Second quarter revenues were $26.2 million, up four percent from $25.2 million in the same period a year earlier. Operating income increased 5.7 percent to $5.7 million in this year’s second quarter from $5.4 million last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 13.6% over the second quarter of 1999, to $9.6 million.
HickoryTech’s customer base grew 20.9 percent over the same quarter one year ago, totaling approximately 113,000 at the close of the second quarter this year. The total includes 3,400 customers added since the first quarter of this year.
Robert D. Alton, Jr., HickoryTech’s Chairman and CEO said, We have reached significant levels of customers in five key communications businesses, approximately 63,000 traditional telephone customers, more than 6,000 telephone customers in competitive markets, more than 15,000 long distance customers, more than 22,000 cellular customers and almost 7,000 Internet customers. Our progress in obtaining market share is on target.
On May 15, 2000, HickoryTech announced its company-wide brand name unification and internal staff reorganization under the HickoryTech brand. It is a tribute to the consistency and strength of our business and customer relationships that we could reorganize, clarify our brand name, and still continue producing a positive trend in financial performance, Alton said.
In June, the Frank Russell Company announced that HickoryTech was to be included in its Russell 2000 Index. As a result, HickoryTech stock has experienced increased trading volumes. Alton said, Inclusion in the widely known Russell Stock Index gives institutional investors easier access to HickoryTech shares. We show up on more market trading screens now than ever before.
Operating revenues increased $1,017,000, or 4.0 percent, over the comparable quarter of 1999, and were $2,933,000 or 6.2 percent higher than 1999 for six months ended June 30. All business sectors reported increases for the quarter except Enterprise Solutions (formerly Communications Products). Sales of equipment have been lagging for the independent distributor industry as a whole.
Operating income increased $309,000 or 5.7 percent for the second quarter of 2000 due in part to control of cash expenses to only a 0.2 percent increase. Net income was $2.1 million or 15 cents per share vs. $7.6 million or 56 cents per share in the second quarter of 1999, which included a one-time gain of $5.2 million net of tax. Excluding the one-time gain, net income for the second quarter of 1999 would have been $2.4 million or 18 cents per share. The second quarter of 2000 had a $233,000 after-tax extraordinary charge related to early extinguishment of term debt. This item was offset by a non-recurring gain related to final payment of the 1998 sale of the business the Company formerly ran in Allen, Texas. The net effect of these two items had no effect on the 15 cent earnings per share in the second quarter of 2000. The decrease in profitability before one-time gains and extraordinary items is due primarily to higher depreciation and interest costs. The Company’s heavier expenditures on capital assets is in its sixth successive quarter, and is a key element of its growth strategy.
We are pleased with our overall performance and that our EPS exceeded analyst expectations of 14 cents per share diluted, Alton said. Prospects for continued growth are better than ever.
