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Section 1: 8-K (FORM 8-K)

cabo20190730_8k.htm
false 0001632127 Cable One, Inc. 0001632127 2019-08-07 2019-08-07

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

___________________________

 

FORM 8-K

___________________________

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): August 7, 2019

___________________________

 

Cable One, Inc.

 

(Exact Name of Registrant as Specified in Its Charter)

___________________________

 

Delaware

001-36863

13-3060083

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

 

210 E. Earll Drive, Phoenix, Arizona

85012

(Address of Principal Executive Offices)

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (602) 364-6000

___________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

   

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

   

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

   

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

Common Stock, par value $0.01

 

CABO

 

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 7, 2019, Cable One, Inc. issued a press release relating to its unaudited results for the second quarter of 2019. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information contained in this Item 2.02 as well as in Exhibit 99.1 is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

   

Item 9.01 Financial Statements and Exhibits.
     

Exhibit

 

Description

 

 

99.1

 

Press release issued by Cable One, Inc. on August 7, 2019.

     
104   The cover page of this Current Report on Form 8-K, formatted in Inline XBRL.

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Cable One, Inc.

 

 

 

 

 

 

By:

/s/ Peter N. Witty

 

 

 

Name:

Peter N. Witty

 

 

 

Title:

Senior Vice President, General Counsel and Secretary

 

 

Date: August 7, 2019

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_152020.htm

Exhibit 99.1

 

 

 

Cable ONE Reports Second Quarter 2019 Results

 

August 7, 2019 Phoenix, Arizona (BUSINESS WIRE) Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable ONE”) today reported financial and operating results for the quarter ended June 30, 2019.

 

Second Quarter 2019 Highlights:

 

 

Total revenues were $285.7 million in the second quarter of 2019 compared to $268.4 million in the second quarter of 2018, an increase of 6.4%. Residential data revenues increased 8.5% and business services revenues increased 29.3% year-over-year.

 

 

Net income was $36.4 million in the second quarter of 2019, a decrease of 16.9% year-over-year. Adjusted EBITDA(1) was $137.6 million, an increase of 8.1% year-over-year. Net profit margin was 12.7% and Adjusted EBITDA margin(1) was 48.2%.

 

 

Net cash provided by operating activities was $108.1 million in the second quarter of 2019, an increase of 6.1% year-over-year. Adjusted EBITDA less capital expenditures(1) was $73.7 million in the second quarter of 2019 compared to $77.4 million in the second quarter of 2018.

 

 

Residential data primary service units (“PSUs”) grew by more than 20,000, or 3.4%, year-over-year.

 

 

Significant financing transactions completed during the quarter included:

 

o

Refinanced the existing $234.4 million term loan A with a new $250.0 million term loan A, increased the revolver capacity to $350.0 million from $250.0 million and obtained a new $450.0 million delayed draw term loan; and

 

o

Redeemed $450.0 million aggregate principal amount of unsecured notes with cash on hand and $325.0 million in new term loan borrowings (the “Notes Redemption”).

 

 

In April 2019, the Company announced that it had entered into an agreement with Fidelity Communications Co. to acquire its data, video and voice business and certain related assets (collectively, “Fidelity”) for $525.9 million in cash, subject to customary post-closing adjustments. The transaction is expected to close early in the fourth quarter of 2019 and to be financed with cash on hand, revolver capacity and borrowings under the new $450.0 million delayed draw term loan.

 

(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.

 

Second Quarter 2019 Financial Results Compared to Second Quarter 2018

 

Revenues increased $17.2 million, or 6.4%, to $285.7 million for the second quarter of 2019, including a $6.8 million contribution from Clearwave Communications (“Clearwave”) operations. The remaining increase was driven primarily by residential data and business services revenue growth, partially offset by decreases in residential video and advertising sales revenues. For the second quarter of 2019 and 2018, residential data revenues comprised 46.5% and 45.6% of total revenues and business services revenues comprised 17.4% and 14.3% of total revenues, respectively.

 

Operating expenses (excluding depreciation and amortization) were $95.7 million in the second quarter of 2019 compared to $91.8 million in the second quarter of 2018. The increase was primarily attributable to additional expenses related to Clearwave operations and various other operating expenses. As a percentage of revenues, operating expenses were 33.5% for the second quarter of 2019 compared to 34.2% for the year-ago quarter.

 

1

 

 

Selling, general and administrative expenses were $60.1 million for the second quarter of 2019 and increased $5.9 million, or 10.9%, compared to the second quarter of 2018. The increase was primarily attributable to higher rebranding costs, acquisition-related costs and other expenses incurred during the second quarter of 2019 as well as additional expenses related to Clearwave operations. Selling, general and administrative expenses as a percentage of revenues were 21.0% and 20.2% for the second quarter of 2019 and 2018, respectively.

 

Depreciation and amortization expense was $54.8 million for the second quarter of 2019 and increased $5.8 million, or 11.8%, compared to the second quarter of 2018. The increase was due primarily to new assets placed in service since the second quarter of 2018 and additional depreciation and amortization related to Clearwave operations, partially offset by assets that became fully depreciated since the second quarter of 2018. The Company recognized $0.9 million and $2.7 million of net losses on asset disposals during the second quarter of 2019 and 2018, respectively.

 

Interest expense increased $3.6 million, or 23.8%, to $18.5 million, driven by additional outstanding debt and an increase in interest rates year-over-year.

 

Other expense of $9.6 million in the second quarter of 2019 consisted primarily of a $6.5 million call premium related to the Notes Redemption and $4.9 million of debt issuance cost write-offs and expenses associated with financing transactions, partially offset by interest and investment income. Other income of $0.9 million in the second quarter of 2018 consisted primarily of interest income.

 

Income tax provision was $9.6 million in the second quarter of 2019 compared to $12.8 million in the prior year quarter. The effective tax rate was 20.8% and 22.6% for the second quarter of 2019 and 2018, respectively. The decrease in the effective tax rate primarily related to a $1.7 million increase in income tax benefits attributable to equity-based compensation awards, partially offset by a $1.2 million decrease in income tax benefits attributable to state effective tax rate changes.

 

Net income was $36.4 million in the second quarter of 2019 compared to $43.8 million in the prior year quarter.

 

Adjusted EBITDA was $137.6 million and $127.2 million for the second quarter of 2019 and 2018, respectively, an increase of 8.1%. Capital expenditures totaled $63.9 million and $49.8 million for the second quarter of 2019 and 2018, respectively. Adjusted EBITDA less capital expenditures for the second quarter of 2019 was $73.7 million compared to $77.4 million in the prior year quarter.

 

Liquidity and Capital Resources

 

At June 30, 2019, the Company had $102.3 million of cash and cash equivalents on hand compared to $264.1 million at December 31, 2018. The Company’s debt balance was approximately $1.3 billion and $1.2 billion at June 30, 2019 and December 31, 2018, respectively. The Company also had $344.5 million available for borrowing under its revolving credit facility as of June 30, 2019.

 

During the quarter, the Company incurred $325.0 million in new term loan borrowings maturing in January 2026 and redeemed all $450.0 million aggregate principal amount of its outstanding unsecured notes. The Company also refinanced its existing $234.4 million term loan A with a new $250.0 million term loan A, increased its revolver capacity to $350.0 million and obtained a new $450.0 million delayed draw term loan, all maturing in May 2024.

 

The Company paid $11.4 million in dividends to stockholders during the second quarter of 2019.

 

Conference Call

 

Cable ONE will host a conference call with the financial community to discuss results for the second quarter of 2019 on Wednesday, August 7, 2019, at 5 p.m. Eastern Time (ET).

 

Shareholders, analysts and other interested parties may register for the conference in advance at http://dpregister.com/10132892. 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.

 

2

 

 

A replay of the call will be available from Wednesday, August 7, 2019 until Wednesday, August 21, 2019 on the Cable ONE Investor Relations website.

 

Additional Information

 

The information in this press release should be read in conjunction with the condensed consolidated financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 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 U.S. 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 or net cash provided by operating activities 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.

 

3

 

 

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 800,000 residential and business customers in 21 states through its SparklightTM 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.

 

Contacts

 

Trish Niemann Steven Cochran
Corporate Communications Director  Chief Financial Officer
602-364-6372  [email protected]
[email protected]  

   

4

 

 

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:

 

 

uncertainties as to the timing of the anticipated acquisition of Fidelity and the risk that the transaction may not be completed in a timely manner or at all;

 

the possibility that any or all of the various conditions to the consummation of the anticipated acquisition of Fidelity may not be satisfied or waived;

 

the effect of the announcement or pendency of the Fidelity transaction on the Company’s and Fidelity’s ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners;

 

risks related to management’s attention being diverted from the Company’s ongoing business operations;

 

uncertainties as to the Company’s ability and the amount of time necessary to realize the expected synergies and other benefits of the Fidelity transaction;

 

the Company’s ability to integrate Fidelity’s operations into its own;

 

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 new significant acquisitions by the Company;

 

risks that the Company’s rebranding may not produce the benefits expected;

 

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 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;

 

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.

 

5

 

 

CABLE ONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

 

   

Three Months Ended June 30,

                 

(dollars in thousands, except per share data)

 

2019

   

2018

   

$ Change

   

% Change

 

Revenues:

 

Residential data

  $ 132,824     $ 122,471     $ 10,353       8.5 %

Residential video

    84,033       87,462       (3,429 )     (3.9 )%

Residential voice

    10,705       10,504       201       1.9 %

Business services

    49,759       38,485       11,274       29.3 %

Advertising sales

    4,750       5,916       (1,166 )     (19.7 )%

Other

    3,579       3,576       3       0.1 %

Total Revenues

    285,650       268,414       17,236       6.4 %

Costs and Expenses:

                               

Operating (excluding depreciation and amortization)

    95,688       91,783       3,905       4.3 %

Selling, general and administrative

    60,103       54,196       5,907       10.9 %

Depreciation and amortization

    54,835       49,033       5,802       11.8 %

Loss on asset disposals, net

    910       2,734       (1,824 )     (66.7 )%

Total Costs and Expenses

    211,536       197,746       13,790       7.0 %

Income from operations

    74,114       70,668       3,446       4.9 %

Interest expense

    (18,516 )     (14,953 )     (3,563 )     23.8 %

Other income (expense), net

    (9,632 )     882       (10,514 )     NM  

Income before income taxes

    45,966       56,597       (10,631 )     (18.8 )%

Income tax provision

    9,571       12,812       (3,241 )     (25.3 )%

Net income

  $ 36,395     $ 43,785     $ (7,390 )     (16.9 )%
                                 

Net Income per Common Share:

 

Basic

  $ 6.41     $ 7.70     $ (1.29 )     (16.8 )%

Diluted

  $ 6.35     $ 7.65     $ (1.30 )     (17.0 )%

Weighted Average Common Shares Outstanding:

 

Basic

    5,673,669       5,687,095       (13,426 )     (0.2 )%

Diluted

    5,730,238       5,722,869       7,369       0.1 %
                                 

Deferred loss on cash flow hedges and other, net of tax

  $ (33,970 )   $ -     $ (33,970 )     NM  

Comprehensive income

  $ 2,425     $ 43,785     $ (41,360 )     (94.5 )%

__________

NM = Not meaningful.

 

6

 

 

CABLE ONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(dollars in thousands, except par values)

 

June 30, 2019

   

December 31, 2018

 

Assets

 

Current Assets:

 

Cash and cash equivalents

  $ 102,283     $ 264,113  

Accounts receivable, net

    30,340       29,947  

Income taxes receivable

    2,693       10,713  

Prepaid and other current assets

    20,400       13,090  

Total Current Assets

    155,716       317,863  

Property, plant and equipment, net

    977,398       847,979  

Intangible assets, net

    1,035,210       953,851  

Goodwill

    355,347       172,129  

Other noncurrent assets

    25,781       11,412  

Total Assets

  $ 2,549,452     $ 2,303,234  
                 

Liabilities and Stockholders' Equity

 

Current Liabilities:

 

Accounts payable and accrued liabilities

  $ 102,817     $ 94,134  

Deferred revenue

    23,078       18,954  

Current portion of long-term debt

    17,153       20,625  

Total Current Liabilities

    143,048       133,713  

Long-term debt

    1,280,637       1,142,056  

Deferred income taxes

    263,245       242,127  

Other noncurrent liabilities

    99,614       9,980  

Total Liabilities

    1,786,544       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 5,706,812 and 5,703,402 shares outstanding as of June 30, 2019 and December 31, 2018, respectively)

    59       59  

Additional paid-in capital

    45,001       38,898  

Retained earnings

    902,615       850,292  

Accumulated other comprehensive loss

    (63,135 )     (96 )

Treasury stock, at cost (181,087 and 184,497 shares held as of June 30, 2019 and December 31, 2018, respectively)

    (121,632 )     (113,795 )

Total Stockholders' Equity

    762,908       775,358  

Total Liabilities and Stockholders' Equity

  $ 2,549,452     $ 2,303,234  

 

7

 

 

CABLE ONE, INC.

RECONCILIATIONS OF NON-GAAP MEASURES

(Unaudited)

 

   

Three Months Ended June 30,

                 

(dollars in thousands)

 

2019

   

2018

   

$ Change

   

% Change

 

Net income

  $ 36,395     $ 43,785     $ (7,390 )     (16.9 )%

Net profit margin

    12.7 %     16.3 %                
                                 

Plus:      Interest expense

  $ 18,516     $ 14,953     $ 3,563       23.8 %

Income tax provision

    9,571       12,812       (3,241 )     (25.3 )%

Depreciation and amortization

    54,835       49,033       5,802       11.8 %

Equity-based compensation

    3,082       2,506       576       23.0 %

Severance expense

    15       377       (362 )     (96.0 )%

Loss on deferred compensation

    78       600       (522 )     (87.0 )%

Acquisition-related costs

    871       -       871       NM  

Loss on asset disposals, net

    910       2,734       (1,824 )     (66.7 )%

System conversion costs

    777       1,327       (550 )     (41.4 )%

Rebranding costs

    2,902       -       2,902       NM  

Other (income) expense, net

    9,632       (882 )     10,514       NM  

Adjusted EBITDA

  $ 137,584     $ 127,245     $ 10,339       8.1 %

Adjusted EBITDA margin

    48.2 %     47.4 %                
                                 

Less:       Capital expenditures

  $ 63,861     $ 49,849     $ 14,012       28.1 %

Capital expenditures as a percentage of net income

    175.5 %     113.8 %                

Capital expenditures as a percentage of Adjusted EBITDA

    46.4 %     39.2 %                
                                 

Adjusted EBITDA less capital expenditures

  $ 73,723     $ 77,396     $ (3,673 )     (4.7 )%

__________

NM = Not meaningful. 

 

 

   

Three Months Ended June 30,

                 

(dollars in thousands)

 

2019

   

2018

   

$ Change

   

% Change

 

Net cash provided by operating activities

  $ 108,116     $ 101,909     $ 6,207       6.1 %

Capital expenditures

    (63,861 )     (49,849 )     (14,012 )     28.1 %

Interest expense

    18,516       14,953       3,563       23.8 %

Amortization of debt issuance cost

    (1,291 )     (1,042 )     (249 )     23.9 %

Income tax provision

    9,571       12,812       (3,241 )     (25.3 )%

Changes in operating assets and liabilities

    (2,851 )     1,150       (4,001 )     NM  

Change in deferred income taxes

    (4,545 )     (3,849 )     (696 )     18.1 %

Loss on deferred compensation

    78       600       (522 )     (87.0 )%

Acquisition-related costs

    871       -       871       NM  

Severance expense

    15       377       (362 )     (96.0 )%

Write-off of debt issuance costs

    (4,207 )     (110 )     (4,097 )     NM  

System conversion costs

    777       1,327       (550 )     (41.4 )%

Rebranding costs

    2,902       -       2,902       NM  

Other (income) expense, net

    9,632       (882 )     10,514       NM  

Adjusted EBITDA less capital expenditures

  $ 73,723     $ 77,396     $ (3,673 )     (4.7 )%

__________

NM = Not meaningful.

 

8

 

 

CABLE ONE, INC.

OPERATING STATISTICS

(Unaudited)

 

   

As of June 30,

   

Year-Over-Year Change

 
   

2019

   

2018

   

Amount

   

%

 

Homes Passed

    2,132,552       2,087,157       45,395       2.2 %
                                 

Residential Customers

    742,137       730,007       12,130       1.7 %
                                 

Data PSUs

    612,626       592,234       20,392       3.4 %

Video PSUs

    293,237       323,514       (30,277 )     (9.4 )%

Voice PSUs

    93,918       103,834       (9,916 )     (9.5 )%

Total residential PSUs

    999,781       1,019,582       (19,801 )     (1.9 )%
                                 

Business Customers

    76,442       69,609       6,833       9.8 %
                                 

Data PSUs

    69,136       61,642       7,494       12.2 %

Video PSUs

    15,256       16,598       (1,342 )     (8.1 )%

Voice PSUs

    29,754       25,849       3,905       15.1 %

Total business services PSUs

    114,146       104,089       10,057       9.7 %
                                 

Total Customers

    818,579       799,616       18,963       2.4 %

Total non-video

    508,294       460,707       47,587       10.3 %

Percent of total

    62.1 %     57.6 %                
                                 

Data PSUs

    681,762       653,876       27,886       4.3 %

Video PSUs

    308,493       340,112       (31,619 )     (9.3 )%

Voice PSUs

    123,672       129,683       (6,011 )     (4.6 )%

Total PSUs

    1,113,927       1,123,671       (9,744 )     (0.9 )%
                                 

Penetration

 

Data

    32.0 %     31.3 %             0.7 %

Video

    14.5 %     16.3 %             (1.8 )%

Voice

    5.8 %     6.2 %             (0.4 )%
                                 
Share of Second Quarter Revenues                                

Residential data

    46.5 %     45.6 %             0.9 %

Business services

    17.4 %     14.3 %             3.1 %

Total

    63.9 %     59.9 %             4.0 %
                                 

ARPU - Second Quarter

 

Residential data(1)

  $ 71.80     $ 68.47     $ 3.33       4.9 %

Residential video(1)

  $ 93.43     $ 88.55     $ 4.88       5.5 %

Residential voice(1), (2)

  $ 37.32     $ 33.22     $ 4.10       12.3 %

Business services(2), (3)

  $ 218.77     $ 187.04     $ 31.73       17.0 %
                                 

Number of Employees

    2,297       2,292       5       0.2 %
   

(1)

Average monthly revenue per unit 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 second quarter of 2019 would have been $33.14 and $214.64, respectively, if reported on a comparable basis.

(3)

Average monthly revenue per unit 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.

 

9

 

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