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Atlantic Broadband Finance, LLC Reports 2009 Second Quarter Financial Results and Conference CallQUINCY, Mass. --(Business Wire)-- Atlantic Broadband Finance, LLC ("Atlantic Broadband" or the "Company") reported today financial results for the period ended June 30, 2009. Revenue for the three months ended June 30, 2009 was $75.3 million as compared to $69.4 million for the three months ended June 30, 2008, an increase of $5.9 million or 8.5%. This increase was mainly the result of (i) a $1.5 million increase in video revenue resulting from increases in digital, Digital Video Recorder and high definition subscribers; (ii) an increase in high-speed data revenue of $1.7 million or 14.5% from continued marketing focus for this service offering driving HSD subscriber growth; (iii) a $1.5 million increase in telephone revenue generated by increases in subscriber levels and (iv) a $1.2 million increase in commercial revenue as we continue to expand our non-residential customer base through targeted marketing efforts. We expect revenues to continue to increase as video subscriber levels stabilize while we expect to continue to see subscriber growth in our high-speed data and telephone service offerings. Operating expenses for the three months ended June 30, 2009 were $33.9 million as compared to $31.9 million for the same period in 2008. The $2.0 million increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with increased HSD and telephony direct costs driven by higher subscriber levels and usage. We expect operating expenses to continue to increase as growth in total revenue generating units will result in increased direct expenses, while technical and customer support levels should remain relatively stable. Selling, general and administrative expenses for the three months ended June 30, 2009 were $10.6 million as compared to $10.8 million for the three months ended June 30, 2008, a decrease of $0.2 million. This decrease resulted mainly from decreases in marketing efforts during a traditionally slower gross subscriber connect season. We expect to see relatively moderate growth in selling, general and administrative expenses as we increase marketing spending to drive subscriber growth trends. Revenue for the six months ended June 30, 2009 was $149.1 million as compared to $136.7 million for the six months ended June 30, 2008, an increase of $12.4 million or 9.1%. This increase was mainly the result of a (i) $2.9 million in video revenue from increased digital subscriber levels, along with increased usage of Digital Video Recorders and high definition converters; (ii) a $3.5 million or 15.5% increase in high-speed data revenue resulting from continued marketing focus for this service offering driving HSD subscriber growth; (iii) a $3.4 million increase in telephone revenue generated by this service offering through subscriber growth and (iv) a $2.3 million increase in commercial revenue as we continue to expand our non-residential customer base through targeted marketing efforts. Operating expenses for the six months ended June 30, 2009 were $67.8 million as compared to $63.2 million for the same period in 2008. The $4.6 million or 7.3% increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with the incurrence of higher levels direct costs associated with our continued expansion of high speed data and cable telephony services. Selling, general and administrative expenses for the six months ended June 30, 2009 and June 30, 2008 were a consistent $20.5 million. Underlying this flat trend is a moderate increase in marketing spending of $0.2 million, offset by decreases in other general expense items due to conscious efforts to control costs. Liquidity and Cash Flow: Total debt outstanding at June 30, 2009 was $599.6 million and cash balances were $10.5 million at quarter end. On an annualized basis, EBITDA for the six months ended June 30, 2009, adjusted for certain expenditures as defined in the Company's credit agreement totaling $0.2 million resulted in a total leverage ratio as defined in said credit agreement of approximately 5.0x. Summary Financial Results: The following tables summarize financial results for the three and six month periods ended June 30, 2009: Subscriber information 6/30/08 12/31/08 6/30/09 EBU's 225,401 223,583 220,328 Digital Subscribers 87,190 89,854 88,559 HSD Residential Subscribers 119,461 126,143 131,669 Telephone Residential Subscribers 41,394 50,692 57,277 Homes Passed 502,596 504,931 505,812 Internet-ready Homes Passed 493,881 497,330 498,211 Telephone-ready Homes Passed 456,692 476,845 486,625 Basic Subscribers 285,471 285,540 283,790 Basic Penetration of Homes Passed 56.8 % 56.6 % 56.1 % Digital Penetration of Basic Subscribers 30.5 % 31.5 % 31.2 % HSD Penetration of Internet-ready Homes Passed 24.2 % 25.4 % 26.4 % Telephone Penetration of Telephone-ready Homes Passed 9.1 % 10.6 % 11.8 % Operating results Three Months Ended June 30. Six Months Ended June 30. 2008 2009 2008 2009 Amount % Amount % Amount % Amount % (dollars in thousands) (dollars in thousands) Revenue: Video $39,997 57.6 % $41,466 55.1 % $79,407 58.1 % $82,338 55.2 % High Speed Data 11,482 16.6 13,149 17.5 22,517 16.5 26,000 17.4 Telephone 4,325 6.2 5,846 7.7 8,054 5.9 11,428 7.7 Advertising Sales 1,789 2.6 1,652 2.2 3,323 2.4 3,314 2.2 Commercial 6,050 8.7 7,299 9.7 11,916 8.7 14,238 9.6 Other 5,771 8.3 5,871 7.8 11,456 8.4 11,732 7.9 Total revenue $69,414 100.0 % $75,283 100.0 % $136,673 100.0 % $149,050 100.0 % Costs and expenses: Operating (excluding depreciation and amortization and other items listed below) 31,885 45.9 % 33,945 45.1 % 63,158 46.2 % 67,794 45.5 % Selling, general and administrative 10,817 15.6 % 10,590 14.1 % 20,452 15.0 % 20,549 13.8 % Depreciation and amortization 10,428 15.0 % 10,283 13.7 % 21,646 15.8 % 21,164 14.2 % Income from operations 16,284 20,465 31,417 39,543 Other Income (expenses): Gain (loss) from derivative instruments 2,706 -- (457 ) 1,821 Loss on extinguishment of debt -- (4,619 ) -- (4,619 ) Interest expense, net (11,545 ) (8,876 ) (24,561 ) (19,170 ) Net Income 7,445 6,970 6,399 17,575 Reconciliation of Income from operations to EBITDA (in thousands): Three Months Six Months Ended Ended June 30, 2009 June 30, 2009 Income from operations $ 20,465 $ 39,543 Plus: Depreciation and amortization 10,283 21,164 EBITDA $ 30,748 $ 60,707 Conference Call: The Company will host a conference call at 11:00 a.m. EDT on Friday August 7, 2009 to discuss the financial results. To access the conference call, interested parties may dial (888) 339-2688 and provide the conference passcode "184 660 80" to the attendant. A replay will be available through August 29, 2009 by dialing (888) 286-8010 and using the passcode "173 845 74". Note Regarding Forward-Looking Statements: Statements in this release that are "forward-looking statements" are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation reform Act of 1995. Words of expressions such as "intends", "expects", "expected", "anticipates" or variations of such words and similar expressions are intended to identify such forward-looking statements. Key risks are described in the Company's report filed with the Securities and Exchange Commission (SEC (News - Alert)). |
