NTELOS HOLDINGS CORP WAYNESBORO, Va., July 28, 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 second quarter ended June 30, 2014.
Second Quarter 2014 Highlights
-- Extended and amended Strategic Network Alliance ("SNA") with Sprint
until December 2022;
-- Launched 4G LTE in Richmond and Norfolk metropolitan markets, providing
coverage of 2.8 million POPs as of June 30, 2014;
-- Operating revenues were $117.8 million for the second quarter 2014;
compared to $119.9 million for the second quarter 2013; and
-- Adjusted EBITDA was $34.4 million for the second quarter 2014, compared
to $41.2 million for the second quarter 2013.
"The successful extension and expansion of our SNA with Sprint during the quarter marked a significant milestone for nTelos. We are pleased with this outcome as it paves the way for nTelos to build the most robust network in our footprint and to deliver an improved user experience to our retail and wholesale customers," said Michael A. Huber, Chairman of the Board of NTELOS Holdings Corp.
Subscriber Highlights
Total Subscribers
-- Total subscribers were 458,100 as of June 30, 2014, compared to 454,800
for the same period of 2013;
-- Total subscriber gross additions for the second quarter 2014 were
39,000, compared to 40,100 for the same period of 2013; and
-- Total net subscriber additions for the second quarter 2014 were 400,
compared to 3,800 for the same period of 2013.
Postpay Subscribers
-- Postpay subscriber gross additions for the second quarter 2014 were
20,400, compared to 16,300 for the second quarter 2013 and 20,200 for
the first quarter 2014;
-- Net postpay subscriber additions were 3,300 for the second quarter 2014,
compared to 200 for the second quarter 2013 and 300 for the first
quarter 2014;
-- Postpay churn for the second quarter 2014 was 1.8%, compared to 1.8% for
the second quarter 2013;
-- ARPA increased 2.9% to $137.20 for the second quarter 2014, compared to
$133.34 for the same period in 2013; and
-- As of June 30, 2014, total postpay subscribers were 308,200.
Prepay Subscribers
-- Prepay subscriber gross additions for the second quarter 2014 were
18,600, compared to 23,800 for the second quarter 2013 and 25,200 for
the first quarter 2014;
-- Net prepay subscriber additions (losses) were (2,900) for the second
quarter 2014, compared to 3,600 for the second quarter 2013 and 3,100
for the first quarter 2014;
-- Prepay churn for the second quarter 2014 was 4.5%, compared to 4.4% for
the second quarter 2013; and
-- As of June 30, 2014, total prepay subscribers were 149,900.
"During the quarter, we delivered solid results in an increasingly competitive operating environment. We will continue to make strategic investments in the business to improve our operations and to drive increased shareholder value," said Stebbins B. Chandor, EVP & Chief Financial Officer of NTELOS Holdings Corp.
Net Income
Net income after net income attributable to noncontrolling interests was $0.5 million, or $0.02 per diluted share, for the first quarter 2014, compared to $9.4 million, or $0.43 per diluted share, for the second quarter 2013.
Business Outlook
For the year ending December 31, 2014, the Company reiterates its full year 2014 Adjusted EBITDA guidance of between $128.0 million and $135.0 million and full year 2014 capital expenditures guidance of between $110.0 million and $120.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its second quarter 2014 results this morning, July 28, 2014, at 8:00 a.m. ET. To participate, please dial 1-888-317-6002, 1-855-669-9657 in Canada and 1-412-317-1083 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 10049798 beginning approximately one hour after the call and continuing until August 12, 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, separation charges, secondary offering costs, net loss from discontinued operations, adjustments for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis and acquisition related charges.
ARPA, or average monthly revenue per account, is computed by dividing service revenues per period by the average number of accounts 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 and provide liquidity for future growth. ARPA provides management with useful information concerning the appeal of the Company's postpay rate plans and service offerings and the Company's performance in attracting and retaining high value customers.
Adjusted EBITDA and ARPA 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.
During the quarter, the Company terminated approximately 2,100 postpay subscribers that repeatedly exceeded their terms and conditions relating to permitted usage. Additionally, the Company changed its business rules related to reporting of long-term, non-revenue producing prepay subscribers. This change resulted in approximately 8,200 prepay subscribers being excluded from our ending subscriber base. The impact of these Company-initiated terminations and change in business rules is reflected in the ending subscriber totals as of June 30, 2014 and is not reflected in our disconnections, net additions and churn calculations for the periods ended June 30, 2014.
About NTELOS
NTELOS Holdings Corp. (NTLS), operating through its subsidiaries as "nTelos Wireless," is headquartered in Waynesboro, VA, and provides high-speed, dependable nationwide voice and data coverage for approximately 458,100 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 network services to Sprint Corporation in the western Virginia and West Virginia portions of its territories for all Sprint CDMA and LTE 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 Income
-- Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to
Adjusted EBITDA
-- Key Metrics
-- ARPA Reconciliation - Postpay
Investor Relations Contacts:
Jeffrey Goldberger / Rob Fink
KCSA Strategic Communications
P: 212-896-1249 / 212-896-1206
Email: jgoldberger@kcsa.com / rfink@kcsa.com
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Balance
Sheets (Unaudited) (Unaudited)
June 30, 2014 December 31, 2013
------------- -----------------
(In thousands)
ASSETS
Current Assets
Cash $108,340 $88,441
Restricted cash 2,167 2,167
Accounts
receivable,
net 41,947 37,740
Inventories and
supplies 15,501 23,962
Deferred income
taxes 8,970 10,650
Prepaid
expenses and
other current
assets 18,819 20,808
195,744 183,768
------- -------
Securities and Investments 1,499 1,499
Property, Plant and Equipment, net 320,795 319,376
Intangible Assets
Goodwill 63,700 63,700
Radio spectrum
licenses 131,838 131,834
Customer
relationships
and
trademarks,
net 5,479 6,985
Deferred Charges and Other Assets 11,117 9,089
Total Assets $730,172 $716,251
======== ========
LIABILITIES AND EQUITY
Current Liabilities
Current portion
of long-term
debt $5,835 $5,410
Accounts
payable 21,812 33,677
Dividends
payable 9,104 9,034
Accrued
expenses and
other current
liabilities 32,318 31,389
69,069 79,510
------ ------
Long-Term Debt 521,978 484,956
Other Long-Term Liabilities 109,716 107,992
Equity 29,409 43,793
Total Liabilities and Equity $730,172 $716,251
======== ========
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Statements of Income Three Months Ended Six Months Ended
------------------------------------------- ------------------ ----------------
(Unaudited) (Unaudited)
(In thousands, except per share amounts) June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
--------------------------------------- ------------- ------------- ------------- -------------
Operating Revenues $117,795 $119,859 $239,877 $239,204
Operating Expenses
Cost of sales and services 47,439 42,567 94,763 87,102
Customer operations 31,329 29,977 65,420 60,931
Corporate operations 9,194 7,760 18,931 15,664
Depreciation and amortization 19,929 20,443 38,996 38,899
Gain on sale of intangible assets - (4,442) - (4,442)
107,891 96,305 218,110 198,154
------- ------ ------- -------
Operating Income 9,904 23,554 21,767 41,050
Other Expense
Interest expense (8,315) (7,398) (16,274) (14,759)
Other income (expense), net (92) 151 (1,164) (218)
---- --- -----
(8,407) (7,247) (17,438) (14,977)
------ ------ ------- -------
Income before Income Taxes 1,497 16,307 4,329 26,073
Income Taxes 640 6,380 1,750 10,124
--- ----- ----- ------
Net Income 857 9,927 2,579 15,949
Net Income Attributable to Noncontrolling Interests (373) (541) (809) (1,070)
Net Income Attributable to NTELOS Holdings Corp. $484 $9,386 $1,770 $14,879
==== ====== ====== =======
Earnings per Share Attributable to NTELOS Holdings Corp.:
Basic $0.02 $0.45 $0.08 $0.71
===== ===== =====
Weighted average shares outstanding - basic 21,099 21,027 21,090 20,962
====== ====== ======
Diluted $0.02 $0.43 $0.08 $0.69
Weighted average shares outstanding - diluted 22,039 21,779 22,037 21,613
====== ====== ======
Cash Dividends Declared per Share - Common Stock $0.42 $0.42 $0.84 $0.84
===== ===== ===== =====
NTELOS Holdings Corp.
---------------------
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
(In thousands)
-------------
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
------------- ------------- ------------- -------------
Net income attributable to NTELOS Holdings Corp. $484 $9,386 $1,770 $14,879
Net income attributable to noncontrolling interests 373 541 809 1,070
--- --- --- -----
Net income $857 $9,927 $2,579 $15,949
Interest expense 8,315 7,398 16,274 14,759
Income taxes 640 6,380 1,750 10,124
Other expense (income), net 92 (151) 1,164 218
--------------------------- --- ---- ----- ---
Operating income $9,904 $23,554 $21,767 $41,050
Depreciation and amortization 19,929 20,443 38,996 38,899
Gain on sale of intangible assets - (4,442) - (4,442)
Accretion of asset retirement obligations 331 173 646 316
Equity-based compensation 1,283 1,460 2,594 2,781
SNA straight-line adjustment (1) 2,043 - 2,043 -
Other (2) 874 - 2,241 -
-------- --- --- ----- ---
Adjusted EBITDA $34,364 $41,188 $68,287 $78,604
======= ======= ======= =======
(1) Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
(2) Other includes legal and advisory fees related to new Sprint agreement and certain employee
separation charges.
NTELOS Holdings Corp.
---------------------
Key Metrics Six Months Ended
----------- ----------------
Quarter Ended: 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 6/30/2013 6/30/2014
-------------- --------- --------- ---------- --------- --------- --------- ---------
Subscribers
-----------
Beginning Subscribers 451,000 454,800 457,100 464,600 468,000 439,600 464,600
Postpay 299,700 298,700 298,000 306,700 306,800 297,400 306,700
Prepay 151,300 156,100 159,100 157,900 161,200 142,200 157,900
Gross Additions 40,100 44,500 50,800 45,400 39,000 88,600 84,400
Postpay 16,300 20,000 28,700 20,200 20,400 36,500 40,600
Prepay 23,800 24,500 22,100 25,200 18,600 52,100 43,800
Disconnections (1) 36,300 42,200 43,300 42,000 38,600 73,400 80,600
Postpay 16,100 19,600 19,800 19,900 17,100 33,000 37,000
Prepay 20,200 22,600 23,500 22,100 21,500 40,400 43,600
Net Additions (Losses) (1) 3,800 2,300 7,500 3,400 400 15,200 3,800
Postpay 200 400 8,900 300 3,300 3,500 3,600
Prepay 3,600 1,900 (1,400) 3,100 (2,900) 11,700 200
Ending Subscribers (1) 454,800 457,100 464,600 468,000 458,100 454,800 458,100
Postpay 298,700 298,000 306,700 306,800 308,200 298,700 308,200
Prepay 156,100 159,100 157,900 161,200 149,900 156,100 149,900
Churn, net (1) 2.7% 3.1% 3.1% 3.0% 2.8% 2.7% 2.9%
Postpay 1.8% 2.2% 2.2% 2.2% 1.8% 1.8% 2.0%
Prepay 4.4% 4.8% 4.9% 4.6% 4.5% 4.5% 4.6%
Other Items
-----------
ARPA Statistics
---------------
ARPA $133.34 $136.90 $136.88 $137.47 $137.20 $132.01 $137.34
Ending Postpay Accounts 141,400 140,200 141,200 138,400 140,500 141,400 140,500
Postpay Subscribers per Account 2.1 2.1 2.2 2.2 2.2 2.1 2.2
Strategic Network Alliance Revenues (000's)(2)
---------------------------------------------
Billed Revenue $39,607 $48,644 $39,326 $39,284 $37,997 $79,759 $77,281
Straight-Line Adjustment - - - - (2,043) - (2,043)
Spectrum Lease Consideration - - - - 822 - 822
SNA Revenues - As Reported $39,607 $48,644 $39,326 $39,284 $36,776 $79,759 $76,060
======= ======= ======= ======= =======
Network Statistics
------------------
Licensed Population (millions) 7.9 7.9 8.0 8.0 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 1,432 1,434 1,444 1,444 1,445 1,432 1,445
(1) During the quarter, the Company terminated approximately 2,100 postpay subscribers that repeatedly exceeded their terms and conditions
relating to permitted usage. Additionally, the Company changed its business rules related to reporting of long-term, non-revenue
prepay subscribers. This change resulted in approximately 8,200 prepay subscribers being excluded from our ending subscriber base.
The impact of these Company-initiated terminations and change in business rules is reflected in our ending subscriber totals as of
June 30, 2014, and is not reflected in our disconnections, net additions and churn calculations for the periods ended June 30, 2014.
(2) Effective 5/1/14, SNA Revenues include the impact of recognizing the fixed fee element of SNA contract revenues on a straightline
basis, which is a reduction of billed revenue, and the non-cash consideration attributable to spectrum lease. We have recognized an
equal charge for spectrum lease expense within cost of sales and services.
NTELOS Holdings Corp.
---------------------
ARPA Reconciliation - Postpay Three Months Ended Six Months Ended
----------------------------- ------------------ ----------------
Average Monthly Revenue per Account (ARPA) (1) June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
--------------------------------------------- ------------- ------------- ------------- -------------
(In thousands, except for accounts and ARPA)
Operating revenues $117,795 $119,859 $239,877 $239,204
Less: prepay service revenues (16,206) (16,182) (33,166) (31,866)
Less: equipment revenues (6,560) (5,499) (14,051) (12,137)
Less: wholesale and other adjustments (37,900) (41,179) (77,918) (82,097)
Postpay service revenues $57,129 $56,999 $114,742 $113,104
Average number of postpay accounts 138,800 142,500 139,200 142,800
Postpay ARPA $137.20 $133.34 $137.34 $132.01
============ ======= ======= ======= =======
(1) Average
monthly
revenue per
account
(ARPA) is
computed by
dividing
postpay
service
revenues per
period by
the average
number of
postpay
accounts
during that
period. ARPA
as defined
may not be
similar to
ARPA
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
ARPA in
order to
determine
their
effectiveness.
ARPA
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.
SOURCE NTELOS Holdings Corp.
