Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable One”)
today reported financial and operating results for the quarter and
year ended December 31, 2019.
Cable One completed the acquisition of Clearwave Communications
(“Clearwave”) on January 8, 2019 and the acquisition of Fidelity
Communications Co.’s data, video and voice business and certain
related assets (collectively, “Fidelity”) on October 1, 2019. The
results discussed below and presented in the tables within this
press release include Clearwave and Fidelity operations for the
periods since the completion of their respective acquisitions.
Fourth Quarter 2019 Highlights:
- Total revenues were $318.8 million in the fourth quarter of
2019 compared to $269.9 million in the fourth quarter of 2018, an
increase of 18.1%. Residential data revenues increased 18.9% and
business services revenues increased 41.6% year-over-year.
- Net income was $53.6 million in the fourth quarter of 2019, an
increase of 27.6% year-over-year. Adjusted EBITDA(1) was $158.3
million, an increase of 24.0% year-over-year. Net profit margin was
16.8% and Adjusted EBITDA margin(1) was 49.7%.
- Net cash provided by operating activities was $156.6 million in
the fourth quarter of 2019, an increase of 56.3% year-over-year.
Adjusted EBITDA less capital expenditures(1) was $72.3 million in
the fourth quarter of 2019 compared to $69.0 million in the fourth
quarter of 2018.
- Residential data primary service units (“PSUs”) grew by over
94,000, or 15.7%, year-over-year and by nearly 76,000, or 12.3%,
sequentially. Business services PSUs grew by nearly 24,000, or
22.4%, year-over-year and by nearly 14,000, or 12.0%,
sequentially.
Full Year 2019 Highlights:
- Total revenues were $1.2 billion in 2019 compared to $1.1
billion in 2018, an increase of 8.9%. Residential data revenues
increased 11.0% and business services revenues increased 31.1%
year-over-year.
- Net income was $178.6 million in 2019, an increase of 8.4%
year-over-year. Adjusted EBITDA was $569.0 million, an increase of
13.6% year-over-year. Net profit margin was 15.3% and Adjusted
EBITDA margin was 48.7%.
- Net cash provided by operating activities was $491.7 million in
2019, an increase of 20.6% year-over-year. Adjusted EBITDA less
capital expenditures was $306.6 million in 2019, an increase of
8.3% year-over-year.
(1)
Adjusted EBITDA, Adjusted EBITDA margin
and Adjusted EBITDA less capital expenditures are defined in the
section of this press release entitled “Use of Non-GAAP Financial
Measures.” Adjusted EBITDA and Adjusted EBITDA less capital
expenditures are reconciled to net income, Adjusted EBITDA margin
is reconciled to net profit margin and Adjusted EBITDA less capital
expenditures is also reconciled to net cash provided by operating
activities. Refer to the “Reconciliations of Non-GAAP Measures”
tables within this press release.
Fourth Quarter 2019 Financial Results Compared to Fourth
Quarter 2018
Revenues increased $48.9 million, or 18.1%, to $318.8 million
for the fourth quarter of 2019, including $39.4 million from
Clearwave and Fidelity operations. The remaining increase was
driven primarily by organic residential data and business services
revenue growth. For the fourth quarter of 2019 and 2018,
residential data revenues comprised 47.1% and 46.8% of total
revenues and business services revenues comprised 17.9% and 14.9%
of total revenues, respectively.
Operating expenses (excluding depreciation and amortization)
were $103.4 million in the fourth quarter of 2019 compared to $91.8
million in the fourth quarter of 2018. Operating expenses as a
percentage of revenues were 32.5% for the fourth quarter of 2019
compared to 34.0% for the year-ago quarter. The increase in
operating expenses was primarily attributable to $12.6 million of
additional expenses related to Clearwave and Fidelity operations.
Operating expenses as a percentage of revenues, excluding the
impact of Clearwave and Fidelity operations, were also 32.5% for
the fourth quarter of 2019 compared to 34.0% for the fourth quarter
of 2018.
Selling, general and administrative expenses were $64.7 million
for the fourth quarter of 2019 and increased $7.1 million, or
12.3%, compared to the fourth quarter of 2018. Selling, general and
administrative expenses as a percentage of revenues were 20.3% and
21.4% for the fourth quarter of 2019 and 2018, respectively. The
increase in selling, general and administrative expenses was
primarily attributable to $6.5 million of additional expenses
related to Clearwave and Fidelity operations. Selling, general and
administrative expenses as a percentage of revenues, excluding the
impact of Clearwave and Fidelity operations, were 20.8% and 21.4%
for the fourth quarter of 2019 and 2018, respectively.
Depreciation and amortization expense was $59.3 million for the
fourth quarter of 2019 and increased $9.8 million, or 19.7%,
including $11.9 million attributable to Clearwave and Fidelity
operations. As a percentage of revenues, depreciation and
amortization expense was 18.6% for the fourth quarter of 2019
compared to 18.3% for the fourth quarter of 2018. The Company
recognized $2.8 million and $1.7 million of net losses on asset
disposals during the fourth quarter of 2019 and 2018,
respectively.
Interest expense increased $3.8 million, or 24.6%, to $19.0
million, driven primarily by additional outstanding debt incurred
in connection with the Clearwave and Fidelity acquisitions and
interest rate swap settlements, partially offset by lower interest
rates.
Other income of $1.3 million and $1.5 million in the fourth
quarter of 2019 and 2018, respectively, consisted primarily of
interest and investment income.
The income tax provision was $17.2 million in the fourth quarter
of 2019 compared to $13.5 million in the prior year quarter. The
effective tax rate was 24.3% for both the fourth quarter of 2019
and 2018.
Net income was $53.6 million in the fourth quarter of 2019
compared to $42.0 million in the prior year quarter.
Adjusted EBITDA was $158.3 million and $127.6 million for the
fourth quarter of 2019 and 2018, respectively, an increase of
24.0%. Capital expenditures for the fourth quarter of 2019 totaled
$86.0 million, including capital expenditures for Clearwave and
Fidelity operations, compared to $58.6 million for the fourth
quarter of 2018. Adjusted EBITDA less capital expenditures for the
fourth quarter of 2019 was $72.3 million compared to $69.0 million
in the prior year quarter.
Full Year 2019 Financial Results Compared to Full Year
2018
Revenues increased $95.7 million, or 8.9%, to $1.2 billion for
2019, driven primarily by $59.3 million from Clearwave and Fidelity
operations as well as organic residential data and business
services revenue growth, partially offset by a decrease in
residential video revenues. For 2019 and 2018, residential data
revenues comprised 46.9% and 46.0% of total revenues and business
services revenues comprised 17.5% and 14.5% of total revenues,
respectively.
Operating expenses (excluding depreciation and amortization)
were $388.6 million for 2019 and increased $18.3 million, or 4.9%,
compared to 2018. Operating expenses as a percentage of revenues
were 33.3% for 2019 compared to 34.5% for 2018. The increase in
operating expenses attributable to Clearwave and Fidelity
operations was $15.4 million. Excluding the expenses associated
with Clearwave and Fidelity operations, operating expenses were
$373.1 million for 2019, an increase of $2.9 million, or 0.8%,
compared to 2018. The increase was due primarily to higher
regulatory costs resulting from certain passthrough fees that were
historically reported on a net basis, partially offset by lower
programming expenses. Operating expenses as a percentage of
revenues, excluding the impact of Clearwave and Fidelity
operations, were 33.7% for 2019 compared to 34.5% for 2018.
Selling, general and administrative expenses increased $22.9
million, or 10.3%, to $245.1 million. Selling, general and
administrative expenses as a percentage of revenues were 21.0% and
20.7% for 2019 and 2018, respectively. The increase in selling,
general and administrative expenses attributable to Clearwave and
Fidelity operations was $9.8 million. Excluding the expenses
associated with Clearwave and Fidelity operations, selling, general
and administrative expenses increased $13.1 million, or 5.9%, to
$235.3 million due primarily to acquisition-related and rebranding
costs incurred during 2019. Selling, general and administrative
expenses as a percentage of revenues, excluding the impact of
Clearwave and Fidelity operations, were 21.2% for 2019 compared to
20.7% for 2018.
Depreciation and amortization expense increased $19.0 million,
or 9.6%, including a $21.0 million increase attributable to
Clearwave and Fidelity operations. As a percentage of revenues,
depreciation and amortization expense was 18.6% for 2019 compared
to 18.4% for 2018.
The Company recognized a net loss on asset disposals of $7.2
million in 2019 compared to $14.2 million in 2018. In 2019, the
Company recognized a gain on the sale of a non-operating property
that housed its former headquarters, while the prior year included
more asset disposals.
Interest expense increased $11.3 million, or 18.7%, to $71.7
million, driven primarily by additional outstanding debt incurred
in connection with the Clearwave and Fidelity acquisitions and
interest rate swap settlements, partially offset by lower interest
rates on variable rate term loans, including loans used to redeem
$450.0 million of higher rate senior unsecured notes in the second
quarter of 2019 (the “Note Redemption”).
The Company recognized other expense of $4.9 million during
2019, consisting primarily of a $6.5 million call premium related
to the Note Redemption and $4.9 million of debt issuance cost
write-offs and expenses associated with financing transactions,
partially offset by interest and investment income. The Company
recognized other income of $4.5 million during 2018, consisting
primarily of interest and investment income.
The income tax provision increased $8.0 million, or 17.0%, due
primarily to an increase in taxable income of $21.8 million, or
10.3%. The Company’s effective tax rate was 23.6% and 22.3% for
2019 and 2018, respectively.
Net income was $178.6 million in 2019 compared to $164.8 million
in 2018.
Adjusted EBITDA was $569.0 million and $500.8 million for 2019
and 2018, respectively, an increase of 13.6%. Capital expenditures
totaled $262.4 million and $217.8 million for 2019 and 2018,
respectively. Adjusted EBITDA less capital expenditures for 2019
was $306.6 million, an increase of $23.5 million, or 8.3%, from the
prior year.
Liquidity and Capital Resources
At December 31, 2019, the Company had $125.3 million of cash and
cash equivalents on hand compared to $264.1 million at December 31,
2018. The Company’s debt balance was $1.8 billion and $1.2 billion
at December 31, 2019 and December 31, 2018, respectively. The
Company also had $343.3 million available for borrowing under its
revolving credit facility as of December 31, 2019. The Company
repurchased 5,984 shares for $5.1 million during the first quarter
of 2019.
The Company paid $48.5 million in dividends to stockholders
during 2019, including $12.9 million during the fourth quarter.
Conference Call
Cable One will host a conference call with the financial
community to discuss results for the fourth quarter and full year
2019 on Thursday, February 27, 2020, at 5 p.m. Eastern Time
(ET).
Shareholders, analysts and other interested parties may register
for the conference in advance at http://dpregister.com/10138555.
Those unable to pre-register may join the call via the live audio
webcast on the Cable One Investor Relations website or by dialing
1-844-378-6483 (Canada: 1-855-669-9657/International:
1-412-542-4178) shortly before 5 p.m. ET.
A replay of the call will be available from Thursday, February
27, 2020 until Thursday, March 12, 2020 on the Cable One Investor
Relations website.
Additional Information Available on Website
The information in this press release should be read in
conjunction with the consolidated financial statements and notes
thereto contained in the Company’s Annual Report on Form 10-K for
the period ended December 31, 2019, which will be posted on the
“SEC Filings” section of the Cable One Investor Relations website
at ir.cableone.net when it is filed with the Securities and
Exchange Commission (the “SEC”). Investors and others interested in
more information about Cable One should consult the Company’s
website, which is regularly updated with financial and other
important information about the Company.
Use of Non-GAAP Financial Measures
The Company uses certain measures that are not defined by
generally accepted accounting principles in the United States
(“GAAP”) to evaluate various aspects of its business. Adjusted
EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital
expenditures and capital expenditures as a percentage of Adjusted
EBITDA are non-GAAP financial measures and should be considered in
addition to, not as superior to, or as a substitute for, net
income, net profit margin, net cash provided by operating
activities or capital expenditures as a percentage of net income
reported in accordance with GAAP. Adjusted EBITDA and Adjusted
EBITDA less capital expenditures are reconciled to net income,
Adjusted EBITDA margin is reconciled to net profit margin and
capital expenditures as a percentage of Adjusted EBITDA is
reconciled to capital expenditures as a percentage of net income.
Adjusted EBITDA less capital expenditures is also reconciled to net
cash provided by operating activities. These reconciliations are
included in the “Reconciliations of Non-GAAP Measures” tables
within this press release.
“Adjusted EBITDA” is defined as net income plus interest
expense, income tax provision, depreciation and amortization,
equity-based compensation, severance expense, (gain) loss on
deferred compensation, acquisition-related costs, (gain) loss on
asset disposals, system conversion costs, rebranding costs, other
(income) expense and other unusual expenses, as provided in the
“Reconciliations of Non-GAAP Measures” tables within this press
release. As such, it eliminates the significant non-cash
depreciation and amortization expense that results from the
capital-intensive nature of the Company’s business as well as other
non-cash or special items and is unaffected by the Company’s
capital structure or investment activities. This measure is limited
in that it does not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating
revenues and the Company’s cash cost of debt financing. These costs
are evaluated through other financial measures.
“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided
by total revenues.
“Adjusted EBITDA less capital expenditures,” when used as a
liquidity measure, is calculated as net cash provided by operating
activities excluding the impact of capital expenditures, interest
expense, income tax provision, changes in operating assets and
liabilities, change in deferred income taxes and other unusual
expenses, as provided in the “Reconciliations of Non-GAAP Measures”
tables within this press release.
“Capital expenditures as a percentage of Adjusted EBITDA” is
defined as capital expenditures divided by Adjusted EBITDA.
The Company uses Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted EBITDA less capital expenditures and capital expenditures
as a percentage of Adjusted EBITDA to assess its performance, and
it also uses Adjusted EBITDA less capital expenditures as an
indicator of its ability to fund operations and make additional
investments with internally generated funds. In addition, Adjusted
EBITDA generally correlates to the measure used in the leverage
ratio calculations under the Company’s credit facilities to
determine compliance with the covenants contained in the credit
agreement. Adjusted EBITDA and capital expenditures are also
significant performance measures used by the Company in its annual
incentive compensation program. Adjusted EBITDA does not take into
account cash used for mandatory debt service requirements or other
non-discretionary expenditures, and thus does not represent
residual funds available for discretionary uses.
The Company believes Adjusted EBITDA, Adjusted EBITDA margin and
capital expenditures as a percentage of Adjusted EBITDA are useful
to investors in evaluating the operating performance of the
Company. The Company believes that Adjusted EBITDA less capital
expenditures is useful to investors as it shows the Company’s
performance while taking into account cash outflows for capital
expenditures and is one of several indicators of the Company’s
ability to service debt, make investments and/or return capital to
its shareholders.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less
capital expenditures, capital expenditures as a percentage of
Adjusted EBITDA and similar measures with similar titles are common
measures used by investors, analysts and peers to compare
performance in the Company’s industry, although the Company’s
measures of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted
EBITDA less capital expenditures and capital expenditures as a
percentage of Adjusted EBITDA may not be directly comparable to
similarly titled measures reported by other companies.
About Cable One
Cable One, Inc. (NYSE: CABO) is a leading broadband
communications provider serving more than 900,000 residential and
business customers in 21 states through its Sparklight® and
Clearwave brands. Sparklight provides consumers with a wide array
of connectivity and entertainment services, including high-speed
internet and advanced Wi-Fi solutions, cable television and phone
service. Sparklight Business and Clearwave provide scalable and
cost-effective products for businesses ranging in size from small
to mid-market, in addition to enterprise, wholesale and carrier
customers.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This communication may contain “forward-looking statements” that
involve risks and uncertainties. These statements can be identified
by the fact that they do not relate strictly to historical or
current facts, but rather are based on current expectations,
estimates, assumptions and projections about the Company’s
industry, business, financial results and financial condition.
Forward-looking statements often include words such as “will,”
“should,” “anticipates,” “estimates,” “expects,” “projects,”
“intends,” “plans,” “believes” and words and terms of similar
substance in connection with discussions of future operating or
financial performance. As with any projection or forecast,
forward-looking statements are inherently susceptible to
uncertainty and changes in circumstances. The Company’s actual
results may vary materially from those expressed or implied in its
forward-looking statements. Accordingly, undue reliance should not
be placed on any forward-looking statement made by the Company or
on its behalf. Important factors that could cause the Company’s
actual results to differ materially from those in its
forward-looking statements include government regulation, economic,
strategic, political and social conditions and the following
factors, which are discussed in the Company’s Annual Report on Form
10-K for the period ended December 31, 2019 to be filed with the
SEC:
- rising levels of competition from historical and new entrants
in the Company’s markets;
- recent and future changes in technology;
- the Company’s ability to continue to grow its business services
products;
- increases in programming costs and retransmission fees;
- the Company’s ability to obtain hardware, software and
operational support from vendors;
- the effects of any acquisitions and strategic investments by
the Company;
- risks that the Company’s rebranding may not produce the
benefits expected;
- damage to the Company’s reputation or brand image;
- risks that the implementation of the Company’s new enterprise
resource planning system disrupts business operations;
- adverse economic conditions;
- the integrity and security of the Company’s network and
information systems;
- the impact of possible security breaches and other disruptions,
including cyber-attacks;
- the Company’s failure to obtain necessary intellectual and
proprietary rights to operate its business and the risk of
intellectual property claims and litigation against the
Company;
- the Company’s ability to retain key employees;
- legislative or regulatory efforts to impose network neutrality
and other new requirements on the Company’s data services;
- additional regulation of the Company’s video and voice
services;
- the Company’s ability to renew cable system franchises;
- increases in pole attachment costs;
- changes in local governmental franchising authority and
broadcast carriage regulations;
- the potential adverse effect of the Company’s level of
indebtedness on its business, financial condition or results of
operations and cash flows;
- the restrictions the terms of the Company’s indebtedness place
on its business and corporate actions;
- the possibility that interest rates will rise, causing the
Company’s obligations to service its variable rate indebtedness to
increase significantly;
- the Company’s ability to incur future indebtedness;
- fluctuations in the Company’s stock price;
- the Company’s ability to continue to pay dividends;
- dilution from equity awards and potential stock issuances in
connection with acquisitions and strategic investments;
- provisions in the Company’s charter, by-laws and Delaware law
that could discourage takeovers; and
- the other risks and uncertainties detailed from time to time in
the Company’s filings with the SEC, including but not limited to
its latest Annual Report on Form 10-K as filed with the SEC.
Any forward-looking statements made by the Company in this
communication speak only as of the date on which they are made. The
Company is under no obligation, and expressly disclaims any
obligation, except as required by law, to update or alter its
forward-looking statements, whether as a result of new information,
subsequent events or otherwise.
CABLE ONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended December
31,
(dollars in
thousands, except per share data)
2019
2018
$ Change
% Change
Revenues:
Residential data
$
150,285
$
126,397
$
23,888
18.9%
Residential video
86,356
82,578
3,778
4.6%
Residential voice
12,938
9,934
3,004
30.2%
Business services
56,936
40,213
16,723
41.6%
Other
12,236
10,730
1,506
14.0%
Total Revenues
318,751
269,852
48,899
18.1%
Costs and Expenses:
Operating (excluding depreciation and
amortization)
103,448
91,791
11,657
12.7%
Selling, general and administrative
64,713
57,632
7,081
12.3%
Depreciation and amortization
59,271
49,506
9,765
19.7%
Loss on asset disposals, net
2,812
1,659
1,153
69.5%
Total Costs and Expenses
230,244
200,588
29,656
14.8%
Income from operations
88,507
69,264
19,243
27.8%
Interest expense
(19,038)
(15,279)
(3,759)
24.6%
Other income, net
1,341
1,485
(144)
(9.7)%
Income before income taxes
70,810
55,470
15,340
27.7%
Income tax provision
17,197
13,462
3,735
27.7%
Net income
$
53,613
$
42,008
$
11,605
27.6%
Net Income per Common Share:
Basic
$
9.43
$
7.40
$
2.03
27.4%
Diluted
$
9.32
$
7.34
$
1.98
27.0%
Weighted Average Common Shares
Outstanding:
Basic
5,685,840
5,674,067
11,773
0.2%
Diluted
5,751,970
5,723,528
28,442
0.5%
Deferred gain on cash flow hedges and
other, net of tax
$
23,043
$
254
$
22,789
NM
Comprehensive income
$
76,656
$
42,262
$
34,394
81.4%
______
NM = Not meaningful.
CABLE ONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Year Ended December
31,
(dollars in
thousands, except per share data)
2019
2018
$ Change
% Change
Revenues:
Residential data
$
547,240
$
492,816
$
54,424
11.0%
Residential video
335,190
343,384
(8,194)
(2.4)%
Residential voice
43,521
41,278
2,243
5.4%
Business services
204,500
155,952
48,548
31.1%
Other
37,546
38,865
(1,319)
(3.4)%
Total Revenues
1,167,997
1,072,295
95,702
8.9%
Costs and Expenses:
Operating (excluding depreciation and
amortization)
388,552
370,269
18,283
4.9%
Selling, general and administrative
245,120
222,216
22,904
10.3%
Depreciation and amortization
216,687
197,731
18,956
9.6%
Loss on asset disposals, net
7,187
14,167
(6,980)
(49.3)%
Total Costs and Expenses
857,546
804,383
53,163
6.6%
Income from operations
310,451
267,912
42,539
15.9%
Interest expense
(71,729)
(60,415)
(11,314)
18.7%
Other income (expense), net
(4,907)
4,487
(9,394)
(209.4)%
Income before income taxes
233,815
211,984
21,831
10.3%
Income tax provision
55,233
47,224
8,009
17.0%
Net income
$
178,582
$
164,760
$
13,822
8.4%
Net Income per Common Share:
Basic
$
31.45
$
28.98
$
2.47
8.5%
Diluted
$
31.12
$
28.77
$
2.35
8.2%
Weighted Average Common Shares
Outstanding:
Basic
5,678,990
5,684,375
(5,385)
(0.1)%
Diluted
5,737,856
5,725,963
11,893
0.2%
Deferred gain (loss) on cash flow hedges
and other, net of tax
$
(68,062)
$
256
$
(68,318)
NM
Comprehensive income
$
110,520
$
165,016
$
(54,496)
(33.0)%
______
NM = Not meaningful.
CABLE ONE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in
thousands, except par values)
December 31, 2019
December 31, 2018
Assets
Current Assets:
Cash and cash equivalents
$
125,271
$
264,113
Accounts receivable, net
38,452
29,947
Income taxes receivable
2,146
10,713
Prepaid and other current assets
15,619
13,090
Total Current Assets
181,488
317,863
Property, plant and equipment, net
1,201,271
847,979
Intangible assets, net
1,312,381
953,851
Goodwill
429,597
172,129
Other noncurrent assets
27,094
11,412
Total Assets
$
3,151,831
$
2,303,234
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued
liabilities
$
136,993
$
94,134
Deferred revenue
23,640
18,954
Current portion of long-term debt
28,909
20,625
Total Current Liabilities
189,542
133,713
Long-term debt
1,711,937
1,142,056
Deferred income taxes
303,314
242,127
Other noncurrent liabilities
105,469
9,980
Total Liabilities
2,310,262
1,527,876
Stockholders' Equity
Preferred stock ($0.01 par value;
4,000,000 shares authorized; none issued or outstanding)
-
-
Common stock ($0.01 par value; 40,000,000
shares authorized; 5,887,899 shares issued; and 5,715,377 and
5,703,402 shares outstanding as of December 31, 2019 and 2018,
respectively)
59
59
Additional paid-in capital
51,198
38,898
Retained earnings
980,355
850,292
Accumulated other comprehensive loss
(68,158)
(96)
Treasury stock, at cost (172,522 and
184,497 shares held as of December 31, 2019 and 2018,
respectively)
(121,885)
(113,795)
Total Stockholders' Equity
841,569
775,358
Total Liabilities and Stockholders'
Equity
$
3,151,831
$
2,303,234
CABLE ONE, INC.
RECONCILIATIONS OF NON-GAAP
MEASURES
(Unaudited)
Three Months Ended December
31,
(dollars in
thousands)
2019
2018
$ Change
% Change
Net income
$
53,613
$
42,008
$
11,605
27.6%
Net profit margin
16.8%
15.6%
Plus:
Interest expense
$
19,038
$
15,279
$
3,759
24.6%
Income tax provision
17,197
13,462
3,735
27.7%
Depreciation and amortization
59,271
49,506
9,765
19.7%
Equity-based compensation
3,139
3,224
(85)
(2.6)%
Severance expense
-
729
(729)
(100.0)%
(Gain) loss on deferred compensation
106
(191)
297
(155.5)%
Acquisition-related costs
2,268
1,734
534
30.8%
Loss on asset disposals, net
2,812
1,659
1,153
69.5%
System conversion costs
1,541
1,135
406
35.8%
Rebranding costs
636
545
91
16.7%
Other income, net
(1,341)
(1,485)
144
(9.7)%
Adjusted EBITDA
$
158,280
$
127,605
$
30,675
24.0%
Adjusted EBITDA margin
49.7%
47.3%
Less:
Capital expenditures
$
86,028
$
58,596
$
27,432
46.8%
Capital expenditures as a percentage of
net income
160.5%
139.5%
Capital expenditures as a percentage of
Adjusted EBITDA
54.4%
45.9%
Adjusted EBITDA less capital
expenditures
$
72,252
$
69,009
$
3,243
4.7%
Three Months Ended December
31,
(dollars in
thousands)
2019
2018
$ Change
% Change
Net cash provided by operating
activities
$
156,556
$
100,152
$
56,404
56.3%
Capital expenditures
(86,028)
(58,596)
(27,432)
46.8%
Interest expense
19,038
15,279
3,759
24.6%
Amortization of debt issuance costs
(1,119)
(1,075)
(44)
4.1%
Income tax provision
17,197
13,462
3,735
27.7%
Changes in operating assets and
liabilities
(9,300)
13,667
(22,967)
(168.0)%
Decrease in deferred income taxes
(27,299)
(16,347)
(10,952)
67.0%
(Gain) loss on deferred compensation
106
(191)
297
(155.5)%
Acquisition-related costs
2,268
1,734
534
30.8%
Severance expense
-
729
(729)
(100.0)%
Write-off of debt issuance costs
(3)
-
(3)
NM
System conversion costs
1,541
1,135
406
35.8%
Rebranding costs
636
545
91
16.7%
Other income, net
(1,341)
(1,485)
144
(9.7)%
Adjusted EBITDA less capital
expenditures
$
72,252
$
69,009
$
3,243
4.7%
NM = Not meaningful.
CABLE ONE, INC.
RECONCILIATIONS OF NON-GAAP
MEASURES
(Unaudited)
Year Ended December
31,
(dollars in
thousands)
2019
2018
$ Change
% Change
Net income
$
178,582
$
164,760
$
13,822
8.4%
Net profit margin
15.3%
15.4%
Plus:
Interest expense
71,729
60,415
11,314
18.7%
Income tax provision
55,233
47,224
8,009
17.0%
Depreciation and amortization
216,687
197,731
18,956
9.6%
Equity-based compensation
12,300
10,486
1,814
17.3%
Severance expense
215
2,347
(2,132)
(90.8)%
Loss on deferred compensation
400
425
(25)
(5.9)%
Acquisition-related costs
9,590
1,773
7,817
NM
Loss on asset disposals, net
7,187
14,167
(6,980)
(49.3)%
System conversion costs
4,828
5,037
(209)
(4.1)%
Rebranding costs
7,294
968
6,326
NM
Other income (expense), net
4,907
(4,487)
9,394
(209.4)%
Adjusted EBITDA
$
568,952
$
500,846
$
68,106
13.6%
Adjusted EBITDA margin
48.7%
46.7%
Less:
Capital expenditures
262,352
217,766
44,586
20.5%
Capital expenditures as a percentage of
net income
146.9%
132.2%
Capital expenditures as a percentage of
Adjusted EBITDA
46.1%
43.5%
Adjusted EBITDA less capital
expenditures
$
306,600
$
283,080
$
23,520
8.3%
NM = Not meaningful.
Year Ended December
31,
(dollars in
thousands)
2019
2018
$ Change
% Change
Net cash provided by operating
activities
$
491,741
$
407,769
$
83,972
20.6%
Capital expenditures
(262,352)
(217,766)
(44,586)
20.5%
Interest expense
71,729
60,415
11,314
18.7%
Amortization of debt issuance costs
(4,646)
(4,163)
(483)
11.6%
Income tax provision
55,233
47,224
8,009
17.0%
Changes in operating assets and
liabilities
(18,118)
18,621
(36,739)
(197.3)%
Decrease in deferred income taxes
(50,011)
(34,973)
(15,038)
43.0%
Loss on deferred compensation
400
425
(25)
(5.9)%
Acquisition-related costs
9,590
1,773
7,817
NM
Severance expense
215
2,347
(2,132)
(90.8)%
Write-off of debt issuance costs
(4,210)
(110)
(4,100)
NM
System conversion costs
4,828
5,037
(209)
(4.1)%
Rebranding costs
7,294
968
6,326
NM
Other income (expense), net
4,907
(4,487)
9,394
(209.4)%
Adjusted EBITDA less capital
expenditures
$
306,600
$
283,080
$
23,520
8.3%
NM = Not meaningful.
CABLE ONE, INC.
OPERATING STATISTICS
(Unaudited)
As of December 31,
Change
(in thousands,
except percentages, ARPU and employee data)
2019
2018
Amount
%
Homes Passed
2,326
2,094
233
11.1%
Residential Customers
822
734
88
12.0%
Data PSUs
695
601
94
15.7%
Video PSUs
298
310
(12)
(3.9)%
Voice PSUs
105
99
6
5.7%
Total residential PSUs
1,098
1,010
88
8.7%
Business Customers
85
71
14
20.2%
Data PSUs
78
62
16
25.8%
Video PSUs
16
16
(0)
(1.5)%
Voice PSUs
35
27
8
28.8%
Total business services PSUs
129
105
24
22.4%
Total Customers
907
805
102
12.7%
Total non-video
592
478
113
23.6%
Percent of total
65.2%
59.4%
Data PSUs
773
663
110
16.6%
Video PSUs
314
326
(12)
(3.8)%
Voice PSUs
139
126
13
10.7%
Total PSUs
1,227
1,115
111
10.0%
Penetration
Data
33.2%
31.7%
1.5%
Video
13.5%
15.6%
(2.1)%
Voice
6.0%
6.0%
0.0%
Share of Fourth Quarter
Revenues
Residential data
47.1%
46.8%
0.3%
Business services
17.9%
14.9%
3.0%
Total
65.0%
61.7%
3.3%
ARPU - Fourth Quarter
Residential data(1)
$
71.72
$
69.90
$
1.82
2.6%
Residential video(1)
$
94.30
$
88.22
$
6.08
6.9%
Residential voice(1), (2)
$
40.52
$
32.97
$
7.55
22.9%
Business services(2), (3)
$
224.41
$
189.40
$
35.01
18.5%
Number of Employees
2,751
2,224
527
23.7%
___________________
Note:
All totals, percentages and
year-over-year changes are calculated using exact numbers. Minor
differences may exist due to rounding.
(1)
Average monthly revenue per unit
(“ARPU”) values represent the applicable quarterly residential
service revenues (excluding installation and activation fees)
divided by the corresponding average of the number of PSUs at the
beginning and end of each period, divided by three.
(2)
The increases in residential
voice and business services ARPU from the prior year were partially
a result of certain passthrough fees that were historically
reported on a net basis. Residential voice and business services
ARPU for the fourth quarter of 2019 would have been $35.67 and
$220.66, respectively, if reported on a comparable basis.
(3)
ARPU values represent quarterly
business services revenues divided by the average of the number of
business customer relationships at the beginning and end of each
period, divided by three.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200227005036/en/
Trish Niemann Senior Director, Corporate Communications
602-364-6372 patricia.niemann@cableone.biz
Steven Cochran Chief Financial Officer
investor_relations@cableone.biz
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