WASHINGTON, Feb. 25, 2021 /PRNewswire/ --
Financial and Business Highlights
- Cogent approved an increase of $0.025 per share to its regular quarterly
dividend for a total of $0.755 per
share for Q1 2021 as compared to $0.730 per share for Q4 2020 – Cogent's
thirty-fourth consecutive quarterly dividend increase.
-
- The Q1 2021 $0.755 dividend per
share represents an annual increase of 14.4% from the dividend per
share of $0.660 for Q1 2020.
- Dividends for 2020 totaled $129.4
million, or $$2.780 per share, with 63.1% treated as a
return of capital and 36.9% treated as dividends for US federal
income tax purposes.
- Service revenue increased by 1.1% from Q3 2020 to Q4 2020,
increased from Q4 2019 to Q4 2020 by 2.6% and increased from full
year 2019 to full year 2020 by 4.0%.
- GAAP gross profit increased by 3.6% from Q4 2019 to
$66.6 million for Q4 2020 and
increased from full year 2019 to full year 2020 by 2.3% to
$251.9 million. Non-GAAP gross
profit increased by 5.6% from Q4 2019 to $89.4 million for Q4 2020 and increased from full
year 2019 to full year 2020 by 7.0% to $350.2 million.
-
- GAAP gross margin increased by 50 basis points from Q4 2019 to
Q4 2020 to 46.3% and increased from full year 2019 to full year
2020 by 160 basis points to 46.7%. Non-GAAP gross margin
increased by 180 basis points from Q4 2019 to Q4 2020 to 62.1% and
increased from full year 2019 to full year 2020 by 170 basis points
to 61.6%.
- Net cash provided by operating activities was $37.6 million for Q4 2020, $33.0 million for Q3 2020 and $46.1 million for Q4 2019. Net cash
provided by operating activities was $148.8
million for full year 2019 and $140.3
million for full year 2020.
- Sales rep productivity – units per full time equivalent sales
rep per month - increased from 3.7 for Q3 2020 to 4.2 for Q4
2020.
- EBITDA margin increased by 30 basis points from Q3 2020 to
38.7% for Q4 2020, increased by 110 basis points from Q4 2019 to Q4
2020 and increased from full year 2019 to full year 2020 by 150
basis points to 37.7%.
- EBITDA increased by 2.0% from Q3 2020 to $55.7 million for Q4 2020, increased by 5.6% from
Q4 2019 to Q4 2020 and increased from full year 2019 to full year
2020 by 8.1% to $214.0 million.
Cogent Communications Holdings, Inc. (NASDAQ: CCOI) ("Cogent")
today announced service revenue of $143.9
million for the three months ended December 31, 2020, an increase of 1.1% from the
three months ended September 30, 2020
and an increase of 2.6% from the three months ended December 31, 2019. Service revenue was
$568.1 million for the year ended
December 31, 2020, an increase of
4.0% from the year ended December 31,
2019. Foreign exchange positively impacted service revenue
growth from the three months ended September
30, 2020 to the three months ended December 31, 2020 by $0.6
million, positively impacted service revenue growth from the
three months ended December 31, 2019
to the three months ended December 31,
2020 by $1.9 million and
positively impacted service revenue growth from the year ended
December 31, 2019 to the year ended
December 31, 2020 by $1.5 million. On a constant currency basis,
service revenue increased by 0.7% from the three months ended
September 30, 2020 to the three
months ended December 31, 2020, grew
by 1.2% from the three months ended December
31, 2019 to the three months ended December 31, 2020 and grew by 3.7% from the year
ended December 31, 2019 to the year
ended December 31, 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 $107.1
million for the three months ended December 31, 2020; an increase of 1.9% from the
three months ended September 30, 2020
and an increase of 4.3% over the three months ended December 31, 2019. On-net revenue was
$419.5 million for the year ended
December 31, 2020; an increase of
5.7% over the year ended December 31,
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 $36.7 million for the three months ended
December 31, 2020; a decrease of 1.1%
from the three months ended September 30,
2020 and a decrease of 2.2% from the three months ended
December 31, 2019. Off-net revenue
was $148.1 million for the year ended
December 31, 2020; a decrease of 0.5%
from the year ended December 31,
2019.
Non-core services are legacy services, which Cogent acquired and
continues to support but does not actively sell.
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
3.6% from the three months ended December
31, 2019 to $66.6 million for
the three months ended December 31,
2020 and increased by 0.7% from the three months ended
September 30, 2020. GAAP gross profit
increased by 7.9% from the year ended December 31, 2019 to $265.5 million for the year ended December 31, 2020. GAAP gross margin was 46.3%
for the three months ended December 31,
2020, 45.8% for the three months ended December 31, 2019 and 46.5% for the three months
ended September 30, 2020. GAAP gross
margin was 46.7% for the year ended December
31, 2020 and 45.1% for the year ended December 31, 2019.
Excise taxes, including Universal Service Fund fees, recorded on
a gross basis and included in service revenue and cost of network
operations expense were $4.1 million
for the three months ended December 31,
2020, $4.3 million for the
three months ended December 31, 2019,
$3.9 million for the three months
ended September 30, 2020,
$15.1 million for the year ended
December 31, 2020 and
$14.9 million for the year ended
December 31, 2019.
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 5.6% from
the three months ended December 31,
2019 to $89.4 million for the
three months ended December 31, 2020
and increased by 1.4% from the three months ended September 30, 2020. Non-GAAP gross profit
increased by 7.0% from the year ended December 31, 2019 to $350.2 million for the year ended December 31, 2020. Non-GAAP gross profit margin
was 62.1% for the three months ended December 31, 2020, 60.3% for the three months
ended December 31, 2019 and 61.9% for
the three months ended September 30,
2020. Non-GAAP gross margin was 61.6% for the year ended
December 31, 2020 and 59.9% for the
year ended December 31, 2019.
Net cash provided by operating activities decreased by 18.5%
from the three months ended December 31,
2019 to $37.6 million for the
three months ended December 31, 2020
and increased by 13.9% from the three months ended September 30, 2020. Net cash provided by
operating activities decreased by 5.7% from the year ended
December 31, 2019 to $140.3 million for the year ended December 31, 2020.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased by 5.6% from the three months ended December 31, 2019 to $55.7
million for the three months ended December 31, 2020 and increased by 2.0% from the
three months ended September 30,
2020. EBITDA increased by 8.1% from the year ended
December 31, 2019 to $214.0 million for the year ended December 31, 2020. EBITDA margin was 38.7% for
the three months ended December 31,
2020, 37.6% for the three months ended December 31, 2019 and 38.4% for the three months
ended September 30, 2020. EBITDA
margin was 37.7% for the year ended December
31, 2020 and 36.2% for the year ended December 31, 2019.
Basic and diluted net (loss) income per share was $(0.14) for the three months ended December 31, 2020, $0.16 for the three months ended December 31, 2019 and $(0.11) for the three months ended September 30, 2020. Basic net income per share
was $0.14 for the year ended
December 31, 2020 and $0.82 for the year ended December 31, 2019. Diluted net income per share
was $0.13 for the year ended
December 31, 2020 and $0.81 for the year ended December 31, 2019.
Unrealized foreign exchange (losses) gains on Cogent's 2024
Senior Euro Unsecured Notes were $(19.2)
million for the three months ended December 31, 2020, $(4.1)
million for the three months ended December 31, 2019, $(17.3)
million for the three months ended September 30, 2020, $(37.0) million for the year ended December 31, 2020 and $2.3
million for the year ended December
31, 2019.
Total customer connections increased by 3.5% from December 31, 2019 to 89,600 as of December 31, 2020 and increased by 1.2% from
September 30, 2020. On-net customer
connections increased by 3.7% from December
31, 2019 to 77,305 as of December 31,
2020 and increased by 1.3% from September 30, 2020. Off-net customer connections
increased by 2.7% from December 31,
2019 to 11,970 as of December 31,
2020 and increased by 1.0% from September 30, 2020.
The number of on-net buildings increased by 113 from
December 31, 2019 to 2,914 as of
December 31, 2020 and increased by 30
from September 30, 2020.
Quarterly Dividend Increase Approved
On February 24, 2021, Cogent's
Board approved a regular quarterly dividend of $0.755 per common share payable on
March 26, 2021 to shareholders of
record on March 12, 2021. This first
quarter 2021 regular dividend represents a 3.4% increase of
$0.025 per share from the fourth
quarter 2020 regular dividend of $0.730 per share and an annual increase of 14.4%
from the Q1 2020 dividend of $0.660
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.
Tax Treatment of 2020 Dividends
Cogent paid four quarterly dividends in 2020 totaling
$129.4 million, or $2.78 per share. The expected tax treatment of
these dividends are generally that 63.1% are treated as a return of
capital and 36.9% are generally treated as dividends for
United States federal income tax
purposes. While the above information includes general statements
about the tax classification of dividends paid on Cogent common
stock, these statements do not constitute tax advice. The taxation
of corporate distributions can be complex, and stockholders are
encouraged to consult their tax advisers to determine what impact
the above information may have on their specific tax situation.
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.
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 ultimate scope and
duration of the pandemic, the availability and efficacy of vaccines
and therapeutic treatments, government actions that have been
taken, or may be taken in the future in response to the pandemic
and global economic conditions during and after the pandemic.
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,
undergo 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 or slow the pace of opening new
offices. 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 Annual Report on Form
10-K for the year ended December 31,
2020 and are set forth in its Quarterly Reports on Form 10-Q
for the quarters ended September 30,
2020, 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 February 25, 2021 to discuss Cogent's operating
results for the fourth quarter of 2020 and full year 2020 and to
discuss Cogent's expectations for full year 2021. 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
|
Q4
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
|
$107,109
|
|
%
Change from previous Qtr.
|
1.9%
|
0.3%
|
2.0%
|
3.3%
|
0.8%
|
0.3%
|
1.2%
|
1.9%
|
|
Off-Net
revenue
|
$36,843
|
$37,191
|
$37,418
|
$37,479
|
$37,321
|
$37,044
|
$37,092
|
$36,672
|
|
%
Change from previous Qtr.
|
0.8%
|
0.9%
|
0.6%
|
0.2%
|
-0.4%
|
-0.7%
|
0.1%
|
-1.1%
|
|
Non-Core revenue
(1)
|
$111
|
$126
|
$108
|
$130
|
$137
|
$146
|
$119
|
$120
|
|
%
Change from previous Qtr.
|
-24.5%
|
13.5%
|
-14.3%
|
20.4%
|
5.4%
|
6.6%
|
-18.5%
|
0.8%
|
|
Service revenue –
total
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
$143,901
|
|
%
Change from previous Qtr.
|
1.6%
|
0.5%
|
1.6%
|
2.4%
|
0.4%
|
0.1%
|
0.9%
|
1.1%
|
|
Constant currency
total revenue quarterly growth rate – sequential quarters
(6)
|
1.7%
|
0.7%
|
1.7%
|
2.5%
|
0.6%
|
0.2%
|
-0.2%
|
0.7%
|
|
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%
|
1.2%
|
|
Excise Taxes
included in service revenue
|
$3,391
|
$3,191
|
$3,998
|
$4,334
|
$3,743
|
$3,298
|
$3,902
|
$4,144
|
|
%
Change from previous Qtr.
|
4.9%
|
-5.9%
|
25.3%
|
8.4%
|
-13.6%
|
-11.9%
|
18.3%
|
6.2%
|
|
Network operations
expenses (2)
|
$53,970
|
$54,181
|
$54,971
|
$55,684
|
$55,669
|
$53,581
|
$54,173
|
$54,513
|
|
%
Change from previous Qtr.
|
-2.6%
|
0.4%
|
1.5%
|
1.3%
|
-%
|
-3.8%
|
1.1%
|
0.6%
|
|
GAAP gross profit
(3)
|
$59,724
|
$60,403
|
$61,683
|
$64,300
|
$65,486
|
$67,208
|
$66,164
|
$66,617
|
|
%
Change from previous Qtr.
|
7.7%
|
1.1%
|
2.1%
|
4.2%
|
1.8%
|
2.6%
|
-1.6%
|
0.7%
|
|
GAAP gross margin
(3)
|
44.5%
|
44.8%
|
45.0%
|
45.8%
|
46.5%
|
47.7%
|
46.5%
|
46.3%
|
|
Non-GAAP gross
profit (4) (6)
|
$80,167
|
$80,608
|
$81,971
|
$84,608
|
$85,246
|
$87,409
|
$88,129
|
$89,388
|
|
%
Change from previous Qtr.
|
4.6%
|
0.6%
|
1.7%
|
3.2%
|
0.8%
|
2.5%
|
0.8%
|
1.4%
|
|
Non-GAAP gross
margin (4) (6)
|
59.8%
|
59.8%
|
59.9%
|
60.3%
|
60.5%
|
62.0%
|
61.9%
|
62.1%
|
|
Selling, general
and administrative expenses (5)
|
$32,568
|
$33,503
|
$31,456
|
$31,884
|
$34,852
|
$34,061
|
$33,546
|
$33,713
|
|
%
Change from previous Qtr.
|
12.2%
|
2.9%
|
-6.1%
|
1.4%
|
9.3%
|
-2.3%
|
-1.5%
|
0.5%
|
|
Depreciation and
amortization expense
|
$20,263
|
$19,979
|
$20,006
|
$20,002
|
$19,508
|
$19,896
|
$21,619
|
$22,455
|
|
%
Change from previous Qtr.
|
-3.3%
|
-1.4%
|
0.1%
|
-%
|
-2.5%
|
2.0%
|
8.7%
|
3.9%
|
|
Equity-based
compensation expense
|
$3,434
|
$5,289
|
$4,797
|
$4,940
|
$5,075
|
$6,083
|
$6,522
|
$5,846
|
|
%
Change from previous Qtr.
|
-22.1%
|
54.0%
|
-9.3%
|
3.0%
|
2.7%
|
19.9%
|
7.2%
|
-10.4%
|
|
Operating
income
|
$24,400
|
$22,022
|
$25,799
|
$28,033
|
$25,850
|
$27,574
|
$26,036
|
$27,384
|
|
%
Change from previous Qtr.
|
9.4%
|
-9.7%
|
17.2%
|
8.7%
|
-7.8%
|
6.7%
|
-5.6%
|
5.2%
|
|
Interest
expense
|
$13,456
|
$13,595
|
$15,191
|
$15,211
|
$15,220
|
$15,499
|
$15,760
|
$16,007
|
|
%
Change from previous Qtr.
|
-0.4%
|
1.0%
|
11.7%
|
0.1%
|
0.1%
|
1.8%
|
1.7%
|
1.6%
|
|
Net income
(loss)
|
$9,217
|
$7,136
|
$13,701
|
$7,465
|
$9,227
|
$8,564
|
$(4,955)
|
$(6,620)
|
|
Realized and
unrealized gains (losses) on 2024 Euro Notes
|
$-
|
$177
|
$6,128
|
$(4,068)
|
$2,908
|
$(873)
|
$(17,315)
|
$(19,170)
|
|
Basic net income
(loss) per common share
|
$0.20
|
$0.16
|
$0.30
|
$0.16
|
$0.20
|
$0.19
|
$(0.11)
|
$(0.14)
|
|
Diluted net income
(loss) per common share
|
$0.20
|
$0.16
|
$0.30
|
$0.16
|
$0.20
|
$0.18
|
$(0.11)
|
$(0.14)
|
|
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
|
45,904,943
|
|
%
Change from previous Qtr.
|
-0.1%
|
0.3%
|
0.2%
|
0.3%
|
0.2%
|
0.2%
|
0.1%
|
0.2%
|
|
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
|
45,904,943
|
|
%
Change from previous Qtr.
|
-0.3%
|
0.6%
|
0.2%
|
0.3%
|
0.5%
|
0.6%
|
-1.9%
|
0.2%
|
|
EBITDA
(6)
|
$47,561
|
$47,105
|
$50,515
|
$52,724
|
$50,394
|
$53,348
|
$54,583
|
$55,675
|
|
%
Change from previous Qtr.
|
-%
|
-1.0%
|
7.2%
|
4.4%
|
-4.4%
|
5.9%
|
2.3%
|
2.0%
|
|
EBITDA
margin
|
35.5%
|
34.9%
|
36.9%
|
37.6%
|
35.8%
|
37.8%
|
38.4%
|
38.7%
|
|
Gains on asset
related transactions
|
$536
|
$185
|
$87
|
$251
|
$39
|
$205
|
$99
|
$10
|
|
EBITDA, as
adjusted (6)
|
$48,097
|
$47,290
|
$50,602
|
$52,975
|
$50,433
|
$53,553
|
$54,682
|
$55,685
|
|
%
Change from previous Qtr.
|
0.9%
|
-1.7%
|
7.0%
|
4.7%
|
-4.8%
|
6.2%
|
2.1%
|
1.8%
|
|
EBITDA, as
adjusted, margin
|
35.9%
|
35.1%
|
37.0%
|
37.8%
|
35.8%
|
38.0%
|
38.4%
|
38.7%
|
|
Net cash provided
by operating activities
|
$28,637
|
$40,632
|
$33,443
|
$46,097
|
$28,458
|
$41,311
|
$32,980
|
$37,571
|
|
% Change from
previous Qtr.
|
-29.7%
|
41.9%
|
-17.7%
|
37.8%
|
-38.3%
|
45.2%
|
-20.2%
|
13.9%
|
|
Capital
expenditures
|
$13,288
|
$11,720
|
$12,051
|
$9,899
|
$12,866
|
$13,930
|
$13,296
|
$15,860
|
|
%
Change from previous Qtr.
|
21.5%
|
-11.8%
|
2.8%
|
-17.9%
|
30.0%
|
8.3%
|
-4.6%
|
19.3%
|
|
Principal payments
of capital (finance) lease obligations
|
$3,030
|
$1,976
|
$2,029
|
$2,056
|
$6,167
|
$3,716
|
$9,509
|
$4,598
|
|
%
Change from previous Qtr.
|
42.4%
|
-34.8%
|
2.7%
|
1.3%
|
200.0%
|
-39.7%
|
155.9%
|
-51.6%
|
|
Dividends
paid
|
$26,565
|
$27,741
|
$28,565
|
$29,776
|
$30,557
|
$31,738
|
$32,657
|
$34,460
|
|
Purchases of
common stock
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
$-
|
$270
|
$4,225
|
|
Gross Leverage
Ratio
|
4.28
|
5.08
|
4.97
|
4.86
|
4.78
|
5.08
|
5.10
|
5.14
|
|
Net Leverage
Ratio
|
2.92
|
2.93
|
2.92
|
2.86
|
2.92
|
3.07
|
3.24
|
3.40
|
|
Customer
Connections – end of period
|
|
|
|
|
|
|
|
|
|
On-Net
|
71,066
|
72,415
|
73,870
|
74,554
|
75,163
|
75,927
|
76,338
|
77,305
|
|
%
Change from previous Qtr.
|
3.3%
|
1.9%
|
2.0%
|
0.9%
|
0.8%
|
1.0%
|
0.5%
|
1.3%
|
|
Off-Net
|
11,138
|
11,321
|
11,503
|
11,660
|
11,721
|
11,846
|
11,849
|
11,970
|
|
%
Change from previous Qtr.
|
1.5%
|
1.6%
|
1.6%
|
1.4%
|
0.5%
|
1.1%
|
0.0%
|
1.0%
|
|
Non-Core
(1)
|
318
|
318
|
319
|
325
|
329
|
339
|
322
|
325
|
|
%
Change from previous Qtr.
|
-12.2%
|
-%
|
-0.3%
|
1.9%
|
1.2%
|
3.0%
|
-5.0%
|
0.9%
|
|
Total customer
connections
|
82,522
|
84,054
|
85,692
|
86,539
|
87,213
|
88,112
|
88,509
|
89,600
|
|
%
Change from previous Qtr.
|
3.0%
|
1.9%
|
1.9%
|
1.0%
|
0.8%
|
1.0%
|
0.5%
|
1.2%
|
|
On-Net Buildings –
end of period
|
|
|
|
|
|
|
|
|
|
Multi-Tenant office
buildings
|
1,746
|
1,751
|
1,757
|
1,767
|
1,769
|
1,771
|
1,783
|
1,792
|
|
Carrier neutral data
center buildings
|
908
|
933
|
960
|
980
|
1,000
|
1,029
|
1,047
|
1,068
|
|
Cogent data
centers
|
52
|
53
|
54
|
54
|
54
|
54
|
54
|
54
|
|
Total on-net
buildings
|
2,706
|
2,737
|
2,771
|
2,801
|
2,823
|
2,854
|
2,884
|
2,914
|
|
Total carrier neutral
data center nodes
|
1,071
|
1,101
|
1,128
|
1,153
|
1,175
|
1,203
|
1,225
|
1,252
|
|
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
|
976,813,678
|
|
Network –
end of period
|
|
|
|
|
|
|
|
|
|
Intercity route
miles
|
57,426
|
57,426
|
57,426
|
57,600
|
58,009
|
58,009
|
58,142
|
58,285
|
|
Metro fiber
miles
|
33,664
|
34,163
|
34,985
|
35,526
|
36,079
|
36,438
|
36,725
|
37,567
|
|
Connected networks –
AS's
|
6,668
|
6,762
|
6,844
|
6,954
|
7,042
|
7,133
|
7,222
|
7,338
|
|
Headcount – end of
period
|
|
|
|
|
|
|
|
|
|
Sales force – quota
bearing
|
501
|
519
|
530
|
548
|
542
|
572
|
597
|
569
|
|
Sales force -
total
|
639
|
656
|
667
|
686
|
684
|
716
|
740
|
712
|
|
Total
employees
|
997
|
1,026
|
1,036
|
1,055
|
1,052
|
1,083
|
1,110
|
1,083
|
|
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
|
4.2
|
|
FTE – sales
reps
|
464
|
478
|
488
|
502
|
522
|
533
|
563
|
542
|
|
|
|
(1)
|
Consists of legacy
services of companies whose assets or businesses were acquired by
Cogent.
|
|
(2)
|
Network operations
expense excludes equity-based compensation expense of $180, $226,
$282, $306, $252, $305, $346 and $316 in the three month periods
ended March 31, 2019 through December 31, 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, $3,902 and $4,144 in the three month periods ended
March 31, 2019 through December 31, 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, $6,176 and $5,530 in the three month periods ended March
31, 2019 through December 31, 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
|
Year
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
Q4
2020
|
Year
2020
|
|
($ in 000's) –
unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$28,637
|
$40,632
|
$33,443
|
$46,097
|
$148,809
|
$28,458
|
$41,311
|
$32,980
|
$37,571
|
$140,320
|
|
Changes in operating
assets and liabilities
|
6,727
|
(5,729)
|
3,785
|
(6,557)
|
(1,949)
|
5,325
|
$(3,232)
|
$6,255
|
$1,920
|
$12,780
|
|
Cash interest expense
and income tax expense
|
12,197
|
12,202
|
13,287
|
13,184
|
51,045
|
16,611
|
15,269
|
15,348
|
16,184
|
60,895
|
|
EBITDA
|
$47,561
|
$47,105
|
$50,515
|
$52,724
|
$197,905
|
$50,394
|
$53,348
|
$54,583
|
$55,675
|
$213,995
|
|
PLUS: Gains on asset
related transactions
|
536
|
185
|
87
|
251
|
1,059
|
39
|
205
|
99
|
10
|
352
|
|
EBITDA, as
adjusted
|
$48,097
|
$47,290
|
$50,602
|
$52,975
|
$198,964
|
$50,433
|
$53,553
|
$54,682
|
$55,685
|
$214,347
|
|
EBITDA
margin
|
35.5%
|
34.9%
|
36.9%
|
37.6%
|
36.2%
|
35.8%
|
37.8%
|
38.4%
|
38.7%
|
37.7%
|
|
EBITDA, as
adjusted, margin
|
35.9%
|
35.1%
|
37.0%
|
37.8%
|
36.4%
|
35.8%
|
38.0%
|
38.4%
|
38.7%
|
37.7%
|
|
|
|
|
Constant currency
revenue is reconciled to service revenue as reported in the tables
below.
|
|
|
Constant currency
impact on revenue changes – sequential periods
|
|
|
($ in 000's) –
unaudited
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Year
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
Q4
2020
|
Year
2020
|
|
Service revenue, as
reported – current period
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$546,159
|
$140,915
|
$140,990
|
$142,302
|
$143,901
|
$568,103
|
|
Impact of foreign
currencies on service revenue
|
135
|
260
|
176
|
88
|
5,286
|
184
|
202
|
(1,616)
|
(621)
|
(1,492)
|
|
Service revenue - as
adjusted for currency impact (1)
|
$134,272
|
$135,049
|
$137,118
|
$140,380
|
$551,445
|
$141,099
|
$141,192
|
$140,686
|
$143,280
|
$566,611
|
|
Service revenue, as
reported – prior sequential period
|
$132,049
|
$134,137
|
$134,789
|
$136,942
|
$520,193
|
$140,292
|
$140,915
|
$140,990
|
$142,302
|
$546,159
|
|
Constant currency
(decrease) increase
|
$2,223
|
$912
|
$2,329
|
$3,438
|
$31,252
|
$807
|
$277
|
$(304)
|
$978
|
$20,452
|
|
Constant currency
percent (decrease) increase
|
1.7%
|
0.7%
|
1.7%
|
2.5%
|
6.0%
|
0.6%
|
0.2%
|
(0.2)%
|
0.7%
|
3.7%
|
|
|
|
(1)
|
Service revenue, as
adjusted for currency impact, is determined by translating the
service revenue for the current period at the average foreign
currency exchange rates for the prior sequential period. The
Company believes that disclosing quarterly sequential revenue
growth without the impact of foreign currencies on service revenue
is a useful measure of sequential revenue growth. Service revenue,
as adjusted for currency impact, is an integral part of the
internal reporting and planning system used by management as a
supplement to GAAP financial information.
|
|
|
|
|
Constant currency
impact on revenue changes – prior year periods
|
|
|
($ in 000's) –
unaudited
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Year
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
Q4
2020
|
Year
2020
|
|
Service revenue, as
reported – current period
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$546,159
|
$140,915
|
$140,990
|
$142,302
|
$143,901
|
$568,103
|
|
Impact of foreign
currencies on service revenue
|
2,078
|
1,505
|
1,058
|
683
|
5,286
|
746
|
674
|
(1,141)
|
(1,891)
|
(1,492)
|
|
Service revenue - as
adjusted for currency impact (2)
|
$136,215
|
$136,294
|
$138,000
|
$140,975
|
$551,445
|
$141,661
|
$141,664
|
$141,161
|
$142,010
|
$566,611
|
|
Service revenue, as
reported – prior year period
|
$128,706
|
$129,296
|
$130,139
|
$132,049
|
$520,193
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$546,159
|
|
Constant currency
increase
|
$7,509
|
$6,998
|
$7,861
|
$8,926
|
$31,252
|
$7,524
|
$6,875
|
$4,219
|
$1,718
|
$20,452
|
|
Percent
increase
|
5.8%
|
5.4%
|
6.0%
|
6.8%
|
6.0%
|
5.6%
|
5.1%
|
3.1%
|
1.2%
|
3.7%
|
|
|
|
(2)
|
Service revenue, as
adjusted for currency impact, is determined by translating the
service revenue for the current period at the average foreign
currency exchange rates for the comparable prior year period. The
Company believes that disclosing year over year revenue growth
without the impact of foreign currencies on service revenue is a
useful measure of revenue growth. Service revenue, as adjusted for
currency impact, is an integral part of the internal reporting and
planning system used by management as a supplement to GAAP
financial information.
|
|
|
|
|
Non-GAAP gross
profit and Non-GAAP gross margin
|
|
|
Non-GAAP gross
profit and Non-GAAP gross margin are reconciled to GAAP gross
profit and GAAP gross margin in the table below.
|
|
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Year
2019
|
Q1
2020
|
Q2
2020
|
Q3
2020
|
Q4
2020
|
Year
2020
|
|
($ in 000's) –
unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue
total
|
$134,137
|
$134,789
|
$136,942
|
$140,292
|
$546,159
|
$140,915
|
$140,990
|
$142,302
|
$143,901
|
$568,103
|
|
Minus - Network
operations expense including equity-based compensation and
including depreciation and amortization expense
|
74,413
|
74,386
|
75,259
|
75,992
|
300,050
|
75,429
|
73,782
|
76,138
|
77,284
|
302,633
|
|
GAAP Gross Profit
(1)
|
$59,724
|
$60,403
|
$61,683
|
$64,300
|
$246,109
|
$65,486
|
$67,208
|
$66,164
|
$66,617
|
$265,470
|
|
Plus -
Equity-based compensation – network operations expense
|
180
|
226
|
282
|
306
|
994
|
252
|
305
|
346
|
316
|
1,219
|
|
Plus – Depreciation
and amortization expense
|
20,263
|
19,979
|
20,006
|
20,002
|
80,247
|
19,508
|
19,896
|
21,619
|
22,455
|
83,477
|
|
Non-GAAP Gross
Profit (2)
|
$80,167
|
$80,608
|
$81,971
|
$84,608
|
$327,350
|
$85,246
|
$87,409
|
$88,129
|
$89,388
|
$350,166
|
|
GAAP Gross Margin
(1)
|
44.5%
|
44.8%
|
45.0%
|
45.8%
|
45.1%
|
46.5%
|
47.7%
|
46.5%
|
46.3%
|
46.7%
|
|
Non-GAAP Gross
Margin (2)
|
59.8%
|
59.8%
|
59.9%
|
60.3%
|
59.9%
|
60.5%
|
62.0%
|
61.9%
|
62.1%
|
61.6%
|
|
|
|
(1)
|
GAAP gross profit is
defined as total service revenue less network operations expense,
depreciation and amortization and equity-based compensation
included in network operations expense. GAAP gross margin is
defined as GAAP gross profit divided by total service
revenue.
|
|
(2)
|
Non-GAAP gross profit
represents service revenue less network operations expense,
excluding equity-based compensation and amounts shown separately
(depreciation and amortization expense). Non-GAAP gross margin is
defined as non-GAAP gross profit divided by total service
revenue. Management believes that non-GAAP gross profit and
non-GAAP gross margin are relevant metrics to provide to investors,
as they are metrics that management uses to measure the margin and
amount available to the Company after network service costs, in
essence these are measures of the efficiency of the Company's
network.
|
Gross and Net Leverage Ratios
Gross leverage ratio is defined as total debt divided by the
trailing last 12 months EBITDA, as adjusted. Net leverage
ratio is defined as total net debt (total debt minus cash and cash
equivalents) divided by the trailing last 12 months EBITDA, as
adjusted. Cogent's gross leverage ratio and net leverage
ratio are shown below.
|
($ in 000's) –
unaudited
|
As of September
30, 2020
|
As of December 31,
2020
|
|
Cash and cash
equivalents
|
$393,293
|
$371,301
|
|
Debt
|
|
|
|
Capital (finance)
leases – current portion
|
15,252
|
15,702
|
|
Capital (finance)
leases – long term
|
197,688
|
203,438
|
|
Senior Secured 2022
Notes
|
445,000
|
445,000
|
|
Senior Unsecured Euro
2024 Notes
|
410,365
|
429,264
|
|
Note
payable
|
10,404
|
7,712
|
|
Total debt
|
1,078,709
|
1,101,116
|
|
Total net
debt
|
685,416
|
729,815
|
|
Trailing 12 months
EBITDA, as adjusted
|
211,643
|
214,353
|
|
Gross leverage
ratio
|
5.10
|
5.14
|
|
Net leverage
ratio
|
3.24
|
3.40
|
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
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
AS OF
DECEMBER 31, 2020 AND 2019
|
|
(IN THOUSANDS,
EXCEPT SHARE AND PER SHARE DATA)
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
371,301
|
|
$
|
399,422
|
|
Accounts receivable,
net of allowance for credit losses of $1,921 and $1,771,
respectively
|
|
44,185
|
|
|
40,484
|
|
Prepaid expenses and
other current assets
|
|
40,851
|
|
|
35,822
|
|
Total current
assets
|
|
456,337
|
|
|
475,728
|
|
Property and
equipment:
|
|
|
|
|
|
|
Property and
equipment
|
|
1,515,867
|
|
|
1,366,782
|
|
Accumulated
depreciation and amortization
|
|
(1,085,532)
|
|
|
(997,853)
|
|
Total property and
equipment, net
|
|
430,335
|
|
|
368,929
|
|
Right-of-use
leased assets
|
|
99,666
|
|
|
73,460
|
|
Deposits and other
assets
|
|
14,139
|
|
|
14,007
|
|
Total
assets
|
$
|
1,000,477
|
|
$
|
932,124
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
9,775
|
|
$
|
11,075
|
|
Accrued and other
current liabilities
|
|
51,029
|
|
|
51,301
|
|
Current maturities,
operating lease liabilities
|
|
11,151
|
|
|
10,101
|
|
Installment payment
agreement, current portion, net of discount of $136 and $350,
respectively
|
|
6,786
|
|
|
9,063
|
|
Finance lease
obligations, current maturities
|
|
15,702
|
|
|
8,154
|
|
Total current
liabilities
|
|
94,443
|
|
|
89,694
|
|
Senior unsecured
2024 Euro notes, net of unamortized debt
costs of $2,961 and $1,410, respectively and net of
discount of
$1,142 and $0, respectively
|
|
425,160
|
|
|
150,001
|
|
Senior secured
2022 notes, net of unamortized debt costs of
$1,052 and $1,897 respectively and including premium
of $544
and $985, respectively
|
|
444,492
|
|
|
444,088
|
|
Senior unsecured
2021 notes, net of unamortized debt costs of $857
|
|
—
|
|
|
188,368
|
|
Operating lease
liabilities, net of current maturities
|
|
111,318
|
|
|
86,690
|
|
Finance lease
obligations, net of current maturities
|
|
203,438
|
|
|
161,635
|
|
Other long-term
liabilities
|
|
14,792
|
|
|
15,327
|
|
Total
liabilities
|
|
1,293,643
|
|
|
1,135,803
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001 par value;
75,000,000 shares authorized;
47,214,077 and 46,840,434 shares issued and
outstanding,
respectively
|
|
47
|
|
|
47
|
|
Additional paid-in
capital
|
|
515,867
|
|
|
493,178
|
|
Accumulated other
comprehensive income (loss)
|
|
(1,306)
|
|
|
(12,326)
|
|
Accumulated
deficit
|
|
(807,774)
|
|
|
(684,578)
|
|
Total stockholders'
deficit
|
|
(293,166)
|
|
|
(203,679)
|
|
Total liabilities
and stockholders' equity
|
$
|
1,000,477
|
|
$
|
932,124
|
|
|
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
FOR THE THREE
MONTHS ENDED DECEMBER 31, 2020 AND DECEMBER 31, 2019
|
|
(IN THOUSANDS,
EXCEPT SHARE AND PER SHARE DATA)
|
|
|
Three
Months
Ended
December 31, 2020
|
|
Three
Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Service
revenue
|
$
|
143,901
|
|
$
|
140,292
|
|
|
Operating
expenses:
|
|
|
|
|
|
Network operations
(including $316 and $306 of equity–
based compensation expense, respectively),
exclusive
of amounts shown separately
|
54,829
|
|
55,990
|
|
|
Selling, general, and
administrative (including $5,530
and $4,634 of equity–based compensation expense,
respectively)
|
39,243
|
|
36,518
|
|
|
Depreciation and
amortization
|
22,455
|
|
20,002
|
|
|
Total operating
expenses
|
116,527
|
|
112,510
|
|
|
Gains on equipment
transactions
|
10
|
|
251
|
|
|
Operating
income
|
27,384
|
|
28,033
|
|
|
Interest
expense
|
(16,007)
|
|
(15,211)
|
|
|
Unrealized foreign
exchange (loss) gain on 2024 Euro Notes
|
(19,170)
|
|
(4,068)
|
|
|
Interest income
and other
|
529
|
|
2,012
|
|
|
(Loss) income
before income taxes
|
(7,264)
|
|
10,766
|
|
|
Income tax benefit
(expense)
|
644
|
|
(3,301)
|
|
|
Net (loss)
income
|
$
|
(6,620)
|
|
$
|
7,465
|
|
|
|
|
|
|
|
Comprehensive
(loss) income:
|
|
|
|
|
|
Net (loss)
income
|
$
|
(6,620)
|
|
$
|
7,465
|
|
|
Foreign currency
translation adjustment
|
6,192
|
|
3,350
|
|
|
Comprehensive
(loss) income
|
$
|
(428)
|
|
$
|
10,815
|
|
|
|
|
|
|
|
Basic net (loss)
income per common share
|
$
|
(0.14)
|
|
$
|
0.16
|
|
|
Diluted net (loss)
income per common share
|
$
|
(0.14)
|
|
$
|
0.16
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.73
|
|
$
|
0.64
|
|
|
|
|
|
|
|
Weighted–average
common shares—basic
|
45,904,943
|
|
45,553,727
|
|
|
|
|
|
|
|
Weighted–average
common shares—diluted
|
45,904,943
|
|
46,145,970
|
|
|
|
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
FOR EACH OF THE
THREE YEARS ENDED DECEMBER 31, 2020
|
|
(IN THOUSANDS,
EXCEPT SHARE AND PER SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Service
revenue
|
$
|
568,103
|
|
$
|
546,159
|
|
$
|
520,193
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Network operations
(including $1,219,
$994 and $895 of equity-based
compensation expense, respectively),
exclusive of amounts shown separately
|
|
219,157
|
|
|
219,801
|
|
|
219,526
|
|
Selling, general, and
administrative
(including $22,306, $17,466 and
$16,813 of equity-based compensation
expense, respectively)
|
|
158,476
|
|
|
146,913
|
|
|
133,858
|
|
Depreciation and
amortization
|
|
83,477
|
|
|
80,247
|
|
|
81,233
|
|
Total operating
expenses
|
|
461,110
|
|
|
446,961
|
|
|
434,617
|
|
Gains on equipment
transactions
|
|
352
|
|
|
1,059
|
|
|
982
|
|
Losses on lease
terminations
|
|
(423)
|
|
|
—
|
|
|
—
|
|
Operating
income
|
|
106,922
|
|
|
100,257
|
|
|
86,558
|
|
Interest
expense
|
|
(62,486)
|
|
|
(57,453)
|
|
|
(51,056)
|
|
Realized foreign
exchange gain on 2024 Euro Notes
|
|
2,533
|
|
|
—
|
|
|
—
|
|
Unrealized foreign
exchange (loss) gain on 2024 Euro Notes
|
|
(36,997)
|
|
|
2,271
|
|
|
—
|
|
Loss on debt
extinguishment and redemption – 2021 Notes
|
|
(638)
|
|
|
—
|
|
|
—
|
|
Interest income
and other
|
|
978
|
|
|
7,599
|
|
|
5,880
|
|
Income before
income taxes
|
|
10,312
|
|
|
52,674
|
|
|
41,382
|
|
Income tax
expense
|
|
(4,096)
|
|
|
(15,154)
|
|
|
(12,715)
|
|
Net
income
|
$
|
6,216
|
|
$
|
37,520
|
|
$
|
28,667
|
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
6,216
|
|
$
|
37,520
|
|
$
|
28,667
|
|
Foreign currency
translation adjustment
|
|
11,020
|
|
|
(1,398)
|
|
|
(6,328)
|
|
Comprehensive
income
|
$
|
17,236
|
|
$
|
36,122
|
|
$
|
22,339
|
|
|
Basic net income
per common share
|
$
|
0.14
|
|
$
|
0.82
|
|
$
|
0.63
|
|
Diluted net income
per common share
|
$
|
0.13
|
|
$
|
0.81
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
2.78
|
|
$
|
2.44
|
|
$
|
2.12
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares—basic
|
|
45,947,772
|
|
|
45,542,315
|
|
|
45,280,161
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares—diluted
|
|
46,668,198
|
|
|
46,080,395
|
|
|
45,780,954
|
|
|
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
FOR THE THREE
MONTHS ENDED DECEMBER 31, 2020 AND DECEMBER 31, 2019
|
|
(IN
THOUSANDS)
|
|
|
Three
Months
Ended
December 31, 2020
|
|
Three
Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net (loss)
income
|
$
|
(6,620)
|
|
$
|
7,466
|
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
22,455
|
|
20,001
|
|
|
Amortization of debt
discount and premium
|
468
|
|
479
|
|
|
Equity–based
compensation expense (net of amounts capitalized)
|
5,846
|
|
4,940
|
|
|
Gains—equipment
transactions and other, net
|
(115)
|
|
(263)
|
|
|
Unrealized foreign
currency exchange loss on 2024 Euro notes
|
19,170
|
|
4,068
|
|
|
Deferred income
taxes
|
(1,818)
|
|
2,873
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
(1,600)
|
|
1,110
|
|
|
Prepaid expenses and
other current assets
|
482
|
|
1,132
|
|
|
Deposits and other
assets
|
(245)
|
|
599
|
|
|
Accounts payable,
accrued liabilities and other long–term liabilities
|
(452)
|
|
3,692
|
|
|
Net cash provided by
operating activities
|
37,571
|
|
46,097
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchases of property
and equipment
|
(15,860)
|
|
(9,899)
|
|
|
Net cash used in
investing activities
|
(15,860)
|
|
(9,899)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Dividends
paid
|
(34,460)
|
|
(34,460)
|
|
|
Principal payments of
capital lease obligations
|
(4,598)
|
|
(2,056)
|
|
|
Principal payments of
installment payment agreement
|
(2,692)
|
|
(2,659)
|
|
|
Purchases of common
stock
|
(4,225)
|
|
—
|
|
|
Proceeds from
exercises of common stock options
|
207
|
|
367
|
|
|
Net cash used in
financing activities
|
(45,768)
|
|
(34,124)
|
|
|
Effect of exchange
rate changes on cash
|
2,065
|
|
1,077
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(21,992)
|
|
3,151
|
|
|
Cash and cash
equivalents, beginning of period
|
393,293
|
|
396,271
|
|
|
Cash and cash
equivalents, end of period
|
$
|
371,301
|
|
$
|
399,422
|
|
|
|
|
|
COGENT
COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
FOR EACH OF THE
THREE YEARS ENDED DECEMBER 31, 2020
|
|
(IN
THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
6,216
|
|
$
|
37,520
|
|
$
|
28,667
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
83,477
|
|
|
80,247
|
|
|
81,233
|
|
Amortization of debt
discount and premium
|
|
1,894
|
|
|
1,807
|
|
|
1,533
|
|
Equity-based
compensation expense (net of amounts capitalized)
|
|
23,525
|
|
|
18,460
|
|
|
17,708
|
|
Unrealized foreign
currency exchange loss (gain) on 2024 Euro Notes
|
|
36,997
|
|
|
(2,271)
|
|
|
—
|
|
Realized foreign
currency exchange gain on 2024 Euro Notes
|
|
(2,533)
|
|
|
—
|
|
|
—
|
|
Loss on extinguishment
of 2021 notes
|
|
638
|
|
|
—
|
|
|
—
|
|
Gains—equipment
transactions and other, net
|
|
(546)
|
|
|
(358)
|
|
|
(1,109)
|
|
Deferred income
taxes
|
|
282
|
|
|
12,158
|
|
|
11,117
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(2,702)
|
|
|
1,067
|
|
|
(3,204)
|
|
Prepaid expenses and
other current assets
|
|
(2,771)
|
|
|
(3,730)
|
|
|
(438)
|
|
Deposits and other
assets
|
|
(873)
|
|
|
(1,131)
|
|
|
(1,490)
|
|
Accounts payable,
accrued liabilities and other long-term liabilities
|
|
(3,284)
|
|
|
5,040
|
|
|
(96)
|
|
Net cash provided by
operating activities
|
|
140,320
|
|
|
148,809
|
|
|
133,921
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(55,952)
|
|
|
(46,958)
|
|
|
(49,937)
|
|
Net cash used in
investing activities
|
|
(55,952)
|
|
|
(46,958)
|
|
|
(49,937)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds from
issuance of senior 2024 Euro
Notes, net of debt costs of $2,137 and $1,556,
respectively
|
|
240,285
|
|
|
152,134
|
|
|
—
|
|
Net proceeds from
issuance of 2022 Notes, net of debt costs of $1,364
|
|
—
|
|
|
—
|
|
|
69,861
|
|
Redemption and
extinguishment of 2021 Notes
|
|
(189,225)
|
|
|
—
|
|
|
—
|
|
Dividends
paid
|
|
(129,412)
|
|
|
(112,647)
|
|
|
(97,887)
|
|
Principal payments of
finance lease obligations
|
|
(23,990)
|
|
|
(9,097)
|
|
|
(10,286)
|
|
Principal payments of
installment payment agreement
|
|
(10,547)
|
|
|
(10,007)
|
|
|
(9,437)
|
|
Purchases of common
stock
|
|
(4,495)
|
|
|
—
|
|
|
(6,564)
|
|
Proceeds from
exercises of common stock options
|
|
1,382
|
|
|
1,637
|
|
|
1,768
|
|
Net cash (used in)
provided by financing activities
|
|
(116,002)
|
|
|
22,020
|
|
|
(52,545)
|
|
Effect of exchange
rate changes on cash
|
|
3,513
|
|
|
(542)
|
|
|
(2,357)
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(28,121)
|
|
|
123,329
|
|
|
29,082
|
|
Cash and cash
equivalents, beginning of year
|
|
399,422
|
|
|
276,093
|
|
|
247,011
|
|
Cash and cash
equivalents, end of year
|
$
|
371,301
|
|
$
|
399,422
|
|
$
|
276,093
|
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 Annual
Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Reports on
Form 10-Q for the quarters ended March
31,2020, June 30, 2020 and
September 30, 2020. 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.