WARWICK, NY--(Marketwire - November 15, 2007) - WVT Communications (
NASDAQ:
WWVY) (the
"Company") announced today its financial results for the three month and
nine month periods ended September 30, 2007. There was continued
improvement in net income for both periods. The Company increased its net
income for the three-month period by 24% from $1,259,000 in 2006 to
$1,557,000 in 2007 and by 15% from $3,162,000 in 2006 to $3,633,000 in 2007
for the nine-month period. If the gain of $611,000 (pre-tax) derived from
the sale of an investment in 2006 is excluded from the net income for the
first nine months of 2006, the Company's net income for the comparable
nine-month period in 2007 increased by 32% over 2006.
Operating revenues decreased 3% for the three-month period from $6,336,000
in 2006 to $6,137,000 in 2007 and by 5% for the nine-month period, from
$18,752,000 in 2006 to $17,906,000 in 2007. While revenues have continued
to decline compared to last year, the rate of decline has been somewhat
lessened. The Company introduced its Customer Winback Program and enhanced
its "Triple Play" (bundle of wireline access, broadband internet and video
services) with the re-introduction of WVT-branded wireless service into an
"Opt 4 Savings with Grand Slam" offering. The Company also extended the
footprint of its video services and added High Definition TV during the
third quarter. Management believes that these initiatives, along with other
new services, competitive pricing plans and advance technology deployment
should further reduce or reverse the revenue decline.
As a result of aggressive cost controls and improved operating
efficiencies, operating expenses decreased a significant 7% for the
three-month period from $6,727,000 in 2006 to $6,280,000 in 2007 and by 13%
for the nine-month period, from $21,639,000 in 2006 to $18,905,000 in 2007.
The Company has a long history in successful deployments of new technology.
WVT Communications was one of the first rural telephone companies to
install digital switching, to offer internet access as an Internet Service
Provider (ISP), and to offer video service as an alternative to cable TV
companies. The Company has continued to invest in its operations to gain
enhanced operating efficiencies and to enable the introduction of new
services to our customers. This year the Company will complete the
installation of its enterprise resource planning system, which will support
new services and provide operating efficiencies. During the third quarter,
the Company replaced its core routers with new technology. The Company has
continued to deploy capital to extend video services and higher speed
broadband internet to a greater number of our customers.
Commenting on the third quarter results, Duane Albro, the President and
CEO, said, "The continued improvement in net income is a significant
accomplishment for WVT Communications and was principally due to the
diligence of our employees in the execution of our business plan. The
focus during the third quarter was to continue our aggressive control of
expenses in order to generate a positive operating margin; lower our cost
structure to enhance our competitiveness; and to position our
infrastructure and products for the increased marketing and sales planned
for the remainder of this year and into 2008. We remain firmly committed
to creating value for our shareholders by the successful planning and
deployment of these initiatives. We also remain committed to expansion of
our CLEC activities through either building or acquiring the capability. We
believe that implementing our plans will maximize the value of our cash
flows. WVT Communications continues to demonstrate that it is a great
company with great customers and great employees... and a solid plan for
growth."
About WVT Communications
WVT Communications is a leading voice, internet, video and wireless
provider servicing consumers and businesses in the lower Hudson Valley of
New York and New Jersey. Additional information about the Company is
available at
www.wvtc.com.
Forward-looking Statements
This press release includes statements that may constitute
"forward-looking" statements. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1955. Forward-looking statements inherently involve risks and
uncertainties that could cause or contribute to such differences that
include, but are not limited to, competitive factors, the success of new
products in the marketplace, dependence on third party vendors, and the
ability to obtain financing. By making these forward-looking statements,
WVT Communications undertakes no obligation to update these statements for
revisions or changes after the date of this release.
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
($ in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Operating revenues:
Local network service $ 799 $ 882 $ 2,418 $ 2,706
Network access service 2,078 2,174 6,093 6,217
Long distance services 1,007 887 2,742 2,633
Directory advertising 328 340 997 1,008
Online services 1,419 1,527 4,334 4,733
Other services and sales 506 526 1,322 1,455
--------- --------- --------- ---------
Total operating revenues 6,137 6,336 17,906 18,752
--------- --------- --------- ---------
Operating expenses:
Plant specific 1,081 1,332 3,138 3,707
Plant non-specific:
Depreciation and
amortization 1,410 1,264 3,998 4,166
Other 752 805 2,199 2,567
Customer operations 1,120 977 3,067 3,091
Corporate operations 1,322 1,709 4,459 6,198
Cost of services and sales 229 367 914 957
Property, revenue and payroll
taxes 366 273 1,130 953
--------- --------- --------- ---------
Total operating expenses 6,280 6,727 18,905 21,639
--------- --------- --------- ---------
Operating loss (143) (391) (999) (2,887)
Other income (expense):
Interest income (expense),
net of capitalized interest (114) 15 (240) 21
Income from equity method
investments 2,626 2,177 6,761 6,945
Gain on sale of investment - - - 611
Other income (expense), net (28) (16) (18) (28)
--------- --------- --------- ---------
Total other income (expense) 2,484 2,176 6,503 7,549
--------- --------- --------- ---------
Income before income taxes 2,341 1,785 5,504 4,662
Income taxes 784 526 1,871 1,500
--------- --------- --------- ---------
Net income 1,557 1,259 3,633 3,162
Preferred dividends 6 6 19 19
--------- --------- --------- ---------
Income applicable to common
stock $ 1,551 $ 1,253 $ 3,614 $ 3,143
========= ========= ========= =========
Basic and diluted earnings
per share of
outstanding common stock $ 0.29 $ 0.23 $ 0.68 $ 0.59
========= ========= ========= =========
Weighted average shares of
common stock outstanding 5,351,780 5,351,780 5,351,780 5,351,780
========= ========= ========= =========
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEETS
($ in thousands except share and per share amounts)
September 30, December 31,
2007 2006
----------- -----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 5,385 $ 12,296
Accounts receivable - net of allowance for
uncollectibles - $150 and $107, in 2007 and
2006, respectively 3,551 4,121
Other accounts receivable 244 262
Materials and supplies 1,689 957
Prepaid expenses 695 695
Deferred income taxes 187 228
----------- -----------
Total current assets 11,751 18,559
----------- -----------
Property, plant and equipment, net 36,231 37,087
Unamortized debt issuance costs 68 77
Other deferred charges 849 814
Investments 8,644 3,733
Other assets 170 179
----------- -----------
Total assets $ 57,713 $ 60,449
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,081 $ 1,013
Current maturities of long-term debt 1,519 1,519
Advance billing and payments 251 251
Customer deposits 108 128
Accrued taxes 404 1,221
Pension and post retirement benefit
obligations 1,155 1,435
Other accrued expenses 2,062 2,199
----------- -----------
Total current liabilites 6,580 7,766
----------- -----------
Long-term debt, net of current maturities 6,075 7,214
Deferred income taxes 1,392 4,490
Long term income taxes payable 1,948 -
Other liabilities and deferred credits 655 624
Pension and post retirement benefit
obligations 7,857 7,583
----------- -----------
Total liabilities 24,507 27,677
----------- -----------
Shareholders' equity
Preferred shares - $100 par value; authorized
and issued shares of 5,000; $0.01 par value
authorized and unissued shares of 10,000,000; 500 500
Common stock - $0.01 par value; authorized
shares of 10,000,000
issued 5,985,463 shares 60 60
Treasury stock - at cost, 633,683 common
shares (4,748) (4,748)
Additional paid in capital 3,487 3,487
Accumulated other comprehensive loss (3,305) (3,554)
Retained earnings 37,212 37,027
----------- -----------
Total shareholders' equity 33,206 32,772
----------- -----------
Total liabilities and shareholders' equity $ 57,713 $ 60,449
=========== ===========
Contact Information: Contact:
WVT Communications
Kenneth H. Volz
Executive Vice President & Chief Financial Officer
845-986-8080