Citizens Communications
3 High Ridge Park
Stamford, CT 06905
203.614.5600
Web site: www.czn.net
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FOR IMMEDIATE RELEASE
Contact:
Brigid M. Smith, Assistant Vice President
Corporate Communications
(203) 614-5042
bsmith@czn.com
CITIZENS COMMUNICATIONS REPORTS FINANCIAL RESULTS
FOR THE THIRD QUARTER OF 2000
November 13, 2000 - Citizens Communications (NYSE:CZN) today reported financial
results for the quarter and nine months ended September 30, 2000. Effective with
the third quarter of 2000, the company has reclassified its gas segment as
"Assets Held for Sale" and is no longer including them in the results of
Discontinued Operations.
After giving effect to the reclassification described above, consolidated third
quarter revenue was $389.9 million, an increase of 16 percent above 1999's third
quarter consolidated revenue of $337.1 million. The reclassification of the
company's gas segment accounted for $80.3 million and $65.6 million of third
quarter 2000 and 1999 revenue, respectively.
Consolidated earnings before interest, taxes, depreciation and amortization
("EBITDA") was $123.9 million in the third quarter, an increase of $35.6 million
or 40 percent above the 1999 third quarter EBITDA of $88.3 million. The current
and year-ago quarters include $7.9 million and $2.6 million in EBITDA,
respectively, from the company's gas segment.
Third quarter consolidated net income was $1.5 million or 1 cent per share,
compared to consolidated net income of $11.9 million or 5 cents per share in the
third quarter of 1999.
Net income for the nine months ended September 30, 2000 was $11.8 million or 4
cents per share, compared to $74.3 million or 29 cents per share for the
nine-month period in 1999. Net income for the year ago period included a $42.9
million gain (net of tax) on the sale of an investment.
Compared to the prior year periods, net income for the quarter and nine months
ended September 30, 2000 was affected by higher depreciation and amortization
expense of $89.1 million and $258.7 million, respectively, as well as higher
interest expense of $45.0 million and $116.3 million, respectively. The higher
interest expense in both periods was primarily due to increased debt levels at
Electric Lightwave.
Telecommunications - Incumbent Local Exchange Carrier Segment ("ILEC Segment")
Third quarter revenue from the company's ILEC Segment was $246.8 million, up 10
percent from the $223.7 million for the 1999 third quarter. Recently completed
acquisitions of approximately 200,000 access lines accounted for $15.6 million
or 68 percent of the increase. The remainder is a result of internal growth.
ILEC Segment EBITDA for the third quarter was $111.0 million, up 18 percent from
$94.2 million in the third quarter of 1999. Third quarter 2000 ILEC Segment
EBITDA included $12.5 million of assimilation expense related to the pending
acquisitions of telephone access lines. Absent this expense, EBITDA from the
company's ILEC Segment increased to $123.5 million, or 31 percent over the prior
year period, resulting in an EBITDA margin of 50 percent for the year 2000 third
quarter compared to 42 percent in the third quarter of 1999.
Competitive Local Exchange Carrier Segment; Electric Lightwave, Inc.
(NASDAQ:ELIX) ("ELI-CLEC") Third quarter revenue from ELI-CLEC totaled $63.6
million compared to $48.6 million, an increase of 31 percent over the prior year
third quarter.
ELI-CLEC third quarter EBITDA was $4.8 million, a $13.7 million improvement over
the $8.9 million EBITDA loss for the prior year's third quarter.
Commenting on the results, Citizens' chairman and chief executive officer
Leonard Tow said, "We are extremely pleased with these results as they represent
significant milestones for both Citizens and Electric Lightwave. Citizens has
reached its interim target of a 50 percent EBITDA margin at its incumbent local
exchange business, and Electric Lightwave has reported its first EBITDA positive
quarter. We expect these upward trends to continue as we proceed with our
transformation of Citizens into a growing, high-margin business."
About Citizens Communications
Citizens Communications serves 1.2 million access lines in 16 states. In 1999
and 2000, Citizens agreed to purchase over 2 million additional access lines in
19 states in transactions that began to close in June of 2000. Citizens also
owns 86 percent of Electric Lightwave, Inc. (NASDAQ:ELIX), a facilities-based,
integrated communications provider that offers a broad range of services to
telecommunications-intensive businesses throughout the United States. More
information about Citizens can be found at www.czn.net.
This document contains forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the statements. These and all forward-looking statements
(including oral representations) are only predictions or statements of current
plans that are constantly under review by the company. All forward-looking
statements may differ from actual results because of, but not limited to,
changes in the local and overall economy, changes in market conditions for debt
and equity securities, the nature and pace of technological changes, the number
and effectiveness of competitors in the company's markets, success in overall
strategy, changes in legal or regulatory policy, changes in legislation, the
company's ability to identify future markets and successfully expand existing
ones, the mix of products and services offered in the company's target markets,
the effects of acquisitions and dispositions and the ability to effectively
integrate businesses acquired. These important factors should be considered in
evaluating any statement contained herein and/or made by the company or on its
behalf. The foregoing information should be read in conjunction with the
company's filings with the U.S. Securities and Exchange Commission including,
but not limited to, reports on Forms 10-K and 10-Q. The company does not intend
to update or revise these forward-looking statements to reflect the occurrence
of future events or circumstances.
(Table to Follow)
Citizens Communications
Consolidated Financial Data
(unaudited)
For the quarter ended For the nine months ended
September 30, September 30,
--------------------------- --------------------------------
% %
(Amounts in thousands - except per-share amounts) 2000 1999 Change 2000 1999 Change
--------------------------- --------------------------------
Income Statement Data
Revenue from continuing operations (1) $389,941 $337,091 16% $ 1,150,140 $1,048,698 10%
Operating income from continuing operations (2) 34,757 18,543 87% 94,067 64,776 45%
Income from discontinued operations, net of tax 6,683 8,272 -19% 13,672 13,459 2%
Net income (2) 1,467 11,906 -88% 11,804 31,389 -62%
EBITDA Data (3)
EBITDA from continuing operations before acquisition
assimilation expense $136,426 $88,258 55% $ 376,874 $ 267,041 41%
EBITDA from continuing operations 123,887 88,258 40% 352,744 267,041 32%
EBITDA from discontinued operations 28,837 29,960 -4% 74,691 71,045 5%
Total Company EBITDA 152,724 118,218 29% 427,435 338,086 26%
Per Share Data (4)
Basic net income per share of common stock (2) $ 0.01 $ 0.05 -80% $ 0.04 $ 0.12 -67%
EBITDA per share from continuing operations 0.47 0.34 38% 1.34 1.03 30%
EBITDA per share from discontinued operations 0.11 0.11 0% 0.28 0.27 4%
Total Company EBITDA per share 0.58 0.45 29% 1.62 1.30 25%
EBITDA per share from continuing operations before acquisition
assimilation expenses 0.52 0.34 52% 1.43 1.03 39%
Weighted average shares outstanding 264,749 260,607 2% 263,725 260,118 1%
(1) Continuing operations are comprised of the Company's Telecommunications,
its Competitive Local Exchange Carrier (Electric Lightwave, Inc.) and the
company's natural gas businesses. The Company still intends to sell the
natural gas segment and is continuing to actively pursue a buyer for those
gas operations for which it does not yet have signed agreements. The
Company is reporting its electric and water/wastewater businesses as
discontinued operations.
(2) The nine months ended September 30, 1999 excludes the gain on sale of
investment of $42.9 million (net of tax).
(3) Operating income plus depreciation and amortization.
(4) Calculated based on weighted average shares outstanding.