Attached files
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| 10-Q - Lightyear Network Solutions, Inc. | v222130_10q.htm |
| EX-32 - Lightyear Network Solutions, Inc. | v222130_ex32.htm |
| EX-31.1 - Lightyear Network Solutions, Inc. | v222130_ex31-1.htm |
| EX-31.2 - Lightyear Network Solutions, Inc. | v222130_ex31-2.htm |
| EX-10.13 - Lightyear Network Solutions, Inc. | v222130_ex10-13.htm |
Exhibit 99.1
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Contact:
Steve Rush, Marketing Manager
502-410-1397
steve.rush@lightyear.net
Porter, LeVay & Rose, Inc.
Marlon Nurse, D.M., V.P. – Investor Relations
212-564-4700
marlon@plrinvest.com
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LIGHTYEAR NETWORK SOLUTIONS REPORTS INCREASED
REVENUE AND GROSS MARGINS FOR FIRST QUARTER 2011
- Revenues Increase 65% to $18.6 Million-
- Gross Margins Increase 81% to $6.6 Million-
LOUISVILLE, KY, May 13, 2011 - Lightyear Network Solutions, Inc. (OTCBB:LYNS), a provider of telecommunications services to business and residential customers throughout North America, local and long distance service, wireless services, conferencing, enhanced Internet services and Voice over Internet Protocol (VoIP), today announced its financial results for the first quarter 2011 ended March 31, 2011. Results for the first quarter of 2011 include Lightyear’s acquisition of SouthEast Telephone, which was completed on October 1, 2010.
Financial highlights for the first quarter include:
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Revenue of $18.6 million for the first quarter 2011 increased 65.3% from $11.3 million in the year-ago quarter;
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Gross profit of $6.6 million increased 80.7% over the first quarter 2010;
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Gross profit margins increased 300 basis points for the quarter to 35.4% from 32.4% in the year-ago quarter;
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Loss from operations reduced to $581 thousand from $930 thousand in the year-ago quarter;
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EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improved to a loss of $161 thousand compared with an EBITDA loss of $870 thousand in the year-ago first quarter; Net loss of $336 thousand compared with a net loss of $1.3 million in the year-ago first quarter;
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Net loss to common stockholders, including $375 thousand of cumulative preferred stock dividends, was $711 thousand, and compared with a net loss of $1.3 million in the year-ago first quarter;
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Net loss per common share, including the cumulative preferred stock dividends, was $0.03 for the quarter, and compared with a net loss of $0.09 per share for the year-ago first quarter.
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-more-
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Mr. Lochmueller continued, “We currently have approximately 60,000 customers with a significant concentration in 5 states, providing us strong regional customer concentrations in contiguous operating areas, along with operating efficiencies. With a large number of customers in the rural markets, we believe we have a significant amount of upside potential to provide our portfolio of services.”
“While the first quarter has historically been our weakest quarter, we produced several positive results. Since becoming a public company, this was our first year- over- year quarterly revenue growth in the core company, demonstrating that our sales and product approaches are correctly tuned for the market. This improved revenue base provides us a good foundation for the remainder of the year. Our first quarter was affected by several charges totaling approximately $477 thousand that were taken in the first quarter, and which we do not expect to recur, ” he continued.
Mr. Lochmueller concluded, “We are pleased with our company’s progress and expect continued growth in 2011.”
About Lightyear Network Solutions, Inc.
Through its wholly owned subsidiaries, Lightyear Network Solutions provides telecommunication services to large, medium and small businesses and to residential consumers throughout North America. Lightyear’s product offerings include local PRI and digital T1, enhanced Internet services, MPLS, Ethernet, Voice over Internet Protocol (VoIP), local and long distance service, and conferencing. Lightyear also offers wireless services to customers in the U.S. through wholesale contracts with multiple wireless providers. Lightyear built its own VoIP network in 2004 to enhance its product offerings and has partnered with some of the most prominent names in telecom including: Sprint, Verizon, AT&T, Level 3, PAETEC, CenturyLink, XO Communications, Intelliverse, BroadSoft, Cisco and ADTRAN. Lightyear Network Solutions is headquartered in Louisville, Ky. Additional information can be found at: www.lightyear.net.
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Forward-Looking Statements
This press release contains "forward-looking statements" for purposes of the Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Lightyear’s actual results to differ materially from those currently anticipated. These forward-looking statements may include, without limitation, statements about our marketing and acquisition opportunities, business strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, the risks and uncertainties which could cause our actual results to differ materially from those currently anticipated includes changes in market conditions, our ability to integrate acquired operations, the ability to obtain additional financing on satisfactory terms, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and risk factors described in our filings with the Securities and Exchange Commission. Lightyear undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
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Lightyear Network Solutions, Inc. and Subsidiaries
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Condensed Consolidated Balance Sheets
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As of
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March 31,
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December 31,
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2011
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2010
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(unaudited)
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Assets
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Current Assets:
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Cash
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$ | 770,673 | $ | 1,009,209 | ||||
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Accounts receivable, net
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6,103,184 | 6,150,424 | ||||||
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Vendor deposits
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1,885,746 | 1,686,911 | ||||||
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Inventories, net
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455,616 | 333,555 | ||||||
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Deferred tax asset - current portion, net
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- | 56,939 | ||||||
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Prepaid expenses and other current assets
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2,230,324 | 2,287,875 | ||||||
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Total Current Assets
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11,445,543 | 11,524,913 | ||||||
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Property and equipment, net
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7,263,215 | 7,202,904 | ||||||
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Intangible assets, net
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2,626,664 | 2,763,666 | ||||||
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Other assets
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318,126 | 311,482 | ||||||
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Total Assets
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$ | 21,653,548 | $ | 21,802,965 | ||||
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Liabilities and Stockholders' Deficiency
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Current Liabilities:
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Accounts payable
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$ | 6,594,102 | $ | 7,160,116 | ||||
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Interest payable - related parties
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63,206 | 113,818 | ||||||
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Accrued agent commissions
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602,894 | 569,833 | ||||||
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Accrued agent commissions - related parties
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15,254 | 25,036 | ||||||
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Deferred revenue
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2,064,614 | 2,017,188 | ||||||
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Other liabilities
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2,360,808 | 1,886,224 | ||||||
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Other liabilities - related parties
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133,221 | 97,383 | ||||||
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Short term borrowings
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- | 320,428 | ||||||
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Current portion of notes payable
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1,036,462 | 529,899 | ||||||
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Current portion of capital lease obligations
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316,346 | 348,178 | ||||||
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Current portion of obligations payable - related parties
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1,000,000 | - | ||||||
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Total Current Liabilities
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14,186,907 | 13,068,103 | ||||||
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Notes payable, non-current portion
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3,591,556 | 2,227,987 | ||||||
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Capital lease obligation, non-current portion
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925,398 | 985,871 | ||||||
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Obligations payable - related parties, non-current portion
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5,250,000 | 7,250,000 | ||||||
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Deferred tax liability, non-current portion, net
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326,683 | 507,422 | ||||||
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Total Liabilities
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24,280,544 | 24,039,383 | ||||||
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Commitments and contingencies
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Stockholders' Deficiency:
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Preferred stock, $.001 par value; 9,500,000 shares authorized;
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9,500,000 shares issued and outstanding at
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March 31, 2011 and December 31, 2010; aggregate liquidation
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preference of $20,470,027 at March 31, 2011
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9,500 | 9,500 | ||||||
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Common stock, $.001 par value; 70,000,000 shares authorized;
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21,644,312 and 20,306,292 shares issued and outstanding at
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March 31, 2011 and December 31, 2010, respectively
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21,644 | 20,306 | ||||||
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Notes and receivables from affiliate
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(13,666,653 | ) | (13,478,920 | ) | ||||
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Additional paid-in capital
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9,029,592 | 8,898,069 | ||||||
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Retained earnings
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1,978,921 | 2,314,627 | ||||||
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Total Stockholders' Deficiency
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(2,626,996 | ) | (2,236,418 | ) | ||||
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Total Liabilities and Stockholders' Deficiency
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$ | 21,653,548 | $ | 21,802,965 | ||||
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Lightyear Network Solutions, Inc. and Subsidiaries
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Condensed Consolidated Statements of Operations
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(unaudited)
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For The Three Months
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Ended March 31,
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2011
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2010
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Revenues
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$ | 18,630,391 | $ | 11,267,695 | ||||
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Cost of revenues
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12,042,114 | 7,622,442 | ||||||
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Gross Profit
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6,588,277 | 3,645,253 | ||||||
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Operating Expenses
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Commission expense
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1,554,142 | 1,174,176 | ||||||
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Commission expense - related parties
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38,053 | 78,217 | ||||||
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Bad debt expense
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309,737 | 395,523 | ||||||
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Transaction expenses
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- | 356,087 | ||||||
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Selling, general and administrative expenses
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4,847,699 | 2,510,846 | ||||||
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Total Operating Expenses
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6,749,631 | 4,514,849 | ||||||
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EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
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(161,354 | ) | (869,596 | ) | ||||
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Depreciation and amortization
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420,076 | 60,396 | ||||||
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Loss From Operations
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(581,430 | ) | (929,992 | ) | ||||
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Other Income (Expense)
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Interest income
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7,992 | 13,368 | ||||||
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Interest income - related parties
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187,733 | - | ||||||
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Interest expense
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(82,596 | ) | (1,069 | ) | ||||
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Interest expense - related parties
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(100,428 | ) | (202,892 | ) | ||||
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Amortization of deferred financing costs
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- | (68,423 | ) | |||||
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Amortization of deferred financing costs
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- related parties
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- | (69,345 | ) | |||||
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Amortization of debt discount - related parties
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- | (100,860 | ) | |||||
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Change in fair value of derivative liabilities
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- related parties
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- | 83,097 | ||||||
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Other income
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109,223 | - | ||||||
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Total Other Income (Expense)
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121,924 | (346,124 | ) | |||||
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Loss before income taxes
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(459,506 | ) | (1,276,116 | ) | ||||
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Income tax benefit
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123,800 | - | ||||||
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Net Loss
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(335,706 | ) | (1,276,116 | ) | ||||
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Cumulative Preferred Stock Dividends
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(374,796 | ) | - | |||||
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Loss Attributable to Common Stockholders
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$ | (710,502 | ) | $ | (1,276,116 | ) | ||
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Net Loss Per Common Share - Basic and Diluted
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$ | (0.03 | ) | $ | (0.09 | ) | ||
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Weighted Average Number of Common Shares Outstanding
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- Basic and Diluted
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20,587,544 | 14,568,156 | ||||||
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Lightyear Network Solutions, Inc. and Subsidiaries
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Condensed Consolidated Statements of Cash Flows
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(unaudited)
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For The
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Three Months Ended March 31,
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2011
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2010
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Cash Flows From Operating Activities
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Net loss
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$ | (335,706 | ) | $ | (1,276,116 | ) | ||
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Adjustments to reconcile net loss to net cash
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used in operating activities:
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Depreciation and amortization
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420,076 | 60,396 | ||||||
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Provision for bad debt expense
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309,737 | 395,523 | ||||||
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Stock-based compensation
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132,861 | - | ||||||
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Interest income from affiliate
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(187,733 | ) | - | |||||
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Amortization of deferred financing costs
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- | 68,423 | ||||||
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Amortization of deferred financing costs - related party
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- | 69,345 | ||||||
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Amortization of debt discount - related party
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- | 100,860 | ||||||
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Change in fair value of derivative liabilities - related party
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- | (83,097 | ) | |||||
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Deferred taxes
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(123,800 | ) | - | |||||
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Gain on sale of fixed asset
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(109,315 | ) | - | |||||
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Changes in operating assets and liabilities:
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Accounts receivable
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(262,497 | ) | (114,738 | ) | ||||
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Other assets
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(6,644 | ) | (7,160 | ) | ||||
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Vendor deposits
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(198,835 | ) | 164,999 | |||||
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Inventories
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(122,061 | ) | 15,669 | |||||
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Prepaid expenses and other current assets
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57,551 | (37,476 | ) | |||||
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Accounts payable
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(566,014 | ) | (1,210,273 | ) | ||||
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Interest payable - related parties
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(50,612 | ) | 89,751 | |||||
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Accrued agent commissions
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33,061 | (6,994 | ) | |||||
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Accrued agent commissions - related parties
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(9,782 | ) | (32 | ) | ||||
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Deferred revenue
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47,426 | 1,165 | ||||||
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Other liabilities
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474,584 | 248,283 | ||||||
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Other liabilities - related parties
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35,838 | 34,827 | ||||||
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Total Adjustments
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(126,159 | ) | (210,529 | ) | ||||
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Net Cash Used in Operating Activities
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(461,865 | ) | (1,486,645 | ) | ||||
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Cash Flows From Investing Activities
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Purchases of property and equipment
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(425,331 | ) | (12,758 | ) | ||||
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Proceeds from sale of fixed asset
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191,261 | - | ||||||
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Net Cash Used in Investing Activities
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(234,070 | ) | (12,758 | ) | ||||
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Cash Flows From Financing Activities
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Repayments of obligations payable - related parties
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(1,000,000 | ) | - | |||||
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Repayments of capital lease obligations
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(92,305 | ) | (10,526 | ) | ||||
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Repayments of short term borrowings
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(320,428 | ) | - | |||||
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Repayments of notes payable
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(129,868 | ) | - | |||||
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Proceeds from notes payable
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2,000,000 | - | ||||||
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Proceeds from obligations payable - related parties, net [1]
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- | 1,826,980 | ||||||
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Payments of deferred debt financing costs
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- | (94,300 | ) | |||||
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Net Cash Provided by Financing Activities
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457,399 | 1,722,154 | ||||||
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Net (Decrease) Increase In Cash
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(238,536 | ) | 222,751 | |||||
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Cash - Beginning
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1,009,209 | 440 | ||||||
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Cash - Ending
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$ | 770,673 | $ | 223,191 | ||||
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Lightyear Network Solutions, Inc. and Subsidiaries
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Condensed Consolidated Statements of Cash Flows--Continued
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(unaudited)
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For The
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Three Months Ended March 31,
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2011
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2010
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Supplemental Disclosures of Cash Flow Information:
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Cash paid during the period for:
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Interest
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$ | 229,483 | $ | 113,143 | ||||
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Non-cash financing activites:
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Forgiveness of indebtedness to Former Parent
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$ | - | $ | 25,292,175 | ||||
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Stock issued in exchange for note receivable
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$ | - | $ | 5,149,980 | ||||
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[1]
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Face value of obligations payable to Former Parent of $2,099,980, less selling commissions withheld of $273,000 during the three months ended March 31, 2010.
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