NorthState, a leading fiber optic network, cloud and IT services provider, announced today its financial results for the fourth quarter and year ended December 31, 2017.
Summary of Selected Financial Data
Quarter Ended December 31, 2017 versus Quarter Ended December 31, 2016
- Consolidated net operating revenue (NOR) for the quarter totaled $36.3 million, up 9% compared to fourth quarter 2016.
- Total strategic revenue1 of $27.0 million, up 13%. Strategic revenue comprised 74% of NOR.
- Net income of $18.6 million, including a $16.7 million adjustment related to the re-measurement of NorthState’s net deferred tax liabilities at the lower corporate income tax rate provided by the federal Tax Cuts and Jobs Act, compared to $1.7 million. Excluding the benefit of the adjustment, net income in the 2017 quarter was $1.9 million.
- Earnings per share (EPS) of $8.18, including $7.38 related to the deferred tax liability re-measurement adjustment, compared to $0.72. Excluding the benefit of the adjustment, EPS in the 2017 quarter was $0.80.
Year Ended December 31, 2017 versus Year Ended December 31, 2016
- Consolidated NOR of $123.5 million, up 4% compared to 2016.
- Total strategic revenue1 of $86.8 million, up 7%. Strategic revenue comprised 70% of NOR.
- Net income of $22.2 million, including the $16.7 million deferred tax liability adjustment in the fourth quarter of 2017, compared to $8.9 million. Excluding the benefit of the adjustment, net income in 2017 was $5.5 million.
- EPS of $9.75, including $7.38 related to the deferred tax liability adjustment, compared to $3.85. Excluding the benefit of the adjustment, EPS in 2017 was $2.37.
Comparative net income and EPS for 2017 were also impacted by $1.9 million in restructuring charges associated with the formation of our integrated information technology services unit, announced in May 2017, and by $1.0 million of lower non-operating income from our wireless partnership.
Chief Executive Officer Royster Tucker III said, “During 2017 we took a series of steps to position NorthState for rapid growth in the coming years. In addition to realigning our executive leadership team, we completed the integration of our information technology services unit and expanded its sales presence in key markets throughout the Southeast. We believe we are well positioned to participate in the growing digital business environment as well as support consumers as they increasingly rely on the Internet and the cloud.
“In 2018, our focus is to grow revenue from services that help businesses digitally transform and increase the number of fiber-connected households and businesses. In particular, we plan to continue our focus on data center, IT security and managed services while also enhancing our product portfolio with new cloud-based, as-a-service offerings. In addition, we plan to extend our fiber network into other parts of the Piedmont Triad, providing customers with a far superior alternative to traditional cable and internet offerings.”
For further details on NorthState’s financial results for the fourth quarter of 2017, please see the financial tables included in the press release on the company’s website at: Q4 2017 Earnings Report.
1 Total strategic revenue is strategic Internet and communications revenue and all IT services and hardware revenue, for both business and consumer segments.
Forward Looking Statements
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 (OTC: NORSA) (OTC: NORSB) 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 best-in-class data center colocation, customized cloud and IT solutions, managed disaster recovery services, managed security and unified communications. For more information, visit northstate.net.
Harriet Fried, SVP