NTELOS Holdings Corp. Reports First Quarter 2013 Operating Results

NTELOS Holdings Corp. Reports First Quarter 2013 Operating Results

-Quarterly Net Subscriber Additions of 11,400

-Quarterly Adjusted EBITDA of $37.4 Million


-Company Declares Quarterly Dividend of $0.42 Per Share

WAYNESBORO, Va.--(BUSINESS WIRE)-- NTELOS Holdings Corp. (the "Company," NASDAQ: NTLS), a leading regional provider of nationwide wireless voice and data communications and home to the "best value in wireless," announced today operating results for its first quarter ended March 31, 2013.

First Quarter Highlights

  • Operating revenues for the first quarter 2013 increased 8.0% to $119.3 million, compared to $110.5 million for the same period in 2012;

  • Net postpay subscriber additions were 3,300 for the first quarter 2013, compared to a loss of (4,800) for the same period in 2012;

  • Postpay churn for the first quarter 2013 improved to 1.9%, compared to 2.5% for the same period in 2012; and

  • ARPU for the first quarter 2013 was $53.87, compared to $49.08 for the same period in 2012.

"During the first quarter of 2013, we continued to reap the benefits of the investments we made in our retail business over the past year," said James A. Hyde, CEO of NTELOS Holdings Corp. "Retail revenues increased both sequentially and year-over-year as we saw growth in our subscriber base and continued expansion of ARPU. Specifically, we posted our fifth consecutive quarter of both positive net additions and increased ARPU, which together helped drive Adjusted EBITDA growth for the second straight quarter."

Highlights from Operations

  • Operating revenues for the first quarter 2013 were $119.3 million, up 8.0% from the first quarter 2012. The increase in operating revenues was primarily driven by a strong increase in subscriber revenues.

  • Retail revenues, which include subscriber and equipment revenue, increased 12.0% to $77.6 million for the first quarter 2013, compared to $69.2 million for the first quarter 2012;

  • Wholesale and other revenue derived primarily from the Company's Strategic Network Alliance with Sprint were $41.8 million for the first quarter 2013, compared to $41.3 million for the first quarter 2012; and

  • Adjusted EBITDA was $37.4 million for the first quarter 2013, compared to $35.9 million for the first quarter 2012.

Total Subscribers

  • Total subscribers were 451,000 as of March 31, 2013, compared to 439,600 as of December 31, 2012;

  • Total gross additions for the first quarter were 48,500, compared to 45,900 for the same period of 2012; and

  • Total net subscriber additions for the first quarter were 11,400 compared to 6,800 for the same period of 2012.

Postpay Subscribers

  • Postpay subscriber gross additions for the first quarter 2013 were 20,200, compared to 17,000 for the first quarter 2012 and 25,100 for the fourth quarter 2012;

  • Net postpay subscriber additions were 3,300 for the first quarter 2013, compared to a loss of (4,800) for the first quarter 2012 and a gain of 9,200 in the fourth quarter 2012;

  • Postpay churn for the first quarter 2013 was 1.9%, compared to 2.5% in the first quarter 2012 and 1.8% for the fourth quarter of 2012; and

  • As of March 31, 2013, total postpay subscribers were 299,700.

Prepay Subscribers

  • Prepay subscriber gross additions for the first quarter 2013 were 28,300, compared to 28,900 for the first quarter 2012 and 21,100 for the fourth quarter 2012;

  • Net prepay subscriber additions were 8,100 for the first quarter 2013, compared to 11,600 for the first quarter 2012 and 100 for the fourth quarter 2012;

  • Prepay churn for the first quarter 2013 was 4.6%, compared to 4.5% for the first quarter 2012 and 4.9% for the fourth quarter of 2012; and

  • As of March 31, 2013, total prepay subscribers were 151,300.

Mr. Hyde concluded, "Looking ahead, we remain on track with our plans to roll out LTE to the first markets in our footprint during the second half of 2013. These investments in our network mark the next chapter in the resurgence of our retail business, building on the foundation we set last year through changes in our handset lineup, improvements in our distribution and continued focus on the customer. We are excited about the growth prospects of both our retail and wholesale business lines and remain committed to making the necessary investments in both areas to create value for our stakeholders."

Net Income

Net income after net income attributable to noncontrolling interests was $5.5 million, or $0.25 per diluted share, for the first quarter 2013 compared to $7.9 million, or $0.37 per diluted share, for the first quarter 2012.

Declaration of Dividend

On May 2, 2013, the Company's Board of Directors declared a quarterly cash dividend on its common stock in the amount of $0.42 per share to be paid on July 12, 2013 to stockholders of record on June 14, 2013.

Business Outlook

For the year ending December 31, 2013, the Company reiterates its full year 2013 Adjusted EBITDA guidance of between $135.0 million and $145.0 million. In addition, the Company reiterates its full year 2013 capital expenditures guidance of between $75.0 million and $85.0 million.

Conference Call

The Company will host a conference call with investors and analysts to discuss its first quarter 2013 results this morning, May 7, 2013, at 11:00 a.m. ET. To participate, please dial 1-888-317-6016, 1-412-317-6016 in Canada and 1-855-669-9657 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 1-877-344-7529 or 1-412-317-0088 internationally and entering access code 10027920 beginning approximately one hour after the call and continuing until May 15, 2013.

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, gain/loss on derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, acquisition related charges, net income from discontinued operations and costs related to the separation of the wireless and wireline operations.

ARPU, or average monthly revenue per user, is computed by dividing service revenues per period by the average number of subscribers during that period. Please see the footnotes in the exhibits for a complete definition of this measure.

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, provide liquidity for future growth and continue to fund dividends. ARPU provides management with useful information concerning the appeal of the Company's rate plans and service offerings and the Company's performance in attracting and retaining high value customers.

Adjusted EBITDA and ARPU 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. (NAS: 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 451,000 retail subscribers based in Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company's licensed territories have a total population of approximately 7.9 million residents, of which its wireless network covers approximately 6.0 million residents. The Company is also the exclusive wholesale provider of wireless digital PCS services to Sprint Nextel in the Company's western Virginia and West Virginia service area for all Sprint CDMA wireless customers. Additional information about the Company is available at www.ntelos.com or www.facebook.com/nteloswireless and www.twitter.com/ntelos_wireless.

SPECIAL NOTE FROM THE COMPANY REGARDING 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. There are 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. We advise the reader to review in detail the cautionary statements and risk factors included in our SEC filings, including our most recent Annual Report filed on Form 10-K.

Exhibits:

  • Consolidated Balance Sheets

  • Consolidated Statements of Operations

  • Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA

  • Key Metrics

  • ARPU Reconciliation

NTELOS Holdings Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

(Audited)

March 31, 2013

December 31, 2012

(In thousands)

ASSETS

Current Assets

Cash

$

99,456

$

76,197

Accounts receivable, net

43,979

51,301

Inventories and supplies

8,757

9,581

Deferred income taxes

4,616

4,297

Prepaid expenses and other current assets

18,881

17,695

175,689

159,071

Securities and Investments

1,499

1,499

Property, Plant and Equipment, net

300,699

303,103

Intangible Assets

Goodwill

63,700

63,700

Radio spectrum licenses

132,033

132,033

Customer relationships and trademarks, net

9,243

9,996

Deferred Charges and Other Assets

10,821

10,712

Total Assets

$

693,684

$

680,114

LIABILITIES AND EQUITY

Current Liabilities

Current portion of long-term debt

$

5,400

$

5,429

Accounts payable

18,468

23,445

Dividends payable

9,006

-

Accrued expenses and other current liabilities

43,063

34,457

75,937

63,331

Long-Term Debt

488,046

488,650

Other Long-Term Liabilities

87,162

83,598

Equity

42,539

44,535

Total Liabilities and Equity

$

693,684

$

680,114

NTELOS Holdings Corp.

Condensed Consolidated Statements of Operations

Three Months Ended

(Unaudited)

(In thousands, except per share amounts)

March 31, 2013

March 31, 2012

Operating Revenues

$

119,345

$

110,540

Operating Expenses

Cost of sales and services

44,535

39,200

Customer operations

30,954

29,583

Corporate operations

7,904

7,999

Depreciation and amortization

18,456

14,907

101,849

91,689

Operating Income

17,496

18,851

Other Expense

Interest expense

(7,361

)

(5,428

)

Other expense, net

(369

)

(62

)

(7,730

)

(5,490

)

Income before Income Taxes

9,766

13,361

Income Taxes

3,744

5,380

Net Income

6,022

7,981

Net Income Attributable to Noncontrolling Interests

(529

)

(129

)

Net Income Attributable to NTELOS Holdings Corp.

$

5,493

$

7,852

Earnings per Share Attributable to NTELOS Holdings Corp.:

Basic

$

0.26

$

0.38

Weighted average shares outstanding - basic

20,960

20,849

Diluted

$

0.25

$

0.37

Weighted average shares outstanding - diluted

21,550

21,152

Cash Dividends Declared per Share - Common Stock

$

0.42

$

0.42

NTELOS Holdings Corp.

Reconciliation of Net Income (Loss) Attributable to NTELOS Holdings Corp. to Adjusted EBITDA

(In thousands)

Three Months Ended

March 31, 2013

March 31, 2012

Net income attributable to NTELOS Holdings Corp.

$

5,493

$

7,852

Net income attributable to noncontrolling interests

529

129

Net income

$

6,022

$

7,981

Interest expense

7,361

5,428

Income taxes

3,744

5,380

Other expense, net

369

62

Operating income

$

17,496

$

18,851

Depreciation and amortization

18,456

14,907

Accretion of asset retirement obligations

143

149

Equity-based compensation

1,321

1,669

Business separation charges 1

-

285

Adjusted EBITDA

$

37,416

$

35,861

1

Charges for legal and consulting services in connection with the separation of the Company's wireless and wireline operations.

NTELOS Holdings Corp.

Key Metrics

Quarter Ended:

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

Subscribers

Beginning Subscribers

414,500

421,300

424,800

430,300

439,600

Prepay

122,100

135,300

139,400

141,400

142,200

Postpay

292,400

286,000

285,400

288,900

297,400

Gross Additions

45,900

36,800

42,400

46,200

48,500

Prepay

28,900

20,000

20,400

21,100

28,300

Postpay

17,000

16,800

22,000

25,100

20,200

Disconnections

39,100

33,300

36,900

36,900

37,100

Prepay

17,300

17,200

19,800

21,000

20,200

Postpay

21,800

16,100

17,100

15,900

16,900