Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable One”)
today reported financial and operating results for the quarter
ended June 30, 2020.
Cable One completed the acquisition of Fidelity Communications
Co.’s data, video and voice business and certain related assets
(collectively, “Fidelity”) on October 1, 2019. The results for the
three months ended June 30, 2020 discussed below and presented in
the tables within this press release include Fidelity operations,
while the results for the comparable prior year period do not,
including any discussion of consolidated results or
performance.
Second Quarter 2020 Highlights:
- Total revenues were $328.3 million in the second quarter of
2020 compared to $285.7 million in the second quarter of 2019, an
increase of 14.9%. Residential data revenues increased 23.5% and
business services revenues increased 17.5% year-over-year.
- Net income was $62.5 million in the second quarter of 2020, an
increase of 71.8% year-over-year. Adjusted EBITDA(1) was $163.2
million, an increase of 18.6% year-over-year. Net profit margin was
19.0% and Adjusted EBITDA margin(1) was 49.7%.
- Net cash provided by operating activities was $153.7 million in
the second quarter of 2020, an increase of 42.2% year-over-year.
Adjusted EBITDA less capital expenditures(1) was $84.5 million in
the second quarter of 2020 compared to $73.7 million in the second
quarter of 2019.
- Residential data primary service units (“PSUs”) grew by over
145,000, or 23.7%, year-over-year and by over 44,000, or 6.2%,
sequentially, which excluded approximately 2,000 residential data
PSUs that were considered to be high risk for disconnection.
Business services PSUs grew by nearly 15,000, or 13.0%,
year-over-year.
- In May 2020, the Company completed a public offering of its
common stock and received total net proceeds of $469.8
million.
- In an effort to help ease the financial burden and provide
continued connectivity for its customers and communities impacted
by the COVID-19 pandemic, beginning in March 2020, the Company
initially committed to do the following for 60 days under the
Federal Communication Commission’s Keep Americans Connected Pledge:
waive late charges and suspend disconnection of data services for
residential and business customers who are unable to pay their bill
due to disruptions caused by the pandemic and open free public
Wi-Fi hotspots in local office parking lots and other public areas
across its footprint, which are in place at nearly 140 locations.
These commitments were scheduled to conclude on June 30, 2020;
however, the Company continued to waive late charges for
residential and small business data and voice customers through
July 31, 2020 and has extended access to its free public Wi-Fi
hotspots through the end of 2020.
- Other actions taken by the Company beginning in March 2020 to
assist customers and the communities it serves during the COVID-19
pandemic included discontinuing charging data overage fees, which
was later extended through the end of June 2020; offering a
low-cost 15 Megabit per second residential data plan for $10 per
month for the first three months of service to help low-income
families and those most impacted by the pandemic, which is
available through December 31, 2020; donating more than $300,000
for community relief efforts and supporting various other local
relief efforts; and partnering with communities, hospitals, medical
centers and other essential institutions to address their broadband
connection needs and challenges. The Company also revised a
majority of its residential data plans to provide 50 to 300
Gigabits of additional data based on the plan as of July 1, 2020,
and the Company continues to work with residential and small
business data and voice customers who have been harmed financially
by the COVID-19 pandemic to keep them connected by offering
flexible payment plans.
(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.
Second Quarter 2020 Financial Results Compared to Second
Quarter 2019
Revenues increased $42.7 million, or 14.9%, to $328.3 million
for the second quarter of 2020, including $33.1 million from
Fidelity operations. The remaining increase was driven primarily by
organic residential data and business services revenue growth,
partially offset by decreases in organic residential video,
residential voice and other revenues. For the second quarter of
2020 and 2019, residential data revenues comprised 50.0% and 46.5%
of total revenues and business services revenues comprised 17.8%
and 17.4% of total revenues, respectively. Certain actions taken by
the Company in response to the COVID-19 pandemic, including
temporarily discontinuing charging data overage fees, waiving late
charges and suspending collection activities, which reduced
reconnect fees, negatively impacted consolidated revenues by $7.9
million in the second quarter of 2020. This negative impact on
consolidated revenues, of which $5.0 million was associated other
revenues, was mostly offset by a larger-than-usual quarterly gain
in residential data customers and the associated increase in
residential data revenues related to the COVID-19 pandemic.
Operating expenses (excluding depreciation and amortization)
were $106.0 million in the second quarter of 2020 compared to $95.7
million in the second quarter of 2019. Operating expenses as a
percentage of revenues were 32.3% for the second quarter of 2020
compared to 33.5% for the year-ago quarter. The increase in
operating expenses was primarily attributable to $10.3 million of
additional expenses related to Fidelity operations and a $3.6
million increase in labor costs, partially offset by a $2.9 million
decrease in programming expenses. On a consolidated basis,
operating expenses for the second quarter of 2020 reflect $3.9
million of increased labor costs and other operating expenses as a
result of the COVID-19 pandemic.
Selling, general and administrative expenses were $65.0 million
for the second quarter of 2020 and increased $4.9 million, or 8.1%,
compared to the second quarter of 2019. Selling, general and
administrative expenses as a percentage of revenues were 19.8% and
21.0% for the second quarter of 2020 and 2019, respectively. The
increase in selling, general and administrative expenses was
primarily attributable to $6.1 million of additional expenses
related to Fidelity operations and a $4.3 million increase in bad
debt expense, partially offset by decreases of $3.1 million in
health insurance costs and $2.6 million in rebranding costs. The
lower health insurance costs were due to reduced claims activity in
connection with stay-at-home orders issued during the pandemic. On
a consolidated basis, selling, general and administrative expenses
for the second quarter of 2020 reflect $3.0 million of additional
expenses primarily attributable to higher bad debt expense
estimates resulting from the COVID-19 pandemic.
Depreciation and amortization expense was $65.6 million for the
second quarter of 2020, including $11.0 million attributable to
Fidelity operations, and increased $10.7 million, or 19.6%,
compared to the second quarter of 2019. As a percentage of
revenues, depreciation and amortization expense was 20.0% for the
second quarter of 2020 compared to 19.2% for the second quarter of
2019.
Interest expense decreased $1.9 million, or 10.3%, to $16.6
million, driven primarily by lower interest rates, partially offset
by additional outstanding debt and higher interest rate swap
settlement expense.
Other income of $1.7 million in the second quarter of 2020
consisted of interest and investment income. Other expense of $9.6
million in the second quarter of 2019 consisted of a $6.5 million
call premium related to the redemption of the Company’s previously
outstanding senior notes and $4.9 million of debt issuance cost
write-offs, partially offset by interest and investment income.
Income tax provision was $13.2 million in the second quarter of
2020 compared to $9.6 million in the prior year quarter. The
effective tax rate was 17.4% and 20.8% for the second quarter of
2020 and 2019, respectively. The decrease in the effective tax rate
was due primarily to a $2.8 million increase in income tax benefits
attributable to the net operating loss carryback provision of the
Coronavirus Aid, Relief, and Economic Security Act enacted in
response to the COVID-19 pandemic and a $1.0 million increase in
income tax benefits attributable to equity-based compensation
awards.
Net income was $62.5 million in the second quarter of 2020
compared to $36.4 million in the prior year quarter.
Adjusted EBITDA was $163.2 million and $137.6 million for the
second quarter of 2020 and 2019, respectively, an increase of
18.6%. Capital expenditures for the second quarter of 2020 totaled
$78.7 million, including capital expenditures for Fidelity
operations, compared to $63.9 million for the second quarter of
2019. Adjusted EBITDA less capital expenditures for the second
quarter of 2020 was $84.5 million compared to $73.7 million in the
prior year quarter.
COVID-19 Impacts
The COVID-19 pandemic and the Company’s associated responses
negatively impacted Adjusted EBITDA by $14.9 million during the
three months ended June 30, 2020, primarily driven by a decrease in
revenues from the suspension of data overage fees, late charges and
reconnect fees, reduced advertising revenues and diminished growth
in business services revenues, coupled with higher labor costs and
bad debt expense. These negative Adjusted EBITDA impacts were
mostly offset by a greater-than-usual quarterly gain in residential
data customers and the associated increase in residential data
revenues as well as a largely unexpected reduction of certain
expenses that resulted from shelter-in-place orders and the
Company’s expanded work-from-home program during the three months
ended June 30, 2020.
The Company expects the negative impacts associated with the
actions it took in response to the pandemic to continue into the
third quarter of 2020, due primarily to reduced data overage fees,
late charges and reconnect fees during the early part of the third
quarter and elevated labor costs throughout the third quarter.
However, the increase in residential data revenues associated with
the significant number of residential data customers acquired
during the second quarter of 2020 is anticipated to partially
offset these reduced revenues and additional costs. In addition,
the Company faces various uncertainties related to the impact of
the COVID-19 pandemic on the overall economy and the Company’s
business, including whether it is able to sustain continued
customer growth, its level of bad debt expense, and if some of the
unexpected expense reductions realized during the second quarter of
2020 will continue or if those expenses will return to more normal
levels as certain areas of the country ease pandemic-related
restrictions.
The Company continues to monitor the evolving situation caused
by the COVID-19 pandemic, and it may take further actions required
by governmental authorities or that it determines are prudent to
support the well-being of its associates, customers, suppliers,
business partners and others. The degree to which the COVID-19
pandemic impacts the Company’s operations, business, financial
results and financial condition will depend on future developments,
which are highly uncertain, continuously evolving and cannot be
predicted. This includes, but is not limited to, the duration and
spread of the pandemic, its severity, the actions to contain the
virus or treat its impact, potential legislative or regulatory
efforts to impose new requirements on our data services and how
quickly and to what extent normal economic and operating conditions
can resume.
Accordingly, the Company’s results and financial condition
discussed herein may not be indicative of its future results and
trends. Refer to the section entitled “Risks Factors” in the
Company’s Quarterly Report on Form 10-Q for the period ended June
30, 2020 (the “Second Quarter 2020 Form 10-Q”) for additional risks
the Company faces due to the COVID-19 pandemic.
Liquidity and Capital Resources
At June 30, 2020, the Company had $642.6 million of cash and
cash equivalents on hand compared to $125.3 million at December 31,
2019. The Company’s debt balance was $1.7 billion and $1.8 billion
at June 30, 2020 and December 31, 2019, respectively. The Company
had $321.3 million available for borrowing under its revolving
credit facility as of June 30, 2020.
In May 2020, the Company completed a public offering of 287,500
shares of its common stock for total net proceeds of $469.8
million, after deducting underwriting discounts and offering
expenses. The Company used a portion of the net proceeds to repay
in full its outstanding revolver borrowings of $100 million in May
2020. The Company expects to use the remainder of the proceeds for
general corporate purposes, including acquisitions and strategic
investments.
The Company paid $13.6 million in dividends to stockholders
during the second quarter of 2020. On August 4, 2020, the Company’s
Board of Directors approved a $0.25 per share increase in the
Company’s quarterly dividend to $2.50 per share of common stock to
be paid on September 4, 2020 to holders of record as of August 18,
2020.
Conference Call
Cable One will host a conference call with the financial
community to discuss results for the second quarter 2020 on
Thursday, August 6, 2020, at 5 p.m. Eastern Time (ET).
Stockholders, analysts and other interested parties may register
for the conference in advance at http://dpregister.com/10146143.
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 Thursday, August 6,
2020 until Thursday, August 20, 2020 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 condensed consolidated financial statements
and notes thereto contained in the Second Quarter 2020 Form 10-Q,
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 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, Adjusted EBITDA less capital
expenditures and capital expenditures as a percentage of Adjusted
EBITDA 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, net cash provided by operating
activities or capital expenditures as a percentage of net income
reported in accordance with GAAP. Adjusted EBITDA and Adjusted
EBITDA less capital expenditures are reconciled to net income,
Adjusted EBITDA margin is reconciled to net profit margin and
capital expenditures as a percentage of Adjusted EBITDA is
reconciled to capital expenditures as a percentage of net income.
Adjusted EBITDA less capital expenditures is also reconciled to net
cash provided by operating activities. These reconciliations are
included 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, depreciation and amortization,
equity-based compensation, severance expense, (gain) loss on
deferred compensation, acquisition-related costs, (gain) loss on
asset sales and disposals, system conversion costs, rebranding
costs, other (income) expense and other unusual 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, changes in operating assets and
liabilities, change in deferred income taxes and other unusual
expenses, as provided in the “Reconciliations of Non-GAAP Measures”
tables within this press release.
“Capital expenditures as a percentage of Adjusted EBITDA” is
defined as capital expenditures divided by Adjusted EBITDA.
The Company uses Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted EBITDA less capital expenditures and capital expenditures
as a percentage of Adjusted EBITDA 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 to
determine compliance with the covenants contained in the Company’s
credit agreement. 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 that Adjusted EBITDA, Adjusted EBITDA
margin and capital expenditures as a percentage of Adjusted EBITDA
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 stockholders.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less
capital expenditures, capital expenditures as a percentage of
Adjusted EBITDA 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, Adjusted
EBITDA less capital expenditures and capital expenditures as a
percentage of Adjusted EBITDA 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 900,000 residential and
business customers in 21 states through its Sparklight® and
Clearwave™ brands. Sparklight 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. Sparklight Business and Clearwave provide 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, strategy, dividend policy, financial results
and financial condition as well as anticipated impacts from the
COVID-19 pandemic on the Company and future responses.
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, which are discussed in the Company’s latest Annual Report
on Form 10-K and the Second Quarter 2020 Form 10-Q as filed with
the SEC:
- the duration and severity of the COVID-19 pandemic and its
effects on the Company’s business, financial condition, results of
operations and cash flows;
- 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 and strategic investments by
the Company;
- risks that the Company’s rebranding may not produce the
benefits expected;
- damage to the Company’s reputation or brand image;
- risks that the implementation of the Company’s new enterprise
resource planning system disrupts business operations;
- 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 restrictions the terms of the Company’s indebtedness place
on its business and corporate actions;
- 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;
- provisions in the Company’s charter, by-laws and Delaware law
that could discourage takeovers and limit the judicial forum for
certain disputes and the liabilities for directors; 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 and the Second Quarter 2020
Form 10-Q 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 June
30,
(dollars in
thousands, except per share data)
2020
2019
$ Change
% Change
Revenues:
Residential data
$
164,015
$
132,824
$
31,191
23.5
%
Residential video
87,328
84,033
3,295
3.9
%
Residential voice
12,120
10,705
1,415
13.2
%
Business services
58,469
49,759
8,710
17.5
%
Other
6,371
8,329
(1,958
)
(23.5
)%
Total Revenues
328,303
285,650
42,653
14.9
%
Costs and Expenses:
Operating (excluding depreciation and
amortization)
106,028
95,688
10,340
10.8
%
Selling, general and administrative
64,994
60,103
4,891
8.1
%
Depreciation and amortization
65,584
54,835
10,749
19.6
%
Loss on asset sales and disposals, net
988
910
78
8.6
%
Total Costs and Expenses
237,594
211,536
26,058
12.3
%
Income from operations
90,709
74,114
16,595
22.4
%
Interest expense
(16,615
)
(18,516
)
1,901
(10.3
)%
Other income (expense), net
1,655
(9,632
)
11,287
(117.2
)%
Income before income taxes
75,749
45,966
29,783
64.8
%
Income tax provision
13,209
9,571
3,638
38.0
%
Net income
$
62,540
$
36,395
$
26,145
71.8
%
Net Income per Common Share:
Basic
$
10.72
$
6.41
$
4.31
67.2
%
Diluted
$
10.63
$
6.35
$
4.28
67.4
%
Weighted Average Common Shares
Outstanding:
Basic
5,831,796
5,673,669
158,127
2.8
%
Diluted
5,883,417
5,730,238
153,179
2.7
%
Unrealized loss on cash flow hedges and
other, net of tax
$
(9,459
)
$
(33,970
)
$
24,511
(72.2
)%
Comprehensive income
$
53,081
$
2,425
$
50,656
NM
NM = Not meaningful.
CABLE ONE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in
thousands, except par values)
June 30, 2020
December 31, 2019
Assets
Current Assets:
Cash and cash equivalents
$
642,552
$
125,271
Accounts receivable, net
41,351
38,452
Income taxes receivable
14,263
2,146
Prepaid and other current assets
19,638
15,619
Total Current Assets
717,804
181,488
Property, plant and equipment, net
1,233,419
1,201,271
Intangible assets, net
1,290,106
1,312,381
Goodwill
429,597
429,597
Other noncurrent assets
72,524
27,094
Total Assets
$
3,743,450
$
3,151,831
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued
liabilities
$
152,840
$
136,993
Deferred revenue
25,333
23,640
Current portion of long-term debt
28,945
28,909
Total Current Liabilities
207,118
189,542
Long-term debt
1,699,525
1,711,937
Deferred income taxes
303,353
303,314
Interest rate swap liability
184,182
78,612
Other noncurrent liabilities
25,726
26,857
Total Liabilities
2,419,904
2,310,262
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; 6,175,399 and 5,887,899 shares issued; and
6,019,834 and 5,715,377 shares outstanding as of June 30, 2020 and
December 31, 2019, respectively)
62
59
Additional paid-in capital
527,641
51,198
Retained earnings
1,085,793
980,355
Accumulated other comprehensive loss
(162,242
)
(68,158
)
Treasury stock, at cost (155,565 and
172,522 shares held as of June 30, 2020 and December 31, 2019,
respectively)
(127,708
)
(121,885
)
Total Stockholders' Equity
1,323,546
841,569
Total Liabilities and Stockholders'
Equity
$
3,743,450
$
3,151,831
CABLE ONE, INC.
RECONCILIATIONS OF NON-GAAP
MEASURES
(Unaudited)
Three Months Ended June
30,
(dollars in
thousands)
2020
2019
$ Change
% Change
Net income
$
62,540
$
36,395
$
26,145
71.8
%
Net profit margin
19.0
%
12.7
%
Plus:
Interest expense
$
16,615
$
18,516
$
(1,901
)
(10.3
)%
Income tax provision
13,209
9,571
3,638
38.0
%
Depreciation and amortization
65,584
54,835
10,749
19.6
%
Equity-based compensation
3,426
3,082
344
11.2
%
Severance expense
-
15
(15
)
(100.0
)%
Loss on deferred compensation
206
78
128
164.1
%
Acquisition-related costs
1,293
871
422
48.5
%
Loss on asset sales and disposals, net
988
910
78
8.6
%
System conversion costs
647
777
(130
)
(16.7
)%
Rebranding costs
311
2,902
(2,591
)
(89.3
)%
Other (income) expense, net
(1,655
)
9,632
(11,287
)
(117.2
)%
Adjusted EBITDA
$
163,164
$
137,584
$
25,580
18.6
%
Adjusted EBITDA margin
49.7
%
48.2
%
Less:
Capital expenditures
$
78,659
$
63,861
$
14,798
23.2
%
Capital expenditures as a percentage of
net income
125.8
%
175.5
%
Capital expenditures as a percentage of
Adjusted EBITDA
48.2
%
46.4
%
Adjusted EBITDA less capital
expenditures
$
84,505
$
73,723
$
10,782
14.6
%
Three Months Ended June
30,
(dollars in
thousands)
2020
2019
$ Change
% Change
Net cash provided by operating
activities
$
153,695
$
108,116
$
45,579
42.2
%
Capital expenditures
(78,659
)
(63,861
)
(14,798
)
23.2
%
Interest expense
16,615
18,516
(1,901
)
(10.3
)%
Amortization of debt issuance costs
(1,106
)
(1,291
)
185
(14.3
)%
Income tax provision
13,209
9,571
3,638
38.0
%
Changes in operating assets and
liabilities
(9,332
)
(2,851
)
(6,481
)
227.3
%
Increase in deferred income taxes
(10,719
)
(4,545
)
(6,174
)
135.8
%
Loss on deferred compensation
206
78
128
164.1
%
Acquisition-related costs
1,293
871
422
48.5
%
Severance expense
-
15
(15
)
(100.0
)%
Write-off of debt issuance costs
-
(4,207
)
4,207
(100.0
)%
System conversion costs
647
777
(130
)
(16.7
)%
Rebranding costs
311
2,902
(2,591
)
(89.3
)%
Other (income) expense, net
(1,655
)
9,632
(11,287
)
(117.2
)%
Adjusted EBITDA less capital
expenditures
$
84,505
$
73,723
$
10,782
14.6
%
CABLE ONE, INC.
OPERATING STATISTICS
(Unaudited)
As of June 30,
Change
(in thousands,
except percentages and ARPU data)
2020
2019
Amount
%
Homes Passed
2,344
2,133
211
9.9
%
Residential Customers(1)
876
742
134
18.0
%
Data PSUs(1)
758
613
145
23.7
%
Video PSUs
276
293
(17
)
(5.9
)%
Voice PSUs
98
94
4
4.6
%
Total residential PSUs(1)
1,132
1,000
132
13.2
%
Business Customers
86
76
9
12.1
%
Data PSUs
80
69
11
15.9
%
Video PSUs
14
15
(1
)
(8.2
)%
Voice PSUs
35
30
5
17.0
%
Total business services PSUs
129
114
15
13.0
%
Total Customers(1)
962
819
143
17.5
%
Total non-video(1)
672
508
164
32.2
%
Percent of total(1)
69.9
%
62.1
%
Data PSUs(1)
838
682
156
22.9
%
Video PSUs
290
308
(18
)
(6.0
)%
Voice PSUs
133
124
9
7.6
%
Total PSUs(1)
1,261
1,114
147
13.2
%
Penetration
Data(1)
35.8
%
32.0
%
3.8
%
Video
12.4
%
14.5
%
(2.1
)%
Voice
5.7
%
5.8
%
(0.1
)%
Share of Second Quarter
Revenues
Residential data
50.0
%
46.5
%
3.5
%
Business services
17.8
%
17.4
%
0.4
%
Total
67.8
%
63.9
%
3.9
%
ARPU - Second Quarter
Residential data(2)
$
73.80
$
71.80
$
2.00
2.8
%
Residential video(2)
$
102.95
$
93.43
$
9.52
10.2
%
Residential voice(2)
$
40.35
$
37.32
$
3.03
8.1
%
Business services(3)
$
228.11
$
218.77
$
9.34
4.3
%
_____________________________________ Note:
All totals, percentages and year-over-year
changes are calculated using exact numbers. Minor differences may
exist due to rounding.
(1)
Amount as of June 30, 2020 excluded
approximately 2,000 residential data customers or PSUs, as
applicable, considered to be high risk for disconnection because
payments have not been made since activation.
(2)
Average monthly revenue per unit (“ARPU”)
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, except that for any new
PSUs added as a result of an acquisition occurring during the
period, the associated ARPU values represent the applicable
residential service revenues (excluding installation and activation
fees) divided by the pro-rated average number of PSUs during such
period.
(3)
ARPU values represent quarterly business
services revenues divided by the average of the number of business
customer relationships at the beginning and end of each period,
divided by three, except that for any new business customer
relationships added as a result of an acquisition occurring during
the period, the associated ARPU values represent business services
revenues divided by the pro-rated average number of business
customer relationships during such period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005694/en/
Trish Niemann Senior Director, Corporate Communications
602-364-6372 patricia.niemann@cableone.biz
Steven Cochran Senior Vice President and Chief Financial Officer
investor_relations@cableone.biz
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