Company Logo Exhibit 99.1
Citizens Utilities
3 High Ridge Park
Stamford, CT 06905
203.614.5600
Web site: www.czn.net
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FOR IMMEDIATE RELEASE
Contacts:
Financial Community: Media:
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Alan H. Oshiki, Assistant Vice President Brigid M. Smith,
Investor Relations Assistant Vice President
(203) 614-5629 Corporate Communications
aoshiki@czn.com (203) 614-5042
bsmith@czn.com
Citizens Utilities Reports Third Quarter 1999 Financial Results
STAMFORD, Conn., November 9, 1999 - Citizens Utilities (NYSE: CZN, CZNPr)
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announced financial results today for the third quarter and nine months ended
September 30, 1999.
Revenues from continuing operations were $271.5 million in the third quarter, up
15% from the $236.3 million in the third quarter of 1998. Pre-tax income
increased to $14.0 million, 3% higher than the $13.6 million for the prior year
quarter. Net income for the third quarter of 1999 was $11.9 million, or 5 cents
per share, compared to $14.5 million, or 6 cents per share, for the third
quarter of 1998. Net income and earnings per share for the current quarter were
affected by increased tax expense related to out-of-period gains on the sales of
investments.
For the nine months ended September 30, 1999, revenues from continuing
operations were $810.2 million, up 18% from the $685.4 million for the prior
year period. Pre-tax income was $92.9 million, 84% above the $50.6 million for
the prior year period. Nine-month net income was $74.3 million, up 33% from the
prior year level of $55.7 million. Earnings per share for the nine-month period
in 1999 was 29 cents, up 38% compared to 21 cents for the 1998 period.
During the third quarter, Citizens adopted a plan to divest its public services
businesses. Accordingly, the financial results of those businesses are now
presented separately on the company's income statements as income from
discontinued operations, net of tax.
"Citizens overall financial performance compared to the prior year quarter was
very strong," said Robert J. DeSantis, vice president and chief financial
officer. "Operating income increased 11% to $21 million, while EBITDA (earnings
before interest, taxes, depreciation and amortization) improved 24% to $100
million."
Commenting on the performance of Citizens Communications, DeSantis said, "Our
local telephone exchange operations continued to generate strong revenue growth.
Network access services revenue was up 16%, driven by an 18% increase in
switched access minutes of use, and local network services revenue was up 9%,
driven by 6% growth in access lines and continued growth in enhanced services.
Communications sector EBITDA also improved, growing to about $95 million, up 11%
over the prior year."
With respect to the company's competitive local exchange operations, DeSantis
said, "Electric Lightwave's revenues increased 91% over the prior year quarter
to $48 million while gross margins reached 70%. Operating and EBITDA losses
declined further and we expect those improvements to continue, with EBITDA
turning positive by the second half of 2000."
"We have also made significant progress with the divestiture of our public
services businesses, with the announced sale in October of our water and
wastewater operations for $835 million," DeSantis said. "We now anticipate a
spirited auction for our gas and electric properties."
Citizens Utilities provides telecommunications services and public services
including gas distribution, electric distribution, water distribution and
wastewater treatment services to approximately 1.9 million customers in 22
states. Citizens also owns 82% 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. Earlier this year, Citizens announced that it was acquiring 800,000
telephone access lines in 11 states from GTE and U S WEST, and that it was
divesting its public services businesses. Citizens plans to use the proceeds
from the divestitures to fund the acquisitions.
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
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, weather conditions,
changes in legal or regulatory policy, changes in legislation, the company's
ability to identify future markets and successfully expand existing ones and the
mix of products and services offered in the company's target markets. 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.
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
For the quarter ended For the nine months ended
September 30, September 30,
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% %
(Dollars in thousands) 1999 1998 Change 1999 1998 Change
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Income Statement Data
Continuing operations (1)
Revenues $ 271,517 $236,324 15% $810,213 $685,375 18%
Network expenses 18,648 24,931 -25% 86,937 73,653 18%
Depreciation and amortization 64,628 50,004 29% 186,276 148,943 25%
Other operating expenses 167,245 142,403 17% 493,901 396,484 25%
Operating income 20,996 18,986 11% 43,099 66,295 -35%
Investment and other income 14,783 11,818 25% 39,434 35,228 12%
Interest expense 21,745 17,181 27% 59,142 48,576 22%
Special items (2) - - 69,499 (2,334)
Pre-tax income 14,034 13,623 3% 92,890 50,613 84%
Income taxes 3,956 1,504 163% 30,812 7,044 337%
Convertible preferred dividends 1,553 1,553 0% 4,657 4,657 0%
Income from continuing operations 8,525 10,566 -19% 57,421 38,912 48%
Income from discontinued operations, net of tax (3) 3,383 3,895 -13% 16,863 16,790 0%
Net income 11,908 14,461 -18% 74,284 55,702 33%
Per-Share Data (4)
Basic net income per share of common stock $ 0.05 $ 0.06 -17% $ 0.29 $ 0.21 38%
Weighted average shares outstanding (5) 260,610 260,139 0% 259,985 259,409 0%
(1) Continuing operations include the Company's Communications and CLEC
businesses.
(2) In the first quarter of 1999, the Company recorded a pre-tax gain of
$69.5 million ($42.9 million net of tax) on the sale of Centennial
Cellular stock. In the first quarter of 1998, Electric Lightwave, Inc.
recorded a pre-tax charge to earnings of $2.8 million ($2.3 million net
of tax) for the cumulative effect of a change in accounting principle.
(3) The company is reporting its Public Services businesses as discontinued
operations. Interest expense has been imputed to these businesses.
(4) Calculated based on weighted average shares outstanding.
(5) Adjusted for subsequent stock dividends and stock splits and used in the
calculation of all per share data.