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Press Release -- February 27th, 2014
Source: nTelos
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NTELOS Holdings Corp. Reports Fourth Quarter and Year-End 2013 Results

-Reports Full Year Retail Revenue of $317.1 million, up 11% from 2012  -Reports Year End Subscribers of 464,600, up 6% from 2012  -Completes Refinancing of Term A Loans in January  -Declares Quarterly Dividend of $0.42 Per Share
Company Release - 02/27/2014 06:00

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, news, filings), 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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