GCI REPORTS
SECOND QUARTER 2014 FINANCIAL RESULTS
Consolidated Revenues of $224
million, Adjusted EBITDA of $84 million
August 6,
2014, Anchorage AK - General Communication, Inc. ("GCI")
(NASDAQ:GNCMA) today reported performance for the second quarter of
2014, with consolidated revenues of $224 million, adjusted EBITDA
of $84 million, and net income of $8 million or $0.20 per
share.
Consolidated revenues of $224
million increased four percent on a sequential basis and increased
eighteen percent on a year-over-year basis. Adjusted EBITDA of $84
million represented a 13 percent increase on a sequential basis and
a 36 percent increase on a year-over-year basis.
On a year to date basis,
consolidated revenues were $441 million, representing a 17 percent
increase over the same period in 2013. Adjusted EBITDA was $159
million, a 32 percent increase over the same period last year. Net
income was $10 million or $0.25 per share, a 38 percent and a 39
percent increase over the same period last year, respectively.
"The first half of 2014 has been a
period of solid performance, especially with wireless and data
services," said Ron Duncan, GCI president and chief executive
officer. "As we look forward to the remainder of 2014, our
challenge is to build on the success of the first half and continue
to execute to plan."
Important
Notes
It should be noted that both
Wireless and Wireline segment results are materially affected by
The Alaska Wireless Network ("AWN") transaction, which was
effective July 23, 2013.
Operating
Highlights
Wireless:
The Wireless segment, reflecting
the results of AWN, posted revenues of $69 million, an 11 percent
increase on a sequential basis, and a 95 percent increase on a
year-over-year basis, reflecting the results of the AWN
transaction. Wireless adjusted EBITDA for the period was $40
million, reflecting a six percent increase on a sequential basis
and a 182 percent increase on a year-over-year basis. When the
sequential growth is compared to a pro forma adjusted EBITDA, with
a normalized effect of handset subsidies, as was reported last
quarter, the normalized growth was 24 percent. This strong increase
is a result of seasonal increases in roaming, as well as increased
demand for backhaul services.
For the second quarter of 2014, the revenue detail
was as follows:
($
millions) |
2Q 2014 |
2Q 2013 |
1Q 2014 |
Wholesale Wireless |
25 |
15 |
25 |
Roaming and Backhaul |
30 |
13 |
25 |
USF Support |
14 |
8 |
13 |
Total Wireless Revenue |
69 |
36 |
63 |
Wireline:
The Wireline segment posted
revenues of $155 million, a one percent increase on a sequential
basis and on a year-over-year basis. Adjusted EBITDA for the
segment was $44 million, representing a 20 percent increase on a
sequential basis, and an eight percent decline on a year-over-year
basis. When the sequential growth is normalized for handset
subsidies, the growth was five percent. The year-over-year decline
is due primarily to increases in Selling, General and
Administrative expenses (SG&A), partially offset by the revenue
increases discussed below. Within SG&A, the primary drivers of
the increase are increased labor costs as well as increased health
care costs.
Wireline -
Consumer:
Consumer revenues for the second
quarter of 2014 were $69 million, a slight decline on a sequential
basis and a slight increase on a year-over-year basis. Growth in
the revenues for the quarter has been driven by video set top
boxes, data average revenue per subscriber (ARPU), and non-Lifeline
wireless subscribers, but has been offset by seasonal losses
overall in cable modem and video subscribers. Revenue was also
lower due to a wireless promotion during the quarter that reduced
activation fees received and credited newly activated customers
$100.
Wireline -
Business Services:
Business Services revenues for the
second quarter of 2014 were $55 million, a five percent increase on
a sequential basis and a three percent decline on a year-over-year
basis. The sequential growth for the quarter in this customer
segment has been driven by seasonal increases in hotel video and
increased demand for data transport and storage. On a
year-over-year basis, the reduction in revenue is largely
attributable to lower Professional Services revenue, which were
particularly strong in the second quarter of 2013.
Data revenues can be better understood by the
following detail:
($
millions) |
2Q 2014 |
2Q 2013 |
1Q 2014 |
Data Transport and Storage |
25 |
22 |
24 |
Professional Services |
11 |
17 |
11 |
Total Data Revenue |
36 |
39 |
35 |
Wireline -
Managed Broadband:
Managed Broadband revenues for the
second quarter of 2014 were $31 million, a slight decline
sequentially, and a seven percent increase on a year-over-year
basis. The strong performance is attributable to continued demand
in the School Access and Telehealth programs, as well as positive
momentum in the regulated business.
Accomplishments and Milestones
-
GCI became the first Alaska carrier to provide a
Lifeline service plan that includes data.
-
GCI's premiere data service, re:D, had its speed
increased to 200 Mbps, and was launched in two additional
markets.
-
On the video front, GCI strengthened its
customer offerings with video on demand (VOD) launches in three new
markets, and an expansion of fourteen new networks on GCI GO (TV
Anywhere access).
-
Also on the video front, GCI is one of the first
carriers in the U.S. to launch the Netflix app on TiVo.
-
On July 28th, the Company
announced the acquisition of three CBS broadcast stations in
Southeast Alaska, KXLJ in Juneau, KTNL in Sitka, and KUBD in
Ketchikan. Through its subsidiary, Denali Media Holdings, the
Company now owns CBS and NBC affiliates in Southeast Alaska and the
CBS affiliate KTVA-TV in Anchorage.
Guidance
The Company previously provided
guidance of annual consolidated revenues in the range of $910
million to $930 million, and adjusted EBITDA in the range of $285
million to $305 million. On a revenue perspective, the first half
performance was weaker than expected, and the Company is revising
the range downward to $880 million to $900 million. For earnings as
measured by adjusted EBITDA, however, the strong performance in the
first two quarters implies that the high end of the range is most
likely.
With respect to capital
expenditures, our cash expenditures for property and equipment have
totaled $81 million year to date, which includes $19 million for
the purchase of real estate, or $62 million in core cash capital
expenditures. At this time, the Company is continuing its guidance
for 2014 core cash capital expenditures of approximately $170
million.
The Company will hold a conference
call to discuss the quarter's results on Thursday, August 7th, at
2:00 p.m. (Eastern). To access the call, call the conference
operator between 1:50-2:00 p.m. (Eastern) at 888-942-9537
(International callers should dial +1-517-308-9456) and identify
your call as "GCI". In addition to dial-up access, GCI will make
available net conferencing. To access the call via net conference,
log on to gci.com and follow the instructions. A replay of the call
will be available for 72-hours by dialing 800-839-2291, access code
7461 (International callers should dial +1-402-998-1194).
About GCI
GCI is the largest Alaska-based
and -operated, integrated telecommunications provider, offering
voice, data, and video services statewide. Learn more about GCI at
www.gci.com/about.
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 on Forms 10-K and 10-Q filed with the Securities and
Exchange Commission.
# # #
Press Release Financials 6-30-14
v4
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
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The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: General Communication Inc via Globenewswire
HUG#1847054
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