NTS, Inc. (NYSE MKT:NTS)(TASE:NTS) (“NTS” or the
“Company”) announces results for the three and nine months ended
September 30, 2013.
Revenues
Revenues from the Company’s Fiber-To-The-Premises (“FTTP”)
business grew 28.2% to $6.1 million in the third quarter ended
September 30, 2013, as compared to $4.8 million for the same period
in 2012. FTTP revenues represented 41.2% of consolidated revenues
for the third quarter of 2013, as compared to 31.9% of consolidated
revenues for the third quarter of 2012.
Consolidated revenues for the quarter ended September 30, 2013
were $14.8 million, down slightly when compared to consolidated
revenues of $14.9 million in the quarter ended September 30,
2012.
For the first nine months of 2013, revenues from the Company’s
FTTP business grew 28.1% to $17.1 million from $13.3 million in the
first nine months of 2012. Consolidated revenues for the nine
months ended September 30, 2013 were $44.9 million, essentially
flat as compared to consolidated revenues for the nine months ended
September 30, 2012.
Customer Expansion
The Company’s total number of FTTP customers as of September 30,
2013 was 11,409, a 25% increase compared to 9,104 FTTP customers as
of September 30, 2012. The increase in the Company’s customer base
is a result of its expansion into additional communities and
increased penetration.
Average Revenue Per User for all of the Company’s fiber markets
is approximately $402 per month for business customers and
approximately $100 per month for residential customers.
The FTTP network build out is primarily 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
During the third quarter of 2013, NTS began connecting customers
in Ponchatoula, Louisiana as it continued to make progress on the
construction of its FTTP network in southern Louisiana. Upon
completion of the Louisiana fiber build out, in addition to
Ponchatoula, the network is expected to include residential and
business customers in the communities of Hammond, Natalbany,
Tickfaw, Independence and Amite, adding approximately 11,500 FTTP
passings. Additionally, NTS continued its sales and marketing
efforts in Abilene, Texas where the Company has established a
“metro build” targeting more than 1,000 business customers.
Adjusted EBITDAS
During the second quarter the Company provided a computation of
Adjusted EBITDAS that excludes the effects of a) the write-off of
$519,435 of assets acquired during various acquisitions in which
management had determined they would not be able to obtain
successful resolution, and b) a significantly higher than usual bad
debt expense of $1,028,538. The Company believes that analysts and
investors will want to understand the effect of the bad debt
expense and the write-off on this non-GAAP measure; hence the
Company provides the computation for clarity and ease-of-use.
EBITDAS for the third quarter of 2013 was $3.7 million, a 20.3%
increase over EBITDAS of $3.1 million in the same quarter last
year. EBITDAS margin in the quarter ended September 30, 2013 was
25.1% compared to EBITDAS margin of 20.7% for the quarter ended
September 30, 2012. This is mainly attributable to the increase in
higher margin FTTP revenues.
For the nine months ended September 30, 2013 the Company
reported Adjusted EBITDAS of $10.8 million, an increase of 24.7%
compared to EBITDAS of $8.6 million in the first nine months of
2012. Adjusted EBITDAS margin for the first nine months of 2013 was
24% compared to EBITDAS margin of 19.3% in the same prior year
period.
Net Income
For the quarter ended September 30, 2013, the Company reported a
net loss of $328 thousand or a loss of $0.01 per basic and diluted
share, assuming 41,571,167 shares outstanding compared to a net
loss of $32 thousand or less than $0.01 per basic and diluted
share, assuming 41,186,596 shares outstanding for the quarter ended
September 30, 2012.
For the quarter ended September 30, 2013, NTS recorded a net
financing expense of $1.9 million compared to a net financing
expense of $1.3 million for the quarter ended September 30, 2012.
The increase in the financial expenses was related to increased
debt incurred to finance the Company’s FTTP expansion into new
markets and the valuation of the U.S. Dollar to the New Israeli
Shekel.
For the nine months ended September 30, 2013, NTS reported a net
loss of $1.1 million or a loss of $0.03 per basic and diluted
share, assuming 41,316,192 shares outstanding compared to a net
loss of $297 thousand or $0.01 per basic and diluted share,
assuming 41,186,596 shares outstanding for the nine months ended
September 30, 2012.
Mr. Guy Nissenson, Chairman, President and CEO of NTS commented,
“Subsequent to the close of the third quarter we announced that we
had entered into a definitive merger agreement with affiliates of
private equity firm Tower Three Partners. This is good news for the
Company, our shareholders and our customers and is a testament to
the hard work of all of our employees during the past five years as
we’ve established our fiber network in select markets in Texas and
Louisiana.”
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) and adjusted EBITDAS. 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 and adjusted EBITDAS. First, these non-GAAP financial
measures exclude depreciation and amortization expenses that are
recurring and significant non-recurring expenses. 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 and adjusted 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.
NTS, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30, 2013
2012 2013 2012 Revenues Services
on Fiber-To-The-Premise network $ 6,095,658 $ 4,755,779 $
17,094,428 $ 13,341,551 Leased local loop services and other
8,710,044 10,170,267 27,833,694 31,592,883
Total Revenues 14,805,702 14,926,046
44,928,122 44,934,434
Expenses
Cost of services (excluding depreciation
andamortization shown below)
6,085,114 6,734,583 19,456,379 20,677,513 Selling, general and
administrative 5,121,467 5,165,190 16,509,564 15,738,473
Depreciation and amortization 2,078,396 1,813,006 5,426,366
4,799,447 Financing expenses, net 1,930,333 1,324,054 4,793,306
3,884,990 Other expenses, net 205,031 69,701
638,704 447,577
Total Expenses 15,420,341
15,106,534 46,824,319 45,548,000 Loss
before taxes (614,639 ) (180,488 ) (1,896,197 ) (613,566 )
Income tax benefit 286,367 148,913 770,175
315,735 Net loss $ (328,272 ) $ (31,575 ) $
(1,126,022 ) $ (297,831 )
Basic and diluted loss per
share $ (0.01 ) $ (0.00 )* $ (0.03 ) $ (0.01 )
Basic and diluted weighted average
number of sharesoutstanding
41,571,167 41,186,596 41,316,192
41,186,596
* Represents amount less than $0.01.
Reconciliation of EBITDAS and Adjusted
EBITDAS to Net loss applicable to
common stockholders as it is presented on
the Condensed Consolidated
Statements of Operations for NTS, Inc.
Three months ended Nine months ended
September 30, September 30, 2013
2012 2013 2012 Net loss $
(328,272 ) $ (31,575 ) $ (1,126,022 ) $ (297,831 )
Write-off of assets acquired during various acquisitions - -
519,435 - Extraordinary bad debt expense - - 1,028,538 -
Depreciation and amortization 2,078,396 1,813,006 5,426,366
4,799,447
Compensation in connection with the
issuance of warrantsand options
118,824 64,389 291,126 143,535 Financing expenses , net 1,930,333
1,324,054 4,793,306 3,884,990 Other expenses , net 205,031 69,701
638,704 447,577 Income tax benefit (286,367 )
(148,913 ) (770,175 ) (315,735 ) EBITDAS
(Adjusted) $ 3,717,945 $ 3,090,662 $ 10,801,278 $ 8,661,983
Investor RelationsInstitutional Marketing
Services (IMS)John G. Nesbett/Jennifer
Belodeau1-203-972-9200jnesbett@institutionalms.comorCompanyNTS,
Inc.Niv Krikov, CFO1-806-771-1181niv@ntscominc.com
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