Press Release
08-11-08 - D&E COMMUNICATIONS REPORTS SECOND QUARTER 2008 RESULTS
D&E COMMUNICATIONS, INC. FOR IMMEDIATE RELEASE August 11, 2008 | CONTACT PERSON: |
• Second quarter net loss of $11.9 million; adjusted to $2.5 million in net income excluding impairment charge and other items impacting comparability.
• Non-cash impairment charge of $26.2 million ($15.3 million after tax) recorded in the second quarter.
• Systems Integration records operating income during the quarter.
EPHRATA, PENNSYLVANIA (August 11, 2008) -- D&E Communications, Inc. ("D&E" or the "Company") (Nasdaq: DECC), a leading provider of integrated communications services in central and eastern Pennsylvania, today announced the results of its operations for the second quarter ended June 30, 2008.
The Company reported total operating revenue of $37.5 million for the second quarter of 2008, compared to $37.2 million in the second quarter of 2007. The revenue increase of $0.3 million for the second quarter of 2008 was the result of an increase in Wireline segment revenue of $0.3 million.
As a result of the completion of the Company's annual test for impairment of goodwill and intangible assets as of April 30, 2008, the Company recognized a non-cash intangible asset impairment charge of $26.2 million ($15.3 million, or $1.06 per share, after tax) relating to its Wireline franchise intangible assets. The second quarter 2008 results were positively affected by a decrease in depreciation expense in the Wireline segment of $1.4 million ($0.9 million, or $0.07 per share, after tax) primarily due to revisions in the estimated useful lives of certain fixed assets effective July 2007, in addition to certain fixed assets becoming fully depreciated in the first and second quarters of 2007.
Primarily as a result of the items described above, the Company reported a net loss of $11.9 million, or $0.82 per share, compared to net income of $2.3 million, or $0.16 per share, for the same period last year and an operating loss for the second quarter of 2008 of $18.1 million, compared to operating income of $6.5 million in the second quarter of 2007. Net income before the items described above was $2.5 million, or $0.17 per share, for the second quarter of 2008 compared to $2.3 million, or $0.16 per share for second quarter of 2007.
For the six months ended June 30, 2008, the Company reported a net loss of $6.8 million, or $0.47 per share, compared to net income of $4.9 million, or $0.34 per share, for the same period last year. Operating loss for the six months ended June 30, 2008 was $10.0 million, compared to operating income of $12.0 million in the six months ended June 30, 2007. The Company reported total operating revenue of $75.3 million for the six months ended June 30, 2008, compared to $75.6 million for the same period last year.
Included in the 2008 six-month results was the non-cash intangible asset impairment on the Wireline franchise intangible assets described above. The 2008 six-month results were also affected by income of $2.9 million ($1.7 million, or $0.12 per common share, after tax) from the termination of a lease guarantee and a decrease in depreciation expense in the Wireline segment of $3.0 million ($2.0 million, or $0.13 per share, after tax) primarily due to revisions in the estimated useful lives of certain fixed assets effective July 2007, in addition to certain fixed assets becoming fully depreciated in the first and second quarters of 2007. Included in the 2007 results was a gain of $0.6 million ($0.6 million, or $0.04 per share, after tax) from life insurance proceeds. Net income before the items described above was $4.8 million, or $0.34 per share, for the six months ended June 30, 2008, compared to $4.3 million, or $0.30 per share, for the six months ended June 30, 2007.
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