PHILADELPHIA, PA--(Marketwired - Mar 16, 2015) - Alteva, Inc. ("Alteva" or the "Company") (
2014 Financial Results Highlights
- For the fourth quarter of 2014, the Company achieved Adjusted EBITDA* of $(0.4) million, an improvement from $(0.8) million for the same period in 2013; for the full year 2014, the Company achieved Adjusted EBITDA* of $(1.2) million, an improvement from $(4.4) million in 2013;
- The Company reduced its operating loss for the fourth quarter of 2014 to $(1.3) million, as compared to $(2.3) million for the same period in 2013; the operating loss for the full year 2014 decreased to $(6.6) million from $(11.6) million for 2013;
- The Company recorded $0.0 million and $3.25 million of income from its former investment in the O-P partnership for the fourth quarters of 2014 and 2013, respectively; the Company recorded $52.4 million and $13.0 million of income from its former investment in the O-P partnership for the full years 2014 and 2013, respectively;
- The Company had a net loss for the fourth quarter of 2014 of $(0.5) million, as compared to $(0.3) million for the same period in 2013; the Company had net income of $29.4 million for the full year 2014, as compared to a net loss of $(0.6) million for the full year of 2013;
- For the fourth quarter of 2014, UC revenues increased by 8% to $4.2 million from $3.9 million for the fourth quarter of 2013;
- For full year 2014, UC revenues increased by 7%, which includes the impact of the Syracuse operations that were sold in September 2013, to $17.0 million from $15.8 million for full year 2013; excluding the Syracuse operations, UC revenues increased 18% for full year 2014 compared to full year 2013;
- At the end of 2014, there were over 50,000 users on Alteva's hosted platform, which represents an increase of 18% of the installed base compared to the end of 2013;
- As of December 31, 2014, the Company had approximately 3,000 new users, or 6% of the installed base, sold and scheduled for implementation;
- Gross profit margin increased to 60% in the fourth quarter of 2014 from 55% for the same period in 2013; gross profit margin increased to 61% for full year 2014 from 55% for full year 2013.
Fourth Quarter 2014 Results
Revenues were flat at $7.4 million in the fourth quarter of 2014.
UC revenues were $4.2 million in the fourth quarter of 2014, an increase of 8% from $3.9 million for the same period in 2013. As a percentage of consolidated revenue, the UC segment contributed approximately 57% of revenues in the fourth quarter of 2014 as compared with 53% for the same period in 2013. The increase in UC revenues was attributable to the addition of new clients and the increase in services to existing clients. Approximately 92% of fourth quarter 2014 UC revenues and 89% of the fourth quarter 2013 revenues were from licenses and services which are expected to be recurring in nature, with the balance of revenues derived from equipment sales that were primarily related to new customer implementations.
Telephone revenues were $3.2 million in the fourth quarter of 2014, as compared with $3.5 million for the same period in 2013. The Telephone segment contributed approximately 43% of revenues in the fourth quarter 2014 as compared with 47% for the same period of 2013. Telephone revenues were slightly lower year-over-year as a result of continued access line losses and lower revenue from pooling arrangements. These decreases were partially offset by an increase in access line rates earlier in the year and modest growth in broadband Internet services revenues.
Gross profit increased by 9% to $4.5 million in the fourth quarter of 2014, from $4.1 million for the same period in 2013. Gross profit as a percentage of revenues was 60% in the fourth quarter of 2014, as compared with 55% for the same period in 2013. The improvement in gross profit primarily reflects the increase in revenues contributed by the UC segment, the Company's ability to leverage its existing infrastructure, and the impact of cost reduction initiatives.
Selling, general and administrative ("SG&A") expenses in the fourth quarter of 2014 were $5.1 million, as compared with $5.4 million for the same period in 2013. The decrease was due to the impact from the expense management initiatives implemented throughout 2014.
Other income for the fourth quarter of 2013 included $3.25 million from the Company's former equity investment in the O-P partnership, which was sold in April 2014.
For the fourth quarter of 2014, the Company had income tax benefit of $0.8 million, or 60% of loss before income taxes, as compared to an income tax expense of $1.1 million, or 137% of income before income taxes, for the fourth quarter of 2013. The estimated effective tax rate for each period includes projections of tax expense on the expected change in our valuation allowance for deferred tax assets.
For the fourth quarter of 2014, the Company's net loss was $(0.5) million, as compared to a net loss of $(0.3) million for the same period of 2013.
Basic and diluted net loss per share was $(0.09) for the fourth quarter of 2014, as compared with basic and diluted net loss per share of $(0.05) in the same period of 2013.
Conference Call
The Company will conduct a conference call to discuss fourth quarter results on Thursday, March 19, 2015 at 10:00 a.m. eastern. Investors and other interested parties can listen to the call by dialing the participant number of 412-317-6789 or 877-317-6789 (toll free), no access code required. A simultaneous webcast of the conference call can be accessed through Alteva's website at www.alteva.com in the Investors section.
A replay of this conference call will also be available by dialing 412-317-0088 or 877-344-7529 (toll free), access code: 10062458, at approximately 12:00 p.m. eastern on March 19, 2015 through 9:00 a.m. eastern April 20, 2015, and via the Company's website at www.alteva.com.
About Alteva
Alteva (
*Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization adjusted to exclude non-cash stock-based compensation, severance related expense, income from equity method investment, and the loss on disposal, restructuring costs and other special charges. A reconciliation of adjusted EBITDA to net income (loss) can be found at the end of the following tables. Adjusted EBITDA is commonly used by management and investors as an indicator of operating performance and liquidity. Adjusted EBITDA is not considered a measure of financial performance under GAAP and it should not be considered as an alternative to net income (loss), or other financial statement data presented in accordance with GAAP in our consolidated financial statements.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements, without limitation, regarding expectations, beliefs, intentions, growth, profitability, or strategies regarding the future. Such statements include, without limitation, statements containing the words "believes," "anticipates," "intends," "expects," "will" and words of similar import. Alteva intends that such forward-looking statements be subject to the safe-harbor provided by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Alteva's actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: expectations of future profitability; general economic and business conditions, both nationally and in the geographic regions in which Alteva operates; industry capacity; demographic changes; technological changes and changes in consumer demand; the successful integration of Alteva's acquired businesses; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; legislative proposals relating to the businesses in which Alteva operates; competition; or the loss of any significant ability to attract and retain qualified personnel. Given these uncertainties, current and prospective investors should be cautioned in their reliance on such forward-looking statements. Except as required by law, Alteva disclaims any obligation to update any such factors or to publicly announce the results of any revision to any of the forward-looking statements contained herein to reflect future events or developments. A more comprehensive discussion of risks, uncertainties, financial reporting restatements, and forward-looking statements may be seen in Alteva's Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.
(tables follow)
| ALTEVA, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (amounts in thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, |
||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Net Revenue | |||||||||||||||||
| Unified Communications | $ | 4,236 | $ | 3,915 | $ | 16,989 | $ | 15,834 | |||||||||
| Telephone | 3,170 | 3,470 | 13,116 | 14,268 | |||||||||||||
| Total operating revenues | 7,406 | 7,385 | 30,105 | 30,102 | |||||||||||||
| Operating expenses | |||||||||||||||||
| Cost of services and products (exclusive of | |||||||||||||||||
| depreciation and amortization expense) | 2,948 | 3,307 | 11,791 | 13,465 | |||||||||||||
| Selling, general and administrative expenses | 5,080 | 5,400 | 20,766 | 23,989 | |||||||||||||
| Loss on disposal, restructuring costs and other special charges | - | 43 | 700 | 447 | |||||||||||||
| Depreciation and amortization | 711 | 896 | 3,464 | 3,815 | |||||||||||||
| Total operating expenses | 8,739 | 9,646 | 36,721 | 41,716 | |||||||||||||
| Operating loss | (1,333 | ) | (2,261 | ) | (6,616 | ) | (11,614 | ) | |||||||||
| Other income (expense) | |||||||||||||||||
| Interest income (expense), net | 11 | (163 | ) | (162 | ) | (756 | ) | ||||||||||
| Income from investment | - | 3,250 | 52,373 | 13,000 | |||||||||||||
| Other income (expense), net | 3 | 4 | 26 | 166 | |||||||||||||
| Total other income | 14 | 3,091 | 52,237 | 12,410 | |||||||||||||
| Income (loss) before income taxes | (1,319 | ) | 830 | 45,621 | 796 | ||||||||||||
| Income tax expense (benefit) | (795 | ) | 1,139 | 16,187 | 1,442 | ||||||||||||
| Net income (loss) | (524 | ) | (309 | ) | 29,434 | (646 | ) | ||||||||||
| Preferred dividends | 6 | 6 | 25 | 25 | |||||||||||||
| Income (loss) applicable to common stock and participating securities | $ | (530 | ) | $ | (315 | ) | $ | 29,409 | $ | (671 | ) | ||||||
| Basic earnings (loss) per share | $ | (0.09 | ) | $ | (0.05 | ) | $ | 4.89 | $ | (0.11 | ) | ||||||
| Diluted earnings (loss) per share | $ | (0.09 | ) | $ | (0.05 | ) | $ | 4.89 | $ | (0.11 | ) | ||||||
| Weighted average shares of common stock | |||||||||||||||||
| used to calculate earnings per share | |||||||||||||||||
| Basic | 5,824 | 6,191 | 5,808 | 6,112 | |||||||||||||
| Diluted | 5,824 | 6,191 | 5,808 | 6,112 | |||||||||||||
| Dividends declared per common share | $ | - | $ | - | $ | - | $ | 0.54 | |||||||||
| ALTEVA, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| As of December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| (in thousands, except per share amounts) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 24,047 | $ | 1,636 | ||||||
| Trade accounts receivable - net of allowance for uncollectibles - | ||||||||||
| $402 and $378 at December 31, 2014 and 2013, respectively | 2,737 | 2,836 | ||||||||
| Other accounts receivable | 488 | 480 | ||||||||
| Materials and supplies | 167 | 237 | ||||||||
| Prepaid expenses | 349 | 774 | ||||||||
| Prepaid income taxes | 311 | - | ||||||||
| Deferred income taxes | 43 | 108 | ||||||||
| Total current assets | 28,142 | 6,071 | ||||||||
| Property, plant and equipment, net | 12,384 | 13,837 | ||||||||
| Intangibles, net | 5,020 | 5,856 | ||||||||
| Seat licenses, net | 1,543 | 1,749 | ||||||||
| Goodwill | 9,006 | 9,006 | ||||||||
| Other assets | 1,023 | 744 | ||||||||
| Total assets | $ | 57,118 | $ | 37,263 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Short-term debt | $ | 325 | $ | 10,126 | ||||||
| Accounts payable | 1,216 | 944 | ||||||||
| Advance billing and payments | 274 | 341 | ||||||||
| Accrued taxes | 1,056 | 1,692 | ||||||||
| Pension and post retirement benefit obligations | 276 | 267 | ||||||||
| Accrued wages | 1,036 | 1,007 | ||||||||
| Other accrued expenses | 2,885 | 2,927 | ||||||||
| Total current liabilities | 7,068 | 17,304 | ||||||||
| Long-term debt | 295 | 297 | ||||||||
| Deferred income taxes | 766 | 649 | ||||||||
| Pension and postretirement benefit obligations | 8,833 | 6,007 | ||||||||
| Total liabilities | 16,962 | 24,257 | ||||||||
| Commitments and contingencies | ||||||||||
| Shareholders' equity | ||||||||||
| Preferred Shares - $100 par value, authorized and issued shares of 5; | ||||||||||
| $0.01 par value, authorized and unissued shares of 10,000 | 500 | 500 | ||||||||
| Common stock - $0.01 par value, authorized shares of 10,000; issued | ||||||||||
| 6,826 and 6,971 shares issued at December 31, 2014 and 2013, respectively | 69 | 70 | ||||||||
| Treasury stock - at cost, 885 and 830 common shares at December 31, 2014 and 2013, respectively | (8,077 | ) | (7,612 | ) | ||||||
| Additional paid in capital | 14,047 | 13,279 | ||||||||
| Accumulated other comprehensive loss | (3,997 | ) | (1,436 | ) | ||||||
| Retained earnings | 37,614 | 8,205 | ||||||||
| Total shareholders' equity | 40,156 | 13,006 | ||||||||
| Total liabilities and shareholders' equity | $ | 57,118 | $ | 37,263 | ||||||
| ALTEVA, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| For the Years Ended December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| (in thousands) | ||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||
| Net income (loss) | $ | 29,434 | $ | (646 | ) | |||||
| Adjustments to reconcile net income (loss) to net cash provided | ||||||||||
| by (used in) operating activities: | ||||||||||
| Depreciation and amortization | 3,464 | 3,815 | ||||||||
| Stock based compensation expense | 767 | 1,457 | ||||||||
| Deferred income taxes | 182 | 544 | ||||||||
| Other non-cash operating activities | 130 | 326 | ||||||||
| Distribution in excess of equity in earnings and gain on sale from equity investment | (49,776 | ) | (5,729 | ) | ||||||
| Loss on disposal | - | 447 | ||||||||
| Changes in assets and liabilities, net of effects of business acquisitions: | ||||||||||
| Trade and other receivables | 58 | 64 | ||||||||
| Prepaid expenses and other assets | 140 | 92 | ||||||||
| Accounts payable and accrued expenses | 3 | 210 | ||||||||
| Accrued taxes | (947 | ) | 1,997 | |||||||
| Pension and post retirement benefit obligations | 274 | (353 | ) | |||||||
| Net cash (used in) provided by operating activities | (16,271 | ) | 2,224 | |||||||
| CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||
| Capital expenditures | (274 | ) | (544 | ) | ||||||
| Proceeds from sale of assets | 33 | 550 | ||||||||
| Purchase of seat licenses and other intangibles | (117 | ) | (471 | ) | ||||||
| Proceeds received in excess of income from equity investments | 49,776 | 5,729 | ||||||||
| Net cash provided by investing activities | 49,418 | 5,264 | ||||||||
| CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from debt | 2,400 | 19,419 | ||||||||
| Repayment of debt and capital leases | (12,646 | ) | (23,541 | ) | ||||||
| Payment of fees for acquisition of debt | - | (63 | ) | |||||||
| Dividends | (25 | ) | (3,340 | ) | ||||||
| Purchase of treasury stock | (465 | ) | (126 | ) | ||||||
| Net cash used in financing activities | (10,736 | ) | (7,651 | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | 22,411 | (163 | ) | |||||||
| Cash and cash equivalents at beginning of year | 1,636 | 1,799 | ||||||||
| Cash and cash equivalents at end of year | $ | 24,047 | $ | 1,636 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Interest paid | $ | 195 | $ | 572 | ||||||
| Income taxes paid (received) | $ | 17,509 | $ | (910 | ) | |||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||||
| Capitalization of loan financing costs | $ | - | $ | 93 | ||||||
| Acquisition of equipment and seat licenses under capital leases | $ | 444 | $ | 357 | ||||||
| Seat licenses acquired, but not paid | $ | 188 | $ | - | ||||||
| ALTEVA | ||||||||||||||||
| RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) | ||||||||||||||||
| AS IT IS PRESENTED ON THE CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net income (loss) | $ | (524 | ) | $ | (309 | ) | $ | 29,434 | $ | (646 | ) | |||||
| Depreciation and amortization | 711 | 896 | 3,464 | 3,815 | ||||||||||||
| Stock-based compensation | 90 | 436 | 767 | 1,457 | ||||||||||||
| Severance related charges | 104 | 116 | 411 | 1,284 | ||||||||||||
| Other Gains (Losses) & Special Charges | - | 43 | 700 | 447 | ||||||||||||
| Interest (income) expense, net | (11 | ) | 163 | 162 | 756 | |||||||||||
| Income from investment | - | (3,250 | ) | (52,373 | ) | (13,000 | ) | |||||||||
| Income tax expense (benefit) | (795 | ) | 1,139 | 16,187 | 1,442 | |||||||||||
| Adjusted EBITDA | $ | (425 | ) | $ | (766 | ) | $ | (1,248 | ) | $ | (4,445 | ) | ||||