[August 07, 2017] |
|
Lumos Networks Corp. Reports Second Quarter 2017 Results
Lumos Networks Corp. ("Lumos Networks", "Lumos" or the "Company")
(Nasdaq: LMOS), a leading fiber-based service provider in the
Mid-Atlantic region, today announced its results for the second quarter
of 2017.
Total revenue for the second quarter of 2017 was $56.4 million, up over
7% from the prior year period. The Company generated operating income of
$9.0 million for the three months ended June 30, 2017, down from $9.7
million in the prior year period. Net income attributable to Lumos
Networks Corp. was $0.5 million, or $0.02 per diluted share, for the
second quarter of 2017, compared to net income of approximately $1.2
million, or $0.05 per diluted share in the prior year period. Total
Adjusted EBITDA for the second quarter was $25.5 million, up over 7%
from the prior year period.
On February 18, 2017, the Company announced that it had entered into a
definitive agreement to be acquired by EQT Infrastructure for $18.00 per
share in an all-cash transaction, resulting in an enterprise value of
approximately $950 million. Shareholder approval of the transaction was
received on May 24, 2017.
The Company is awaiting approvals from one additional state and from the
FCC and now expects the transaction to close in the next 90 days.
About Lumos Networks
Lumos Networks is a leading fiber-based service provider in the
Mid-Atlantic region serving Carrier, Enterprise and Data Center
customers, offering end-to-end connectivity in 26 markets in Virginia,
West Virginia, North Carolina, Pennsylvania, Maryland, Ohio and
Kentucky. With a fiber network of 10,983 fiber route miles and 515,362
total fiber strand miles, Lumos Networks connects 1,307 unique Fiber to
the Cell sites, 1,672 total FTTC connections, 2,171 on-net buildings and
approximately 3,500 total on-net locations. The Company also connects 43
total data centers, including five data centers acquired from DC74, two
acquired from Clarity Communications and seven company owned co-location
facilities. In 2016, Lumos Networks generated over $123 million in Data
revenue over our fiber network. Detailed information about Lumos
Networks is available at www.lumosnetworks.com.
Non-GAAP Measures
Contribution Margin is net income or loss attributable to Lumos Networks
Corp. before interest, income taxes, depreciation and amortization,
accretion of asset retirement obligations, net income attributable to
noncontrolling interests, other (income) expenses, net, restructuring
charges, changes in the fair value of contingent consideration
obligations, corporate general and administrative expenses, including
equity-based compensation, acquisition and merger related charges, and
amortization of actuarial gains or losses, and indirect operating
expenses. Contribution Margin ratio is calculated as the ratio of
Contribution Margin, as defined, to operating revenues.
Adjusted EBITDA is net income or loss attributable to Lumos Networks
Corp. before interest, income taxes, depreciation and amortization and
accretion of asset retirement obligations, net income attributable to
noncontrolling interests, other (income) expenses, net, equity-based
compensation, amortization of actuarial losses, restructuring charges,
acquisition and merger related charges and changes in fair value of
contingent consideration obligations. Adjusted EBITDA margin is
calculated as the ratio of Adjusted EBITDA, as defined, to operating
revenues.
Contribution Margin, Contribution Margin Ratio, Adjusted EBITDA and
Adjusted EBITDA Margin are non-GAAP financial performance measures. They
should not be considered in isolation or as an alternative to measures
determined in accordance with GAAP. Please refer to the schedules herein
and our SEC filings 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.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation 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. 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, include, but are not limited to: the
successful closing of the announced EQT Merger, including obtaining the
requisite regulatory and governmental approvals and satisfying other
closing conditions; the risk that required governmental and regulatory
approvals may delay the Merger or result in the imposition of conditions
that could cause the parties to abandon the Merger or materially impact
the financial benefits of the Merger; the timing to consummate the
proposed Merger; any disruption from the proposed Merger making it more
difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on Merger-related issues;
the Merger may involve unexpected costs, liabilities or delays; the
outcome of any legal proceedings related to the Merger, the failure by
EQT Infrastructure to obtain the necessary financing arrangement set
forth in commitment letters received in connection with the Merger; the
impact of our previous acquisitions of Clarity and DC74 on our
operations; rapid development and intense competition with resulting
pricing pressure in the telecommunications and high speed data transport
industry; our ability to grow our data business on an organic or
inorganic basis in order to offset expected revenue declines in legacy
voice and access products; our ability to obtain new carrier contracts
or expand services under existing carrier contracts at competitive
pricing levels to offset churn and achieve revenue growth from our
carrier businesses; our ability to separate our legacy business on a
timely basis; our ability to effectively allocate capital and timely
implement network expansion plans necessary to accommodate organic
growth initiatives; our ability to complete customer installations in a
timely manner; adverse economic conditions; operating and financial
restrictions imposed by our senior credit facility and our unsecured
debt obligations; our cash and capital requirements; our ability to
maintain and enhance our network; the potential to experience a high
rate of customer turnover; federal and state regulatory fees,
requirements and developments; our reliance on certain suppliers and
vendors; and other unforeseen difficulties that may occur. These risks
and uncertainties are not intended to represent a complete list of all
risks and uncertainties inherent in our business, and should be read in
conjunction with the more detailed cautionary statements and risk
factors included in our SEC filings, including our Quarterly Report on
Form 10-Q for the quarter ended March 31, 2017 and our Annual Report on
Form 10-K for the year ended December 31, 2016.
Exhibits:
-
Condensed Consolidated Balance Sheets
-
Condensed Consolidated Statements of Operations
-
Condensed Consolidated Statements of Cash Flows
-
Summary of Operating Results, Customer and Network Statistics
-
Reconciliation of Non-GAAP Financial Measures to GAAP Results
|
|
|
|
Lumos Networks Corp.
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
34,769
|
|
$
|
33,575
|
|
|
Marketable securities
|
|
4,500
|
|
|
38,081
|
|
|
Accounts receivable, net
|
|
23,337
|
|
|
22,609
|
|
|
Other receivables
|
|
366
|
|
|
753
|
|
|
Income tax receivable
|
|
313
|
|
|
459
|
|
|
Prepaid expenses and other
|
|
7,471
|
|
|
5,028
|
|
|
Total Current Assets
|
|
70,756
|
|
|
100,505
|
|
|
|
|
|
|
|
Securities and investments
|
|
1,585
|
|
|
1,479
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
535,789
|
|
|
536,288
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
Goodwill
|
|
125,667
|
|
|
100,297
|
|
|
Other intangibles, net
|
|
19,317
|
|
|
8,503
|
|
|
Deferred charges and other assets
|
|
5,843
|
|
|
6,300
|
|
|
Total Other Assets
|
|
150,827
|
|
|
115,100
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
758,957
|
|
$
|
753,372
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Current portion of long-term debt
|
$
|
13,521
|
|
$
|
13,530
|
|
|
Accounts payable
|
|
7,448
|
|
|
8,607
|
|
|
Advance billings and customer deposits
|
|
14,524
|
|
|
14,140
|
|
|
Accrued compensation
|
|
1,482
|
|
|
1,491
|
|
|
Accrued operating taxes
|
|
5,980
|
|
|
4,518
|
|
|
Other accrued liabilities
|
|
9,245
|
|
|
5,000
|
|
|
Total Current Liabilities
|
|
52,200
|
|
|
47,286
|
|
|
|
|
|
|
|
Long-Term Liabilities
|
|
|
|
|
|
Long-term debt, net of unamortized discount and debt issuance costs,
excluding current portion
|
|
450,496
|
|
|
454,885
|
|
|
Retirement benefits
|
|
15,489
|
|
|
16,029
|
|
|
Deferred income taxes, net
|
|
93,163
|
|
|
96,988
|
|
|
Other long-term liabilities
|
|
7,529
|
|
|
2,124
|
|
|
Total Long-term Liabilities
|
|
566,677
|
|
|
570,026
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
139,126
|
|
|
135,174
|
|
Noncontrolling Interests
|
|
954
|
|
|
886
|
|
|
Total Equity
|
|
140,080
|
|
|
136,060
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
$
|
758,957
|
|
$
|
753,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lumos Networks Corp.
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share amounts)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
|
|
|
$
|
56,366
|
|
|
$
|
52,448
|
|
|
$
|
111,282
|
|
|
$
|
103,242
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue, exclusive of depreciation and amortization
|
|
|
|
10,517
|
|
|
|
10,079
|
|
|
|
20,936
|
|
|
|
20,291
|
|
|
Selling, general and administrative, exclusive of depreciation and
amortization1
|
|
|
|
22,357
|
|
|
|
20,216
|
|
|
|
53,025
|
|
|
|
43,551
|
|
|
Depreciation and amortization
|
|
|
|
14,192
|
|
|
|
12,398
|
|
|
|
29,184
|
|
|
|
24,289
|
|
|
Accretion of asset retirement obligations
|
|
|
|
24
|
|
|
|
34
|
|
|
|
49
|
|
|
|
68
|
|
|
Restructuring charges
|
|
|
|
34
|
|
|
|
-
|
|
|
|
34
|
|
|
|
2,207
|
|
|
Change in fair value of contingent consideration obligations
|
|
|
|
200
|
|
|
|
-
|
|
|
|
600
|
|
|
|
-
|
|
|
Total Operating Expenses
|
|
|
|
47,324
|
|
|
|
42,727
|
|
|
|
103,828
|
|
|
|
90,406
|
|
Operating Income
|
|
|
|
9,042
|
|
|
|
9,721
|
|
|
|
7,454
|
|
|
|
12,836
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses)
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(7,592
|
)
|
|
|
(7,012
|
)
|
|
|
(14,985
|
)
|
|
|
(14,001
|
)
|
|
Other income, net
|
|
|
|
16
|
|
|
|
98
|
|
|
|
639
|
|
|
|
272
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Tax
|
|
|
|
1,466
|
|
|
|
2,807
|
|
|
|
(6,892
|
)
|
|
|
(893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
|
|
|
901
|
|
|
|
1,527
|
|
|
|
(2,173
|
)
|
|
|
666
|
|
Net Income (Loss)
|
|
|
|
565
|
|
|
|
1,280
|
|
|
|
(4,719
|
)
|
|
|
(1,559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Noncontrolling Interests
|
|
|
|
(35
|
)
|
|
|
(36
|
)
|
|
|
(68
|
)
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Lumos Networks Corp.
|
|
|
$
|
530
|
|
|
$
|
1,244
|
|
|
$
|
(4,787
|
)
|
|
$
|
(1,650
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Earnings (Loss) per Common Share Attributable to
Lumos Networks Corp. Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share
|
|
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Includes equity-based compensation expense related to all of the
Company's share-based awards, annual employee bonuses paid in the
form of immediately vested shares and the Company's 401(k) matching
contributions. Equity-based compensation totaled $1.2 million and
$1.3 million for the three months ended June 30, 2017 and 2016,
respectively, and $8.0 million and $6.8 million for the six months
ended June 30, 2017 and 2016, respectively. Also includes $0.5
million and $3.4 million of acquisition and merger related costs for
the three and six months ended June 30, 2017, respectively.
|
|
|
|
Lumos Networks Corp.
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
(In thousands)
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net Loss
|
|
|
$
|
(4,719
|
)
|
$
|
(1,559
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
|
|
26,868
|
|
|
23,001
|
|
Amortization
|
|
|
|
2,316
|
|
|
1,288
|
|
Accretion of asset retirement obligations
|
|
|
|
49
|
|
|
68
|
|
Change in fair value of contingent consideration obligations
|
|
|
|
600
|
|
|
-
|
|
Deferred income taxes
|
|
|
|
(2,172
|
)
|
|
447
|
|
Equity-based compensation expense
|
|
|
|
7,996
|
|
|
6,816
|
|
Amortization of debt issuance costs
|
|
|
|
2,371
|
|
|
2,212
|
|
Retirement benefits, net of cash contributions and distributions
|
|
|
|
111
|
|
|
218
|
|
Other
|
|
|
|
208
|
|
|
877
|
|
Changes in operating assets and liabilities, net
|
|
|
|
103
|
|
|
(687
|
)
|
Net Cash Provided by Operating Activities
|
|
|
|
33,731
|
|
|
32,681
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(24,197
|
)
|
|
(45,191
|
)
|
Purchase of Clarity
|
|
|
|
(9,961
|
)
|
|
-
|
|
Purchase of DC74
|
|
|
|
(23,528
|
)
|
|
-
|
|
Purchases of available-for-sale marketable securities
|
|
|
|
(4,000
|
)
|
|
(18,344
|
)
|
Proceeds from sale or maturity of available-for-sale marketable
securities
|
|
|
|
37,596
|
|
|
74,764
|
|
Net Cash (Used in) Provided by Investing Activities
|
|
|
|
(24,090
|
)
|
|
11,229
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Principal payments on senior secured term loans
|
|
|
|
(6,517
|
)
|
|
(4,015
|
)
|
Principal payments under capital lease obligations
|
|
|
|
(254
|
)
|
|
(2,397
|
)
|
Proceeds from stock option exercises and employee stock purchase plan
|
|
|
|
1,031
|
|
|
530
|
|
Repurchases of common stock to settle tax withholding obligations on
employee stock awards
|
|
|
|
(2,707
|
)
|
|
(2,311
|
)
|
Net Cash Used in Financing Activities
|
|
|
|
(8,447
|
)
|
|
(8,193
|
)
|
Increase in cash and cash equivalents
|
|
|
|
1,194
|
|
|
35,717
|
|
Cash and cash equivalents:
|
|
|
|
|
Beginning of Year
|
|
|
|
33,575
|
|
|
13,267
|
|
|
|
|
|
|
End of Year
|
|
|
$
|
34,769
|
|
$
|
48,984
|
|
|
|
|
|
|
|
Lumos Networks Corp.
|
Operating Results, Customer and Network Statistics
|
(Dollars in thousands)
|
|
|
Three months ended:
|
Six Months Ended:
|
|
|
|
|
|
June 30, 2017
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
September 30, 2016
|
|
|
June 30, 2016
|
|
|
|
June 30, 2017
|
|
|
June 30, 2016
|
Revenue, Gross Margin, Contribution Margin and Adjusted EBITDA
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise Data
|
|
$
|
17,604
|
$
|
16,473
|
|
$
|
13,911
|
|
$
|
13,549
|
|
$
|
12,878
|
|
|
$
|
34,077
|
|
$
|
24,879
|
|
|
Transport
|
|
|
8,221
|
|
8,454
|
|
|
8,106
|
|
|
8,499
|
|
|
8,902
|
|
|
|
16,675
|
|
|
18,001
|
|
|
FTTC
|
|
|
9,709
|
|
9,660
|
|
|
9,629
|
|
|
9,325
|
|
|
9,176
|
|
|
|
19,369
|
|
|
17,705
|
|
|
Total Data
|
|
|
35,534
|
|
34,587
|
|
|
31,646
|
|
|
31,373
|
|
|
30,956
|
|
|
|
70,121
|
|
|
60,585
|
|
|
Residential and Small Business
|
|
|
15,490
|
|
15,205
|
|
|
15,488
|
|
|
15,863
|
|
|
16,149
|
|
|
|
30,695
|
|
|
31,977
|
|
|
RLEC Access
|
|
|
5,342
|
|
5,124
|
|
|
4,752
|
|
|
4,535
|
|
|
5,343
|
|
|
|
10,466
|
|
|
10,680
|
|
|
Total Revenue
|
|
$
|
56,366
|
$
|
54,916
|
|
$
|
51,886
|
|
$
|
51,771
|
|
$
|
52,448
|
|
|
$
|
111,282
|
|
$
|
103,242
|
|
Gross Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
|
84.2%
|
|
84.2%
|
|
|
86.6%
|
|
|
85.5%
|
|
|
85.3%
|
|
|
|
84.2%
|
|
|
84.9%
|
|
|
Residential and Small Business
|
|
|
68.5%
|
|
67.3%
|
|
|
69.1%
|
|
|
67.7%
|
|
|
65.8%
|
|
|
|
67.9%
|
|
|
65.1%
|
|
Contribution Margin1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
$
|
27,586
|
$
|
26,968
|
|
$
|
25,517
|
|
$
|
24,822
|
|
$
|
24,477
|
|
|
$
|
54,554
|
|
$
|
47,867
|
|
|
Residential and Small Business
|
|
|
9,466
|
|
9,128
|
|
|
9,554
|
|
|
9,516
|
|
|
9,394
|
|
|
|
18,594
|
|
|
18,536
|
|
|
RLEC Access
|
|
|
5,179
|
|
4,970
|
|
|
4,591
|
|
|
4,360
|
|
|
5,171
|
|
|
|
10,149
|
|
|
10,363
|
|
|
Total Contribution Margin
|
|
$
|
42,231
|
$
|
41,066
|
|
$
|
39,662
|
|
$
|
38,698
|
|
$
|
39,042
|
|
|
$
|
83,297
|
|
$
|
76,766
|
|
Contribution Margin Ratio1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
|
77.6%
|
|
78.0%
|
|
|
80.6%
|
|
|
79.1%
|
|
|
79.1%
|
|
|
|
77.8%
|
|
|
79.0%
|
|
|
Residential and Small Business
|
|
|
61.1%
|
|
60.0%
|
|
|
61.7%
|
|
|
60.0%
|
|
|
58.2%
|
|
|
|
60.6%
|
|
|
58.0%
|
|
|
RLEC Access
|
|
|
96.9%
|
|
97.0%
|
|
|
96.6%
|
|
|
96.1%
|
|
|
96.8%
|
|
|
|
97.0%
|
|
|
97.0%
|
|
|
Total Contribution Margin Ratio
|
|
|
74.9%
|
|
74.8%
|
|
|
76.4%
|
|
|
74.7%
|
|
|
74.4%
|
|
|
|
74.9%
|
|
|
74.4%
|
|
Adjusted EBITDA1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
$
|
15,105
|
$
|
14,307
|
|
$
|
14,311
|
|
$
|
14,567
|
|
$
|
13,826
|
|
|
$
|
29,412
|
|
$
|
27,140
|
|
|
Residential and Small Business
|
|
|
5,660
|
|
5,121
|
|
|
5,506
|
|
|
5,723
|
|
|
5,339
|
|
|
|
10,781
|
|
|
10,488
|
|
|
RLEC Access
|
|
|
4,707
|
|
4,463
|
|
|
4,122
|
|
|
3,970
|
|
|
4,611
|
|
|
|
9,170
|
|
|
9,263
|
|
|
Total Adjusted EBITDA
|
|
$
|
25,472
|
$
|
23,891
|
|
$
|
23,939
|
|
$
|
24,260
|
|
$
|
23,776
|
|
|
$
|
49,363
|
|
$
|
46,891
|
|
Adjusted EBITDA Margin1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data
|
|
|
42.5%
|
|
41.4%
|
|
|
45.2%
|
|
|
46.4%
|
|
|
44.7%
|
|
|
|
41.9%
|
|
|
44.8%
|
|
|
Residential and Small Business
|
|
|
36.5%
|
|
33.7%
|
|
|
35.6%
|
|
|
36.1%
|
|
|
33.1%
|
|
|
|
35.1%
|
|
|
32.8%
|
|
|
RLEC Access
|
|
|
88.1%
|
|
87.1%
|
|
|
86.7%
|
|
|
87.5%
|
|
|
86.3%
|
|
|
|
87.6%
|
|
|
86.7%
|
|
|
Total Adjusted EBITDA Margin
|
|
|
45.2%
|
|
43.5%
|
|
|
46.1%
|
|
|
46.9%
|
|
|
45.3%
|
|
|
|
44.4%
|
|
|
45.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
$
|
11,100
|
$
|
13,097
|
|
$
|
18,747
|
|
$
|
20,089
|
|
$
|
23,185
|
|
|
$
|
24,197
|
|
$
|
45,191
|
|
Adjusted EBITDA less Capital Expenditures
|
|
$
|
14,372
|
$
|
10,794
|
|
$
|
5,192
|
|
$
|
4,171
|
|
$
|
591
|
|
|
$
|
25,166
|
|
$
|
1,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lumos Networks Corp.
|
|
|
|
|
|
|
|
|
|
|
Operating Results, Customer and Network Statistics (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended:
|
|
|
|
|
June 30, 2017
|
|
March 31, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
Fiber Network Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Fiber Route-Miles
|
|
10,983
|
|
10,907
|
|
10,112
|
|
9,204
|
|
8,985
|
|
Fiber Miles2
|
|
515,362
|
|
503,616
|
|
491,276
|
|
475,507
|
|
436,451
|
|
Fiber Markets
|
|
26
|
|
26
|
|
25
|
|
24
|
|
24
|
|
FTTC Unique Towers
|
|
1,307
|
|
1,306
|
|
1,304
|
|
1,297
|
|
1,295
|
|
FTTC Total Connections
|
|
1,672
|
|
1,663
|
|
1,659
|
|
1,642
|
|
1,636
|
|
On-Network Buildings
|
|
2,171
|
|
2,125
|
|
2,031
|
|
1,984
|
|
1,922
|
|
Data Centers3
|
|
43
|
|
43
|
|
36
|
|
36
|
|
36
|
|
Mobile Switching Centers
|
|
16
|
|
15
|
|
15
|
|
14
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&SB Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Voice Connections5
|
|
61,186
|
|
62,972
|
|
65,285
|
|
68,084
|
|
69,903
|
|
Video Subscribers
|
|
5,601
|
|
5,723
|
|
5,851
|
|
5,841
|
|
5,817
|
|
Fiber-to-the-Premise Broadband Connections
|
|
9,415
|
|
9,330
|
|
8,972
|
|
8,307
|
|
7,982
|
|
Premises Passed by Fiber4
|
|
20,119
|
|
19,983
|
|
19,783
|
|
19,591
|
|
19,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RLEC Access Lines5
|
|
22,071
|
|
22,483
|
|
22,991
|
|
23,381
|
|
23,695
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Contribution Margin, Contribution Margin Ratio, Adjusted EBITDA and
Adjusted EBITDA Margin are non-GAAP measures. See definitions on
page 2 of this earnings release.
|
2
|
|
Fiber miles are calculated as the fiber route miles multiplied by
the number of fiber strands within each cable (represents an average
of 47 fibers per route as of June 30, 2017).
|
3
|
|
Data centers reported include both commercial and private data
centers and Company-owned facilities offering commercial data center
services.
|
4
|
|
Includes residential and small business locations passed by fiber
and available for service. Approximately 92% of the premises passed
by fiber and available for service as of June 30, 2017 were
residential.
|
5
|
|
During the fourth quarter of 2016, the Company revised its
competitive and RLEC voice connections as a result of enhanced
system reporting capabilities. Historical voice connections for
prior quarters have been revised to reflect the updated information.
|
|
|
|
Note: Certain prior period Adjusted EBITDA amounts have been
reclassified to conform with the current year presentation.
|
|
|
|
|
|
|
Lumos Networks Corp.
|
Reconciliation of Net Income (Loss) Attributable to Lumos
Networks Corp. to Contribution Margin
|
(Dollars in thousands)
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
For The Three Months Ended June 30,
|
|
|
|
|
|
|
Net Income Attributable to Lumos Networks Corp.
|
|
$
|
530
|
|
|
$
|
1,244
|
|
|
|
Net Income Attributable to Noncontrolling Interests
|
|
|
35
|
|
|
|
36
|
|
|
|
Net Income
|
|
|
565
|
|
|
|
1,280
|
|
|
|
Income tax expense
|
|
|
901
|
|
|
|
1,527
|
|
|
|
Interest expense
|
|
|
7,592
|
|
|
|
7,012
|
|
|
|
Other income, net
|
|
|
(16
|
)
|
|
|
(98
|
)
|
|
|
Operating income
|
|
|
9,042
|
|
|
|
9,721
|
|
|
|
Depreciation and amortization and accretion of asset retirement
obligations
|
|
|
14,216
|
|
|
|
12,432
|
|
|
|
Restructuring charges
|
|
|
34
|
|
|
|
-
|
|
|
|
Change in fair value of contingent consideration obligations
|
|
|
200
|
|
|
|
-
|
|
|
|
Indirect operating costs
|
|
|
10,475
|
|
|
|
8,939
|
|
|
|
Corporate general and administrative costs, including equity-based
compensation and acquisition and merger related charges
|
|
|
8,264
|
|
|
|
7,950
|
|
|
|
Contribution Margin
|
|
$
|
42,231
|
|
|
$
|
39,042
|
|
|
|
Contribution Margin Ratio
|
|
|
74.9
|
%
|
|
|
74.4
|
%
|
|
|
|
|
|
|
|
For The Six Months Ended June 30,
|
|
|
|
|
|
|
Net Loss Attributable to Lumos Networks Corp.
|
|
$
|
(4,787
|
)
|
|
$
|
(1,650
|
)
|
|
|
Net Income Attributable to Noncontrolling Interests
|
|
|
68
|
|
|
|
91
|
|
|
|
Net Loss
|
|
|
(4,719
|
)
|
|
|
(1,559
|
)
|
|
|
Income tax (benefit) expense
|
|
|
(2,173
|
)
|
|
|
666
|
|
|
|
Interest expense
|
|
|
14,985
|
|
|
|
14,001
|
|
|
|
Other income, net
|
|
|
(639
|
)
|
|
|
(272
|
)
|
|
|
Operating Income
|
|
|
7,454
|
|
|
|
12,836
|
|
|
|
Depreciation and amortization and accretion of asset retirement
obligations
|
|
|
29,233
|
|
|
|
24,357
|
|
|
|
Restructuring charges
|
|
|
34
|
|
|
|
2,207
|
|
|
|
Change in fair value of contingent consideration obligations
|
|
|
600
|
|
|
|
-
|
|
|
|
Indirect operating costs
|
|
|
20,945
|
|
|
|
17,536
|
|
|
|
Corporate general and administrative costs, including equity-based
compensation and acquisition and merger related charges
|
|
|
25,031
|
|
|
|
19,830
|
|
|
|
Contribution Margin
|
|
$
|
83,297
|
|
|
$
|
76,766
|
|
|
|
Contribution Margin Ratio
|
|
|
74.9
|
%
|
|
|
74.4
|
%
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) Attributable to Lumos
Networks Corp. to Adjusted EBITDA
|
(Dollars in thousands)
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
For The Three Months Ended June 30,
|
|
|
|
|
|
|
Net Income Attributable to Lumos Networks Corp.
|
|
$
|
530
|
|
|
$
|
1,244
|
|
|
|
Net Income Attributable to Noncontrolling Interests
|
|
|
35
|
|
|
|
36
|
|
|
|
Net Income
|
|
|
565
|
|
|
|
1,280
|
|
|
|
Income tax expense
|
|
|
901
|
|
|
|
1,527
|
|
|
|
Interest expense
|
|
|
7,592
|
|
|
|
7,012
|
|
|
|
Other income, net
|
|
|
(16
|
)
|
|
|
(98
|
)
|
|
|
Operating income
|
|
|
9,042
|
|
|
|
9,721
|
|
|
|
Depreciation and amortization and accretion of asset retirement
obligations
|
|
|
14,216
|
|
|
|
12,432
|
|
|
|
Amortization of actuarial losses
|
|
|
325
|
|
|
|
337
|
|
|
|
Equity-based compensation
|
|
|
1,202
|
|
|
|
1,286
|
|
|
|
Restructuring charges
|
|
|
34
|
|
|
|
-
|
|
|
|
Acquisition and merger related charges
|
|
|
453
|
|
|
|
-
|
|
|
|
Change in fair value of contingent consideration obligations
|
|
|
200
|
|
|
|
-
|
|
|
|
Adjusted EBITDA
|
|
$
|
25,472
|
|
|
$
|
23,776
|
|
|
|
Adjusted EBITDA Margin
|
|
|
45.2
|
%
|
|
|
45.3
|
%
|
|
|
|
|
|
|
|
For The Six Months Ended June 30,
|
|
|
|
|
|
|
Net Loss Attributable to Lumos Networks Corp.
|
|
$
|
(4,787
|
)
|
|
$
|
(1,650
|
)
|
|
|
Net Income Attributable to Noncontrolling Interests
|
|
|
68
|
|
|
|
91
|
|
|
|
Net Loss
|
|
|
(4,719
|
)
|
|
|
(1,559
|
)
|
|
|
Income tax (benefit) expense
|
|
|
(2,173
|
)
|
|
|
666
|
|
|
|
Interest expense
|
|
|
14,985
|
|
|
|
14,001
|
|
|
|
Other income, net
|
|
|
(639
|
)
|
|
|
(272
|
)
|
|
|
Operating Income
|
|
|
7,454
|
|
|
|
12,836
|
|
|
|
Depreciation and amortization and accretion of asset retirement
obligations
|
|
|
29,233
|
|
|
|
24,357
|
|
|
|
Amortization of actuarial losses
|
|
|
651
|
|
|
|
675
|
|
|
|
Equity-based compensation
|
|
|
7,996
|
|
|
|
6,816
|
|
|
|
Restructuring charges
|
|
|
34
|
|
|
|
2,207
|
|
|
|
Acquisition and merger related charges
|
|
|
3,395
|
|
|
|
-
|
|
|
|
Change in fair value of contingent consideration obligations
|
|
|
600
|
|
|
|
-
|
|
|
|
Adjusted EBITDA
|
|
$
|
49,363
|
|
|
$
|
46,891
|
|
|
|
Adjusted EBITDA Margin
|
|
|
44.4
|
%
|
|
|
45.4
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170807005433/en/
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|