CABO Cable One Inc

Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable One”) today reported financial and operating results for the quarter ended June 30, 2024.

 

Three Months Ended June 30,

 

 

 

 

(dollars in thousands)

2024

 

2023

 

$ Change

 

% Change

Revenues

$

394,461

 

 

$

424,024

 

 

$

(29,563

)

 

(7.0

)%

Net income

$

47,649

 

 

$

55,246

 

 

$

(7,597

)

 

(13.8

)%

Net profit margin

 

12.1

%

 

 

13.0

%

 

 

 

 

Cash flows from operating activities

$

155,548

 

 

$

169,564

 

 

$

(14,016

)

 

(8.3

)%

Adjusted EBITDA(1)

$

212,372

 

 

$

231,294

 

 

$

(18,922

)

 

(8.2

)%

Adjusted EBITDA margin(1)

 

53.8

%

 

 

54.5

%

 

 

 

 

Capital expenditures

$

71,592

 

 

$

81,507

 

 

$

(9,915

)

 

(12.2

)%

Adjusted EBITDA less capital expenditures(1)

$

140,780

 

 

$

149,787

 

 

$

(9,007

)

 

(6.0

)%

"We believe our strategic initiatives intended to drive penetration deeper across all market segments are setting the stage for sustainable long-term growth," said Julie Laulis, Cable One President and CEO. "Despite challenges such as the discontinuation of the Affordable Connectivity Program ("ACP") and typical seasonal headwinds, the underlying fundamentals of both residential and business data additions and retention levels maintained positive momentum during the second quarter, with both connects and disconnects improving year-over-year for the second consecutive quarter."

Second Quarter 2024 Summary:

• Residential data primary service units ("PSUs") decreased by approximately 4,200 sequentially, of which approximately 4,000 related to the expiration of the ACP during the second quarter. Business data PSUs increased by 500 sequentially.
• Net income was $47.6 million in the second quarter of 2024 compared to $55.2 million in the second quarter of 2023. Adjusted EBITDA was $212.4 million in the second quarter of 2024 compared to $231.3 million in the second quarter of 2023. Net profit margin was 12.1% and Adjusted EBITDA margin was 53.8%.
• Net cash provided by operating activities was $155.5 million in the second quarter of 2024 compared to $169.6 million in the second quarter of 2023. Adjusted EBITDA less capital expenditures was $140.8 million in the second quarter of 2024 compared to $149.8 million in the second quarter of 2023.
• Total revenues were $394.5 million in the second quarter of 2024 compared to $424.0 million in the second quarter of 2023.
• The Company paid $17.1 million in dividends during the second quarter of 2024.
• The Company repaid $50.0 million under its revolving credit facility (the "Revolver") during the second quarter of 2024.

____________________

(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 2024 Financial Results Compared to Second Quarter 2023

Revenues were $394.5 million in the second quarter of 2024 compared to $424.0 million in the second quarter of 2023. Residential data revenues decreased $16.4 million, or 6.7%, year-over-year due primarily to a 6.9% decrease in average revenue per unit. Residential video revenues decreased $9.0 million, or 13.5%, year-over-year due primarily to a decrease in residential video subscribers, partially offset by a rate adjustment enacted earlier in the year. Business data revenues increased $0.9 million, or 1.6%, year-over-year, due primarily to an increase in business data subscribers.

Net income was $47.6 million in the second quarter of 2024 compared to $55.2 million in the prior year quarter. The year-over-year decrease was due primarily to lower revenues, partially offset by an $8.5 million reduction in programming costs resulting from video customer losses, a $5.5 million severance charge resulting from organizational changes implemented during the quarter and a $7.7 million gain related to C-band spectrum relocation funding received from the federal government. Net profit margin was 12.1% in the second quarter of 2024 compared to 13.0% in the prior year quarter.

Adjusted EBITDA was $212.4 million and $231.3 million for the second quarter of 2024 and 2023, respectively. Adjusted EBITDA margin was 53.8% in the second quarter of 2024 compared to 54.5% in the prior year quarter.

Net cash provided by operating activities was $155.5 million in the second quarter of 2024 compared to $169.6 million in the second quarter of 2023. Capital expenditures for the second quarter of 2024 totaled $71.6 million compared to $81.5 million for the second quarter of 2023. Adjusted EBITDA less capital expenditures for the second quarter of 2024 was $140.8 million compared to $149.8 million in the prior year quarter.

Liquidity and Capital Resources

At June 30, 2024, the Company had $201.5 million of cash and cash equivalents on hand compared to $190.3 million at December 31, 2023. The Company’s debt balance was $3.57 billion and $3.68 billion at June 30, 2024 and December 31, 2023, respectively. The Company had $238.0 million of borrowings and $762.0 million available for borrowing under the Revolver as of June 30, 2024.

The Company paid $17.1 million in dividends to stockholders during the second quarter of 2024.

The Company repaid $50.0 million under the Revolver during the second quarter of 2024 and repaid an additional $50.0 million in July 2024.

The Company's capital expenditures by category for the three months ended June 30, 2024 and 2023 were as follows (in thousands):

 

Three Months Ended June 30,

 

2024

 

2023

Customer premise equipment(1)

$

15,411

 

$

13,061

Commercial(2)

 

2,955

 

 

11,725

Scalable infrastructure(3)

 

9,472

 

 

7,086

Line extensions(4)

 

18,372

 

 

10,758

Upgrade/rebuild(5)

 

7,288

 

 

13,818

Support capital(6)

 

18,094

 

 

25,059

Total

$

71,592

 

$

81,507

____________________

(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 second quarter of 2024 on Thursday, August 1, 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 August 1, 2024 until August 15, 2024 at ir.cableone.net.

Additional Information Available on Website

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, 2024, 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, net profit margin, net cash provided by operating activities or capital expenditures as a percentage of net income 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 net interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance and contract termination costs, acquisition-related costs, net (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, net equity method investment (income) loss, net other (income) expense and any special 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, net interest expense, amortization of debt discount and issuance costs, income tax provision, changes in operating assets and liabilities, change in deferred income taxes and certain other 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 less capital expenditures is also a significant performance measure that has 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 served more than one million residential and business customers in 24 states as of June 30, 2024. 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, market expansion plans, announced organizational changes, dividend policy, capital allocation, financing strategy, ability to fund the purchase price payable if the put option associated with the remaining equity interests in Mega Broadband Investments Holdings LLC ("MBI") is exercised, 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 Company’s latest Annual Report on Form 10-K as 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 data 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, including risks associated with the potential exercise of the put option associated with the remaining equity interests in MBI;
• 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 data 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 June 30,

 

 

 

 

(dollars in thousands, except per share data)

2024

 

2023(1)

 

Change

 

% Change

Revenues:

 

 

 

 

 

 

 

Residential data

$

230,404

 

 

$

246,840

 

 

$

(16,436

)

 

(6.7

)%

Residential video

 

57,178

 

 

 

66,137

 

 

 

(8,959

)

 

(13.5

)%

Residential voice

 

8,203

 

 

 

9,507

 

 

 

(1,304

)

 

(13.7

)%

Business data

 

56,687

 

 

 

55,792

 

 

 

895

 

 

1.6

%

Business other

 

18,663

 

 

 

21,020

 

 

 

(2,357

)

 

(11.2

)%

Other

 

23,326

 

 

 

24,728

 

 

 

(1,402

)

 

(5.7

)%

Total Revenues

 

394,461

 

 

 

424,024

 

 

 

(29,563

)

 

(7.0

)%

Costs and Expenses:

 

 

 

 

 

 

 

Operating (excluding depreciation and amortization)

 

105,845

 

 

 

112,804

 

 

 

(6,959

)

 

(6.2

)%

Selling, general and administrative

 

90,770

 

 

 

86,173

 

 

 

4,597

 

 

5.3

%

Depreciation and amortization

 

85,314

 

 

 

87,240

 

 

 

(1,926

)

 

(2.2

)%

(Gain) loss on asset sales and disposals, net

 

2,395

 

 

 

2,767

 

 

 

(372

)

 

(13.4

)%

Total Costs and Expenses

 

284,324

 

 

 

288,984

 

 

 

(4,660

)

 

(1.6

)%

Income from operations

 

110,137

 

 

 

135,040

 

 

 

(24,903

)

 

(18.4

)%

Interest expense, net

 

(34,964

)

 

 

(38,737

)

 

 

3,773

 

 

(9.7

)%

Other income (expense), net

 

(641

)

 

 

(6,593

)

 

 

5,952

 

 

(90.3

)%

Income before income taxes and equity method investment income (loss), net

 

74,532

 

 

 

89,710

 

 

 

(15,178

)

 

(16.9

)%

Income tax provision

 

17,774

 

 

 

20,949

 

 

 

(3,175

)

 

(15.2

)%

Income before equity method investment income (loss), net

 

56,758

 

 

 

68,761

 

 

 

(12,003

)

 

(17.5

)%

Equity method investment income (loss), net

 

(9,109

)

 

 

(13,515

)

 

 

4,406

 

 

(32.6

)%

Net income

$

47,649

 

 

$

55,246

 

 

$

(7,597

)

 

(13.8

)%

 

 

 

 

 

 

 

 

Net Income per Common Share:

 

 

 

 

 

 

 

Basic

$

8.48

 

 

$

9.76

 

 

$

(1.28

)

 

(13.1

)%

Diluted

$

8.16

 

 

$

9.36

 

 

$

(1.20

)

 

(12.8

)%

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

Basic

 

5,620,592

 

 

 

5,660,751

 

 

 

(40,159

)

 

(0.7

)%

Diluted

 

6,029,382

 

 

 

6,070,996

 

 

 

(41,614

)

 

(0.7

)%

 

 

 

 

 

 

 

 

Unrealized gain (loss) on cash flow hedges and other, net of tax

$

(693

)

 

$

21,711

 

 

$

(22,404

)

 

(103.2

)%

Comprehensive income

$

46,956

 

 

$

76,957

 

 

$

(30,001

)

 

(39.0

)%

____________________

(1)

Interest and investment income for the three months ended June 30, 2023 has been reclassified from Other income (expense), net, to Interest expense, net, to conform to the current year presentation.

CABLE ONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in thousands, except par values)

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

201,518

 

 

$

190,289

 

Accounts receivable, net

 

66,051

 

 

 

93,973

 

Prepaid and other current assets

 

71,177

 

 

 

58,116

 

Total Current Assets

 

338,746

 

 

 

342,378

 

Equity investments

 

1,128,363

 

 

 

1,125,447

 

Property, plant and equipment, net

 

1,785,765

 

 

 

1,791,120

 

Intangible assets, net

 

2,563,427

 

 

 

2,595,892

 

Goodwill

 

928,947

 

 

 

928,947

 

Other noncurrent assets

 

82,393

 

 

 

63,149

 

Total Assets

$

6,827,641

 

 

$

6,846,933

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current Liabilities:

 

 

 

Accounts payable and accrued liabilities

$

142,297

 

 

$

156,645

 

Deferred revenue

 

26,270

 

 

 

27,169

 

Current portion of long-term debt

 

18,898

 

 

 

19,023

 

Total Current Liabilities

 

187,465

 

 

 

202,837

 

Long-term debt

 

3,521,450

 

 

 

3,626,928

 

Deferred income taxes

 

972,144

 

 

 

974,467

 

Other noncurrent liabilities

 

182,958

 

 

 

169,556

 

Total Liabilities

 

4,864,017

 

 

 

4,973,788

 

 

 

 

 

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 5,619,200 and 5,616,987 shares outstanding as of June 30, 2024 and December 31, 2023, respectively)

 

62

 

 

 

62

 

Additional paid-in capital

 

622,150

 

 

 

607,574

 

Retained earnings

 

1,886,596

 

 

 

1,825,542

 

Accumulated other comprehensive income (loss)

 

54,326

 

 

 

36,745

 

Treasury stock, at cost (556,199 and 558,412 shares held as of June 30, 2024 and December 31, 2023, respectively)

 

(599,510

)

 

 

(596,778

)

Total Stockholders' Equity

 

1,963,624

 

 

 

1,873,145

 

Total Liabilities and Stockholders' Equity

$

6,827,641

 

 

$

6,846,933

 

CABLE ONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Three Months Ended June 30,

(in thousands)

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income

$

47,649

 

 

$

55,246

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

85,314

 

 

 

87,240

 

Amortization of debt discount and issuance costs

 

2,189

 

 

 

2,274

 

Equity-based compensation

 

7,111

 

 

 

5,999

 

Change in deferred income taxes

 

(5,628

)

 

 

1,354

 

(Gain) loss on asset sales and disposals, net

 

2,396

 

 

 

2,766

 

Equity method investment (income) loss, net

 

9,109

 

 

 

13,515

 

Fair value adjustments

 

8,360

 

 

 

6,508

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(5,521

)

 

 

(28,462

)

Prepaid and other current assets

 

4,081

 

 

 

8,852

 

Accounts payable and accrued liabilities

 

3,560

 

 

 

4,378

 

Deferred revenue

 

(809

)

 

 

3,859

 

Other

 

(2,263

)

 

 

6,035

 

Net cash provided by operating activities

 

155,548

 

 

 

169,564

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Cash paid for debt and equity investments

 

(20,000

)

 

 

(14,704

)

Capital expenditures

 

(71,592

)

 

 

(81,507

)

Change in accrued expenses related to capital expenditures

 

(1,749

)

 

 

(3,170

)

Proceeds from sales of property, plant and equipment

 

575

 

 

 

565

 

Net cash used in investing activities

 

(92,766

)

 

 

(98,816

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payment of debt issuance costs

 

—

 

 

 

(198

)

Payments on long-term debt

 

(54,813

)

 

 

(54,719

)

Repurchases of common stock

 

—

 

 

 

(41,368

)

Payment of withholding tax for equity awards

 

(77

)

 

 

(122

)

Dividends paid to stockholders

 

(17,107

)

 

 

(16,339

)

Net cash used in financing activities

 

(71,997

)

 

 

(112,746

)

 

 

 

 

Change in cash and cash equivalents

 

(9,215

)

 

 

(41,998

)

Cash and cash equivalents, beginning of period

 

210,733

 

 

 

202,732

 

Cash and cash equivalents, end of period

$

201,518

 

 

$

160,734

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

Cash paid for interest, net of capitalized interest

$

43,605

 

 

$

46,179

 

Cash paid for income taxes, net of refunds received

$

26,349

 

 

$

17,882

 

CABLE ONE, INC.

RECONCILIATIONS OF NON-GAAP MEASURES

(Unaudited)

 

Three Months Ended June 30,

 

 

 

 

(dollars in thousands)

2024

 

2023

 

$ Change

 

% Change

Net income

$

47,649

 

 

$

55,246

 

 

$

(7,597

)

 

(13.8

)%

Net profit margin

 

12.1

%

 

 

13.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Plus: Interest expense, net

 

34,964

 

 

 

38,737

 

 

 

(3,773

)

 

(9.7

)%

Income tax provision

 

17,774

 

 

 

20,949

 

 

 

(3,175

)

 

(15.2

)%

Depreciation and amortization

 

85,314

 

 

 

87,240

 

 

 

(1,926

)

 

(2.2

)%

Equity-based compensation

 

7,111

 

 

 

5,999

 

 

 

1,112

 

 

18.5

%

Severance and contract termination costs

 

5,544

 

 

 

—

 

 

 

5,544

 

 

NM

 

Acquisition-related costs

 

209

 

 

 

248

 

 

 

(39

)

 

(15.7

)%

(Gain) loss on asset sales and disposals, net

 

2,395

 

 

 

2,767

 

 

 

(372

)

 

(13.4

)%

System conversion costs

 

1,230

 

 

 

—

 

 

 

1,230

 

 

NM

 

Rebranding costs

 

432

 

 

 

—

 

 

 

432

 

 

NM

 

Equity method investment (income) loss, net

 

9,109

 

 

 

13,515

 

 

 

(4,406

)

 

(32.6

)%

Other (income) expense, net

 

641

 

 

 

6,593

 

 

 

(5,952

)

 

(90.3

)%

Adjusted EBITDA

$

212,372

 

 

$

231,294

 

 

$

(18,922

)

 

(8.2

)%

Adjusted EBITDA margin

 

53.8

%

 

 

54.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Less: Capital expenditures

$

71,592

 

 

$

81,507

 

 

$

(9,915

)

 

(12.2

)%

Capital expenditures as a percentage of net income

 

150.2

%

 

 

147.5

%

 

 

 

 

Capital expenditures as a percentage of Adjusted EBITDA

 

33.7

%

 

 

35.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA less capital expenditures

$

140,780

 

 

$

149,787

 

 

$

(9,007

)

 

(6.0

)%

____________________

NM = Not meaningful.

 

Three Months Ended June 30,

 

 

 

 

(dollars in thousands)

2024

 

2023

 

$ Change

 

% Change

Net cash provided by operating activities

$

155,548

 

 

$

169,564

 

 

$

(14,016

)

 

(8.3

)%

Capital expenditures

 

(71,592

)

 

 

(81,507

)

 

 

9,915

 

 

(12.2

)%

Interest expense, net

 

34,964

 

 

 

38,737

 

 

 

(3,773

)

 

(9.7

)%

Amortization of debt discount and issuance costs

 

(2,189

)

 

 

(2,274

)

 

 

85

 

 

(3.7

)%

Income tax provision

 

17,774

 

 

 

20,949

 

 

 

(3,175

)

 

(15.2

)%

Changes in operating assets and liabilities

 

951

 

 

 

5,338

 

 

 

(4,387

)

 

(82.2

)%

Change in deferred income taxes

 

5,628

 

 

 

(1,354

)

 

 

6,982

 

 

NM

 

Acquisition-related costs

 

209

 

 

 

248

 

 

 

(39

)

 

(15.8

)%

Severance and contract termination costs

 

5,544

 

 

 

—

 

 

 

5,544

 

 

NM

 

System conversion costs

 

1,230

 

 

 

—

 

 

 

1,230

 

 

NM

 

Rebranding costs

 

432

 

 

 

—

 

 

 

432

 

 

NM

 

Fair value adjustments

 

(8,360

)

 

 

(6,508

)

 

 

(1,852

)

 

28.5

%

Other (income) expense, net

 

641

 

 

 

6,593

 

 

 

(5,952

)

 

(90.3

)%

Adjusted EBITDA less capital expenditures

$

140,780

 

 

$

149,787

 

 

$

(9,007

)

 

(6.0

)%

____________________

NM = Not meaningful.

CABLE ONE, INC.

OPERATING STATISTICS

(Unaudited)

 

As of June 30,

 

 

(in thousands, except percentages and ARPU data)

2024

 

2023

 

Change

 

% Change

Homes Passed

 

2,809.2

 

 

 

2,733.9

 

 

 

75.2

 

 

2.8

%

 

 

 

 

 

 

 

 

Residential Customers

 

992.9

 

 

 

998.8

 

 

 

(5.9

)

 

(0.6

)%

 

 

 

 

 

 

 

 

Data PSUs

 

963.2

 

 

 

960.1

 

 

 

3.1

 

 

0.3

%

Video PSUs

 

118.8

 

 

 

149.2

 

 

 

(30.4

)

 

(20.4

)%

Voice PSUs

 

72.7

 

 

 

84.7

 

 

 

(12.0

)

 

(14.1

)%

Total residential PSUs

 

1,154.7

 

 

 

1,193.9

 

 

 

(39.3

)

 

(3.3

)%

 

 

 

 

 

 

 

 

Business Customers

 

102.8

 

 

 

102.2

 

 

 

0.6

 

 

0.6

%

 

 

 

 

 

 

 

 

Data PSUs

 

99.6

 

 

 

97.8

 

 

 

1.7

 

 

1.8

%

Video PSUs

 

7.2

 

 

 

9.0

 

 

 

(1.7

)

 

(19.2

)%

Voice PSUs

 

38.9

 

 

 

40.3

 

 

 

(1.4

)

 

(3.6

)%

Total business services PSUs

 

145.7

 

 

 

147.1

 

 

 

(1.4

)

 

(1.0

)%

 

 

 

 

 

 

 

 

Total Customers

 

1,095.7

 

 

 

1,101.0

 

 

 

(5.3

)

 

(0.5

)%

Total non-video

 

967.3

 

 

 

940.5

 

 

 

26.9

 

 

2.9

%

Percent of total

 

88.3

%

 

 

85.4

%

 

 

 

2.9

%

 

 

 

 

 

 

 

 

Data PSUs

 

1,062.8

 

 

 

1,057.9

 

 

 

4.8

 

 

0.5

%

Video PSUs

 

126.0

 

 

 

158.1

 

 

 

(32.1

)

 

(20.3

)%

Voice PSUs

 

111.6

 

 

 

125.0

 

 

 

(13.4

)

 

(10.7

)%

Total PSUs

 

1,300.4

 

 

 

1,341.1

 

 

 

(40.7

)

 

(3.0

)%

 

 

 

 

 

 

 

 

Penetration

 

 

 

 

 

 

 

Data

 

37.8

%

 

 

38.7

%

 

 

 

(0.9

)%

Video

 

4.5

%

 

 

5.8

%

 

 

 

(1.3

)%

Voice

 

4.0

%

 

 

4.6

%

 

 

 

(0.6

)%

 

 

 

 

 

 

 

 

Share of Second Quarter Revenues

 

 

 

 

 

 

 

Residential data

 

58.4

%

 

 

58.2

%

 

 

 

0.2

%

Business services

 

19.1

%

 

 

18.1

%

 

 

 

1.0

%

Total

 

77.5

%

 

 

76.3

%

 

 

 

1.2

%

 

 

 

 

 

 

 

 

ARPU - Second Quarter

 

 

 

 

 

 

 

Residential data(1)

$

79.36

 

 

$

85.20

 

 

$

(5.84

)

 

(6.9

)%

Residential video(1)

$

155.95

 

 

$

143.53

 

 

$

12.42

 

 

8.7

%

Residential voice(1)

$

36.75

 

 

$

36.71

 

 

$

0.04

 

 

0.1

%

Business services(2)

$

244.52

 

 

$

251.02

 

 

$

(6.50

)

 

(2.6

)%

____________________

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/20240801512701/en/

Trish Niemann Vice President, Communications Strategy 602-364-6372 patricia.niemann@cableone.biz

Todd Koetje Chief Financial Officer investor_relations@cableone.biz