LICT Corporation Reports Second Quarter 2021 Results

Rhea-AI Summary

LICT Corporation reported unaudited financial results for Q2 2021, showing revenues of $32.3 million, an increase from $30.5 million in Q2 2020. EBITDA rose to $14.8 million from $13.8 million. Non-regulated revenues, driven by broadband sales, increased by 12% to $16.8 million. Regulated revenues remained flat at $15.5 million. The company acquired NeboNet, enhancing its broadband network in Utah. Earnings per share rose to $346 from $307. The 2021 revenue guidance remains $127-$131 million.

Positive

• Q2 2021 revenues increased to $32.3 million, up from $30.5 million in Q2 2020.
• EBITDA rose to $14.8 million, compared to $13.8 million year-over-year.
• Non-regulated revenues grew by 12% to $16.8 million, bolstered by broadband sales.
• Successfully acquired NeboNet, expanding broadband capabilities in Utah.
• Earnings per share increased to $346 from $307 year-over-year.
• Capital expenditures increased to $7.5 million, facilitating fiber deployment.

Negative

• Regulated revenues remained stagnant at $15.5 million year-over-year.
• Voice lines decreased slightly by 0.2%, indicating potential market saturation.
• Broadband revenue growth may be impacted by the COVID-19 pandemic in H2 2021.

LICT Corporation (“LICT” or the “Company”; OTC Pink^®: LICT) reports unaudited, financial results for the quarter ended June 30, 2021.

COVID-19 - LICT continues to closely monitor developments of the new variants of COVID -19. We continue to take steps to mitigate the potential risks related to the COVID-19 pandemic to our teammates and customers.

SECOND QUARTER – In 2021, LICT’s second quarter revenues were $32.3 million compared to $30.5 million for the corresponding quarter in 2020. EBITDA was $14.8 million in the second quarter of 2021 as compared to $13.8 million in 2020.

Non-regulated revenues increased 12%, or $1.8 million, to $16.8 million from the prior year’s second quarter $15.0 million, driven by broadband and cable modem sales. Non-regulated EBITDA rose just over 12% to $7.3 million, from $6.5 million.

Regulated revenues totaled $15.5 million in the second quarter of both 2021 and 2020. Regulated EBITDA was $7.5 million compared to $7.3 million last year.

In April 2021, CentraCom, the Company’s Utah operation, closed on the acquisition of assets and operations of NeboNet, a fixed wireless Internet Service Provider located in Nephi, Utah. NeboNet offered high speed wireless Internet service in the counties of Juab and Boxer Elder, Utah. CentraCom will expand and enhance the bandwidth capabilities of the network throughout these communities.

OTHER INCOME – Other income/(expense) for the second quarter of 2021 and 2020 totaled $0.3 million, mostly due to the $50 million drawdown from CoBank in the prior year, which we have reduced to $10 million.

EARNINGS PER SHARE – Earnings per share from operations for the second quarter of 2021 were $346 per share as compared to $307 per share in the prior year’s second quarter.

ALTERNATIVE – CONNECT AMERICA COST MODEL (“A-CAM”) PROGRAM – LICT included $8.0 million in the second quarter of 2021 for A-CAM and A-CAM II revenues, about the same as the $8.1 million in the second quarter of 2020.

All LICT telephone companies have elected to participate in the Federal Communications Commission’s (“FCC”) A-CAM and A-CAM II programs. The A-CAM program commenced January 1, 2017, with revisions in 2018 and 2019. A-CAM II was implemented by the FCC in 2019, which LICT adopted in Wisconsin. The A-CAM program is designed to accelerate and expand the deployment of broadband capabilities throughout the nation’s rural areas with mandatory build-out requirements for receipt of support. LICT is actively building and expanding broadband facilities. A-CAM and A-CAM II replaced two prior USF mechanisms for companies electing A-CAM.

EMERGENCY BROADBAND BENEFIT (“EBB”) PROGRAM – LICT is actively participating in the FCC’s $3.2 billion EBB Program to support our ongoing commitment to provide affordable broadband to the rural communities we serve and help close the digital divide. This program provides consumers who are eligible with a broadband credit of up to $50 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan for the duration of the program.

FCC AUCTIONS – During the second quarter of 2021 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 are engaged in the filing process required by the FCC for the markets we were awarded in Auction 904, the Rural Digital Opportunities Fund auction, as well as planning to participate in the upcoming Auction 110.

2021 OUTLOOK – LICT’s guidance for 2021 revenue and EBITDA remains unchanged with revenues of $127 - $131 million and EBITDA in the range of $58 to $60 million. LICT’s guidance on capital expenditures is increasing to a range of $31 and $33 million as we have increased deployment of fiber in the communities we serve. The effect of the COVID-19 pandemic may impact revenue growth, in the second half of 2021.

STRATEGIC REVIEW - As previously stated, the Company continues to systematically seek, analyze and evaluate a full range of means to expand the scope and scale of its businesses to accelerate growth across all of them, and thereby enhance our shareholders’ value.

CAPITAL EXPENDITURES – In the second quarter of 2021, capital expenditures were $7.5 million, of which $4.1 million was for non-regulated activities and $3.4 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 June 30, 2021, LICT owns and operates 5,325 miles of fiber optic cable, 11,494 miles of copper cable, 770 miles of coaxial cable and 83 towers. During the quarter, we added 26 towers as a result of our acquisition of NeboNet in Utah.

SHARE REPURCHASES – During the six months ended June 30, 2021, the Company repurchased 453 shares for $10.1 million, with an average price of $22,200 per share. On June 30, 2021, 18,080 shares were outstanding.

OPERATING STATISTICS / BROADBAND DEPLOYMENT - As of June 30, 2021, the Company’s broadband penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 93.3%, as compared to 90.8% at December 31, 2020.

	June 30,		December 31,		Percent
				Increase	Increase
	2021	2020		(Decrease)	(Decrease)
Broadband lines	40,607	39,825		782	2.0%
Voice Lines
ILEC	23,957	24,005		(48)	(0.2%)
Out of franchise	6,897	7,456		(559)	(7.5%)
Total	30,854	31,461		(607)	(1.9%)
Video Subscribers	4,307	4,406		(99)	(2.2%)
Revenue Generating Units	75,768	75,692		76	0.1%

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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
Statements of Operations and Selected Balance Sheet Data				Page 1 of 2
(In Thousands, Except Per Share Data)
STATEMENTS OF OPERATIONS
	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2021	2020		2021	2020
Revenues	$32,287	$30,507		$64,302	$60,553
Cost and Expenses:
Cost of revenue, excluding depreciation	14,519	13,550		28,998	26,748
Selling, general and administration	3,016	3,176		6,189	6,275
Corporate Office Expenses	917	1,063		1,863	2,013
Charitable Contributions	183	247		183	247
Depreciation and amortization	4,655	4,074		9,291	8,414
Total Costs and Expenses	23,290	22,110		46,524	43,697
Operating profit	8,997	8,397		17,778	16,856
Other Income (Expense)
Investment income	22	154		784	267
Interest expense	(319)	(486)		(704)	(788)
Equity in earnings of affiliated companies	21	--		206	53
Gain from the sale of investment (a)	--	--		--	13,071
Other	(22)	25		36	(4)
	(298)	(307)		322	12,599
Income Before Income Tax Provision	8,699	8,090		18,100	29,455
Provision for income taxes	(2,413)	(2,323)		(4,840)	(7,877)
Net Income	$6,286	$5,767		$13,260	$21,578
Capital Expenditures	$7,566	$7,852		$14,689	12,915
Weighted Average Shares- Basic and Diluted	18,185	18,803		18,318	18,953
Actual shares outstanding at end of period	18,080	18,719		18,080	18,719
Earnings Per Share:	$346	$307		$724	$1,139
Earnings Per Share excluding the gain from the sale of an investment(a)	$346	$307		$724	$631
(a) Please note for the six months ended June 30, 2020, includes the gain of $13.1 million stemming from the sale of MODOC which added $508 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	June 30,	December 31,
	2021	2020
Cash and Cash Equivalents	$36,488	$67,324
Other short-term investments	-	$20,000
Long-Term Debt (including current portion)	22,325	$63,176
Net Cash	$14,163	$24,148
Shareholders' Equity	$183,795	$180,595
Shares Outstanding	18,080	18,533
EBITDA
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 can 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							Six Months Ended
		June 30,							June 30,
		2021			2020				2021		2020
EBITDA Reconciliation:
Operating Profit from Continuing Operations		$ 8,997		$ 8,397					$ 17,778			$16,856
Additions:
Corporate expenses		917		1,063					1,863			2,013
Charitable contributions		183		247					183			247
Depreciation and amortization		4,655		4,074					9,291			8,414
EBITDA from Operations Before Corporate Expenses		14,752		13,781					29,115			27,530
Corporate Expenses		(917)		(1,063)					(1,863)			(2,013)
EBITDA		$ 13,835		$ 12,718					$ 27,252			$ 25,517

 

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FAQ

What were LICT's revenues for the second quarter of 2021?

LICT's revenues for Q2 2021 were $32.3 million.

What is the earnings per share for LICT in Q2 2021?

Earnings per share for LICT in Q2 2021 were $346.

What acquisition did LICT make in 2021?

LICT acquired NeboNet, enhancing its broadband services in Utah.

How much did LICT spend on capital expenditures in Q2 2021?

LICT's capital expenditures in Q2 2021 totaled $7.5 million.

What is LICT's revenue guidance for 2021?

LICT's revenue guidance for 2021 remains unchanged at $127-$131 million.