GCI REPORTS
SECOND QUARTER 2015 FINANCIAL RESULTS
Consolidated Revenue of $248
million
Adjusted EBITDA of $88 million
August 4, 2015,
Anchorage, Alaska - General Communication, Inc. ("GCI")
(NASDAQ: GNCMA) today reported record financial and operational
performance for the second quarter of 2015.
Strong wireless and data
performance drove consolidated revenues for the second quarter of
2015 to $248 million, an increase of $23 million or ten percent
when compared with the second quarter of 2014. Compared with the
first quarter of 2015, consolidated revenues are up $16 million or
seven percent.
Adjusted EBITDA for the quarter
was $88 million, after the deduction of $6 million in transition
costs associated with the Alaska Wireless Network ("AWN")
transaction. Adjusted EBITDA grew $4 million or four percent
compared with the second quarter of 2014 and grew $13 million or 17
percent compared to the first quarter of 2015.
"We are pleased with GCI's strong
financial and operational performance during the second quarter. We
remain on track for another record year at GCI," said Ron Duncan,
GCI's president and chief executive officer. "I am particularly
pleased with our team's efforts in managing the transition of our
recently acquired wireless customers. With much of the AWN
integration completed, we can now focus on simplifying our business
and driving long-term growth. In addition, following the quarter we
made strides in optimizing our capital structure by amending our
term loan to reduce the company's annual interest expense."
Transition Highlights
The second quarter was an
important quarter for GCI as we transitioned approximately 87,000
wireless subscribers from ACS. The operating teams worked
diligently to make sure that our new customers were served well.
Through the quarter we transitioned approximately one-third of the
customers from the legacy billing platform and onto GCI's standard
wireless billing platform. We will continue the conversion
over the next several quarters but are pleased with the progress to
date.
Operating and Financial
Highlights
There are two factors that should
be taken into account when comparing the second quarter with
previous quarters:
-
AWN Transition Costs: During the first and
second quarters of 2015 we had $7 million and $6 million in
one-time transition costs that reduced adjusted EBITDA. There were
no transition costs in the second quarter of 2014.
-
Equipment Installment Plans: Beginning in the
first quarter of 2015 GCI began aggressively promoting equipment
installment plans on wireless handsets. These plans allow our
customers to choose how frequently they would like to upgrade their
handsets. However, moving a customer from the two-year contract
device subsidy model to the equipment financing model does have a
financial statement impact. Under the equipment finance model, the
upfront handset revenue is higher and the monthly plan fee revenue
is lower compared to the subsidy model. Thus, for the first couple
of quarters as we move from the subsidy model to the equipment
finance model the EBITDA will be substantially positively impacted
by the equipment finance revenue. The equipment finance revenue was
$4 million and $7 million in the first and second quarters of 2015
respectively.
Wireless
The wireless segment posted
revenues of $68 million for the quarter, representing a two percent
decline over the second quarter of 2014 and a 15 percent increase
over the prior quarter. The decrease in revenue year-over-year was
related to a simplification in how we internally allocate revenues
between segments, which became possible after the AWN transaction.
Total wireless revenues, including wireless revenues generated in
GCI's wireline segment, grew on a year-over-year basis by $7
million or 10 percent exclusive of equipment installment plan
differences. Sequential quarter growth was due to the seasonal
roaming trends.
The Wireless segment revenue detail is as
follows:
($ millions) |
2Q15 |
2Q14 |
1Q15 |
Wholesale Wireless |
21 |
25 |
21 |
Roaming and Backhaul |
34 |
30 |
24 |
USF Support |
13 |
14 |
14 |
Total Wireless Revenue |
68 |
69 |
59 |
Wireless segment adjusted EBITDA
was $46 million for the quarter, an increase of $6 million or 14
percent over the second quarter of 2014, and a sequential increase
of $8 million or 22 percent over the first quarter of 2015.
Adjusted EBITDA growth was improved on a sequential and
year-over-year basis by strong roaming revenue.
Wireline
The wireline segment posted
revenues of $180 million, an $18 million or 11 percent increase
over the second quarter of 2014 and a $5 million or three percent
increase over the prior quarter when adjusted for equipment
installment plan revenue.
Adjusted EBITDA for the quarter
was $42 million. EBITDA declined by $2 million or five percent
year-over-year and was up $4 million or 11 percent
sequentially.
Wireline - Consumer
Consumer revenues were $89 million
for the quarter, a year-over-year increase of $21 million or 30
percent, and a sequential increase of $5 million or six percent.
Much of this growth was from the acquired ACS wireless subscribers
and wireless equipment sales but there was still strong growth in
data of $5 million and $1 million on a year-over-year and
sequential basis.
The company's high-speed data
product offerings remain a compelling choice in the marketplace,
and annual revenue growth in this area remains strong. GCI remains
on track to deliver 1 gigabit broadband service in Anchorage before
year end.
Wireline - Business Services
Business Services revenues, which
include broadcast and cable advertising revenues, were $53 million
for the quarter, representing a $2 million or four percent decline
over the second quarter of 2014 and a slight decline over the first
quarter of 2015.
On a year-over-year basis, there
was a $3 million decline in video revenues, driven in large part by
a decline in advertising revenues as 2014 was a strong political
year that drove elevated advertising spending.
Wireline - Managed Broadband
Managed broadband revenues were
$37 million for the quarter, representing a $6 million or 21
percent increase year-over-year and a $3 million or 10 percent
increase sequentially. Managed broadband is benefiting from
significant investments in building infrastructure in rural
Alaska.
SG&A
SG&A expenses were $83 million
in the second quarter of 2015, up $13 million or 19 percent from a
year ago and down one percent sequentially. The increase
year-over-year is a result of transition costs and additional
staffing both on the front line and in technical roles.
Significant Events
The conversion of former ACS
customers to GCI's network continues. Transition costs year-to-date
total $13 million and represent the majority of the expected costs,
which were originally estimated to be approximately $30
million.
On June 23rd, GCI
launched a repricing of the company's $275 million term loan B. The
amendment closed on August 3, and will provide $2 million per year
in interest savings.
Capital expenditures for the
quarter totaled $40 million and remain in line with
expectations.
During the quarter, GCI
repurchased 1.2 million shares of its Class A common stock, at a
cost of $19.7 million. This brings the total shares repurchased in
2015 to 2.3 million.
GCI completed the issuance of $450
million of senior notes due 2025 on April 1, and used the proceeds
to repay and retire all outstanding senior notes due 2019. As a
result of this refinancing, GCI recorded a $28 million loss on
extinguishment of debt in the second quarter of 2015. This amount
represents $20 million in call premiums to redeem the 2019 notes
and $8 million in unamortized deferred loan costs and original
issue discounts.
During the quarter GCI recorded a
net loss of approximately $8 million from the write down of one
investment and the sale of another investment.
2015 Guidance
-
Revenues are unchanged and in the range of $920
- 970 million.
-
Adjusted EBITDA of $310 - $335 million.
Previously this had been with the caveat that it would be less
approximately $30 million in one-time transition costs.
However, one-time transition expenses have totaled only $13 million
thus far and are expected to be approximately $20 million for the
year. Additionally, we are having good success with equipment
installment plans which improved EBITDA by approximately $11
million on a year-to-date basis.
-
Core capital expenditures are unchanged and will
be approximately $170 million.
Conference Call
The company will hold a conference
call to discuss the financial results on Wednesday, August 5, at
2:00 p.m. (Eastern). To access the call, call the conference
operator between 1:45-2:00 p.m. (Eastern) at 844-850-0551
(International callers should dial +1-412-902-4197) 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 877-344-7529, access code
10069357 (International callers should dial +1-412-317-0088).
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.
About GCI
GCI is the largest Alaska-based
and -operated, integrated telecommunications provider, offering
wireless, voice, data, and video services statewide. Learn more
about GCI at www.gci.com.
#
# #
Source: GCI
Contacts:
Peter Pounds, 907.868.6952; ppounds@gci.com
David Morris, 907.265.5396, dmorris@gci.com
Press Release Financials 2015
Q2
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
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#1943667
Gci Liberty, Inc. (delisted) (NASDAQ:GNCMA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gci Liberty, Inc. (delisted) (NASDAQ:GNCMA)
Historical Stock Chart
From Jul 2023 to Jul 2024