GCI REPORTS
THIRD QUARTER 2013 FINANCIAL RESULTS
-
Consolidated revenue of $220
million
-
Adjusted EBITDA of $79
million
-
Net income of $9 million or $0.22
per diluted share
November 6,
2013, Anchorage AK -
General Communication, Inc. ("GCI") (NASDAQ:GNCMA) today reported
its third quarter 2013 results with consolidated revenues of $220
million, an adjusted EBITDA of $79 million, and net income of $9
million or $0.22 per diluted share. These results reflect the
consolidation of the Alaska Wireless Network ("AWN") transaction,
which was effective July 23, 2013.
For the third quarter of 2013,
revenue increased $42 million or 23 percent over the third quarter
of 2012 revenue of $178 million. Adjusted EBITDA increased $19
million or 32 percent over the third quarter of 2012 EBITDA of $59
million. Net income increased 141 percent compared to third quarter
of 2012 net income of $4 million.
For the first nine months of 2013,
revenue increased to $596 million, an increase of $70 million or 13
percent over the first nine months of 2012 revenue of $527 million.
Adjusted EBITDA increased to $200 million, an increase of $26
million or 15 percent over the first nine months of 2012 EBITDA of
$174 million. Net income increased to $16 million, an increase of
$7 million or 79 percent over the first nine months of 2012 net
income of $9 million.
"We are very happy to have the AWN
transaction closed, and even happier to have the consolidated
wireless results reflected in a portion of our third quarter
results," said Ron Duncan, GCI president and chief executive
officer. "We are pleased with the progress we have made this year.
The year is going well and we expect to continue well in the fourth
quarter and into next year."
Operating
Highlights
Wireless:
As mentioned above and previously announced, the AWN transaction
closed on July 22nd, and was
effective on July 23rd. This
transaction combined the wireless networks of GCI and Alaska
Communications ("ACS"). At this point, AWN provides wholesale
wireless services to AWN's owners, GCI and ACS, as well as roaming
and backhaul service to other wireless carriers. This quarter's
results include a partial quarter of AWN's operations as of the
effective date.
Wireless revenues of $68 million
for the third quarter of 2013 increased $36 million when compared
to the third quarter of 2012. Wireless Adjusted EBITDA of $37
million increased $24 million compared to the third quarter of
2012.
With a partial quarter of AWN for
the third quarter 2013, and with the second quarter 2013 and the
third quarter 2012 results representing only GCI's wireless
business, the revenue detail is as follows:
($ millions) |
3Q 2013 |
3Q 2012 |
2Q 2013 |
Wholesale Wireless |
$24 |
$14 |
$15 |
Roaming and Backhaul |
$31 |
$10 |
$13 |
USF Support |
$13 |
$8 |
$8 |
Total Wireless Revenue |
$68 |
$32 |
$36 |
During the quarter, the company
implemented many enhancements and improvements to the network,
including:
-
Initiating 4G LTE service in
Juneau, expanding LTE service in Anchorage, and improving service
in Dillingham and the Mat-Su Valley. 4G LTE is expected to launch
in Fairbanks by the end of the year.
-
Expanding Turbozone wireless
service to 1,205 venues, representing the most extensive wi-fi
network coverage in Alaska and offering up to 50 Mbps
speed.
Wireline -
Consumer:
Consumer revenues of $69 million for the third quarter of 2013
increased 4 percent over the same period of 2012. Adjusted EBITDA
of $17 million for the third quarter of 2013 increased 5 percent
compared to the third quarter of 2012. Increases in data and
wireless revenues, especially with respect to average revenue per
subscriber, offset the decreases in voice and video revenues.
During the quarter, the Company
announced several campaigns and new programs:
-
Special marketing campaigns
capitalizing on the expansion of the LTE wireless
service.
-
Special marketing campaigns
capitalizing on the expansion and improvement of Turbozone wireless
service and speed.
-
Introduction of the SimplyShare
plans for the national and Alaska markets.
-
Launch of TiVo service in five new
markets.
-
Addition of four new HD networks
to GCI TV offerings.
-
Expansion of GCI GO with ten new
networks available for viewing on mobile devices.
Wireline -
Business Services:
Business Services revenues of $54 million for the third quarter of
2013 increased 3 percent over the same period in 2012. Adjusted
EBITDA was $16 million, which represented an 11 percent decline
from the third quarter of 2012. The year over year revenue
improvements were driven by growth in data, wireless and video,
which grew 9 percent, 14 percent and 18 percent respectively.
The Data revenue results can
better be understood by examining the components of the
category:
($ millions) |
3Q 2013 |
3Q 2012 |
2Q 2013 |
Data Transport & Storage Charges |
$27 |
$25 |
$24 |
Professional Services |
$12 |
$11 |
$15 |
Total Data Revenue |
$39 |
$36 |
$39 |
During the quarter, revenues
benefited from the strength of oil and gas sector activity, which
has increased significantly in recent quarters. However, the EBITDA
decline was also driven by these recent projects, initially lower
margin Professional Services initiatives, as well as by increased
SG&A allocations for the quarter and year to date.
Wireline - Managed
Broadband:
Managed Broadband revenues for the third quarter of 2013 totaled
$30 million, an increase of 6 percent over the third quarter of
2012. Adjusted EBITDA for the quarter was $8 million, which
represented a 30 percent decline over the same period in 2012. The
year-over-year growth of revenue is due to continuing investment in
terrestrial broadband facilities in rural Alaska and success in
acquiring additional telemedicine and distance learning customers.
The decline in EBITDA is due to ongoing development project
expenses, increased expenses in the regulated business, and an
increased allocation of corporate SG&A.
On November 5th, GCI completed
another phase of its terrestrial broadband network, TERRA, with
full service extending to Nome. GCI expects to complete the next
phase, to Kotzebue, by the end of 2014.
Corporate
Highlights
-
GCI repurchased 242,000 shares of
its Class A common stock in the third quarter of 2013 at a cost of
$2 million. GCI is authorized to repurchase $101 million of its
shares depending on company performance, market conditions,
liquidity, leverage and subject to board oversight. At the
end of the third quarter of 2013 GCI had approximately 41 million
Class A and B shares outstanding.
-
SG&A expenses for the third
quarter of 2013 totaled $70 million, an increase of $11 million
compared to the third quarter of 2012. This increase reflects,
among other items, an increase in labor costs and an increase in
success-based incentive compensation. As a percentage of revenues,
SG&A expenses for the quarter declined to 32 percent from 33
percent for the same period in 2012.
GCI will hold a conference call to
discuss the quarter's results on Thursday, November 7, 2013
beginning at 2 p.m. (Eastern). To access the briefing, call the
conference operator between 1:50-2:00 p.m. (Eastern Time) at
800-988-0202 (International callers should dial 1-212-547-0478) and
identify your call as "GCI." In addition to the dial-up
access, GCI will make available net conferencing. To access
the call via net conference, log on to www.gci.com and follow the
instructions. A replay of the call will be available for
72-hours by dialing 866-483-9044, access code 7461 (International
callers should dial 1-203-369-1586.)
About GCI
GCI is the largest
telecommunications company in Alaska. GCI's cable plant,
which provides broadband data services, video, and voice, passes 78
percent of Alaska households. GCI operates Alaska's most
extensive terrestrial/subsea fiber optic network which connects not
only Anchorage but also Fairbanks and Juneau/Southeast Alaska to
the lower 48 states with a diversely routed, protected fiber
network. GCI's TERRA fiber/microwave system links 68 communities
from Nome through the Yukon-Kuskokwim Delta and Bristol Bay to
Anchorage, bringing terrestrial broadband Internet access to the
region for the first time. GCI's satellite network provides
communications services to small towns and communities throughout
rural Alaska. GCI's statewide mobile wireless network
seamlessly links urban and rural Alaska.
A pioneer in bundled services, GCI
is the top provider of data, video and voice services to Alaska
consumers with a 70 percent share of the consumer broadband
market. GCI is also the leading provider of communications
services to enterprise customers, particularly large enterprise
customers with complex data networking needs. More
information about GCI can be found at www.gci.com.
Forward Looking Statement
Disclosure
The foregoing contains
forward-looking statements regarding GCI's expected results that
are based on management's expectations as well as on a number of
assumptions concerning future events. Actual results might
differ materially from those projected in the forward looking
statements due to uncertainties and other factors, many of which
are outside GCI's control. Additional information concerning
factors that could cause actual results to differ materially from
those in the forward looking statements is contained in GCI's
cautionary statement sections of Forms 10-K and 10-Q filed with the
Securities and Exchange Commission.
# # #
Press Release Financials Q3 13 v4
FINAL
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information contained therein.
Source: General Communication Inc via Thomson Reuters
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