Press Release
05-07-09 - D&E COMMUNICATIONS REPORTS FIRST QUARTER 2009 RESULTS
D&E COMMUNICATIONS, INC. FOR IMMEDIATE RELEASE May 8, 2009 | CONTACT PERSON: |
• Operating income of $8.7 million
• Net income attributable to common shareholders of $4.0 million and earnings per share of $0.28
EPHRATA, PENNSYLVANIA (May 7, 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 first quarter ended March 31, 2009.
For the first quarter of 2009, the Company reported a net income attributable to common shareholders of $4.0 million, or $0.28 per share, compared to $5.1 million, or $0.35 per share, for the same period last year. Operating income for the first quarter of 2009 was $8.7 million, compared to $8.1 million in the first quarter of 2008. Total operating revenue for the first quarter of 2009 was $35.9 million, compared to $37.8 million in the first quarter of 2008.
Operating income increased $0.6 million due to a reduction in operating expenses of $2.5 million, partially offset by a decline in operating revenue of $1.9 million. Operating expenses declined as a result of a pension curtailment gain of $1.0 million, of which $0.9 million ($0.5 million, or $0.03 per share, after tax) was recorded as a reduction of operating expenses and the remaining $0.1 million was capitalized. Wireline depreciation expense decreased $0.8 million ($0.5 million, or $0.04 per share, after tax) due to certain fixed assets becoming fully depreciated in June and July 2008 and other operating expenses decreased $0.8 million. In the first quarter of 2009, the Company offered a one-time payment to non-union employees who were eligible and elected to retire by December 31, 2009. The Company recorded an expense of $0.2 million ($0.1 million, or $0.01 per share, after tax) in the first quarter of 2009 for those employees who elected to retire. The revenue decrease of $1.9 million for the first quarter of 2009 was the result of decreases in Wireline and Systems Integration segment revenues of $1.7 million and $0.2 million, respectively.
The first quarter 2008 results included 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 reserve of $0.2 million ($0.1 million, or $0.01 per share, after tax) recognized on a note receivable from the sale of assets in 2006. Adjusted net income attributable to common shareholders for the first quarter of 2009 before the items described above was $3.1 million, or $0.22 per share. Adjusted net income attributable to common shareholders for the first quarter of 2008 before the items described above was $3.5 million, or $0.24 per share.
"Even in light of the current economic conditions, we continue to see growth in both our DSL/High-Speed Internet subscribers and our CLEC access lines, albeit at a slower rate than this time last year. We're especially pleased to see our total revenue from private line circuits, dedicated circuits, Ethernet and IP VPN services grow by $0.4 million, or 10.7%, over the first quarter of 2008. This is a reflection of our business customers continuing to place high value on D&E's advanced data networking services," stated James W. Morozzi, D&E's President and Chief Executive Officer. "During the first quarter of 2009, D&E's operating income increased $0.6 million, mainly due to a pension curtailment gain of $0.9 million as a result of a hard freeze to our non-union pension plan and a reduction in depreciation expense of $0.8 million. Net income decreased $1.1 million in comparison to the 2008 period primarily due to a one-time aftertax gain of $1.7 million in the first quarter of 2008."
Mr. Morozzi continued, "On April 23, 2009, the D&E board of directors declared a quarterly dividend of $0.125 per common share, continuing our long-standing practice of paying quarterly dividends from operating cash flows of the business."
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