LICT Corporation Reports First Quarter 2021 Results

  • Revenues increased 6.6% to $32.0 from $30.0 million.
  • EBITDA from operations was $14.3 versus $13.7 million.
  • EPS from operations rose 17% to $378 from $324 per share.

RYE, N.Y.--()--LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports unaudited, financial results for the quarter ended March 31, 2021.

(Y)our “S” in ESG-

SHAREHOLDER DESIGNATED CHARITABLE CONTRIBUTION PROGRAM — In 2016, the Company adopted a Shareholder Designated Charitable Contribution Program. Under the Program, all registered shareholders are eligible to designate charities and the company will a make a contribution to that charity. In 2016 through 2020, the company made $100 per share contribution on behalf of its shareholders to their designated charities. LICT is committed to giving back to our communities and, over the past four years, LICT has made over $6.0 million in charitable contributions.

COVID-19 - LICT continues to closely monitor developments as we begin to see pandemic related restrictions lifted. The voice and data services we provide are essential to the communities we serve. We will continue to take steps to mitigate the potential risks related to the COVID-19 pandemic to our teammates and customers.

FIRST QUARTER – In 2021, LICT’s first quarter revenues were $32.0 million compared to $30.0 million for the corresponding quarter in 2020. EBITDA was $14.3 million in the first quarter of 2020 as compared to $13.7 million in 2019.

Non-regulated revenues increased 13%, or $1.9 million, to $16.4 million from the prior year’s first quarter $14.5 million, driven by broadband and cable modem sales. Non-regulated EBITDA rose just over 15% to $7.1 million, from $6.2 million.

Regulated revenues were $15.6 million in the first quarter of 2021 versus the prior year’s first quarter of $15.5 million. Regulated EBITDA was $7.2 million compared to $7.6 million last year. The quarter over quarter decline in EBITDA is predominantly due to expenses related to increased customer installs, maintenance of fiber and additional testing for compliance with A-CAM reporting.

OTHER INCOME – Other income increased by $0.6 million due to an increase of Patronage Capital of $0.3 million related to our $50 million line of credit with CoBank, and $0.3 million investment income from an affiliated company.

EARNINGS PER SHARE Diluted earnings per share from operations for the first quarter of 2021 was $378 per share as compared to $324 per share in 2020, which excludes the $504 gain per share on the sale of MODOC.

ALTERNATIVE – CONNECT AMERICA COST MODEL (“A-CAM”) PROGRAM –All LICT telephone companies have elected to participate in the FCC’s A-CAM and A-CAM II programs. The A-CAM program is designed to speed and expand the deployment of broadband capabilities throughout the nation’s rural areas and replaced two prior USF mechanisms for companies electing A-CAM. LICT received $8.0 million in the first quarter of 2021 for A-CAM and A-CAM II revenues, as compared to $8.1 million in the first quarter of 2020.

The FCC’s A-CAM program, which commenced January 1, 2017, with revisions in 2018 and 2019, and the addition of A-CAM II in Wisconsin in 2019, is designed to increase broadband speed and expand broadband deployment in rural portions of the country with mandatory build-out requirements for receipt of support. A-CAM and A-CAM II replaced two prior legacy FCC Universal Service Fund (“USF”) mechanisms which LICT had been receiving. LICT is actively building and expanding broadband facilities.

EMERGENCY BROADBAND BENEFIT – LICT is actively participating in the Federal Communications Commission’s (“FCC”) $3.2 billion Emergency Broadband Benefit Program to support our ongoing commitment to provide broadband to the rural communities we serve and help close the digital divide. This program provides consumers who are eligible for a broadband credit of up to $50 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan for the length of the program and we offer a variety of broadband options that qualify under the Emergency Broadband Benefit program

BALANCE SHEET – LICT benefited from strong cash from operations in the first quarter of 2021. In addition, this reflects the return of a portion of our FCC deposit of $20 million for Auction 107, as well as the reduction of the borrowings against our line of credit by $30.0 million dollars. At the end of the first quarter of 2021 our net cash position totaled $22.1 million.

2021 OUTLOOK – LICT’s guidance for 2021 remains unchanged with revenues of $127 - $131 million, EBITDA in the range of $58 to $60 million, and total capital expenditures between $27 and $29 million. We are aware that the effect of the COVID-19 pandemic may impact revenue growth.

FCC SPECTRUM AUCTIONS - LICT Wireless Broadband Company, LLC (“LICT Wireless”), a wholly owned subsidiary, participated in FCC Auction 107 – 3.7 GHz band which ended on February 18, 2021. In this auction, LICT acquired 5 licenses in 5 Partial Economic Areas (PEA) for $4.3 million of spectrum 3.7 GHz band licenses. In March 2021, the FCC returned $15.7 million which is our $20.0 million original deposit less the $4.3 million in licenses we were highest bidder on.

During the first quarter we continued our efforts to deploy the spectrum licenses we were awarded in Auction 105 of last year which will enable us to reach some of our more remote customers with increased speeds. In addition, we continue the filing process required by the FCC for the 5 markets we were awarded in the RDOF auction.

STRATEGIC REVIEW - As previously announced, LICT has initiated a strategic review to accelerate and broaden the Corporation’s businesses. The actions to be explored will include, among others, the possible creation of a Special Purpose Acquisition Corporation (“SPAC”); the spin-off of one or more of the Corporation’s subsidiaries as a separate entity; potential strategic and accretive acquisitions in the Corporation’s current or adjacent industries; and the possibility of raising additional capital by such means as a rights offering to the Corporation’s existing shareholders.

CAPITAL EXPENDITURES – In the first quarter of 2021, capital expenditures were $7.1 million, of which $4.6 million was for non-regulated activities and $2.5 million for regulated activities. Our capital spending will enable us to meet and exceed our A-CAM requirements, offer enhanced broadband speeds, and increase the overall fiber route miles in our network.

As of March 31, 2021, LICT owns and operates 5,251 miles of fiber optic cable, 11,492 miles of copper cable, 767 miles of coaxial cable and 57 towers.

SHARE REPURCHASES – During the three months ended March 31, 2021, the Company repurchased 134 shares for $2.6 million, with an average price of $19,100 per share. On March 31, 2021, 18,399 shares were outstanding.

OPERATING STATISTICS / BROADBAND DEPLOYMENT - As of March 31, 2021, the Company’s broadband penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 91.9%, as compared to 90.8% at December 31, 2020. During the first quarter the Company’s broadband lines grew by 1.8% to just over 40,500 units, this marginal increase offset our voice and video line loss resulting in an overall growth of 0.4%:

 

March 31,

December 31,

 

Percent

 

Increase

Increase

 

2021

2020

(Decrease)

(Decrease)

Broadband lines

40,556

39,825

731

1.8%

Voice Lines

 

 

 

 

ILEC

23,739

24,005

(266)

(1.1%)

Out of franchise

7,423

7,456

(33)

(0.4%)

Total

31,162

31,461

(299)

(1.0%)

Video Subscribers

4,307

4,406

(99)

(2.2%)

Revenue Generating Units

76,025

75,692

333

0.4%

 

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This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation anticipated financial results, financing, capital expenditures and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation, business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by LICT on its website, www.lictcorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful, or that financial targets will be met. Such forward-looking information is subject to uncertainties, risks and inaccuracies, which could be material.

LICT Corporation is a holding company with subsidiaries in broadband and other telecommunications services that actively seeks acquisitions, principally in its existing business areas.

LICT Corporation is listed on the OTC Pink® under the symbol LICT. For further information visit our website at http://www.lictcorp.com.

 

 

LICT CORPORATION

Exhibit A
Page 1 of 2

Statements of Operations and Balance Sheet Data

 

(In Thousands, Except Per Share Data)

 

 

STATEMENTS OF OPERATIONS

 

Three Months Ended

 

March 31,

 

2021

 

2020

 

 

 

 

Revenues

$32,015

 

$30,046

 

 

 

 

 

Cost and Expenses:

 

 

 

Cost of revenue, excluding depreciation

14,479

 

13,198

 

 

Selling, general and administration

3,173

 

3,099

 

 

Corporate office expenses

946

 

950

 

 

 

Depreciation and amortization

4,636

 

4,340

 

 

Total Costs and Expenses

23,234

 

21,587

 

 

 

 

 

 

 

Operating profit

8,781

 

8,459

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

Investment income

762

 

113

 

 

Interest expense

(385

)

(302

)

 

Equity in earnings of affiliated companies

185

 

53

 

 

Gain from the sale of investment (a)

-

 

13,071

 

 

 

Other

58

 

(29

)

 

620

 

12,906

 

 

 

 

 

Income Before Income Tax Provision

9,401

 

21,365

 

 

Provision for Income Taxes

(2,427

)

(5,554

)

 

Net Income

$6,974

 

$15,811

 

 

Capital Expenditures

$7,123

 

$4,996

 

 

 

 

 

Weighted Average Shares- Basic and Diluted

18,458

 

19,101

 

 

 

Actual shares outstanding at end of period

18,399

 

19,008

 

 

 

 

 

 

 

Earnings Per Share:

$378

 

$828

 

 

 

Earnings Per Share excluding the gain from the sale of an investment(a)

$378

 

$324

 

 

 

(a) Please note the Three Months ended March 31, 2020 includes the gain of $13.1 million stemming from the sale of MODOC which added $504 to earnings per share.

 

LICT Corporation
Statements of Operations and Selected Balance Sheet Data-Continued
(in thousands, Except Per Share Data)

Exhibit A
Page 2 of 2

 

 

SELECTED BALANCE SHEET DATA

Mar. 31,

Dec. 31,

 

 

2021

2020

 

 

 

 

 

 

Cash and Cash Equivalents

$55,231

$67,324

 

 

 

 

 

 

Other short-term investments

$-

$20,000

 

 

 

 

 

 

 

Long-Term Debt (including current portion)

$33,176

$63,176

 

 

 

 

 

 

Net Cash

$22,055

$24,148

 

 

 

Shareholders' Equity

$184,897

$180,595

 

 

 

Shares Outstanding

18,399

18,533

 

 

 

EBITDA is an established measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures. We believe that EBITDA trends are a valuable indicator of whether our operations are able to produce sufficient operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.

EBITDA is calculated as Operating Profit from Continuing Operations plus depreciation and amortization expense and charitable contributions.

Three Months Ended

March 31,

 

2021

 

 

2020

 

 

EBITDA Reconciliation:

Operating Profit from Continuing Operations

$

8,781

 

 

$

 

8,459

 

 

Additions:

 

 

Depreciation and amortization

 

4,636

 

 

4,340

 

Corporate Expenses

 

946

 

 

950

 

EBITDA from Operations

before Corporate Expenses

 

14,363

 

 

13,749

 

Corporate Expenses

 

(946

)

 

(950

)

EBITDA

$

13,417

 

$

12,799

 

 

Contacts

Stephen J. Moore
Vice President-Finance

914-921-8821
www.lictcorp.com

Contacts

Stephen J. Moore
Vice President-Finance

914-921-8821
www.lictcorp.com