A jump in monthly expenses outpaced a revenue increase of 21 percent for LUS Fiber's telecommunications business for the month of August. The numbers, part of the business' most recent monthly financial report, show expenses climbing from $559,757.71 in July to $843,724.33 in August, a 34 percent increase. LUS Director Terry Huval has said that the business' expenses are directly tied to its growing subscriber base. The nascent business also faces other startup expenses as it expands its fiber-to-the-home phone, cable and Internet service. The business launched in February. Huval recently announced that the fiber buildout is running ahead of schedule and now is on target to be offered citywide by July 2010.
The report shows retail revenue for August totaled $82,851. LUS Fiber also had $186,350.75 in wholesale revenue, bringing total operating revenue to $269,201.75 for the month. The August numbers follow July's 31 percent retail revenue increase.
August's net operating revenue (before depreciation and amortization) was negative $574,522.58. This was up from July's net operating loss of $494,539.56.
... written by Dantes Fire Hydrant , November 09, 2009 - 07:21 pm
OK, now when do we break even on this?
... written by Brent Neader , November 09, 2009 - 10:42 pm
I am not sure how they figure construction costs into the monthly expenses, but even if they put it all in the month it was done, or amortize it out over many months, there is still a one time cost for each new customer.
Since this is just a one time cost, once it is off the books then the numbers would look a lot better.
Keep in mind running a new fiber network is extremely construction intensive, but LUS knew that going in and planned accordingly.
... written by John St. Julien , November 10, 2009 - 03:45 am
Thanks Brent, the series of stories here on the IND that implicitly compare Month X's expenses and costs are pretty radically misleading and leave the impression that LUS is losing money...a conclusion that you can't draw by comparing those figures. The "acquisition" costs are huge—pulling all that fiber and installing expensive electronics & interior wiring is expensive. And all they get in return for that big investment in the same month is, on the average, a half month of revenue! Of course, over the next few years, as that big upfront investment is paid off, the costs will be paid off. That is and has always been the plan.
The two monthly figures just shouldn't be juxtaposed. They tell you nothing about the state of the system.
... written by M. Leblanc , November 10, 2009 - 02:28 pm
How is the theIND getting this info and is it available online from LUS?
... written by Brent Neader , November 10, 2009 - 08:49 pm
I would also like to add that the economics of scale also play a part. Meaning you have a lot of static costs to even offer services like this (main networking equipment,servers, staff, ect). Once you start adding more and more customers, these types of costs scale in a very favorable ratio.
When they say fiber for the future, they dont mean next month or next year, you need to think in terms of the next 20 years. I wouldnt pay attention to these numbers until at least years 3 to 5. I believe i saw Terry Huval post their plan somewhere as to how long they expected to take a loss, and it wasnt ending anytime soon.
... written by NORTHSIDIAN SHOTGUN , November 10, 2009 - 11:24 pm
Thanks Brent,ah guess das like dey should'nt Juxtapose da two figahs, on da INITIALLY, PROPOSED CONSTRUCTION COST OF DAT "CAMELLIA BRIDGE", ahn da actual, END CONSTRUCTION COST OF DAT CAMELLA BRIDGE !!! DAS UN-AMERICAN, Like in the GREEK alphabet, whar D follows C, as in DELUSION FOLLOWS COLLUSION, and dat was after ah $ 50,OOO.OO study by A DALLAS, TEXAS FIRM, which presented ta da LAFAYETTE PARISH CONSOLATING GOVERNAMENT DA MOST COST-EFFECTIVE PLAN!!!!! Now everrybody knows ya don't pass no bond issue for ah PIGGLY WIGGLY PROJECT wid/out ya first get ah $50,000.00 study, dat be lak youse get married wid/out gettin Kissed!
... written by Alan Greenspan , November 11, 2009 - 03:05 am
Brent, the article states that depreciation and amortization are not included in the figures. Consequently, construction expenses, or capital items, are not in the expenses. More than likely the increase is due to wages and related costs.
St. Julien, the figures do tell us something: the Fiber project has a loss, a significant loss.
... written by Nathan Stubbs , November 11, 2009 - 03:36 am
No one of these articles, or blog posts, should by any means be taken as the last word on the fiber system. It's a mere snap shot month by month, and the business should be judged on its performance over time. That said, we don't see anything wrong with updating that info as it is available, but readers should keep some perspective on this thing.
I would also like to go ahead and point out that the August expenses appear to be a bit of an anomoly, due to a spike in the Administrative Expense account. I've just received the September numbers, and expenses are back down significantly for that month. I'll be posting more on this by the end of the week.
I've spoken to some LUS folks about the August spike and they're still looking into the details, but say it appears to be due to some things that came up in the billing/accounting cycle. Hope this clears up some of the questions.
... written by M. Leblanc , November 11, 2009 - 02:18 pm
It would be better if detailed financial statements were available.
... written by NORTHSIDIAN SHOTGUN , November 13, 2009 - 10:54 pm
OOOP'S don't rock da boat!!!!!!!!!!
You must be logged in to post a comment. Log in using your Facebook account or register if you do not have an account yet.
Is it a crime for citizens to photograph, video, or take notes of a police officer in the line of duty, or a right protected by the First Amendment of the U.S. Constitution? Locally, such activity, as witnessed recently, will at the very least result in a night spent behind bars.
David Calhoun and Elizabeth “EB” Brooks are the first two employees of Lafayette Central Park Inc., the nonprofit charged with turning Lafayette Consolidated Government’s 100-acre Johnston Street Horse Farm property into a passive public park. Calhoun was named executive director, and Brooks is director of planning and design.
At Thursday's State of the Economy luncheon, LEDA President and CEO Gregg Gothreaux said PXP has already quietly hired 180 people for its Broussard expansion.
Episcopal School of Acadiana’s Dr. Joshua Caffery, chair of the school’s English Department, is headed to Washington, D.C., and the Library of Congress as the latest winner of the Alan Lomax Fellowship in Folklife Studies.
This year’s Cool Town issue is all about people who are not native to South Louisiana but made a conscious decision to be here, to be among us, to participate in our culture and contribute to it.
A shelved ordinance transferring $200,000 from a northside drainage project to a south Lafayette development may not break any laws, but it stinks to high heaven.
An effort to restore a shuttered dancehall and document other vacant or razed honky-tonks could serve as a model for saving an endangered species of entertainment.
Lafayette’s gene pool has been host to a long line of eccentric characters who have blurred the lines between crazy, genius, disturbed and curiously entertaining.
Subscribe to this comment's feed