Press Release
11-05-08 - D&E COMMUNICATIONS REPORTS THIRD QUARTER 2008 RESULTS
D&E COMMUNICATIONS, INC. FOR IMMEDIATE RELEASE November 5, 2008 | CONTACT PERSON: |
• Net income of $3.7 million and earnings per share of $0.25
EPHRATA, PENNSYLVANIA (November 5, 2008) -- D&E Communications, Inc. ("D&E" or the "Company")(Nasdaq: DECC), a leading provider of integrated communications services in central and eastern Pennsylvania, todayannounced the results of its operations for the third quarter ended September 30, 2008.
For the third quarter of 2008, the Company reported operating income of $8.6 million, compared to operating income of $8.5 million in the third quarter of 2007. Net income for the third quarter of 2008 was $3.7 million, or $0.25 per share, compared to net income of $3.8 million, or $0.26 per share, for the same period last year. The Company reported total operating revenue of $36.6 million for the third quarter of 2008, compared to $38.2 million in the third quarter of 2007. The revenue decrease of $1.6 million for the third quarter of 2008 was the result of decreases in Wireline segment revenue of $1.1 million and Systems Integration segment revenue of $0.5 million.
"During the third quarter, we continued our focus on adding broadband subscribers, CLEC growth, improving Systems Integration performance and managing our expenses," stated James W. Morozzi, D&E's President and Chief Executive Officer. "In this competitive marketplace, we had slight improvements in operating income and income before taxes for the quarter compared to the prior year. However, an approximate 1% increase in the effective tax rate caused net income for the quarter to be slightly lower compared to the prior year."
The third quarter 2008 results were positively affected by a decrease in depreciation expense in the Wireline segment of $0.8 million ($0.5 million, or $0.03 per share, after tax) primarily due to certain fixed assets becoming fully depreciated in June and July of 2008. Net income before this item described above was $3.2 million, or $0.22 per share, for the third quarter of 2008 compared to $3.8 million, or $0.26 per share for the third quarter of 2007.
For the nine months ended September 30, 2008, the Company reported a net loss of $3.1 million, or $0.22 per share, compared to net income of $8.7 million, or $0.60 per share, for the same period last year. Operating loss for the nine months ended September 30, 2008 was $1.3 million, compared to operating income of $20.6 million in the nine months ended September 30, 2007. The Company reported total operating revenue of $112.0 million for the nine months ended September 30, 2008, compared to $113.8 million for the same period last year.
Included in the 2008 nine-month results was the non-cash intangible asset impairment of $26.2 million ($15.3 million, or $1.06 per share, after tax) on the Wireline franchise intangible assets 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 2008 nine-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 $3.8 million ($2.5 million, or $0.17 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 and June and July of 2008. 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 $8.0 million, or $0.55 per share, for the nine months ended September 30, 2008, compared to $8.1 million, or $0.56 per share, for the nine months ended September 30, 2007.
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