The St. Augustine, FL-based parent of Orlando-based Epic Communications Inc. is putting the subsidiary on the selling block as it writes off Epic's entire book value of $238.1 million. FECI retained Morgan Stanley in June of this year to analyze Epik's future potential. Epik's sale follows Morgan Stanley's recommendation.
The 1,850-mile network never recovered from the telecommunications industry pullback in 2000, FECI says in a prepared statement disclosing its third-quarter financials.
The company lost $146.4 million or $4.02 per diluted share on revenue of $64.5 million compared to a profit of $2 million or five cents per diluted share on sales of $65.8 million.
However, excluding discontinued operations, Epik, building and land sales, and certain non-recurring items, FECI posted an operating profit of $9.6 million for the quarter versus $13.2 million in the same 2001 period.
Income from continuing operations, excluding the discontinued items, was $3.1 million or eight cents per share compared with $7.5 million or 20 cents per diluted share in third quarter 2001."We are committed to exiting the telecommunications business in the best way possible for our shareholders," FECI chairman/CEO Robert W. Anestis told a quarterly conference of analysts Nov. 6. "Going forward, we will continue to focus on our core real estate and railway businesses."
FECI owns Flagler Development Co. of St. Augustine and the Florida East Coast Railway, one of the state's largest land owners. "Both have a solid track record of success," Anestis says in a prepared statement.
"Notably, our core businesses generate significant cash flow to support the future growth of our company," says Anestis. "We will capitalize on FECI's established positions in the Southeast real estate and freight markets."
On an annualized basis, the railway contributes over $70 million in EBITDA and Flagler Development's operating property rentals generate about $40 million.
FECI's common was trading Thursday on the New York Stock Exchange at $25.05 per share, down 53 cents (2.07%) from $25.58 per share on Nov. 6. The stock's 52-week high-low is $30 and $17 per share. There are 36.5 million shares outstanding.
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