Regional telecom carrier Iowa Telecom on July 29 reported 2Q 2009 total revenue of $58.819 million and net income of $2.921 million–0.08 per diluted share as management continues to grow the company by expanding into neighboring Minnesota.
The 2Q total results translate into a 1% rise in revenue as compared to 2Q 2008 but a fall of nearly 45% in net income. Operating revenue totaled $58.8 million and operating income $12.4 million while EBITDA came in at $28.2 million.
Iowa Telecom president and CEO Alan L. Wells put a bright shine on things. “We are very pleased that our business continues to deliver solid revenues and free cash flows, despite a challenging macro economic environment,” he commented. “We believe our results reflect the success of our bundling strategy, as the number of access lines lost during the quarter was the lowest since early 2007. Our DSL product growth continued, as we added 900 new customers in the quarter.
Iowa Telecom’s total telephone access lines fell 1.3% quarter-to-quarter but rose 0.9% year-to-year, to 235,500. ILEC lines dropped 1.4% both on year-to-year and sequential quarterly bases to 203,200. CLEC lines rose 18.3% year-to-year but fell 0.3% on a quarterly basis to 32,300.
Growth in video subscribers and, to a lesser degree, high-speed DSL subscribers, was a highlight of Iowa Telecom’s 2Q report. DSL subscribers rose 17% year-to-year and 1.2% quarterly to 79,100. Video subscribers rose 75.8% year-to-year and 5.1% quarterly, to reach 22,500.
Long distance subscribers increased to 143,200, a 2.9% year-to-year gain and 1.2% decline quarter-to-quarter. The carrier’s Dial-up Internet subscriber base decreased 9.3% on a sequential quarterly basis and 27.1% year-to-year, to 13,700.
Looking to expand into neighboring Minnesota, Iowa Telecom completed its acquisition of the assets of Sherburne Tele Systems during 2Q. The Sherburne acquisition includes 26,000 ILEC and 14,200 CLEC access lines in Minnesota.
“On July 1, 2009, we closed our acquisition of the assets of Sherburne Tele Systems, Inc., a telecommunications company serving nine communities adjacent to the Minneapolis/St. Paul Metropolitan area, and headquartered just 30 miles from our existing Lakedale operations. We expect the transaction to be cash flow accretive on a per share basis, and are excited about the opportunity to grow our operations in the state,” Wells said.
Adding to their growing infrastructure in Minnesota, Iowa Telecom recently announced an agreement to acquire another 2,000 CLEC access lines by buying WHComm, as well as a 2,500-mile part-owned, part-leased pan-Minnesota fiber optic network by acquiring the interests of New Ulm Telecom in Iowa Telecom’s SHAL LLC, SHAL Networks, and EN-TEL Communications LLC subsidiaries.
