WARWICK, NY--(Marketwire - May 15, 2008) - Warwick Valley Telephone Company ("WVT
Communications") ("the Company") (NASDAQ: WWVY) announced today its
financial results for the three months ended March 31, 2008. The Company
increased its net income by 4.7% to $760,000 from $726,000 for the
three-month period over the same period in 2007. The increase was
attributable primarily to our increased investments in Orange
County-Poughkeepsie Limited Partnership ("OP") and continued expense
containment partially offset by higher costs associated with the ramp-up of
our sales force focusing on the small and medium sized business market, as
well as one time separation costs for management employees.
Operating revenues decreased 4.2% from $5,891,000 to $5,644,000 for the
three months ended March 31, 2008 compared to the same period in the prior
period. The decrease is primarily due to a decrease in online service and
local network service revenues resulting from the migration of customers
from dial-up service to other high speed Internet providers partially
offset by an increase in other services and sales resulting from the
increased sales of customer business telephone systems.
As a result of continued cost controls, operating expenses decreased 1.8%
from $6,591,000 to $6,474,000 for the three months ended March 31, 2008.
These decreases derived largely from the continued oversight of outside
vendors and through operating efficiencies partially offset by increases in
depreciation, higher content costs, trunk line costs, severance payments
made to management employees as well as the ramp-up of our direct sales
force.
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. 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 first quarter results, Duane Albro, the President and
CEO, said, "We recognize the benefit we gain from our interest in the OP
wireless partnership and we know that our primary telephone business must
be self-sufficient. We have the infrastructure in place and we are
aggressively ramping up our sales activities to drive our top-line revenue.
We will also continue our aggressive control of expenses in order to
improve our operating margin and enhance our competitiveness. We remain
firmly committed to creating value for our shareholders by the successful
implementation of the above initiatives. We also remain committed to
expansion of our Competitive Local Exchange Carrier 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
(Unaudited)
($ in thousands, except share and per share amounts)
Three Months Ended
March 31
--------------------
2008 2007
--------- ---------
Operating revenues:
Local network service $ 749 $ 825
Network access service 1,913 1,949
Long distance services 822 910
Directory advertising 325 338
Online services 1,340 1,475
Other services and sales 495 394
--------- ---------
Total operating revenues 5,644 5,891
--------- ---------
Operating expenses:
Plant specific 1,314 1,186
Plant non-specific:
Depreciation and amortization 1,359 1,294
Other 763 701
Customer operations 1,130 1,052
Corporate operations 1,298 1,550
Cost of services and sales 261 391
Property, revenue and payroll taxes 349 417
--------- ---------
Total operating expenses 6,474 6,591
--------- ---------
Operating loss (830) (700)
Other income (expense):
Interest income (expense), net of capitalized
interest (87) (34)
Income from equity method investments 2,147 1,870
Other income (expense), net (49) (18)
--------- ---------
Total other income (expense) 2,011 1,818
--------- ---------
Income before income taxes 1,181 1,118
Income taxes 421 392
--------- ---------
Net income 760 726
Preferred dividends 6 6
--------- ---------
Income applicable to common stock $ 754 $ 720
========= =========
Basic and diluted earnings per share of
outstanding common stock $ 0.14 $ 0.13
========= =========
Weighted average shares of common stock
outstanding 5,351,780 5,351,780
========= =========
WARWICK VALLEY TELEPHONE COMPANY
CONSOLIDATED BALANCE SHEETS
($ in thousands except share and per share amounts)
March 31, December 31,
2008 2007
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 5,295 $ 5,849
Accounts receivable - net of allowance for
uncollectibles - $209 and $214, in 2008 and
2007, respectively 2,844 3,067
Other accounts receivable 73 152
Materials and supplies 1,615 1,591
Prepaid expenses 942 769
Prepaid expenses 253 -
Deferred income taxes 108 119
------------ ------------
Total current assets 11,130 11,547
------------ ------------
Property, plant and equipment, net 35,380 35,791
Unamortized debt issuance costs 61 65
Other deferred charges 749 762
Investments 8,233 8,276
Other assets 210 210
------------ ------------
Total assets $ 55,763 $ 56,651
============ ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,103 $ 940
Current maturities of long-term debt 1,519 1,519
Advance billing and payments 208 234
Customer deposits 105 116
Accrued taxes 126 80
Pension and post retirement benefit
obligations 929 929
Other accrued expenses 1,344 1,830
------------ ------------
Total current liabilites 5,334 5,648
------------ ------------
Long-term debt, net of current maturities 5,315 5,695
Deferred income taxes 3,334 3,334
Long term income taxes payable 660 640
Other liabilities and deferred credits 622 591
Pension and post retirement benefit
obligations 4,374 4,324
------------ ------------
Total liabilities 19,639 20,232
------------ ------------
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 60 60
issued 5,985,463 shares
Treasury stock - at cost, 633,683 common
shares (4,748) (4,748)
Additional paid in capital 3,487 3,487
Accumulated other comprehensive loss (853) (875)
Retained earnings 37,678 37,995
------------ ------------
Total shareholders' equity 36,124 36,419
------------ ------------
Total liabilities and shareholders' equity $ 55,763 $ 56,651
============ ============
Contact Information: Contact:
WVT Communications
Kenneth H. Volz
Executive Vice President, Chief Financial Officer and Treasurer
845-986-8080