WARWICK, NY--(Marketwire - March 20, 2008) - Warwick Valley Telephone Company (the
"Company," "WVT Communications") (NASDAQ: WWVY) announced today its
financial results for the twelve months ended December 31, 2007. The
Company increased its net income by 37% to $5,493,000 from $3,997,000 for
the twelve-month period over the same period in 2006 as compared to a
decrease in net income by 23% to $3,997,000 from $5,170,000 for the
twelve-month period over the same period in 2005. The Company's net income
for the twelve-month period in 2006 included $611,000 derived from the sale
of an investment. That income did not recur in 2007. If it is excluded
from the net income for the twelve months of 2006, the Company's net income
for the comparable twelve-month period in 2007 increased by 53% over 2006.
Operating revenues decreased 5% from $25,236,000 to $24,042,000 for the
twelve months ended December 31, 2007 compared to the same period in the
prior year and decreased 8% from $27,342,000 to $25,236,000 for the twelve
months ended December 31, 2006 compared to the same period in the prior
year. While revenues have continued to decline compared to last year, the
rate of decline has been somewhat lessened. The Company also extended the
footprint of its video services and added High Definition TV during the
year.
As a result of aggressive cost controls, operating expenses decreased a
significant 13% from $29,030,000 to $25,140,000 for the twelve months ended
December 31, 2007 and decreased 4% from $30,289,000 to $29,030,000 for the
twelve months ended December 31, 2006 compared to the same periods in the
prior year. These decreases derived largely from greater oversight of
outside vendors and through improved operating efficiencies.
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. During 2007, the Company upgraded its core
network 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 year end results, Duane Albro, the President and CEO,
said, "2007 was a milestone year for our company as we delivered
improvement in net income and the overall efficiency of the business. Our
results were principally due to the diligence of our employees in the
execution of our business plan. The focus during the year has been to
continue our aggressive control of expenses in order to improve our
operating margin, lower our cost structure to enhance our competitiveness,
and to position our infrastructure and products for increased marketing and
sales in 2008. We remain firmly committed to creating value for our
shareholders by the successful planning and deployment of the above
initiatives. We also remain committed to expansion of our Competitive
Local Exchange Carrier (CLEC) activities through either building or
acquiring the capability. WVT Communications continues to demonstrate that
it is a great company with great customers and great employees... with 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 forward-looking statements as defined be the Private
Securities Litigation Reform Act of 1995. These include statements
concerning expectations, estimates, and projections about the industry,
management beliefs and assumptions of Warwick Valley Telephone Company
("Warwick," "we," "us," or "our"). Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," and variations of
such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions
that difficult to forecast. Therefore, our actual results may materially
differ from those expressed or forecasted in any such forward-looking
statements. When considering these risks, uncertainties and assumptions,
you should keep in mind the cautionary statements elsewhere in this report
and in any document incorporated herein by reference. New risks and
uncertainties arise from time to time and we can not predict those events
or how they may affect us. For a more detailed discussion of the risks and
uncertainties that may affect Warwick's operating and financial results and
its ability to achieve its financial objectives, interested parties should
review the "Risk Factors" sections in the Warwick's reports filed with the
Securities and Exchange Commission, including the Annual Report on Form
10-K for the fiscal year ended December 31, 2007. We undertake no
obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31,
-------------------------------
2007 2006 2005
--------- --------- ---------
($ in thousands except share
and per share amounts)
Operating Revenues:
Local network service $ 3,367 $ 3,550 $ 3,903
Network access service 8,150 8,648 9,711
Long distance services 3,618 3,498 3,586
Directory advertising 1,325 1,348 1,390
Online services 5,733 6,223 6,734
Other services and sales 1,849 1,969 2,018
--------- --------- ---------
Total operating revenues 24,042 25,236 27,342
--------- --------- ---------
Operating Expenses:
Plant specific 4,415 5,388 4,911
Plant non-specific:
Depreciation & amortization 5,252 5,407 5,652
Other 2,932 3,531 3,561
Customer operations 4,232 4,164 4,460
Corporate operations 5,750 8,153 8,717
Cost of services and sales 1,341 1,199 1,578
Property, revenue and payroll taxes 1,218 1,188 1,410
--------- --------- ---------
Total operating expenses 25,140 29,030 30,289
--------- --------- ---------
Operating (loss) income (1,098) (3,794) (2,947)
Other Income (Expenses):
Interest income (expense), net (213) (30) (210)
Income from equity method investments,
net 9,651 9,367 10,638
Gain on sale of investment -- 611 889
Loss on write-down of investment -- -- (705)
Other income (expense), net (52) (117) 291
--------- --------- ---------
Total other income 9,386 9,831 10,903
--------- --------- ---------
Income before income taxes 8,288 6,037 7,956
Income Taxes 2,795 2,040 2,786
--------- --------- ---------
Net Income 5,493 3,997 5,170
Preferred Dividends 25 25 25
--------- --------- ---------
Income Applicable to Common Stock $ 5,468 $ 3,972 $ 5,145
========= ========= =========
Basic & Diluted Earnings per Share of
Outstanding Common Stock $ 1.02 $ 0.74 $ 0.96
========= ========= =========
Weighted Average Shares of Common Stock
Outstanding 5,351,780 5,351,780 5,359,862
========= ========= =========
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2007 2006
------------- -------------
($ in thousands except share
and per share amounts)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,849 $ 12,296
Accounts receivable -- net of allowance for
uncollectibles -- $214 and $107 in 2007 and
2006, respectively 3,067 4,121
Other accounts receivable 152 262
Materials and supplies 1,591 957
Prepaid expenses 769 695
Deferred income taxes 119 228
------------- -------------
Total Current Assets 11,547 18,559
------------- -------------
Property, plant and equipment, net 35,791 37,087
Unamortized debt issuance costs 65 77
Other deferred charges 762 814
Investments 8,276 3,733
Other assets 210 179
------------- -------------
Total Assets $ 56,651 $ 60,449
============= =============
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable $ 940 $ 1,013
Current maturities of long-term debt 1,519 1,519
Advance billing and payments 234 251
Customer deposits 116 128
Accrued taxes 80 1,221
Pension and post retirement benefit
obligations 929 1,435
Other accrued expenses 1,830 2,199
------------- -------------
Total Current Liabilities 5,648 7,766
------------- -------------
Long-term debt, net of current maturities 5,695 7,214
Deferred income taxes 3,334 4,490
Long-term income taxes payable 640 --
Other liabilities and deferred credits 591 624
Pension and postretirement benefit
obligations 4,324 7,583
------------- -------------
Total Liabilities 20,232 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 (875) (3,554)
Retained earnings 37,995 37,027
------------- -------------
Total Shareholders Equity 36,419 32,772
------------- -------------
Total Liabilities and Shareholders Equity $ 56,651 $ 60,449
============= =============
Contact Information: Contact:
WVT Communications
Kenneth H. Volz
Executive Vice President, Chief Financial Officer and Treasurer
845-986-8080