LICT Corporation Reports Third Quarter 2021 Results

- Non-Regulated Revenues Report Record Results

- Shareholder Designated Contribution Program to Resume

RYE, N.Y.--(BUSINESS WIRE)-- LICT Corporation (“LICT” or the “Company”; OTC Pink^®: LICT) reports unaudited, financial results for the quarter ended September 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 the communities we serve and our teammates who work efficiently and diligently to serve their respective communities.

RESULTS-

Driven by broadband services, third quarter non-regulated revenues increased 9%, to a record $17.1 million from the prior year’s third quarter $15.6 million. Non-regulated EBITDA rose over 9% to $7.3 million, from $6.7 million.

Regulated revenues on the other hand slipped to $15.2 million from last year’s third quarter revenues of $16.5. This shortfall is traceable to a reduction from DSL detariffing and a cost study revision associated with network changes.

Last year’s third quarter included a non-recurring receivable of $0.6 million driven by changes in the computation of the cost recovery mechanism.

Regulated EBITDA was $7.4 million compared to $8.8 million last year.

Overall revenues in LICT’s third quarter were $32.3 million compared to $32.2 million for the corresponding quarter in 2020. EBITDA was $14.7 million in the third quarter of 2021 as compared to $15.5 million in 2020.

OTHER EXPENSES – A decline in other expenses to $300,000 from $500,000 was mostly due to a decrease in interest expense reflecting payment of a large portion of the $50 million loan from CoBank in 2020.

EARNINGS PER SHARE – Earnings per share from operations for the third quarter of 2021 were $342 per share for the third quarter as compared to $371 per share in the prior year’s third quarter. Full year we expect earnings per share to be $1,435 per share versus $1,353 in 2020. Shares outstanding at the end of the third quarter of 2021 were 17,960.

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.

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 broadband plan for the duration of the program.

FCC AUCTIONS – LICT is currently participating in Auction 110. During the third quarter of 2021, we continued our efforts to deploy the spectrum licenses we were awarded in various auctions which will enable us to provide increases speeds to some of our more remote customers. 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.

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 third quarter of 2021, capital expenditures increased by $1.7 million to $8.1 million, of which $3.5 million was for non-regulated activities and $4.6 million for regulated activities. LICT’s guidance on capital expenditures is increasing to a range of $31 and $33 million this year from $28 million invested in 2020 as we have increased deployment of fiber in the communities we serve. Our capital spending enables us to meet and exceed our A-CAM requirements, by accelerating our broadband deployment, offering enhanced broadband speeds, and increase the overall fiber route miles in our network.

As of September, 30, 2021, LICT owns and operates 5,411 miles of fiber optic cable, 11,499 miles of copper cable, 775 miles of cable and 83 towers.

SHARE REPURCHASES – During the nine months ended September 30, 2021, the Company repurchased 573 shares for $12.9 million, with an average price of $22,600 per share. On September 30, 2021, 17,960 shares were outstanding, with 914 shares still available for authorized repurchase mostly on an opportunistic basis.

SHAREHOLDER CONTRIBUTION PROGRAM – LICT’s Board of Directors has approved $100 per share for this year’s Shareholder Designated Charitable Contribution Program. For the past 6 years LICT has extended to registered shareholders, the opportunity to designate a 501(c) 3 charity to which LICT will contribute $100. per share. Details regarding the program will be issued under separate cover.

OPERATING STATISTICS / BROADBAND DEPLOYMENT - As of September 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.

	September 30,	December 31,			Percent
				Increase	Increase
	2021	2020		(Decrease)	(Decrease)
Broadband lines	43,480	39,825		3,655	9.2%
Voice Lines
ILEC	23,896	24,005		(109)	(0.5%)
Out of franchise	6,919	7,456		(537)	(7.2%)
Total	30,815	31,461		(646)	(2.1%)
Video Subscribers	4,179	4,406		(227)	(5.2%)
Revenue Generating Units	78,474	75,692		2,782	3.7%

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			Nine Months Ended
	September 30,			September 30,
	2021	2020		2021	2020
Revenues	$32,314	$32,183		$96,616	$92,736
Cost and Expenses:
Cost of revenue, excluding depreciation	14,624	13,739		43,622	40,487
Selling, general and administration	2,960	2,911		9,149	9,186
Corporate Office Expenses	880	1,207		2,743	3,220
Charitable Contributions	--	--		183	247
Depreciation and amortization	4,919	4,453		14,210	12,867
Total Costs and Expenses	23,383	22,310		69,907	66,007
Operating profit	8,931	9,873		26,709	26,729
Other Income (Expense)
Investment income	7	16		791	283
Interest expense	(277)	(481)		(981)	(1,269)
Equity in earnings of affiliated companies	29	--		235	53
Gain from the sale of investment (a)	--	--		--	13,071
Other	(31)	16		5	12
	(272)	(449)		50	12,150
Income Before Income Tax Provision	8,659	9,424		26,759	38,879
Provision for income taxes	(2,497)	(2,481)		(7,337)	(10,358)
Net Income	$6,162	$6,943		$19,422	$28,521
Capital Expenditures	$8,132	$6,460		$22,763	$19,348
Weighted Average Shares- Basic and Diluted	18,026	18,701		18,214	18,866
Actual shares outstanding at end of period	17,960	18,673		17,960	18,673
Earnings Per Share:	$342	$371		$1,066	$1,512
Earnings Per Share excluding the gain from the sale of an investment(a)	$342	$371		$1,066	$1,002
(a) Please note for the nine months ended September 30, 2020, includes the gain of $13.1 million stemming from the sale of MODOC which added $510 to earnings per share.
See EBITDA on page 2

LICT Corporation								Exhibit A
Statements of Operations and Selected Balance Sheet Data-Continued (In Thousands, Except Per Share Data)								Page 2 of 2
	SELECTED BALANCE SHEET DATA		September 30,		December 31,
			2021		2020
	Cash and Cash Equivalents		$42,738		$67,324
	Other short-term investments		$20,000		$20,000
	Long-Term Debt (including current portion)		$(47,325)		$(63,176)
	Net Cash		$15,413		$24,148
	Shareholders' Equity		$187,047		$180,595
	Shares Outstanding		17,960		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							Nine Months Ended
		September 30,							September 30,
		2021			2020				2021			2020
EBITDA Reconciliation:
Operating Profit from Continuing Operations		$8,931			$9,873				$26,709			$26,729
Additions:
Corporate expenses		880			1,207				2,743			3,220
Charitable contributions		--			--				183			247
Depreciation and amortization		4,919			4,453				14,210			12,867
EBITDA from Operations Before Corporate Expenses		14,730			15,533				43,845			43,063
Corporate Expenses		(880)			(1,207)				(2,743)			(3,220)
EBITDA		$13,850			$14,326				$41,102			$39,843

 

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Stephen J. Moore

Vice President-Finance



914-921-8821

www.lictcorp.com

Source: LICT Corporation