Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable One”)
today reported financial and operating results for the quarter and
year ended December 31, 2023.
Three Months Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Revenues
$
411,815
$
425,515
$
(13,700
)
(3.2
)%
Net income (loss)
$
115,294
$
(77,210
)
$
192,504
(249.3
)%
Net profit margin
28.0
%
(18.1
)%
Cash flows from operating activities
$
151,669
$
168,247
$
(16,578
)
(9.9
)%
Adjusted EBITDA(1)
$
226,877
$
233,215
$
(6,338
)
(2.7
)%
Adjusted EBITDA margin(1)
55.1
%
54.8
%
Capital expenditures
$
115,600
$
106,843
$
8,757
8.2
%
Adjusted EBITDA less capital
expenditures(1)
$
111,277
$
126,372
$
(15,095
)
(11.9
)%
Year Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Revenues
$
1,678,081
$
1,706,043
$
(27,962
)
(1.6
)%
Net income
$
267,436
$
234,118
$
33,318
14.2
%
Net profit margin
15.9
%
13.7
%
Cash flows from operating activities
$
663,170
$
738,040
$
(74,870
)
(10.1
)%
Adjusted EBITDA(1)
$
916,944
$
911,851
$
5,093
0.6
%
Adjusted EBITDA margin(1)
54.6
%
53.4
%
Capital expenditures
$
371,028
$
414,095
$
(43,067
)
(10.4
)%
Adjusted EBITDA less capital
expenditures(1)
$
545,916
$
497,756
$
48,160
9.7
%
“Our return to sequential residential high-speed data customer
growth in the fourth quarter, as expected, is very encouraging,"
said Julie Laulis, Cable One President and CEO. "Along with our
highest margin residential data and business services product lines
comprising over 77% of all revenues during the quarter, we look
forward to executing on our business plan for 2024.”
Fourth Quarter 2023 Highlights:
- Net income was $115.3 million in the fourth quarter of 2023
compared to a net loss of $77.2 million in the fourth quarter of
2022. Adjusted EBITDA was $226.9 million in the fourth quarter of
2023 compared to $233.2 million in the fourth quarter of 2022. Net
profit margin was 28.0% and Adjusted EBITDA margin was 55.1%.
- Net cash provided by operating activities was $151.7 million in
the fourth quarter of 2023 compared to $168.2 million in the fourth
quarter of 2022. Adjusted EBITDA less capital expenditures was
$111.3 million in the fourth quarter of 2023 compared to $126.4
million in the fourth quarter of 2022.
- Total revenues were $411.8 million in the fourth quarter of
2023 compared to $425.5 million in the fourth quarter of 2022.
Year-over-year, residential data revenues increased 2.1%.
- Residential data primary service units (“PSUs”) grew
sequentially by over 1,600, or 0.2%, from the third quarter of
2023.
- Residential data average monthly revenue per unit (“ARPU”) was
$83.95 for the fourth quarter of 2023, an increase of $2.24, or
2.7%, from the prior year quarter.
- The Company paid $16.8 million in dividends during the fourth
quarter of 2023.
- The Company repaid $50.0 million under its revolving credit
facility (the "Revolver") during the fourth quarter of 2023.
Full Year 2023 Highlights:
- Net income was $267.4 million in 2023 compared to $234.1
million in 2022. Adjusted EBITDA was $916.9 million in 2023
compared to $911.9 million in 2022. Net profit margin was 15.9% and
Adjusted EBITDA margin was 54.6%.
- Net cash provided by operating activities was $663.2 million in
2023 compared to $738.0 million in 2022. Adjusted EBITDA less
capital expenditures was $545.9 million in 2023 compared to $497.8
million in 2022.
- Total revenues were $1.7 billion in both 2023 and 2022.
Year-over-year, residential data revenues increased 4.8%.
- Residential data ARPU was $84.57 for 2023, an increase of
$3.45, or 4.3%, from the prior year.
- The Company repurchased 141,551 shares of its common stock at
an aggregate cost of $99.6 million and paid $66.3 million in
dividends during 2023. The Company had $143.1 million of remaining
share repurchase authorization as of December 31, 2023.
- The Company repaid $150.0 million under the Revolver during
2023.
_______________
(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 (loss), 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 2023 Financial Results Compared to Fourth
Quarter 2022
Revenues decreased $13.7 million, or 3.2%, to $411.8 million for
the fourth quarter of 2023 due primarily to decreases in
residential video, residential voice and other revenues, partially
offset by an increase in residential data revenues.
Net income was $115.3 million in the fourth quarter of 2023
compared to a net loss of $77.2 million in the prior year quarter.
Net income for the fourth quarter of 2023 included a $66.6 million
non-cash gain on fair value adjustment associated with the call and
put options to acquire the remaining equity interests in Mega
Broadband Investments Holdings LLC (the "MBI Net Option"). Net loss
for the fourth quarter of 2022 included a $128.8 million non-cash
loss on fair value adjustment associated with the MBI Net Option.
Net profit margin was 28.0% in the fourth quarter of 2023 compared
to negative 18.1% in the prior year quarter.
Adjusted EBITDA was $226.9 million and $233.2 million for the
fourth quarter of 2023 and 2022, respectively. Adjusted EBITDA
margin increased to 55.1% in the fourth quarter of 2023 from 54.8%
in the prior year quarter.
Net cash provided by operating activities was $151.7 million in
the fourth quarter of 2023 compared to $168.2 million in the fourth
quarter of 2022. The decrease was driven primarily by higher income
tax payments, unfavorable changes in the timing of working capital
balances compared to the prior year and lower Adjusted EBITDA.
Capital expenditures for the fourth quarter of 2023 totaled $115.6
million compared to $106.8 million for the fourth quarter of 2022.
Adjusted EBITDA less capital expenditures for the fourth quarter of
2023 was $111.3 million compared to $126.4 million in the prior
year quarter.
Full Year 2023 Financial Results Compared to Full Year
2022
Revenues decreased $28.0 million, or 1.6%, due primarily to
decreases in residential video and residential voice revenues,
partially offset by an increase in residential data revenues.
Net income was $267.4 million in 2023 compared to $234.1 million
in the prior year. Net income for 2023 included a $28.0 million
non-cash gain on fair value adjustment associated with the MBI Net
Option, while net income for 2022 included a $40.7 million non-cash
loss on fair value adjustment associated with the MBI Net Option.
Net income for 2023 also included $54.3 million in net losses from
the Company's pro rata share of earnings in equity method
investments compared to $14.9 million in net losses in the prior
year. Net profit margin was 15.9% in 2023 compared to 13.7% in the
prior year.
Adjusted EBITDA was $916.9 million and $911.9 million for 2023
and 2022, respectively. Adjusted EBITDA margin increased to 54.6%
in 2023 from 53.4% in the prior year.
Net cash provided by operating activities was $663.2 million in
2023 compared to $738.0 million in 2022. The decrease was driven by
higher income tax and interest payments along with unfavorable
changes in the timing of working capital balances compared to the
prior year, partially offset by an increase in Adjusted EBITDA.
Capital expenditures for 2023 totaled $371.0 million compared to
$414.1 million for 2022. Adjusted EBITDA less capital expenditures
for 2023 was $545.9 million compared to $497.8 million in the prior
year.
Liquidity and Capital Resources
At December 31, 2023, the Company had $190.3 million of cash and
cash equivalents on hand compared to $215.2 million at December 31,
2022. The Company’s debt balance was approximately $3.7 billion and
$3.8 billion at December 31, 2023 and 2022, respectively. The
Company had $338.0 million of borrowings and $662.0 million
available for borrowing under its Revolver as of December 31,
2023.
The Company paid $16.8 million in dividends to stockholders
during the fourth quarter of 2023. During 2023, the Company paid
$66.3 million in dividends and repurchased 141,551 shares of its
common stock at an aggregate cost of $99.6 million. The Company had
$143.1 million of remaining share repurchase authorization as of
December 31, 2023.
The Company repaid $50.0 million under its Revolver during the
fourth quarter of 2023, bringing total repayments under the
Revolver to $150.0 million during 2023. In February 2024, the
Company repaid an additional $50.0 million under its Revolver.
The Company's capital expenditures by category were as follows
for the periods presented (in thousands):
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Customer premise equipment(1)
$
17,045
$
24,070
$
62,066
$
101,252
Commercial(2)
11,181
9,328
38,893
34,282
Scalable infrastructure(3)
26,441
6,029
54,097
52,086
Line extensions(4)
17,943
19,269
51,466
52,839
Upgrade/rebuild(5)
13,521
24,675
60,898
87,284
Support capital(6)
29,469
23,472
103,608
86,352
Total
$
115,600
$
106,843
$
371,028
$
414,095
_______________
(1)
Customer premise equipment includes costs
incurred at customer locations, including installation costs and
customer premise equipment (e.g., modems and set-top boxes).
(2)
Commercial includes costs related to
securing business services customers and PSUs, including small and
medium-sized businesses and enterprise customers.
(3)
Scalable infrastructure includes costs not
related to customer premise equipment to secure growth of new
customers and PSUs or provide service enhancements (e.g., headend
equipment).
(4)
Line extensions include network costs
associated with entering new service areas (e.g., fiber/coaxial
cable, amplifiers, electronic equipment, make-ready and design
engineering).
(5)
Upgrade/rebuild includes costs to modify
or replace existing fiber/coaxial cable networks, including
betterments.
(6)
Support capital includes costs associated
with the replacement or enhancement of non-network assets due to
technological and physical obsolescence (e.g., non-network
equipment, land, buildings and vehicles) and capitalized internal
labor costs not associated with customer installation
activities.
Conference Call
Cable One will host a conference call with the financial
community to discuss results for the fourth quarter and full year
2023 on Thursday, February 22, 2024, at 5 p.m. Eastern Time
(ET).
The conference call will be available via an audio webcast on
the Cable One Investor Relations website at ir.cableone.net or by
dialing 1-888-800-3155 (International: 1-646-307-1696) and using
the access code 1202376. Participants should register for the
webcast or dial in for the conference call shortly before 5 p.m.
ET.
A replay of the call will be available from February 22, 2024
until March 7, 2024 at ir.cableone.net.
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, 2023 (the "2023 Form 10-K"), 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
(loss), net profit margin, net cash provided by operating
activities or capital expenditures as a percentage of net income
(loss) reported in accordance with GAAP. Adjusted EBITDA and
Adjusted EBITDA less capital expenditures are reconciled to net
income (loss), 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
(loss). 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 (loss) plus interest
expense, income tax provision, depreciation and amortization,
equity-based compensation, severance and contract termination
costs, (gain) loss on deferred compensation, acquisition-related
costs, (gain) loss on asset sales and disposals, system conversion
costs, (gain) loss on sales of businesses, equity method investment
(income) loss, other (income) expense and other unusual items, 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
items, 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 agreement and the
indenture governing the Company’s non-convertible senior unsecured
notes to determine compliance with the covenants contained in the
credit agreement and the ability to take certain actions under the
indenture governing the non-convertible senior unsecured notes.
Adjusted EBITDA, capital expenditures as a percentage of Adjusted
EBITDA, and Adjusted EBITDA less capital expenditures are also
significant performance measures that have been used by the Company
in its incentive compensation programs. 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 that 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 stockholders.
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 committed to connecting customers and
communities to what matters most. Through Sparklight® and the
associated Cable One family of brands, the Company serves more than
1 million residential and business customers in 24 states. Powered
by a fiber-rich network, the Cable One family of brands provide
residential customers with a wide array of connectivity and
entertainment services, including Gigabit speeds, advanced Wi-Fi
and video. For businesses ranging from small and mid-market up to
enterprise, wholesale and carrier, the Company offers scalable,
cost-effective solutions that enable businesses of all sizes to
grow, compete and succeed.
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, strategy, acquisitions and strategic
investments, dividend policy, 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 2023 Form 10-K 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, and the Company's
ability to develop, deploy and operate new technologies, service
offerings and customer service platforms;
- the Company’s ability to continue to grow its residential data
and business services revenues and customer base;
- increases in programming costs and retransmission fees;
- the Company’s ability to obtain hardware, software and
operational support from vendors;
- risks that the Company may fail to realize the benefits
anticipated as a result of the Company's purchase of the remaining
interests in Hargray Acquisition Holdings, LLC that the Company did
not already own;
- risks relating to existing or future acquisitions and strategic
investments by the Company;
- risks that the implementation of the Company’s new enterprise
resource planning and billing systems disrupt business
operations;
- 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;
- 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;
- changes in government subsidy programs;
- 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 continue to rise,
causing the Company’s obligations to service its variable rate
indebtedness to increase significantly;
- risks associated with the Company’s convertible
indebtedness;
- the Company’s ability to continue to pay dividends;
- provisions in the Company’s charter, by-laws and Delaware law
that could discourage takeovers and limit the judicial forum for
certain disputes;
- adverse economic conditions, labor shortages, supply chain
disruptions, changes in rates of inflation and the level of move
activity in the housing sector;
- pandemics, epidemics or disease outbreaks, such as the COVID-19
pandemic, have, and may in the future, disrupt the Company's
business and operations, which could materially affect the
Company's business, financial condition, results of operations and
cash flows;
- lower demand for the Company's residential data and business
services products;
- fluctuations in the Company’s stock price;
- dilution from equity awards, convertible indebtedness and
potential future convertible debt and stock issuances;
- damage to the Company’s reputation or brand image;
- the Company’s ability to retain key employees (whom the Company
refers to as associates);
- the Company’s ability to incur future indebtedness;
- provisions in the Company’s charter that could limit the
liabilities for directors; and
- the other risks and uncertainties detailed from time to time in
the Company’s filings with the SEC, including but not limited to
those described under "Risk Factors" in its latest Annual Report on
Form 10-K and in its subsequent filings 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)
2023
2022
$ Change
% Change
Revenues
Residential data
$
242,340
$
237,247
$
5,093
2.1
%
Residential video
59,247
75,256
(16,009
)
(21.3
)%
Residential voice
8,755
9,991
(1,236
)
(12.4
)%
Business services
75,879
76,287
(408
)
(0.5
)%
Other
25,594
26,734
(1,140
)
(4.3
)%
Total Revenues
411,815
425,515
(13,700
)
(3.2
)%
Costs and Expenses:
Operating (excluding depreciation and
amortization)
106,265
112,617
(6,352
)
(5.6
)%
Selling, general and administrative
89,022
85,739
3,283
3.8
%
Depreciation and amortization
87,305
86,898
407
0.5
%
(Gain) loss on asset sales and disposals,
net
1,994
1,584
410
25.9
%
Total Costs and Expenses
284,586
286,838
(2,252
)
(0.8
)%
Income from operations
127,229
138,677
(11,448
)
(8.3
)%
Interest expense
(42,381
)
(39,164
)
(3,217
)
8.2
%
Other income (expense), net
71,994
(122,873
)
194,867
(158.6
)%
Income (loss) before income taxes and
equity method investment income (loss), net
156,842
(23,360
)
180,202
NM
Income tax provision
25,765
40,167
(14,402
)
(35.9
)%
Income (loss) before equity method
investment income (loss), net
131,077
(63,527
)
194,604
NM
Equity method investment income (loss),
net
(15,783
)
(13,683
)
(2,100
)
15.3
%
Net income (loss)
$
115,294
$
(77,210
)
$
192,504
(249.3
)%
Net Income (Loss) per Common Share:
Basic
$
20.56
$
(13.38
)
$
33.94
NM
Diluted
$
19.39
$
(13.38
)
$
32.77
(244.9
)%
Weighted Average Common Shares
Outstanding:
Basic
5,606,607
5,769,537
(162,930
)
(2.8
)%
Diluted
6,025,092
5,769,537
255,555
4.4
%
Unrealized gain (loss) on cash flow hedges
and other, net of tax
$
(35,624
)
$
(4,475
)
$
(31,149
)
NM
Comprehensive income (loss)
$
79,670
$
(81,685
)
$
161,355
(197.5
)%
_______________
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)
2023
2022
$ Change
% Change
Revenues
Residential data
$
979,296
$
934,564
$
44,732
4.8
%
Residential video
257,966
325,200
(67,234
)
(20.7
)%
Residential voice
37,088
43,096
(6,008
)
(13.9
)%
Business services
304,527
305,286
(759
)
(0.2
)%
Other
99,204
97,897
1,307
1.3
%
Total Revenues
1,678,081
1,706,043
(27,962
)
(1.6
)%
Costs and Expenses:
Operating (excluding depreciation and
amortization)
440,916
470,916
(30,000
)
(6.4
)%
Selling, general and administrative
354,663
350,310
4,353
1.2
%
Depreciation and amortization
342,891
350,462
(7,571
)
(2.2
)%
(Gain) loss on asset sales and disposals,
net
12,708
9,199
3,509
38.1
%
(Gain) loss on sales of businesses,
net
—
(13,833
)
13,833
(100.0
)%
Total Costs and Expenses
1,151,178
1,167,054
(15,876
)
(1.4
)%
Income from operations
526,903
538,989
(12,086
)
(2.2
)%
Interest expense
(170,147
)
(137,713
)
(32,434
)
23.6
%
Other income (expense), net
54,640
(25,913
)
80,553
NM
Income before income taxes and equity
method investment income (loss), net
411,396
375,363
36,033
9.6
%
Income tax provision
89,704
126,332
(36,628
)
(29.0
)%
Income before equity method investment
income (loss), net
321,692
249,031
72,661
29.2
%
Equity method investment income (loss),
net
(54,256
)
(14,913
)
(39,343
)
NM
Net income
$
267,436
$
234,118
$
33,318
14.2
%
Net Income per Common Share:
Basic
$
47.34
$
39.73
$
7.61
19.2
%
Diluted
$
45.14
$
38.06
$
7.08
18.6
%
Weighted Average Common Shares
Outstanding:
Basic
5,648,934
5,892,077
(243,143
)
(4.1
)%
Diluted
6,062,331
6,314,148
(251,818
)
(4.0
)%
Unrealized gain (loss) on cash flow hedges
and other, net of tax
$
(13,286
)
$
132,826
$
(146,112
)
(110.0
)%
Comprehensive income
$
254,150
$
366,944
$
(112,794
)
(30.7
)%
_______________
NM = Not meaningful.
CABLE ONE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in
thousands, except par values)
December 31, 2023
December 31, 2022
Assets
Current Assets:
Cash and cash equivalents
$
190,289
$
215,150
Accounts receivable, net
93,973
74,383
Prepaid and other current assets
58,116
57,172
Total Current Assets
342,378
346,705
Equity investments
1,125,447
1,195,221
Property, plant and equipment, net
1,791,120
1,701,755
Intangible assets, net
2,595,892
2,666,585
Goodwill
928,947
928,947
Other noncurrent assets
63,149
74,677
Total Assets
$
6,846,933
$
6,913,890
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued
liabilities
$
156,645
$
164,518
Deferred revenue
27,169
23,706
Current portion of long-term debt
19,023
55,931
Total Current Liabilities
202,837
244,155
Long-term debt
3,626,928
3,752,591
Deferred income taxes
974,467
966,821
Other noncurrent liabilities
169,556
192,350
Total Liabilities
4,973,788
5,155,917
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; 6,175,399 shares issued; and 5,616,987 and
5,766,011 shares outstanding as of December 31, 2023 and 2022,
respectively)
62
62
Additional paid-in capital
607,574
578,154
Retained earnings
1,825,542
1,624,406
Accumulated other comprehensive income
(loss)
36,745
50,031
Treasury stock, at cost (558,412 and
409,388 shares held as of December 31, 2023 and 2022,
respectively)
(596,778
)
(494,680
)
Total Stockholders' Equity
1,873,145
1,757,973
Total Liabilities and Stockholders'
Equity
$
6,846,933
$
6,913,890
CABLE ONE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended December
31,
Year Ended December
31,
(in thousands)
2023
2022
2023
2022
Cash flows from operating activities: Net Income
$
115,294
$
(77,210
)
$
267,436
$
234,118
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
87,305
86,898
342,891
350,462
Non-cash interest expense, net
2,215
2,394
9,019
9,518
Equity-based compensation
7,601
5,498
29,420
22,514
Write-off of debt issuance costs
—
—
3,340
—
Change in deferred income taxes
11,344
35,906
11,479
68,378
(Gain) loss on asset sales and disposals,
net
1,994
1,584
12,708
9,199
(Gain) loss on sales of businesses,
net
—
—
—
(13,833
)
Equity method investment (income) loss,
net
15,783
13,683
54,256
14,913
Fair value adjustments
(66,591
)
128,420
(39,514
)
40,400
Changes in operating assets and
liabilities:
Accounts receivable, net
(7,642
)
(9,776
)
(19,590
)
2,734
Prepaid and other current assets
3,045
10,877
(2,227
)
(3,971
)
Accounts payable and accrued
liabilities
(17,902
)
(25,264
)
(10,664
)
(157
)
Deferred revenue
(91
)
95
3,463
(389
)
Other
(686
)
(4,858
)
1,153
4,154
Net cash provided by operating
activities
151,669
168,247
663,170
738,040
Cash flows from investing
activities:
Cash paid for debt and equity
investments
(13,890
)
(25,310
)
(29,410
)
(50,385
)
Capital expenditures
(115,600
)
(106,843
)
(371,028
)
(414,095
)
Change in accrued expenses related to
capital expenditures
2,630
(627
)
3,324
3,358
Purchase of wireless licenses
(2,750
)
—
(2,750
)
—
Proceeds from sales of property, plant and
equipment
168
19
1,230
3,628
Proceeds from sales of equity
investments
—
—
56,730
—
Proceeds from sales of operations
—
—
—
9,227
Net cash used in investing activities
(129,442
)
(132,761
)
(341,904
)
(448,267
)
Cash flows from financing
activities:
Proceeds from long-term debt
borrowings
—
—
638,000
—
Payment of debt issuance costs
—
—
(8,096
)
—
Payments on long-term debt
(54,711
)
(13,083
)
(807,633
)
(38,845
)
Repurchases of common stock
—
(46,258
)
(99,614
)
(353,289
)
Payment of withholding tax for equity
awards
(93
)
(210
)
(2,484
)
(5,036
)
Dividends paid to stockholders
(16,766
)
(16,504
)
(66,300
)
(66,255
)
Net cash used in financing activities
(71,570
)
(76,055
)
(346,127
)
(463,425
)
Change in cash and cash equivalents
(49,343
)
(40,569
)
(24,861
)
(173,652
)
Cash and cash equivalents, beginning of
period
239,632
255,719
215,150
388,802
Cash and cash equivalents, end of
period
$
190,289
$
215,150
$
190,289
$
215,150
Supplemental cash flow
disclosures:
Cash paid for interest, net of capitalized
interest
$
45,131
$
43,556
$
160,224
$
127,158
Cash paid for income taxes, net of refunds
received
$
16,151
$
4,882
$
92,456
$
23,379
CABLE ONE, INC.
RECONCILIATIONS OF NON-GAAP MEASURES (Unaudited)
Three Months Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Net income (loss)
$
115,294
$
(77,210
)
$
192,504
(249.3
)%
Net profit margin
28.0
%
(18.1
)%
Plus: Interest expense
42,381
39,164
3,217
8.2
%
Income tax provision
25,765
40,167
(14,402
)
(35.9
)%
Depreciation and amortization
87,305
86,898
407
0.5
%
Equity-based compensation
7,601
5,498
2,103
38.3
%
Severance and contract termination
costs
1,673
—
1,673
NM
(Gain) loss on deferred compensation
—
51
(51
)
(100.0
)%
Acquisition-related costs
473
424
49
11.6
%
(Gain) loss on asset sales and disposals,
net
1,994
1,584
410
25.9
%
System conversion costs
602
83
519
NM
Equity method investment (income) loss,
net
15,783
13,683
2,100
15.3
%
Other (income) expense, net
(71,994
)
122,873
(194,867
)
(158.6
)%
Adjusted EBITDA
$
226,877
$
233,215
$
(6,338
)
(2.7
)%
Adjusted EBITDA margin
55.1
%
54.8
%
Less: Capital expenditures
$
115,600
$
106,843
$
8,757
8.2
%
Capital expenditures as a percentage of
net income (loss)
100.3
%
(138.4
)%
Capital expenditures as a percentage of
Adjusted EBITDA
51.0
%
45.8
%
Adjusted EBITDA less capital expenditures
$
111,277
$
126,372
$
(15,095
)
(11.9
)%
_______________
NM = Not meaningful.
Three Months Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Net cash provided by operating
activities
$
151,669
$
168,247
$
(16,578
)
(9.9
)%
Capital expenditures
(115,600
)
(106,843
)
(8,757
)
8.2
%
Interest expense
42,381
39,164
3,217
8.2
%
Non-cash interest expense
(2,215
)
(2,394
)
179
(7.5
)%
Income tax provision
25,765
40,167
(14,402
)
(35.9
)%
Changes in operating assets and
liabilities
23,276
28,926
(5,650
)
(19.5
)%
Change in deferred income taxes
(11,344
)
(35,906
)
24,562
(68.4
)%
(Gain) loss on deferred compensation
—
51
(51
)
(100.0
)%
Acquisition-related costs
473
424
49
11.6
%
Severance and contract termination
costs
1,673
—
1,673
NM
System conversion costs
602
83
519
NM
Fair value adjustments
66,591
(128,420
)
195,011
(151.9
)%
Other (income) expense, net
(71,994
)
122,873
(194,867
)
(158.6
)%
Adjusted EBITDA less capital
expenditures
$
111,277
$
126,372
$
(15,095
)
(11.9
)%
_______________
NM = Not meaningful.
CABLE ONE, INC.
RECONCILIATIONS OF NON-GAAP MEASURES (Unaudited)
Year Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Net income
$
267,436
$
234,118
$
33,318
14.2
%
Net profit margin
15.9
%
13.7
%
Plus: Interest expense
170,147
137,713
32,434
23.6
%
Income tax provision
89,704
126,332
(36,628
)
(29.0
)%
Depreciation and amortization
342,891
350,462
(7,571
)
(2.2
)%
Equity-based compensation
29,420
22,514
6,906
30.7
%
Severance and contract termination
costs
2,890
—
2,890
NM
(Gain) loss on deferred compensation
—
(154
)
154
(100.0
)%
Acquisition-related costs
1,331
3,208
(1,877
)
(58.5
)%
(Gain) loss on asset sales and disposals,
net
12,708
9,199
3,509
38.1
%
System conversion costs
801
1,466
(665
)
(45.4
)%
(Gain) loss on sales of businesses,
net
—
(13,833
)
13,833
(100.0
)%
Equity method investment (income) loss,
net
54,256
14,913
39,343
NM
Other (income) expense, net
(54,640
)
25,913
(80,553
)
NM
Adjusted EBITDA
$
916,944
$
911,851
$
5,093
0.6
%
Adjusted EBITDA margin
54.6
%
53.4
%
Less: Capital expenditures
$
371,028
$
414,095
$
(43,067
)
(10.4
)%
Capital expenditures as a percentage of
net income
138.7
%
176.9
%
Capital expenditures as a percentage of
Adjusted EBITDA
40.5
%
45.4
%
_______________
NM = Not meaningful.
Year Ended December
31,
(dollars in
thousands)
2023
2022
$ Change
% Change
Net cash provided by operating
activities
$
663,170
$
738,040
$
(74,870
)
(10.1
)%
Capital expenditures
(371,028
)
(414,095
)
43,067
(10.4
)%
Interest expense
170,147
137,713
32,434
23.6
%
Non-cash interest expense
(9,019
)
(9,518
)
499
(5.2
)%
Income tax provision
89,704
126,332
(36,628
)
(29.0
)%
Changes in operating assets and
liabilities
27,865
(2,371
)
30,236
NM
Write-off of debt issuance costs
(3,340
)
—
(3,340
)
NM
Change in deferred income taxes
(11,479
)
(68,378
)
56,899
(83.2
)%
(Gain) loss on deferred compensation
—
(154
)
154
(100.0
)%
Acquisition-related costs
1,331
3,208
(1,877
)
(58.5
)%
Severance and contract termination
costs
2,890
—
2,890
NM
System conversion costs
801
1,466
(665
)
(45.4
)%
Fair value adjustment
39,514
(40,400
)
79,914
(197.8
)%
Other (income) expense, net
(54,640
)
25,913
(80,553
)
NM
Adjusted EBITDA less capital
expenditures
$
545,916
$
497,756
$
48,160
9.7
%
_______________
NM = Not meaningful.
CABLE ONE, INC.
OPERATING STATISTICS
(Unaudited)
As of December 31,
(in thousands,
except percentages and ARPU data)
2023
2022
Change
% Change
Homes Passed
2,774.9
2,704.3
70.6
2.6
%
Residential Customers
994.4
1,010.2
(15.8
)
(1.6
)%
Data PSUs
960.5
963.7
(3.3
)
(0.3
)%
Video PSUs
134.2
171.2
(37.1
)
(21.6
)%
Voice PSUs
79.2
91.3
(12.1
)
(13.3
)%
Total residential PSUs
1,173.8
1,226.3
(52.4
)
(4.3
)%
Business Customers
102.6
101.6
1.1
1.1
%
Data PSUs
98.8
96.6
2.2
2.3
%
Video PSUs
8.1
10.3
(2.2
)
(21.7
)%
Voice PSUs
39.5
40.8
(1.3
)
(3.1
)%
Total business services PSUs
146.4
147.7
(1.3
)
(0.9
)%
Total Customers
1,097.0
1,111.7
(14.7
)
(1.3
)%
Total non-video
952.3
927.2
25.1
2.7
%
Percent of total
86.8
%
83.4
%
3.4
%
Data PSUs
1,059.3
1,060.4
(1.1
)
(0.1
)%
Video PSUs
142.3
181.5
(39.3
)
(21.6
)%
Voice PSUs
118.7
132.1
(13.4
)
(10.1
)%
Total PSUs
1,320.2
1,374.0
(53.8
)
(3.9
)%
Penetration
Data
38.2
%
39.2
%
(1.0
)%
Video
5.1
%
6.7
%
(1.6
)%
Voice
4.3
%
4.9
%
(0.6
)%
Share of Fourth Quarter
Revenues
Residential data
58.8
%
55.8
%
3.0
%
Business services
18.4
%
17.9
%
0.5
%
Total
77.3
%
73.7
%
3.6
%
ARPU - Fourth Quarter
Residential data(1)
$
83.95
$
81.71
$
2.24
2.7
%
Residential video(1)
$
143.78
$
138.56
$
5.22
3.8
%
Residential voice(1)
$
36.24
$
35.69
$
0.55
1.5
%
Business services(2)
$
246.35
$
249.78
$
(3.43
)
(1.4
)%
Note:
All totals, percentages and year-over-year
changes are calculated using exact numbers. Minor differences may
exist due to rounding.
(1)
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,
except that for any PSUs added or subtracted as a result of an
acquisition or divestiture occurring during the period, the
associated ARPU values represent the applicable residential service
revenues (excluding installation and activation fees) divided by
the pro-rated average number of PSUs during such period.
(2)
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, except that for any business customer
relationships added or subtracted as a result of an acquisition or
divestiture occurring during the period, the associated ARPU values
represent business services revenues divided by the pro-rated
average number of business customer relationships during such
period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240222930038/en/
Trish Niemann Vice President, Communications Strategy
602-364-6372 patricia.niemann@cableone.biz
Todd Koetje Chief Financial Officer
investor_relations@cableone.biz
Cable One (NYSE:CABO)
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