Delivers 3Q15 Revenue of $51 million and Adjusted EBITDA of $22.3 Million
Reiterates 2015 Revenue and Adjusted EBITDA Guidance of Approximately $202 Million and Approximately $92 Million, respectively
3Q15 Fiber to the Cell (“FTTC”) Revenue exceeds $7.5 million, up 59% Year-over-Year
3Q15 Enterprise Revenue increases more than 10% Year-over-Year to $11.6 Million
WAYNESBORO, Va.–(BUSINESS WIRE)–Lumos Networks Corp. (“Lumos Networks”, “Lumos” or the “Company”) (Nasdaq: LMOS), a leading fiber-based service provider of data, voice and IP-based telecommunication services in the Mid-Atlantic region, today announced its third quarter financial results. Total revenue in the third quarter of 2015 was $51 million, up nearly 1% from the prior year period. Total Data segment revenue grew over 8% year-over-year to approximately $28.6 million and constituted over 56% of total revenue, up from 52% in the prior year period.
In the aggregate, FTTC and Enterprise revenue grew nearly 6% sequentially and 26% year-over-year to over $19 million in the third quarter, and constituted 67% of total data revenue, up from 57% in the prior year period. In the aggregate, Ethernet and other advanced fiber technologies account for 90-95% of revenue within these two product groups.
The Company generated operating income of $8.6 million and $26.4 million for the three and nine months ended September 30, 2015, respectively. Net income attributable to Lumos Networks Corp. was $1.3 million, or 6 cents per diluted share, for the third quarter of 2015 and $7.4 million, or 32 cents per diluted share, for the nine months ended September 30, 2015.
“In the third quarter, we continued to make steady progress in our transformation into a fiber bandwidth infrastructure provider,” said Timothy G. Biltz, President and CEO of Lumos Networks. “In addition to reiterating our 2015 guidance for overall revenue and Adjusted EBITDA, we are maintaining our target for overall 2015 Data segment revenue of approximately $115 million, or 8% year-over-year organic revenue growth.”
“Our organic growth rate in our data business, which is amongst the higher in the fiber industry, is driven by continued strength in both our FTTC and Enterprise businesses,” Mr. Biltz continued. “For 2015, we maintain our target for $29 million in FTTC revenue, up approximately 45% year-over-year, and for $46 million in Enterprise revenue, up over 8% from 2014.”
“Our key focus remains the completion of the vast majority of our transformational network expansion project of approximately 665 miles into the Richmond and Norfolk markets by the end of 2015. This network, underpinned by a 257 FTTC site build with a major US wireless carrier, increases our Enterprise addressable market by approximately 60%, or $135 million, and significantly de-risks our business model in 2016.”
Third Quarter 2015 Highlights
- The Company ended 3Q15 with 1,030 unique FTTC sites, up 54 sequentially and an increase of 45% from the prior year. Additionally, Lumos ended the quarter with 1,363 total FTTC connections up nearly 42% from the prior year period.
- In the first nine months of 2015, Lumos renewed Enterprise accounts totaling $603,000 in monthly recurring charges (“MRC”), up over 17% from the prior year period. Year-to-date, Lumos has renewed Enterprise accounts worth over $26 million of total contract value, up approximately 20% from the prior year period.
- Lumos Networks added 308 route miles of fiber in the quarter, the most added organically in the Company’s history, and ended the quarter with 8,408 total route miles. Additionally, Lumos added 68 Enterprise lit buildings in the quarter and 165 in the first nine months of 2015, up over 47% from the prior year period.
Business Outlook
For the full year 2015, the Company reiterates its financial guidance for revenue of approximately $202 million, Adjusted EBITDA of approximately $92 million and capital expenditures of approximately $112 million.
Please see the schedules accompanying this release for additional financial guidance, including reconciliations of non-GAAP measures to GAAP results.
Statements made are based on management’s current expectations. These statements are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements.”
Conference Call
A conference call and simultaneous webcast, hosted by Timothy G. Biltz, CEO, Johan Broekhuysen, CFO, and Will Davis, Vice President of Investor Relations and Chief of Staff, to discuss today’s announcement and to review these financial and operational results and financial guidance will be held at 10:00 A.M. (ET) on November 3, 2015.
The webcast may be accessed via the Internet at http://ir.lumosnetworks.com/ and the live call (“Lumos Networks Third Quarter Earnings Conference Call”) may be accessed with the following numbers:
Domestic: 1-877-510-3772
International: 1-412-902-4135
Canada: 1-855-669-9657
The conference call will be archived and available for replay through November 17, 2015 and may be accessed with the following numbers:
Domestic: 1-877-344-7529
International: 1-412-317-0088
Canada: 1-855-669-9658
Replay pass codes: Conference ID: 10074914
The webcast will also be archived and the replay may be accessed at http://ir.lumosnetworks.com/.
About Lumos Networks
Lumos Networks is a leading fiber-based service provider in the Mid-Atlantic region serving Carrier, Enterprise and Data Center customers, offering end-to-end connectivity in 24 markets in Virginia, Pennsylvania, West Virginia, Maryland, Ohio and Kentucky. With a fiber network of 8,408 fiber route miles and approximately 379,000 total fiber strand miles, Lumos Networks connects 1,030 unique Fiber to the Cell sites, 1,363 total FTTC connections, 33 data centers, including 7 company owned co-location facilities, 1,642 on-net buildings and approximately 2,700 total on-net locations. In 2014, Lumos Networks generated over $106 million in data revenue and nearly $52 million in Adjusted EBITDA over our fiber network. Detailed information about Lumos Networks is available at www.lumosnetworks.com.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to Lumos Networks before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to non-controlling interests, other income or expenses, equity-based compensation charges, acquisition-related charges, amortization of actuarial losses on retirement plans, employee separation charges, restructuring-related charges, gain or loss on settlements and gain or loss on interest rate swap derivatives. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to operating revenues.
Adjusted EBITDA is a non-GAAP financial performance measure. It should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the schedules herein and our SEC filings 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.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation 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,” “scheduled” 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. 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, include, but are not limited to: rapid development and intense competition in the telecommunications and high speed data transport industry; our ability to offset expected revenue declines in legacy voice and access products related to the recent regulatory actions, wireless substitution, technology changes and other factors; our ability to effectively allocate capital and implement our network expansion plans in a timely manner; our ability to complete customer installations in a timely manner; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility and our unsecured debt obligations; our cash and capital requirements; declining prices for our services; our ability to maintain and enhance our network; the potential to experience a high rate of customer turnover; federal and state regulatory fees, requirements and developments; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Report filed on Form 10-K.
Exhibits:
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Income
- Condensed Consolidated Statements of Cash Flows
- Summary of Operating Results, Customer and Network Statistics
- Reconciliation of Net Income Attributable to Lumos Networks Corp. to Adjusted EBITDA
- Business Outlook
| Lumos Networks Corp. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| September 30, 2015 | December 31, 2014 | |||||
| (In thousands) | ||||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 63,791 | $ | 14,140 | ||
| Marketable securities | 60,875 | 16,870 | ||||
| Restricted cash 1 | 370 | 4,208 | ||||
| Accounts receivable, net | 21,867 | 22,925 | ||||
| Other receivables | 789 | 2,113 | ||||
| Income tax receivable | 179 | 172 | ||||
| Prepaid expenses and other | 5,822 | 4,321 | ||||
| Deferred income taxes | 2,360 | 5,601 | ||||
| Total Current Assets | 156,053 | 70,350 | ||||
| Securities and investments | 1,119 | 914 | ||||
| Property, plant and equipment, net | 479,177 | 429,451 | ||||
| Other Assets | ||||||
| Goodwill | 100,297 | 100,297 | ||||
| Other intangibles, net | 11,807 | 15,884 | ||||
| Deferred charges and other assets | 1,639 | 512 | ||||
| Total Other Assets | 113,743 | 116,693 | ||||
| Total Assets | $ | 750,092 | $ | 617,408 | ||
| LIABILITIES AND EQUITY | ||||||
| Current Liabilities | ||||||
| Current portion of long-term debt | $ | 10,454 | $ | 10,227 | ||
| Accounts payable | 19,147 | 20,257 | ||||
| Dividends payable | – | 3,152 | ||||
| Advance billings and customer deposits | 13,760 | 14,029 | ||||
| Accrued compensation | 1,381 | 1,516 | ||||
| Accrued operating taxes | 4,943 | 4,618 | ||||
| Other accrued liabilities | 5,257 | 4,223 | ||||
| Total Current Liabilities | 54,942 | 58,022 | ||||
| Long-Term Liabilities | ||||||
| Long-term debt, net of unamortized discount and debt issuance costs, excluding current portion | 457,306 | 357,950 | ||||
| Retirement benefits | 17,075 | 18,257 | ||||
| Deferred income taxes | 90,833 | 87,864 | ||||
| Other long-term liabilities | 1,888 | 1,746 | ||||
| Income tax payable | 93 | 110 | ||||
| Total Long-term Liabilities | 567,195 | 465,927 | ||||
| Stockholders’ Equity | 127,062 | 92,677 | ||||
| Noncontrolling Interests | 893 | 782 | ||||
| Total Equity | 127,955 | 93,459 | ||||
| Total Liabilities and Equity | $ | 750,092 | $ | 617,408 | ||
1 | During 2010, the Company received a Federal stimulus award providing 50% funding to bring broadband services and infrastructure to Alleghany County, Virginia. The Company was required to deposit 100% of its grant ($8.1 million) into pledged accounts in advance of any reimbursements, to be drawn down ratably following reimbursement approvals. The project was completed and the grant has ended as of September 30, 2015. | |
| Lumos Networks Corp. | ||||||||||||||||
| Condensed Consolidated Statements of Income | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| (In thousands, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Operating Revenues | $ | 50,969 | $ | 50,516 | $ | 152,417 | $ | 150,771 | ||||||||
| Operating Expenses | ||||||||||||||||
| Network access costs | 9,932 | 10,250 | 29,556 | 31,154 | ||||||||||||
| Selling, general and administrative 1, 2 | 20,554 | 8,545 | 60,657 | 44,964 | ||||||||||||
| Depreciation and amortization | 11,803 | 11,272 | 35,112 | 33,141 | ||||||||||||
| Accretion of asset retirement obligations | 33 | 38 | 105 | 95 | ||||||||||||
| Restructuring charges | – | – | 637 | – | ||||||||||||
| Total Operating Expenses | 42,322 | 30,105 | 126,067 | 109,354 | ||||||||||||
| Operating Income | 8,647 | 20,411 | 26,350 | 41,417 | ||||||||||||
| Other Income (Expenses) | ||||||||||||||||
| Interest expense | (5,817 | ) | (3,969 | ) | (13,022 | ) | (11,755 | ) | ||||||||
| Gain on interest rate swap derivatives | 198 | 302 | 445 | 395 | ||||||||||||
| Other income (expenses), net | 58 | 179 | (89 | ) | 529 | |||||||||||
| Income Before Income Tax Expense | 3,086 | 16,923 | 13,684 | 30,586 | ||||||||||||
| Income Tax Expense | 1,774 | 6,713 | 6,221 | 12,402 | ||||||||||||
| Net Income | 1,312 | 10,210 | 7,463 | 18,184 | ||||||||||||
| Net Income Attributable to Noncontrolling Interests | (33 | ) | (3 | ) | (111 | ) | (69 | ) | ||||||||
| Net Income Attributable to Lumos Networks Corp. | $ | 1,279 | $ | 10,207 | $ | 7,352 | $ | 18,115 | ||||||||
| Basic and Diluted Earnings per Common Share Attributable to Lumos Networks Corp. Stockholders: | ||||||||||||||||
| Earnings per share – basic | $ | 0.06 | $ | 0.46 | $ | 0.32 | $ | 0.81 | ||||||||
| Earnings per share – diluted | $ | 0.06 | $ | 0.45 | $ | 0.32 | $ | 0.80 | ||||||||
| Cash Dividends Declared per Share – Common Stock | $ | – | $ | 0.14 | $ | – | $ | 0.42 | ||||||||
1 | Includes equity-based compensation expense related to all of the Company’s share-based awards and the Company’s 401(k) matching contributions of $1.5 million and $1.1 million for the three months ended September 30, 2015 and 2014, respectively, and $4.2 million and $3.1 million for the nine months ended September 30, 2015 and 2014, respectively. | |
2 | Selling, general and administrative expenses for the three and nine months ended September 30, 2014 includes a $10.2 million curtailment gain related to the elimination of certain medical benefits under the Company’s postretirement plan. | |
| Lumos Networks Corp. | ||||||||
| Condensed Consolidated Statements of Cash Flows | Nine Months Ended September 30, | |||||||
| (In thousands) | 2015 | 2014 | ||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 7,463 | $ | 18,184 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 31,035 | 26,251 | ||||||
| Amortization | 4,077 | 6,890 | ||||||
| Accretion of asset retirement obligations | 105 | 95 | ||||||
| Deferred income taxes | 5,802 | 12,045 | ||||||
| Gain on interest rate swap derivatives | (445 | ) | (395 | ) | ||||
| Equity-based compensation expense | 4,236 | 3,109 | ||||||
| Amortization of debt issuance costs | 1,648 | 1,102 | ||||||
| Retirement benefits, net of cash contributions and distributions | (171 | ) | (11,352 | ) | ||||
| Excess tax benefits from share-based compensation | – | (201 | ) | |||||
| Other | 206 | 206 | ||||||
| Changes in operating assets and liabilities, net | (1,951 | ) | 4,619 | |||||
| Net Cash Provided by Operating Activities | 52,005 | 60,553 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property, plant and equipment | (80,118 | ) | (64,151 | ) | ||||
| Broadband network expansion funded by stimulus grant | (2,578 | ) | (284 | ) | ||||
| Purchases of available-for-sale marketable securities | (74,088 | ) | (17,010 | ) | ||||
| Proceeds from sale or maturity of available-for-sale marketable securities | 29,903 | 36,856 | ||||||
| Change in restricted cash | 3,838 | 116 | ||||||
| Cash reimbursement received from broadband stimulus grant | 3,838 | 116 | ||||||
| Other | – | 106 | ||||||
| Net Cash Used in Investing Activities | (119,205 | ) | (44,251 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of senior secured term loan | 28,000 | – | ||||||
| Proceeds from issuance of unsecured notes, net of debt discount | 148,500 | – | ||||||
| Payment of financing costs | (8,192 | ) | – | |||||
| Principal payments on senior secured term loans | (45,953 | ) | (3,313 | ) | ||||
| Cash dividends paid on common stock | (3,152 | ) | (9,323 | ) | ||||
| Principal payments under capital lease obligations | (2,378 | ) | (1,312 | ) | ||||
| Proceeds from stock option exercises and employee stock purchase plan | 293 | 1,668 | ||||||
| Excess tax benefits from share-based compensation | – | 201 | ||||||
| Other | (267 | ) | (66 | ) | ||||
| Net Cash Provided by (Used in) Financing Activities | 116,851 | (12,145 | ) | |||||
| Increase in cash and cash equivalents | 49,651 | 4,157 | ||||||
| Cash and cash equivalents: | ||||||||
| Beginning of Period | 14,140 | 14,114 | ||||||
| End of Period | $ | 63,791 | $ | 18,271 | ||||
| Lumos Networks Corp. | |||||||||||||||||||||
| Operating Results, Customer and Network Statistics | |||||||||||||||||||||
| (Dollars in thousands) | Three months ended: | Nine months ended: | |||||||||||||||||||
| September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
| Revenue, Gross Margin and Adjusted EBITDA | |||||||||||||||||||||
| Revenue | |||||||||||||||||||||
| Enterprise Data | 11,560 | 11,298 | 11,027 | 10,833 | 10,470 | 33,885 | 31,501 | ||||||||||||||
| Transport | 9,507 | 10,036 | 10,473 | 10,962 | 11,279 | 30,016 | 33,411 | ||||||||||||||
| FTTC | 7,556 | 6,755 | 6,267 | 5,515 | 4,739 | 20,578 | 14,420 | ||||||||||||||
| Total Data | 28,623 | 28,089 | 27,767 | 27,310 | 26,488 | 84,479 | 79,332 | ||||||||||||||
| Residential and Small Business | 16,560 | 17,010 | 17,265 | 17,423 | 17,668 | 50,835 | 54,605 | ||||||||||||||
| RLEC Access | 5,786 | 5,854 | 5,463 | 5,952 | 6,360 | 17,103 | 16,834 | ||||||||||||||
| Total Revenue | 50,969 | 50,953 | 50,495 | 50,685 | 50,516 | 152,417 | 150,771 | ||||||||||||||
| Gross Margin | |||||||||||||||||||||
| Data | 84.2 | % | 85.5 | % | 86.9 | % | 85.5 | % | 85.1 | % | 85.5 | % | 84.8 | % | |||||||
| Residential and Small Business | 67.4 | % | 65.6 | % | 64.9 | % | 67.0 | % | 64.3 | % | 65.9 | % | 65.0 | % | |||||||
| Adjusted EBITDA1 | |||||||||||||||||||||
| Data | 12,395 | 12,492 | 12,367 | 12,629 | 12,984 | 37,254 | 39,096 | ||||||||||||||
| Residential and Small Business | 5,045 | 5,327 | 5,627 | 4,623 | 4,503 | 15,999 | 15,277 | ||||||||||||||
| RLEC Access | 4,834 | 4,848 | 4,517 | 4,621 | 5,214 | 14,199 | 13,618 | ||||||||||||||
| Adjusted EBITDA before Curtailment Gain | 22,274 | 22,667 | 22,511 | 21,873 | 22,701 | 67,452 | 67,991 | ||||||||||||||
| Curtailment Gain2 | – | – | – | 567 | 10,207 | – | 10,207 | ||||||||||||||
| Total Adjusted EBITDA | 22,274 | 22,667 | 22,511 | 22,440 | 32,908 | 67,452 | 78,198 | ||||||||||||||
| Adjusted EBITDA Margin1 | |||||||||||||||||||||
| Data | 43.3 | % | 44.5 | % | 44.5 | % | 46.2 | % | 49.0 | % | 44.1 | % | 49.3 | % | |||||||
| Residential and Small Business | 30.5 | % | 31.3 | % | 32.6 | % | 26.5 | % | 25.5 | % | 31.5 | % | 28.0 | % | |||||||
| RLEC Access | 83.5 | % | 82.8 | % | 82.7 | % | 77.6 | % | 82.0 | % | 83.0 | % | 80.9 | % | |||||||
| Total Adjusted EBITDA Margin | 43.7 | % | 44.5 | % | 44.6 | % | 44.3 | % | 65.1 | % | 44.3 | % | 51.9 | % | |||||||
| Capital Expenditures | 24,769 | 26,125 | 29,224 | 19,949 | 26,863 | 80,118 | 64,151 | ||||||||||||||
| Adjusted EBITDA less Capital Expenditures | (2,495 | ) | (3,458 | ) | (6,713 | ) | 2,491 | 6,045 | (12,666 | ) | 14,047 | ||||||||||
| Fiber Network Statistics | |||||||||||||||||||||
| Fiber Route-Miles | 8,408 | 8,100 | 7,955 | 7,822 | 7,645 | 8,408 | 7,645 | ||||||||||||||
| Fiber Miles3 | 378,581 | 369,238 | 363,189 | 354,118 | 352,347 | 378,581 | 352,347 | ||||||||||||||
| Fiber Markets | 24 | 24 | 23 | 23 | 23 | 24 | 23 | ||||||||||||||
| FTTC Unique Towers | 1,030 | 976 | 907 | 858 | 708 | 1,030 | 708 | ||||||||||||||
| FTTC Total Connections | 1,363 | 1,307 | 1,236 | 1,153 | 961 | 1,363 | 961 | ||||||||||||||
| On-Network Buildings | 1,642 | 1,574 | 1,530 | 1,477 | 1,456 | 1,642 | 1,456 | ||||||||||||||
| Data Centers4 | 33 | 32 | 31 | 31 | 28 | 33 | 28 | ||||||||||||||
| R&SB Statistics | |||||||||||||||||||||
| Competitive Voice Connections | 76,380 | 79,022 | 81,456 | 83,406 | 85,683 | 76,380 | 85,683 | ||||||||||||||
| Video Subscribers | 5,760 | 5,516 | 5,472 | 5,352 | 5,309 | 5,760 | 5,309 | ||||||||||||||
| Fiber-to-the-Premise Broadband Connections | 8,007 | 6,807 | 6,602 | 6,358 | 6,119 | 8,007 | 6,119 | ||||||||||||||
| Premises Passed by Fiber5 | 19,170 | 18,983 | 18,142 | 17,461 | 17,102 | 19,170 | 17,102 | ||||||||||||||
| RLEC Access Lines | 25,902 | 26,276 | 26,746 | 27,257 | 27,716 | 25,902 | 27,716 | ||||||||||||||
| 1 | Adjusted EBITDA is a non-GAAP measure. See definition on page 2 of this earnings release. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to Total Revenue. | |
| 2 | The Company recorded a gain totaling $10.2 million in the third quarter of 2014 related to the curtailment of medical benefits under the Company’s postretirement plan, which gain was not allocated to the operating segments. | |
| 3 | Fiber miles are calculated as the fiber route miles multiplied by the number of fiber strands within each cable (represents an average of 45 fibers per route as of September 30, 2015). | |
| 4 | Data centers reported include both commercial and private data centers and Company-owned facilities offering commercial data center services. | |
| 5 | Includes residential and small business locations passed by fiber and available for service. Approximately 93% of the premises passed by fiber and available for service as of September 30, 2015 were residential. |
| Lumos Networks Corp. | ||||||||||
| Reconciliation of Net Income Attributable to Lumos Networks Corp. to Adjusted EBITDA | ||||||||||
| (Dollars in thousands) | 2015 | 2014 | ||||||||
| For The Three Months Ended September 30, | ||||||||||
| Net Income Attributable to Lumos Networks Corp. | $ | 1,279 | $ | 10,207 | ||||||
| Net Income Attributable to Noncontrolling Interests | 33 | 3 | ||||||||
| Net Income | 1,312 | 10,210 | ||||||||
| Income tax expense | 1,774 | 6,713 | ||||||||
| Interest expense | 5,817 | 3,969 | ||||||||
| Gain on interest rate swap derivatives | (198 | ) | (302 | ) | ||||||
| Other income, net | (58 | ) | (179 | ) | ||||||
| Operating Income | 8,647 | 20,411 | ||||||||
| Depreciation and amortization and accretion of asset retirement obligations | 11,836 | 11,310 | ||||||||
| Amortization of actuarial losses | 337 | 64 | ||||||||
| Equity-based compensation | 1,454 | 1,123 | ||||||||
| Adjusted EBITDA | $ | 22,274 | $ | 32,908 | ||||||
| Adjusted EBITDA Margin | 43.7 | % | 65.1 | % | ||||||
| For The Nine Months Ended September 30, | ||||||||||
| Net Income Attributable to Lumos Networks Corp. | $ | 7,352 | $ | 18,115 | ||||||
| Net Income Attributable to Noncontrolling Interests | 111 | 69 | ||||||||
| Net Income | 7,463 | 18,184 | ||||||||
| Income tax expense | 6,221 | 12,402 | ||||||||
| Interest expense | 13,022 | 11,755 | ||||||||
| Gain on interest rate swap derivatives | (445 | ) | (395 | ) | ||||||
| Other expense (income), net | 89 | (529 | ) | |||||||
| Operating Income | 26,350 | 41,417 | ||||||||
| Depreciation and amortization and accretion of asset retirement obligations | 35,217 | 33,236 | ||||||||
| Amortization of actuarial losses | 1,012 | 192 | ||||||||
| Equity-based compensation | 4,236 | 3,109 | ||||||||
| Restructuring charges | 637 | – | ||||||||
| Employee separation charges | – | 244 | ||||||||
| Adjusted EBITDA | $ | 67,452 | $ | 78,198 | ||||||
| Adjusted EBITDA Margin | 44.3 | % | 51.9 | % | ||||||
| Lumos Networks Corp. | ||||||
| Business Outlook 1 (as of November 2, 2015) | ||||||
| (In millions) | 2015 Annual | |||||
| Operating Revenues | approximately $202 | |||||
| Adjusted EBITDA | approximately $92 | |||||
| Capital Expenditures | approximately $112 | |||||
| Cash, Cash Equivalents and Marketable Securities (at end of period) | approximately $100 | |||||
| Reconciliation of Net Income to Adjusted EBITDA: | ||||||
| Net Income | approximately $12 | |||||
| Income tax expense | approximately $8 | |||||
| Interest expense | approximately $15 | |||||
| Operating Income | approximately $35 | |||||
| Depreciation and amortization | approximately $50 | |||||
| Equity-based compensation charges | approximately $6 | |||||
| Amortization of actuarial losses | approximately $1 | |||||
| Adjusted EBITDA | approximately $92 | |||||
| 1 | These estimates are based on management’s current expectations. These estimates are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements” in the Lumos Networks Corp. third quarter 2015 earnings release dated November 2, 2015. |
Contacts
Lumos Networks Corp.
Will Davis
Chief of Staff and Vice President of Investor Relations
917-519-6994
davisw@lumosnet.com
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