NTS Reports 1Q 2012 EBITDAS Increase Of 34.5% To $2.7 Million

NTS, Inc., f/k/a Xfone, Inc. (NYSE Amex/TASE: NTS) (“NTS” or “the Company”) announces results for the three months ended March 31, 2012.

Revenue

Revenue from the Company’s Fiber-To-The-Premise (FTTP) business grew 38.3% to $4.1 million in the first quarter ended March 31, 2012, as compared to $2.9 million for the same prior year period. FTTP revenue represented 27.3% of total revenue for the first quarter of 2012, as compared to 20.7% of total revenue for the first quarter of 2011. Sequentially, fiber revenues grew 12.5% in the first quarter of 2012 as compared to fiber revenues of $3.6 million in the fourth quarter of 2011.

Consolidated revenue for the quarter ended March 31, 2012 was $14.9 million, a 4.7% increase compared to $14.3 million in the quarter ended March 31, 2011, mainly attributed to the growth of our FTTP business.

Customer Expansion

The Company’s total number of FTTP customers as of March 31, 2012 was 8,053 compared to 6,024 FTTP customers as of March 31, 2011, representing an increase of 33.7%.

Average Revenue Per User for all of the Company’s fiber markets is approximately $410 per month for business customers and approximately $100 per month for residential customers.

The construction of the NTS FTTP network has continued to progress on time with costs below budget. The PRIDE FTTP network build out is financed by $99.9 million in funds from the Federal Broadband Stimulus Program, of which 45.9% is in the form of grants and 54.1% is in the form of low cost long-term loans.

New Market Progress

As previously announced, during the first quarter of 2012, NTS began laying fiber in the communities of Tahoka, Lamesa, Plainview, Abernathy and Hale Center, Texas and also began signing up fiber customers in the town of Slaton, Texas. Since the close of the first quarter, NTS began signing fiber customers in the towns of Lamesa, Wilson and Meadow, Texas. The Company now has a fiber presence in 12 communities in Texas and continues to make good progress marketing and signing up triple play subscribers in the new communities it has entered.

Click Here to View FTTP Trendline Charts

EBITDAS

EBITDAS for the first quarter of 2012 was $2.7 million, a 34.5% increase over the same quarter last year and a 7.2% increase sequentially when compared to the fourth quarter of 2011. EBITDAS margin in the quarter ended March 31, 2012 was 18.1% compared to EBITDAS margin of 14% for the quarter ended March 31, 2011. This is mainly attributed to the increase in higher margin FTTP revenue. The Company uses EBITDAS to measure its profitability as the component of stock based compensation is a non-cash expense.

Net Income

For the quarter ended March 31, 2012, the Company reported a net loss from continued operations of $339 thousand or a loss of $0.01 per basic and diluted share, assuming 41,186,596 shares outstanding compared to a net loss of $634 thousand or a loss of $0.03 per diluted share, assuming 21,119,488 shares outstanding for the quarter ended March 31, 2011.

For the quarter ended March 31, 2012, NTS recorded a net financing expense of $1.4 million compared to a net financing expense of $1.5 million for the quarter ended March 31, 2011.

Mr. Guy Nissenson, Chairman, President and CEO of NTS commented, “During the first quarter of 2012, we continued to make excellent progress building out our high margin fiber network, which we have now established in twelve Texas communities. While our fiber business has had consistent revenue growth, it is notable that this is the first quarter that we have achieved consolidated revenue growth from the previous quarter since NTS started the fiber build out.

“In addition to the capable project management around the construction of our fiber build out, we are very pleased with the successful sales and marketing of our triple play services in our new and existing markets which increased our customer base. This is a very exciting time for our Company as we leverage opportunities to establish our state of the art broadband offerings to previously underserved communities.”

Conference Call:

The Company will host a conference call today, May 16, 2012 at 10:00 a.m. Eastern Time to discuss its financial results. The conference call may be accessed in the U.S. and Canada by dialing toll-free 1-877-407-8035. International callers may access the call by dialing 1-201-689-8035.

A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter account number 286 and conference number 394204.

To access the live webcast, log onto the NTS website at http://www.ntscom.com. The webcast can also be accessed at http://www.InvestorCalendar.com. An online replay will be available shortly after the call.

About NTS

NTS is a provider of high speed broadband services, including internet access, digital cable TV programming and local and long distance telephone service to residential and business customers in northern Texas and southeastern Louisiana. NTS' Fiber-To-The-Premise (FTTP) network provides one of the fastest internet connections available. The Company currently has operations in Texas, Mississippi and Louisiana and also serves customers in Arizona, Colorado, Kansas, New Mexico and Oklahoma. For the Company's website, please visit: www.ntscom.com.

In addition to disclosing financial measures prepared in accordance with Accounting Principles Generally Accepted in the US (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP EBITDAS (non-GAAP earnings before interest, taxes, depreciation, amortization and stock-based compensation, other expenses, acquisition costs and non-recurring loss). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

There are a number of limitations related to the use of non-GAAP EBITDAS. First, these non-GAAP financial measures exclude depreciation and amortization expenses that are recurring and significant non-recurring expenses. First, Depreciation and amortization have been, and will continue to be for the foreseeable future, a significant recurring expense with an impact upon our company notwithstanding the lack of immediate impact upon cash. Second, there is no assurance the components of the costs that we exclude in our calculation of non-GAAP operating loss do not differ from the components that our peer companies exclude when they report their results of operations. Third, there is no assurance we will avoid further non-recurring costs associated with other balance sheet items. Our management compensates for these limitations by providing specific reconciliation of GAAP amounts to these non-GAAP financial EBITDAS and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. Readers should note the chart at the end of this release which sets forth how we calculate the non-GAAP EBITDAS.

This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." NTS' financial and operational results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.
     

NTS, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 
Three months ended
March 31,
2012       2011
Revenues
Services on Fiber-To-The-Premise network $ 4,072,667 $ 2,945,400
Leased local loop services and other   10,851,162   11,311,818
 
Total Revenues   14,923,829   14,257,218
 
Expenses
Cost of services (excluding depreciation and amortization shown below) 7,122,654 7,011,475
Selling, general and administrative 5,136,761 5,317,448
Depreciation and amortization 1,533,973 1,169,282
Financing expenses, net 1,441,699 1,524,430
Other expenses   198,669   146,732
 
Total Expenses   15,433,756   15,169,367
 
Loss before taxes (509,927 ) (912,149 )
 
Income tax benefit   170,926   278,535
 
Net loss $ (339,001 ) $ (633,614 )
 
 
Basic and diluted loss per share $ (0.01 ) $ (0.03 )
 
Basic and diluted weighted average number of shares outstanding   41,186,596   21,119,488
     

Reconciliation of EBITDAS to Net income (loss) applicable to

common stockholders as it is presented on the Condensed Consolidated

Statements of Operations for NTS, Inc.
 
Three Months Ended
March 31,
2012       2011
 
Net income (loss) attributed to shareholders $ (339,001 ) $ (633,614 )
 
 
Depreciation and amortization 1,533,973 1,169,282
Compensation in connection with the issuance of warrants and options 40,530 82,996
Financing expense (income), net 1,441,699 1,524,430
Other expenses 198,669 146,732
Income tax benefit   (170,926 )   (278,535 )
 
EBITDAS $ 2,704,944 $ 2,011,291

Copyright Business Wire 2010

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