Earnings

Mediacom Combined Earnings

Mediacom Communications Reports Combined Results for First Quarter 2019

MEDIACOM PARK, N.Y.--(BUSINESS WIRE)--MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months ended March 31, 2019.

Mediacom Combined Results for First Quarter 2019*

  • Revenues were $497.9 million, reflecting a 4.1% increase from the prior year period
  • Adjusted OIBDA was $195.5 million, reflecting an 8.9% increase from the prior year period
  • Capital expenditures were $72.7 million, compared to $79.8 million in the prior year period
  • Free cash flow was $98.2 million, compared to $74.7 million in the prior year period
  • Ending primary service units (“PSUs”) of 2,669,000, a 1.6% increase from March 31, 2018
  • Ending customer relationships of 1,367,000, a 0.3% increase from March 31, 2018
  • Net leverage ratio of 2.82x, compared to 3.49x at March 31, 2018
  • Interest coverage ratio of 7.94x, compared to 7.16x at March 31, 2018
  • Ending net debt of $2,202.0 million, a $306.3 million reduction from March 31, 2018

Reference to “Mediacom Combined” reflects the combined results of Mediacom Broadband LLC and Mediacom LLC, eliminating intercompany amounts. Mediacom Combined information is being provided for convenience and informational purposes, and does not modify or supplement the separate financial and operating results of Mediacom Broadband LLC, which were previously released and filed with the SEC on Form 8-K on May 2, 2019.

About Mediacom

Mediacom Communications Corporation is the 5th largest cable operator in the United States and the leading gigabit broadband provider to smaller markets primarily in the Midwest and Southeast. Through its fiber-rich network, Mediacom provides high-speed data, video and phone services to nearly 1.4 million households and businesses across 22 states. The company delivers scalable broadband solutions to commercial and public sector customers of all sizes through Mediacom Business, and sells advertising and production services under the OnMedia brand. More information about Mediacom is available at www.mediacomcable.com.

                   

TABLE 1*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)

(Unaudited)

 
                   
      Three Months Ended
March 31,
         
      2019       2018       YoY % Change
High-speed data (“HSD”)     $

201,097

      $ 178,341       12.8 %
Video       187,721         195,248       (3.9 %)
Phone       29,426         28,069       4.8 %
Business services       69,407         65,277       6.3 %
Advertising       10,203         11,468       (11.0 %)
Total revenues     $ 497,854       $ 478,403       4.1 %
Service costs       (213,062 )       (209,485 )     1.7 %
SG&A expenses       (78,659 )       (79,298 )     (0.8 %)
Management fees       (11,000 )       (10,000 )     10.0 %
OIBDA (a)     $ 195,133       $ 179,620       8.6 %
Deferred compensation       385      

       
Adjusted OIBDA (a)     $ 195,518       $ 179,620       8.9 %
Cash interest expense (a)       (24,629 )       (25,087 )     (1.8 %)
Capital expenditures       (72,659 )       (79,820 )     (9.0 %)
Free cash flow (a)     $ 98,230       $ 74,713       31.5 %
                         
Adjusted OIBDA margin (b)       39.3 %       37.5 %        
                         
                         
      March 31, 2019       March 31, 2018       YoY % Change
HSD customers       1,288,000         1,228,000       4.9 %
Video customers       764,000         817,000       (6.5 %)
Phone customers       617,000         582,000       6.0 %
Primary service units (“PSUs”)       2,669,000         2,627,000       1.6 %
                         
HSD customer increases       24,000         19,000          
Video customer declines       (12,000 )       (4,000 )        
Phone customer increases       3,000         18,000          
Quarterly PSU increases       15,000         33,000          
                         
Customer relationships (c)       1,367,000         1,363,000       0.3 %
                         
Average total monthly revenue per:                        
PSU (d)     $ 62.35       $ 61.09       2.1 %
Customer relationship (e)     $ 121.84       $ 117.00       4.1 %
                         
                         
      March 31, 2019     March 31, 2018          
Bank credit facility     $ 2,147,750       $ 2,189,750          
5½% senior notes due 2021       200,000         200,000          
6⅜% senior notes due 2023             300,000          
Total debt (f)     $ 2,347,750       $ 2,689,750          
Cash       (145,723 )       (181,382 )        
Net debt (a)     $ 2,202,027       $ 2,508,368          
                         
Net leverage ratio (g)     2.82x       3.49x          
Interest coverage ratio (h)     7.94x       7.16x          
                         

* See Table 4 for information about our use of non-GAAP measures and definitions of Adjusted OIBDA and free cash flow and Table 5 for footnotes.

         
TABLE 2*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
         
   

Three Months Ended
March 31, 2019

   

Mediacom
Broadband

   

Mediacom
LLC

    Eliminations    

Mediacom
Combined

HSD   $

109,436

    $ 91,661    

$

    $ 201,097  
Video     103,195       84,526             187,721  
Phone     15,918       13,508             29,426  
Business services     42,350       27,057             69,407  
Advertising     8,355       1,848             10,203  
Total revenues   $ 279,254     $ 218,600    

$

    $ 497,854  
Service costs     (115,399 )     (97,663 )           (213,062 )
SG&A expenses     (47,512 )     (31,147 )           (78,659 )
Management fees     (6,600 )     (4,400 )           (11,000 )
OIBDA (a)   $ 109,743     $ 85,390    

$

    $ 195,133  
Investment income from affiliate         4,500         (4,500 )    
Deferred compensation     204       181             385  
Adjusted OIBDA (a)   $ 109,947     $ 90,071    

$

 

(4,500 )   $ 195,518  
Cash interest expense (a)     (13,087 )     (11,542 )           (24,629 )
Capital expenditures     (36,554 )     (36,105 )           (72,659 )
Dividend to preferred members     (4,500 )           4,500      
Free cash flow (a)   $ 55,806     $ 42,424    

$

    $ 98,230  
                           
                           
   

Mediacom
Broadband

   

Mediacom
LLC

           

Mediacom
Combined

 
HSD customers     713,000       575,000               1,288,000  
Video customers     422,000       342,000               764,000  
Phone customers     342,000       275,000               617,000  
Primary service units (“PSUs”)     1,477,000       1,192,000               2,669,000  
                           
HSD customer increases     14,000       10,000               24,000  
Video customer declines     (6,000 )     (6,000 )             (12,000 )
Phone customer increases     3,000                   3,000  
Quarterly PSU increases     11,000       4,000               15,000  
                           
Customer relationships (c)     759,000       608,000               1,367,000  
                           
Average total monthly revenue per:                          
PSU (d)   $ 63.26     $ 61.23             $ 62.35  
Customer relationship (e)   $ 123.13     $ 120.24             $ 121.84  
                           
                           
   

Mediacom
Broadband

   

Mediacom
LLC

           

Mediacom
Combined

 
Bank credit facility   $ 1,019,250     $ 1,128,500             $ 2,147,750  
5½% senior notes due 2021     200,000                   200,000  
Total debt (f)   $ 1,219,250     $ 1,128,500             $ 2,347,750  
Cash     (133,886 )     (11,837 )             (145,723 )
Net debt (a)   $ 1,085,364     $ 1,116,663             $ 2,202,027  
                           
Net leverage ratio (g)   2.47x     3.10x             2.82x  
Interest coverage ratio (h)   8.40x     7.80x             7.94x  
                           

* See Table 4 for information about our use of non-GAAP measures and definitions of Adjusted OIBDA and free cash flow and Table 5 for footnotes.

           
TABLE 3*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
           
   

Three Months Ended
March 31, 2018

   

Mediacom
Broadband

   

Mediacom
LLC

    Eliminations    

Mediacom
Combined

HSD   $

97,501

    $ 80,840    

$

    $ 178,341  
Video     107,672       87,576    

 

      195,248  
Phone     15,149       12,920    

 

      28,069  
Business services     40,153       25,124    

 

      65,277  
Advertising     9,206       2,262    

 

      11,468  
Total revenues   $ 269,681     $ 208,722    

$

    $ 478,403  
Service costs     (113,042 )     (96,443 )  

 

      (209,485 )
SG&A expenses     (47,708 )     (31,590 )  

 

      (79,298 )
Management fees     (6,000 )     (4,000 )  

 

      (10,000 )
OIBDA (a)   $ 102,931     $ 76,689    

$

    $ 179,620  
Investment income from affiliate         4,500       (4,500 )    
Deferred compensation          

 

     
Adjusted OIBDA (a)   $ 102,931     $ 81,189     $ (4,500 )   $ 179,620  
Cash interest expense (a)     (15,966 )     (9,121 )  

 

      (25,087 )
Capital expenditures     (44,889 )     (34,931 )  

 

      (79,820 )
Dividend to preferred members     (4,500 )         4,500      
Free cash flow (a)   $ 37,576     $ 37,137    

$

    $ 74,713  
                           
                           
   

Mediacom
Broadband

   

Mediacom
LLC

           

Mediacom
Combined

 
HSD customers     679,000       549,000               1,228,000  
Video customers     453,000       364,000               817,000  
Phone customers     323,000       259,000               582,000  
Primary service units (“PSUs”)     1,455,000       1,172,000               2,627,000  
                           
HSD customer increases     11,000       8,000               19,000  
Video customer declines     (2,000 )     (2,000 )             (4,000 )
Phone customer increases     11,000       7,000               18,000  
Quarterly PSU increases     20,000       13,000               33,000  
                           
Customer relationships (c)     756,000       607,000               1,363,000  
                           
Average total monthly revenue per:                          
PSU (d)   $ 62.21     $ 59.69             $ 61.09  
Customer relationship (e)   $ 118.99     $ 114.53             $ 117.00  
                           
                           
   

Mediacom
Broadband

   

Mediacom
LLC

           

Mediacom
Combined

 
Bank credit facility   $ 1,039,750     $ 1,150,000             $ 2,189,750  
5½% senior notes due 2021     200,000                   200,000  
6⅜% senior notes due 2023     300,000                   300,000  
Total debt (f)   $ 1,539,750     $ 1,150,000             $ 2,689,750  
Cash     (170,970 )     (10,412 )             (181,382 )
Net debt (a)   $ 1,368,780     $ 1,139,588             $ 2,508,368  
                           
Net leverage ratio (g)   3.32x     3.51x             3.49x  
Interest coverage ratio (h)   6.45x     8.90x             7.16x  
                           

* See Table 4 for information about our use of non-GAAP measures and definitions of Adjusted OIBDA and free cash flow and Table 5 for footnotes.

TABLE 4
Use of Non-GAAP Financial Measures

“OIBDA,” “Adjusted OIBDA,” “cash interest expense,” “free cash flow” and “net debt” are not financial measures calculated in accordance with generally accepted accounting principles (“GAAP”) in the United States. We define OIBDA as operating income before depreciation and amortization and Adjusted OIBDA as OIBDA plus investment income from affiliate and excluding deferred compensation. OIBDA and Adjusted OIBDA may not be comparable to similarly titled measures used by other companies, which may have different depreciation and amortization policies, and are key components in our covenant calculations.

We define net debt as total debt less cash and cash equivalents. Net debt is used as an alternative to total debt for comparison purposes under certain circumstances in which we have greater than usual levels of cash. On April 15, 2019, Mediacom Broadband LLC and Mediacom Broadband Corporation (together, “Mediacom Broadband”) completed the redemption of $150.0 million principal amount outstanding of their existing 5½% senior notes due 2021 (the “5½% Notes”) at an aggregate redemption price of $150.0 million, which was funded in part by $117.9 million of excess cash. On April 2, 2018, Mediacom Broadband completed the redemption of all of their outstanding 6⅜% senior notes due 2023 at an aggregate redemption price of $309.6 million, which was funded in part by $158.0 million of excess cash. Due to the timing of such transactions, Mediacom Broadband temporarily had greater than usual levels of cash as of both March 31, 2019 and 2018, and therefore we believe net debt to be a more appropriate comparative measure for periods where excess cash is held for the purpose of retiring debt.

We define cash interest expense as interest expense, net, less amortization of deferred financing costs. Cash interest expense excludes the amortization of financing costs which were paid upon the financing of the relevant debt.

We define free cash flow as Adjusted OIBDA less capital expenditures, cash interest expense and dividends to preferred members. Free cash flow may not be comparable to similarly titled measures reported by other companies.

TABLE 5
Footnotes

     
(a)   See Table 4 for information regarding our use of non-GAAP financial measures.
(b)   Represents Adjusted OIBDA as a percentage of total revenues.
(c)   Represents the total number of customers that take at least one service, without regard to which service(s) customers purchase.
(d)   Represents average total monthly revenues for the period divided by average PSUs for such period.
(e)   Represents average total monthly revenues for the period divided by average customer relationships for such period.
(f)   Total debt excludes the effect of deferred financing costs, net.
(g)   Represents net debt at period end divided by annualized Adjusted OIBDA for the period.
(h)   Represents Adjusted OIBDA divided by cash interest expense for the period.
     

 

Contacts

Investor Relations
Jack P. Griffin
Group Vice President,
Corporate Finance
(845) 443-2654

Media Relations
Thomas J. Larsen
Senior Vice President,
Government and Public Relations
(845) 443-2754