EXHIBIT 99.1
[CT Communications Logo]
CT COMMUNICATIONS PRESS RELEASE
For Immediate Release
May 3, 2005
Concord, NC
Contact:
Jim Hausman
704.722.2410
Duane Johnson
704.722.3231
CT COMMUNICATIONS ANNOUNCES FIRST QUARTER RESULTS
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CT Communications, Inc. (NASDAQ: CTCI) announces consolidated operating revenue
for the quarter ended March 31, 2005 of $41.4 million, representing a 2.1%
increase over the same period last year. Operating revenue from CT's non-ILEC
operations grew 11.0% to $18.7 million from the $16.9 million reported in the
first quarter of 2004. The non-ILEC growth was driven by a 12% increase in
Wireless subscribers, a 26% increase in Greenfield access lines and a 41%
increase in DSL subscribers. These gains were offset by a decrease in Concord
Telephone's operating revenue due to lower access and interconnection revenue
and a decline in line revenue related to access line losses.
Operating income for the first quarter of 2005 was $5.1 million or a 12.3%
operating margin, compared to $6.9 million or a 17.1% operating margin for the
first quarter of 2004. Operating margin improvements in the Wireless, Greenfield
and Internet Services businesses were offset by declining operating margin in
the Company's ILEC business. Operating expense in the ILEC increased $1.8
million from the first quarter last year, with the increases mainly attributable
to a $0.9 million increase in general administrative expense driven by an
increase in professional fees related to the year-end audit and Sarbanes-Oxley
404 compliance, a $0.4 million increase in depreciation expense and a $0.3
million increase in access and interconnection expense. Access and
interconnection expense in the first quarter of 2004 was favorably impacted by a
one-time settlement of disputed access charges that reduced expense by $0.2
million in that period. Wireless operating expense increased $0.9 million from
the first quarter last year primarily due to a larger subscriber base that
resulted in a $0.5 million increase in customer operations expense, as well as a
$0.4 million increase in subscriber acquisition and retention costs. The
Company's acquisition and retention initiatives resulted in an 11% increase in
net subscriber additions and a 20% decline in the customer churn rate to 1.6%
when compared to the first quarter of 2004.
Other Income (Expense) for the first quarter was negatively impacted due to an
impairment charge of $0.4 million associated with investment securities held by
the Company. Net income for the first quarter of 2005 was $3.0 million, or $0.16
per diluted common share, compared to $4.2 million, or $0.22 per diluted common
share in the first quarter of 2004.
During the first quarter of 2005 the Company continued to enhance its network
infrastructure, reduced its debt and increased its dividend. Capital
expenditures for the first quarter 2005 were $7.8 million representing a $3.8
million increase over the same period last year. The increase in capital
expenditures was primarily driven by the broadband capital plan to enhance the
ILEC network's bandwidth capabilities, which is progressing according to
schedule. In addition, the Wireless business invested approximately $1.1 million
in the first quarter to add one cell site and expand service capacity at several
other sites. In the first quarter of 2005, the Company reduced its outstanding
debt by $6.3 million and announced a 43% increase in the dividend payable to its
shareholders.
Results by business unit:
o ILEC - ("CONCORD TELEPHONE")
Concord Telephone's operating revenue and income decreased to $22.7
million and $5.4 million, respectively, in the first quarter of 2005
compared to the same quarter in 2004. The decline in operating results
was attributable to a $1.0 million decrease in operating revenue
coupled with a $1.8 million increase in operating expense. The
decrease in revenue was due to a $0.6 million reduction in access and
interconnection revenue associated with the recovery of disputed
billings during the first quarter of 2004 and a $0.5 million decline
in line revenue from access line losses. The growth in operating
expense was driven by an increase in general administrative expense
related to professional fees for the Company's year-end audit and
Sarbanes-Oxley Section 404 compliance, access and interconnection
expense and depreciation expense. Concord Telephone ended the first
quarter of 2005 with 112,821 access lines in service, a decline of
only 95 lines from year end 2004, and a 2% decrease from the first
quarter of 2004.
o WIRELESS SERVICE - ("CTC WIRELESS")
CTC Wireless' operating revenue increased 19.2% to $8.5 million from
the $7.1 million reported in the first quarter of 2004. Contributing
to the increase in wireless revenue was a $0.8 million increase in
customer revenue associated with a 12% growth in wireless subscribers
and an
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increase of $0.5 million or 28% in settlement and roaming revenue.
Operating income for the first quarter of 2005 was $0.8 million
compared to $0.3 million for the first quarter of 2004. Driving the
increase in operating income was the higher settlement and roaming
revenue coupled with the increasing scale of this business that held
expense growth to 13.5%. The first quarter decline in customer churn
to 1.6% was attributable to the Company's ongoing focus on customer
retention initiatives. CTC Wireless ended the first quarter with
44,091 subscribers compared to 39,250 at the end of the first quarter
of 2004.
o CLEC - ("CTC EXCHANGE SERVICES")
CLEC first quarter 2005 operating revenue grew to $5.1 million
representing a 1.9% increase over first quarter 2004 revenue. The
increase in operating revenue was driven by increased line revenue
attributable to a 5% growth in access lines that was somewhat offset
by a decline in revenue per customer due to the competitive market
environment and advancement of alternative lower-cost voice and data
service offerings. Operating income for the first quarter of 2005 was
relatively flat with the first quarter of 2004. CLEC ended the first
quarter of 2005 with 31,861 access lines in service compared to 30,415
at the end of the first quarter of 2004. CLEC ended the first quarter
of 2005 with 24,443 long distance lines, an increase of 2,751 long
distance lines compared with the end of the first quarter of 2004.
o GREENFIELD - ("CTC EXCHANGE SERVICES")
Greenfield's first quarter 2005 operating revenue increased 17.8% to
$2.3 million compared to the same period last year. Greenfield line
revenue and access lines grew 27.9% and 26%, respectively, while
operating expense for the first quarter was flat with the same quarter
last year. Operating loss for the first quarter of 2005 improved to
$0.7 million compared to an operating loss of $1.0 million for the
first quarter of 2004. Depreciation expense was $0.8 million and $0.7
million in the first quarter of 2005 and 2004, respectively.
Greenfield ended the first quarter of 2005 with 13,451 access lines
and 7,326 long distance lines in service, which represented increases
of 26% and 43%, respectively. As of March 31, 2005 the Company had
signed 110 agreements, which in total represent a potential of more
than 49,000 lines at the completion of the projects.
o INTERNET & DATA - ("CTC INTERNET SERVICES")
CTC Internet Services' operating revenue of $2.8 million was flat in
comparison to the first quarter of 2004. DSL revenue grew 32.6% while
subscribers grew 41% for the quarter. DSL
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revenue growth was lower than the customer growth due to discounted
promotional service rates new DSL customers currently receive during
their first three months of service. Offsetting the DSL revenue growth
was the continued churn of dial-up customers and a decline in
high-speed services revenue due to lower priced data solutions for
business customers. Operating expense decreased $0.2 million or 8.7%
in the first quarter of 2005 compared to the same period last year.
Operating income was $0.2 million compared to an operating loss of
$0.1 million for the first quarter of 2004. CTC Internet Services
ended the first quarter of 2005 with 15,523 DSL subscribers compared
to 10,987 subscribers at the end of the first quarter of 2004, with
over 1,600 net customers added in the first quarter. Dial-up accounts
decreased 19% to 8,494 and high-speed accounts increased 9% to 617 at
March 31, 2005 compared to March 31, 2004.
FUTURE PERIOD GUIDANCE
We currently expect operating results to approximate the following during these
future periods:
o 2nd Quarter 2005
o Revenue of $41 to $42 million
o Operating income of $5.2 to $5.7 million
o Depreciation expense of $7.9 to $8.0 million
o Consolidated earnings per diluted share of $0.16 to $0.18
o Capital expenditures of $6 to $7 million
o Full Year 2005
o Revenue of $164 to $168 million
o Operating income of $20.0 to $23.0 million
o Depreciation expense of $31.5 to $33.0 million
o Consolidated earnings per diluted share of $0.70 to $0.75
o Capital expenditures of $29 to $32 million
CT Communications will host a conference call to discuss the results of the
first quarter on Wednesday, May 4, 2005 at 10:00 AM ET. You are invited to
listen to the conference call that will be broadcast live over the Internet at
www.ctc.net. If you are unable to listen during the live webcast, the call will
be archived on the web site at www.ctc.net until May 31, 2005. Additionally, a
replay of the call will be available until 5:00 PM ET on Friday, May 6th at
800-633-8284. Enter access number 21245562.
CT Communications, Inc. is headquartered in Concord, N.C. and is a growing
provider of integrated telecommunications and related services to residential
and business customers located primarily in North
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Carolina. CT Communications, Inc. offers a comprehensive package of
telecommunications services, including local and long distance telephone
services, Internet and data services and wireless services.
Certain statements contained in this press release are "forward-looking
statements," within the meaning of federal securities laws. We intend these
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks,
uncertainties and assumptions made by management about us, including, among
other things, changes in industry conditions created by the Telecommunications
Act of 1996 and related state and federal legislation and regulations, the
impact of economic conditions related to financial performance of customers,
business partners, competitors and peers within the telecommunications industry,
the recovery of the substantial costs incurred over the past few years in
connection with our expansion into new businesses, retention of our existing
customer base and our ability to attract new customers, our ability to control
pricing and product offerings in a highly competitive industry, our ability to
attract and retain key personnel, the performance of our investments, rapid
changes in technology, our ability to manage capital expenditures related to
changes in technology, actions of our competitors, and the impact of economic
and political events on our business, operating regions and customers, including
terrorist attacks. In some cases, these forward-looking statements can be
identified by the use of words such as "may," "will," "should," "expect,"
"plan," "anticipate," "believe," "estimate," "predict," "project," "intend" or
"potential" or the negative of those words or other comparable words. These
forward-looking statements may differ materially from actual events or results
because they involve estimates, assumptions and uncertainties and should be
viewed with caution. We undertake no obligation to update or revise any
forward-looking statements, whether as the result of new information, future
events or otherwise. Readers are also directed to consider the risks,
uncertainties and other factors discussed in documents filed by us with the
Securities and Exchange Commission, including those matters summarized under the
caption "Risk Factors" in our Annual Report on Form 10-K/A for the year ended
December 31, 2004.
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CT COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended March 31,
2005 2004 % Change
-------- -------- --------
Operating Revenue
ILEC Services $ 22,679 $ 23,699 (4.3%)
Wireless Services 8,492 7,122 19.2%
CLEC Services 5,135 5,038 1.9%
Greenfield Services 2,291 1,945 17.8%
Internet & Data Services 2,800 2,760 1.4%
-------- --------
Total Operating Revenue 41,397 40,564 2.1%
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Operating Expense
ILEC Services 17,261 15,455 11.7%
Wireless Services 7,687 6,775 13.5%
CLEC Services 5,251 5,024 4.5%
Greenfield Services 2,963 2,939 0.8%
Internet & Data Services 2,603 2,852 (8.7%)
Other 532 588 (9.5%)
-------- --------
Total Operating Expense 36,297 33,633 7.9%
-------- --------
Operating Income 5,100 6,931 (26.4%)
Other Income (Expense)
Investment, Equity Method 1,243 1,391 (10.6%)
Gains, Interest, Dividends 148 255 (42.0%)
Impairment on Investments (418) (19) NMF
Other Expenses, Principally Interest (1,175) (1,432) (17.9%)
-------- --------
Total Other Income (Expense) (202) 195 (203.6%)
-------- --------
Pre-Tax Income 4,898 7,126 (31.3%)
Income Tax Expense 1,909 2,887 (33.9%)
-------- --------
Net Income $ 2,989 $ 4,239 (29.5%)
======== ========
Weighted Average Diluted Shares 18,980 18,953
Earnings Per Diluted Common Share $ 0.16 $ 0.22
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CT COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
March 31, December 31,
2005 2004
-------- -----------
ASSETS
Cash and Cash Equivalents $ 15,739 $ 28,358
Accounts Receivable and Unbilled Revenue, Net 16,460 17,371
Other Assets 7,966 6,244
-------- --------
Current Assets 40,165 51,973
Investment Securities 4,590 5,190
Investments in Unconsolidated Companies 17,239 16,002
Property, Plant and Equipment, Net 206,964 207,072
Other Assets 50,648 50,395
-------- --------
TOTAL ASSETS $319,606 $330,632
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Portion of Long-Term Debt $ 20,000 $ 5,000
Accounts Payable 6,897 6,822
Customer Deposits and Advance Billings 3,152 3,307
Other Accrued Liabilities 11,727 18,475
Liabilities of Discontinued Operations 483 604
-------- --------
Current Liabilities 42,259 34,208
-------- --------
Long-Term Debt 43,750 65,000
Deferred Credits and Other Liabilities 43,072 43,196
Stockholders' Equity 190,525 188,228
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $319,606 $330,632
======== ========
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CT COMMUNICATIONS, INC.
CUSTOMER INFORMATION
March 31, March 31, %
2005 2004 Change
-------- -------- ------
ILEC Access Lines
Business Lines 28,647 29,130 (1.7%)
Residential Lines 84,174 86,191 (2.3%)
-------- --------
Total ILEC Access Lines 112,821 115,321 (2.2%)
CLEC Access Lines 31,861 30,415 4.8%
Greenfield Access Lines 13,451 10,674 26.0%
-------- --------
Total Wired Access Lines 158,133 156,410 1.1%
======== ========
Wireless Subscribers 44,091 39,250 12.3%
======== ========
Long Distance Lines
In ILEC 84,900 84,811 0.1%
In CLEC 24,443 21,692 12.7%
In Greenfield 7,326 5,130 42.8%
-------- --------
Total Long Distance Lines 116,669 111,633 4.5%
======== ========
Internet Access Customers
Dial-Up 8,494 10,484 (19.0%)
DSL 15,523 10,987 41.3%
High Speed 617 565 9.2%
-------- --------
Total Internet Access Customers 24,634 22,036 11.8%
======== ========
GREENFIELD PROJECTS Lines in Potential Total
Service Lines Projects
-------- --------- --------
By Year Signed
Previous Years 9,206 27,001 51
2002 3,292 12,694 24
2003 675 4,846 18
2004 278 3,864 12
2005 -- 1,324 5
-------- --------- --------
Totals 13,451 49,729 110
======== ========= ========
By Type
Mall 2,506 2,800 3
Single Family Homes 7,330 34,411 58
Multi-Dwelling Units 2,925 11,289 40
Business 690 1,229 9
-------- --------- --------
Totals 13,451 49,729 110
======== ========= ========
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CT COMMUNICATIONS, INC.
OTHER SELECTED FINANCIAL DATA
(unaudited, in thousands)
CAPITAL EXPENDITURES
Three Months Ended March 31,
2005 2004
------- ------
ILEC $4,459 $1,988
Wireless 1,093 382
CLEC 223 211
Greenfield 1,348 742
Internet 428 297
Other 207 293
------ ------
Total $7,758 $3,913
====== ======
% of Revenue 18.7% 9.6%
DEPRECIATION
Three Months Ended March 31,
2005 2004
------- ------
ILEC $5,109 $4,714
Wireless 504 469
CLEC 629 635
Greenfield 810 720
Internet 479 516
Other 335 371
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Total $7,866 $7,425
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[CT Communications Logo]
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