ntelos Holdings Corp. (the “Company,” NASDAQ: NTLS), a leading regional provider of nationwide wireless voice and data communications announced today operating and financial results for its third quarter ended September 30, 2014.
Third Quarter 2014 Operational Update
- Expanded 4G LTE network to cover 3.2 million of 6.0 million total covered POPs in footprint as of September 30, 2014;
- Successfully introduced Equipment Installment Plan (“EIP”) on August 15, 2014 with program gaining increasing popularity;
- Operating revenues were $119.6 million for the third quarter 2014; compared to $130.9 million (or $121.9 million when excluding the one-time Strategic Network Alliance (“SNA”) settlement) for the third quarter 2013, reflecting an increase in retail revenues and wholesale revenues consistent with our expectations following the May 2014 signing of the Sprint SNA amendment; and
- Adjusted EBITDA was $32.8 million for the third quarter 2014, compared to $45.6 million (or $36.0 million when excluding the one-time impact from the SNA settlement) for the third quarter 2013.
“In what continues to be a challenging competitive environment, nTelos is focused on executing on our partnership with Sprint and strengthening our retail sales operations. The launch of our EIP midway through the third quarter helped us achieve our tenth consecutive quarter of positive net postpay adds and our thirteenth consecutive quarter of positive total net ports,” said Michael A. Huber, Chairman of the Board of ntelos Holdings Corp. “We are also working diligently to improve our processes, drive additional operational efficiencies and optimize our retail offerings. Overall, we remain optimistic that nTelos is on track to execute our strategic objectives.”
Subscriber Update
Total Subscribers
- Total subscribers were 457,200 as of September 30, 2014, compared to 457,100 for the same period of 2013;
- Total subscriber gross additions for the third quarter 2014 were 41,400, compared to 44,500 for the same period of 2013; and
- Total net subscriber additions (losses) for the third quarter 2014 were (900), compared to 2,300 for the same period of 2013.
Postpay Subscribers
- Postpay subscriber gross additions for the third quarter 2014 were 20,800, compared to 20,000 for the third quarter 2013 and 20,400 for the second quarter 2014;
- Net postpay subscriber additions were 1,900 for the third quarter 2014, compared to 400 for the third quarter 2013 and 3,300 for the second quarter 2014;
- Postpay churn for the third quarter 2014 was 2.0%, compared to 2.2%, for the third quarter 2013;
- ARPA was $134.18 for the third quarter 2014, compared to $136.91 for the same period in 2013; and
- As of September 30, 2014, total postpay subscribers were 310,200.
Prepay Subscribers
- Prepay subscriber gross additions for the third quarter 2014 were 20,600, compared to 24,500 for the third quarter 2013 and 18,600 for the second quarter 2014;
- Net prepay subscriber additions (losses) were (2,800) for the third quarter 2014, compared to 1,900 for the third quarter 2013 and (2,900) for the second quarter 2014;
- Prepay churn for the third quarter 2014 was 5.3%, compared to 4.8% for the third quarter 2013; and
- As of September 30, 2014, total prepay subscribers were 147,000.
Net Income
Net income after net income attributable to noncontrolling interests was $0.8 million, or $0.04 per diluted share, for the third quarter 2014, compared to $10.6 million, or $0.48 per diluted share, for the third quarter 2013.
Business Outlook
For the year ending December 31, 2014, the Company is narrowing its full year 2014 Adjusted EBITDA guidance to between $128.0 million and $132.0 million and lowering its full year 2014 capital expenditures guidance to be approximately $105.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its third quarter 2014 results this morning, October 31, 2014, at 10:00 a.m. ET. To participate, please dial 1-888-317-6002, 1-855-669-9657 in Canada and 1-412-317-1083 for international, approximately 10 minutes before the scheduled start of the call. The conference call and accompanying presentation will also be accessible live on the Investor Relations section of the Company’s website at http://ir.ntelos.com.
An archive of the conference call will be available online at http://ir.ntelos.com beginning approximately one hour after the call. A replay will also be available via telephone by dialing 1-877-344-7529, 1-855-669-9658 in Canada or 1-412-317-0088 internationally and entering access code 10049798 beginning approximately one hour after the call and continuing until November 14, 2014.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to ntelos Holdings Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, gain/loss on sale of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, separation charges, secondary offering costs, net loss from discontinued operations, adjustments for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis and acquisition related charges.
ARPA, or average monthly revenue per account, is computed by dividing service revenues per period by the average number of accounts during that period. Please see the footnotes in the exhibits for a complete definition of this measure.
Adjusted EBITDA is a key metric used by investors to determine if the Company is generating sufficient cash flows to continue to produce shareholder value and provide liquidity for future growth. ARPA provides management with useful information concerning the appeal of the Company’s postpay rate plans and service offerings and the Company’s performance in attracting and retaining high value customers.
Adjusted EBITDA and ARPA are non-GAAP financial performance measures. They should not be considered in isolation or as an alternative to measures determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Please refer to the exhibits and materials posted on the Company’s website 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.
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