Lightyear Network Solutions Reports Net Income for Q3 2011

Published on Tuesday, 15 November 2011 07:34 Written by TradersHuddle Staff

LOUISVILLE, Ky.-( Business Wire )-

Lightyear Network Solutions, Inc. (the “Company”) (OTCBB: LYNS), an established provider of data, voice and wireless telecommunication services to business and residential customers throughout North America, today announced its financial results for the quarter ended September 30, 2011. Results for the third quarter of 2011 include Lightyear’s acquisition of SouthEast Telephone, which was completed on October 1, 2010.

Financial highlights for the Third Quarter include:

• Net income of $103 thousand for the third quarter 2011 compared with a net loss of $222 thousand in the second quarter 2011 and a net loss of $828 thousand in the year-ago third quarter;
• Gross profit increased 1.2%, or $78 thousand, compared with the second quarter of this year;
• SGA (Selling, General and Administrative) expenses were reduced 6.1% compared with the second quarter 2011;
• Loss from operations was reduced to $45 thousand from $250 thousand in the second quarter 2011 and from $987 thousand in the year-ago third quarter;
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improved to $515 thousand compared with an EBITDA of $178 thousand in the second quarter of this year and a loss before interest, taxes, depreciation and amortization of $935 thousand in the year-ago third quarter;
• Net loss per common share, including the cumulative preferred stock dividends, was $0.01 compared with a net loss of $0.06 per share for the year-ago third quarter.

“Lightyear continues to make significant strides forward as we again had several encouraging financial trends in the third quarter,” said Stephen M. Lochmueller, Lightyear’s Chief Executive Officer. “One of the more important indicators was that the Company recorded net income compared with a net loss in the year-ago quarter, and we were EBITDA positive in the quarter compared with a net loss last year. Lightyear also had some encouraging quarter-to-quarter figures, as our gross profit margin increased 1.2%, and our SGA operating expenses were reduced 6.1%.”

“We believe that our improving financial results, along with our recently announced redemption of convertible preferred stock, positions Lightyear well for the future,” Mr. Lochmueller added. “Had the stock redemption been recorded as of January 1, 2011, the net loss per share would have been reduced by $.02 per share during the first nine months of 2011. We are pleased with the progress our Company is making, and we believe we’ll continue to see improvement in our financial results this year.”

Earnings Conference Call set for Nov. 22 at 11 a.m. EST

Management of Lightyear will host an earnings conference call on Tuesday, Nov. 22, 2011, at 11 a.m. EST. Those who wish to participate in the conference call may dial 877-597-2663 (conference code: 5351842) from the United States; international callers may dial 678-809-2332.

An audio replay and transcript of the conference call will be available. For details, visit www.lightyear.net.

About Lightyear Network Solutions, Inc.

Through its wholly owned subsidiaries, Lightyear Network Solutions, Inc. 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, Windstream, CenturyLink, tw telecom, XO Communications, Cisco and ADTRAN. Lightyear Network Solutions is headquartered in Louisville, Ky. Additional information can be found at: www.lightyear.net.

Forward-Looking Statements

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.

Lightyear Network Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
							September 30,				December 31,
							2011				2010
							(unaudited)
Assets
Current Assets:
Cash							$	42,674			$	1,009,209
Accounts receivable, net								5,192,455				6,150,424
Vendor deposits								1,927,439				1,686,911
Inventories, net								495,990				333,555
Deferred tax asset - current portion, net								-				56,939
Prepaid expenses and other current assets								2,358,107				2,287,875
Total Current Assets								10,016,665				11,524,913
Property and equipment, net								7,459,820				7,202,904
Intangible assets, net								2,352,230				2,763,666
Other assets								-				311,482
Total Assets							$	19,828,715			$	21,802,965
Liabilities and Stockholders' Deficiency
Current Liabilities:
Accounts payable							$	7,451,084			$	7,160,116
Interest payable - related parties								65,283				113,818
Accrued agent commissions								547,696				569,833
Accrued agent commissions - related parties								2,757				25,036
Deferred revenue								485,529				2,017,188
Other liabilities								1,898,073				1,886,224
Other liabilities - related parties								92,334				97,383
Short term borrowings								-				320,428
Current portion of notes payable								861,246				529,899
Current portion of capital lease obligations								266,482				348,178
Total Current Liabilities								11,670,484				13,068,103
Notes payable, non-current portion								3,558,668				2,227,987
Capital lease obligation, non-current portion								811,547				985,871
Obligations payable - related party, non-current portion								6,250,000				7,250,000
Deferred tax liability, non-current portion, net								326,683				507,422
Total Liabilities								22,617,382				24,039,383
Commitments and contingencies								-				-
Stockholders' Deficiency:
Convertible preferred stock, $0.001 par value; 9,500,000 shares authorized; 9,500,000 shares issued and outstanding at
September 30, 2011 and December 31, 2010; aggregate liquidation preference of $21,232,110 at September 30, 2011								9,500				9,500
Common stock, $0.001 par value; 70,000,000 shares authorized; 22,089,888 and 20,306,292 shares issued and outstanding at
September 30, 2011 and December 31, 2010, respectively								22,090				20,306
Notes and receivables from affiliate								(14,049,887	)			(13,478,920	)
Additional paid-in capital								9,369,630				8,898,069
Retained earnings								1,860,000				2,314,627
Total Stockholders' Deficiency								(2,788,667	)			(2,236,418	)
Total Liabilities and Stockholders' Deficiency							$	19,828,715			$	21,802,965

Lightyear Network Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
							For The Three Months								For The Nine Months
							Ended September 30,								Ended September 30,
							2011				2010				2011				2010
Revenues							$	17,409,514			$	11,588,424			$	53,886,561			$	34,128,989
Cost of revenues								11,089,139				7,999,755				34,735,187				23,315,583
Gross Profit								6,320,375				3,588,669				19,151,374				10,813,406
Operating Expenses
Commission expense								1,544,955				1,222,056				4,581,358				3,590,420
Commission expense - related parties								13,734				54,761				(2,834	)			192,113
Depreciation and amortization								437,182				52,387				1,282,970				169,761
Bad debt expense								195,429				213,925				698,937				930,866
Transaction expenses								-				324,975				-				753,898
Selling, general and administrative expenses								4,173,910				2,707,335				13,466,738				8,144,638
Total Operating Expenses								6,365,210				4,575,439				20,027,169				13,781,696
Loss From Operations								(44,835	)			(986,770	)			(875,795	)			(2,968,290	)
Other Income (Expense)
Interest income								8,151				7,903				24,183				29,327
Interest income - related parties								192,664				284,306				570,967				388,718
Interest expense								(77,180	)			(16,374	)			(234,878	)			(35,129	)
Interest expense - related parties								(98,459	)			(116,404	)			(296,276	)			(417,409	)
Amortization of deferred financing costs								-				-				-				(68,423	)
Amortization of deferred financing costs - related parties								-				-				-				(69,345	)
Amortization of debt discount - related parties								-				-				-				(100,860	)
Change in fair value of derivative liabilities - related parties								-				-				-				83,097
Other income								122,304				(721	)			233,372				(612	)
Other expense - related parties								-				-				-				(260,000	)
Total Other Income (Expense)								147,480				158,710				297,368				(450,636	)
Income (loss) before income taxes								102,645				(828,060	)			(578,427	)			(3,418,926	)
Income tax benefit								-				-				123,800				-
Net Income (Loss)								102,645				(828,060	)			(454,627	)			(3,418,926	)
Cumulative Preferred Stock Dividends								(383,122	)			(383,124	)			(1,136,877	)			(712,110	)
Loss Attributable to Common Stockholders							$	(280,477	)		$	(1,211,184	)		$	(1,591,504	)		$	(4,131,036	)
Net Loss Per Common Share - Basic and Diluted							$	(0.01	)		$	(0.06	)		$	(0.07	)		$	(0.23	)
Weighted Average Number of Common Shares
Outstanding - Basic and Diluted								22,242,475				19,831,101				21,641,444				17,771,761

Non-U.S. GAAP Financial Measures

The Company has utilized the non-GAAP information set forth below as an additional device to aid in understanding and analyzing its financial results for the three months ended September 30, 2011, and the three months ended September 30, 2010. Management believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the Company’s business and facilitate meaningful comparison of the results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered a substitute for results that are presented in a manner consistent with GAAP.

A limitation of utilizing these non-GAAP measures is that GAAP accounting does in fact reflect the underlying financial results of the Company’s business. Therefore, management believes that the GAAP measures as well as the corresponding non-GAAP measures of the Company’s financial performance should be considered together.

A reconciliation of the Company’s GAAP net income for the third quarter of 2011 and the net loss in the third quarter of 2010 to its non-GAAP EBITDA for the same periods is set forth below:

							For The Three Months
							Ended September 30,
							2011				2010
Net Income (Loss)								102,645				(828,060	)
Depreciation and Amortization								437,182				52,387
Interest, Net								(25,176	)			(159,431	)
Earnings (Loss) Before Interest,
Taxes, Depreciation and Amortization							$	514,651			$	(935,104	)

Lightyear Network Solutions, Inc.Steve Rush, Marketing Manager, This e-mail address is being protected from spambots. You need JavaScript enabled to view it.