GCI REPORTS
THIRD QUARTER 2015 FINANCIAL RESULTS
Consolidated Revenue of $259
million
Adjusted EBITDA of $97 million
November 4, 2015,
Anchorage, Alaska - General Communication, Inc. ("GCI")
(NASDAQ: GNCMA) today reported its third quarter 2015 results.
Growth in broadband data
subscribers and ARPU coupled with strong wireless roaming drove
consolidated revenues for the third quarter of 2015 to $259
million, an increase of $18 million or seven percent when compared
with the third quarter of 2014.
Adjusted EBITDA for the quarter
was $97 million, growing $3 million or four percent compared with
the third quarter of 2014. EBITDA for the quarter was negatively
affected by $4 million in AWN-related transition costs and the
absence of political advertising, which was particularly strong in
the third quarter of 2014. On a comparative basis, quarterly EBITDA
benefited from $8 million in equipment installment plan revenue
versus $7 million in the second quarter of 2015 and none in
2014. As more customers take our equipment installment plans,
we are seeing a reduction in ARPU which dampens the EBITDA benefit
of equipment installment revenue.
"We are pleased with our strong
quarter led by roaming and backhaul revenues of $45 million", said
Ron Duncan, GCI's president and Chief Executive Officer. "We
anticipate that this quarter will represent the high water mark of
those revenues for the foreseeable future. We have been
working with our largest carrier customers to offer them a
competitive alternative that will reduce their rates, eliminate the
seasonality in our revenues, and retain significant traffic on our
network. If we're successful, we will have the majority of our
roaming traffic on long-term contracts but cash receipts from
roaming and backhaul could decrease by approximately 20 percent for
2016 as compared to 2015."
Transition Highlights
The AWN transition remains on
track. As of the end of the third quarter, we had
transitioned nearly half of the newly acquired customers from the
legacy billing platform onto our billing platform and LTE
network.
Operating and
Financial Highlights
Wireless:
The wireless segment posted
revenues of $80 million for the quarter, representing a five
percent increase over the third quarter of 2014 and an 18 percent
increase over the prior quarter. Year-over-year growth was due to
exceptionally strong roaming activity. Sequential growth was due to
the seasonal nature of roaming.
The Wireless segment revenue detail is as
follows:
($ millions) |
3Q15 |
3Q14 |
2Q15 |
Wholesale Wireless |
21 |
25 |
21 |
Roaming and Backhaul |
45 |
38 |
34 |
USF Support |
14 |
13 |
13 |
Total Wireless Revenue |
80 |
76 |
68 |
Wireless segment adjusted EBITDA
was $57 million for the quarter, an increase of $10 million or 21
percent over the third quarter of 2014, and a sequential increase
of $12 million or 26 percent over the second quarter of 2015.
Adjusted EBITDA growth was primarily driven by strong roaming
revenue.
Wireline:
The wireline segment posted
revenues of $178 million, a $14 million or eight percent increase
over the third quarter of 2014 and a $1 million or one percent
decline over the prior quarter.
Adjusted EBITDA for the quarter
was $39 million. EBITDA declined by $7 million or 15 percent
year-over-year. The EBITDA decline year-over-year was driven
by AWN transition costs and the decline in cable advertising
revenues due to strong political advertising in 2014.
Wireline -
Consumer:
Consumer revenues were $88 million
for the quarter, a year-over-year increase of $15 million or 21
percent. Revenue growth was driven by the inclusion of acquired
wireless subscribers, equipment installment plan revenues, and
strong growth in data subscribers and data ARPUs. On a
sequential basis revenues were down $2 million. This was
driven by a decline in wireless ARPUs, which are down due to
migrating our acquired customers onto better plans and the effect
of equipment installment plans.
Our high speed data product
offerings continue to lead the market. In September, we
strengthened that leadership position by launching our Gigabit
red consumer data service
in Anchorage. By the end of the year, all Anchorage homes
passed by our cable plant will have access to this service, a first
in the nation.
Wireline -
Business Services:
Business Services revenues, which
include broadcast and cable advertising revenues, were $52 million
for the quarter, representing an $8 million or 13 percent decline
over the third quarter of 2014 and a $1 million or two percent
decline sequentially.
Year-over-year declines were
driven in large part by a $6 million decline in video revenues
associated with the strong political advertising market in 2014.
The remainder of the decline is a result of rate compression in the
commercial data market.
Wireline -
Managed Broadband:
Managed Broadband revenues were
$38 million for the quarter, representing a $6 million or 20
percent increase year-over-year and a $1 million or two percent
increase sequentially. Managed Broadband continues to benefit from
our significant infrastructure investments in rural Alaska.
SG&A
SG&A expenses were $83 million
in the third quarter of 2015, up $10 million or 14 percent from a
year ago and down slightly sequentially. Year-over-year growth is a
result of AWN transition costs and incremental costs to serve our
acquired wireless customers.
Other Events
During the quarter, GCI
repurchased 0.4 million shares of its Class A common stock bringing
the total shares repurchased in 2015 to 2.8 million.
Capital expenditures for the
quarter totaled $47 million bringing our total for the year to $126
million.
2015 Guidance
Our 2015 guidance remains
unchanged; however, we are expecting to end the year near the top
of the revenue and EBITDA range.
-
Revenues are unchanged and in the range of $920
- 970 million.
-
Adjusted EBITDA remains at $310 - $335
million.
-
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 Thursday, November 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.
Contacts:
Kyle Jones, 907.868.7105; kjones@gci.com
David Morris, 907.265.5396, dmorris@gci.com
#
# #
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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#1964242
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