NTELOS Holdings Corp. Reports Second Quarter 2015 Results
-Total Subscribers Up 9% over Prior Year in Western Markets
-Quarterly Revenues Up 6% over Prior Year in Western Markets
WAYNESBORO, Va., July 28, 2015 /PRNewswire/ -- NTELOS Holdings Corp. (NASDAQ: NTLS) ("nTelos" or the "Company") announced today operating and financial results for its second quarter ended June 30, 2015. In the fourth quarter of 2014, the Company announced a strategic refocus of its business operations in its western Virginia and West Virginia markets ("Western Markets" or "Markets"). The Company is currently in the process of winding down operations in its Eastern Markets, which it expects to complete by November 15, 2015.
"nTelos's increased focus on being competitive in our local markets, strong retail offerings and expanded 4G LTE network continue to drive robust subscriber growth. During the first half of 2015, we more than doubled net adds over the same period last year and surpassed the halfway point of our LTE network build out, ahead of schedule," said Rod Dir, Chief Executive Officer of NTELOS Holdings Corp. "With ample liquidity evidenced by our quarter end cash balance of over $146 million, an improving cost structure and a more focused operating plan, we are well positioned to continue unlocking value and enhancing our competitive position within our Markets."
The "Highlights" and "Subscriber Update" sections represent results of operations for our Western Markets, which are included in the supplemental schedules provided.
Highlights
- Revenues increased 6% to $91.4 million for the second quarter 2015, compared to $86.1 million for the second quarter 2014;
- Postpaid average monthly billings per user ("ABPU") was $58.64 for the second quarter 2015, compared to $58.04 for the first quarter 2015 and $59.78 for the second quarter 2014;
- Adjusted EBITDA was $27.5 million for the second quarter 2015, compared to $33.3 million for the second quarter 2014. Adjusted EBITDA during the second quarter 2015 reflected the absorption of corporate overhead previously allocated to the Eastern Markets in 2014;
- Net subscriber additions for the six months ended June 30, 2015 of 15,400 exceeded net subscriber additions for the full year 2014 of 14,600;
- Postpaid churn of 1.5% was the Company's lowest quarterly churn since second quarter 2008; and
- Approximately 53% of our covered POPs have access to our LTE network, exceeding our original year end 2015 goal of 50%.
Subscriber Update
Total Subscribers
- Total subscribers were 297,500 as of June 30, 2015, compared to 290,100 for the first quarter 2015 and 274,000 for the second quarter 2014;
- Total subscriber gross additions for the second quarter 2015 were 25,700, compared to 27,500 for the first quarter 2015 and 22,500 for the second quarter 2014; and
- Total subscriber net additions for the second quarter 2015 were 7,400, compared to 8,000 for the first quarter 2015 and 3,000 for the second quarter 2014.
Postpay Subscribers
- Postpay subscriber gross additions for the second quarter 2015 were 14,300, compared to 15,700 for the first quarter 2015 and 14,700 for the second quarter 2014;
- Net postpay subscriber additions were 4,300 for the second quarter 2015, compared to 4,600 for the first quarter 2015 and 3,500 for the second quarter 2014;
- Postpay churn for the second quarter 2015 was 1.5%, compared to 1.7% for the first quarter 2015 and 1.8% for the second quarter 2014;
- ARPA was $117.18 for the second quarter 2015, compared to $136.61 for the second quarter 2014; and
- As of June 30, 2015, total postpay subscribers were 229,000.
Prepay Subscribers
- Prepay subscriber gross additions for the second quarter 2015 were 11,400, compared to 11,800 for the first quarter 2015 and 7,800 for the second quarter 2014;
- Net prepay subscriber additions (losses) were 3,100 for the second quarter 2015, compared to 3,400 for the first quarter 2015 and (500) for the second quarter 2014;
- Prepay churn for the second quarter 2015 was 4.1%, compared to 4.4% for the first quarter 2015 and 4.2% for the second quarter 2014; and
- As of June 30, 2015, total prepay subscribers were 68,500.
Eastern Markets Wind Down Update
During the six months ended June 30, 2015, we reduced our Eastern Markets subscribers by 85,400 as we take action to wind down our operations in an orderly manner. In addition, on June 30 we released the first 10MHz of spectrum to the buyer as planned. Eastern Markets Adjusted EBITDA for the six months ended June 30, 2015 was $13.7 million, and is not included in Western Markets Adjusted EBITDA as discussed above.
Net Income
Net income of nTelos Holdings, after net income attributable to noncontrolling interests, was $1.6 million, or $0.07 per diluted share, for the second quarter 2015, compared to $0.5 million, or $0.02 per diluted share, for the second quarter 2014.
Liquidity
Cash at the end of the second quarter 2015 was $146.5 million, compared to $75.7 million at the end of the fourth quarter 2014. The cash balance includes $2.2 million in restricted cash and approximately $56.0 million nTelos received on April 15, 2015 in connection with the sale of the Company's spectrum portfolio in its Eastern Markets.
Business Outlook
For the year ending December 31, 2015, the Company reiterates its full year 2015 Adjusted EBITDA guidance to be between $100.0 million and $108.0 million. Adjusted EBITDA excludes restructuring costs and results from the Eastern Markets. Full year 2015 capital expenditures are still expected of between $95.0 and $105.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its second quarter 2015 results this morning, July 28, 2015, at 11:00am ET. To participate, please dial 1-877-407-9120 in the U.S. and Canada and 1-412-902-1009 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 1-877-660-6853 in the U.S. and Canada or 1-201-612-7415 internationally and entering access code 13601222 beginning approximately one hour after the call and continuing until August 4, 2015.
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, transaction related costs, restructuring and asset impairment charges, gain/loss on sale or disposal of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, separation charges, secondary offering costs, adjustments for impact of recognizing deferred gain associated with towers sold to Grain Management and adjustments for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
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.
ABPU, or average billings per user, is computed by adding average monthly postpaid service billings to users and equipment installment plan (EIP) billings divided by the average number of postpaid users during the period, further divided by the number of months in the period. NTELOS believes average postpaid customer billings per user is indicative of estimated cash collection, including equipment installments, from customers each month.
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 and ABPU 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, ARPA and ABPU 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.
About NTELOS
NTELOS Holdings Corp. (NTLS), operating through its subsidiaries as "nTelos Wireless," is headquartered in Waynesboro, VA, and provides high-speed, dependable nationwide voice and data coverage for approximately 297,500 retail subscribers based in its Western Markets, comprised of western Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company's licensed territories in the Western Markets have a total population of approximately 4.4 million residents, of which its wireless network covers approximately 3.1 million residents. The Company is also the exclusive wholesale provider of wireless network services to Sprint Corporation in portions of its western Virginia and West Virginia territories for all Sprint wireless customers.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release 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: our ability to attract and retain retail subscribers to our services; our dependence on our strategic relationship with Sprint Corporation ("Sprint"); our ability to realize the expected proceeds, cost savings and other benefits from the wind down of our Eastern Markets; a potential increase in roaming rates and wireless handset subsidy costs; rapid development and intense competition in the telecommunications industry; our ability to finance, design, construct and realize the benefits of any planned network technology upgrade; our ability to acquire or gain access to additional spectrum in the future; the potential to experience a high rate of customer turnover; the potential for competitors to build networks in our markets; cash and capital requirements; operating and financial restrictions imposed by our credit agreement; adverse economic conditions; federal and state regulatory fees, requirements and developments; loss of ability to use our current cell sites; our continued reliance on indirect channels of retail distribution; 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 most recent Annual Report filed on Form 10-K.
Exhibits:
- Consolidated Financial Statements
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Income
- Consolidated Operating Metrics
- Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
- Key Metrics
- ARPA Reconciliation – Postpay
- ABPU Reconciliation- Postpay
- Western Markets Operating Metrics
- Western Markets Condensed Consolidated Statements of Operating Income
- Western Markets Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
- Western Markets Key Metrics
- Western Markets ARPA Reconciliation – Postpay
- Western Markets ABPU Reconciliation – Postpay
|
NTELOS Holdings Corp. |
|||||
|
Condensed Consolidated Balance Sheets |
(Unaudited) |
(Unaudited) | |||
|
June 30, 2015 |
December 31, 2014 | ||||
|
(In thousands) |
|||||
|
ASSETS |
|||||
|
Current Assets |
|||||
|
Cash |
$ 144,293 |
$ 73,546 | |||
|
Restricted cash |
2,167 |
2,167 | |||
|
Accounts receivable, net |
52,771 |
43,668 | |||
|
Inventories and supplies |
16,282 |
18,297 | |||
|
Deferred income taxes |
24,034 |
24,770 | |||
|
Prepaid expenses |
14,684 |
13,543 | |||
|
Other current assets |
336 |
4,626 | |||
|
254,567 |
180,617 | ||||
|
Assets Held for Sale |
1,454 |
64,271 | |||
|
Securities and Investments |
1,522 |
1,522 | |||
|
Property, Plant and Equipment, net |
308,422 |
289,947 | |||
|
Intangible Assets |
|||||
|
Goodwill |
63,700 |
63,700 | |||
|
Radio spectrum licenses |
44,933 |
44,933 | |||
|
Customer relationships and trademarks, net |
4,688 |
5,084 | |||
|
Deferred Charges and Other Assets |
20,869 |
18,474 | |||
|
Total Assets |
$ 700,155 |
$ 668,548 | |||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|||||
|
Current Liabilities |
|||||
|
Current portion of long-term debt |
$ 5,728 |
$ 5,816 | |||
|
Accounts payable |
15,474 |
24,541 | |||
|
Accrued expenses and other current liabilities |
47,788 |
41,706 | |||
|
68,990 |
72,063 | ||||
|
Long-Term Debt |
517,111 |
519,592 | |||
|
Other Long-Term Liabilities |
128,351 |
109,845 | |||
|
Stockholders' Equity (Deficit) |
(14,297) |
(32,952) | |||
|
Total Liabilities and Stockholders' Equity (Deficit) |
$ 700,155 |
$ 668,548 | |||
|
NTELOS Holdings Corp. | ||||||
|
Condensed Consolidated Statements of Income |
Three Months Ended |
Six Months Ended | ||||
|
(Unaudited) |
(Unaudited) | |||||
|
(In thousands, except per share amounts) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||
|
Operating Revenues |
||||||
|
Retail Revenue |
$ 58,223 |
$ 72,935 |
$ 124,757 |
$ 146,811 | ||
|
Wholesale and other revenue |
37,647 |
38,300 |
73,930 |
79,015 | ||
|
Equipment sales |
12,454 |
6,560 |
29,843 |
14,051 | ||
|
Operating Revenues |
108,324 |
117,795 |
228,530 |
239,877 | ||
|
Operating Expenses |
||||||
|
Cost of services |
32,017 |
29,180 |
61,675 |
57,085 | ||
|
Cost of equipment sold |
20,038 |
22,144 |
43,673 |
45,997 | ||
|
Customer operations |
20,499 |
25,377 |
44,848 |
53,000 | ||
|
Corporate operations |
9,975 |
11,261 |
19,387 |
23,032 | ||
|
Restructuring |
1,602 |
- |
3,610 |
- | ||
|
Depreciation and amortization |
14,485 |
19,929 |
28,359 |
38,996 | ||
|
Gain on sale of assets |
(802) |
- |
(16,749) |
- | ||
|
97,814 |
107,891 |
184,803 |
218,110 | |||
|
Operating Income |
10,510 |
9,904 |
43,727 |
21,767 | ||
|
Other Expense |
||||||
|
Interest expense |
(7,574) |
(8,315) |
(15,491) |
(16,274) | ||
|
Other income (expense), net |
35 |
(92) |
31 |
(1,164) | ||
|
(7,539) |
(8,407) |
(15,460) |
(17,438) | |||
|
Income before Income Taxes |
2,971 |
1,497 |
28,267 |
4,329 | ||
|
Income Taxes |
1,090 |
640 |
11,099 |
1,750 | ||
|
Net Income |
1,881 |
857 |
17,168 |
2,579 | ||
|
Net Income Attributable to Noncontrolling Interests |
(271) |
(373) |
(762) |
(809) | ||
|
Net Income Attributable to NTELOS Holdings Corp. |
$ 1,610 |
$ 484 |
$ 16,406 |
$ 1,770 | ||
|
Earnings per Share Attributable to Common Shares: |
||||||
|
Net Income applicable to NTELOS Holdings Corp. |
$ 1,610 |
$ 484 |
$ 16,406 |
$ 1,770 | ||
|
Net Income applicable to participating securities |
70 |
- |
611 |
- | ||
|
Net Income applicable to common shares |
$ 1,540 |
$ 484 |
$ 15,795 |
$ 1,770 | ||
|
Basic |
$ 0.07 |
$ 0.02 |
$ 0.74 |
$ 0.08 | ||
|
Weighted average shares outstanding - basic |
21,242 |
21,099 |
21,218 |
21,090 | ||
|
Diluted |
$ 0.07 |
$ 0.02 |
$ 0.71 |
$ 0.08 | ||
|
Weighted average shares outstanding - diluted |
22,564 |
22,039 |
22,347 |
22,037 | ||
|
Cash Dividends Declared per Share - Common Stock |
$ - |
$ 0.42 |
$ - |
$ 0.84 | ||
|
NTELOS Holdings Corp. | |||||||||
|
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA - (Consolidated) | |||||||||
|
(In thousands) |
|||||||||
|
Three Months Ended |
Six Months Ended | ||||||||
|
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||||
|
Net income attributable to NTELOS Holdings Corp. |
$ 1,610 |
$ 484 |
$ 16,406 |
$ 1,770 | |||||
|
Net income attributable to noncontrolling interests |
271 |
373 |
762 |
809 | |||||
|
Net income |
$ 1,881 |
$ 857 |
$ 17,168 |
$ 2,579 | |||||
|
Interest expense |
7,574 |
8,315 |
15,491 |
16,274 | |||||
|
Income taxes |
1,090 |
640 |
11,099 |
1,750 | |||||
|
Other expense |
(35) |
92 |
(31) |
1,164 | |||||
|
Operating income |
$ 10,510 |
$ 9,904 |
$ 43,727 |
$ 21,767 | |||||
|
Depreciation and amortization |
14,485 |
19,929 |
28,359 |
38,996 | |||||
|
Restructuring |
1,602 |
- |
3,610 |
- | |||||
|
Gain on sale of assets |
(802) |
- |
(16,749) |
- | |||||
|
Accretion of asset retirement obligations |
447 |
331 |
951 |
646 | |||||
|
Equity-based compensation |
910 |
1,283 |
1,769 |
2,594 | |||||
|
SNA straight-line adjustment ¹ |
3,065 |
2,043 |
6,130 |
2,043 | |||||
|
Cell site spectrum rent |
1,006 |
- |
1,006 |
- | |||||
|
Other 2 |
(94) |
873 |
(294) |
2,240 | |||||
|
Adjusted EBITDA |
$ 31,129 |
$ 34,363 |
$ 68,509 |
$ 68,286 | |||||
|
1 |
Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis. | ||||||||
|
2 |
In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee separation charges. In 2015, Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of the deferred gain for towers sold to Grain Management, LLC. | ||||||||
|
NTELOS Holdings Corp. |
||||||||||||
|
Key Metrics |
Six Months Ended |
|||||||||||
|
Quarter Ended: |
6/30/2014 |
9/30/2014 |
12/31/2014 |
3/31/2015 |
6/30/2015 |
6/30/2014 |
6/30/2015 |
|||||
|
Subscribers |
||||||||||||
|
Beginning Subscribers |
468,000 |
458,100 |
457,200 |
448,900 |
414,700 |
464,600 |
448,900 |
|||||
|
Postpay |
306,800 |
308,200 |
310,200 |
310,100 |
294,300 |
306,700 |
310,100 |
|||||
|
Prepay |
161,200 |
149,900 |
147,000 |
138,800 |
120,400 |
157,900 |
138,800 |
|||||
|
Gross Additions |
39,000 |
41,400 |
40,400 |
28,800 |
25,800 |
84,400 |
54,600 |
|||||
|
Postpay |
20,400 |
20,800 |
22,500 |
15,800 |
14,400 |
40,600 |
30,200 |
|||||
|
Prepay |
18,600 |
20,600 |
17,900 |
13,000 |
11,400 |
43,800 |
24,400 |
|||||
|
Disconnections ¹ |
38,600 |
42,300 |
48,700 |
63,000 |
61,600 |
80,600 |
124,600 |
|||||
|
Postpay |
17,100 |
18,900 |
22,700 |
31,500 |
32,200 |
37,000 |
63,700 |
|||||
|
Prepay |
21,500 |
23,400 |
26,000 |
31,500 |
29,400 |
43,600 |
60,900 |
|||||
|
Net Additions (Losses) ¹ |
400 |
(900) |
(8,300) |
(34,200) |
(35,800) |
3,800 |
(70,000) |
|||||
|
Postpay |
3,300 |
1,900 |
(200) |
(15,700) |
(17,800) |
3,600 |
(33,500) |
|||||
|
Prepay |
(2,900) |
(2,800) |
(8,100) |
(18,500) |
(18,000) |
200 |
(36,500) |
|||||
|
Ending Subscribers ¹ |
458,100 |
457,200 |
448,900 |
414,700 |
378,900 |
458,100 |
378,900 |
|||||
|
Postpay |
308,200 |
310,200 |
310,100 |
294,300 |
276,400 |
308,200 |
276,400 |
|||||
|
Prepay |
149,900 |
147,000 |
138,800 |
120,400 |
102,500 |
149,900 |
102,500 |
|||||
|
Churn, net ¹ |
2.8% |
3.1% |
3.6% |
4.9% |
5.2% |
2.9% |
5.0% |
|||||
|
Postpay |
1.8% |
2.0% |
2.4% |
3.5% |
3.8% |
2.0% |
3.6% |
|||||
|
Prepay |
4.5% |
5.3% |
6.0% |
8.1% |
8.8% |
4.6% |
8.5% |
|||||
|
Other Items |
||||||||||||
|
ABPU/ARPA Statistics |
||||||||||||
|
ABPU |
$ 62.05 |
$ 61.41 |
$ 61.43 |
$ 61.41 |
$ 60.14 |
$ 62.38 |
$ 60.80 |
|||||
|
ARPA |
$ 137.20 |
$ 134.18 |
$ 132.48 |
$ 125.98 |
$117.90 |
$ 137.34 |
$ 122.05 |
|||||
|
Postpay Accounts ² |
140,500 |
142,100 |
143,400 |
138,500 |
130,500 |
140,500 |
130,500 |
|||||
|
Postpay Subscribers per Account ² |
2.2 |
2.2 |
2.2 |
2.1 |
2.1 |
2.2 |
2.1 |
|||||
|
Strategic Network Alliance Revenues (000's) ³ |
||||||||||||
|
Billed Revenue |
$ 37,997 |
$ 38,144 |
$ 38,329 |
$ 36,627 |
$ 37,887 |
$ 77,281 |
$ 74,514 |
|||||
|
Straight-Line Adjustment |
(2,043) |
(3,065) |
(3,065) |
(3,065) |
(3,065) |
(2,043) |
(6,130) |
|||||
|
Spectrum Lease Consideration |
822 |
1,234 |
1,233 |
1,190 |
1,222 |
822 |
2,412 |
|||||
|
SNA Revenues |
$ 36,776 |
$ 36,313 |
$ 36,497 |
$ 34,752 |
$ 36,044 |
$ 76,060 |
$ 70,796 |
|||||
|
Network Statistics |
||||||||||||
|
Licensed Population (millions) |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
8.0 |
|||||
|
Covered Population (millions) |
6.0 |
6.0 |
6.0 |
6.0 |
6.0 |
6.0 |
6.0 |
|||||
|
Total Cell Sites |
1,445 |
1,446 |
1,453 |
1,455 |
1,443 |
1,445 |
1,443 |
|||||
|
¹ |
During the 2014 second quarter, the Company terminated approximately 2,100 postpay subscribers that repeatedly exceeded their terms and conditions relating to permitted usage. Additionally, the Company changed its business rules related to reporting of long-term, non-revenue prepay subscribers. This change resulted in approximately 8,200 prepay subscribers being excluded from our ending subscriber base. The impact of these Company-initiated terminations and change in business rules is reflected in our ending subscriber totals as of June 30, 2014, and is not reflected in our disconnections, net additions and churn calculations for the quarter ended June 30, 2014. | |||||||||||
|
² |
End of Period | |||||||||||
|
³ |
Effective 5/1/14, SNA Revenues include the impact of recognizing the fixed fee element of SNA contract revenues on a straightline basis, which is a reduction of billed revenue, and the non-cash consideration attributable to spectrum leases. We have recognized an equal charge for spectrum lease expense within cost of sales and services. | |||||||||||
|
NTELOS Holdings Corp. |
||||||||
|
ARPA Reconciliation - Postpay - (Consolidated) |
Three Months Ended |
Six Months Ended | ||||||
|
Average Monthly Revenue per Account (ARPA) ¹ |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||
|
(In thousands, except for accounts and ARPA) |
||||||||
|
Retail Revenue |
$ 58,223 |
$ 72,935 |
$ 124,757 |
$ 146,811 | ||||
|
Less: prepay service revenues and other |
(10,612) |
(15,806) |
(23,560) |
(32,069) | ||||
|
Postpay service revenues |
$ 47,611 |
$ 57,129 |
$ 101,197 |
$ 114,742 | ||||
|
Average number of postpay accounts |
134,600 |
138,800 |
138,200 |
139,200 | ||||
|
Postpay ARPA |
$ 117.90 |
$ 137.20 |
$ 122.05 |
$ 137.34 | ||||
|
¹ |
Average monthly revenue per account (ARPA) is computed by dividing postpay service revenues per period by the average number of postpay accounts during that period. ARPA as defined may not be similar to ARPA measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's consolidated statements of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPA in order to determine their effectiveness. ARPA provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company's performance in attracting and retaining high-value customers. |
|||||||
|
NTELOS Holdings Corp. |
||||||||
|
ABPU Reconciliation - Postpay - (Consolidated) |
Three Months Ended |
Six Months Ended | ||||||
|
Average Monthly Billings per User (ABPU) ¹ |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||
|
(In thousands, except for accounts and ABPU) |
||||||||
|
Retail Revenue |
$ 58,223 |
$ 72,935 |
$ 124,757 |
$ 146,811 | ||||
|
Plus: EIP billings |
3,919 |
- |
6,249 |
- | ||||
|
Less: prepay service revenues and other |
(10,612) |
(15,806) |
(23,560) |
(32,069) | ||||
|
Total postpay billings |
$ 51,530 |
$ 57,129 |
$ 107,446 |
$ 114,742 | ||||
|
Average number of postpay subscribers |
285,600 |
306,900 |
294,500 |
306,600 | ||||
|
Postpay ABPU |
$ 60.14 |
$ 62.05 |
$ 60.80 |
$ 62.38 | ||||
|
¹ |
Average monthly billings per user (ABPU) is computed by dividing postpay service revenues and equipment installment plan (EIP) billings per period by the average number of postpay subscribers during that period. ABPU as defined may not be similar to ABPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's consolidated statements of operations. The Company closely monitors the effects of new rate plans and service offerings on ABPU in order to determine their effectiveness. ABPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company's performance in attracting and retaining high-value customers. |
|||||||
|
NTELOS Western Markets ¹ | ||||||
|
Condensed Consolidated Statements of Operating Income |
Three Months Ended |
Six Months Ended | ||||
|
(Unaudited) |
(Unaudited) | |||||
|
(In thousands) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||
|
Operating Revenues |
||||||
|
Retail Revenue |
$ 42,547 |
$ 44,262 |
$ 85,558 |
$ 88,643 | ||
|
Wholesale and other revenue |
36,700 |
37,811 |
72,297 |
78,039 | ||
|
Equipment sales |
12,141 |
4,052 |
28,844 |
8,609 | ||
|
Operating Revenues |
91,388 |
86,125 |
186,699 |
175,291 | ||
|
Operating Expenses |
||||||
|
Cost of services |
22,785 |
19,858 |
43,606 |
38,643 | ||
|
Cost of equipment sold |
19,885 |
14,744 |
42,883 |
30,510 | ||
|
Customer operations |
16,130 |
14,996 |
35,682 |
31,017 | ||
|
Corporate operations |
9,317 |
7,238 |
17,942 |
14,961 | ||
|
Restructuring |
677 |
- |
2,282 |
- | ||
|
Depreciation and amortization |
13,073 |
13,718 |
25,934 |
26,640 | ||
|
Gain on sale of assets |
(102) |
- |
(11,111) |
- | ||
|
81,765 |
70,554 |
157,218 |
141,771 | |||
|
Operating Income |
$ 9,623 |
$ 15,571 |
$ 29,481 |
$ 33,520 | ||
|
¹ |
Western Markets is defined as Holdings less Eastern Markets. | |||||
|
NTELOS Western Markets ¹ | |||||||||
|
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Western Markets Proforma Adjusted EBITDA | |||||||||
|
(In thousands) |
|||||||||
|
Three Months Ended |
Six Months Ended | ||||||||
|
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||||
|
Net Income Attributable to NTELOS Holdings Corp. |
$ 1,610 |
$ 484 |
$ 16,406 |
$ 1,770 | |||||
|
Net income attributable to noncontrolling interests |
271 |
373 |
762 |
809 | |||||
|
Net income |
$ 1,881 |
$ 857 |
$ 17,168 |
$ 2,579 | |||||
|
Operating loss (income) attributable to Eastern Markets |
(887) |
5,668 |
(14,246) |
11,754 | |||||
|
Interest expense |
7,574 |
8,315 |
15,491 |
16,274 | |||||
|
Income taxes |
1,090 |
640 |
11,099 |
1,750 | |||||
|
Other expense |
(35) |
92 |
(31) |
1,164 | |||||
|
Operating income |
$ 9,623 |
$ 15,572 |
$ 29,481 |
$ 33,521 | |||||
|
Depreciation and amortization |
13,073 |
13,718 |
25,934 |
26,640 | |||||
|
Restructuring 2 |
677 |
- |
2,282 |
- | |||||
|
Gain on sale of assets |
(102) |
- |
(11,111) |
- | |||||
|
Accretion of asset retirement obligations |
315 |
234 |
615 |
457 | |||||
|
Equity-based compensation |
900 |
867 |
1,760 |
1,754 | |||||
|
SNA straight-line adjustment ³ |
3,065 |
2,043 |
6,130 |
2,043 | |||||
|
Other ⁴ |
(95) |
873 |
(295) |
2,240 | |||||
|
Adjusted EBITDA |
$ 27,456 |
$ 33,307 |
$ 54,796 |
$ 66,655 | |||||
|
1 |
Western Markets is defined as Holdings less Eastern Markets. | ||||||||
|
2 |
Restructuring costs attributable to Corporate and Western Markets. | ||||||||
|
3 |
Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis. | ||||||||
|
4 |
In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee separation charges. | ||||||||
|
In 2015, Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of the deferred gain for towers sold to Grain Management, LLC. | |||||||||
|
NTELOS Western Markets ¹ |
||||||||||
|
Key Metrics |
Six Months Ended | |||||||||
|
Quarter Ended: |
6/30/2014 |
9/30/2014 |
12/31/2014 |
3/31/2015 |
6/30/2015 |
6/30/2014 |
6/30/2015 | |||
|
Subscribers |
||||||||||
|
Beginning Subscribers |
277,100 |
274,000 |
277,100 |
282,100 |
290,100 |
273,600 |
282,100 | |||
|
Postpay |
210,300 |
212,400 |
215,500 |
220,100 |
224,700 |
208,800 |
220,100 | |||
|
Prepay |
66,800 |
61,600 |
61,600 |
62,000 |
65,400 |
64,800 |
62,000 | |||
|
Gross Additions |
22,500 |
24,600 |
28,300 |
27,500 |
25,700 |
47,500 |
53,200 | |||
|
Postpay |
14,700 |
15,500 |
18,600 |
15,700 |
14,300 |
29,300 |
30,000 | |||
|
Prepay |
7,800 |
9,100 |
9,700 |
11,800 |
11,400 |
18,200 |
23,200 | |||
|
Disconnections ² |
19,500 |
21,500 |
23,300 |
19,500 |
18,300 |
41,000 |
37,800 | |||
|
Postpay |
11,200 |
12,500 |
13,900 |
11,100 |
10,000 |
24,100 |
21,100 | |||
|
Prepay |
8,300 |
9,000 |
9,400 |
8,400 |
8,300 |
16,900 |
16,700 | |||
|
Net Additions (Losses) ² |
3,000 |
3,100 |
5,000 |
8,000 |
7,400 |
6,500 |
15,400 | |||
|
Postpay |
3,500 |
3,000 |
4,700 |
4,600 |
4,300 |
5,200 |
8,900 | |||
|
Prepay |
(500) |
100 |
300 |
3,400 |
3,100 |
1,300 |
6,500 | |||
|
Ending Subscribers ² |
274,000 |
277,100 |
282,100 |
290,100 |
297,500 |
274,000 |
297,500 | |||
|
Postpay |
212,400 |
215,500 |
220,100 |
224,700 |
229,000 |
212,400 |
229,000 | |||
|
Prepay |
61,600 |
61,600 |
62,000 |
65,400 |
68,500 |
61,600 |
68,500 | |||
|
Churn, net ² |
2.3% |
2.6% |
2.8% |
2.3% |
2.1% |
2.5% |
2.2% | |||
|
Postpay |
1.8% |
1.9% |
2.2% |
1.7% |
1.5% |
1.9% |
1.6% | |||
|
Prepay |
4.2% |
4.9% |
5.0% |
4.4% |
4.1% |
4.3% |
4.3% | |||
|
Other Items |
||||||||||
|
ABPU/ARPA Statistics |
||||||||||
|
ABPU |
$ 59.78 |
$ 59.27 |
$ 59.35 |
$ 58.04 |
$ 58.64 |
$ 59.99 |
$ 58.34 | |||
|
ARPA |
$ 136.61 |
$ 133.83 |
$ 132.12 |
$ 122.04 |
$ 117.18 |
$ 136.60 |
$ 119.58 | |||
|
Postpay Accounts ³ |
93,700 |
95,500 |
98,700 |
101,900 |
104,307 |
93,700 |
104,307 | |||
|
Postpay Subscribers per Account ³ |
2.3 |
2.3 |
2.2 |
2.2 |
2.2 |
2.3 |
2.2 | |||
|
Strategic Network Alliance Revenues (000's) ⁴ |
||||||||||
|
Billed Revenue |
$ 37,997 |
$ 38,144 |
$ 38,329 |
$ 36,627 |
$ 37,887 |
$ 77,281 |
$ 74,514 | |||
|
Straight-Line Adjustment |
(2,043) |
(3,065) |
(3,065) |
(3,065) |
(3,065) |
(2,043) |
(6,130) | |||
|
Spectrum Lease Consideration |
822 |
1,234 |
1,233 |
1,190 |
1,222 |
822 |
2,412 | |||
|
SNA Revenues |
$ 36,776 |
$ 36,313 |
$ 36,497 |
$ 34,752 |
$ 36,044 |
$ 76,060 |
$ 70,796 | |||
|
Network Statistics |
||||||||||
|
Licensed Population (millions) |
4.4 |
4.4 |
4.4 |
4.4 |
4.4 |
4.4 |
4.4 | |||
|
Covered Population (millions) |
3.1 |
3.1 |
3.1 |
3.1 |
3.1 |
3.1 |
3.1 | |||
|
Total Cell Sites |
999 |
1,000 |
1,004 |
1,006 |
1,007 |
999 |
1,007 | |||
|
LTE Cell Sites |
89 |
135 |
135 |
202 |
274 |
89 |
274 | |||
|
LTE % of Total Cell Sites |
8.9% |
13.5% |
13.4% |
20.1% |
27.2% |
8.9% |
27.2% | |||
|
LTE % of Covered POPs |
NA |
NA |
22.2% |
43.6% |
53.1% |
NA |
53.1% | |||
|
¹ |
Western Markets is defined as Holdings less Eastern Markets. | |||||||||
|
² |
During the 2014 second quarter, the Company terminated approximately 1,400 postpay subscribers that repeatedly exceeded their terms and conditions relating to permitted usage. Additionally, the Company changed its business rules related to reporting of long-term, non-revenue prepay subscribers. This change resulted in approximately 4,700 prepay subscribers being excluded from our ending subscriber base. The impact of these Company-initiated terminations and change in business rules is reflected in our ending subscriber totals as of June 30, 2014, and is not reflected in our disconnections, net additions and churn calculations for the periods ended June 30, 2014. | |||||||||
|
³ |
End of Period | |||||||||
|
⁴ |
Effective 5/1/14, SNA Revenues include the impact of recognizing the fixed fee element of SNA contract revenues on a straightline basis, which is a reduction of billed revenue, and the non-cash consideration attributable to spectrum leases. We have recognized an equal charge for spectrum lease expense within cost of sales and services. | |||||||||
|
NTELOS Western Markets ¹ | ||||||||
|
ARPA Reconciliation - Postpay |
Three Months Ended |
Six Months Ended | ||||||
|
Average Monthly Revenue per Account (ARPA) ² |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||
|
(In thousands, except for accounts and ARPA) |
||||||||
|
Retail Revenue |
$ 42,547 |
$ 44,262 |
$ 85,558 |
$ 88,643 | ||||
|
Less: prepay service revenues and other |
(6,320) |
(6,398) |
(12,570) |
(13,008) | ||||
|
Postpay service revenues |
$ 36,227 |
$ 37,864 |
$ 72,988 |
$ 75,635 | ||||
|
Average number of postpay accounts |
103,000 |
92,400 |
101,700 |
92,300 | ||||
|
Postpay ARPA |
$ 117.18 |
$ 136.61 |
$ 119.58 |
$ 136.60 | ||||
|
¹ |
Western Markets is defined as Holdings less Eastern Markets. |
|||||||
|
² |
Average monthly revenue per account (ARPA) is computed by dividing postpay service revenues per period by the average number of postpay accounts during that period. ARPA as defined may not be similar to ARPA measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's consolidated statements of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPA in order to determine their effectiveness. ARPA provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company's performance in attracting and retaining high-value customers. |
|||||||
|
NTELOS Western Markets ¹ | ||||||||
|
ABPU Reconciliation - Postpay |
Three Months Ended |
Six Months Ended | ||||||
|
Average Monthly Billings per User (ABPU) ² |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 | ||||
|
(In thousands, except for accounts and ABPU) |
||||||||
|
Retail Revenue |
$ 42,547 |
$ 44,262 |
$ 85,558 |
$ 88,643 | ||||
|
Plus: EIP billings |
3,640 |
- |
5,636 |
- | ||||
|
Less: prepay service revenues |
(6,320) |
(6,398) |
(12,570) |
(13,008) | ||||
|
Total postpay billings |
$ 39,867 |
$ 37,864 |
$ 78,624 |
$ 75,635 | ||||
|
Average number of postpay subscribers |
226,600 |
211,100 |
224,600 |
210,100 | ||||
|
Postpay ABPU |
$ 58.64 |
$ 59.78 |
$ 58.34 |
$ 59.99 | ||||
|
¹ |
Western Markets is defined as Holdings less Eastern Markets. |
|||||||
|
² |
Average monthly billings per user (ABPU) is computed by dividing postpay service revenues and equipment installment plan (EIP) billings per period by the average number of postpay subscribers during that period. ABPU as defined may not be similar to ABPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's consolidated statements of operations. The Company closely monitors the effects of new rate plans and service offerings on ABPU in order to determine their effectiveness. ABPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company's performance in attracting and retaining high-value customers. |
|||||||
SOURCE NTELOS Holdings Corp.
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