High Point, NC — May 17, 2018 — NorthState, a fiber optic network, cloud and IT services provider, announced today its financial results for the first quarter ended March 31, 2018.
Summary of Selected Financial Data
Quarter Ended March 31, 2018 versus Quarter Ended March 31, 2017
- Consolidated net operating revenue (NOR) for the 2018 quarter totaled $30.1 million, up 3.7% compared to NOR of $29.1 million for the 2017 quarter.
- Total strategic revenue1 of $21.8 million for the 2018 quarter, up 5.6% compared to strategic revenue of $20.6 million for the 2017 quarter. Strategic revenue was partially offset by a decline of 1.1% in legacy voice revenue (from $8.5 million for the 2017 quarter to $8.3 million for the 2018 quarter). Strategic revenue comprised 72% of NOR for the 2018 quarter, compared to 71% of NOR for the 2017 quarter.
- Net income of $1.6 million for the 2018 quarter compared to $2.2 million for the 2017 quarter. 2018 net income reflects a $0.2 million negative impact resulting from the new revenue recognition standard ASC 606.
- Earnings per share (EPS) of $0.69 for the 2018 quarter compared to EPS of $0.99 for the 2017 quarter.
Chief Executive Officer Royster Tucker III commented, “Our first-quarter results demonstrate continued progress in NorthState’s ongoing transformation into a combined fiber network, cloud enablement and IT services company. Revenues from our fiber initiative and our business focused IT services grew year-over-year. Increases in content costs are reflected in our Costs of Goods Sold. Investments in our expanded sales organization and customer engagement teams, supporting the sales ramp up around our cloud initiatives are reflected in our Sales, General and Administrative costs in this opening quarter.”
“During the first three months of 2018, the number of fiber-connected households and businesses increased by a total of 16%, fueling revenue growth in broadband and entertainment. We expanded our fiber residential footprint by 12% as we continued to pass residential homes through our expansion in the Piedmont Triad Region of North Carolina.”
“Our IT services business recently introduced several new solutions designed to meet the growing IT security and technology demands of businesses. The new solutions include Meraki as a Service (MaaS), a cloud-managed solution that allows organizations to streamline wireless networks, switching and security tasks via the web. In addition, we introduced Multi-Cloud Exchange (MCX), a cloud platform that enables enterprise businesses to securely manage the interactions of users and applications across multiple cloud environments, including hybrid cloud, private cloud, public cloud and SaaS providers. Finally, we introduced Unified Communications as a Service (UCaaS), enabling businesses to effectively communicate and collaborate from any screen, anywhere. These solutions are part of our ongoing effort to provide a product portfolio aimed at helping businesses digitally transform themselves.”
For further details on NorthState’s financial results for the first quarter of 2018, please see the financial tables included in the press release on the company’s website at: Q1 2018 Earnings Report.
1 Total strategic revenue is all revenue excluding legacy voice revenue. Legacy voice revenue is comprised of non-IP voice, long distance, and network access revenue.
The inclusion of forward-looking information should not be construed as a representation by NorthState that our plans or expectations will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
NorthState is a technology company focused on inspiring the Internet-driven lifestyle through high-touch experiences. Its fiber-delivered, ultrafast Internet and Internet-driven applications enable residential customers and businesses to efficiently and securely take advantage of the Internet. Through its Technology Solutions business unit, NorthState provides data center colocation, customized cloud and IT solutions, managed disaster recovery services, managed security and unified communications. For more information, visit northstate.net.
Andrew Stevenson Harriet Fried, SVP