Read the full 10-Q here. Red highlights are mine.
Lightyear Network Solutions Reports Increased Revenue and Gross Margins for First Quarter 2011
Revenues Increase 65% to $18.6 Million
Gross Margins Increase 81% to $6.6 Million
Companies: Lightyear Network Solutions, Inc.
Press Release Source: Lightyear Network Solutions, Inc. On Friday May 13, 2011, 7:30 am EDT
LOUISVILLE, Ky.–(BUSINESS WIRE)– Lightyear Network Solutions, Inc. (OTCBB:LYNS.ob – News), a provider of telecommunications services to business and residential customers throughout North America, local and long distance service, wireless services, conferencing, enhanced Internet services and Voice over Internet Protocol (VoIP), today announced its financial results for the first quarter 2011 ended March 31, 2011. Results for the first quarter of 2011 include Lightyear’s acquisition of SouthEast Telephone, which was completed on October 1, 2010.
Financial highlights for the first quarter include:
- Revenue of $18.6 million for the first quarter 2011 increased 65.3% from $11.3 million in the year-ago quarter;
- Gross profit of $6.6 million increased 80.7% over the first quarter 2010;
- Gross profit margins increased 300 basis points for the quarter to 35.4% from 32.4% in the year-ago quarter;
- Loss from operations reduced to $581 thousand from $930 thousand in the year-ago quarter;
- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improved to a loss of $161 thousand compared with an EBITDA loss of $870 thousand in the year-ago first quarter; Net loss of $336 thousand compared with a net loss of $1.3 million in the year-ago first quarter;
- Net loss to common stockholders, including $375 thousand of cumulative preferred stock dividends, was $711 thousand, and compared with a net loss of $1.3 million in the year-ago first quarter;
- Net loss per common share, including the cumulative preferred stock dividends, was $0.03 for the quarter, and compared with a net loss of $0.09 per share for the year-ago first quarter.
Stephen M. Lochmueller, CEO of Lightyear said, “Our results for the quarter were favorably impacted by our acquisition of SouthEast Telephone, which has already had a significant impact on our financial results on revenue and gross profit. It provided us with additional network infrastructure that is enabling us to lower costs on our existing business. We have already implemented a number of steps that will provide us the ability to lower our operating costs. We expect to continue to see improvements in our operating efficiencies as we realize the full benefits of our integration with SouthEast Telephone.”
Mr. Lochmueller continued, “We currently have approximately 60,000 customers with a significant concentration in 5 states, providing us strong regional customer concentrations in contiguous operating areas, along with operating efficiencies. With a large number of customers in the rural markets, we believe we have a significant amount of upside potential to provide our portfolio of services.
“While the first quarter has historically been our weakest quarter, we produced several positive results. Since becoming a public company, this was our first year-over-year quarterly revenue growth in the core company, demonstrating that our sales and product approaches are correctly tuned for the market. This improved revenue base provides us a good foundation for the remainder of the year. Our first quarter was affected by several charges totaling approximately $477 thousand that were taken in the first quarter, and which we do not expect to recur,” he continued.
Mr. Lochmueller concluded, “We are pleased with our company’s progress and expect continued growth in 2011.”
About Lightyear Network Solutions, Inc.
Through its wholly owned subsidiaries, Lightyear Network Solutions provides telecommunication services to large, medium and small businesses and to residential consumers throughout North America. Lightyear’s product offerings include local PRI and digital T1, enhanced Internet services, MPLS, Ethernet, Voice over Internet Protocol (VoIP), local and long distance service, and conferencing. Lightyear also offers wireless services to customers in the U.S. through wholesale contracts with multiple wireless providers. Lightyear built its own VoIP network in 2004 to enhance its product offerings and has partnered with some of the most prominent names in telecom including: Sprint, Verizon, AT&T, Level 3, PAETEC, CenturyLink, XO Communications, Intelliverse, BroadSoft, Cisco and ADTRAN. Lightyear Network Solutions is headquartered in Louisville, Ky. Additional information can be found at: www.lightyear.net.
This press release contains “forward-looking statements” for purposes of the Securities and Exchange Commission’s “safe harbor” provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Lightyear’s actual results to differ materially from those currently anticipated. These forward-looking statements may include, without limitation, statements about our marketing and acquisition opportunities, business strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, the risks and uncertainties which could cause our actual results to differ materially from those currently anticipated includes changes in market conditions, our ability to integrate acquired operations, the ability to obtain additional financing on satisfactory terms, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and risk factors described in our filings with the Securities and Exchange Commission. Lightyear undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
Jim Patterson, Founder/CEO, Mobile Symmetry: In 2012 we may see “the end of the post-paid market as we know it.”
Another HUMONGOUS PREPAID prediction!
Jim Patterson, CEO and co-founder of Mobile Symmetry, and former President of Wholesale Services for Sprint, yesterday wrote a blockbuster article, “Reality Check: Is 2011 the year of prepaid?” that gives us ANOTHER voice predicting the impending end of contract (“postpaid”) cell service.
He begins his article with (red highlights are mine):
“This time, it’s for real.” If I have heard that phrase once, I’ve heard it a thousand times this week to describe how the prepaid carriers are going to take over the low end of the wireless market. I wrote about the role of pre-paid carriers and did a fairly detailed analysis of the economics a little less than a year ago. The economics certainly make sense at the individual (and, in the case of MetroPCS Communications Inc., at the family) level.
But can the prepaid carriers (in this case, Wal-Mart/Tracfone Wireless Inc., MetroPCS, Leap Wireless International Inc./Cricket Communications Inc., and the divisions of T-Mobile USA Inc. and Sprint Nextel Corp.) really make an impact for the entire year? Can they hold on to gains made in a particular quarter (usually the fourth or the first) through subsequent quarters? And, with handset availability being driven to new heights (MetroPCS now carriers a Samsung Electronics Co. Ltd. Galaxy handset for $299), and the Chinese vendors more than willing to develop Android handsets for double-digit retail (subsidized) price points, can this part of the wireless industry really shine?
The short answer is no. 2011 is a set-up, not a breakout year. 2012 is – “for real!”
He notes the significant growth of prepaid last year – “almost two-times post-paid”:
“The most important thing about the prepaid segment is that it’s growing. Sprint Nextel added 2.1 million net prepaid subscribers in the past year; MetroPCS 1.6 million; T-Mobile USA 670,000; and Leap just over 500,000. Wal-Mart, which usually counts in the carrier wholesale/reseller figures, added at least 2 million customers in the past year. With Wal-Mart, it looks like 6.9 million prepaid net additions in the past year, versus 3.6 million postpaid. Bottom line: Lots of growth, almost two-times post-paid.”
And he touched on the increase in revenue per user and profitability, pointing out that, “Average revenue per user … is steady to growing for each carrier as smartphones become a larger part of the sales mix.”
Then Jim maps out the industry’s looming upgrade to smartphones, which is where the real excitement begins:
“The four prepaid providers plus Wal-Mart have about 46 million subscribers, and about half of them will be upgrading to a new device (likely Android) this year. That’s 23 million total new devices sold in the prepaid channel, and 12 million of those are Android smartphones. AT&T Mobility and Verizon Wireless have 152 million postpaid retail subscribers, and half of them will be out of contract this year. Judging from the latest reports, about two-thirds of the base that is upgrade eligible will upgrade to a smartphone.”
His “46 million” prepaid number sounds low, or sounds like a number for 2010, but we win either way: if the number is ONLY at 46M, that’s more market share switching soon for us to take! And he’s predicting half of prepaid users “will be upgrading to a new device (likely Android) this year.” That’s incredible and right in line with our strategy.
He follows that with, “Two years ago, the thought of having a postpaid smartphone for free was preposterous. Now you can go to T-Mobile USA and get a Samsung Fascinate with a 1 Ghz processor or a BlackBerry Bold for free … We saw similar offers on the Verizon Wireless Droid product line through Wal-Mart.com in December. Is it impossible to think about a $49 Android smartphone from MetroPCS or Leap with a decent (600 MHz or 800 Mhz) processor for December? How about a 4G model for $199 in 2012?” Again, that is LightYear’s exact strategy, to offer a great selection of Android smartphones at a lower price, and then lock up customers with an unbeatable data plan.
“If the consideration is a $199 premium smartphone from Verizon Wireless or Sprint Nextel vs. a $199 1 Ghz smartphone from MetroPCS, will the decision be difficult for an individual user? Bottom line: The closer the “walk out costs” converge between postpaid and prepaid offerings, the higher the probability of success for the prepaid providers.”
I personally think Sprint has already prepared for this, as LightYear this month adds the Sprint fone lineup to the LightYear store! This will be a revolutionary step that will catapult our growth.
Jim ends his article by saying, “… until 2012, we have the year of Android. 2012 could be a “dual year” with both Apple products and LTE. That “two-fer” could spell the end of the post-paid market as we know it.”
Echoing my predictions beautifully …
Reality Check: Is 2011 the year of prepaid?
May 10 2011 – 6:00 am ET | Jim Patterson, founder and CEO, Mobile Symmetry | RCR Wireless News
ChannelPartnersOnline.com: T-Mobile USA Q1 2011 = 372,000 prepaid additions, 471,000 contract losses
Here’s the only quote you need from the article below:
“Although T-Mobile USA reported 372,000 prepaid additions, the company lost 471,000 customers on contract, triple the number in the period a year ago (118,000). T-Mobile has lost 789,000 customers on contract over the last two quarters.”
T-Mobile USA said, “The year-on-year increase in contract churn was driven by continued competitive pressures in the US wireless industry,” but I’m sorry, people are not fleeing contract because of “competitive pressures,” they’re fleeing to MUCH LOWER PRICED PREPAID PLANS! This is crystal-clear, but the Corp. guys won’t admit it. Because T-Mobile is being swallowed by AT&T, their numbers are worse than the other big boys, but the trend is still obvious. Red highlights and bolding are mine.
T-Mobile USA Loses Nearly 100,000 Subscribers
May 6, 2011
T-Mobile USA, the mobile operator that is planning to merge with AT&T, continues to struggle after losing nearly 100,000 subscribers in the first quarter.
T-Mobile USA lost 99,000 customers, more than triple the number of losses in the fourth quarter of 2010 (23,000).
But the company’s parent, Deutsche Telekom of Germany, vowed to continue fighting until AT&T acquires the fourth-largest U.S. mobile operator.
“Our deal with AT&T … will not change the focus of our US business,” said Rene Obermann, CEO of Deutsche Telekom. “Until the closing of the deal, T-Mobile will continue to challenge its competitors and compete aggressively in the US market.”
Bellevue, Wash.-based T-Mobile now serves 33.63 million customers, down from 33.71 million subscribers a year ago.
Although T-Mobile USA reported 372,000 prepaid additions, the company lost 471,000 customers on contract, triple the number in the period a year ago (118,000). T-Mobile has lost 789,000 customers on contract over the last two quarters.
Contract churn improved sequentially to 2.4 percent from 2.5 percent in the fourth quarter of 2010, but customer turnover was significantly higher than in the period a year ago (2.2 percent).
“The year-on-year increase in contract churn was driven by continued competitive pressures in the US wireless industry,” T-Mobile USA said.
Android: The World Just Can’t Get Enough
May 4, 2011
The Android operating system once again topped the smartphone market in the first three months of the year, and for the second quarter in a row, according to research firm Canalys.
With 35.7 million units shipped, Android increased its global hold on the market to 35 percent, Canalys said. Asia Pacific became the largest region, with year-on-year growth of 98 percent, for a total of 37.3 million units. That put Asia Pacific ahead of Europe, the Middle East and Africa for the first time since 2007’s third quarter.
The United States remained the largest country for smartphone shipments, with Apple achieving a share of 31 percent and growth of more than 150 percent year-on-year. Volumes were boosted significantly by shipments of the iPhone 4 with Verizon Wireless, Canalys said. However, Android remained the leading smartphone platform in the United States for the third consecutive quarter, with a 49 percent share. And HTC became the No. 1 Android-based handset in the United States and the second-place smartphone vendor in the country.
Indeed, the Android platform is boosting several manufacturers’ fortunes worldwide.
“HTC, Samsung, LG, Motorola and Sony Ericsson drove Android shipments in the first quarter, with each vendor shipping well over 3 million devices,’ said Pete Cunningham, Canalys principal analyst.
Meantime, smartphones continue to dominate the handset sector. Overall shipments worldwide grew 83 percent to 101 million units. Nokia held on to its leadership position, staying ahead of RIM in EMEA and Apple in Asia Pacific. In fact, Asia Pacific became Nokia’s largest region, accounting for 53 percent of its overall shipments.
Nokia, Apple, RIM, Samsung and HTC were the top five global smart phone vendors, just as in the fourth quarter of 2010.
This Antipaper.net site reached 40,000 visitors today. That’s about a month before it turns two-years-old on June 9.
Thanks for visiting!
Two weeks left in our amazing Spring Fever Sale, thru May 20. Save $25 to $100 on EVERY phone in Lightyear’s inventory by porting (transferring) your existing number to Lightyear AND getting our $59.99 Truly Unlimited Talk, Text, and Web Plan on the Sprint nationwide, 3G network! Shop here.
- $199.99 for the brand-new Android Sanyo Zio. It’s our hottest phone and it’s getting rave reviews from our rep force. This thin, durable, large-screen phone was $274.99 from us just two months ago.
- $94.99 for the brand-new Samsung Seek, which has a large touch-screen, a pull-out keyboard, and surfs the internet. Two months ago we offered the Seek for $164.99. Sprint currently sells it without contract for $229.99, Amazon does the same for $199.99, and BoostMobile has it for $149.99.
- $24.99 for the brand-new Sanyo 2700 Black (Pink is ONLY $19.99). BoostMobile sells the exact same phone (they call it the “Juno”) for $79.99. Two months ago we sold it for $124.99.
- $99.99 for the Samsung Instinct m800, new, out-of-the-box. This is the device that two years ago challenged the iPhone. Now it’s under $100.
- $314.99 for the Android HTC Hero, new, out-of-the-box. This is the predecessor to the EVO, which we’ll have in June. The price is about as low as price you’ll find a Hero for.
- $49.99 for the Blackberry Curve 8330 Gray, Certified Pre-Owned. If you’ve gotta have a Blackberry and you’re low on funds, here you go!
- $9.99 LG Rumor 2, Certified Pre-Owned, one of the best prices in the history of Lightyear Wireless. Don’t need to surf the internet, or want to get a kid a phone at a super-low price?
- $9.99 Sanyo Katana 2 Pink, new, out-of-the-box. People still love this camera flip-phone.
After the first month, if you want to downgrade to one of our lesser plans, you can do that. See all our phones & plans.
FREE SERVICE – HOW SIMPLE?
“You+5=Free!” Refer 5 people who get service and yours is free every month those 5 pay their bill. A friend of mine just switched to LightYear, and he said his wife and son will get service when their contracts end soon, and then he said he knows a couple friends who need to save money on their bills. That’s 4 right there, and all he needs is one more for free service every month! Read it with your own eyes.
Not only will Lightyear Wireless SAVE customers more than 50% off AT&T and Verizon’s rates on unlimited talk/text/web, we also give customers a GREAT phone at a GREAT price!
Anyone who’s paying anywhere near $100 a month on their cell bill is crazy not to switch to our $59.99 plan – that would save you approximately $500 per year! With No Contract, No Commitment, No Deposits, and No Hassles, you also can send unlimited international texts and tether your computer, all for $59.99! No other company gives you all that for such a low price, and you can reduce your cost to FREE simply by referring five friends to Lightyear.
Below are two fascinating videos from Google. I love the content (stats), but it’s cool to look at the transformation happening, and the PACE of that change, too.
Download your complimentary copy of the Google Mobile Ads Marketing Team study, “Mobile Movement: Understanding Smartphone Users” at the new Think Insights with Google site.
In the PDF on page 34, there’s one stat I can’t ignore: of the “Motivations for Mobile Search As a Result Of …”, the #1 reason was “Word of Mouth” from “Friends/Family” at 51% and “Social Networking” climbing quickly at 38%.
Our world will be so dramatically different by 2015 …