WASHINGTON, Nov. 5, 2020 /PRNewswire/ --
Financial and Business Highlights
- Cogent approved an increase of $0.025 per share to its regular quarterly
dividend for a total of $0.730 per
share for Q4 2020 as compared to $0.705 per share for Q3 2020 – Cogent's
thirty-third consecutive quarterly dividend increase
-
- The Q4 2020 $0.730 dividend per
share represents an annual increase of 14.1% from the dividend per
share of $0.640 for Q4 2019.
- Service revenue increased by 0.9% from Q2 2020 to Q3 2020 and
increased from Q3 2019 to Q3 2020 by 3.9%.
- GAAP gross profit increased by 7.3% from Q3 2019 to
$66.2 million for Q3 2020. Non-GAAP
gross profit increased by 7.5% from Q3 2019 to $88.1 million for Q3 2020.
-
- GAAP gross margin increased by 150 basis points from Q3 2019 to
Q3 2020 to 46.5%. Non-GAAP gross margin increased by 200 basis
points from Q3 2019 to Q3 2020 to 61.9%.
- Net cash provided by operating activities was $33.0 million for Q3 2020, $41.3 million for Q2 2020 and $33.4 million for Q3 2019.
- EBITDA margin increased by 60 basis points from Q2 2020 to
38.4% for Q3 2020 and increased by 150 basis points from Q3
2019.
- EBITDA increased by 2.3% from Q2 2020 to $54.6 million for Q3 2020 and increased by 8.1%
from Q3 2019.
Cogent Communications Holdings, Inc. (NASDAQ: CCOI) ("Cogent")
today announced service revenue of $142.3
million for the three months ended September 30, 2020, an increase of 0.9% from the
three months ended June 30, 2020 and
an increase of 3.9% from the three months ended September 30, 2019. Foreign exchange positively
impacted service revenue growth from the three months ended
June 30, 2020 to the three months
ended September 30, 2020 by
$1.6 million and positively impacted
service revenue growth from the three months ended September 30, 2019 to the three months ended
September 30, 2020 by $1.1 million. On a constant currency basis,
service revenue declined by 0.2% from the three months ended
June 30, 2020 to the three months
ended September 30, 2020 and grew by
3.1% from the three months ended September
30, 2019 to the three months ended September 30, 2020.
On-net service is provided to customers located in buildings
that are physically connected to Cogent's network by Cogent
facilities. On-net revenue was $105.1
million for the three months ended September 30, 2020; an increase of 1.2% from the
three months ended June 30, 2020 and
an increase of 5.7% over the three months ended September 30, 2019.
Off-net customers are located in buildings directly connected to
Cogent's network using other carriers' facilities and services to
provide the last mile portion of the link from the customers'
premises to Cogent's network. Off-net revenue was $37.1 million for the three months ended
September 30, 2020; an increase of
0.1% over the three months ended June 30,
2020 and a decrease of 0.9% over the three months ended
September 30, 2019.
Non-core services are legacy services, which Cogent acquired and
continues to support but does not actively sell. Non-core
revenue was $119,000 for the three
months ended September 30, 2020; a
decrease of 18.5% from the three months ended June 30, 2020. Non-core revenue was $108,000 for the three months ended September 30, 2019.
GAAP gross profit is defined as total service revenue less
network operations expense, depreciation and amortization and
equity based compensation included in network operations
expense. GAAP gross margin is defined as GAAP gross profit
divided by total service revenue. GAAP gross profit increased by
7.3% from the three months ended September
30, 2019 to $66.2 million for
the three months ended September 30,
2020 and decreased by 1.6% from the three months ended
June 30, 2020. GAAP gross margin was
46.5% for the three months ended September
30, 2020, 45.0% for the three months ended September 30, 2019 and 47.7% for the three months
ended June 30, 2020. Excise taxes,
including Universal Service Fund fees, recorded on a gross basis
and included in service revenue and cost of network operations
expense were $3.9 million for the
three months ended September 30,
2020, $4.0 million for the
three months ended September 30,
2019 and $3.3 million for the
three months ended June 30, 2020.
Non-GAAP gross profit represents service revenue less network
operations expense, excluding equity-based compensation and amounts
shown separately (depreciation and amortization expense). Non-GAAP
gross margin is defined as Non-GAAP gross profit divided by total
service revenue. Non-GAAP gross profit increased by 7.5% from
the three months ended September 30,
2019 to $88.1 million for the
three months ended September 30, 2020
and increased by 0.8% from the three months ended June 30, 2020. Non-GAAP gross profit margin was
61.9% for the three months ended September
30, 2020, 59.9% for the three months ended September 30, 2019 and 62.0% for the three months
ended June 30, 2020.
Net cash provided by operating activities decreased by 1.4% from
the three months ended September 30,
2019 to $33.0 million for the
three months ended September 30, 2020
and decreased by 20.2% from the three months ended June 30, 2020.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased by 8.1% from the three months ended September 30, 2019 to $54.6 million for the three months ended
September 30, 2020 and increased by
2.3% from the three months ended June
30, 2020. EBITDA margin was 38.4% for the three months
ended September 30, 2020, 36.9% for
the three months ended September 30,
2019 and 37.8% for the three months ended June 30, 2020.
Basic net (loss) income per share was $(0.11) for the three months ended September 30, 2020, $0.30 for the three months ended September 30, 2019 and $0.19 for the three months ended June 30, 2020. Diluted net (loss) income per
share was $(0.11) for the three
months ended September 30, 2020,
$0.30 for the three months ended
September 30, 2019 and $0.18 for the three months ended June 30, 2020.
Unrealized foreign exchange (losses) gains on Cogent's 2024
Senior Euro Notes were $(17.3)
million for the three months ended September 30, 2020, $6.2
million for the three months ended September 30, 2019 and $(3.4) million for the three months ended
June 30, 2020.
Total customer connections increased by 3.3% from 85,692 as of
September 30, 2019 to 88,509 as of
September 30, 2020 and increased by
0.5% from 88,112 as of June 30, 2020.
On-net customer connections increased by 3.3% from 73,870 as of
September 30, 2019 to 76,338 as of
September 30, 2020 and increased by
0.5% from 75,927 as of June 30, 2020.
Off-net customer connections increased by 3.0% from 11,503 as of
September 30, 2019 to 11,849 as of
September 30, 2020 and off-net
customer connections were 11,846 as of June
30, 2020.
The number of on-net buildings increased by 113 buildings from
September 30, 2019 to 2,884 on-net
buildings as of September 30, 2020
and increased by 30 on-net buildings from June 30, 2020.
Quarterly Dividend Increase Approved
On November 4, 2020, Cogent's
Board approved a regular quarterly dividend of $0.730 per common share payable on
December 4, 2020 to shareholders of
record on November 20, 2020. This
fourth quarter 2020 regular dividend represents a 3.5% increase of
$0.025 per share from the third
quarter 2020 regular dividend of $0.705 per share and an annual increase of 14.1%
from the Q4 2019 dividend of $0.640
per share.
The payment of any future dividends and any other returns of
capital will be at the discretion of the Board and may be reduced,
eliminated or increased and will be dependent upon Cogent's
financial position, results of operations, available cash, cash
flow, capital requirements, limitations under Cogent's debt
indenture agreements and other factors deemed relevant by the
Board.
Share Buy-back Program Extension and Stock Purchases
On November 4, 2020, the Board
extended Cogent's share buy-back program to December 31, 2021.
During the three months ended September
30, 2020 Cogent purchased 4,567 shares of its common stock
for $0.3 million.
Subsequent to September 30, 2020,
Cogent purchased 53,516 shares of its common stock for $3.1 million.
Impact of COVID-19
Cogent continues to be impacted by the COVID-19 pandemic and the
accompanying responses by governments around the world.
Cogent's workforce continues to work remotely with
dedication. During the third quarter of 2020, Cogent
experienced a decrease in sales productivity as certain new
potential customers decided to delay the purchase of services and
certain existing and new corporate customers decided to reduce
their number of secondary service locations.
The ongoing impact of the COVID-19 pandemic and related
government restrictions on Cogent's business is unknown as a
significant amount of uncertainty and volatility
remains. Cogent does not know the scope and duration of
the pandemic, what actions governments may take in the future in
response to the pandemic and what the impact will be on the
economies of the world. While Cogent's workforce is working
remotely, Cogent provides no assurance that this will be sufficient
to protect its workforce or its key employees. Moreover,
Cogent's results of operations may be adversely affected in the
future as the pandemic and the related government restrictions
continue. Cogent may also experience slowdowns in new
customer orders, find it difficult to collect from customers who
are experiencing financial distress, an increase in customer churn,
encounter difficulties accessing the buildings and locations where
Cogent installs new services and serves existing customers, or have
difficulties procuring, shipping or installing necessary equipment
on its network. Cogent may also find that its largest
customer base, which is served primarily in its multi-tenant office
buildings, may be adversely affected by falling demand for
commercial office space in central business districts as companies
located in these buildings elect not to return to their office
space either on a temporary or even permanent basis. In
addition, Cogent's corporate customer base may reduce their overall
number of locations due to adverse economic conditions or new
working configurations which may adversely affect Cogent's number
of corporate connections and service revenues. As a result,
the global economic impact of the COVID-19 pandemic may have
prolonged effects that impact Cogent's business well into the
future. These and other risks will be described in more
detail in Cogent's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2020 and are set
forth in its annual report on Form 10-K for the year ended
December 31, 2019 and its Quarterly
Report on Form 10-Q for the quarters ended June 30, 2020 and March
31, 2020.
Conference Call and Website Information
Cogent will host a conference call with financial analysts at
8:30 a.m. (ET) on November 5, 2020 to discuss Cogent's operating
results for the third quarter of 2020 and to discuss Cogent's
expectations for full year 2020. Investors and other interested
parties may access a live audio webcast of the earnings call in the
"Events" section of Cogent's website at www.cogentco.com/events. A
replay of the webcast, together with the press release, will be
available on the website following the earnings call. A
downloadable file of Cogent's "Summary of Financial and Operational
Results" and a transcript of its conference call will also be
available on Cogent's website following the conference
call.
About Cogent Communications
Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1
facilities-based ISP. Cogent specializes in providing
businesses with high-speed Internet access, Ethernet transport, and
colocation services. Cogent's facilities-based, all-optical IP
network backbone provides services in over 200 markets
globally.
Cogent Communications is headquartered at 2450 N Street, NW,
Washington, D.C. 20037. For more
information, visit www.cogentco.com. Cogent Communications can be
reached in the United States at
(202) 295-4200 or via email at info@cogentco.com.
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
Summary of
Financial and Operational Results
|
|
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
|
Metric ($ in
000's, except share and per share data) – unaudited
|
|
|
|
|
|
|
|
|
On-Net
revenue
|
$97,183
|
$97,472
|
$99,416
|
$102,683
|
$103,457
|
$103,800
|
$105,091
|
|
%
Change from previous Qtr.
|
1.9%
|
0.3%
|
2.0%
|
3.3%
|
0.8%
|
0.3%
|
1.2%
|
|
Off-Net
revenue
|
$36,843
|
$37,191
|
$37,418
|
$37,479
|
$37,321
|
$37,044
|
$37,092
|
|
%
Change from previous Qtr.
|
0.8%
|
0.9%
|
0.6%
|
0.2%
|
-0.4%
|
-0.7%
|
0.1%
|
|
Non-Core revenue
(1)
|
$111
|
$126
|
$108
|
$130
|
$137
|
$146
|
$119
|
|
%
Change from previous Qtr.
|
-24.5%
|
13.5%
|
-14.3%
|
20.4%
|
5.4%
|
6.6%
|
-18.5%
|
|
Service revenue –
total
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
|
%
Change from previous Qtr.
|
1.6%
|
0.5%
|
1.6%
|
2.4%
|
0.4%
|
0.1%
|
0.9%
|
|
Constant currency
total revenue quarterly growth rate – sequential quarters
(6)
|
1.7%
|
0.7%
|
1.7%
|
2.5%
|
0.6%
|
0.2%
|
-0.2%
|
|
Constant currency
total revenue quarterly growth rate – year over year quarters
(6)
|
5.8%
|
5.4%
|
6.0%
|
6.8%
|
5.6%
|
5.1%
|
3.1%
|
|
Excise Taxes
included in service revenue
|
$3,391
|
$3,191
|
$3,998
|
$4,334
|
$3,743
|
$3,298
|
$3,902
|
|
%
Change from previous Qtr.
|
4.9%
|
-5.9%
|
25.3%
|
8.4%
|
-13.6%
|
-11.9%
|
18.3%
|
|
Network operations
expenses (2)
|
$53,970
|
$54,181
|
$54,971
|
$55,684
|
$55,669
|
$53,581
|
$54,173
|
|
%
Change from previous Qtr.
|
-2.6%
|
0.4%
|
1.5%
|
1.3%
|
-%
|
-3.8%
|
1.1%
|
|
GAAP gross profit
(3)
|
$59,724
|
$60,403
|
$61,683
|
$64,300
|
$65,486
|
$67,208
|
$66,164
|
|
%
Change from previous Qtr.
|
7.7%
|
1.1%
|
2.1%
|
4.2%
|
1.8%
|
2.6%
|
-1.6%
|
|
GAAP gross margin
(3)
|
44.5%
|
44.8%
|
45.0%
|
45.8%
|
46.5%
|
47.7%
|
46.5%
|
|
Non-GAAP gross
profit (4) (6)
|
$80,167
|
$80,608
|
$81,971
|
$84,608
|
$85,246
|
$87,409
|
$88,129
|
|
%
Change from previous Qtr.
|
4.6%
|
0.6%
|
1.7%
|
3.2%
|
0.8%
|
2.5%
|
0.8%
|
|
Non-GAAP gross
margin (4) (6)
|
59.8%
|
59.8%
|
59.9%
|
60.3%
|
60.5%
|
62.0%
|
61.9%
|
|
Selling, general
and administrative expenses (5)
|
$32,568
|
$33,503
|
$31,456
|
$31,884
|
$34,852
|
$34,061
|
$33,546
|
|
%
Change from previous Qtr.
|
12.2%
|
2.9%
|
-6.1%
|
1.4%
|
9.3%
|
-2.3%
|
-1.5%
|
|
Depreciation and
amortization expense
|
$20,263
|
$19,979
|
$20,006
|
$20,002
|
$19,508
|
$19,896
|
$21,619
|
|
%
Change from previous Qtr.
|
-3.3%
|
-1.4%
|
0.1%
|
-%
|
-2.5%
|
2.0%
|
8.7%
|
|
Equity-based
compensation expense
|
$3,434
|
$5,289
|
$4,797
|
$4,940
|
$5,075
|
$6,083
|
$6,522
|
|
%
Change from previous Qtr.
|
-22.1%
|
54.0%
|
-9.3%
|
3.0%
|
2.7%
|
19.9%
|
7.2%
|
|
Operating
income
|
$24,400
|
$22,022
|
$25,799
|
$28,033
|
$25,850
|
$27,574
|
$26,036
|
|
%
Change from previous Qtr.
|
9.4%
|
-9.7%
|
17.2%
|
8.7%
|
-7.8%
|
6.7%
|
-5.6%
|
|
Interest
expense
|
$13,456
|
$13,595
|
$15,191
|
$15,211
|
$15,220
|
$15,499
|
$15,760
|
|
%
Change from previous Qtr.
|
-0.4%
|
1.0%
|
11.7%
|
0.1%
|
0.1%
|
1.8%
|
1.7%
|
|
Net
income
|
$9,217
|
$7,136
|
$13,701
|
$7,465
|
$9,227
|
$8,564
|
$(4,955)
|
|
Realized and
unrealized gains (losses) on 2024 euro notes
|
$-
|
$177
|
$6,128
|
$(4,032)
|
$2,908
|
$(873)
|
$(17,315)
|
|
Basic net income
per common share
|
$0.20
|
$0.16
|
$0.30
|
$0.16
|
$0.20
|
$0.19
|
$(0.11)
|
|
Diluted net income
per common share
|
$0.20
|
$0.16
|
$0.30
|
$0.16
|
$0.20
|
$0.18
|
$(0.11)
|
|
Weighted average
common shares – basic
|
45,223,157
|
45,354,327
|
45,438,656
|
45,553,727
|
45,658,565
|
45,754,880
|
45,815,718
|
|
%
Change from previous Qtr.
|
-0.1%
|
0.3%
|
0.2%
|
0.3%
|
0.2%
|
0.2%
|
0.1%
|
|
Weighted average
common shares – diluted
|
45,644,236
|
45,912,291
|
46,019,691
|
46,145,970
|
46,391,066
|
46,686,665
|
45,815,718
|
|
%
Change from previous Qtr.
|
-0.3%
|
0.6%
|
0.2%
|
0.3%
|
0.5%
|
0.6%
|
-1.9%
|
|
EBITDA
(6)
|
$47,561
|
$47,105
|
$50,515
|
$52,724
|
$50,394
|
$53,348
|
$54,583
|
|
%
Change from previous Qtr.
|
-%
|
-1.0%
|
7.2%
|
4.4%
|
-4.4%
|
5.9%
|
2.3%
|
|
EBITDA
margin
|
35.5%
|
34.9%
|
36.9%
|
37.6%
|
35.8%
|
37.8%
|
38.4%
|
|
Gains on asset
related transactions
|
$536
|
$185
|
$87
|
$251
|
$39
|
$205
|
$99
|
|
EBITDA, as
adjusted (6)
|
$48,097
|
$47,290
|
$50,602
|
$52,975
|
$50,433
|
$53,553
|
$54,682
|
|
%
Change from previous Qtr.
|
0.9%
|
-1.7%
|
7.0%
|
4.7%
|
-4.8%
|
6.2%
|
2.1%
|
|
EBITDA, as
adjusted, margin
|
35.9%
|
35.1%
|
37.0%
|
37.8%
|
35.8%
|
38.0%
|
38.4%
|
|
Net cash provided
by operating activities
|
$28,637
|
$40,632
|
$33,443
|
$46,097
|
$28,458
|
$41,311
|
$32,980
|
|
%
Change from previous Qtr.
|
-29.7%
|
41.9%
|
-17.7%
|
37.8%
|
-38.3%
|
45.2%
|
-20.2%
|
|
Capital
expenditures
|
$13,288
|
$11,720
|
$12,051
|
$9,899
|
$12,866
|
$13,930
|
$13,296
|
|
% Change from previous Qtr.
|
21.5%
|
-11.8%
|
2.8%
|
-17.9%
|
30.0%
|
8.3%
|
-4.6%
|
|
Principal payments
of capital (finance) lease obligations
|
$3,030
|
$1,976
|
$2,029
|
$2,056
|
$6,167
|
$3,716
|
$9,509
|
|
% Change from previous Qtr.
|
42.4%
|
-34.8%
|
2.7%
|
1.3%
|
200.0%
|
-39.7%
|
155.9%
|
|
Dividends
paid
|
$26,565
|
$27,741
|
$28,565
|
$29,776
|
$30,557
|
$31,738
|
$32,657
|
|
Purchases of
common stock
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$-
|
$270
|
|
Gross Leverage
Ratio
|
4.28
|
5.08
|
4.97
|
4.86
|
4.78
|
5.08
|
5.10
|
|
Net Leverage
Ratio
|
2.92
|
2.93
|
2.92
|
2.86
|
2.92
|
3.07
|
3.24
|
|
Customer
Connections – end of period
|
|
|
|
|
|
|
|
|
On-Net
|
71,066
|
72,415
|
73,870
|
74,554
|
75,163
|
75,927
|
76,338
|
|
%
Change from previous Qtr.
|
3.3%
|
1.9%
|
2.0%
|
0.9%
|
0.8%
|
1.0%
|
0.5%
|
|
Off-Net
|
11,138
|
11,321
|
11,503
|
11,660
|
11,721
|
11,846
|
11,849
|
|
%
Change from previous Qtr.
|
1.5%
|
1.6%
|
1.6%
|
1.4%
|
0.5%
|
1.1%
|
0.0%
|
|
Non-Core
(1)
|
318
|
318
|
319
|
325
|
329
|
339
|
322
|
|
%
Change from previous Qtr.
|
-12.2%
|
-%
|
-0.3%
|
1.9%
|
1.2%
|
3.0%
|
-5.0%
|
|
Total customer
connections
|
82,522
|
84,054
|
85,692
|
86,539
|
87,213
|
88,112
|
88,509
|
|
%
Change from previous Qtr.
|
3.0%
|
1.9%
|
1.9%
|
1.0%
|
0.8%
|
1.0%
|
0.5%
|
|
On-Net Buildings –
end of period
|
|
|
|
|
|
|
|
|
Multi-Tenant office
buildings
|
1,746
|
1,751
|
1,757
|
1,767
|
1,769
|
1,771
|
1,783
|
|
Carrier neutral data
center buildings
|
908
|
933
|
960
|
980
|
1,000
|
1,029
|
1,047
|
|
Cogent data
centers
|
52
|
53
|
54
|
54
|
54
|
54
|
54
|
|
Total on-net
buildings
|
2,706
|
2,737
|
2,771
|
2,801
|
2,823
|
2,854
|
2,884
|
|
Square feet –
multi-tenant office buildings – on-net
|
949,486,923
|
951,031,709
|
954,013,024
|
957,173,183
|
961,154,384
|
962,049,183
|
968,355,695
|
|
Network –
end of period
|
|
|
|
|
|
|
|
|
Intercity route
miles
|
57,426
|
57,426
|
57,426
|
57,600
|
58,009
|
58,009
|
58,142
|
|
Metro fiber
miles
|
33,664
|
34,163
|
34,985
|
35,526
|
36,079
|
36,438
|
36,725
|
|
Connected networks –
AS's
|
6,668
|
6,762
|
6,844
|
6,954
|
7,042
|
7,133
|
7,222
|
|
Headcount – end of
period
|
|
|
|
|
|
|
|
|
Sales force – quota
bearing
|
501
|
519
|
530
|
548
|
542
|
572
|
597
|
|
Sales force -
total
|
639
|
656
|
667
|
686
|
684
|
716
|
740
|
|
Total
employees
|
997
|
1,026
|
1,036
|
1,055
|
1,052
|
1,083
|
1,110
|
|
Sales rep
productivity – units per full time equivalent sales rep ("FTE") per
month
|
5.1
|
4.9
|
4.4
|
4.1
|
4.5
|
4.0
|
3.7
|
|
FTE – sales
reps
|
464
|
478
|
488
|
502
|
522
|
533
|
563
|
|
|
|
(1)
|
Consists of legacy
services of companies whose assets or businesses were acquired by
Cogent, primarily including voice services (only provided in
Toronto, Canada).
|
|
(2)
|
Network operations
expense excludes equity-based compensation expense of $180, $226,
$282, $306, $252, $305 and $346 in the three month periods ended
March 31, 2019 through September 30, 2020, respectively.
Network operations expense includes excise taxes, including
Universal Service Fund fees of $3,391, $3,191, $3,998, $4,334,
$3,743, $3,298 and $3,902 in the three month periods ended March
31, 2019 through September 30, 2020, respectively.
|
|
(3)
|
GAAP gross profit is
defined as total service revenue less network operations expense,
depreciation and amortization and equity based compensation
included in network operations expense. GAAP gross margin is
defined as GAAP gross profit divided by total service
revenue.
|
|
(4)
|
Non-GAAP gross profit
represents service revenue less network operations expense,
excluding equity-based compensation and amounts shown separately
(depreciation and amortization expense). Non-GAAP gross margin is
defined as non-GAAP gross profit divided by total service
revenue. Management believes that non-GAAP gross profit and
non-GAAP gross profit margin are relevant metrics to provide
investors, as they are metrics that management uses to measure the
margin available to the company after network service costs, in
essence a measure of the efficiency of the Company's
network.
|
|
(5)
|
Excludes equity-based
compensation expense of $3,254, $5,063, $4,515, $4,634, $4,823,
$5,778 and $6,176 in the three month periods ended March 31, 2019
through September 30, 2020, respectively.
|
|
(6)
|
See Schedules of
Non-GAAP measures below for definitions and reconciliations to GAAP
measures.
|
Schedules of Non-GAAP Measures
EBITDA and EBITDA, as adjusted
EBITDA represents net cash flows provided by operating
activities plus changes in operating assets and liabilities, cash
interest expense and cash income tax expense. Management
believes the most directly comparable measure to EBITDA calculated
in accordance with generally accepted accounting principles in
the United States, or GAAP, is net
cash provided by operating activities. The Company also believes
that EBITDA is a measure frequently used by securities analysts,
investors, and other interested parties in their evaluation of
issuers. EBITDA, as adjusted, represents EBITDA plus net
gains (losses) on asset related transactions.
The Company believes that EBITDA, and EBITDA, as adjusted, are
useful measures of its ability to service debt, fund capital
expenditures and expand its business. EBITDA, and EBITDA, as
adjusted are an integral part of the internal reporting and
planning system used by management as a supplement to GAAP
financial information. EBITDA, and EBITDA, as adjusted are not
recognized terms under GAAP and accordingly, should not be viewed
in isolation or as a substitute for the analysis of results as
reported under GAAP, but rather as a supplemental measure to GAAP.
For example, these metrics are not intended to reflect the
Company's free cash flow, as it does not consider certain current
or future cash requirements, such as capital expenditures,
contractual commitments, and changes in working capital needs,
interest expenses and debt service requirements. The Company's
calculations of these metrics may also differ from the calculations
performed by its competitors and other companies and as such, its
utility as a comparative measure is limited.
|
EBITDA, and
EBITDA, as adjusted, are reconciled to net cash provided by
operating activities in the table below.
|
|
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
|
($ in 000's) –
unaudited
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$28,637
|
$40,632
|
$33,443
|
$46,097
|
$28,458
|
$41,311
|
$32,980
|
|
Changes in operating
assets and liabilities
|
6,727
|
(5,729)
|
3,785
|
(6,557)
|
5,325
|
$(3,232)
|
$6,255
|
|
Cash interest expense
and income tax expense
|
12,197
|
12,202
|
13,287
|
13,184
|
16,611
|
15,269
|
15,348
|
|
EBITDA
|
$47,561
|
$47,105
|
$50,515
|
$52,724
|
$50,394
|
$53,348
|
$54,583
|
|
PLUS: Gains on asset
related transactions
|
536
|
185
|
87
|
251
|
39
|
205
|
99
|
|
EBITDA, as
adjusted
|
$48,097
|
$47,290
|
$50,602
|
$52,975
|
$50,433
|
$53,553
|
$54,682
|
|
EBITDA
margin
|
35.5%
|
34.9%
|
36.9%
|
37.6%
|
35.8%
|
37.8%
|
38.4%
|
|
EBITDA, as
adjusted, margin
|
35.9%
|
35.1%
|
37.0%
|
37.8%
|
35.8%
|
38.0%
|
38.4%
|
|
Constant currency
revenue is reconciled to service revenue as reported in the tables
below.
|
|
|
Constant currency
impact on revenue changes – sequential periods
|
|
|
($ in 000's) –
unaudited
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
|
Service revenue, as
reported – current period
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
|
Impact of foreign
currencies on service revenue
|
135
|
260
|
176
|
88
|
184
|
202
|
(1,616)
|
|
Service revenue - as
adjusted for currency impact (1)
|
$134,272
|
$135,049
|
$137,118
|
$140,380
|
$141,099
|
$141,192
|
$140,686
|
|
Service revenue, as
reported – prior sequential period
|
$132,049
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
|
Constant currency
(decrease) increase
|
$2,223
|
$912
|
$2,329
|
$3,438
|
$807
|
$277
|
$(304)
|
|
Constant currency
percent (decrease) increase
|
1.7%
|
0.7%
|
1.7%
|
2.5%
|
0.6%
|
0.2%
|
(0.2)%
|
|
|
|
(1)
|
Service revenue, as
adjusted for currency impact, is determined by translating the
service revenue for the current period at the average foreign
currency exchange rates for the prior sequential period. The
Company believes that disclosing quarterly sequential revenue
growth without the impact of foreign currencies on service revenue
is a useful measure of sequential revenue growth. Service revenue,
as adjusted for currency impact, is an integral part of the
internal reporting and planning system used by management as a
supplement to GAAP financial information.
|
|
Constant currency
impact on revenue changes – prior year periods
|
|
|
($ in 000's) –
unaudited
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
|
Service revenue, as
reported – current period
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
|
Impact of foreign
currencies on service revenue
|
2,078
|
1,505
|
1,058
|
683
|
746
|
674
|
(1,141)
|
|
Service revenue - as
adjusted for currency impact (2)
|
$136,215
|
$136,294
|
$138,000
|
$140,975
|
$141,661
|
$141,664
|
$141,161
|
|
Service revenue, as
reported – prior year period
|
$128,706
|
$129,296
|
$130,139
|
$132,049
|
$134,137
|
$134,789
|
$136,942
|
|
Constant currency
increase
|
$7,509
|
$6,998
|
$7,861
|
$8,926
|
$7,524
|
$6,875
|
$4,219
|
|
Percent
increase
|
5.8%
|
5.4%
|
6.0%
|
6.8%
|
5.6%
|
5.1%
|
3.1%
|
|
|
|
(2)
|
Service revenue, as
adjusted for currency impact, is determined by translating the
service revenue for the current period at the average foreign
currency exchange rates for the comparable prior year period. The
Company believes that disclosing year over year revenue growth
without the impact of foreign currencies on service revenue is a
useful measure of revenue growth. Service revenue, as adjusted for
currency impact, is an integral part of the internal reporting and
planning system used by management as a supplement to GAAP
financial information.
|
|
Non-GAAP gross
profit and Non-GAAP gross margin
|
|
|
Non-GAAP gross
profit and Non-GAAP gross margin are reconciled to GAAP gross
profit and GAAP gross margin in the table below.
|
|
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
|
($ in 000's) –
unaudited
|
|
|
|
|
|
|
|
|
Service revenue
total
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
|
Minus - Network
operations expense including equity-based compensation and
including depreciation and amortization expense
|
74,413
|
74,386
|
75,259
|
75,992
|
75,429
|
73,782
|
76,138
|
|
GAAP Gross Profit
(1)
|
$59,724
|
$60,403
|
$61,683
|
$64,300
|
$65,486
|
$67,208
|
$66,164
|
|
Plus -
Equity-based compensation – network operations expense
|
180
|
226
|
282
|
306
|
252
|
305
|
346
|
|
Plus – Depreciation
and amortization expense
|
20,263
|
19,979
|
20,006
|
20,002
|
19,508
|
19,896
|
21,619
|
|
Non-GAAP Gross
Profit (2)
|
$80,167
|
$80,608
|
$81,971
|
$84,608
|
$85,246
|
$87,409
|
$88,129
|
|
GAAP Gross Margin
(1)
|
44.5%
|
44.8%
|
45.0%
|
45.8%
|
46.5%
|
47.7%
|
46.5%
|
|
Non-GAAP Gross
Margin (2)
|
59.8%
|
59.8%
|
59.9%
|
60.3%
|
60.5%
|
62.0%
|
61.9%
|
|
|
|
(1)
|
GAAP gross profit is
defined as total service revenue less network operations expense,
depreciation and amortization and equity based compensation
included in network operations expense. GAAP gross margin is
defined as GAAP gross profit divided by total service
revenue.
|
|
(2)
|
Non-GAAP gross profit
represents service revenue less network operations expense,
excluding equity based compensation and amounts shown separately
(depreciation and amortization expense). Non-GAAP gross margin is
defined as non-GAAP gross profit divided by total service
revenue. Management believes that non-GAAP gross profit and
non-GAAP gross margin are relevant metrics to provide to investors,
as they are metrics that management uses to measure the margin and
amount available to the Company after network service costs, in
essence these are measures of the efficiency of the Company's
network.
|
Gross and Net Leverage Ratios
Gross leverage ratio is defined as total debt divided by the
trailing last 12 months EBITDA, as adjusted. Net leverage
ratio is defined as total net debt (total debt minus cash and cash
equivalents) divided by the trailing last 12 months EBITDA, as
adjusted. Cogent's gross leverage ratio and net leverage
ratio are shown below.
|
($ in 000's) –
unaudited
|
As of June 30,
2020
|
As of September
30, 2020
|
|
Cash and cash
equivalents
|
$417,026
|
$393,293
|
|
Debt
|
|
|
|
Capital (finance)
leases – current portion
|
14,734
|
15,252
|
|
Capital (finance)
leases – long term
|
189,044
|
197,688
|
|
Senior secured
notes
|
445,000
|
445,000
|
|
Senior unsecured euro
2024 notes
|
393,011
|
410,365
|
|
Note
payable
|
12,831
|
10,404
|
|
Total debt
|
1,054,620
|
1,078,709
|
|
Total net
debt
|
637,594
|
685,416
|
|
Trailing 12 months
EBITDA, as adjusted
|
207,563
|
211,643
|
|
Gross leverage
ratio
|
5.08
|
5.10
|
|
Net leverage
ratio
|
3.07
|
3.24
|
Cogent's SEC filings are available online via the Investor
Relations section of www.cogentco.com or on the Securities and
Exchange Commission's website at www.sec.gov.
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
AS OF SEPTEMBER
30, 2020 AND DECEMBER 31, 2019
|
|
(IN THOUSANDS,
EXCEPT SHARE DATA)
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
393,293
|
|
$
|
399,422
|
|
Accounts receivable,
net of allowance for credit losses of $2,204 and $1,771,
respectively
|
|
|
42,053
|
|
|
40,484
|
|
Prepaid expenses and
other current assets
|
|
|
40,007
|
|
|
35,822
|
|
Total current
assets
|
|
|
475,353
|
|
|
475,728
|
|
Property and
equipment, net
|
|
|
421,251
|
|
|
368,929
|
|
Right-of-use leased
assets
|
|
|
90,400
|
|
|
73,460
|
|
Deposits and other
assets
|
|
|
13,910
|
|
|
14,007
|
|
Total assets
|
|
$
|
1,000,914
|
|
$
|
932,124
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
11,983
|
|
$
|
11,075
|
|
Accrued and other
current liabilities
|
|
|
47,714
|
|
|
51,301
|
|
Installment payment
agreement, current portion, net of discounts of $245 and $350,
respectively
|
|
|
8,292
|
|
|
9,063
|
|
Current maturities,
operating lease liabilities
|
|
|
12,006
|
|
|
10,101
|
|
Current maturities,
finance lease obligations
|
|
|
15,252
|
|
|
8,154
|
|
Total current
liabilities
|
|
|
95,247
|
|
|
89,694
|
|
Senior secured
2022 notes, net of unamortized debt costs of $1,267
and $1,897,
respectively and including premiums of $656
and $985, respectively
|
|
|
444,389
|
|
|
444,088
|
|
Senior unsecured
2024 Euro notes, net of unamortized debt costs
of $3,166 and
$1,410, respectively and net of discounts of
$1,164 and $0, respectively
|
|
|
406,034
|
|
|
150,001
|
|
Senior unsecured
2021 notes, net of unamortized debt costs
of $857
|
|
|
—
|
|
|
188,368
|
|
Operating lease
liabilities, net of current maturities
|
|
|
101,447
|
|
|
86,690
|
|
Finance lease
obligations, net of current maturities
|
|
|
197,688
|
|
|
161,635
|
|
Other long term
liabilities
|
|
|
16,800
|
|
|
15,327
|
|
Total
liabilities
|
|
|
1,261,605
|
|
|
1,135,803
|
|
Commitments and
contingencies:
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, $0.001
par value; 75,000,000 shares authorized; 47,284,336 and
46,840,434 shares issued and outstanding,
respectively
|
|
|
47
|
|
|
47
|
|
Additional paid-in
capital
|
|
|
513,454
|
|
|
493,178
|
|
Accumulated other
comprehensive income — foreign currency translation
|
|
|
(7,498)
|
|
|
(12,326)
|
|
Accumulated
deficit
|
|
|
(766,694)
|
|
|
(684,578)
|
|
Total stockholders'
deficit
|
|
|
(260,691)
|
|
|
(203,679)
|
|
Total liabilities
and stockholders' deficit
|
|
$
|
1,000,914
|
|
$
|
932,124
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)
INCOME
|
|
FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 2020 AND SEMPTEMBER 30,
2019
|
|
(IN THOUSANDS,
EXCEPT SHARE AND PER SHARE AMOUNTS)
|
|
|
|
Three Months
Ended
September 30, 2020
|
|
Three Months
Ended
September 30, 2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Service
revenue
|
|
$
|
142,302
|
|
$
|
136,942
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Network operations
(including $346 and $282 of equity-based compensation
expense, respectively, exclusive of depreciation and
amortization shown
separately below)
|
|
|
54,519
|
|
|
55,253
|
|
Selling, general, and
administrative (including $6,176 and $4,515 of equity-based
compensation expense, respectively)
|
|
|
39,722
|
|
|
35,971
|
|
Depreciation and
amortization
|
|
|
21,619
|
|
|
20,006
|
|
Total operating
expenses
|
|
|
115,860
|
|
|
111,230
|
|
Loss on finance
leases amendment
|
|
|
(505)
|
|
|
—
|
|
Gains on equipment
transactions
|
|
|
99
|
|
|
87
|
|
Operating
income
|
|
|
26,036
|
|
|
25,799
|
|
Interest
expense
|
|
|
(15,760)
|
|
|
(15,191)
|
|
Unrealized foreign
exchange (loss) gain on 2024 Euro Notes
|
|
|
(17,315)
|
|
|
6,162
|
|
Interest income and
other, net
|
|
|
484
|
|
|
2,185
|
|
(Loss) income before
income taxes
|
|
|
(6,555)
|
|
|
18,955
|
|
Income tax benefit
(provision)
|
|
|
1,600
|
|
|
(5,254)
|
|
Net (loss)
income
|
|
$
|
(4,955)
|
|
$
|
13,701
|
|
|
|
|
|
|
|
|
Comprehensive (loss)
income:
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(4,955)
|
|
$
|
13,701
|
|
Foreign currency
translation adjustment
|
|
|
5,408
|
|
|
(4,709)
|
|
Comprehensive
income
|
|
$
|
453
|
|
$
|
8,992
|
|
|
|
|
|
|
|
|
Net (loss) income
per common share:
|
|
|
|
|
|
|
|
Basic net (loss)
income per common share
|
|
$
|
(0.11)
|
|
$
|
0.30
|
|
Diluted net (loss)
income per common share
|
|
$
|
(0.11)
|
|
$
|
0.30
|
|
Dividends declared
per common share
|
|
$
|
0.705
|
|
$
|
0.620
|
|
|
|
|
|
|
|
|
Weighted-average
common shares - basic
|
|
|
45,815,718
|
|
|
45,438,656
|
|
|
|
|
|
|
|
|
Weighted-average
common shares - diluted
|
|
|
45,815,718
|
|
|
46,019,691
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30,
2019
|
|
(IN THOUSANDS,
EXCEPT SHARE AND PER SHARE AMOUNTS)
|
|
|
|
Nine Months
Ended
September 30, 2020
|
|
Nine Months
Ended
September 30, 2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Service
revenue
|
|
$
|
424,205
|
|
$
|
405,866
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Network operations
(including $903 and $688 of equity-based compensation
expense, respectively, exclusive of depreciation and
amortization shown
separately below)
|
|
|
164,326
|
|
|
163,811
|
|
Selling, general, and
administrative (including $16,776 and $12,832 of equity-
based compensation expense, respectively)
|
|
|
119,232
|
|
|
110,396
|
|
Depreciation and
amortization
|
|
|
61,022
|
|
|
60,246
|
|
Total operating
expenses
|
|
|
344,580
|
|
|
334,453
|
|
Loss on finance
lease amendments
|
|
|
(423)
|
|
|
—
|
|
Gains on equipment
transactions
|
|
|
343
|
|
|
808
|
|
Operating
income
|
|
|
79,545
|
|
|
72,221
|
|
Interest
expense
|
|
|
(46,481)
|
|
|
(42,243)
|
|
Realized foreign
exchange gain on issuance of 2024 Euro Notes
|
|
|
2,547
|
|
|
—
|
|
Unrealized (loss)
gain on foreign exchange on 2024 Euro Notes
|
|
|
(17,827)
|
|
|
6,339
|
|
Interest income and
other, net
|
|
|
430
|
|
|
5,588
|
|
Loss on debt
extinguishment and redemption- 2021 Notes
|
|
|
(638)
|
|
|
—
|
|
Income before income
taxes
|
|
|
17,576
|
|
|
41,905
|
|
Income tax
provision
|
|
|
(4,740)
|
|
|
(11,851)
|
|
Net
income
|
|
$
|
12,836
|
|
$
|
30,054
|
|
|
|
|
|
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,836
|
|
$
|
30,054
|
|
Foreign currency
translation adjustment
|
|
|
4,828
|
|
|
(4,748)
|
|
Comprehensive
income
|
|
$
|
17,664
|
|
$
|
25,306
|
|
|
|
|
|
|
|
|
Net income per
common share:
|
|
|
|
|
|
|
|
Basic net income per
common share
|
|
$
|
0.28
|
|
$
|
0.66
|
|
Diluted net income
per common share
|
|
$
|
0.28
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
2.045
|
|
$
|
1.800
|
|
|
|
|
|
|
|
|
Weighted-average
common shares – basic
|
|
|
45,818,677
|
|
|
45,428,305
|
|
|
|
|
|
|
|
|
Weighted-average
common shares – diluted
|
|
|
46,598,870
|
|
|
45,948,331
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30,
2019
|
|
(IN
THOUSANDS)
|
|
|
|
Three months
Ended
September 30, 2020
|
|
Three months
Ended
September 30, 2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(4,955)
|
|
$
|
13,701
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
21,619
|
|
|
20,006
|
|
Amortization of debt
costs, discounts and premiums
|
|
|
496
|
|
|
486
|
|
Equity-based
compensation expense (net of amounts capitalized)
|
|
|
6,522
|
|
|
4,796
|
|
Unrealized losses
(gains) on foreign exchange
|
|
|
17,378
|
|
|
(6,128)
|
|
Gains - equipment
transactions and other, net
|
|
|
406
|
|
|
176
|
|
Deferred income
taxes
|
|
|
(2,153)
|
|
|
4,454
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,009)
|
|
|
(1,048)
|
|
Prepaid expenses and
other current assets
|
|
|
(788)
|
|
|
(1,315)
|
|
Accounts payable,
accrued liabilities and other long-term liabilities
|
|
|
(4,305)
|
|
|
(3,738)
|
|
Deposits and other
assets
|
|
|
(231)
|
|
|
2,053
|
|
Net cash provided by
operating activities
|
|
|
32,980
|
|
|
33,443
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(13,296)
|
|
|
(12,051)
|
|
Net cash used in
investing activities
|
|
|
(13,296)
|
|
|
(12,051)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Dividends
paid
|
|
|
(32,657)
|
|
|
(28,565)
|
|
Purchases of common
stock
|
|
|
(270)
|
|
|
—
|
|
Principal payments on
installment payment agreement
|
|
|
(2,727)
|
|
|
(2,574)
|
|
Principal payments of
finance lease obligations
|
|
|
(9,509)
|
|
|
(2,029)
|
|
Proceeds from exercises
of stock options
|
|
|
186
|
|
|
351
|
|
Net cash (used in)
financing activities
|
|
|
(44,977)
|
|
|
(32,817)
|
|
Effect of exchange
rates changes on cash
|
|
|
1,560
|
|
|
(1,583)
|
|
Net decrease in cash
and cash equivalents
|
|
|
(23,733)
|
|
|
(13,008)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
417,026
|
|
|
409,279
|
|
Cash and cash
equivalents, end of period
|
|
$
|
393,293
|
|
$
|
396,271
|
|
|
|
|
|
|
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30,
2019
|
|
(IN
THOUSANDS)
|
|
|
|
Nine months
Ended
September 30, 2020
|
|
Nine months
Ended
September 30, 2019
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,836
|
|
$
|
30,054
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
61,022
|
|
|
60,246
|
|
Amortization of debt
costs, discounts and premiums
|
|
|
1,426
|
|
|
1,328
|
|
Equity-based
compensation expense (net of amounts capitalized)
|
|
|
17,679
|
|
|
13,520
|
|
Loss on debt
extinguishment and redemption – 2021 Notes
|
|
|
638
|
|
|
—
|
|
Unrealized losses
(gains) on foreign exchange
|
|
|
17,281
|
|
|
(6,305)
|
|
Realized foreign
exchange gain on issuance of 2024 Notes
|
|
|
(2,547)
|
|
|
—
|
|
Gains - equipment
transactions and other, net
|
|
|
80
|
|
|
(131)
|
|
Deferred income
taxes
|
|
|
2,100
|
|
|
9,285
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,102)
|
|
|
(43)
|
|
Prepaid expenses and
other current assets
|
|
|
(3,253)
|
|
|
(4,862)
|
|
Accounts payable,
accrued liabilities and other long-term liabilities
|
|
|
(2,783)
|
|
|
1,350
|
|
Deposits and other
assets
|
|
|
(628)
|
|
|
(1,730)
|
|
Net cash provided by
operating activities
|
|
|
102,749
|
|
|
102,712
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(40,092)
|
|
|
(37,059)
|
|
Net cash used in
investing activities
|
|
|
(40,092)
|
|
|
(37,059)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Dividends
paid
|
|
|
(94,952)
|
|
|
(82,871)
|
|
Purchases of common
stock
|
|
|
(270)
|
|
|
—
|
|
Redemption and
extinguishment of 2021 Notes
|
|
|
(189,225)
|
|
|
—
|
|
Net proceeds from
issuance of senior unsecured 2024 Euro Notes - net of debt
costs
of $2,137 and $1,556, respectively
|
|
|
240,285
|
|
|
152,128
|
|
Principal payments on
installment payment agreement
|
|
|
(7,855)
|
|
|
(7,348)
|
|
Principal payments of
finance lease obligations
|
|
|
(19,392)
|
|
|
(7,035)
|
|
Proceeds from exercises
of stock options
|
|
|
1,175
|
|
|
1,270
|
|
Net cash (used in)
provided by financing activities
|
|
|
(70,234)
|
|
|
56,144
|
|
Effect of exchange
rates changes on cash
|
|
|
1,448
|
|
|
(1,619)
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
(6,129)
|
|
|
120,178
|
|
Cash and cash
equivalents, beginning of period
|
|
|
399,422
|
|
|
276,093
|
|
Cash and cash
equivalents, end of period
|
|
$
|
393,293
|
|
$
|
396,271
|
Except for historical information and discussion contained
herein, statements contained in this release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such
statements include, but are not limited to statements identified by
words such as "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "targets," "projects" and similar
expressions. The statements in this release are based upon
the current beliefs and expectations of Cogent's management and are
subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking
statements. Numerous factors could cause or contribute to
such differences, including the impact of the COVID-19 pandemic and
the related government policies; future economic instability in the
global economy or a contraction of the capital markets which could
affect spending on Internet services and our ability to engage in
financing activities; the impact of changing foreign exchange rates
(in particular the Euro to USD and Canadian dollar to USD exchange
rates) on the translation of our non-USD denominated revenues,
expenses, assets and liabilities; legal and operational
difficulties in new markets; the imposition of a requirement
that we contribute to the US Universal Service Fund on the basis of
our Internet revenue; changes in government policy and/or
regulation, including net neutrality rules by the United
States Federal Communications Commission and in the area of data
protection; increasing competition leading to lower prices for our
services; our ability to attract new customers and to increase and
maintain the volume of traffic on our network; the ability to
maintain our Internet peering arrangements on favorable terms; our
reliance on an equipment vendor, Cisco Systems Inc., and the
potential for hardware or software problems associated with such
equipment; the dependence of our network on the quality and
dependability of third-party fiber providers; our ability to retain
certain customers that comprise a significant portion of our
revenue base; the management of network failures and/or
disruptions; and outcomes in litigation as well as other risks
discussed from time to time in our filings with the Securities and
Exchange Commission, including, without limitation, our Quarterly
Report on Form 10-Q for the quarters ended September 30, 2020, June
30, 2020 and March 31, 2020
and our Annual Report on Form 10-K for the year ended December 31, 2019. Cogent undertakes no
duty to update any forward-looking statement or any information
contained in this press release or in other public disclosures at
any time.
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SOURCE Cogent Communications Holdings, Inc.