North Pittsburgh Systems (MM) (NASDAQ:NPSI)
Historical Stock Chart
From Oct 2019 to Oct 2024
North Pittsburgh Systems, Inc. (NASDAQ:NPSI) today
announced net income of $5,035,000, or $.34 per share, on operating
revenues of $27,532,000 for the third quarter of 2005. This compares
to net income of $4,721,000, or $.31 per share, on operating revenues
of $27,091,000 for the comparable period last year. NPSI's President,
Harry R. Brown, stated that the increase in third quarter 2005 net
income was attributable primarily to a $280,000 increase in investment
earnings recorded from the Company's temporary investments, a $72,000
increase in net operating income and a $61,000 decrease in interest
expense as a result of the Company's continued debt reduction.
Mr. Brown reported that operating revenues increased $441,000, or
1.6%, during third quarter 2005 as compared to third quarter 2004. The
increase was principally due to the Company's ability to continue to
effectively penetrate its Competitive Local Exchange Carrier's (CLEC)
edge-out markets and the further expansion of its broadband service
offerings. This ability to grow end-user customer revenues was offset
in part by decreases in the Company's access revenues and
telecommunication equipment sales.
Operating expenses for the third quarter of 2005 increased
$369,000, or 1.8%, in relation to the prior year period. Mr. Brown
noted that the increase in operating expenses was predominantly due to
increases in the direct costs associated with the growth in access
lines and access line equivalents, such as fees paid for leasing
unbundled network elements in the portions of the CLEC edge-out
markets that the Company does not wholly provision over its own
facilities, and fees paid to terminate the increased local, toll and
Internet traffic generated by the Company's growing customer base. In
addition, depreciation expense increased as a result of a 3.9%
increase in the Company's depreciable asset base over the prior year
comparable period.
Other income (net) for the third quarter of 2005 increased
$436,000 over the prior year comparable period due partially to a
$280,000 increase in interest income earned on higher cash and
temporary investment balances. In addition, the Company benefited from
a $61,000 decrease in interest expense as a result of the Company's
continued debt reduction and a $39,000 increase in equity income
recorded from the Company's partnership investments (which consist
primarily of limited partner interests in three wireless
partnerships).
For the first nine months of 2005, net income increased
$2,417,000, or 17.6%, to $16,183,000 from $13,766,000 for the first
nine months of 2004, and earnings per share amounted to $1.08 as
compared to $.92 for the first nine months of 2004. In addition, for
the first nine months of 2005, operating revenues increased
$2,668,000, or 3.3%, while operating expenses increased $556,000, or
0.9%, and Other income (net) increased $1,940,000, as compared to the
first nine months of 2004. Many of the factors described above in the
third quarter analysis also contributed to the net income increase for
the first nine months of 2005. In addition, net income for the first
nine months of 2005 was positively impacted by a settlement agreement
reached with a carrier in the second quarter of 2005. The $2,404,000
settlement, which covered the exchange of traffic between the
Company's Incumbent Local Exchange Carrier (ILEC) and the carrier over
a multi-year period of time, resulted in a $1,604,000 increase in
revenues and an $800,000 decrease in operating expenses. On an after
tax basis, the settlement contributed $1,406,000 to the increase in
year-to-date net income for 2005, or $.09 per share.
Turning to operations, Mr. Brown reported that as of September 30,
2005, the Company had a total of 71,003 access lines in its ILEC
territory, 60,812 CLEC access line equivalents (including 2,311 DSL
subscribers) and a total of 13,687 DSL subscribers across all
subsidiaries. He noted that although ILEC access lines had decreased
2.6% during the twelve-month period ended September 30, 2005, total
CLEC access line equivalents and consolidated DSL subscribers had
grown 5.5% and 18.1%, respectively, over that same twelve-month
period. Mr. Brown concluded his remarks by stating that he was pleased
with the continued strong growth in broadband circuits, which he sees
as vital to the long-term success of the Company. He explained that
these broadband circuits are essential to establishing a critical link
to the Company's customer base that will serve as the platform on
which the Company will be able to offer the next generation of
enhanced services and applications.
North Pittsburgh Systems, Inc. has total assets of $156 million
and operates an integrated high-technology telecommunications business
in Western Pennsylvania providing competitive and local exchange
services, long distance, business phone systems and Internet services
through its subsidiaries, North Pittsburgh Telephone Company, Penn
Telecom, Inc. and Pinnatech, Inc. (d/b/a Nauticom).
In addition to historical information, this information may
contain forward-looking statements regarding events, performance,
financial trends and accounting policies that may affect the Company's
future operating results, financial position or cash flows. Such
forward-looking statements are based on assumptions and estimates and
involve risks and uncertainties. Various factors could affect future
results and could cause actual results to differ materially from those
expressed in or implied by the forward-looking statements. Factors
that could cause such a difference include, but are not limited to: a
change in economic conditions; government and regulatory policies (at
both the federal and state levels); unanticipated higher capital
spending for, or delays in, the deployment of new technologies; the
pricing and availability of equipment, materials and inventories;
changes in the competitive environment; and the Company's ability to
continue to penetrate its edge-out markets. This information should be
read in conjunction with the Company's periodic reports filed with the
Securities and Exchange Commission, the most recent of which is the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2005.
-0-
*T
NORTH PITTSBURGH SYSTEMS, INC.
SUMMARIZED FINANCIAL INFORMATION
(Unaudited)
(Amounts in Thousands - Except Per Share Data)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
--------------------- --------------------
2005 2004(a) 2005 2004(a)
---------- ---------- ---------- ---------
Total operating revenues $27,532 $27,091 $84,575 $81,907
Total operating expenses 20,655 20,286 61,519 60,963
---------- ---------- ---------- ---------
Net operating income 6,877 6,805 23,056 20,944
Other income, net 1,667 1,231 4,424 2,484
---------- ---------- ---------- ---------
Income before income taxes 8,544 8,036 27,480 23,428
Provision for income taxes 3,509 3,315 11,297 9,662
---------- ---------- ---------- ---------
Net income $5,035 $4,721 $16,183 $13,766
========== ========== ========== =========
Common shares outstanding 15,005 15,005 15,005 15,005
========== ========== ========== =========
Basic and diluted earnings
per share $.34 $.31 $1.08 $.92
========== ========== ========== =========
Dividends per share $.19 $.18 $.56 $.54
========== ========== ========== =========
*T
-0-
*T
September 30 December 31
2005 2004
------------ ------------
Cash and temporary investments $49,270 $42,569
Total assets 155,778 155,500
Total debt 22,368 24,682
Total shareholders' equity 94,628 86,861
(a)Certain prior year operating revenues and expenses have been
reclassified to conform to the current year's presentation. These
reclassifications did not affect the net operating income or net
income amounts.
*T