Welcome!

@CloudExpo Authors: Yeshim Deniz, Elizabeth White, Derek Weeks, Jyoti Bansal, Liz McMillan

News Feed Item

WVT Communications Group Reports Third Quarter 2012 Financial Results

Unified Communications Revenues Increased 38%; Conference Call Scheduled for November 12

WARWICK, NY -- (Marketwire) -- 11/09/12 -- Warwick Valley Telephone Company (NYSE MKT: WVT) (referred to as WVT Communications Group or the Company), the parent company of leading cloud communications pioneers, today announced financial results for its third quarter ended September 30, 2012. Financial results and recent corporate development highlights include:

  • Cloud or unified communications ("UC") revenues net of eliminations were $3.6 million in third quarter 2012, an increase of 38% from $2.6 million compared to the same period last year and 11% from the second quarter 2012, while revenue from our Telephone segment declined 19% to $3.4 million
  • Total third quarter revenues increased 3% over the same period last year
  • At over 51% of third quarter consolidated revenues, UC is now the Company's largest segment
  • Gross profit was $3.6 million in third quarter 2012, an increase of 29% from $2.8 million in third quarter 2011 and up by 3.5% from $3.5 million in the second quarter 2012
  • Gross profit as a percentage of revenues increased to 51.4% in third quarter 2012, from 41.1% in third quarter 2011 and 50.1% in second quarter 2012
  • The Company received $3.25 million in cash distributions from Orange County-Poughkeepsie Limited Partnership ("O-P") investment, which were recorded as other income in the third quarter of 2012
  • During the third quarter 2012, we recorded a net loss of $(922,000), or $(0.16) per common share, a lost reduction of nearly 50% from the same period last year. The Company declared quarterly cash dividend of $0.27 per common share for the third quarter of 2012
  • Transition and rebranding as leading cloud-based UC provider bolstered by new listing on NYSE MKT with ticker symbol WVT which became effective on November 6, 2012, and a successful start to transforming of the parent company into an unregulated holding company on November 1, 2012.
  • Cloud-based UC Solutions Headlines:
    • Grand opening of first Innovation Center for potential customers to experience Alteva unified communications solutions, located in new UC headquarters in Philadelphia
    • Alteva received 2012 Cloud Computing Excellence Award with Hosted VoIP Communications honored for innovation
    • Alteva received 2012 Internet Telephony Excellence Award
    • Alteva Hosted UC Services named Communications Solutions Product of the Year Award by TMC
    • Ranked #9 in North America Hosted IP Telephony/UC Services Market by Frost & Sullivan*
    • Provisioning of new customers for UC services continues at record levels

Third Quarter 2012 Results

Revenues for the three-month period ended September 30, 2012 increased 3% to $7.1 million, compared to $6.8 million for the same period in 2011.

In the first quarter of 2012, the Company realigned its segment reporting and management structure as a result of the Alteva acquisition in 2011. The Company's segments are strategic business units that offer different products and services and are now managed as Unified Communications ("UC") or Cloud Communications services, and Telephone. Revenues discussed in this press release for periods prior to the first quarter of 2012 have been presented on the basis of the new segment reporting.

Revenues from UC services, net of eliminations, were $3.6 million in the third quarter of 2012, an increase of 38% from $2.6 million in the prior year period. As a percentage of consolidated revenue, the UC segment contributed over 51% of revenues in the third quarter of 2012 as compared with 38% in the same period of the prior year and 47% in the second quarter of 2012. The increase in UC revenues of nearly $1 million was primarily attributable to the full quarter impact of the Company's acquisition of Alteva on August 5, 2011, and organic unified communications services revenue growth.

Telephone services revenues net of eliminations were $3.4 million in the third quarter of 2012, a decrease from $4.2 million in the corresponding 2011 period. The Telephone segment contributed 49% of revenues in the third quarter as compared with 62% in the third quarter of 2011 and 53% in the second quarter of 2012. The decrease was primarily due to lower Universal Service Fund revenues and the termination of the Nation Rural Telecommunications Cooperative ("NRTC") contract as of August 15, 2011. The termination of the NRTC contract changed our DIRECTV services revenue from monthly recurring to one based on sales commissions and reimbursements for installation costs and losses due to wireless substitution and competition for other triple play service providers offset by an increase in access lines rates.

Gross profit increased by 29% to $3.6 million in the third quarter of 2012 from $2.8 million in the same period of 2011. Gross profit as a percentage of revenues increased to 51.4% in the third quarter 2012 from 41.1% in the 2011 period and 50.1% in the second quarter of 2012. The improvement in gross profit in dollars as well as on a margin basis primarily reflects (i) the substantial increase in revenues contributed by the UC segment in the third quarter of 2012 compared to the same period last year, (ii) and our ability to leverage our infrastructure.

Selling, general and administrative ("SG&A") expenses in the third quarter of 2012 increased to $6.2 million from $4.9 million in the corresponding period of 2011. The 27% increase in SG&A expenses reflects the additional operating expenses for Alteva as well as the current and ongoing requirements to support the Company's Cloud Communications growth strategies. Included in SG&A for the three months ended September 30, 2012 was $550,000 of nonrecurring charges. These charges were primarily professional fees and other costs related to the acquisition of Alteva and the corporate restructuring.

Total other income for the three-month period ended September 30, 2012 was $2.7 million as compared to $1.3 million for the same period in 2011. This increase is primarily due to O-P distributions of $3.25 million in the third quarter of 2012 as compared with $1.3 million in the prior year period which was recorded based on the amount in excess of the Company's share of the O-P earnings for that period as opposed to being applied to the investment account.

For the three-month period ended September 30, 2012, the Company had a net loss of $(922,000), or $(0.16) per basic and diluted share, compared to a net loss of $(1.7) million, or $(0.31) per basic and diluted share, for the three-month period ended September 30, 2011.

Dividends

The Board of Directors of WVT Communications Group declared a regular quarterly dividend of $0.27 per share on the Company's common shares. The dividend was paid on September 28, 2012 to shareholders of record as of September 18, 2012. In addition, the Board of Directors declared the regular quarterly dividend of $1.25 per share on the outstanding 5,000 shares of the Company's 5% Preferred Shares that was paid on September 28, 2012 to shareholders of record as of September 18, 2012. Dividends distributed by the Company are paid using the cash distributions from the O-P.

Management Comments

"WVT Communications Group has made impressive progress toward our goal of transitioning into a highly prominent, fast growing cloud-based Unified Communications platform provider," said Duane W. Albro, the Company's Chief Executive Officer. "UC revenues contributed more than half of our quarterly consolidated revenues for the first time in the Company's history. We are further pleased that our UC platform is well positioned for continued growth in revenue and gross margins. These are some of the business characteristics we sought as we embarked on our transformation.

"In related and supportive initiatives, WVT Communications Group became a holding company on November 1, 2012, and moved its ILEC operations to a wholly-owned subsidiary which is now subject to regulations by telecommunications governing bodies. This is being accompanied by a complete rebranding of the Company that focuses on our cloud UC platform, including the transfer of our common stock to the NYSE MKT on November 6, 2012, with WVT as our new ticker symbol that will reflect, upon shareholder approval, an official name change to WVT Communications Group.

"Our transition has further taken hold with numerous industry accolades. We have won several awards for technology innovation within the Cloud Communications industry and our executives are in high demand for speaking and conference appearances across the country. Industry analysts are taking note of us and business customers are lining up for our services. The numbers of customers in provisioning for our UC services remains at a record high level. While our UC solutions are ideal for most business customers, our efforts to target the middle market segment are showing signs of success. Given our market position and the significant leverage in our operating model, we look forward to capitalizing on the demand for our UC services."

Conference Call

The Company will conduct a conference call to discuss third quarter results on Monday, November 12, 2012, at 9:00 a.m. eastern. Investors and other interested parties can listen to the call by dialing the participant numbers of 877-317-6789 (toll free) or 412-317-6789, no access code required, approximately 10 minutes prior to the start of the conference call. The conference call will also be webcast live on the WVT Communications Group website at www.wvtcg.com.

A replay of this conference call will also be available by dialing 877-344-7529 (toll free) or 412-317-0088, access code: 10016612, beginning 11:00 a.m. eastern on November 12 through December 3, and via the investor relations section of the Company's website.

About WVT Communications Group
WVT Communications Group is a world technology leader in providing cloud-based Unified Communications (UC) solutions for small, medium and enterprise businesses. Founded in 1902, the Company has continued to adapt and remain on the forefront of technology, chiseling its position among the most stable and respected communications vendors around the globe. Moving forward, it is forging the new model that communications providers, large and small, are striving to emulate. WVT Communications Group is merging new innovations, such as those from Alteva and USA Datanet, with proven technology from industry leaders like Microsoft, Cisco, BroadSoft, Panasonic, and Polycom to build the ideal hosting architecture for communications.

Through its USA Datanet (a Hosted VoIP and carrier services provider), Alteva (the nation's ninth largest UC provider), and Warwick Valley Telephone (a highly respected traditional telecom provider turned premier regional broadband company) businesses, WVT Communications Group is enabling businesses of any size to communicate more efficiently with hassle-free communications tools. By overlaying a UC division on its stabile, regional broadband company, WVT Communications Group has positioned itself in front of its peer group of companies and created an evolutionary change in its strategy. With this, the company may offer its residential customers a similar suite of UC applications and services for use in a home environment that its business customers can enjoy. Visit www.wvtcg.com or call 855-U-GO-CLOUD for more information.

All trademarks are the properties of their respective owners.
*Frost & Sullivan Analysis, March 2012

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 or strategies regarding the future. WVT Communications Group 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 WVT Communications Group'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: general economic and business conditions, both nationally and in the geographic regions in which WVT Communications Group operates; industry capacity; demographic changes; technological changes and changes in consumer demand; the successful integration of WVT Communication Group'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 WVT Communication Group operates; reduction in cash distributions from the Orange County-Poughkeepsie Limited Partnership; 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, WVT Communications Group 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 and forward-looking statements may be seen in WVT Communications Group's Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.



                      WARWICK VALLEY TELEPHONE COMPANY
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
            ($ in thousands except share and per share amounts)


                               Three Months Ended       Nine Months Ended
                                  September 30,           September 30,
                             ----------------------  ----------------------
                                2012        2011        2012        2011
                             ----------  ----------  ----------  ----------

Operating revenues
  Unified Communications     $    3,621  $    2,628  $   10,147  $    5,269
  Telephone                       3,429       4,201      10,870      13,549
                             ----------  ----------  ----------  ----------
  Total operating revenues        7,050       6,829      21,017      18,818

Operating expenses
  Cost of services and
   products (exclusive of
   depreciation and
   amortization expense)          3,428       4,024      10,410      10,215
  Selling, general and
   administrative expenses        6,230       4,883      17,241      12,471
  Depreciation and
   amortization                   1,411       1,365       3,986       4,103
                             ----------  ----------  ----------  ----------
  Total operating expenses       11,069      10,272      31,637      26,789
                             ----------  ----------  ----------  ----------
  Operating loss                 (4,019)     (3,443)    (10,620)     (7,971)

Other income (expense)
  Interest income (expense),
   net                             (123)        (55)       (292)          4
  Income from equity method
   investment                     3,250       1,328       7,771       6,744
  Other income (expense),
   net                             (468)         31        (337)         46
                             ----------  ----------  ----------  ----------
  Total other income
   (expense)                      2,659       1,304       7,142       6,794
                             ----------  ----------  ----------  ----------
  Loss before income taxes       (1,360)     (2,139)     (3,478)     (1,177)

Income taxes benefit               (438)       (450)     (1,094)       (120)
                             ----------  ----------  ----------  ----------
  Net loss                         (922)     (1,689)     (2,384)     (1,057)

Preferred dividends                   6           6          19          19
                             ----------  ----------  ----------  ----------
  Loss applicable to common
   stock                     $     (928) $   (1,695) $   (2,403) $   (1,076)
                             ==========  ==========  ==========  ==========

  Basic loss per share       $    (0.16) $    (0.31) $    (0.42) $    (0.20)
                             ==========  ==========  ==========  ==========
  Basic loss per puttable
   common share              $    (0.16) $    (0.31) $    (0.42) $    (0.20)
                             ==========  ==========  ==========  ==========

  Diluted loss per share     $    (0.16) $    (0.31) $    (0.42) $    (0.20)
                             ==========  ==========  ==========  ==========
  Diluted loss per puttable
   common share              $    (0.16) $    (0.31) $    (0.42) $    (0.20)
                             ==========  ==========  ==========  ==========

Weighted average shares of
 common stock used to
 calculate loss per share
Basic                         5,744,020   5,424,927   5,732,231   5,408,603
                             ==========  ==========  ==========  ==========
Diluted                       5,744,020   5,424,927   5,732,231   5,408,603
                             ==========  ==========  ==========  ==========
Dividends declared per
 common share                $     0.27  $     0.26  $     0.81  $     0.78
                             ==========  ==========  ==========  ==========




                      WARWICK VALLEY TELEPHONE COMPANY
                   CONDENSED CONSOLIDATED BALANCE SHEETS
            ($ in thousands except share and per share amounts)

                                              September 30,   December 31,
                                                  2012            2011
                                             --------------  --------------
Assets                                         (Unaudited)
Current assets
  Cash and cash equivalents                  $        2,559  $        4,575
  Short term investments                                  -             259
  Accounts receivable - net of allowance for
   uncollectibles - $744 and $759 in 2012
   and 2011, respectively                             3,549           2,717
  Other accounts receivable                             240             174
  Materials and supplies                                763             832
  Prepaid expenses                                    1,255             731
  Prepaid income taxes                                2,206           2,715
  Deferred Income taxes                                 405             405
                                             --------------  --------------
Total current assets                                 10,977          12,408
                                             --------------  --------------

  Property, plant and equipment, net                 25,864          25,425
  Intangible assets, net                              8,287           8,605
  Investments                                             -           1,979
  Goodwill                                            9,121           9,121
  Other assets                                          416             378
                                             --------------  --------------

  Total assets                               $       54,665  $       57,916
                                             ==============  ==============
Liabilities and Shareholders' Equity
Current liabilities
  Short-term borrowings                      $       12,095  $        5,600
  Current maturities of long-term debt                    -           1,139
  Accounts payable                                    1,292           1,715
  Amounts due in connection with business
   acquisition                                          488           2,377
  Derivative liability in connection with
   business acquisition                                   -             131
  Advance billing and payments                          389             390
  Accrued taxes                                         684             521
  Pension and postretirement benefit
   obligations                                          622             622
  Other accrued expenses                              3,907           3,398
                                             --------------  --------------
Total current liabilities                            19,477          15,893
                                             --------------  --------------

  Amounts due in connection with business
   acquisition                                            -             472
  Deferred income taxes                               1,575           1,358
  Pension and postretirement benefit
   obligations                                        9,463           9,915
                                             --------------  --------------

  Total liabilities                                  30,515          27,638
                                             --------------  --------------

Commitments and contingencies

Puttable common stock, $.01 par value,
 25,148 shares issued and outstanding at
 September 30, 2012 and 272,479 shares
 issued and outstanding at December 31, 2011            369           4,125
Shareholders' equity
  Preferred shares - $100 par value;
   authorized and issued shares of 5,000;
   $0.01 par value; authorized and unissued
   shares of 10,000,000                                 500             500
  Common stock - $0.01 par value; authorized
   shares of 10,000,000 Issued 6,556,081 and
   6,217,839 shares at September 30, 2012
   and December 31, 2011, respectively                   66              62
  Treasury stock - at cost, 788,825 and
   735,391 shares of common stock at
   September 30, 2012 and December 31, 2011,
   respectively                                      (7,049)         (6,262)
  Additional paid in capital                         11,310           6,191
  Accumulated other comprehensive loss               (4,590)         (4,979)
  Retained earnings                                  23,544          30,641
                                             --------------  --------------

  Total shareholders' equity                         23,781          26,153
                                             --------------  --------------

  Total liabilities and shareholders' equity $       54,665  $       57,916
                                             ==============  ==============


More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@CloudExpo Stories
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
"We host and fully manage cloud data services, whether we store, the data, move the data, or run analytics on the data," stated Kamal Shannak, Senior Development Manager, Cloud Data Services, IBM, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Imagine having the ability to leverage all of your current technology and to be able to compose it into one resource pool. Now imagine, as your business grows, not having to deploy a complete new appliance to scale your infrastructure. Also imagine a true multi-cloud capability that allows live migration without any modification between cloud environments regardless of whether that cloud is your private cloud or your public AWS, Azure or Google instance. Now think of a world that is not locked i...
SYS-CON Events announced today that Auditwerx will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Auditwerx specializes in SOC 1, SOC 2, and SOC 3 attestation services throughout the U.S. and Canada. As a division of Carr, Riggs & Ingram (CRI), one of the top 20 largest CPA firms nationally, you can expect the resources, skills, and experience of a much larger firm combined with the accessibility and atten...
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to m...
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).