Lumos Networks Corp. ("Lumos Networks" or the "Company") (Nasdaq: LMOS),
a fiber-based service provider of data, voice and IP-based
telecommunication services in the Mid-Atlantic region, today announced
financial results for the second quarter of 2014.
Total revenue for the second quarter of 2014 was $50.2 million, compared
to $52.3 million for the second quarter of 2013 and $50.1 million in the
first quarter of 2014. Total Adjusted EBITDA in the second quarter of
2014 was $22.7 million, compared to $24.6 million in the second quarter
of 2013 and $22.6 million in the first quarter of 2014.
Total Data segment revenue in the second quarter of 2014 was $26.7
million, up over 2% sequentially, and constituted over 53% of total
revenue versus 49% in the prior year period. Total Adjusted EBITDA for
the Data segment reached $13.4 million in the second quarter of 2014,
and Adjusted EBITDA margin for the Data segment was 50.2% in the second
quarter, up from 48.7% in the first quarter.
Lumos Networks President and CEO Timothy G. Biltz said, "I am satisfied
that Lumos Networks delivered results in the second quarter that
slightly exceeded our internal targets and maintained its annual 2014
guidance for revenue and Adjusted EBITDA of $200 million and $90
million, respectively. Our FTTC operations continued its strong
performance, growing 8.5% sequentially and surpassing $5 million in
quarterly revenues. We see a strong pipeline for both FTTC sales and
installations for the rest of 2014."
Mr. Biltz continued, "While Transport revenue grew slightly quarter on
quarter, we continue to believe Transport revenue will decline in the
range of 8-10% in 2014 due to the churn of TDM circuits as carriers
groom their networks. Our Enterprise revenue dipped slightly
sequentially due to previously disclosed churn events, but our goal is
for accelerated growth in 2015 due to the following initiatives: new
customer renewal and retention programs, increased reach of our Carrier
End User distribution channels, and the connection to more commercial
"My focus remains on continuing to aggressively invest in the fiber
infrastructure and personnel necessary to support long-term fiber
contracts in key growth areas like Fiber to the Cell, Data Center
Connectivity, Carrier End User and Edge-Out markets like Richmond,
Virginia," Mr. Biltz said. "Our primary mission is building our fiber
revenue backlog through 2014 in order to accelerate our Data revenue
growth in 2015."
"To that end," Mr. Biltz finished, "Lumos Networks made significant
progress in expanding its fiber network in the second quarter, adding
over 80 route miles, substantially completing the build of a critical
long-haul route in Virginia between Richmond and Charlottesville,
connecting a Peak 10 data center in Richmond, connecting 33 on-net
buildings and connecting 40 additional FTTC sites."
For the full year 2014, the Company maintains its financial guidance for
revenue of approximately $200 million and Adjusted EBITDA of
approximately $90 million.
Please see the schedules accompanying this release for additional
financial guidance, including reconciliations of non-GAAP measures to
Statements made are based on management's current expectations. These
statements are forward-looking and actual results may differ materially.
Please see "Special Note from the Company Regarding Forward-Looking
A conference call and simultaneous webcast, hosted by Timothy G. Biltz,
CEO, Johan Broekhuysen, Interim CFO, and Will Davis, Vice President of
Investor Relations and Chief of Staff, to review these financial and
operational results and financial guidance will be held at 9:30 A.M.
(ET) on August 7, 2014.
The webcast may be accessed via the Internet at http://ir.lumosnetworks.com/
and the live call ("Lumos Networks Second Quarter Earnings Conference
Call") may be accessed with the following numbers:
Domestic: 1-877-510-3772International: 1-412-902-4135Canada:
The conference call will be archived and available for replay through
August 28, 2014 and may be accessed with the following numbers:
Domestic: 1-877-344-7529International: 1-412-317-0088Canada:
1-855-669-9658Replay pass codes: Conference ID: 10050045
The webcast will also be archived and the replay may be accessed at http://ir.lumosnetworks.com/.
About Lumos Networks
Lumos Networks is a fiber-based service provider in the Mid-Atlantic
region serving carrier, business and residential customers over a dense
fiber network offering data, voice and IP services. With headquarters in
Waynesboro, VA, Lumos Networks serves Virginia, West Virginia and
portions of Pennsylvania, Kentucky, Ohio, and Maryland over a fiber
network of approximately 7,550 fiber route miles. Detailed information
about Lumos Networks is available at www.lumosnetworks.com.
Adjusted EBITDA is defined as net income attributable to Lumos Networks
before interest, income taxes, depreciation and amortization, accretion
of asset retirement obligations, net income or loss attributable to
noncontrolling interests, other expenses/income, equity-based
compensation charges, acquisition-related charges, amortization of
actuarial losses on retirement plans, employee separation charges,
restructuring-related charges, gain or loss on settlements and gain or
loss on interest rate derivatives. Adjusted EBITDA margin is calculated
as the ratio of Adjusted EBITDA, as defined, to operating revenues.
Adjusted EBITDA is a non-GAAP financial performance measure. It should
not be considered in isolation or as an alternative to measures
determined in accordance with GAAP. Please refer to the schedules herein
and our SEC filings for a reconciliation of these non-GAAP financial
performance measures to the most comparable measures reported in
accordance with GAAP and for a discussion of the presentation,
comparability and use of such financial performance measures.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation that are not statements of
historical fact, including statements about our beliefs and
expectations, are forward-looking statements and should be evaluated as
such. The words "anticipates," "believes," "expects," "intends,"
"plans," "estimates," "targets," "projects," "should," "may," "will" and
similar words and expressions are intended to identify forward-looking
statements. Such forward-looking statements reflect, among other things,
our current expectations, plans and strategies, and anticipated
financial results, all of which are subject to known and unknown risks,
uncertainties and factors that may cause our actual results to differ
materially from those expressed or implied by these forward-looking
statements. Many of these risks are beyond our ability to control or
predict. Because of these risks, uncertainties and assumptions, you
should not place undue reliance on these forward-looking statements.
Furthermore, forward-looking statements speak only as of the date they
are made. We do not undertake any obligation to update or review any
forward-looking information, whether as a result of new information,
future events or otherwise. Important factors with respect to any such
forward-looking statements, including certain risks and uncertainties
that could cause actual results to differ from those contained in the
forward-looking statements, include, but are not limited to: rapid
development and intense competition in the telecommunications and high
speed data transport industry; our ability to offset expected revenue
declines in legacy voice and access products related to the recent
regulatory actions, wireless substitution, technology changes and other
factors; our ability to effectively allocate capital and implement our
"edge-out" expansion plans in a timely manner; our ability to complete
customer installations in a timely manner; adverse economic conditions;
operating and financial restrictions imposed by our senior credit
facility; our cash and capital requirements; declining prices for our
services; our ability to maintain and enhance our network; the potential
to experience a high rate of customer turnover; federal and state
regulatory fees, requirements and developments; our reliance on certain
suppliers and vendors; and other unforeseen difficulties that may occur.
These risks and uncertainties are not intended to represent a complete
list of all risks and uncertainties inherent in our business, and should
be read in conjunction with the more detailed cautionary statements and
risk factors included in our SEC filings, including our Annual Report
filed on Form 10-K for the year ended December 31, 2013.
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