SHENANDOAH TELECOMMUNICATIONS COMPANY WAYNESBORO, Va., Oct. 28, 2015 /PRNewswire/ -- NTELOS Holdings Corp. (NASDAQ: NTLS) ("nTelos" or the "Company") announced today operating and financial results for its third quarter ended September 30, 2015.
On August 10, 2015, the Company entered into a definitive agreement to be acquired by Shenandoah Telecommunications Company ("Shentel"; NASDAQ: SHEN) for $9.25 in cash per share. A vote to approve the merger will be held at the Company's Annual Meeting of Stockholders on November 11, 2015. The proposed acquisition by Shentel is expected to close in early 2016 subject to customary closing conditions. In addition to stockholder approval, the transaction must be approved by certain federal and state regulatory agencies. On September 22, 2015, the Company received notification from the Federal Trade Commission of the early termination of the applicable waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Additionally, the Company expects that the public notice period mandated by the Federal Communications Commission ("FCC") will commence shortly and that the FCC's review of the proposed transaction will be completed by early 2016. The Company has received all necessary state regulatory approvals. For additional information regarding the transaction and the necessary regulatory approvals required in connection with the proposed merger, please see the Company's filings with the Securities and Exchange Commission ("SEC"), including the definitive proxy statement filed with the SEC on October 13, 2015.
The "Highlights" and "Subscriber Update" sections represent results of operations for the Company's Western Markets, which are included in the supplemental schedules provided.
Highlights
-- Revenues increased slightly to $88.3 million for the third quarter 2015,
compared to $88.2 million for the third quarter 2014;
-- Adjusted EBITDA was $23.1 million for the third quarter 2015, compared
to $32.9 million for the third quarter 2014. Adjusted EBITDA during the
third quarter 2015 reflected lower wholesale revenue and the absorption
of corporate overhead previously allocated to the Eastern Markets in
2014;
-- Net subscriber additions for the nine months ended September 30, 2015 of
18,100 exceeded net subscriber additions for the full year 2014 of
14,600; and
-- Approximately 65% of covered POPs have access to our LTE network,
exceeding the original year end 2015 goal of 50%.
Subscriber Update
Total Subscribers
-- Total subscribers were 300,200 as of September 30, 2015, compared to
297,500 for the second quarter 2015 and 277,100 for the third quarter
2014;
-- Total subscriber gross additions for the third quarter 2015 were 25,500,
compared to 25,700 for the second quarter 2015 and 24,600 for the third
quarter 2014; and
-- Total subscriber net additions for the third quarter 2015 were 2,700,
compared to 7,400 for the second quarter 2015 and 3,100 for the third
quarter 2014.
Postpay Subscribers
-- Postpay subscriber gross additions for the third quarter 2015 were
15,400, compared to 14,300 for the second quarter 2015 and 15,500 for
the third quarter 2014;
-- Net postpay subscriber additions were 2,100 for the third quarter 2015,
compared to 4,300 for the second quarter 2015 and 3,000 for the third
quarter 2014;
-- Postpay churn for the third quarter 2015 was 1.9%, compared to 1.5% for
second first quarter 2015 and 1.9% for the third quarter 2014;
-- ARPA was $112.81 for the third quarter 2015, compared to $133.83 for the
third quarter 2014; and
-- As of September 30, 2015, total postpay subscribers were 231,300.
Prepay Subscribers
-- Prepay subscriber gross additions for the third quarter 2015 were
10,100, compared to 11,400 for the second quarter 2015 and 9,100 for the
third quarter 2014;
-- Net prepay subscriber additions were 600 for the third quarter 2015,
compared to 3,100 for the second quarter 2015 and 100 for the third
quarter 2014;
-- Prepay churn for the third quarter 2015 was 4.6%, compared to 4.1% for
the second quarter 2015 and 4.9% for the third quarter 2014; and
-- As of September 30, 2015, total prepay subscribers were 68,900.
Eastern Markets Wind Down Update
In the fourth quarter of 2014, the Company announced a strategic refocus of its business operations in its western Virginia and West Virginia markets ("Western Markets" or "Markets"). The Company is currently in the process of winding down commercial operations in its Eastern Markets, which it expects to complete by November 15, 2015.
During the nine months ended September 30, 2015, the Company reduced its Eastern Markets subscribers by 123,300 as part of winding down operations in an orderly manner. Eastern Markets Adjusted EBITDA for the nine months ended September 30, 2015 was $12.7 million, and is not included in Western Markets Adjusted EBITDA as discussed above.
Net Income
Net income (loss) of nTelos Holdings, after net income attributable to noncontrolling interests, was $(9.0) million, or $(0.42) per basic share, for the third quarter 2015, compared to $0.8 million, or $0.04 per diluted share, for the third quarter 2014.
Liquidity
Total cash, including both restricted and unrestricted cash, at the end of the third quarter 2015 was $111.0 million, compared to $75.7 million at the end of the fourth quarter 2014.
Business Outlook
As a result of the announcement that the Company has entered into a definitive agreement to be acquired by Shentel, the Company will no longer provide operating or financial guidance.
Conference Call
As a result of the announcement that the Company has entered into a definitive agreement to be acquired by Shentel, the Company will not host a third quarter 2015 conference call and webcast.
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, transaction related costs, restructuring and asset impairment charges, gain/loss on sale or disposal of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, separation charges, secondary offering costs, adjustments for impact of recognizing deferred gain associated with towers sold to Grain Management and adjustments for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
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.
ABPU, or average billings per user, is computed by adding average monthly postpaid service billings to users and equipment installment plan (EIP) billings divided by the average number of postpaid users during the period, further divided by the number of months in the period. NTELOS believes average postpaid customer billings per user is indicative of estimated cash collection, including equipment installments, from customers each month.
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 and ABPU 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, ARPA and ABPU 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. (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 300,200 retail subscribers based in its Western Markets, comprised of western Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company's licensed territories in the Western Markets have a total population of approximately 4.4 million residents, of which its wireless network covers approximately 3.1 million residents. The Company is also the exclusive wholesale provider of wireless network services to Sprint Corporation in portions of its western Virginia and West Virginia territories for all Sprint wireless customers.
FORWARD-LOOKING STATEMENTS
This document may contain statements, estimates or projections that constitute "forward-looking statements" as defined under U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "plan," "estimate," "anticipate," "project," "will," "may" "should," and similar expressions identify forward-looking statements, which generally are not historical in nature.
Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. The forward-looking statements are or may be based on a series of projections and estimates and involve risks and uncertainties. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, those described in Part II, "Item 1A, Risk Factors" and elsewhere in this quarterly report and in our Annual Report on Form 10-K for the year ended December 31, 2014 and those described from time to time in our future reports filed with the Securities and Exchange Commission ("SEC").
Additionally, there are risks and uncertainties associated with the proposed acquisition by Shentel such as: (1) the Company may be unable to obtain stockholder approval as required for the proposed merger with Shenandoah Telecommunications Company ("Shentel"); (2) conditions to the closing of the merger, including, without limitation, the consummation of certain transactions between Shentel and Sprint, may not be satisfied and required regulatory approvals may not be obtained; (3) the merger may involve unexpected costs, liabilities or delays; (4) the risks related to disruption of management's attention from the Company's ongoing business operations due to the transaction, (5) the effect of the announcement of the merger on the ability of the Company to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally, (6) the outcome of any legal proceedings related to the merger; (7) the Company may be adversely affected by other economic, business, and/or competitive factors; (8) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (9) changes in the legal or regulatory environment; and (10) other risks to consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all. If the merger is consummated, the Company stockholders will cease to have any equity interest in the Company and will have no right to participate in its earnings and future growth.
Additional Information and Where to Find It
This document does not constitute a solicitation of any vote or approval. In connection with the proposed transaction, NTELOS has filed with the SEC and mailed or otherwise provided to its stockholders a proxy statement regarding the proposed transaction. BEFORE MAKING ANY VOTING DECISION, NTELOS'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY AND ALL OTHER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement and other documents that NTELOS has filed with the SEC from the SEC's website at www.sec.gov and on NTELOS's investor relations section website at ir.ntelos.com. In addition, the proxy statement and other documents filed by NTELOS with the SEC may be obtained from NTELOS free of charge by directing a request to NTELOS's Public Relations advisor at KCSA Strategic Communications, 880 Third Avenue, 6th Floor, New York, NY 10022.
NTELOS and its directors, executive officers and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from NTELOS stockholders with respect to the proposed acquisition of NTELOS. Security holders may obtain information regarding the names, affiliations and interests of such individuals in NTELOS's Annual Report on Form 10-K for the year ended December 31, 2014. Additional information regarding the interests of such individuals in the proposed acquisition of NTELOS is included in the proxy statement filed with the SEC. These documents may be obtained free of charge from the SEC's website at www.sec.gov and NTELOS's investor relations website at ir.ntelos.com.
Exhibits:
-- Consolidated Financial Statements
-- Condensed Consolidated Balance Sheets
-- Condensed Consolidated Statements of Operations
-- Consolidated Operating Metrics
-- Reconciliation of Net Income Attributable to NTELOS Holdings Corp.
to Adjusted EBITDA
-- Key Metrics
-- ARPA Reconciliation - Postpay
-- ABPU Reconciliation - Postpay
-- Western Markets Operating Metrics
-- Western Markets Condensed Consolidated Statements of Operating
Income
-- Western Markets Reconciliation of Net Income Attributable to NTELOS
Holdings Corp. to Adjusted EBITDA
-- Western Markets Key Metrics
-- Western Markets ARPA Reconciliation - Postpay
-- Western Markets ABPU Reconciliation - Postpay
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Balance Sheets (Unaudited) (Unaudited)
September 30, 2015 December 31, 2014
------------------ -----------------
(In thousands)
ASSETS
Current Assets
Cash $108,842 $73,546
Restricted cash 2,167 2,167
Accounts receivable, net 52,508 45,054
Inventories and supplies 12,464 18,297
Deferred income taxes 22,144 24,770
Prepaid expenses 12,732 13,543
Other current assets 536 4,626
211,393 182,003
------- -------
Assets Held for Sale 1,454 64,271
Securities and Investments 1,522 1,522
Property, Plant and Equipment, net 321,673 289,947
Intangible Assets
Goodwill 63,700 63,700
Radio spectrum licenses 44,933 44,933
Customer relationships and trademarks, net 4,490 5,084
Deferred Charges and Other Assets 19,260 18,474
Total Assets $668,425 $669,934
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Current portion of long-term debt $5,696 $5,816
Accounts payable 11,847 24,541
Accrued expenses and other current liabilities 43,084 43,092
60,627 73,449
------ ------
Long-Term Debt 515,875 519,592
Other Long-Term Liabilities 114,012 109,845
Stockholders' Equity (Deficit) (22,089) (32,952)
Total Liabilities and Stockholders' Equity (Deficit) $668,425 $669,934
======== ========
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Statements of Operations Three Months Ended Nine Months Ended
----------------------------------------------- ------------------ -----------------
(Unaudited) (Unaudited)
(In thousands, except per share amounts) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
--------------------------------------- ------------------ ------------------ ------------------ ------------------
Operating Revenues
Retail Revenue $50,221 $72,034 $174,978 $218,845
Wholesale and other revenue 35,567 37,802 109,497 116,817
Equipment sales 11,752 9,802 41,595 23,853
Operating Revenues 97,540 119,638 326,070 359,515
------ ------- ------- -------
Operating Expenses
Cost of services 30,087 30,591 91,762 87,676
Cost of equipment sold 21,495 26,290 65,168 72,287
Customer operations 19,201 25,381 64,049 78,383
Corporate operations 11,830 8,580 31,217 31,610
Restructuring 4,627 - 8,237 -
Depreciation and amortization 15,157 18,473 43,516 57,469
Gain on sale of assets - - (16,749) -
102,397 109,315 287,200 327,425
------- ------- ------- -------
Operating Income (loss) (4,857) 10,323 38,870 32,090
Other Expense
Interest expense (7,422) (8,371) (22,913) (24,644)
Other income (expense), net 30 (29) 61 (1,194)
--- --- ---
(7,392) (8,400) (22,852) (25,838)
------ ------ ------- -------
Income before Income Taxes (12,249) 1,923 16,018 6,252
Income Tax Expense, (Benefit) (3,523) 767 7,576 2,517
------ --- ----- -----
Net Income (Loss) (8,726) 1,156 8,442 3,735
Net Income Attributable to Noncontrolling Interests (237) (352) (999) (1,161)
Net Income (Loss) Attributable to NTELOS Holdings Corp. $(8,963) $804 $7,443 $2,574
======= ==== ====== ======
Earnings per Share Attributable to Common Shares:
Net Income (Loss) applicable to NTELOS Holdings Corp. $(8,963) $804 $7,443 $2,574
Net Income (Loss) applicable to participating securities - - 292 -
Net Income (Loss) applicable to common shares $(8,963) $804 $7,151 $2,574
======== ==== ======
Basic $(0.42) $0.04 $0.34 $0.12
===== ===== =====
Weighted average shares outstanding - basic 21,284 21,119 21,241 21,100
====== ====== ======
Diluted $(0.42) $0.04 $0.32 $0.12
=======
Weighted average shares outstanding - diluted 21,284 21,894 22,569 21,706
====== ====== ======
Cash Dividends Declared per Share - Common Stock $ - $ - $ - $0.84
================= ================= ================= =====
NTELOS Holdings Corp.
---------------------
Reconciliation of Net Income (Loss) Attributable to NTELOS Holdings Corp. to Adjusted EBITDA - (Consolidated)
(In thousands)
-------------
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
------------------ ------------------ ------------------ ------------------
Net income (loss) attributable to NTELOS Holdings Corp. $(8,963) $804 $7,443 $2,574
Net income attributable to noncontrolling interests 237 352 999 1,161
--- --- --- -----
Net income (loss) $(8,726) $1,156 $8,442 $3,735
Interest expense 7,422 8,371 22,913 24,644
Income tax expense (benefit) (3,523) 767 7,576 2,517
Other expense (income), net (30) 29 (61) 1,194
--------------------------- --- --- --- -----
Operating income (loss) $(4,857) $10,323 $38,870 $32,090
Depreciation and amortization 15,157 18,473 43,516 57,469
Restructuring 4,627 - 8,237 -
Gain on sale of assets - - (16,749) -
Accretion of asset retirement obligations 272 280 1,224 926
Equity-based compensation 883 (403) 2,651 2,191
SNA straight-line adjustment (1) 2,565 3,065 8,695 5,108
Cell site spectrum rent 603 - 1,609 -
Other (2) 2,825 1,040 2,531 3,279
-------- ----- ----- ----- -----
Adjusted EBITDA $22,075 $32,778 $90,584 $101,063
======= ======= ======= ========
(1) Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight
line basis.
(2) In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee separation charges.
In 2015, Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of the deferred
gain
for towers sold to Grain Management, LLC.
NTELOS Holdings Corp.
---------------------
Key Metrics - (Consolidated) Nine Months Ended
--------------------------- -----------------
Quarter Ended: 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 9/30/2014 9/30/2015
-------------- --------- ---------- --------- --------- --------- --------- ---------
Subscribers
-----------
Beginning Subscribers 458,100 457,200 448,900 414,700 378,900 464,600 448,900
Postpay 308,200 310,200 310,100 294,300 276,400 306,700 310,100
Prepay 149,900 147,000 138,800 120,400 102,500 157,900 138,800
Gross Additions 41,400 40,400 28,800 25,800 25,600 125,800 80,200
Postpay 20,800 22,500 15,800 14,400 15,400 61,400 45,600
Prepay 20,600 17,900 13,000 11,400 10,200 64,400 34,600
Disconnections 42,300 48,700 63,000 61,600 60,800 122,900 185,400
Postpay 18,900 22,700 31,500 32,200 36,500 55,900 100,200
Prepay 23,400 26,000 31,500 29,400 24,300 67,000 85,200
Net Additions (Losses) (900) (8,300) (34,200) (35,800) (35,200) 2,900 (105,200)
Postpay 1,900 (200) (15,700) (17,800) (21,100) 5,500 (54,600)
Prepay (2,800) (8,100) (18,500) (18,000) (14,100) (2,600) (50,600)
Ending Subscribers 457,200 448,900 414,700 378,900 343,700 457,200 343,700
Postpay 310,200 310,100 294,300 276,400 255,500 310,200 255,500
Prepay 147,000 138,800 120,400 102,500 88,200 147,000 88,200
Churn, net 3.1% 3.6% 4.9% 5.2% 5.6% 2.9% 5.2%
Postpay 2.0% 2.4% 3.5% 3.8% 4.6% 2.0% 3.9%
Prepay 5.3% 6.0% 8.1% 8.8% 8.5% 4.8% 8.5%
Other Items
-----------
ABPU/ARPA Statistics
--------------------
ABPU $61.41 $61.43 $61.41 $60.14 $57.80 $62.05 $59.87
ARPA $134.18 $132.48 $125.98 $117.90 $109.47 $136.27 $118.12
Postpay Accounts (1) 142,100 143,400 138,500 130,500 120,600 142,100 120,600
Postpay Subscribers per Account
(1) 2.2 2.2 2.1 2.1 2.1 2.2 2.1
Strategic Network Alliance Revenues (000's) (2)
----------------------------------------------
Billed Revenue $38,144 $38,329 $36,627 $37,887 $35,408 $115,425 $109,922
Straight-Line Adjustment (3,065) (3,065) (3,065) (3,065) (2,565) (5,108) (8,695)
Spectrum Lease Consideration 1,234 1,233 1,190 1,222 1,221 2,056 3,633
------------ ----- ----- -----
SNA Revenues $36,313 $36,497 $34,752 $36,044 $34,064 $112,373 $104,860
------- ------- ------- ------- --------
Network Statistics
------------------
Licensed Population (millions) 8.0 8.0 8.0 8.0 8.0 8.0 8.0
Covered Population (millions) 6.0 6.0 6.0 6.0 5.9 6.0 5.9
Total Cell Sites 1,446 1,453 1,455 1,443 1,417 1,446 1,417
(1) End of Period
(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 leases. We have recognized an equal charge for spectrum lease expense within
cost of sales and services.
NTELOS Holdings Corp.
---------------------
ARPA Reconciliation - Postpay - (Consolidated) Three Months Ended Nine Months Ended
--------------------------------------------- ------------------ -----------------
Average Monthly Revenue per Account (ARPA) (1) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
--------------------------------------------- ------------------ ------------------ ------------------ ------------------
(In thousands, except for accounts and ARPA)
Retail Revenue $50,221 $72,034 $174,978 $218,845
Less: prepay service revenues and other (9,031) (14,950) (32,591) (47,019)
---------------------------------------- ------ ------- ------- -------
Postpay service revenues $41,190 $57,084 $142,387 $171,826
Average number of postpay accounts 125,400 141,800 133,900 140,100
Postpay ARPA $109.47 $134.18 $118.12 $136.27
============ ======= ======= ======= =======
(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.
NTELOS Holdings Corp.
---------------------
ABPU Reconciliation - Postpay - (Consolidated) Three Months Ended Nine Months Ended
--------------------------------------------- ------------------ -----------------
Average Monthly Billings per User (ABPU) (1) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
------------------------------------------- ------------------ ------------------ ------------------ ------------------
(In thousands, except for accounts and ABPU)
Retail Revenue $50,221 $72,034 $174,978 $218,845
Plus: EIP billings 4,835 18 11,084 18
Less: prepay service revenues and other (9,031) (14,950) (32,591) (47,019)
---------------------------------------- ------ ------- ------- -------
Total postpay billings $46,025 $57,102 $153,471 $171,844
Average number of postpay subscribers 265,400 310,000 284,800 307,700
Postpay ABPU $57.80 $61.41 $59.87 $62.05
============ ====== ====== ====== ======
(1) Average monthly billings per user (ABPU) is computed by dividing postpay service revenues and equipment installment plan (EIP) billings per
period by the average number of postpay subscribers during that period. ABPU as defined may not be similar to ABPU 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
ABPU in order to determine their effectiveness. ABPU 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.
NTELOS Western Markets (1)
-------------------------
Condensed Consolidated Statements of Operating Income Three Months Ended Nine Months Ended
----------------------------------------------------- ------------------ -----------------
(Unaudited) (Unaudited)
(In thousands) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
------------- ------------------ ------------------ ------------------ ------------------
Operating Revenues
Retail Revenue $42,110 $44,224 $127,668 $132,867
Wholesale and other revenue 34,758 37,348 107,055 115,387
Equipment sales 11,478 6,619 40,322 15,228
Operating Revenues 88,346 88,191 275,045 263,482
------ ------ ------- -------
Operating Expenses
Cost of services 22,789 20,772 66,395 59,415
Cost of equipment sold 21,160 17,813 64,043 48,323
Customer operations 16,288 15,169 51,970 46,186
Corporate operations 11,551 5,629 29,493 20,590
Restructuring 90 - 2,372 -
Depreciation and amortization 13,795 13,658 39,729 40,298
Gain on sale of assets - - (11,111) -
85,673 73,041 242,891 214,812
------ ------ ------- -------
Operating Income $2,673 $15,150 $32,154 $48,670
(1) Western Markets is defined as Holdings less Eastern Markets.
NTELOS Western Markets (1)
-------------------------
Reconciliation of Net Income (Loss) Attributable to NTELOS Holdings Corp. to Western Markets Proforma Adjusted EBITDA
(In thousands)
-------------
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
------------------ ------------------ ------------------ ------------------
Net income (loss) attributable to NTELOS Holdings Corp. $(8,963) $804 $7,443 $2,574
Net income attributable to noncontrolling interests 237 352 999 1,161
--- --- --- -----
Net income (loss) $(8,726) $1,156 $8,442 $3,735
Operating loss (income) attributable to Eastern Markets 7,530 4,827 (6,716) 16,581
Interest expense 7,422 8,371 22,913 24,644
Income tax expense, (benefit) (3,523) 767 7,576 2,517
Other expense (income), net (30) 29 (61) 1,194
--------------------------- --- --- --- -----
Operating income $2,673 $15,150 $32,154 $48,671
Depreciation and amortization 13,795 13,658 39,729 40,298
Restructuring (2) 90 - 2,372 -
Gain on sale of assets - - (11,111) -
Accretion of asset retirement obligations 319 179 934 637
Equity-based compensation 875 (212) 2,635 1,541
SNA straight-line adjustment (3) 2,565 3,065 8,695 5,108
Other 2,806 1,038 2,511 3,278
------- ----- ----- ----- -----
Adjusted EBITDA $23,123 $32,878 $77,919 $99,533
======= ======= ======= =======
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) Restructuring costs attributable to Corporate and Western Markets.
(3) Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a
straight line basis.
4 In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee separation
charges.
In 2015, Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of the
deferred gain
for towers sold to Grain Management, LLC.
NTELOS Western Markets (1)
-------------------------
Key Metrics Nine Months Ended
----------- -----------------
Quarter Ended: 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 9/30/2014 9/30/2015
-------------- --------- ---------- --------- --------- --------- --------- ---------
Subscribers
-----------
Beginning Subscribers 274,000 277,100 282,100 290,100 297,500 273,600 282,100
Postpay 212,400 215,500 220,100 224,700 229,000 208,800 220,100
Prepay 61,600 61,600 62,000 65,400 68,500 64,800 62,000
Gross Additions 24,600 28,300 27,500 25,700 25,500 72,100 78,700
Postpay 15,500 18,600 15,700 14,300 15,400 44,800 45,400
Prepay 9,100 9,700 11,800 11,400 10,100 27,300 33,300
Disconnections 21,500 23,300 19,500 18,300 22,800 62,500 60,600
Postpay 12,500 13,900 11,100 10,000 13,300 36,600 34,400
Prepay 9,000 9,400 8,400 8,300 9,500 25,900 26,200
Net Additions (Losses) 3,100 5,000 8,000 7,400 2,700 9,600 18,100
Postpay 3,000 4,700 4,600 4,300 2,100 8,200 11,000
Prepay 100 300 3,400 3,100 600 1,400 7,100
Ending Subscribers 277,100 282,100 290,100 297,500 300,200 277,100 300,200
Postpay 215,500 220,100 224,700 229,000 231,300 215,500 231,300
Prepay 61,600 62,000 65,400 68,500 68,900 61,600 68,900
Churn, net 2.6% 2.8% 2.3% 2.1% 2.5% 2.5% 2.3%
Postpay 1.9% 2.2% 1.7% 1.5% 1.9% 1.9% 1.7%
Prepay 4.9% 5.0% 4.4% 4.1% 4.6% 4.5% 4.4%
Other Items
-----------
ABPU/ARPA Statistics
--------------------
ABPU $59.27 $59.35 $58.04 $58.64 $58.29 $59.75 $58.32
ARPA $133.83 $132.12 $122.04 $117.18 $112.81 $135.66 $117.27
Postpay Accounts (2) 95,500 98,700 101,900 104,300 106,200 95,500 106,200
Postpay Subscribers per
Account (2) 2.3 2.2 2.2 2.2 2.2 2.3 2.2
Strategic Network Alliance Revenues (000's) (3)
----------------------------------------------
Billed Revenue $38,144 $38,329 $36,627 $37,887 $35,408 $115,425 $109,922
Straight-Line Adjustment (3,065) (3,065) (3,065) (3,065) (2,565) (5,108) (8,695)
Spectrum Lease Consideration 1,234 1,233 1,190 1,222 1,221 2,056 3,633
------------ ----- ----- ----- -----
SNA Revenues $36,313 $36,497 $34,752 $36,044 $34,064 $112,373 $104,860
------- ------- ------- ------- --------
Network Statistics
------------------
Licensed Population
(millions) 4.4 4.4 4.4 4.4 4.4 4.4 4.4
Covered Population
(millions) 3.1 3.1 3.1 3.1 3.1 3.1 3.1
Total Cell Sites 1,000 1,004 1,006 1,007 1,006 1,000 1,006
LTE Cell Sites 135 135 202 274 382 135 382
LTE % of Total Cell Sites 13.5% 13.4% 20.1% 27.2% 38.0% 13.5% 38.0%
LTE % of Covered POPs NA 22.2% 43.6% 53.1% 64.7% NA 64.7%
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) End of Period
(3) 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 leases. We have recognized an
equal charge for
spectrum lease expense within cost of sales and services.
NTELOS Western Markets (1)
-------------------------
ARPA Reconciliation - Postpay Three Months Ended Nine Months Ended
----------------------------- ------------------ -----------------
Average Monthly Revenue per Account (ARPA) (2) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
--------------------------------------------- ------------------ ------------------ ------------------ ------------------
(In thousands, except for accounts and ARPA)
Retail Revenue $42,110 $44,224 $127,668 $132,867
Less: prepay service revenues and other (6,405) (6,118) (18,975) (19,126)
Postpay service revenues $35,705 $38,106 $108,693 $113,741
Average number of postpay accounts 105,500 94,900 103,000 93,200
Postpay ARPA $112.81 $133.83 $117.27 $135.66
============ ======= ======= ======= =======
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) 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.
NTELOS Western Markets (1)
-------------------------
ABPU Reconciliation - Postpay Three Months Ended Nine Months Ended
----------------------------- ------------------ -----------------
Average Monthly Billings per User (ABPU) (2) September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014
------------------------------------------- ------------------ ------------------ ------------------ ------------------
(In thousands, except for accounts and ABPU)
Retail Revenue $42,110 $44,224 $127,668 $132,867
Plus: EIP billings 4,631 13 10,267 13
Less: prepay service revenues and other (6,405) (6,118) (18,975) (19,126)
---------------------------------------- ------ ------ ------- -------
Total postpay billings $40,336 $38,119 $118,960 $113,754
Average number of postpay subscribers 230,700 214,400 226,600 211,600
Postpay ABPU $58.29 $59.27 $58.32 $59.75
============ ====== ====== ====== ======
(1) Western Markets is defined as Holdings less Eastern
Markets.
(2) Average monthly billings per user (ABPU) is computed by dividing postpay service revenues and equipment
installment plan (EIP) billings per period by the average number of postpay subscribers during that period.
ABPU as defined may not be similar to ABPU 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 ABPU in order to determine their effectiveness. ABPU 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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ntelos-holdings-corp-reports-third-quarter-2015-results-300168237.html
SOURCE NTELOS Holdings Corp.
