For Immediate Release
October 26, 2000
Contact: Barry Rubens
704.722.2404
Mary Jean King
704.722.3741
CT Communications Announces Third Quarter Earnings:
Strong Competitive Business Growth
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CT Communications, Inc. (CTC; Nasdaq: CTCI) announces revenues of $28.6
million for the quarter ended September 30, 2000, an increase of 7.7% over
the $26.6 million reported in the third quarter of 1999. Net income was
$27.3 million for the quarter versus the $5.0 million reported for the
third quarter of 1999. The quarter included a $23.6 million after-tax gain
on the sale of CTC's 1.96% interest in the BellSouth Carolina PCS
Partnership. Diluted earnings per common share for the current quarter was
$1.44 per share, compared to $.27 per share in the third quarter of 1999.
Highlights of the third quarter included:
o Strong business line growth and margins in the telephone company.
Concord Telephone Company business access lines grew 14.6% in the last
twelve months to over 31,000 lines. Total access lines grew 6% to
122,121 lines. The telephone company's operating margin remained above
30% with its earnings before interest, taxes, depreciation and
amortization (EBITDA) margin improving to 49% for the quarter compared
to 48% in the same quarter last year.
o Record competitive local exchange carrier (CLEC) access lines sales
and the opening of a new market.
During the quarter CTC sold over 3,900 CLEC access lines and added
1,767 lines in-service. In the first nine months of the year CTC has
sold a net total of 8,384 CLEC lines and placed 4,356 CLEC lines in
service bringing total CLEC lines in service to 7,943 at September 30,
2000. In addition CTC began its CLEC sales efforts in the Greensboro,
North Carolina market during the quarter.
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o Five preferred provider "Greenfield" deals signed in the third quarter.
CTC signed preferred provider agreements with five residential and
business developments in CTC's competitive markets during the third
quarter bringing the total preferred provider agreements to ten. The
ten signed "Greenfields" represent an estimated 7,500 lines upon
completion to occur in stages over the next few years.
o Significant digital subscriber line (DSL) and revenue growth in
Internet and data services.
In the third quarter, CTC added 469 DSL lines for a total of 1,032 lines
in service at September 30, 2000. Internet revenues for the quarter
grew 25.7% over the third quarter of 1999 to $1.9 million.
o High revenue growth in digital wireless business.
Digital wireless revenue grew 53.4% in the quarter over the third
quarter of 1999, driven by a 46.2% growth in digital wireless
subscribers. CTC ended the quarter with over 14,250 digital wireless
customers.
Operating income was $3.2 million for the current quarter, versus $5.9
million for third quarter of 1999. The operating revenue increase of $2.0
million was more than offset by a $4.0 million increase in operating
expense primarily related to the expansion of the competitive businesses.
Additionally, depreciation and amortization increased $.7 million or 17%
primarily reflecting the capital additions to the CLEC plant.
Other income was $42.2 million, including a $39.2 million pre-tax gain from
the sale of CTC's interest in the BellSouth Carolinas PCS Partnership and a
$2.7 million pre-tax gain on the sale of equity securities. Third quarter
1999 other income was $2.6 million including a $2.5 million pre-tax gain on
the sale of equity securities.
"The expansion of our CLEC markets, the success of our Greenfield efforts,
and continued strong customer and revenue growth in our Internet and
wireless business have marked a very exciting quarter for our competitive
businesses. Continued strong line growth and margins in our telephone
company and the success of our strategic investments have allowed us to
apply additional resources to our competitive businesses, paving the way
for future growth in these endeavors," said Michael R. Coltrane, President
and Chief Executive Officer of CTC.
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CT Communications, Inc. will be holding a conference call to discuss the
company's third quarter earnings at 10:00am EDT on Friday, October 27,
2000. The call will be audio broadcast live via Webcast from CTC's web site
at www.ctc.net and from the www.streetevents.com web site and will be
available for replay on those sites for 30 days. Additionally a replay of
the call will be available via phone at 1-800-633-8284 reservation number
16689363 from 12:00pm EDT to 7:00pm EDT on Friday October 27, 2000.
CT Communications, Inc., which is headquartered in Concord, N.C., is a
growing provider of integrated telecommunications services to residential
and business customers located primarily in North and South Carolina. CT
Communications, Inc. offers a comprehensive package of telecommunications
services, including local and long distance telephone services, Internet
and data services and digital wireless services.
Certain statements contained in this press release are "forward-looking
statements," within the meaning of federal securities laws. 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 and
related state and federal legislation and regulations, recovery of the
substantial costs that will result from the implementation of our new
businesses, retention of our existing customer base and our ability to
attract new customers, rapid changes in technology, and actions of our
competitors. These forward-looking statements may differ materially from
actual 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.
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<TABLE>
<CAPTION>
Consolidated Statements of Income
($ in thousands, except per share amounts)
(Unaudited) Three Months Ended Three Months Ended %
September 30, 2000 September 30, 1999 Change
------------------ ------------------ ------
<S> <C> <C> <C>
Operating Revenue
-----------------
ILEC Services $20,144 $19,318 4.3%
CLEC Services 938 651 44.1%
Long Distance Services 3,479 3,659 (4.9%)
Internet & Data Services 1,875 1,491 25.8%
Digital Wireless Services 2,091 1,363 53.4%
Other 113 113 0%
------------------- ------------------ -------------
Total Operating Revenue $28,640 $26,595 7.7%
Operating Expenses
------------------
ILEC Services 10,267 10,087 1.8%
CLEC Services 3,503 1,365 156.6%
Long Distance Services 1,989 2,081 (4.4%)
Internet & Data Services 2,257 1,347 67.6%
Digital Wireless Services 2,457 1,628 50.9%
Other 163 171 4.7%
------------------ ------------------ -------------
Operating Expenses $20,636 $16,679 23.7%
EBITDA $8,004 $9,916 (19.3%)
Depreciation and Amortization 4,757 4,065 17.0%
------------------ ------------------ -------------
Operating Income $3,247 $5,851 (44.5%)
Other Income 42,234 2,649 1494%
Tax Expense 18,148 3,485 420.7%
------------------ ------------------ -------------
Net Income $27,333 $5,015 445.0%
------------------ ------------------ -------------
Dividends on preferred stock 6 7 (14.3%)
Earnings for Common Stock $27,327 $5,008 445.7%
Weighted Average Diluted Shares 18,942 18,854 0.5%
Diluted Earnings per common share $1.44 $.27 433.3%
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<CAPTION>
Consolidated Statements of Income
($ in thousands, except per share amounts)
(Unaudited) Nine Months Ended Nine Months Ended %
September 30, 2000 September 30, 1999 Change
------------------ ------------------ ------
<S> <C> <C> <C>
Operating Revenue
-----------------
ILEC Services $60,796 $56,922 6.8%
CLEC Services 3,272 1,819 79.9%
Long Distance Services 10,465 10,824 (3.3%)
Internet & Data Services 5,068 4,225 20.0%
Digital Wireless Services 5,512 3,675 50.0%
Other 337 563 (40.1%)
------------------ ------------------ ----------
Total Operating Revenue $85,450 $78,028 9.5%
Operating Expenses
------------------
ILEC Services 31,293 30,856 1.4%
CLEC Services 9,397 3,489 169.3%
Long Distance Services 5,875 6,323 (7.1%)
Internet & Data Services 5,639 3,918 43.9%
Digital Wireless Services 6,642 4,714 40.9%
Other 468 477 (1.9%)
------------------ ----------------- ---------
Operating Expenses $59,314 $49,777 19.2%
EBITDA $26,136 $28,251 (7.5%)
Depreciation and Amortization 13,385 11,517 16.2%
------------------ ----------------- ---------
Operating Income $12,751 $16,734 (23.8%)
Other Income 49,723 13,715 262.5%
Tax Expense 24,971 12,422 101.0%
------------------ ----------------- ---------
Net Income $37,503 $18,027 108.0%
------------------ ----------------- ---------
Dividends on preferred stock 19 19 -
Earnings for Common Stock $37,484 $18,008 108.2%
Weighted Average Diluted Shares 18,942 18,806 0.7%
Diluted Earnings per common share $1.98 $.96 106.3%
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<CAPTION>
Consolidated Balance Sheets
($ in thousands)
(Unaudited)
September 30, At December 31,
2000 1999
----------------------------------------
<S> <C> <C>
ASSETS
------
Current Assets $56,296 $23,999
Investment securities 36,999 81,950
Investment in affiliates 38,133 31,684
Property, plant and equipment, net 143,083 114,175
Other Assets 7,254 5,887
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TOTAL ASSETS $281,765 $257,695
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LIABILITIES &
STOCKHOLDERS' EQUITY
--------------------
Current Liabilities $32,039 $15,873
Long-term debt 39,000 20,000
Deferred credits and other liabilities 29,598 46,543
Redeemable preferred stock 113 113
Stockholders' Equity 181,015 175,166
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $281,765 $257,695
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<CAPTION>
CT COMMUNICATIONS CUSTOMER GROWTH
At 9/30/00 At 9/30/99 % Change
---------- ---------- --------
<S> <C> <C> <C>
ILEC Access Lines
Business Lines 31,476 27,476 14.6%
Residential Lines 90,645 87,798 3.2%
Total ILEC Lines 122,121 115,274 5.9%
CLEC Access Lines 7,943 3,270 142.9%
Long Distance Lines 83,199 77,633 7.2%
ISP Customers
Dial-Up 16,649 14,794 12.5%
DSL Lines 1,032 - -
Web Hosting 324 221 46.6%
High Speed/Co-Lo 392 241 62.7%
Total ISP Customers 18,397 15,256 20.6%
Wireless Subscribers 14,259 9,750 46.2%
<CAPTION>
CT COMMUNICATIONS CAPITAL EXPENDITURES ($ in thousands)
Business Unit 3rd Quarter 2000 YTD 2000
------------- ---------------- --------
<S> <C> <C> <C>
ILEC $7,230 $27,931
CLEC 3,015 11,714
ISP 248 1,766
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Total $10,493 $41,411
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