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LICT Corporation Reports 2024 First Quarter Results

LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports financial results for the quarter ended March 31, 2024. Data for all periods has been adjusted for the spin-off of MachTen ...

Business Wire
  • Revenue increased 15.5% quarter over quarter to $33.5 million.
  • EBITDA increased 30% to $14.7 vs. $11.5 million in Q1 2023.
  • Earnings were $295 Per Share compared to $228 last year.
  • Capex increased to $16.4 million from $9.7 million to fund buildout requirements for E-ACAM and Federal and State grants, as well as our non-regulated markets.

2024-Unaudited First Quarter Results

RYE, N.Y.: LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports financial results for the quarter ended March 31, 2024. Data for all periods has been adjusted for the spin-off of MachTen on August 31, 2023, and 2023 results are presented as discontinued operations.

Total revenues in the first quarter of 2024 increased by $4.5 million to $33.5 million versus $29.0 million in the same quarter a year ago.

Regulated revenues were $15.0 million in the first quarter of 2024, an increase of $3.4 million versus the prior year’s first quarter of $11.6 million. The acceptance of Enhanced ACAM (E-ACAM) accounted for a $3.5 million increase in regulated revenues for the quarter.

Non-regulated revenues for the first quarter of 2024 increased 6.3% to $18.5 million from the prior year’s first quarter $17.4 million driven by sales of broadband services and high-speed data circuits. Further, our results for the first quarter of 2024 include revenues from the Manti Non-Regulated entities which were acquired on December 1, 2023.

Total EBITDA was $14.7 million in the first quarter of 2024 as compared to $11.4 million in 2023. The $3.3 million increase in EBITDA was driven by the election of E-ACAM as well as an increase in our non-regulated business, which was offset by higher operating expenses, including labor costs, professional and engineering expenses.

Regulated EBITDA in the first quarter of 2024 was $7.4 million compared to $4.4 million during the same period last year, driven by E-ACAM and offset by increases in operating expenses.

Non-regulated EBITDA in the first quarter was $7.3 million compared to $7.1 million last year. The increase was driven by increases in revenue from broadband services and high-speed data circuits, offset by increased expenses.

OTHER INCOME/(EXPENSES) – Other income/expenses decreased by $0.8 million in the first quarter of 2024, due to higher interest expense and the impact of an unrealized loss on our 20% interest in MachTen, Inc.

EARNINGS PER SHARE – Earnings per share from continuing operations for the first quarter of 2024 were $295 per share compared to $228 per share last year.

FCC Programs and Other Capital Expenditures

With the acceptance of E-ACAM, LICT now has buildout requirements to just under 20,000 locations to speeds of 100/20 which must be completed by December of 2028. The total gross Capital Expenditures to meet the buildout requirements for E-ACAM, along with Federal (ReConnect III & IV) and State grants are estimated at $511 million ($349 million net of grant funding).

I. ENHANCED ALTERNATIVE CONNECT AMERICA COST MODEL (E-ACAM) PROGRAM

  • The Federal Communications Commission proposed an increase in ACAM funding through a program known as E-ACAM, which began January 1, 2024.
  • In the new program LICT entities will receive an incremental $14 million per year or a total of $37.2 million annually through 2038 with minimum speed requirements of 100/20 Mbps.

II. RECONNECT III and RECONNECT IV-

  • As previously announced, LICT has been awarded $157.5 million for seven United States Department of Agriculture (USDA) ReConnect III and ReConnect IV grants with a total project cost of $171.2 million, of which, our share of cost will be approximately $13.7 million. These grants require us to provide 1 Gig of fiber broadband speed. To date, six of the seven awards are still pending environmental clearance approval before construction can commence.

III. AFFORDABLE CONNECTIVITY PROGRAM (ACP)

  • Under the ACP program (which was terminated in May of 2024) eligible customers received a broadband credit of up to $30 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan. During 2023, our approximately 1,900 eligible customers received just over a half million dollars in credits. LICT has informed its ACP customers that the company will continue an equivalent Extended Broadband Discount (EBD) through January 31, 2025, at LICT’s cost.

Strategic Initiatives

The spin-off of our Michigan entity, MachTen (OTC Pink: MACT), occurred on August 31, 2023. At the time of the spin-off each shareholder of LICT received 150 shares of MachTen per one share of LICT. We continue to own 20% of MachTen as well as holding a note receivable of $15 million.

LICT’s acquisition of Manti Telephone Communications Company (MTCC), and AFConnect (AFI) is complete, the non-regulated facet of the Manti transaction closed on December 1, 2023. The regulated facet, Manti Telephone Company (MTC) transaction is still pending regulatory approval.

As previously reported, during the fourth quarter of 2023, LICT completed the sale of 40% of its 20% ownership of Brick Skirt Holding Company (formerly DFT Communications) to CIBL, Inc. LICT’s sale of its remaining 12% ownership of Brick Skirt, is still pending regulatory approval. Bretton Woods continues to utilize Brick Skirt for certain administrative functions as it has since 2014.

FIXED WIRELESS - Sound Broadband LLC, LICT’s wireless company, has initiated the installation of 5G wireless broadband services in areas we serve in New Mexico, California, Oregon & Utah. Additional analysis continues in order to expand the implementation of 5G wireless broadband services in our other locations to efficiently provide increased broadband speeds to many of the communities we serve.

CAPITAL EXPENDITURES – For the first quarter of 2024, capital expenditures were $16.4 million versus $9.7 million in the first quarter of 2023. This increase in capital spending was driven by the build out requirements of E-ACAM.

SHARE REPURCHASES – During the three months ended March 31, 2024, the Company repurchased 92 shares for $1.5 million, with an average price of $16,758 per share. As of March 31, 2024, 16,879 shares were outstanding,

OPERATING STATISTICS/BROADBAND DEPLOYMENT - LICT owns and operates 6,664 miles of fiber optic cable, 9,040 miles of copper cable, 839 miles of coaxial cable and 95 towers.

 

Annual Meeting Date

The LICT annual meeting of Stockholders will be held at 10:30 am on June 25, 2024.

The meeting will be held 401 Theodore Fremd Avenue, Rye, NY 10580.

 

 

 

 

 

March 31,

December 31,

 

Percent

 

 

 

Increase

Increase

 

2024

2023

(Decrease)

(Decrease)

Broadband lines

44,770

44,367

403

0.9%

Voice Lines

 

 

 

 

ILEC

17,327

17,549

(222)

(1.3%)

Out of franchise

6,377

6,287

90

1.4%

Total

23,704

23,836

(132)

(0.6%)

Video Subscribers

3,520

3,341

179

5.4%

Revenue Generating Units

71,994

71,544

450

0.6%

This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation anticipated financial results, financing, capital expenditures and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation, business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by LICT on its website, www.lictcorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful, or that financial targets will be met. Such forward-looking information is subject to uncertainties, risks and inaccuracies, which could be material.

LICT Corporation is a holding company with subsidiaries in broadband and other telecommunications services that actively seeks acquisitions, principally in its existing business.

 

LICT Corporation
Statements of Operations
(In Thousands, Except Per Share Data)

 
 

 

Three Months Ended
March 31,

2024

(Unaudited)

2023

(Restated)

 

Revenues

$33,499

$29,005

 

 

Cost and Expenses:

 

 

Cost of revenue

16,073

14,901

General and administrative costs at operations

2,746

2,632

Corporate office expenses

1,278

1,064

Depreciation and amortization

6,005

5,298

Total Costs and Expenses

26,102

23,895

 

 

 

Operating profit

7,397

5,110

 

 

 

Other Income (Expense)

 

 

Investment income

894

825

Interest expense

(970)

(637)

Equity Loss in affiliated companies

(27)

-

Unrealized gain/(loss) on Investment in MachTen

(594)

-

Other

38

(61)

Total Other Income (Expense)

(659)

127

 

 

 

Income from continuing operations

6,738

5,237

Provision for Income Taxes

(1,761)

(1,289)

Income from continuing operations, net of tax

4,977

3,948

Income from discontinued operations

-

1,510

Tax Provision for discontinued operations

-

(358)

Income from discontinued operations, net of tax

-

1,152

Net Income

$4,977

$5,100

Capital Expenditures

$16,354

$9,676

 

 

 

 

 

Basic and Diluted Weighted-Average Shares

16,943

17,309

 

 

 

Actual shares outstanding at end of period

16,879

17,263

 

 

 

 

 

 

Earnings Per Share:

 

Income from continuing operations

$295

$228

Income from discontinued operations

-

67

Basic and Diluted Earnings Per Share

$295

$295

 

LICT Corporation
Balance Sheet
(In Thousands, Except Per Share Data)

 

 

 

 

(Unaudited)
March 31,
2024

(Audited)
December 31,
2023

ASSETS

 

 

Current assets:

 

Cash and cash equivalents

$10,602

$11,545

Accounts receivable, less allowances of $137 and $140, respectively

9,299

7,123

Note receivable from affiliate, including accrued interest

Material and supplies

15,600

13,267

15,345

16,825

Prepaid expenses, and other current assets

5,485

4,417

Total current assets

54,253

55,255

 

 

 

Property, plant, and equipment

158,389

150,112

Goodwill

48,251

48,251

Other intangibles

34,510

34,590

Investments in Affiliated Companies

6,776

7,396

Other assets

10,603

11,436

Total assets

$312,782

$307,040

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

Trade accounts payable

$4,692

$7,773

Accrued interest payable

550

272

Accrued liabilities

8,888

7,696

Current maturities of long-term debt

3,876

3,876

Total current liabilities

18,006

19,617

 

 

 

Long-term debt

54,057

49,576

Deferred income taxes

28,885

28,898

Other liabilities

13,715

14,261

Total liabilities

114,663

112,352

Total shareholders’ equity

198,119

194,688

Total liabilities and shareholders’ equity

$312,782

$307,040

 

LICT Corporation
Selected Balance Sheet Data-Continued
(In Thousands, Except Per Share Data)
b>SELECTED BALANCE SHEET DATA

 
 

(Unaudited)

(Audited)

March 31,

2024

December 31,

2023

Cash and Cash Equivalents

$10,602

$11,545

Notes Receivable

15,600

15,345

 

$26,202

$26,890

Long-Term Debt (including current portion)

(57,933)

(53,452)

Net Debt

($31,731)

($26,562)

 

 

 

Shareholders’ Equity

$198,119

$194,688

Shares Outstanding

16,879

17,263

 

EBITDA

EBITDA is an established measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures. We believe that EBITDA trends are a valuable indicator of whether our operations are able to produce sufficient operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.

EBITDA is calculated as Operating Profit from Continuing Operations plus depreciation and amortization expense and corporate expenses.

Three Months Ended

March 31,

2024
(Unaudited)

2023
(Restated)

EBITDA Reconciliation:

Operating Profit from Continuing Operations

$7,397

 

$5,110

Additions:

 

 

Corporate expenses

1,278

1,064

Depreciation and amortization

6,005

5,298

EBITDA from operations

$14,680

$11,472

 

Fonte: Business Wire

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