114,402 | 103,399 | 416,046 | 390,847 | |||
| Operating Income | 7,364 | 13,999 | 75,836 | 63,142 | ||
| Other Expense | ||||||
| Interest expense | (7,504) | (6,651) | (29,743) | (22,944) | ||
| Other expense, net | (161) | (7,038) | (810) | (7,194) | ||
| (7,665) | (13,689) | (30,553) | (30,138) | |||
| Income (Loss) before Income Taxes | (301) | 310 | 45,283 | 33,004 | ||
| Income Taxes | 80 | (454) | 18,544 | 12,676 | ||
| Net Income (Loss) | (381) | 764 | 26,739 | 20,328 | ||
| Net Income Attributable to Noncontrolling Interests | (403) | (443) | (2,061) | (1,941) | ||
| Net Income (Loss) Attributable to NTELOS Holdings Corp. | $ (784) | $ 321 | $ 24,678 | $ 18,387 | ||
| Earnings per Share Attributable to NTELOS Holdings Corp.: | ||||||
| Basic | $ (0.04) | $ 0.02 | $ 1.17 | $ 0.88 | ||
| Weighted average shares outstanding – basic | 21,061 | 20,922 | 21,026 | 20,889 | ||
| Diluted | $ (0.04) | $ 0.02 | $ 1.13 | $ 0.86 | ||
| Weighted average shares outstanding – diluted | 22,008 | 21,380 | 21,826 | 21,337 | ||
| Cash Dividends Declared per Share – Common Stock | $ 0.42 | $ 0.42 | $ 1.68 | $ 1.68 | ||
| NTELOS Holdings Corp. | |||||||||
| Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA | |||||||||
| (In thousands) | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||
| Net income attributable to NTELOS Holdings Corp. | $ (784) | $ 321 | $ 24,678 | $ 18,387 | |||||
| Net income attributable to noncontrolling interests | 403 | 443 | 2,061 | 1,941 | |||||
| Net income | $ (381) | $ 764 | $ 26,739 | $ 20,328 | |||||
| Interest expense | 7,504 | 6,651 | 29,743 | 22,944 | |||||
| Income taxes | 80 | (454) | 18,544 | 12,676 | |||||
| Other expense, net | 161 | 7,038 | 810 | 7,194 | |||||
| Operating income | $ 7,364 | $ 13,999 | $ 75,836 | $ 63,142 | |||||
| Depreciation and amortization | 17,486 | 17,440 | 72,944 | 63,258 | |||||
| Gain on sale of intangible assets | – | – | (4,442) | – | |||||
| Accretion of asset retirement obligations | 171 | 174 | 622 | 637 | |||||
| Equity-based compensation | 1,330 | 1,346 | 5,553 | 6,029 | |||||
| Business separation and advisory charges 1 2 | 375 | 56 | 375 | 1,660 | |||||
| Adjusted EBITDA | $ 26,726 | $ 33,015 | $ 150,888 | $ 134,726 | |||||
| 1 | Charges for legal and consulting services in connection with the separation of the Company’s wireless and wireline operations in 2012. | ||||||||
| 2 | Charges for advisory fees for secondary offering in 2013. | ||||||||
| NTELOS Holdings Corp. | ||||||||||
| Key Metrics | Twelve Months Ended | |||||||||
| Quarter Ended: | 12/31/2012 | 3/31/2013 | 6/30/2013 | 9/30/2013 | 12/31/2013 | 12/31/2012 | 12/31/2013 | |||
| Subscribers | ||||||||||
| Beginning Subscribers | 430,300 | 439,600 | 451,000 | 454,800 | 457,100 | 414,500 | 439,600 | |||
| Postpay | 288,900 | 297,400 | 299,700 | 298,700 | 298,000 | 292,400 | 297,400 | |||
| Prepay | 141,400 | 142,200 | 151,300 | 156,100 | 159,100 | 122,100 | 142,200 | |||
| Gross Additions | 46,200 | 48,500 | 40,100 | 44,500 | 50,800 | 171,300 | 183,900 | |||
| Postpay | 25,100 | 20,200 | 16,300 | 20,000 | 28,700 | 80,900 | 85,200 | |||
| Prepay | 21,100 | 28,300 | 23,800 | 24,500 | 22,100 | 90,400 | 98,700 | |||
| Disconnections | 36,900 | 37,100 | 36,300 | 42,200 | 43,300 | 146,200 | 158,900 | |||
| Postpay | 15,900 | 16,900 | 16,100 | 19,600 | 19,800 | 70,900 | 72,400 | |||
| Prepay | 21,000 | 20,200 | 20,200 | 22,600 | 23,500 | 75,300 | 86,500 | |||
| Net Additions (Losses) | 9,300 | 11,400 | 3,800 | 2,300 | 7,500 | 25,100 | 25,000 | |||
| Postpay | 9,200 | 3,300 | 200 | 400 | 8,900 | 10,000 | 12,800 | |||
| Prepay | 100 | 8,100 | 3,600 | 1,900 | (1,400) | 15,100 | 12,200 | |||
| Ending Subscribers | 439,600 | 451,000 | 454,800 | 457,100 | 464,600 | 439,600 | 464,600 | |||
| Postpay | 297,400 | 299,700 | 298,700 | 298,000 | 306,700 | 297,400 | 306,700 | |||
| Prepay | 142,200 | 151,300 | 156,100 | 159,100 | 157,900 | 142,200 | 157,900 | |||
| Churn, net | 2.8% | 2.8% | 2.7% | 3.1% | 3.1% | 2.9% | 2.9% | |||
| Postpay | 1.8% | 1.9% | 1.8% | 2.2% | 2.2% | 2.0% | 2.0% | |||
| Prepay | 4.9% | 4.6% | 4.4% | 4.8% | 4.9% | 4.6% | 4.7% | |||
| Other Items | ||||||||||
| ARPU | $ 52.78 | $ 53.87 | $ 53.82 | $ 54.29 | $ 54.11 | $ 50.57 | $ 54.02 | |||
| Postpay | $ 61.19 | $ 62.67 | $ 63.48 | $ 64.62 | $ 63.91 | $ 57.82 | $ 63.67 | |||
| Prepay | $ 35.41 | $ 35.85 | $ 35.04 | $ 34.80 | $ 35.56 | $ 35.31 | $ 35.30 | |||
| Data ARPU | $ 21.03 | $ 21.86 | $ 22.14 | $ 22.35 | $ 24.73 | $ 20.00 | $ 22.78 | |||
| Licensed Population (millions) | 7.9 | 7.9 | 7.9 | 7.9 | 8.0 | 7.9 | 8.0 | |||
| Covered Population (millions) | 6.0 | 6.0 | 6.0 | 6.0 | 6.0 | 6.0 | 6.0 | |||
| Total Cell Sites | 1,429 | 1,431 | 1,432 | 1,434 | 1,444 | 1,429 | 1,444 | |||
| SNA Revenues (000’s) | $ 40,747 | $40,152 | $39,607 | $48,644 | $ 39,326 | $162,645 | $167,729 | |||
| NTELOS Holdings Corp. | ||||||||
| ARPU Reconciliation | Three Months Ended | Twelve Months Ended | ||||||
| Average Monthly Revenue per User (ARPU) 1 | December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||
| (In thousands, except for subscribers and ARPU) | ||||||||
| Operating Revenues | $ 121,766 | $ 117,398 | $ 491,882 | $ 453,989 | ||||
| Less: Equipment revenue from sales to new customers | (3,691) | (3,808) | (13,911) | (15,041) | ||||
| Less: Equipment revenue from sales to existing customers | (2,882) | (3,315) | (11,340) | (15,037) | ||||
| Less: Wholesale, other and adjustments | (40,525) | (41,488) | (172,764) | (165,765) | ||||
| Gross subscriber revenue | 74,668 | 68,787 | 293,867 | 258,146 | ||||
| Less: prepay subscriber revenue | (16,494) | (14,823) | (63,826) | (56,330) | ||||
| Less: adjustments to prepay subscriber revenue | (462) | (237) | (1,474) | (1,706) | ||||
| Gross postpay subscriber revenue | $ 57,712 | $ 53,727 | $ 228,567 | $ 200,110 | ||||
| Prepay subscriber revenue | 16,494 | 14,823 | 63,826 | 56,330 | ||||
| Plus: adjustments to prepay subscriber revenue | 462 | 237 | 1,474 | 1,706 | ||||
| Gross prepay subscriber revenue | $ 16,956 | $ 15,060 | $ 65,300 | $ 58,036 | ||||
| Average number of subscribers | 459,968 | 434,457 | 453,300 | 425,377 | ||||
| Total ARPU | $ 54.11 | $ 52.78 | $ 54.02 | $ 50.57 | ||||
| Average number of postpay subscribers | 301,028 | 292,668 | 299,161 | 288,428 | ||||
| Postpay ARPU | $ 63.91 | $ 61.19 | $ 63.67 | $ 57.82 | ||||
| Average number of prepay subscribers | 158,940 | 141,789 | 154,138 | 136,949 | ||||
| Prepay ARPU | $ 35.56 | $ 35.41 | $ 35.30 | $ 35.31 | ||||
| Gross subscriber revenue | 74,668 | 68,787 | 293,867 | 258,146 | ||||
| Less: voice and other feature revenue | (40,544) | (41,379) | (169,952) | (156,032) | ||||
| Data revenue | $ 34,124 | $ 27,408 | $ 123,915 | $ 102,114 | ||||
| Average number of subscribers | 459,968 | 434,457 | 453,300 | 425,377 | ||||
| Total Data ARPU | $ 24.73 | $ 21.03 | $ 22.78 | $ 20.00 | ||||
| Gross postpay subscriber revenue | 57,712 | 53,727 | 228,567 | 200,110 | ||||
| Less: postpay voice and other feature revenue | (33,368) | (34,651) | (142,142) | (130,601) | ||||
| Postpay data revenue | $ 24,344 | $ 19,076 | $ 86,425 | $ 69,509 | ||||
| Gross prepay subscriber revenue | 16,956 | 15,060 | 65,300 | 58,036 | ||||
| Less: prepay voice and other feature revenue | (7,176) | (6,728) | (27,810) | (25,431) | ||||
| Prepay data revenue | $ 9,780 | $ 8,332 | $ 37,490 | $ 32,605 | ||||
| Average number of postpay subscribers | 301,028 | 292,668 | 299,161 | 288,428 | ||||
| Postpay data ARPU | $ 26.96 | $ 21.73 | $ 24.07 | $ 20.08 | ||||
| Average number of prepay subscribers | 158,940 | 141,789 | 154,138 | 136,949 | ||||
| Prepay data ARPU | $ 20.51 | $ 19.59 | $ 20.27 | $ 19.84 | ||||
| 1 | Average monthly revenue per user (ARPU) is computed by dividing service revenues per period by the average number of subscribers during that period. ARPU as defined may not be similar to ARPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company’s consolidated statements of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPU in order to determine their effectiveness. ARPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company’s performance in attracting and retaining high-value customers. | ||||||||||
Investor Relations Contacts:
Jeffrey Goldberger / Rob Fink
KCSA Strategic Communications
P: 212-896-1249 / 212-896-1206
Email: jgoldberger@kcsa.com / rfink@kcsa.com
SOURCE NTELOS Holdings Corp.
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