PHOENIX--(BUSINESS WIRE)--
Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable ONE”) today
reported financial and operating results for the quarter and year ended
December 31, 2018.
Fourth Quarter 2018 Highlights:
-
Total revenues were $269.9 million in the fourth quarter of 2018
compared to $257.7 million in the fourth quarter of 2017, an increase
of 4.7%. Residential data revenues increased 12.3% and business
services revenues increased 10.3% year-over-year.
-
Net income was $42.0 million in the fourth quarter of 2018, a decrease
of 70.9% year-over-year primarily as a result of a significant benefit
from the Federal tax reform legislation enacted in the fourth quarter
of 2017. Adjusted EBITDA(1) was $127.6 million, an increase
of 8.8% year-over-year. Net profit margin was 15.6% and Adjusted
EBITDA margin(1) was 47.3%.
-
Net cash provided by operating activities was $100.2 million in the
fourth quarter of 2018, a decrease of 4.3% year-over-year. Adjusted
EBITDA less capital expenditures(1) was $69.0 million in
the fourth quarter of 2018, an increase of 3.4% year-over-year.
Full Year 2018 Highlights:
-
Total revenues were $1.1 billion in 2018 compared to $960.0 million in
2017, an increase of 11.7%. Residential data revenues increased 18.4%
and business services revenues increased 19.0% year-over-year.
-
Net income was $164.8 million in 2018, a decrease of 29.9%
year-over-year primarily as a result of the aforementioned Federal tax
reform legislation. Adjusted EBITDA was $500.8 million, an increase of
12.9% year-over-year. Net profit margin was 15.4% and Adjusted EBITDA
margin was 46.7%.
-
Net cash provided by operating activities was $407.8 million in 2018,
an increase of 25.7% year-over-year. Adjusted EBITDA less capital
expenditures was $283.1 million in 2018, an increase of 7.1%
year-over-year.
Other Highlight:
-
In January 2019, the Company completed the acquisition of Clearwave
Communications, a facilities-based service provider that owns and
operates a high-capacity fiber network offering dense regional
coverage in Southern Illinois (“Clearwave”).
|
(1)
|
|
Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA less
capital expenditures are defined in the section of this press
release entitled “Use of Non-GAAP Financial Measures.” Adjusted
EBITDA and Adjusted EBITDA less capital expenditures are
reconciled to net income, Adjusted EBITDA margin is reconciled to
net profit margin and Adjusted EBITDA less capital expenditures is
also reconciled to net cash provided by operating activities.
Refer to the “Reconciliations of Non-GAAP Measures” tables
within this press release.
|
Fourth Quarter 2018 Financial Results Compared to Fourth Quarter
2017
Revenues increased $12.2 million, or 4.7%, to $269.9 million for the
fourth quarter of 2018, driven primarily by residential data and
business services revenue growth, partially offset by decreases in
residential video and voice revenues. For the fourth quarter of 2018 and
2017, residential data revenues comprised 46.8% and 43.7% of total
revenues and business services revenues comprised 14.9% and 14.2% of
total revenues, respectively.
Operating expenses (excluding depreciation and amortization) were $91.8
million in the fourth quarter of 2018 compared to $92.0 million in the
fourth quarter of 2017. As a percentage of revenues, operating expenses
were 34.0% for the fourth quarter of 2018 compared to 35.7% for the
year-ago quarter.
Selling, general and administrative expenses were $57.6 million for the
fourth quarter of 2018 and increased $2.4 million, or 4.4%, compared to
the fourth quarter of 2017. The increase was primarily attributable to
system conversion and acquisition-related costs incurred during the
quarter and an increase in bonus expense. Selling, general and
administrative expenses as a percentage of revenues were 21.4% for both
the fourth quarter of 2018 and 2017.
Depreciation and amortization expense was $49.5 million for the fourth
quarter of 2018 and increased $2.2 million, or 4.6%, compared to the
fourth quarter of 2017. The increase was due primarily to new assets
placed in service since the fourth quarter of 2017, partially offset by
assets that became fully depreciated since the fourth quarter of 2017.
The Company recognized $1.7 million and $3.8 million of net losses on
asset disposals during the fourth quarter of 2018 and 2017, respectively.
Interest expense increased $1.8 million, or 13.5%, to $15.3 million,
driven by an increase in interest rates year-over-year.
Income tax provision was $13.5 million in the fourth quarter of 2018
compared to an income tax benefit of $98.0 million in the prior year
quarter. The year-over-year change was a result of Federal tax reform
legislation enacted in the fourth quarter of 2017, which resulted in a
reduction in statutory tax rates and a remeasurement of the Company’s
deferred tax liability.
Net income was $42.0 million in the fourth quarter of 2018 compared to
$144.3 million in the prior year quarter.
Adjusted EBITDA was $127.6 million and $117.3 million for the fourth
quarter of 2018 and 2017, respectively, an increase of 8.8%. Capital
expenditures totaled $58.6 million and $50.5 million for the fourth
quarter of 2018 and 2017, respectively. Adjusted EBITDA less capital
expenditures for the fourth quarter of 2018 was $69.0 million, an
increase of $2.3 million, or 3.4%, from the prior year quarter.
Full Year 2018 Financial Results Compared to Full Year 2017
Revenues increased $112.3 million, or 11.7%, to $1.1 billion for 2018,
driven primarily by residential data and business services revenue
growth. For 2018 and 2017, residential data revenues comprised 46.0% and
43.4% of total revenues and business services revenues comprised 14.5%
and 13.7% of total revenues, respectively. Full year results for 2017
include eight months of NewWave Communications (“NewWave”) operations,
as the acquisition was completed on May 1, 2017.
Operating expenses (excluding depreciation and amortization) were $370.3
million in 2018 compared to $337.0 million in 2017. The increase in
operating expenses attributable to the NewWave operations was $30.5
million. Excluding the impact of the NewWave operations, operating
expenses increased $2.7 million, or 1.0%. The increase was due primarily
to higher programming and repairs and maintenance costs. As a percentage
of revenues, operating expenses were 34.5% for 2018 compared to 35.1%
for 2017.
Selling, general and administrative expenses were $222.2 million for
2018 and increased $17.8 million, or 8.7%, compared to 2017. The
increase in selling, general and administrative expenses attributable to
the NewWave operations was $12.8 million, including $4.6 million for
system conversion costs. Excluding the impact of the NewWave operations,
selling, general and administrative expenses increased $5.0 million, or
2.7%. The increase was primarily attributable to higher insurance,
marketing, rebranding and compensation expenses, partially offset by
lower acquisition-related costs. Selling, general and administrative
expenses as a percentage of revenues were 20.7% and 21.3% for 2018 and
2017, respectively.
Depreciation and amortization expense was $197.7 million for 2018 and
increased $16.1 million, or 8.9%, compared to 2017. The increase was due
primarily to additional depreciation and amortization from a full year
of the NewWave operations.
The Company recorded $14.2 million and $0.6 million of net losses on
asset disposals during 2018 and 2017, respectively. The prior year
amount consisted of a $7.2 million net loss on asset disposals and a
$6.6 million gain on the sale of a portion of the Company’s previous
headquarters property. The year-over-year increase in the net loss on
asset disposals was primarily attributable to a write-off of excess
equipment and a higher amount of assets retired as new assets replaced
them.
Interest expense increased $13.6 million, or 28.9%, to $60.4 million,
driven by additional outstanding debt incurred to finance the NewWave
acquisition and an increase in interest rates year-over-year.
Income tax provision was $47.2 million in 2018 compared to an income tax
benefit of $45.0 million in 2017, which was a result of the 2017 Federal
tax reform legislation.
Net income was $164.8 million in 2018 compared to $235.2 million in 2017.
Adjusted EBITDA was $500.8 million and $443.6 million for 2018 and 2017,
respectively, an increase of 12.9%. Capital expenditures totaled $217.8
million and $179.4 million for 2018 and 2017, respectively. Adjusted
EBITDA less capital expenditures for 2018 was $283.1 million, an
increase of $18.8 million, or 7.1%, from the prior year.
Liquidity and Capital Resources
At December 31, 2018, the Company had $264.1 million of cash and cash
equivalents on hand compared to $161.8 million at December 31, 2017. The
Company’s debt balance was approximately $1.2 billion at both December
31, 2018 and 2017. The Company also had $195.9 million available for
borrowing under its revolving credit facility as of December 31, 2018.
The Company repurchased 38,814 shares for $26.6 million during 2018,
including 4,786 shares repurchased in the fourth quarter for $4.0
million.
In January 2019, the Company borrowed $250.0 million of term loans
maturing in 2026 to finance, in part, the Clearwave acquisition.
Conference Call
Cable ONE will host a conference call with the financial community to
discuss results for the fourth quarter and full year 2018 on Wednesday,
February 27, 2019, at 5 p.m. Eastern Time (ET).
Shareholders, analysts and other interested parties may register for the
conference in advance at http://dpregister.com/10128581.
Those unable to pre-register may join the call via the live audio
webcast on the Cable
ONE Investor Relations website or by dialing 1-844-378-6483 (Canada:
1-855-669-9657/International: 1-412-542-4178) shortly before 5 p.m. ET.
A replay of the call will be available from Wednesday, February 27, 2019
until Wednesday, March 13, 2019 on the Cable
ONE Investor Relations website.
Additional Information Available on Website
The information in this press release should be read in conjunction with
the consolidated financial statements and notes thereto contained in the
Company’s Annual Report on Form 10-K for the period ended December 31,
2018, which will be posted on the “SEC Filings” section of the Cable ONE
Investor Relations website at ir.cableone.net when it is filed with the
U.S. Securities and Exchange Commission (the “SEC”). Investors and
others interested in more information about Cable ONE should consult the
Company’s website, which is regularly updated with financial and other
important information about the Company.
Use of Non-GAAP Financial Measures
The Company uses certain measures that are not defined by generally
accepted accounting principles in the United States (“GAAP”) to evaluate
various aspects of its business. Adjusted EBITDA, Adjusted EBITDA margin
and Adjusted EBITDA less capital expenditures are non-GAAP financial
measures and should be considered in addition to, not as superior to, or
as a substitute for, net income, net profit margin or net cash provided
by operating activities reported in accordance with GAAP. Adjusted
EBITDA and Adjusted EBITDA less capital expenditures are reconciled to
net income, and Adjusted EBITDA margin is reconciled to net profit
margin, in the “Reconciliations of Non-GAAP Measures” tables
within this press release. Adjusted EBITDA less capital expenditures is
also reconciled to net cash provided by operating activities in the “Reconciliations
of Non-GAAP Measures” tables within this press release.
“Adjusted EBITDA” is defined as net income plus interest expense, income
tax provision (benefit), depreciation and amortization, equity-based
compensation, severance expense, (gain) loss on deferred compensation,
acquisition-related costs, (gain) loss on asset disposals, system
conversion costs, rebranding costs, other (income) expense and other
unusual operating expenses, as provided in the “Reconciliations of
Non-GAAP Measures” tables within this press release. As such, it
eliminates the significant non-cash depreciation and amortization
expense that results from the capital-intensive nature of the Company’s
business as well as other non-cash or special items and is unaffected by
the Company’s capital structure or investment activities. This measure
is limited in that it does not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating revenues
and the Company’s cash cost of debt financing. These costs are evaluated
through other financial measures.
“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by total
revenues.
“Adjusted EBITDA less capital expenditures,” when used as a liquidity
measure, is calculated as net cash provided by operating activities
excluding the impact of capital expenditures, interest expense, income
tax provision (benefit), changes in operating assets and liabilities,
change in deferred income taxes and other unusual operating expenses, as
provided in the “Reconciliations of Non-GAAP Measures” tables
within this press release.
The Company uses Adjusted EBITDA, Adjusted EBITDA margin and Adjusted
EBITDA less capital expenditures to assess its performance, and it also
uses Adjusted EBITDA less capital expenditures as an indicator of its
ability to fund operations and make additional investments with
internally-generated funds. In addition, Adjusted EBITDA generally
correlates to the measure used in the leverage ratio calculations under
the Company’s credit facilities and senior unsecured notes to determine
compliance with the covenants contained in the credit facilities and
ability to take certain actions under the indenture governing the notes.
Adjusted EBITDA and capital expenditures are also significant
performance measures used by the Company in its annual incentive
compensation program. Adjusted EBITDA does not take into account cash
used for mandatory debt service requirements or other non-discretionary
expenditures, and thus does not represent residual funds available for
discretionary uses.
The Company believes Adjusted EBITDA and Adjusted EBITDA margin are
useful to investors in evaluating the operating performance of the
Company. The Company believes that Adjusted EBITDA less capital
expenditures is useful to investors as it shows the Company’s
performance while taking into account cash outflows for capital
expenditures and is one of several indicators of the Company’s ability
to service debt, make investments and/or return capital to its
shareholders.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital
expenditures and similar measures with similar titles are common
measures used by investors, analysts and peers to compare performance in
the Company’s industry, although the Company’s measures of Adjusted
EBITDA, Adjusted EBITDA margin and Adjusted EBITDA less capital
expenditures may not be directly comparable to similarly titled measures
reported by other companies.
About Cable ONE
Cable One, Inc. (NYSE: CABO) is a leading broadband communications
provider serving more than 800,000 residential and business customers in
21 states. Cable ONE provides consumers with a wide array of
connectivity and entertainment services, including high-speed internet
and advanced Wi-Fi solutions, cable television and phone service. Cable
ONE Business provides scalable and cost-effective products for
businesses ranging in size from small to mid-market, in addition to
enterprise, wholesale and carrier customers.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This communication may contain “forward-looking statements” that involve
risks and uncertainties. These statements can be identified by the fact
that they do not relate strictly to historical or current facts, but
rather are based on current expectations, estimates, assumptions and
projections about the Company’s industry, business, financial results
and financial condition. Forward-looking statements often include words
such as “will,” “should,” “anticipates,” “estimates,” “expects,”
“projects,” “intends,” “plans,” “believes” and words and terms of
similar substance in connection with discussions of future operating or
financial performance. As with any projection or forecast,
forward-looking statements are inherently susceptible to uncertainty and
changes in circumstances. The Company’s actual results may vary
materially from those expressed or implied in its forward-looking
statements. Accordingly, undue reliance should not be placed on any
forward-looking statement made by the Company or on its behalf.
Important factors that could cause the Company’s actual results to
differ materially from those in its forward-looking statements include
government regulation, economic, strategic, political and social
conditions and the following factors:
-
rising levels of competition from historical and new entrants in the
Company’s markets;
-
recent and future changes in technology;
-
the Company’s ability to continue to grow its business services
products;
-
increases in programming costs and retransmission fees;
-
the Company’s ability to obtain hardware, software and operational
support from vendors;
-
the effects of any acquisitions by the Company;
-
risks that the Company’s rebranding may not produce the benefits
expected;
-
adverse economic conditions;
-
the integrity and security of the Company’s network and information
systems;
-
the impact of possible security breaches and other disruptions,
including cyber-attacks;
-
the Company’s failure to obtain necessary intellectual and proprietary
rights to operate its business and the risk of intellectual property
claims and litigation against the Company;
-
the Company’s ability to retain key employees;
-
legislative or regulatory efforts to impose network neutrality and
other new requirements on the Company’s data services;
-
additional regulation of the Company’s video and voice services;
-
the Company’s ability to renew cable system franchises;
-
increases in pole attachment costs;
-
changes in local governmental franchising authority and broadcast
carriage regulations;
-
the potential adverse effect of the Company’s level of indebtedness on
its business, financial condition or results of operations and cash
flows;
-
the possibility that interest rates will rise, causing the Company’s
obligations to service its variable rate indebtedness to increase
significantly;
-
the Company’s ability to incur future indebtedness;
-
fluctuations in the Company’s stock price;
-
the Company’s ability to continue to pay dividends;
-
dilution from equity awards and potential stock issuances in
connection with acquisitions;
-
provisions in the Company’s charter, by-laws and Delaware law that
could discourage takeovers; and
-
the other risks and uncertainties detailed from time to time in the
Company’s filings with the SEC, including but not limited to its
latest Annual Report on Form 10-K as filed with the SEC.
Any forward-looking statements made by the Company in this communication
speak only as of the date on which they are made. The Company is under
no obligation, and expressly disclaims any obligation, except as
required by law, to update or alter its forward-looking statements,
whether as a result of new information, subsequent events or otherwise.
|
|
| CABLE ONE, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME |
| (Unaudited) |
|
|
|
|
| Three Months Ended
December 31, |
| | |
|
(dollars in thousands, except per share and share data)
| | | 2018 |
|
| 2017 | | | $ Change |
|
| % Change |
|
Revenues:
| |
|
Residential data
| | |
$
|
126,397
| | | |
$
|
112,556
| | | |
$
|
13,841
| | | |
12.3
|
%
|
|
Residential video
| | | |
82,555
| | | | |
86,608
| | | | |
(4,053
|
)
| | |
(4.7
|
)%
|
|
Residential voice
| | | |
9,934
| | | | |
11,184
| | | | |
(1,250
|
)
| | |
(11.2
|
)%
|
|
Business services
| | | |
40,236
| | | | |
36,466
| | | | |
3,770
| | | |
10.3
|
%
|
|
Advertising sales
| | | |
7,474
| | | | |
7,348
| | | | |
126
| | | |
1.7
|
%
|
|
Other
| | |
|
3,256
|
| | |
|
3,536
|
| | |
|
(280
|
)
| | |
(7.9
|
)%
|
|
Total Revenues
| | | |
269,852
| | | | |
257,698
| | | | |
12,154
| | | |
4.7
|
%
|
|
Costs and Expenses:
| | | | | | | | | | | | | | | |
|
Operating (excluding depreciation and amortization)
| | | |
91,791
| | | | |
92,013
| | | | |
(222
|
)
| | |
(0.2
|
)%
|
|
Selling, general and administrative
| | | |
57,632
| | | | |
55,229
| | | | |
2,403
| | | |
4.4
|
%
|
|
Depreciation and amortization
| | | |
49,506
| | | | |
47,350
| | | | |
2,156
| | | |
4.6
|
%
|
|
Loss on asset disposals, net
| | |
|
1,659
|
| | |
|
3,752
|
| | |
|
(2,093
|
)
| | |
(55.8
|
)%
|
|
Total Costs and Expenses
| | |
|
200,588
|
| | |
|
198,344
|
| | |
|
2,244
|
| | |
1.1
|
%
|
|
Income from operations
| | | |
69,264
| | | | |
59,354
| | | | |
9,910
| | | |
16.7
|
%
|
|
Interest expense
| | | |
(15,279
|
)
| | | |
(13,457
|
)
| | | |
(1,822
|
)
| | |
13.5
|
%
|
|
Other income, net
| | |
|
1,485
|
| | |
|
425
|
| | |
|
1,060
|
| | |
249.4
|
%
|
|
Income before income taxes
| | | |
55,470
| | | | |
46,322
| | | | |
9,148
| | | |
19.7
|
%
|
|
Income tax provision (benefit)
| | |
|
13,462
|
| | |
|
(97,971
|
)
| | |
|
111,433
|
| | |
NM
| |
|
Net income
| | |
$
|
42,008
|
| | |
$
|
144,293
|
| | |
$
|
(102,285
|
)
| | |
(70.9
|
)%
|
|
|
|
Net income per common share:
| |
|
Basic
| | |
$
|
7.40
|
| | |
$
|
25.38
|
| | |
$
|
(17.98
|
)
| | |
(70.8
|
)%
|
|
Diluted
| | |
$
|
7.34
|
| | |
$
|
25.09
|
| | |
$
|
(17.75
|
)
| | |
(70.7
|
)%
|
|
Weighted average common shares outstanding:
| |
|
Basic
| | |
5,674,067
| | | |
5,684,785
| | | |
(10,718
|
)
| | |
(0.2
|
)%
|
|
Diluted
| | |
5,723,528
| | | |
5,750,420
| | | |
(26,892
|
)
| | |
(0.5
|
)%
|
|
|
|
Other comprehensive income, net of tax
| | |
$
|
254
|
| | |
$
|
89
|
| | |
$
|
165
|
| | |
185.4
|
%
|
|
Comprehensive income
| | |
$
|
42,262
|
| | |
$
|
144,382
|
| | |
$
|
(102,120
|
)
| | |
(70.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
| | | |
|
| |
|
NM = Not meaningful.
| |
|
|
| CABLE ONE, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME |
| (Unaudited) |
|
|
|
|
| Year Ended December 31, |
| | |
|
(dollars in thousands, except per share and share data)
| | | 2018 |
|
| 2017(1) | | | $ Change |
|
| % Change |
|
Revenues:
| |
|
Residential data
| | |
$
|
492,816
| | | |
$
|
416,355
| | | |
$
|
76,461
| | | |
18.4
|
%
|
|
Residential video
| | | |
343,344
| | | | |
332,536
| | | | |
10,808
| | | |
3.3
|
%
|
|
Residential voice
| | | |
41,278
| | | | |
43,733
| | | | |
(2,455
|
)
| | |
(5.6
|
)%
|
|
Business services
| | | |
155,993
| | | | |
131,082
| | | | |
24,911
| | | |
19.0
|
%
|
|
Advertising sales
| | | |
24,919
| | | | |
24,824
| | | | |
95
| | | |
0.4
|
%
|
|
Other
| | |
|
13,945
|
| | |
|
11,426
|
| | |
|
2,519
|
| | |
22.0
|
%
|
|
Total Revenues
| | | |
1,072,295
| | | | |
959,956
| | | | |
112,339
| | | |
11.7
|
%
|
|
Costs and Expenses:
| | | | | | | | | | | | | | | |
|
Operating (excluding depreciation and amortization)
| | | |
370,269
| | | | |
337,040
| | | | |
33,229
| | | |
9.9
|
%
|
|
Selling, general and administrative
| | | |
222,216
| | | | |
204,384
| | | | |
17,832
| | | |
8.7
|
%
|
|
Depreciation and amortization
| | | |
197,731
| | | | |
181,619
| | | | |
16,112
| | | |
8.9
|
%
|
|
Loss on asset disposals, net
| | |
|
14,167
|
| | |
|
574
|
| | |
|
13,593
|
| | |
NM
| |
|
Total Costs and Expenses
| | |
|
804,383
|
| | |
|
723,617
|
| | |
|
80,766
|
| | |
11.2
|
%
|
|
Income from operations
| | | |
267,912
| | | | |
236,339
| | | | |
31,573
| | | |
13.4
|
%
|
|
Interest expense
| | | |
(60,415
|
)
| | | |
(46,864
|
)
| | | |
(13,551
|
)
| | |
28.9
|
%
|
|
Other income, net
| | |
|
4,487
|
| | |
|
668
|
| | |
|
3,819
|
| | |
NM
| |
|
Income before income taxes
| | | |
211,984
| | | | |
190,143
| | | | |
21,841
| | | |
11.5
|
%
|
|
Income tax provision (benefit)
| | |
|
47,224
|
| | |
|
(45,028
|
)
| | |
|
92,252
|
| | |
NM
| |
|
Net income
| | |
$
|
164,760
|
| | |
$
|
235,171
|
| | |
$
|
(70,411
|
)
| | |
(29.9
|
)%
|
|
|
|
Net income per common share
| |
|
Basic
| | |
$
|
28.98
|
| | |
$
|
41.40
|
| | |
$
|
(12.42
|
)
| | |
(30.0
|
)%
|
|
Diluted
| | |
$
|
28.77
|
| | |
$
|
40.92
|
| | |
$
|
(12.15
|
)
| | |
(29.7
|
)%
|
|
Weighted average common shares outstanding:
| |
|
Basic
| | |
5,684,375
| | | |
5,680,073
| | | |
4,302
| | | |
0.1
|
%
|
|
Diluted
| | |
5,725,963
| | | |
5,747,037
| | | |
(21,074
|
)
| | |
(0.4
|
)%
|
|
|
|
Other comprehensive income, net of tax
| | |
$
|
256
|
| | |
$
|
94
|
| | |
$
|
162
|
| | |
172.3
|
%
|
|
Comprehensive income
| | |
$
|
165,016
|
| | |
$
|
235,265
|
| | |
$
|
(70,249
|
)
| | |
(29.9
|
)%
|
_______
| |
|
NM = Not meaningful.
|
|
(1) Results for 2017 include only eight months of NewWave operations.
|
|
|
| CABLE ONE, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
|
|
(in thousands, except par value and share
data) |
| December 31, 2018 |
|
| December 31, 2017 |
| Assets |
|
Current Assets:
|
|
Cash and cash equivalents
| |
$
|
264,113
| | | |
$
|
161,752
| |
|
Accounts receivable, net
| | |
29,947
| | | | |
29,930
| |
|
Income taxes receivable
| | |
10,713
| | | | |
21,331
| |
|
Prepaid and other current assets
| |
|
13,090
|
| | |
|
10,898
|
|
|
Total Current Assets
| | |
317,863
| | | | |
223,911
| |
|
Property, plant and equipment, net
| | |
847,979
| | | | |
831,892
| |
|
Intangible assets, net
| | |
953,851
| | | | |
965,745
| |
| Goodwill | | |
172,129
| | | | |
172,129
| |
|
Other noncurrent assets
| |
|
11,412
|
| | |
|
10,955
|
|
|
Total Assets
| |
$
|
2,303,234
|
| | |
$
|
2,204,632
|
|
|
|
| Liabilities and Stockholders' Equity |
|
Current Liabilities:
|
|
Accounts payable and accrued liabilities
| |
$
|
94,134
| | | |
$
|
117,855
| |
|
Deferred revenue
| | |
18,954
| | | | |
15,008
| |
|
Current portion of long-term debt
| |
|
20,625
|
| | |
|
14,375
|
|
|
Total Current Liabilities
| | |
133,713
| | | | |
147,238
| |
|
Long-term debt
| | |
1,142,056
| | | | |
1,160,682
| |
|
Deferred income taxes
| | |
242,127
| | | | |
207,154
| |
|
Other noncurrent liabilities
| |
|
9,980
|
| | |
|
13,111
|
|
|
Total Liabilities
| |
|
1,527,876
|
| | |
|
1,528,185
|
|
|
|
|
Stockholders' Equity
|
|
Preferred stock ($0.01 par value; 4,000,000 shares authorized; none
issued or outstanding)
| | |
-
| | | | |
-
| |
|
Common stock ($0.01 par value; 40,000,000 shares authorized;
5,887,899 shares issued; and 5,703,402 and 5,731,442 shares
outstanding as of December 31, 2018 and 2017, respectively)
| | |
59
| | | | |
59
| |
|
Additional paid-in capital
| | |
38,898
| | | | |
28,412
| |
|
Retained earnings
| | |
850,292
| | | | |
728,386
| |
|
Accumulated other comprehensive loss
| | |
(96
|
)
| | | |
(352
|
)
|
| Treasury stock, at cost (184,497 and 156,457 shares held as of
December 31, 2018 and 2017, respectively)
| |
|
(113,795
|
)
| | |
|
(80,058
|
)
|
|
Total Stockholders' Equity
| |
|
775,358
|
| | |
|
676,447
|
|
|
Total Liabilities and Stockholders' Equity
| |
$
|
2,303,234
|
| | |
$
|
2,204,632
|
|
|
|
| CABLE ONE, INC. |
| RECONCILIATIONS OF NON-GAAP MEASURES |
| (Unaudited) |
|
|
|
| Three Months Ended December 31, | | |
(dollars in thousands) | | 2018 |
| 2017 |
| $ Change |
|
| % Change |
|
Net income
| |
$
|
42,008
| | |
$
|
144,293
| | |
$
|
(102,285
|
)
| |
|
(70.9
|
)%
|
|
|
| Net profit margin | | | 15.6 | % | | | 56.0 | % | | | | | | |
|
|
|
Plus:
|
Interest expense
| | |
15,279
| | | |
13,457
| | | |
1,822
| | |
13.5
|
%
|
|
Income tax provision (benefit)
| | |
13,462
| | | |
(97,971
|
)
| | |
111,433
| | |
NM
| |
|
Depreciation and amortization
| | |
49,506
| | | |
47,350
| | | |
2,156
| | |
4.6
|
%
|
|
Equity-based compensation
| | |
3,224
| | | |
2,822
| | | |
402
| | |
14.2
|
%
|
|
Severance expense
| | |
729
| | | |
2,512
| | | |
(1,783
|
)
| |
(71.0
|
)%
|
|
(Gain) loss on deferred compensation
| | |
(191
|
)
| | |
839
| | | |
(1,030
|
)
| |
(122.8
|
)%
|
|
Acquisition-related costs
| | |
1,734
| | | |
662
| | | |
1,072
| | |
161.9
|
%
|
|
Loss on asset disposals, net
| | |
1,659
| | | |
3,752
| | | |
(2,093
|
)
| |
(55.8
|
)%
|
|
System conversion costs(1) | | |
1,135
| | | |
-
| | | |
1,135
| | |
NM
| |
|
Rebranding costs
| | |
545
| | | |
-
| | | |
545
| | |
NM
| |
|
Other income, net
| | |
(1,485
|
)
| | |
(425
|
)
| | |
(1,060
|
)
| |
249.4
|
%
|
|
Adjusted EBITDA
| |
$
|
127,605
| | |
$
|
117,291
| | |
$
|
10,314
| | | |
8.8
|
%
|
|
|
| Adjusted EBITDA margin | | | 47.3 | % | | | 45.5 | % | | | | | | |
|
|
|
Less:
|
Capital expenditures
| |
|
58,596
|
| |
|
50,533
|
| |
|
8,063
|
| |
16.0
|
%
|
|
Adjusted EBITDA less capital expenditures
| |
$
|
69,009
|
| |
$
|
66,758
|
| |
$
|
2,251
|
| | |
3.4
|
%
|
|
| | |
|
NM = Not meaningful.
(1) Comprised of $0.8 million of billing system conversion costs
related to NewWave and $0.3 million of enterprise resource
planning system (“ERP”) implementation costs.
|
|
|
| | Three Months Ended December 31, | | |
(dollars in thousands) | | 2018 | | 2017 | | $ Change | |
| % Change |
|
Net cash provided by operating activities
| |
$
|
100,152
| | |
$
|
104,698
| | |
$
|
(4,546
|
)
| | |
(4.3
|
)%
|
|
Capital expenditures
| | |
(58,596
|
)
| | |
(50,533
|
)
| | |
(8,063
|
)
| |
16.0
|
%
|
|
Interest expense
| | |
15,279
| | | |
13,457
| | | |
1,822
| | |
13.5
|
%
|
|
Amortization of debt issuance cost
| | |
(1,075
|
)
| | |
(991
|
)
| | |
(84
|
)
| |
8.5
|
%
|
|
Income tax provision (benefit)
| | |
13,462
| | | |
(97,971
|
)
| | |
111,433
| | |
NM
| |
|
Changes in operating assets and liabilities
| | |
13,667
| | | |
(2,531
|
)
| | |
16,198
| | |
NM
| |
|
Change in deferred income taxes
| | |
(16,347
|
)
| | |
97,041
| | | |
(113,388
|
)
| |
NM
| |
|
(Gain) loss on deferred compensation
| | |
(191
|
)
| | |
839
| | | |
(1,030
|
)
| |
(122.8
|
)%
|
|
Acquisition-related costs
| | |
1,734
| | | |
662
| | | |
1,072
| | |
161.9
|
%
|
|
Severance expense
| | |
729
| | | |
2,512
| | | |
(1,783
|
)
| |
(71.0
|
)%
|
|
System conversion costs(1) | | |
1,135
| | | |
-
| | | |
1,135
| | |
NM
| |
|
Rebranding costs
| | |
545
| | | |
-
| | | |
545
| | |
NM
| |
|
Other income, net
| |
|
(1,485
|
)
| |
|
(425
|
)
| |
|
(1,060
|
)
| |
249.4
|
%
|
|
Adjusted EBITDA less capital expenditures
| |
$
|
69,009
|
| |
$
|
66,758
|
| |
$
|
2,251
|
| | |
3.4
|
%
|
|
| | |
|
NM = Not meaningful.
(1) Comprised of $0.8 million of billing system conversion costs
related to NewWave and $0.3 million of ERP implementation costs.
|
|
|
| CABLE ONE, INC. |
| RECONCILIATIONS OF NON-GAAP MEASURES |
| (Unaudited) |
|
| |
|
|
| Year Ended December 31, |
| |
(dollars in thousands) | | | 2018 |
|
| 2017(1) | |
| $ Change | |
| % Change |
|
Net income
| | |
$
|
164,760
| | | |
$
|
235,171
| | | |
$
|
(70,411
|
)
| | |
|
(29.9
|
)%
|
| |
|
| Net profit margin | | | | 15.4 | % | | | | 24.5 | % | | | | | | | | |
| |
|
|
Plus:
|
Interest expense
| | | |
60,415
| | | | |
46,864
| | | | |
13,551
| | | |
28.9
|
%
|
|
Income tax provision (benefit)
| | | |
47,224
| | | | |
(45,028
|
)
| | | |
92,252
| | | |
NM
| |
|
Depreciation and amortization
| | | |
197,731
| | | | |
181,619
| | | | |
16,112
| | | |
8.9
|
%
|
|
Equity-based compensation
| | | |
10,486
| | | | |
10,743
| | | | |
(257
|
)
| | |
(2.4
|
)%
|
|
Severance expense
| | | |
2,347
| | | | |
5,652
| | | | |
(3,305
|
)
| | |
(58.5
|
)%
|
|
Loss on deferred compensation
| | | |
425
| | | | |
2,753
| | | | |
(2,328
|
)
| | |
(84.6
|
)%
|
|
Acquisition-related costs
| | | |
1,773
| | | | |
5,942
| | | | |
(4,169
|
)
| | |
(70.2
|
)%
|
|
Loss on asset disposals, net
| | | |
14,167
| | | | |
574
| | | | |
13,593
| | | |
NM
| |
|
System conversion costs(2) | | | |
5,037
| | | | |
-
| | | | |
5,037
| | | |
NM
| |
|
Rebranding costs
| | | |
968
| | | | |
-
| | | | |
968
| | | |
NM
| |
|
Other income, net
| | | |
(4,487
|
)
| | | |
(668
|
)
| | | |
(3,819
|
)
| | |
NM
| |
|
Adjusted EBITDA
| | |
$
|
500,846
| | | |
$
|
443,622
| | | |
$
|
57,224
| | | | |
12.9
|
%
|
| |
|
| Adjusted EBITDA margin | | | | 46.7 | % | | | | 46.2 | % | | | | | | | | |
| |
|
|
Less:
|
Capital expenditures
| | |
|
217,766
|
| | |
|
179,363
|
| | |
|
38,403
|
| | |
21.4
|
%
|
|
Adjusted EBITDA less capital expenditures
| | |
$
|
283,080
|
| | |
$
|
264,259
|
| | |
$
|
18,821
|
| | | |
7.1
|
%
|
|
| | | |
|
NM = Not meaningful.
| | |
|
(1) Results for 2017 include only eight months of NewWave operations.
(2) Comprised of $4.6 million of billing system conversion costs
related to NewWave and $0.4 million of ERP implementation costs.
|
| |
|
| | | Year Ended December 31, | | | | |
(dollars in thousands) | | | 2018 | | | 2017(1) | | | $ Change | | | % Change |
|
Net cash provided by operating activities
| | |
$
|
407,769
| | | |
$
|
324,486
| | | |
$
|
83,283
| | | | |
25.7
|
%
|
|
Capital expenditures
| | | |
(217,766
|
)
| | | |
(179,363
|
)
| | | |
(38,403
|
)
| | |
21.4
|
%
|
|
Interest expense
| | | |
60,415
| | | | |
46,864
| | | | |
13,551
| | | |
28.9
|
%
|
|
Amortization of debt issuance cost
| | | |
(4,163
|
)
| | | |
(3,174
|
)
| | | |
(989
|
)
| | |
31.2
|
%
|
|
Income tax provision (benefit)
| | | |
47,224
| | | | |
(45,028
|
)
| | | |
92,252
| | | |
NM
| |
|
Changes in operating assets and liabilities
| | | |
18,621
| | | | |
20,185
| | | | |
(1,564
|
)
| | |
(7.7
|
)%
|
|
Change in deferred income taxes
| | | |
(34,973
|
)
| | | |
87,223
| | | | |
(122,196
|
)
| | |
NM
| |
|
Loss on deferred compensation
| | | |
425
| | | | |
2,753
| | | | |
(2,328
|
)
| | |
(84.6
|
)%
|
|
Acquisition-related costs
| | | |
1,773
| | | | |
5,942
| | | | |
(4,169
|
)
| | |
(70.2
|
)%
|
|
Severance expense
| | | |
2,347
| | | | |
5,652
| | | | |
(3,305
|
)
| | |
(58.5
|
)%
|
|
Write-off of debt issuance costs
| | | |
(110
|
)
| | | |
(613
|
)
| | | |
503
| | | |
(82.1
|
)%
|
|
System conversion costs(2) | | | |
5,037
| | | | |
-
| | | | |
5,037
| | | |
NM
| |
|
Rebranding costs
| | | |
968
| | | | |
-
| | | | |
968
| | | |
NM
| |
|
Other income, net
| | |
|
(4,487
|
)
| | |
|
(668
|
)
| | |
|
(3,819
|
)
| | |
NM
| |
|
Adjusted EBITDA less capital expenditures
| | |
$
|
283,080
|
| | |
$
|
264,259
|
| | |
$
|
18,821
|
| | | |
7.1
|
%
|
|
| | | |
|
NM = Not meaningful.
| | |
|
(1) Results for 2017 include only eight months of NewWave operations.
(2) Comprised of $4.6 million of billing system conversion costs
related to NewWave and $0.4 million of ERP implementation costs.
|
|
|
| CABLE ONE, INC. |
| OPERATING STATISTICS |
| (Unaudited) |
|
| |
| | As of December 31, |
| Year-Over-Year Change |
| | 2018 |
| 2017 | | Amount |
| % |
| Homes Passed (1) | | 2,093,501 | | | 2,145,577 | | | (52,076 | ) | | (2.4 | )% |
| |
|
| Residential Customers | | 734,250 | | | 731,011 | | | 3,239 | | | 0.4 | % |
|
| | | | | | | | | |
|
Data PSUs
| |
600,716
| | |
584,854
| | |
15,862
| | |
2.7
|
%
|
|
Video PSUs
| |
310,475
| | |
346,712
| | |
(36,237
|
)
| |
(10.5
|
)%
|
|
Voice PSUs
| |
99,070
|
| |
110,013
|
| |
(10,943
|
)
| |
(9.9
|
)%
|
|
Total residential PSUs
| |
1,010,261
| | |
1,041,579
| | |
(31,318
|
)
| |
(3.0
|
)%
|
| |
|
| Business Customers | | 70,615 | | | 66,526 | | | 4,089 | | | 6.1 | % |
| |
|
|
Data PSUs
| |
62,358
| | |
58,299
| | |
4,059
| | |
7.0
|
%
|
|
Video PSUs
| |
15,948
| | |
17,176
| | |
(1,228
|
)
| |
(7.1
|
)%
|
|
Voice PSUs
| |
26,864
|
| |
24,868
|
| |
1,996
|
| |
8.0
|
%
|
|
Total business services PSUs
| |
105,170
| | |
100,343
| | |
4,827
| | |
4.8
|
%
|
| |
|
| Total Customers | | 804,865 | | | 797,537 | | | 7,328 | | | 0.9 | % |
|
Total non-video
| |
478,442
| | |
435,087
| | |
43,355
| | |
10.0
|
%
|
|
Percent of total
| |
59.4
|
%
| |
54.6
|
%
| | | | |
| |
|
|
Data PSUs
| |
663,074
| | |
643,153
| | |
19,921
| | |
3.1
|
%
|
|
Video PSUs
| |
326,423
| | |
363,888
| | |
(37,465
|
)
| |
(10.3
|
)%
|
|
Voice PSUs
| |
125,934
|
| |
134,881
|
| |
(8,947
|
)
| |
(6.6
|
)%
|
|
Total PSUs
| |
1,115,431
| | |
1,141,922
| | |
(26,491
|
)
| |
(2.3
|
)%
|
| |
|
| Penetration | | |
|
Data
| |
31.7
|
%
| |
30.0
|
%
| | | |
1.7
|
%
|
|
Video
| |
15.6
|
%
| |
17.0
|
%
| | | |
(1.4
|
)%
|
|
Voice
| |
6.0
|
%
| |
6.3
|
%
| | | |
(0.3
|
)%
|
| |
|
| Share of Fourth Quarter Revenues | | |
|
Residential data
| |
46.8
|
%
| |
43.7
|
%
| | | |
3.1
|
%
|
|
Business services
| |
14.9
|
%
| |
14.2
|
%
| | | |
0.7
|
%
|
|
Total
| |
61.7
|
%
| |
57.9
|
%
| | | |
3.8
|
%
|
| |
|
| ARPU - Fourth Quarter | | |
|
Residential data (2) | |
$
|
69.90
| | |
$
|
63.92
| | |
$
|
5.98
| | |
9.4
|
%
|
|
Residential video (2) | |
$
|
88.20
| | |
$
|
82.42
| | |
$
|
5.78
| | |
7.0
|
%
|
|
Residential voice (2) | |
$
|
32.97
| | |
$
|
33.69
| | |
$
|
(0.72
|
)
| |
(2.1
|
)%
|
|
Business services (3) | |
$
|
186.71
| | |
$
|
182.85
| | |
$
|
3.86
| | |
2.1
|
%
|
| |
|
| Number of Employees | | 2,224 | | | 2,310 | | | (86 | ) | | (3.7 | )% |
|
(1)
|
|
Homes passed represents the estimated number of residential and
business serviceable addresses within the Company's footprint.
During the first quarter of 2018, the number of legacy Cable ONE
homes passed was reduced by approximately 74,000 to adjust for
duplicate and non-serviceable addresses.
|
|
(2)
| |
Average monthly revenue per unit values represent the applicable
quarterly residential service revenues (excluding installation and
activation fees) divided by the corresponding average of the number
of PSUs at the beginning and end of each period, divided by three.
|
|
(3)
| |
Average monthly revenue per unit values represent quarterly business
services revenues (excluding installation and activation fees)
divided by the average of the number of business customer
relationships at the beginning and end of each period, divided by
three.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190227005137/en/
Trish Niemann
Corporate Communications Director
602-364-6372
Steven Cochran
Chief Financial Officer
602-364-6210
Source: Cable One, Inc.