KEYTECH REPORTS EARNINGS COMPANY RECOGNIZES RESULTS OF STRATEGIC TRANSACTIONS
December 14, 2016
Six Month September 30, 2016 Financial Highlights:
- • Revenues: $61.1 million, compared to $46.0 million in the prior year
- • Operating profits: $8.0 million, compared to loss of $1.7 million in the prior year
- • Earnings per share $0.64, an increase of $0.61 per share
December 14, 2016
The KeyTech Group of Companies today announced unaudited results for the six months ended September 30, 2016. For the period the consolidated profit from operations was $8.0 million. Earnings before interest, depreciation, amortization and one time charges for the period was $17.0 million compared with $9.5 million for the six month period ended September 30, 2015, an increase of $7.5 million. Consolidated revenue for the period is $61.1 million compared with $46.0 million in the prior period, an increase of $15.1 million.
The increase in operating profit and revenue for the six month period was primarily the result of the positive impact of the Company’s recent transaction with ATN International, Inc. (“ATN”), whereby the Company acquired all of the ownership of Bermuda Digital Communications, Ltd. (“CellOne”) and $41.6 million in cash in exchange for a 51% interest in the Company’s shares (the “ATN transaction”). As a result of this transaction, the Company has recorded an estimated $22.0 million gain on the resulting full consolidation of the Company’s wireless business, measured at a provisional amount based on management’s preliminary estimate of fair value. Subscriber growth in both Bermuda and the Cayman Islands also positively impacted revenue for the period, resulting in a $1.9 million increase in data revenue from the prior period. This growth was partially offset by declines in television revenue of $1.6 million for the period, as subscribers opted to “cord cut” and source video content through IP based solutions.
“Our six months results already start to highlight for shareholders the benefits we expect to see from our strategic transaction with ATN. The operational efficiencies and stronger balance sheet gained from the transaction put us in a great position to invest in and expand our networks to improve value both for customers and shareholders as a streamlined fixed and mobile provider,” said Frank Amaral, Chief Executive Officer of KeyTech. “To highlight our new position and strategy heading into the next year, we launched a new, unified brand for all of businesses operating under the “One Communications” name in November. We look forward to putting the new investment in the Company to work revamping our operations under this new name to better serve our residential and business clients.”
Operating expenses were $53.1 million for the period compared with the prior year of $47.7 million, related to the increased support needed for the full consolidation of the Company’s wireless business. The Company’s share of income in associates for the period, including its investments in its wireless business for the one month period prior to the merger transaction and Quo Vadis Holding Ltd., was $0.3 million compared to $3.4 million for the prior period. The Company retired all of its subordinated debt of $24.7 million as part of the transaction with ATN and reduced its remaining long term debt by $3.2 million during the period.
A one-time dividend of $11.4 million was paid during the period, representing $0.75 per share as part of the ATN Transaction, while none were paid in the prior period. Earnings per share for continuing operations for the period ending September 30, 2016 were $0.64 compared to $0.03 in the same period last year.
The Company will be changings its reporting year end from March 31 to December 31 effective December 31, 2016.
Deep Blue Communications
Cautionary Language Concerning Forward Looking Statements
This press release contains forward-looking statements relating to, among other matters, future financial performance and results of operations; the competitive environment in key markets, demand for services and industry trends; the pace of network expansion and improvement; and management’s plans and strategy for the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors and the Company undertakes no obligation and has no intention to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements.