Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) (the
“Company”) reported results for the fourth quarter 2015.
Fourth quarter financial summary:
- Revenue was $188.2 million.
- Net cash from operations was $51.5 million.
- Adjusted EBITDA was $79.4 million.
- Dividend payout ratio was 72.2%.
“The fourth quarter concluded another solid year for the Company
with strong growth in our commercial and carrier revenues led by
metro Ethernet and new fiber to the tower sites,” said Bob Udell,
President and Chief Executive Officer. “The successful
execution of our strategy is evident by the continued expansion of
our fiber network, growth in our business and broadband services,
and consistent cash flows supporting our dividend to
shareholders.”
Pro Forma Financial Results for the Fourth
Quarter
We have presented various adjusted pro forma information below
and in the tables at the end of the release. This information
is presented as if the acquisition of Enventis had occurred on
January 1, 2014 in order to provide a better view of the period
over period performance for the combined business.
- Total revenues were $188.2 million, compared to $192.6 million
for the same period last year. Excluding revenue from our
equipment sales and service and revenue associated with the sale of
the Enventis third party billing platform, revenues were $178.1
million, compared to $180.6 million for the fourth quarter of
2014. Strong growth in strategic sales channels were more
than offset by declines in voice services, subsidies and network
access revenues.
- Income from operations was $19.7 million, compared to $25.9
million in the fourth quarter of 2014. The decrease in the
quarter was primarily due to the decline in revenue and $1.8
million in higher depreciation and amortization costs from our
increased growth investments.
- Interest expense, net improved by $3.0 million to $19.3 million
from $22.3 million for the same period last year. The
improvement is primarily due to the use of proceeds from the add-on
we completed in June of 2015 to our 6.5% senior notes due
2022. We used certain of the proceeds to redeem the entire
remaining portion of our then-outstanding 10 7/8% senior
notes.
- Other income, net was $9.4 million, compared to $8.4 million
for the same period in 2014 driven primarily from higher equity
earnings in our wireless partnerships with Verizon.
- Adjusted diluted net income per share excludes certain items in
the manner described in the table provided in this release.
Adjusted diluted net income per share was $0.16 for both the
current quarter and the same period last year.
- Cash distributions from our Verizon Wireless partnerships were
$11.2 million compared to $9.2 million for the fourth quarter of
2014.
- Adjusted EBITDA was $79.4 million compared to $80.6 million for
the same period in 2014.
- The total net debt to last twelve month adjusted EBITDA ratio
was 4.21x.
Financial Results for the Twelve Months Ended December
31, 2015
- Revenues were $775.7 million and adjusted EBITDA was $328.9
million.
Cash Available to Pay Dividends For the
quarter, cash available to pay dividends, or CAPD, was $27.1
million, and the dividend payout ratio was 72.2%. At December
31, 2015, cash and cash equivalents were $15.9 million.
Capital expenditures for the quarter were $33.8 million.
Financial Guidance The Company is providing its
full year 2016 guidance as outlined below.
|
|
|
|
|
2016
Guidance |
|
2015 Results
|
|
|
|
|
Cash
Interest Expense |
$73.0
million to $75.0 million |
|
$76.9 million |
Cash
Income Taxes |
$1.0
million to $3.0 million |
|
$1.8 million |
Capital
Expenditures |
$125.0
million to $130.0 million |
|
$133.9
million |
|
|
|
|
Dividend PaymentsOn February 19, 2016, the
Company’s board of directors declared its next quarterly dividend
of $0.38738 per common share, which is payable on May 2, 2016 to
stockholders of record at the close of business on April 15,
2016. This will represent the 43rd consecutive quarterly
dividend paid by the Company.
Conference Call Information The Company
will host a conference call today at 11:00 a.m. Eastern Time /
10:00 a.m. Central Time to discuss fourth quarter earnings and
developments with respect to the Company. The live webcast
and replay can be accessed from the “Investor Relations” section of
the company’s website at http://ir.consolidated.com. The live
conference call dial-in number is 1-877-374-3981 with conference ID
24959106. A telephonic replay of the conference call will be
available through March 3, 2016 and can be accessed by calling
1-855-859-2056.
Use of Non-GAAP Financial Measures This press
release, as well as the conference call, includes disclosures
regarding “EBITDA”, “adjusted EBITDA”, “cash available to pay
dividends” and the related “dividend payout ratio”, “total net debt
to last twelve month adjusted EBITDA coverage ratio”, “adjusted
diluted net income per share” and “adjusted net income attributable
to common stockholders”, all of which are non-GAAP financial
measures and described in this section as not being in compliance
with Regulation S-X. Accordingly, they should not be
construed as alternatives to net cash from operating or investing
activities, cash and cash equivalents, cash flows from operations,
net income or net income per share as defined by GAAP and are not,
on their own, necessarily indicative of cash available to fund cash
needs as determined in accordance with GAAP. In addition, not all
companies use identical calculations, and the non-GAAP financial
measures may not be comparable to other similarly titled measures
of other companies. A reconciliation of the differences
between these non-GAAP financial measures and the most directly
comparable financial measures presented in accordance with GAAP is
included in the tables that follow.
Adjusted EBITDA is comprised of EBITDA, adjusted for certain
items as permitted or required by the lenders under our credit
agreement in place at the end of each quarter in the periods
presented. The tables that follow include an explanation of
how adjusted EBITDA is calculated for each of the periods presented
with the reconciliation to net income. EBITDA is defined as
net earnings before interest expense, income taxes, depreciation
and amortization on a historical basis.
Cash available to pay dividends represents adjusted EBITDA plus
cash interest income less (1) cash interest expense, (2) capital
expenditures and (3) cash income taxes; this calculation differs in
certain respects from the similar calculation used in our credit
agreement.
We present adjusted EBITDA, cash available to pay dividends and
the related dividend payout ratio for several reasons.
Management believes adjusted EBITDA, cash available to pay
dividends and the dividend payout ratio are useful as a means to
evaluate our ability to fund our estimated uses of cash (including
interest on our debt) and pay dividends. In addition, we have
presented adjusted EBITDA, cash available to pay dividends and the
dividend payout ratio to investors in the past because they are
frequently used by investors, securities analysts and other
interested parties in the evaluation of companies in our industry,
and management believes presenting them here provides a measure of
consistency in our financial reporting. Adjusted EBITDA and cash
available to pay dividends, referred to as Available Cash in our
credit agreement, are also components of the restrictive covenants
and financial ratios contained in our credit agreement that
requires us to maintain compliance with these covenants and limit
certain activities, such as our ability to incur debt and to pay
dividends. The definitions in these covenants and ratios are
based on adjusted EBITDA and cash available to pay dividends after
giving effect to specified charges. In addition, adjusted
EBITDA, cash available to pay dividends and the dividend payout
ratio provide our board of directors with meaningful information to
determine, with other data, assumptions and considerations, our
dividend policy and our ability to pay dividends under the
restrictive covenants in our credit agreement and to measure our
ability to service and repay debt. We present the related
“total net debt to last twelve month adjusted EBITDA coverage
ratio” principally to put other non-GAAP measures in context and
facilitate comparisons by investors, security analysts and others;
this ratio differs in certain respects from the similar ratio used
in our credit agreement. These measures differ in certain
respects from the ratios used in our senior notes
indenture.
These non-GAAP financial measures have certain
shortcomings. In particular, adjusted EBITDA does not
represent the residual cash flows available for discretionary
expenditures, since items such as debt repayment and interest
payments are not deducted from such measure. Similarly, while
we may generate cash available to pay dividends, we are not
required to use any such cash to pay dividends, and the payment of
any dividends is subject to declaration by our board of directors,
compliance with applicable law and the terms of our credit
agreement. Because adjusted EBITDA is a component of the
dividend payout ratio and the ratio of total net debt to last
twelve month adjusted EBITDA, these measures are also subject to
the material limitations discussed above. In addition, the
ratio of total net debt to last twelve month adjusted EBITDA is
subject to the risk that we may not be able to use the cash on the
balance sheet to reduce our debt on a dollar-for-dollar basis.
Management believes these ratios are useful as a means to evaluate
our ability to incur additional indebtedness in the
future.
We present the non-GAAP measures adjusted diluted net income per
share and adjusted diluted net income attributable to common
stockholders because our net income and net income per share are
regularly affected by items that occur at irregular intervals or
are non-cash items. We believe that disclosing these measures
assists investors, securities analysts and other interested parties
in evaluating both our company over time and the relative
performance of the companies in our industry.
About Consolidated Consolidated Communications
Holdings, Inc. is a leading communications provider within its
11-state operations. Headquartered in Mattoon, IL, the Company has
been providing services in many of its markets for over a century.
The Company leverages its advanced fiber optic network to offer a
wide range of solutions including: High-Speed Internet, Data
and Ethernet solutions, Digital TV, Voice, managed and cloud
services and wireless backhaul.
Safe Harbor The Securities and Exchange
Commission (“SEC”) encourages companies to disclose forward-looking
information so that investors can better understand a company’s
future prospects and make informed investment decisions.
Certain statements in this press release are forward-looking
statements and are made pursuant to the safe harbor provisions of
the Securities Litigation Reform Act of 1995. These
forward-looking statements reflect, among other things, our current
expectations, plans, strategies, and anticipated financial results.
There are a number of risks, uncertainties, and conditions
that may cause our actual results to differ materially from those
expressed or implied by these forward-looking statements.
These risks and uncertainties include a number of factors
related to our business, including economic and financial market
conditions generally and economic conditions in our service areas;
various risks to shareholders of not receiving dividends and risks
to our ability to pursue growth opportunities if we continue to pay
dividends according to the current dividend policy; various risks
to the price and volatility of our common stock; changes in the
valuation of pension plan assets; the substantial amount of debt
and our ability to repay or refinance it or incur additional debt
in the future; our need for a significant amount of cash to service
and repay the debt and to pay dividends on the common stock;
restrictions contained in our debt agreements that limit the
discretion of management in operating the business; regulatory
changes, including changes to subsidies, rapid development and
introduction of new technologies and intense competition in the
telecommunications industry; risks associated with our possible
pursuit of acquisitions; system failures; losses of large customers
or government contracts; risks associated with the rights-of-way
for the network; disruptions in the relationship with third party
vendors; losses of key management personnel and the inability to
attract and retain highly qualified management and personnel in the
future; changes in the extensive governmental legislation and
regulations governing telecommunications providers and the
provision of telecommunications services; telecommunications
carriers disputing and/or avoiding their obligations to pay network
access charges for use of our network; high costs of regulatory
compliance; the competitive impact of legislation and regulatory
changes in the telecommunications industry; and liability and
compliance costs regarding environmental regulations. A detailed
discussion of these and other risks and uncertainties that could
cause actual results and events to differ materially from such
forward-looking statements are discussed in more detail in our
filings with the Securities and Exchange Commission, including our
reports on Form 10-K and Form 10-Q. Many of these
circumstances are beyond our ability to control or predict.
Moreover, forward-looking statements necessarily involve
assumptions on our part. These forward-looking statements
generally are identified by the words “believe”, “expect”,
“anticipate”, “estimate”, “project”, “intend”, “plan”, “should”,
“may”, “will”, “would”, “will be”, “will continue” or similar
expressions. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of Consolidated
Communications Holdings, Inc. and its subsidiaries to be different
from those expressed or implied in the forward-looking statements.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements that appear throughout this press
release. Furthermore, forward-looking statements speak only
as of the date they are made. Except as required under the
federal securities laws or the rules and regulations of the
Securities and Exchange Commission, we disclaim any intention or
obligation to update or revise publicly any forward-looking
statements. You should not place undue reliance on
forward-looking statements.
- Tables Follow -
|
|
Consolidated Communications Holdings,
Inc. |
|
Condensed Consolidated Balance
Sheets |
|
(Dollars in thousands, except par value) |
|
(Unaudited) |
|
|
December
31, |
|
December
31, |
|
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
15,878 |
|
|
$ |
6,679 |
|
|
Accounts
receivable, net |
|
68,848 |
|
|
|
77,536 |
|
|
Income
tax receivable |
|
23,867 |
|
|
|
18,940 |
|
|
Deferred
income taxes |
|
- |
|
|
|
13,374 |
|
|
Prepaid
expenses and other current assets |
|
17,815 |
|
|
|
17,616 |
|
|
Total current
assets |
|
126,408 |
|
|
|
134,145 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
1,093,261 |
|
|
|
1,137,478 |
|
|
Investments |
|
105,543 |
|
|
|
115,376 |
|
|
Goodwill |
|
764,630 |
|
|
|
764,630 |
|
|
Other intangible
assets |
|
43,497 |
|
|
|
56,322 |
|
|
Other assets |
|
5,187 |
|
|
|
3,892 |
|
|
Total assets |
$ |
2,138,526 |
|
|
$ |
2,211,843 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
12,576 |
|
|
$ |
15,277 |
|
|
Advance
billings and customer deposits |
|
27,616 |
|
|
|
31,933 |
|
|
Dividends
payable |
|
19,551 |
|
|
|
19,510 |
|
|
Accrued
compensation |
|
21,883 |
|
|
|
32,581 |
|
|
Accrued
interest |
|
9,353 |
|
|
|
6,784 |
|
|
Accrued
expense |
|
42,384 |
|
|
|
40,141 |
|
|
Current
portion of long-term debt and capital lease obligations |
|
10,937 |
|
|
|
9,849 |
|
|
Total current
liabilities |
|
144,300 |
|
|
|
156,075 |
|
|
|
|
|
|
Long-term debt and
capital lease obligations |
|
1,377,892 |
|
|
|
1,341,332 |
|
|
Deferred income
taxes |
|
236,529 |
|
|
|
246,665 |
|
|
Pension and other
post-retirement obligations |
|
112,966 |
|
|
|
122,363 |
|
|
Other long-term
liabilities |
|
16,140 |
|
|
|
14,579 |
|
|
Total
liabilities |
|
1,887,827 |
|
|
|
1,881,014 |
|
|
|
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
Common
stock, par value $0.01 per share; 100,000,000 shares |
|
|
|
authorized, 50,470,096 and 50,364,579, shares
outstanding |
|
|
|
as
of December 31, 2015 and December 31, 2014, respectively
|
|
505 |
|
|
|
504 |
|
|
Additional paid in capital |
|
281,738 |
|
|
|
357,139 |
|
|
Retained
earnings (deficit) |
|
(881 |
) |
|
|
- |
|
|
Accumulated other comprehensive loss, net |
|
(35,699 |
) |
|
|
(31,640 |
) |
|
Noncontrolling interest |
|
5,036 |
|
|
|
4,826 |
|
|
Total
shareholders' equity |
|
250,699 |
|
|
|
330,829 |
|
|
Total
liabilities and shareholders' equity |
$ |
2,138,526 |
|
|
$ |
2,211,843 |
|
|
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Condensed Consolidated Statements of
Operations |
(Dollars in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
December
31, |
|
December
31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
188,191 |
|
|
$ |
186,014 |
|
|
$ |
775,737 |
|
|
$ |
635,738 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Cost of
services and products |
|
78,923 |
|
|
|
75,008 |
|
|
|
328,400 |
|
|
|
242,661 |
|
Selling,
general and administrative |
|
|
|
|
|
|
|
expenses |
|
42,545 |
|
|
|
42,691 |
|
|
|
178,227 |
|
|
|
140,636 |
|
Acquisition and other transaction costs |
|
358 |
|
|
|
9,822 |
|
|
|
1,413 |
|
|
|
11,817 |
|
Depreciation and amortization |
|
46,658 |
|
|
|
42,920 |
|
|
|
179,922 |
|
|
|
149,435 |
|
Income from
operations |
|
19,707 |
|
|
|
15,573 |
|
|
|
87,775 |
|
|
|
91,189 |
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest
expense, net of interest income |
|
(19,341 |
) |
|
|
(22,257 |
) |
|
|
(79,618 |
) |
|
|
(82,537 |
) |
Loss on
extinguishment of debt |
|
- |
|
|
|
(13,785 |
) |
|
|
(41,242 |
) |
|
|
(13,785 |
) |
Other
income, net |
|
9,350 |
|
|
|
8,446 |
|
|
|
35,189 |
|
|
|
33,548 |
|
Income (loss) before
income taxes |
|
9,716 |
|
|
|
(12,023 |
) |
|
|
2,104 |
|
|
|
28,415 |
|
Income tax expense
(benefit) |
|
5,033 |
|
|
|
(1,353 |
) |
|
|
2,775 |
|
|
|
13,027 |
|
Net income
(loss) |
|
4,683 |
|
|
|
(10,670 |
) |
|
|
(671 |
) |
|
|
15,388 |
|
|
|
|
|
|
|
|
|
Less: net income
attributable to noncontrolling interest |
|
1 |
|
|
|
36 |
|
|
|
210 |
|
|
|
321 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders |
$ |
4,682 |
|
|
$ |
(10,706 |
) |
|
$ |
(881 |
) |
|
$ |
15,067 |
|
|
|
|
|
|
|
|
|
Net income (loss) per basic and
diluted common share |
|
|
|
|
|
|
|
attributable to common
shareholders |
$ |
0.09 |
|
|
$ |
(0.22 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Pro Forma Condensed Consolidated Statements of
Operations |
(Dollars in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
December
31, |
|
December
31, |
|
|
|
Pro
Forma |
|
|
|
Pro
Forma |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
188,191 |
|
|
$ |
192,648 |
|
|
$ |
775,737 |
|
|
$ |
790,745 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Operating
expenses (exclusive of depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and amortization) |
|
121,826 |
|
|
|
121,878 |
|
|
|
508,040 |
|
|
|
499,093 |
|
Depreciation and amortization |
|
46,658 |
|
|
|
44,896 |
|
|
|
179,922 |
|
|
|
186,978 |
|
Income from
operations |
|
19,707 |
|
|
|
25,874 |
|
|
|
87,775 |
|
|
|
104,674 |
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest
expense, net of interest income |
|
(19,341 |
) |
|
|
(22,266 |
) |
|
|
(79,618 |
) |
|
|
(87,820 |
) |
Loss on
extinguishment of debt |
|
- |
|
|
|
(13,785 |
) |
|
|
(41,242 |
) |
|
|
(13,785 |
) |
Other
income, net |
|
9,350 |
|
|
|
8,446 |
|
|
|
35,189 |
|
|
|
33,548 |
|
Income (loss) from
before income taxes |
|
9,716 |
|
|
|
(1,731 |
) |
|
|
2,104 |
|
|
|
36,617 |
|
Income tax expense
(benefit) |
|
5,033 |
|
|
|
4,245 |
|
|
|
2,775 |
|
|
|
17,969 |
|
Net Income
(loss) |
|
4,683 |
|
|
|
(5,976 |
) |
|
|
(671 |
) |
|
|
18,648 |
|
Less: net income
attributable to noncontrolling interest |
|
1 |
|
|
|
36 |
|
|
|
210 |
|
|
|
321 |
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders |
$ |
4,682 |
|
|
$ |
(6,012 |
) |
|
$ |
(881 |
) |
|
$ |
18,327 |
|
|
|
|
|
|
|
|
|
Net income (loss) per basic and
diluted common share |
|
|
|
|
|
|
|
attributable to common
shareholders |
$ |
0.09 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Condensed Consolidated
Statements of Cash Flows |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
|
|
December
31, |
|
December
31, |
|
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
4,683 |
|
|
$ |
(10,670 |
) |
|
$ |
(671 |
) |
|
$ |
15,388 |
|
|
|
Adjustments to
reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
46,658 |
|
|
|
42,920 |
|
|
|
179,922 |
|
|
|
149,435 |
|
|
|
Deferred income
taxes |
|
|
1,610 |
|
|
|
11,202 |
|
|
|
5,828 |
|
|
|
10,244 |
|
|
|
Cash distributions from
wireless partnerships in excess of/(less than) earnings |
|
|
745 |
|
|
|
996 |
|
|
|
8,585 |
|
|
|
212 |
|
|
|
Non- cash stock-based
compensation |
|
|
795 |
|
|
|
964 |
|
|
|
3,060 |
|
|
|
3,636 |
|
|
|
Amortization of
deferred financing |
|
|
786 |
|
|
|
1,250 |
|
|
|
3,378 |
|
|
|
4,364 |
|
|
|
Loss on extinguishment
of debt |
|
|
- |
|
|
|
13,785 |
|
|
|
41,242 |
|
|
|
13,785 |
|
|
|
Other adjustments,
net |
|
|
(418 |
) |
|
|
1,381 |
|
|
|
506 |
|
|
|
2,973 |
|
|
|
Changes in operating
assets and liabilities, net |
|
|
(3,317 |
) |
|
|
(7,407 |
) |
|
|
(22,671 |
) |
|
|
(12,252 |
) |
|
|
Net cash
provided by operating activities |
|
|
51,542 |
|
|
|
54,421 |
|
|
|
219,179 |
|
|
|
187,785 |
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
Business acquisition,
net of cash acquired |
|
|
- |
|
|
|
(139,558 |
) |
|
|
- |
|
|
|
(139,558 |
) |
|
|
Purchase of property,
plant and equipment, net |
|
|
(33,815 |
) |
|
|
(32,960 |
) |
|
|
(133,934 |
) |
|
|
(108,998 |
) |
|
|
Purchase of
investments |
|
|
- |
|
|
|
(100 |
) |
|
|
- |
|
|
|
(100 |
) |
|
|
Proceeds from sale of
assets |
|
|
13,430 |
|
|
|
232 |
|
|
|
13,548 |
|
|
|
1,795 |
|
|
|
Proceeds from the sale
of investments |
|
|
- |
|
|
|
- |
|
|
|
846 |
|
|
|
- |
|
|
|
Restricted cash related
to acquisition |
|
|
- |
|
|
|
149,917 |
|
|
|
- |
|
|
|
- |
|
|
|
Net cash
used in investing activities |
|
|
(20,385 |
) |
|
|
(22,469 |
) |
|
|
(119,540 |
) |
|
|
(246,861 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
Proceeds on bond
offering |
|
|
- |
|
|
|
- |
|
|
|
294,780 |
|
|
|
200,000 |
|
|
|
Restricted cash on bond
offering |
|
|
- |
|
|
|
54,886 |
|
|
|
- |
|
|
|
- |
|
|
|
Proceeds on issuance of
long-term debt |
|
|
8,000 |
|
|
|
52,000 |
|
|
|
69,000 |
|
|
|
80,000 |
|
|
|
Payment of capital
lease obligation |
|
|
(449 |
) |
|
|
(222 |
) |
|
|
(1,107 |
) |
|
|
(703 |
) |
|
|
Payment on long-term
debt |
|
|
(26,275 |
) |
|
|
(30,275 |
) |
|
|
(107,100 |
) |
|
|
(63,100 |
) |
|
|
Partial redemption of
senior notes |
|
|
- |
|
|
|
(84,127 |
) |
|
|
(261,874 |
) |
|
|
(84,127 |
) |
|
|
Payment of financing
costs |
|
|
- |
|
|
|
(4,731 |
) |
|
|
(4,805 |
) |
|
|
(7,438 |
) |
|
|
Share repurchases for
minimum tax withholding |
|
|
(843 |
) |
|
|
(1,856 |
) |
|
|
(1,125 |
) |
|
|
(1,856 |
) |
|
|
Dividends on common
stock |
|
|
(19,566 |
) |
|
|
(15,607 |
) |
|
|
(78,209 |
) |
|
|
(62,341 |
) |
|
|
Other |
|
|
- |
|
|
|
(231 |
) |
|
|
- |
|
|
|
(231 |
) |
|
|
Net cash
(used)/provided by financing activities |
|
|
(39,133 |
) |
|
|
(30,163 |
) |
|
|
(90,440 |
) |
|
|
60,204 |
|
Net change
in cash and cash equivalents |
|
|
(7,976 |
) |
|
|
1,789 |
|
|
|
9,199 |
|
|
|
1,128 |
|
Cash and
cash equivalents at beginning of period |
|
|
23,854 |
|
|
|
4,890 |
|
|
|
6,679 |
|
|
|
5,551 |
|
Cash and
cash equivalents at end of period |
|
$ |
15,878 |
|
|
$ |
6,679 |
|
|
$ |
15,878 |
|
|
$ |
6,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Consolidated Revenue by Category |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
PRO FORMA |
|
|
|
|
|
Q4'14 |
|
Q1'15 |
|
Q2'15 |
|
Q3'15 |
|
Q4'15 |
|
Commercial and carrier: |
|
|
|
|
|
Data and transport services
(includes VoIP) |
$ |
43,392 |
|
$ |
45,055 |
|
$ |
45,049 |
|
$ |
46,187 |
|
$ |
47,003 |
|
Voice services |
|
26,346 |
|
|
26,055 |
|
|
26,213 |
|
|
25,463 |
|
|
25,288 |
|
Other |
|
3,414 |
|
|
2,596 |
|
|
2,841 |
|
|
3,208 |
|
|
3,621 |
|
|
|
73,152 |
|
|
73,706 |
|
|
74,103 |
|
|
74,858 |
|
|
75,912 |
|
Consumer: |
|
|
|
|
|
Broadband (VoIP, Data and
Video) |
|
53,394 |
|
|
53,725 |
|
|
54,051 |
|
|
52,956 |
|
|
52,863 |
|
Voice services |
|
16,085 |
|
|
15,556 |
|
|
15,120 |
|
|
15,143 |
|
|
14,829 |
|
|
|
69,479 |
|
|
69,281 |
|
|
69,171 |
|
|
68,099 |
|
|
67,692 |
|
|
|
|
|
|
|
Equipment
Sales and Service |
|
11,062 |
|
|
10,853 |
|
|
19,309 |
|
|
14,759 |
|
|
10,080 |
|
Subsidies |
|
14,348 |
|
|
14,392 |
|
|
14,516 |
|
|
13,905 |
|
|
13,524 |
|
Network
Access |
|
19,789 |
|
|
19,399 |
|
|
19,056 |
|
|
17,923 |
|
|
17,529 |
|
Other
products and services |
|
4,818 |
|
|
4,947 |
|
|
4,855 |
|
|
4,414 |
|
|
3,454 |
|
Total operating
revenue |
$ |
192,648 |
|
$ |
192,578 |
|
$ |
201,010 |
|
$ |
193,958 |
|
$ |
188,191 |
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Schedule of Adjusted EBITDA
Calculation |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
December
31, |
|
December
31, |
|
|
|
Pro
forma |
|
|
|
Pro
forma |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Net income (loss) |
$ |
4,683 |
|
|
$ |
(5,976 |
) |
|
$ |
(671 |
) |
|
$ |
18,648 |
|
Add (subtract): |
|
|
|
|
|
|
|
Income
tax expense (benefit) |
|
5,033 |
|
|
|
4,245 |
|
|
|
2,775 |
|
|
|
17,969 |
|
Interest
expense, net |
|
19,341 |
|
|
|
22,266 |
|
|
|
79,618 |
|
|
|
87,820 |
|
Depreciation and amortization |
|
46,658 |
|
|
|
44,896 |
|
|
|
179,922 |
|
|
|
186,978 |
|
EBITDA |
|
75,715 |
|
|
|
65,431 |
|
|
|
261,644 |
|
|
|
311,415 |
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA
(1): |
|
|
|
|
|
|
|
Other,
net (2) |
|
2,425 |
|
|
|
(309 |
) |
|
|
14,330 |
|
|
|
(1,532 |
) |
Loss on
extinguishment of debt |
|
- |
|
|
|
13,785 |
|
|
|
41,242 |
|
|
|
13,785 |
|
Investment income (accrual basis) |
|
(10,644 |
) |
|
|
(8,551 |
) |
|
|
(36,690 |
) |
|
|
(34,516 |
) |
Investment distributions (cash basis) |
|
11,153 |
|
|
|
9,244 |
|
|
|
45,316 |
|
|
|
34,600 |
|
Non-cash
compensation (3) |
|
795 |
|
|
|
1,014 |
|
|
|
3,060 |
|
|
|
4,301 |
|
Adjusted
EBITDA |
$ |
79,444 |
|
|
$ |
80,614 |
|
|
$ |
328,902 |
|
|
$ |
328,053 |
|
|
|
|
|
|
|
|
|
Footnotes for
Adjusted EBITDA: |
|
|
|
|
|
|
|
(1) These
adjustments reflect those required or permitted by the lenders
under our credit agreement. |
(2) Other,
net includes income attributable to noncontrolling interests,
acquisition and non-recurring related |
costs, and
certain miscellaneous items. |
(3)
Represents compensation expenses in connection with our Restricted
Share Plan, which because |
of the
non-cash nature of the expenses are excluded from adjusted
EBITDA. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Cash Available to Pay Dividends |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
|
|
Twelve Months
Ended |
|
December 31,
2015 |
|
|
December 31,
2015 |
|
|
|
|
|
Adjusted EBITDA |
$ |
79,444 |
|
|
|
$ |
328,902 |
|
|
|
|
|
|
- Cash interest
expense |
|
(18,474 |
) |
|
|
|
(76,913 |
) |
- Capital
expenditures |
|
(33,815 |
) |
|
|
|
(133,934 |
) |
- Cash income
taxes |
|
(40 |
) |
|
|
|
(1,835 |
) |
|
|
|
|
|
Cash available to pay
dividends |
$ |
27,115 |
|
|
|
$ |
116,220 |
|
|
|
|
|
|
Dividends Paid |
$ |
19,566 |
|
|
|
$ |
78,209 |
|
Payout Ratio |
|
72.2 |
% |
|
|
|
67.3 |
% |
|
|
|
|
|
Note:
The above calculation excludes the principal payments |
on the
amortization of our debt |
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Total Net Debt to LTM Adjusted EBITDA
Ratio |
(Dollars in thousands) |
(Unaudited) |
|
|
Summary of Outstanding
Debt |
|
Term loan, net of
discount $3,340 |
$ |
888,460 |
|
Revolving loan |
|
10,000 |
|
Senior unsecured notes
due 2022, net of discount $4,893 |
|
495,107 |
|
Capital leases |
|
7,580 |
|
Total debt as of
December 31, 2015 |
$ |
1,401,147 |
|
Less cash on hand |
|
(15,878 |
) |
Total net debt as of
December 31, 2015 |
$ |
1,385,269 |
|
|
|
Adjusted EBITDA for the
last |
|
twelve months ended December 31, 2015 |
$ |
328,902 |
|
|
|
Total Net Debt to last
twelve months |
|
Adjusted
EBITDA |
|
4.21x |
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Adjusted Net Income
and Net Income Per Share |
(in thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
|
Pro
Forma |
|
|
|
Pro
Forma |
|
Dec
31, |
|
Dec
31, |
|
Dec
31, |
|
Dec
31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Net income (loss) |
$ |
4,683 |
|
|
$ |
(5,976 |
) |
|
$ |
(671 |
) |
|
$ |
18,648 |
|
Transaction and
severance related costs, net of tax |
|
1,024 |
|
|
|
823 |
|
|
|
9,386 |
|
|
|
1,626 |
|
Loss on extinguishment
of debt, net of tax |
|
- |
|
|
|
12,233 |
|
|
|
25,323 |
|
|
|
7,471 |
|
Deferred tax rate
change |
|
1,931 |
|
|
|
- |
|
|
|
1,931 |
|
|
|
- |
|
Loss related to sale of
building, net of tax |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
401 |
|
Impairment charge for
CVIN investment, net of tax |
|
- |
|
|
|
- |
|
|
|
514 |
|
|
|
- |
|
Non-cash stock
compensation, net of tax |
|
488 |
|
|
|
900 |
|
|
|
1,879 |
|
|
|
2,331 |
|
Adjusted net
income |
$ |
8,126 |
|
|
$ |
7,980 |
|
|
$ |
38,362 |
|
|
$ |
30,477 |
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding |
|
50,206 |
|
|
|
50,053 |
|
|
|
50,176 |
|
|
|
50,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted net
income per share |
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.76 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
*
Calculations above assume a 38.6% and 11.3% effective tax rate for
the three months ended and |
38.6% and
45.8% for the twelve months ended December 31, 2015 and 2014,
respectively. |
|
|
|
|
|
|
|
|
|
Consolidated Communications Holdings,
Inc. |
Key Operating Statistics |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
31-Dec-15 |
|
30-Sep-15 |
|
% Change in
Qtr |
|
31-Dec-14 |
|
% Change
yoy |
|
|
|
|
|
|
|
|
|
|
|
Voice
Connections |
|
|
482,735 |
|
|
|
488,037 |
|
|
|
(1.1 |
%) |
|
|
503,120 |
|
|
|
(4.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Data and
Internet Connections |
|
|
456,100 |
|
|
|
452,265 |
|
|
|
0.8 |
% |
|
|
443,489 |
|
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Video
Connections |
|
|
117,882 |
|
|
|
119,643 |
|
|
|
(1.5 |
%) |
|
|
124,229 |
|
|
|
(5.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Business and
Broadband as % of total revenue |
|
|
80.4 |
% |
|
|
80.1 |
% |
|
|
0.4 |
% |
|
|
80.7 |
% |
|
|
(0.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Fiber route
network miles (long-haul and metro) |
|
|
13,717 |
|
|
|
13,441 |
|
|
|
2.1 |
% |
|
|
12,400 |
|
|
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
On-net
buildings |
|
|
5,163 |
|
|
|
4,981 |
|
|
|
3.7 |
% |
|
|
4,660 |
|
|
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Consumer
Customers |
|
|
268,934 |
|
|
|
270,496 |
|
|
|
(0.6 |
%) |
|
|
277,753 |
|
|
|
(3.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Consumer
ARPU |
|
$ |
83.90 |
|
|
$ |
83.92 |
|
|
|
(0.0 |
%) |
|
$ |
72.58 |
|
|
|
15.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
BB%
includes commercial/carrier, equipment sales and service,
directory, consumer broadband and special access |
|
|
|
|
|
|
|
|
|
|
|
Company Contact:
Matt Smith
Treasurer and VP of Finance & IR
217-258-2959
matthew.smith@consolidated.com
Consolidated Communicati... (NASDAQ:CNSL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Consolidated Communicati... (NASDAQ:CNSL)
Historical Stock Chart
From Apr 2023 to Apr 2024