NTELOS HOLDINGS CORP WAYNESBORO, Va., Oct. 31, 2014 /PRNewswire/ -- NTELOS Holdings Corp. (the "Company," NASDAQ: NTLS), a leading regional provider of nationwide wireless voice and data communications announced today operating and financial results for its third quarter ended September 30, 2014.
Third Quarter 2014 Operational Update
-- Expanded 4G LTE network to cover 3.2 million of 6.0 million total
covered POPs in footprint as of September 30, 2014;
-- Successfully introduced Equipment Installment Plan ("EIP") on August 15,
2014 with program gaining increasing popularity;
-- Operating revenues were $119.6 million for the third quarter 2014;
compared to $130.9 million (or $121.9 million when excluding the
one-time Strategic Network Alliance ("SNA") settlement) for the third
quarter 2013, reflecting an increase in retail revenues and wholesale
revenues consistent with our expectations following the May 2014 signing
of the Sprint SNA amendment; and
-- Adjusted EBITDA was $32.8 million for the third quarter 2014, compared
to $45.6 million (or $36.0 million when excluding the one-time impact
from the SNA settlement) for the third quarter 2013.
"In what continues to be a challenging competitive environment, nTelos is focused on executing on our partnership with Sprint and strengthening our retail sales operations. The launch of our EIP midway through the third quarter helped us achieve our tenth consecutive quarter of positive net postpay adds and our thirteenth consecutive quarter of positive total net ports," said Michael A. Huber, Chairman of the Board of NTELOS Holdings Corp. "We are also working diligently to improve our processes, drive additional operational efficiencies and optimize our retail offerings. Overall, we remain optimistic that nTelos is on track to execute our strategic objectives."
Subscriber Update
Total Subscribers
-- Total subscribers were 457,200 as of September 30, 2014, compared to
457,100 for the same period of 2013;
-- Total subscriber gross additions for the third quarter 2014 were 41,400,
compared to 44,500 for the same period of 2013; and
-- Total net subscriber additions (losses) for the third quarter 2014 were
(900), compared to 2,300 for the same period of 2013.
Postpay Subscribers
-- Postpay subscriber gross additions for the third quarter 2014 were
20,800, compared to 20,000 for the third quarter 2013 and 20,400 for the
second quarter 2014;
-- Net postpay subscriber additions were 1,900 for the third quarter 2014,
compared to 400 for the third quarter 2013 and 3,300 for the second
quarter 2014;
-- Postpay churn for the third quarter 2014 was 2.0%, compared to 2.2%, for
the third quarter 2013;
-- ARPA was $134.18 for the third quarter 2014, compared to $136.91 for the
same period in 2013; and
-- As of September 30, 2014, total postpay subscribers were 310,200.
Prepay Subscribers
-- Prepay subscriber gross additions for the third quarter 2014 were
20,600, compared to 24,500 for the third quarter 2013 and 18,600 for the
second quarter 2014;
-- Net prepay subscriber additions (losses) were (2,800) for the third
quarter 2014, compared to 1,900 for the third quarter 2013 and (2,900)
for the second quarter 2014;
-- Prepay churn for the third quarter 2014 was 5.3%, compared to 4.8% for
the third quarter 2013; and
-- As of September 30, 2014, total prepay subscribers were 147,000.
Net Income
Net income after net income attributable to noncontrolling interests was $0.8 million, or $0.04 per diluted share, for the third quarter 2014, compared to $10.6 million, or $0.48 per diluted share, for the third quarter 2013.
Business Outlook
For the year ending December 31, 2014, the Company is narrowing its full year 2014 Adjusted EBITDA guidance to between $128.0 million and $132.0 million and lowering its full year 2014 capital expenditures guidance to be approximately $105.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its third quarter 2014 results this morning, October 31, 2014, at 10:00 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 November 14, 2014.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to NTELOS Holdings Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, gain/loss on sale of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, 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.
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 457,200 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
NTELOS Holdings Corp.
Condensed Consolidated Balance Sheets
(Unaudited) (Unaudited)
(In thousands) September 30,
2014 December 31, 2013
-------------- -----------------
ASSETS
Current Assets
Cash $105,788 $88,441
Restricted cash 2,167 2,167
Accounts receivable,
net 38,737 37,741
Inventories and
supplies 19,655 23,962
Deferred income
taxes 8,522 10,650
Prepaid expenses 11,951 15,891
Other current assets 935 4,916
187,755 183,768
------- -------
Securities and
Investments 1,522 1,499
Property, Plant and
Equipment, net 335,637 319,376
Intangible Assets
Goodwill 63,700 63,700
Radio spectrum
licenses 131,825 131,834
Customer
relationships and
trademarks, net 5,282 6,985
Deferred Charges and
Other Assets 11,539 9,089
------ -----
Total Assets $737,260 $716,251
======== ========
LIABILITIES AND
EQUITY
Current Liabilities
Current portion of
long-term debt $5,835 $5,410
Accounts payable 30,537 24,748
Dividends payable - 9,034
Accrued expenses and
other current
liabilities 39,943 40,399
------
76,315 79,591
------ ------
Long-Term Debt 520,779 484,956
Other Long-Term
Liabilities 110,242 107,911
Equity 29,924 43,793
------ ------
Total Liabilities
and Equity $737,260 $716,251
======== ========
NTELOS Holdings Corp.
Condensed Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(Unaudited) (Unaudited)
(In thousands, except per share amounts) 2014 2013 2014 2013
Operating Revenues $119,638 $130,912 $359,515 $370,116
Operating Expenses
Cost of sales and services 56,881 49,580 159,963 141,020
Customer operations 25,381 26,502 78,383 78,321
Corporate operations 8,580 10,850 31,610 31,294
Depreciation and amortization 18,473 16,559 57,469 55,458
Gain on sale of intangible assets - - - (4,442)
--- --- --- ------
109,315 103,491 327,425 301,651
------- ------- ------- -------
Operating Income 10,323 27,421 32,090 68,465
Other Expense
Interest expense (8,371) (7,480) (24,644) (22,232)
Other expense, net (29) (430) (1,194) (649)
--- ---- ------ ----
(8,400) (7,910) (25,838) (22,881)
------ ------ ------- -------
Income before Income Taxes 1,923 19,511 6,252 45,584
Income Taxes 767 8,340 2,517 18,464
--- ----- ----- ------
Net Income 1,156 11,171 3,735 27,120
Net Income Attributable to Noncontrolling Interests (352) (588) (1,161) (1,658)
---- ---- ------ ------
Net Income Attributable to NTELOS Holdings Corp. $804 $10,583 $2,574 $25,462
==== ======= ====== =======
Earnings per Share Attributable to NTELOS Holdings Corp.:
Basic $0.04 $0.50 $0.12 $1.21
===== ===== ===== =====
Weighted average shares outstanding - basic 21,119 21,047 21,100 20,987
====== ====== ====== ======
Diluted $0.04 $0.48 $0.12 $1.17
===== ===== ===== =====
Weighted average shares outstanding - diluted 21,894 21,910 21,706 21,708
====== ====== ====== ======
Cash Dividends Declared per Share - Common Stock $ - $0.42 $0.84 $1.26
=== === ===== ===== =====
NTELOS Holdings Corp.
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(In thousands) 2014 2013 2014 2013
---- ---- ---- ----
Net income attributable to NTELOS Holdings Corp. $804 $10,583 $2,574 $25,462
Net income attributable to noncontrolling interests 352 588 1,161 1,658
--- --- ----- -----
Net income $1,156 $11,171 $3,735 $27,120
Interest expense 8,371 7,480 24,644 22,232
Income taxes 767 8,340 2,517 18,464
Other expense, net 29 430 1,194 649
--- --- ----- ---
Operating income 10,323 27,421 32,090 68,465
Depreciation and amortization 18,473 16,559 57,469 55,458
Gain on sale of intangible assets - - - (4,442)
Accretion of asset retirement obligations 280 135 926 451
Equity-based compensation (403) 1,442 2,191 4,223
SNA straight-line adjustment (1) 3,065 - 5,108 -
Other (2) 1,040 1 3,279 -
----- --- ----- ---
Adjusted EBITDA $32,778 $45,558 $101,063 $124,155
======= ======= ======== ========
(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
Amended and Restated
Sprint agreement and
certain employee
separation charges.
NTELOS Holdings Corp.
Key Metrics
Nine Months Ended
-----------------
Quarter 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 9/30/2013 9/30/2014
Ended:
------
Subscribers
Beginning Subscribers 454,800 457,100 464,600 468,000 458,100 439,600 464,600
Postpay 298,700 298,000 306,700 306,800 308,200 297,400 306,700
Prepay 156,100 159,100 157,900 161,200 149,900 142,200 157,900
Gross Additions 44,500 50,800 45,400 39,000 41,400 133,100 125,800
Postpay 20,000 28,700 20,200 20,400 20,800 56,500 61,400
Prepay 24,500 22,100 25,200 18,600 20,600 76,600 64,400
Disconnections(1) 42,200 43,300 42,000 38,600 42,300 115,600 122,900
Postpay 19,600 19,800 19,900 17,100 18,900 52,600 55,900
Prepay 22,600 23,500 22,100 21,500 23,400 63,000 67,000
Net Additions (Losses)(1) 2,300 7,500 3,400 400 (900) 17,500 2,900
Postpay 400 8,900 300 3,300 1,900 3,900 5,500
Prepay 1,900 (1,400) 3,100 (2,900) (2,800) 13,600 (2,600)
Ending Subscribers (1) 457,100 464,600 468,000 458,100 457,200 457,100 457,200
Postpay 298,000 306,700 306,800 308,200 310,200 298,000 310,200
Prepay 159,100 157,900 161,200 149,900 147,000 159,100 147,000
Churn, net (1) 3.1% 3.1% 3.0% 2.8% 3.1% 2.8% 2.9%
Postpay 2.2% 2.2% 2.2% 1.8% 2.0% 2.0% 2.0%
Prepay 4.8% 4.9% 4.6% 4.5% 5.3% 4.6% 4.8%
Other Items
ARPA Statistics
---------------
ARPA $136.91 $136.89 $137.47 $137.20 $134.18 $133.64 $136.27
Ending Postpay Accounts 140,200 141,200 138,400 140,500 142,100 140,200 142,100
Postpay Subscribers per Account 2.1 2.2 2.2 2.2 2.2 2.1 2.2
Strategic Network Alliance Revenues (000's) (2)
----------------------------------------------
Billed Revenue $48,644 $39,326 $39,284 $37,997 $38,144 $128,403 $115,425
Straight-Line Adjustment - - - (2,043) (3,065) (5,108)
Spectrum Lease Consideration - - - 822 1,234 2,056
--- --- --- --- ----- -----
SNA Revenues - As Reported $48,644 $39,326 $39,284 $36,776 $36,313 $128,403 $112,373
======= ======= ======= ======= ======= ======== ========
Network Statistics
------------------
Licensed Population (millions) 7.9 8.0 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 1,434 1,444 1,444 1,445 1,446 1,434 1,446
(1) During the second 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 leases. We have recognized
an equal charge for spectrum lease
expense within cost of sales and
services.
NTELOS Holdings Corp.
ARPA Reconciliation - Postpay
Average Monthly Revenue per Account (ARPA) (1)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
(In thousands, except for accounts and ARPA) 2014 2013 2014 2013
---- ---- ---- ----
Operating revenues $119,638 $130,912 $359,515 $370,116
Less: prepay service revenues (15,521) (16,478) (48,687) (48,344)
Less: equipment revenues (9,802) (6,540) (23,853) (18,673)
Less: wholesale and other adjustments (37,231) (50,142) (115,149) (132,229)
------- ------- -------- --------
Postpay service revenues $57,084 $57,752 $171,826 $170,870
Average number of postpay accounts 141,800 140,600 140,100 142,100
Postpay ARPA $134.18 $136.91 $136.27 $133.64
======= ======= ======= =======
(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.
Investor Relations Contacts:
Jeffrey Goldberger / Rob Fink
KCSA Strategic Communications
P: 212-896-1249 / 212-896-1206
Email: jgoldberger@kcsa.com / rfink@kcsa.com
SOURCE NTELOS Holdings Corp.
