News Press Releases

LICT Corporation Reports Preliminary Fourth Quarter and Full Year 2022 Results

LICT | March 14, 2023

LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports unaudited, financial results for the quarter ended December 31, 2022.

The Company wishes Kevin Errity well upon his departure and success in his future endeavors.

CHARITABLE CONTRIBUTIONS - LICT has completed the recent Shareholder Designated Contribution Program. The current program resulted in $1.1 million of designated contributions for 2022. Equally important, is that since the inception of the program in 2016, LICT has contributed $8.4 million to designated 501 (c) 3 organizations chosen by shareholders.

RESULTS - FULL YEAR

Revenues in 2022 were $131.3 million, an increase of $2.2 million, compared to $129.1 million in 2021. EBITDA in 2022 was $57.6 million versus $57.8 million in 2021.

Earnings per share for the full year of 2022 were $1,311 per share as compared to $1,368 per sharefor the prior year.

RESULTS - 4TH QUARTER

Fourth quarter 2022 revenues totaled $33.1 million compared to $32.5 million for the corresponding quarter in 2021. EBITDA was $14.4 million in the fourth quarter of 2022 as compared to $14.0 million in 2021.

Non-regulated revenues for the fourth quarter of 2022 increased 4.6%, to $18.1 million from the prior year’s fourth quarter $17.2 million. Non-regulated EBITDA was $7.5 million, versus the $6.9 million earned in the same period last year. The increase in revenues was driven by the sale of broadband services throughout our network.

Regulated revenues were $15.0 million in the fourth quarter of 2022 versus the prior year’s fourth quarter of $15.3 million. Regulated EBITDA was $6.9 million compared to $7.1 million last year.

Corporate costs were unchanged at $1.1 million in the fourth quarter of 2022 versus 2021.

Earnings per share for the fourth quarter of 2022 were $272 per share as compared to $291 per sharefor the prior year. Shares outstanding as of December 31, 2022 were 17,341.

BROADBAND INITIATIVES -

-ReConnect Loan and Grant Program - The ReConnect Loan and Grant Program of the US Department of Agriculture, furnishes loans and grants to provide funds for the costs of construction, improvement, or acquisition of facilities and equipment needed to provide broadband service in eligible rural areas. To date, the Company has accepted a $6.3 million ReConnect III grant, of which LICT has a 25% commitment, from the United States Department of Agriculture (USDA) to build fiber to additional customers in Kansas. In addition, LICT recently accepted 100% grants in New Mexico, California and Michigan for a total of $62.0 million. We are awaiting announcements by USDA on the balance of our ReConnect III applications.

-Affordable Connectivity Program – LICT continues its participation in the FCC Affordable Connectivity Program (“ACP”) to support the Company’s ongoing commitment to provide affordable broadband to the rural communities we serve and help close the digital divide. This program provides consumers who are eligible, a broadband credit of up to $30 per month (up to $75 for households on Tribal Lands) towards their qualifying internet plan. We offer a variety of broadband options that qualify under the ACP.

-Alternative – Connect America Cost Model (“A-CAM”) Program – The A-CAM program is designed to increase broadband speed and expand the deployment of broadband capabilities throughout the nation’s rural areas with mandatory build-out requirements for receipt of support. LICT is actively building and expanding broadband facilities.

CAPITAL EXPENDITURES – In the fourth quarter of 2022, capital expenditures from operations increased by $9.0 million to $17.4 million. Full year 2022 capital expenditures from operations increased by $17.1 million to $48.3 million versus $31.2 million in 2021. Our capital spending enables us to offer enhanced broadband speeds, increase the overall fiber route miles in our network and meet and exceed our A-CAM requirements.

SHARE REPURCHASES – During the twelve months ended December 31, 2022, the Company repurchased 530 shares (3.1% of shares outstanding) for $12.3 million, with an average price of $23,204 per share. On December 31, 2022, 17,341 shares were outstanding, with 795 shares still available for authorized repurchase with a target of 40% of our Net Income.

AUREON INVESTMENT – 2022 investment income includes a dividend of $0.5 million from a minority investment in Aureon versus $0.2 million in the prior year. We carry this investment at our historical cost of $3.0 million, however, LICT’s share of the book value of the investment is estimated to be closer to $9.0 million.

STRATEGIC INITIATIVES – Sound Broadband, LLC, a wireless company providing 5G wireless services within LICT’s footprint and beyond, was formed in the fourth quarter of 2022. LICT continues the process of finalizing the spinoff of our Michigan operation as well as evaluating acquisitions and other growth opportunities.

OPERATING STATISTICS/BROADBAND DEPLOYMENT – As of December 31, 2022, LICT owns and operates 6,703 miles of fiber optic cable, 11,258 miles of copper cable, 831 miles of coaxial cable and 85 towers. The Company’s broadband penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 98.6%, as compared to 93.3% at December 31, 2021. During 2022, the Company’s broadband lines grew by 4.6% to 46,000 units. This increase offsets our voice and video line losses for the year:

	December 31,	December 31,		Percent
	December 31,	December 31,	Increase	Increase
	2022	2021	(Decrease)	(Decrease)
Broadband lines	45,966	43,939	2,027	4.6%
Voice Lines
ILEC	22,655	23,644	(989)	(4.2%)
CLEC	6,943	7,043	(100)	(1.4%)
Total	29,598	30,687	(1,089)	(3.5%)
Video Subscribers	3,670	4,117	(447)	(10.9%)
Revenue Generating Units	79,234	78,743	491	0.6%

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 anticipated financial results, financing, capital expenditures 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.lictcorp.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. Such forward-looking information is subject to uncertainties, risks and inaccuracies, which could be material.

LICT Corporation is a holding company with subsidiaries in broadband and other telecommunications services that actively seeks acquisitions, principally in its existing business areas.

LICT Corporation is listed on the OTC Pink® under the symbol LICT. For further information visit our website at http://www.lictcorp.com.


LICT CORPORATION			Exhibit A
Statements of Operations, Balance Sheet and EBITDA			Page 1 of 3
(In Thousands, Except Per Share Data)

STATEMENTS OF OPERATIONS
	Three Months Ended		Twelve Months Ended
	December 31,		December 31,
	2022	2021	2022	2021

Revenues	$33,131	$32,544	$131,293	$129,160
Cost and Expenses:
Cost of revenue, excluding depreciation	15,688	15,395	61,579	59,017
Selling, general and administration	3,019	3,153	12,154	12,302
Corporate Office Expenses	1,143	1,111	4,676	3,854
Charitable Contributions	910	922	1,051	1,105
Depreciation and amortization	5,380	4,640	20,034	18,851
Total Costs and Expenses	26,140	25,221	99,494	95,129

Operating profit	6,991	7,323	31,799	34,031

Other Income (Expense)
Investment income	204	12	1,224	803
Interest expense	(601)	(362)	(1,617)	(1,343)
Equity in earnings of affiliated companies	7	19	109	273
Other	(43)	28	(142)	14
	(433)	(303)	(426)	(253)

Income Before Income Tax Provision	6,558	7,020	31,373	33,778
Provision for income taxes	(1,829)	(1,811)	(8,366)	(8,954)
Net Income	$4,729	$5,209	$23,007	$24,824

Capital Expenditures from Operations	$17,410	$8,429	$48,335	$31,192
Building Acquisition	$ -	$ -	$ 1,750	$ -
Total Capital Expenditures	$17,410	$8,429	$50,085	$31,192


Weighted Average Shares- Basic and Diluted	17,397	17,924	17,551	18,141
Actual shares outstanding at end of period	17,341	17,871	17,341	17,871

Earnings Per Share Basic and Dilutive	$272	$291	$1,311	$1,368

See EBITDA on page 3

LICT CORPORATION		Exhibit A
Statements of Operations, Balance Sheet and EBITDA (continued)		Page 2 of 3
(In Thousands)
	December 31, 2022	December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$27,257	$42,466
Accounts receivable, less allowances of $152 and $169, respectively	7,609	7,180
Material and supplies	11,307	8,212
Deposit	-	20,000
Prepaid expenses and other assets	4,490	4,068
Total current assets	50,663	81,926

Property, plant, and equipment	152,218	123,473

Goodwill	48,048	48,048
Other intangibles	29,712	16,392
Investments in and advances to affiliated entities	2,318	3,822
Other assets	13,307	10,476
Total assets	$296,266	$284,137

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Trade accounts payable	$8,962	$4,388
Accrued interest payable	11	154
Accrued liabilities	10,666	7,720
Current maturities of long-term debt	372	25,577
Total current liabilities	20,011	37,839

Long-term debt	38,252	21,748
Deferred income taxes	28,148	25,025
Other liabilities	8,943	9,323
Total liabilities	95,354	93,935

Total shareholders' equity	200,912	190,202
Total liabilities and shareholders’ equity	$296,266	$284,137

LICT Corporation
Statements of Operations, Balance Sheet and EBITDA (continued)				Exhibit A
(In Thousands, Except Per Share Data)				Page 3 of 3

	SELECTED BALANCE SHEET DATA	December 31,	December 31,
		2022	2021

	Cash and Cash Equivalents	$27,257	$42,466

	Deposit with the FCC for Auction	-	20,000

	Long-Term Debt (including current portion)	(38,624)	(47,325)

	Net (Debt) Cash	($11,367)	$15,141

	Shareholders' Equity	$200,912	$190,202

	Shares Outstanding	17,341	17,871


EBITDA

EBITDA is an established measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures. We believe that EBITDA trends are a valuable indicator of whether our operations can produce sufficient operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.

EBITDA is calculated as Operating Profit plus corporate office expenses, depreciation and amortization expense and charitable contributions.

	Three Months Ended		Twelve Months Ended
	December 31,		December 31,
	2022	2021	2022	2021
EBITDA Reconciliation:
Operating Profit	$6,991	$7,323	$31,799	$34,031

Additions:
Corporate expenses	1,143	1,111	4,676	3,854
Charitable contributions	910	922	1,051	1,105
Depreciation and amortization	5,380	4,640	20,034	18,851
EBITDA from Operations	$14,424	$13,996	$57,560	57,841