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Press Release LICT CORPORATION ANNOUNCES FOURTH QUARTER EARNINGS FOURTH QUARTER RESULTS During the fourth quarter of 2006, our revenues were $24.3 million, as compared to $25.4 million in the fourth quarter of 2005. Despite the $1.1 million revenue decline, EBITDA (earnings before interest, taxes, depreciation and amortization) generated during the fourth quarter of 2006 by our operating subsidiaries was $10.9 million which was the same as the fourth quarter results of 2005. The fourth quarter’s revenue decline is predominantly due to a regulatory issue at the federal level as one of the inter-state pools is generating earnings considerably below the authorized rate-of-return. This negatively impacted fourth quarter revenues and EBITDA by $0.9 million. The Company believes this effect will be corrected in the middle of 2007, and be non-recurring thereafter. In addition, another part of the revenue decline is related to intra-state regulated revenue and EBITDA declines of $0.4 million in Michigan as a result of state mandated extended areas calling. Cost savings initiatives have been implemented in the operations resulting in level operating EBITDA; however, lower costs in certain jurisdictions, in which revenues are cost-based, also resulted in lower revenues but increased EBITDA. As a result of these and other cost savings initiatives, EBITDA from our operations remained constant. Corporate office expenses were $1.0 million as compared to $0.9 million last year. FULL YEAR RESULTS While the First Quarter 2007 Financial Results are not available, the Company’s reiterates its expectation that Full Year Revenues for 2007 will be about $102 million, as compared to $98 million in 2006 and $94 million in 2005. Full Year EBITDA from operations for 2007 is expected to be $48 million, the same as 2006 and up from $44 million in 2005. Capital expenditures in 2007 are expected to be approximately $18 million, up from $14 million in 2006 and $10 million in 2005. The additional capital expenditures in 2007 are to expand the Company’s high-speed capabilities. At December 31, 2006, the Company’s DSL penetration was 16%, up from 11% at December 31, 2005, and the Company is looking to significantly increase DSL penetration during 2007. BALANCE SHEET/CASH FLOW At December 31, the Company had approximately $41 million in cash and $194 million in total debt. Due to numerous debt covenants and other restrictions, the Company does not have direct access to the majority of this cash which is held in various subsidiary companies. STRATEGIC INTIATIVES Our operating subsidiaries are in the process of developing and launching several wireless and wireline broadband opportunities which will provide an excellent complement to our strong RLEC base and to provide the communities that we serve with the telecommunication and data transport tools necessary to compete. In addition, the Company will continue to look at acquisitions that will strategically fit its long-term objectives. MONETIZATION OF ASSETS AND SPIN-OFF In addition and as previously announced, the Company is considering distributing certain assets by means of a spin-off into a newly formed company. The Company is also in the process of evaluating a financial plan to maximize shareholder value and provide a strong financial platform to fund growth objectives. The Company anticipates that as part of this plan, it will continue to repurchase shares of our common stock in the open market, subject to regulatory and financial constraints, and develop plans to harvest some assets and distribute others to our shareholders. * * * * This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, full year revenue, EBITDA and capital expenditure expectations, and anticipated financing and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by LICT on its website, www.lynchinteractivecorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful or that financial targets will be met, and such information is subject to uncertainties, risks and inaccuracies, which could be material. LICT Corporation is a holding company with subsidiaries in telecommunications and multimedia, and actively seeks acquisitions, principally in its existing business areas. LICT Corporation is listed on the Pink Sheets® under the symbol LICT. Its World Wide Web address is: http://www.lynchinteractivecorp.com/lict/. Contact: Robert E. Dolan Chief Executive Officer 914/921-8821 Release: 07-04 |
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