Press Release
03-11-09 - D&E COMMUNICATIONS REPORTS FOURTH QUARTER AND YEAR END 2008 RESULTS
D&E COMMUNICATIONS, INC. FOR IMMEDIATE RELEASE November 5, 2008 | CONTACT PERSON: |
• Fourth quarter 2008 reported net loss of $7.8 million and adjusted net income of $3.5 million (shown below) excluding impairment charges and other items impacting comparability
• Non-cash impairment charge of $19.6 million ($11.5 million after tax) recorded in the fourth quarter of 2008
• Full year 2008 reported net loss of $11.0 million and adjusted net income of $11.6 million (shown below) excluding impairment charges and other items impacting comparability
• Full year 2008 Systems Integration Adjusted EBITDA of $31,000, a $2.0 million improvement from 2007
EPHRATA, PENNSYLVANIA (March 11, 2009) -- 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 fourth quarter and year ended December 31, 2008.
For the fourth quarter of 2008, the Company reported a net loss of $7.8 million, or $0.54 per share, compared to a net income of $2.0 million, or $0.14 per share, for the same period last year. The operating loss for the fourth quarter of 2008 was $9.5 million, compared to operating income of $4.1 million in the fourth quarter of 2007. Total operating revenue for the fourth quarter of 2008 was $37.5 million, compared to $38.8 million in the fourth quarter of 2007.
Results for the fourth quarter of 2008 included a non-cash intangible asset impairment of $19.6 million ($11.5 million, or $0.79 per share, after tax) on the Wireline franchise intangible assets as a result of an interim test for impairment of goodwill and intangible assets as of December 31, 2008. In the fourth quarter of 2008, the Company recorded a reserve of $0.7 million ($0.4 million, or $0.03 per share, after tax) on a note receivable from the sale of assets in 2006.
The revenue decrease of $1.3 million for the fourth quarter 2008 was the result of decreases in Wireline and Systems Integration segment revenues of $1.2 million and $0.1 million, respectively. Operating income (loss) declined $13.6 million primarily as a result of the non-cash intangible asset impairment described above and a decline in operating revenue of $1.3 million, partially offset by a decline in Wireline depreciation expense of $0.9 million ($0.6 million, or $0.04 per share, after tax) primarily due to certain fixed assets becoming fully depreciated in June and July 2008, a decline in other operating expenses of $1.2 million and the effect of the fourth quarter 2007 non-cash goodwill impairment of $5.2 million ($4.7 million, or $0.32 per share, after tax) recognized in the Systems Integration segment.
The fourth quarter 2007 results included income of $4.6 million ($2.7 million, or $0.19 per common share, after tax) from the collection of the remaining outstanding principal on the note received from the sale of Conestoga Wireless assets in 2003, which was scheduled to be paid in monthly installments through June 1, 2009. The note receivable was fully reserved on our balance sheet. In the fourth quarter of 2007, the Company recognized a reserve of $0.13 million ($0.1 million, or $0.01 per share, after tax) on the note receivable from the sale of assets in 2006. Net income for the fourth quarter of 2008 before the decline in depreciation expense and other items described above was $3.5 million, or $0.24 per share. Net income for the fourth quarter of 2007 before the items described above was $4.1 million, or $0.28 per share.
Total operating revenue for the full year 2008 was $149.5 million, compared to $152.6 million for the previous year. The revenue decrease of $3.1 million for the year 2008 was due to lower Wireline and Systems Integration segment revenues of $1.7 million and $1.6 million, respectively, partially offset by an increase in Corporate and Other segment revenue of $0.2 million. The operating loss for 2008 was $10.9 million, compared to operating income of $24.6 million in 2007. The net loss for the year was $11.0 million, or $0.76 per share, compared to a net income of $10.6 million, or $0.74 per share, for 2007. Net income before certain one-time items described below was $11.6 million, or $0.80 per share, for the year ended December 31, 2008, compared to $11.6 million, or $0.81 per share, for the year ended December 31, 2007.
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