Monday, October 21, 2002
Aliant announces third quarter results
- net income up 32%
- free cash flow from operations strong at $134 million year to date
Saint John, NB - October, 21, 2002
- Aliant Inc. (TSX: AIT) today reported financial results for the third quarter ended September 30, 2002. On a consolidated basis, the company's net income increased by 32% to $44 million, up $11 million from $33 million during the same period last year. This translates into earnings per share of $0.30, a 30% increase over the $0.23 earnings per share of the third quarter of 2001.
"Aliant's financial performance is indicative of management's continued focus on increasing value for shareholders by sustaining strong earnings momentum and managing its operations and investments to improve positive free cash flow from operations1," said Jay Forbes, President and CEO of Aliant.
Revenue for the quarter amounted to $654 million, up 2% over the third quarter in 2001. Strong wireless and Internet revenue growth, which both increased 11% for the quarter, continued to offset declining local revenues that have been negatively impacted by CRTC rulings. Information technology revenues decreased by 3% for the quarter due to continued softening in the IT industry. Remote communications revenues increased 16% for the third quarter this year over 2001 due to growth in demand for INMARSAT high-speed data services by military and media customers. EBITDA2 (earnings before interest, taxes, depreciation and amortization) was $223 million, down 11% over the same quarter last year.
"Our continued cost management efforts, including our capital investment review program which allows us to balance immediate investment requirements while planning strategically for long-term growth, have enabled us to record the lowest quarter of capital investment year to date of $98 million, contributing to positive free cash flow from operations of $134 million year to date," said Mr. Forbes. "Overall, we have made significant strides in driving costs out of our organizations, and by the end of 2002, we anticipate our savings run-rate to reach $89 million as we continue to realize the benefits from our voluntary workforce reductions and as we progress with our alignment efforts with Bell Canada."
Earlier this month, Aliant announced that management expects 2002 consolidated revenues to be in the range of $2.63 billion to $2.67 billion or 1% to 3% growth over last year, and it anticipates EBITDA to be in the range of $940 million to $975 million, a decline of 4% to flat over 2001. The company's earlier guidance for earnings per share (EPS) of $1.60 to $1.90, an increase of between 22% and 45%3, remains unchanged. Estimates for capital expenditures for 2002 are between $415 million and $430 million, which in comparison to 2001, reflects a reduction in capital spending of between 11% and 8%. Free cash flow from operations for 2002, is expected to range from $160 million to $200 million.
Today, Aliant's Board of Directors declared a common share dividend of $0.25 per common share payable on December 30, 2002 to shareholders of record on December 15, 2002. The Board of Directors also declared a preferred share dividend of $0.340625 per preference share, payable on December 31, 2002 to shareholders of record on December 15, 2002.
Financial Highlights (For the period ended September 30)
Note: 2001 results have been restated to reflect new Canadian Generally Accepted Accounting Principles for foreign exchange gains and losses effective January 1, 2002.
| || Three Months || Nine Months |
| (000’s except per share amounts) || 2002 || 2001 (Restated) || % Growth || 2002 || 2001 (Restated) || % Growth |
| Total operating revenue || $654,068 || $640,501 || 2.1 || $1,969,824 || $1,937,707 || 1.7 |
| Net Income || $44,140 || $33,494 || 31.8 || $182,095 || $109,226 || 66.7 |
|Net income applicable to common shares ||$41,756 ||$31,110 ||34.2 ||$174,942 || $104,991 ||66.6 |
|Earnings per average common share ||$0.30 ||$0.23 ||30.4 ||$1.26 ||$0.78 ||61.5 |
|Average number of common shares outstanding ||139,568 || 135,975 ||2.6 ||138,719 ||135,216 ||2.6 |
Aliant is a recognized leader in communications and information technology. From its headquarters in eastern Canada, Aliant develops pacesetting telecommunications technologies and commercializes them for customers, and for export through partners worldwide. Aliant complements its industry-leading telecommunications business with strengths in developing information technology and knowledge services applications. The company's 10,200 employees collaborate to deliver the highest quality of customer service, while consistently demonstrating innovative capabilities that drive growth in existing and new markets. Aliant is a TSX 100 company with a market capitalization of approximately $4 billion. With strong operations, and an equally strong financial position, Aliant offers investors sound growth prospects. More information on Aliant may be found on our Web site at www.aliant.ca.
A conference call with analysts is scheduled for Tuesday, October 22 at 8:30 a.m. ET (9:30 a.m. AT, 10:00 a.m. NFT). The dial in number is 1-877-888-3490. Media are invited to attend in a listen mode. A replay of the analyst session can be heard between Tuesday, October 22, 2002, noon (ET) and Tuesday, October 29, 2002, 8:00a.m. (ET). To access the replay, dial 1-888-509-0082. A live audio webcast of the call will be available online at www.aliant.ca and at www.vcall.com.
1 Free cash flow from operations is defined by the company as cash and cash equivalents from (used in) operations, less capital expenditures.
2EBITDA is defined by the company as operating income plus depreciation and amortization expense. The company has included information concerning EBITDA because it believes it is used by certain investors as one measure of the company's financial performance. EBITDA should not be construed as an alternative measure of liquidity.
3 Based on 2001 earnings per share before required retroactive restatement of foreign exchange gains and losses.
Free cash flow from operations and EBITDA are not considered to be measures of financial performance under Canadian Generally Accepted Accounting Principles and such measures may not be comparable to similarly titled measures used by other companies.
This news release contains statements and information about potential future circumstances and developments. Such statements and information are qualified by any of the inherent risks and uncertainties surrounding future expectations generally and may differ materially from Aliant Inc.'s actual future experience. Aliant Inc. disclaims any intention or obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.
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For more information:
Aliant Investor Relations
Aliant Communications and Public Affairs