SOURCE: Warwick Valley Telephone Company

March 20, 2008 17:29 ET

WVT Communications Reports Financial Results for the Year Ended 2007

WARWICK, NY--(Marketwire - March 20, 2008) - Warwick Valley Telephone Company (the "Company," "WVT Communications") (NASDAQ: WWVY) announced today its financial results for the twelve months ended December 31, 2007. The Company increased its net income by 37% to $5,493,000 from $3,997,000 for the twelve-month period over the same period in 2006 as compared to a decrease in net income by 23% to $3,997,000 from $5,170,000 for the twelve-month period over the same period in 2005. The Company's net income for the twelve-month period in 2006 included $611,000 derived from the sale of an investment. That income did not recur in 2007. If it is excluded from the net income for the twelve months of 2006, the Company's net income for the comparable twelve-month period in 2007 increased by 53% over 2006.

Operating revenues decreased 5% from $25,236,000 to $24,042,000 for the twelve months ended December 31, 2007 compared to the same period in the prior year and decreased 8% from $27,342,000 to $25,236,000 for the twelve months ended December 31, 2006 compared to the same period in the prior year. While revenues have continued to decline compared to last year, the rate of decline has been somewhat lessened. The Company also extended the footprint of its video services and added High Definition TV during the year.

As a result of aggressive cost controls, operating expenses decreased a significant 13% from $29,030,000 to $25,140,000 for the twelve months ended December 31, 2007 and decreased 4% from $30,289,000 to $29,030,000 for the twelve months ended December 31, 2006 compared to the same periods in the prior year. These decreases derived largely from greater oversight of outside vendors and through improved operating efficiencies.

The Company has a long history in successful deployments of new technology. WVT Communications was one of the first rural telephone companies to install digital switching, to offer Internet access as an Internet Service Provider (ISP), and to offer video service as an alternative to cable TV companies. The Company has continued to invest in its operations to gain enhanced operating efficiencies and to enable the introduction of new services to our customers. During 2007, the Company upgraded its core network with new technology. The Company has continued to deploy capital to extend video services and higher speed broadband Internet to a greater number of our customers.

Commenting on the year end results, Duane Albro, the President and CEO, said, "2007 was a milestone year for our company as we delivered improvement in net income and the overall efficiency of the business. Our results were principally due to the diligence of our employees in the execution of our business plan. The focus during the year has been to continue our aggressive control of expenses in order to improve our operating margin, lower our cost structure to enhance our competitiveness, and to position our infrastructure and products for increased marketing and sales in 2008. We remain firmly committed to creating value for our shareholders by the successful planning and deployment of the above initiatives. We also remain committed to expansion of our Competitive Local Exchange Carrier (CLEC) activities through either building or acquiring the capability. WVT Communications continues to demonstrate that it is a great company with great customers and great employees... with a solid plan for growth."

About WVT Communications

WVT Communications is a leading voice, Internet, video and wireless provider servicing consumers and businesses in the lower Hudson Valley of New York and New Jersey. Additional information about the Company is available at www.wvtc.com.

Forward-looking Statements

This press release forward-looking statements as defined be the Private Securities Litigation Reform Act of 1995. These include statements concerning expectations, estimates, and projections about the industry, management beliefs and assumptions of Warwick Valley Telephone Company ("Warwick," "we," "us," or "our"). Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that difficult to forecast. Therefore, our actual results may materially differ from those expressed or forecasted in any such forward-looking statements. When considering these risks, uncertainties and assumptions, you should keep in mind the cautionary statements elsewhere in this report and in any document incorporated herein by reference. New risks and uncertainties arise from time to time and we can not predict those events or how they may affect us. For a more detailed discussion of the risks and uncertainties that may affect Warwick's operating and financial results and its ability to achieve its financial objectives, interested parties should review the "Risk Factors" sections in the Warwick's reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2007. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.


                      WARWICK VALLEY TELEPHONE COMPANY

                      CONSOLIDATED STATEMENTS OF INCOME




                                           For the Years Ended December 31,
                                           -------------------------------
                                             2007       2006       2005
                                           ---------  ---------  ---------
                                             ($ in thousands except share
                                               and per share amounts)
Operating Revenues:
  Local network service                    $   3,367  $   3,550  $   3,903
  Network access service                       8,150      8,648      9,711
  Long distance services                       3,618      3,498      3,586
  Directory advertising                        1,325      1,348      1,390
  Online services                              5,733      6,223      6,734
  Other services and sales                     1,849      1,969      2,018
                                           ---------  ---------  ---------
Total operating revenues                      24,042     25,236     27,342
                                           ---------  ---------  ---------
Operating Expenses:
  Plant specific                               4,415      5,388      4,911
  Plant non-specific:
    Depreciation & amortization                5,252      5,407      5,652
    Other                                      2,932      3,531      3,561
  Customer operations                          4,232      4,164      4,460
  Corporate operations                         5,750      8,153      8,717
  Cost of services and sales                   1,341      1,199      1,578
  Property, revenue and payroll taxes          1,218      1,188      1,410
                                           ---------  ---------  ---------
Total operating expenses                      25,140     29,030     30,289
                                           ---------  ---------  ---------
Operating (loss) income                       (1,098)    (3,794)    (2,947)
Other Income (Expenses):
  Interest income (expense), net                (213)       (30)      (210)
  Income from equity method investments,
   net                                         9,651      9,367     10,638
  Gain on sale of investment                      --        611        889
  Loss on write-down of investment                --         --       (705)
  Other income (expense), net                    (52)      (117)       291
                                           ---------  ---------  ---------
Total other income                             9,386      9,831     10,903
                                           ---------  ---------  ---------
Income before income taxes                     8,288      6,037      7,956
Income Taxes                                   2,795      2,040      2,786
                                           ---------  ---------  ---------
Net Income                                     5,493      3,997      5,170
Preferred Dividends                               25         25         25
                                           ---------  ---------  ---------
Income Applicable to Common Stock          $   5,468  $   3,972  $   5,145
                                           =========  =========  =========
Basic & Diluted Earnings per Share of
 Outstanding Common Stock                  $    1.02  $    0.74  $    0.96
                                           =========  =========  =========
Weighted Average Shares of Common Stock
 Outstanding                               5,351,780  5,351,780  5,359,862
                                           =========  =========  =========




                      WARWICK VALLEY TELEPHONE COMPANY

                       CONSOLIDATED BALANCE SHEETS




                                               December 31,   December 31,
                                                  2007           2006
                                              -------------  -------------

                                              ($ in thousands except share
                                                 and per share amounts)
                    ASSETS
Current Assets:
  Cash and cash equivalents                   $       5,849  $      12,296
    Accounts receivable -- net of allowance for
     uncollectibles -- $214 and $107 in 2007 and
     2006, respectively                               3,067          4,121
  Other accounts receivable                             152            262
  Materials and supplies                              1,591            957
  Prepaid expenses                                      769            695
  Deferred income taxes                                 119            228
                                              -------------  -------------
Total Current Assets                                 11,547         18,559
                                              -------------  -------------
  Property, plant and equipment, net                 35,791         37,087
  Unamortized debt issuance costs                        65             77
  Other deferred charges                                762            814
  Investments                                         8,276          3,733
  Other assets                                          210            179
                                              -------------  -------------
Total Assets                                  $      56,651  $      60,449
                                              =============  =============
     LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
  Accounts payable                            $         940  $       1,013
  Current maturities of long-term debt                1,519          1,519
  Advance billing and payments                          234            251
  Customer deposits                                     116            128
  Accrued taxes                                          80          1,221
  Pension and post retirement benefit
   obligations                                          929          1,435
  Other accrued expenses                              1,830          2,199
                                              -------------  -------------
Total Current Liabilities                             5,648          7,766
                                              -------------  -------------
  Long-term debt, net of current maturities           5,695          7,214
  Deferred income taxes                               3,334          4,490

  Long-term income taxes payable                        640             --
  Other liabilities and deferred credits                591            624
  Pension and postretirement benefit
   obligations                                        4,324          7,583
                                              -------------  -------------
Total Liabilities                                    20,232         27,677
                                              -------------  -------------
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 5,985,463
   shares                                                60             60
  Treasury stock -- at cost, 633,683 common
   shares                                            (4,748)        (4,748)
  Additional paid in capital                          3,487          3,487
  Accumulated other comprehensive loss                 (875)        (3,554)
  Retained earnings                                  37,995         37,027
                                              -------------  -------------
Total Shareholders’ Equity                           36,419         32,772
                                              -------------  -------------
Total Liabilities and Shareholders’ Equity    $      56,651  $      60,449
                                              =============  =============

Contact Information

  • Contact:
    WVT Communications
    Kenneth H. Volz
    Executive Vice President, Chief Financial Officer and Treasurer
    845-986-8080