Lightyear Network Solutions Announces Year End 2012 Financial Results

Lightyear Network Solutions Announces Year End 2012 Financial Results

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Lightyear Network Solutions, Inc. (the "Company") (OTCQB: LYNS), an established provider of data, voice and wireless telecommunication services to business and residential customers throughout North America, announced today its financial results for the year ended December 31, 2012.

Financial highlights for 2012 include:

  • Overall revenue decreased approximately 6% from fiscal year 2011. Wireless services revenue grew by approximately $1.2 million (or 30%) in 2012 compared with 2011, while local services revenue decreased by approximately $2.7 million (or 9%) for the same period
  • Operating expenses decreased by approximately $2.2 million (or 8.6%) in 2012 compared with the previous year
  • Loss from operations, when adjusted for a one-time impairment charge related to the sale of our Pikeville real estate, was essentially unchanged at $870,310 in 2012 and $871,899 in 2011
  • Cash generated from operations increased to approximately $1.4 million in 2012 compared with approximately $47,000 in 2011
  • Net loss per common share for the year was $.10

"Our team continues to stay focused, manage expenses and work diligently to create opportunities for growth during this tough economy. We are encouraged with several new commercial clients and the increase in the cash generated from operations," said Stephen M. Lochmueller, Lightyear's Chief Executive Officer.

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 Communication and Cisco. Lightyear Network Solutions, Inc. 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 Form 10-K for the year ended December 31, 2012 and other 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
Consolidated Balance Sheets
       
December 31,
2012 2011
 
Assets
 
Current Assets:
Cash $ 48,424 $ 108,133
Accounts receivable, net 4,694,100 5,237,404
Vendor deposits 1,894,522 1,771,028
Inventories, net 267,427 335,964
Prepaid expenses and other current assets   1,137,654     2,523,039  
 
Total Current Assets 8,042,127 9,975,568
 
Property and equipment, net 5,511,426 7,161,057
Intangible assets, net   1,492,083     1,928,749  
 
Total Assets $ 15,045,636   $ 19,065,374  
 
Liabilities and Stockholders' Deficiency
 
Current Liabilities:
Accounts payable $ 6,212,388 $ 7,216,117
Interest payable - related parties 114,972 47,282
Accrued agent commissions 459,712 530,268
Accrued agent commissions - related parties 847 1,069
Deferred revenue 473,957 427,715
Other liabilities 1,667,724 1,876,163
Other liabilities - related parties 142,330 81,718
Current portion of notes payable 934,529 895,918
Current portion of capital lease obligations   164,662     239,203  
 
Total Current Liabilities 10,171,121 11,315,453
Notes payable, non-current portion 2,400,441 3,334,992
Note payable - related party, non-current portion 6,250,000 6,250,000
Capital lease obligations, non-current portion 711,255 758,750
Deferred tax liability, non-current portion, net   37,830     326,683  
 
Total Liabilities   19,570,647     21,985,878  
 
Commitments and contingencies
 
Stockholders' Deficiency:

Common stock, $0.001 par value; 70,000,000 shares authorized; 22,086,641 shares issued and outstanding at December 31, 2012 and December 31, 2011

22,087 22,087
Note receivable from affiliate (1,223,203 ) (1,223,203 )
Additional paid-in capital 10,148,545 9,490,226
Accumulated deficit   (13,472,440 )   (11,209,614 )
 
Total Stockholders' Deficiency   (4,525,011 )   (2,920,504 )
 
Total Liabilities and Stockholders' Deficiency $ 15,045,636   $ 19,065,374  
 
 
Lightyear Network Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations
       
For The Years Ended
December 31,
2012 2011
 
Revenues $ 66,440,789 $ 70,495,597
 
Cost of revenues   44,281,234     45,158,389  
 
Gross Profit   22,159,555     25,337,208  
 
Operating Expenses
Commission expense 5,416,415 5,979,886
Commission expense - related parties 72,747 55,647
Depreciation and amortization 1,303,709 1,691,845
Bad debt expense 1,039,270 940,277
Selling, general and administrative expenses 15,100,955 17,104,471

Selling, general and administrative expenses - related party

96,769 199,231
Impairment of intangible assets - 237,750
Impairment of property and equipment   938,270     -  
 
Total Operating Expenses   23,968,135     26,209,107  
 
Loss From Operations   (1,808,580 )   (871,899 )
 
Other (Expense) Income
Interest income 25,533 45,731
Interest income - related parties - 570,967
Interest expense (236,471 ) (310,581 )
Interest expense - related parties (278,587 ) (376,734 )
Gain on sale of fixed assets - 192,284
Loss on abandonment of property - (107,540 )
Other income   35,279     140,495  
 
Total Other (Expense) Income   (454,246 )   154,622  
 
Loss before income taxes (2,262,826 ) (717,277 )
Income tax benefit   -     123,800  
 
Net Loss (2,262,826 ) (593,477 )
 
Deemed dividends to convertible preferred stockholders   -     (11,835,530 )
 
Loss Attributable to Common Stockholders $ (2,262,826 ) $ (12,429,007 )
 
Net Loss Per Common Share - Basic and Diluted $ (0.10 ) $ (0.57 )
 

Weighted Average Number of Common Shares Outstanding - Basic and Diluted

  22,328,205     21,796,111  
 
 
Lightyear Network Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
       
For The Years Ended
December 31,
2012 2011
Cash Flows From Operating Activities
Net loss $ (2,262,826 ) $ (593,477 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 1,303,709 1,691,845
Provision for bad debt expense 1,039,270 940,277
Provision for inventory reserve - 17,205
Stock-based compensation 658,319 593,938
Interest income from affiliate - (570,967 )
Deferred taxes - (123,800 )
Gain on sale of fixed assets - (192,284 )
Loss on abandonment of property - 107,540
Impairment of intangible assets - 237,750
Impairment of property and equipment, net 938,270 -
Changes in operating assets and liabilities:
Accounts receivable (495,966 ) (27,257 )
Other assets - (5,254 )
Vendor deposits (123,494 ) (84,117 )
Inventories 68,537 (19,614 )
Prepaid expenses and other current assets 1,385,385 (235,164 )
Accounts payable (1,003,729 ) 56,001
Interest payable - related parties 67,690 (66,536 )
Accrued agent commissions (70,556 ) (39,565 )
Accrued agent commissions - related parties (222 ) (23,967 )
Deferred revenue 46,242 (1,589,473 )
Other liabilities (208,439 ) (10,061 )
Other liabilities - related parties   60,612     (15,665 )
 
Total Adjustments   3,665,628     640,832  
 
Net Cash Provided by Operating Activities   1,402,802     47,355  
 
Cash Flows From Investing Activities
Purchases of property and equipment (318,305 ) (1,145,994 )
Proceeds from sale of fixed assets   -     321,277  
 
Net Cash Used in Investing Activities   (318,305

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