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Mediacom Communications Reports Combined Results for First Quarter 2019 248.4 KB

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