EX-99.1 2 d723294dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO    For Immediate Release

Mediacom Broadband LLC and Mediacom LLC Report

Results for First Quarter 2014

 

 

Mediacom Park, NY – May 6, 2014 – MEDIACOM BROADBAND LLC AND MEDIACOM LLC, wholly-owned subsidiaries of Mediacom Communications Corporation, today each reported unaudited financial and operating highlights for the three months ended March 31, 2014.

Mediacom Broadband LLC*

 

    Revenues were $232.6 million, reflecting a 3.2% increase from the prior year period

 

    Operating income before depreciation and amortization (“OIBDA”) was $90.2 million, reflecting a 7.0% increase from the prior year period

 

    Free cash flow of $31.3 million, compared to $24.9 million in the prior year period

 

    Net quarterly increase of 11,000 primary service units (“PSUs”), compared to a net increase of 21,000 PSUs in the prior year period

Mediacom LLC*

 

    Revenues were $175.7 million, reflecting a 2.8% increase from the prior year period

 

    Adjusted OIBDA was $70.4 million, reflecting a 2.8% increase from the prior year period

 

    Free cash flow of $22.8 million, compared to $16.9 million in the prior year period

 

    Net quarterly increase of 4,000 PSUs, compared to a net increase of 12,000 PSUs in the prior year period

About Mediacom

Mediacom Communications Corporation is the nation’s eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities in the United States, with a significant customer concentration in the Midwestern and Southeastern regions. Mediacom Communications offers a wide array of information, communications and entertainment services, including video, high-speed data and phone, and provides innovative broadband communications solutions through its Mediacom Business division that can be tailored to any size business. Mediacom Communications sells advertising and production services through its OnMedia division. More information about Mediacom Communications is available at www.mediacomcc.com.

 

Contacts:  

Investor Relations

 

Media Relations

Mark E. Stephan

 

Thomas J. Larsen

Executive Vice President
and Chief Financial Officer

 

Group Vice President,
Legal and Public Affairs

(845) 443-2640

 

(845) 443-2754

 

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


TABLE 1*

Mediacom Broadband LLC

Selected Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

     Three Months Ended
March 31,
       
     2014     2013     YoY% Change  

Video

   $ 113,485      $ 113,618        (0.1 )% 

High-speed data

     64,759        60,366        7.3

Phone

     15,849        16,519        (4.1 )% 

Business services

     27,505        23,441        17.3

Advertising

     10,955        11,321        (3.2 )% 
  

 

 

   

 

 

   

 

 

 

Total revenues

   $ 232,553      $ 225,265        3.2

Service costs

     (93,990     (92,236     1.9

SG&A expenses

     (44,102     (44,796     (1.5 )% 

Management fees

     (4,300     (4,000     7.5
  

 

 

   

 

 

   

 

 

 

OIBDA (a)

   $ 90,161      $ 84,233        7.0

Cash interest expense (a)

     (21,642     (23,544     (8.1 )% 

Capital expenditures (b)

     (32,742     (31,290     4.6

Dividend to preferred members

     (4,500     (4,500     —     
  

 

 

   

 

 

   

 

 

 

Free cash flow (a)

   $ 31,277      $ 24,899        25.6
  

 

 

   

 

 

   

 

 

 

OIBDA margin (c)

     38.8     37.4  

 

     March 31, 2014     March 31, 2013  

Video customers

     524,000        558,000   

High-speed data (“HSD”) customers

     546,000        520,000   

Phone customers

     210,000        196,000   
  

 

 

   

 

 

 

Primary service units (“PSUs”)

     1,280,000        1,274,000   

Video customer declines

     (4,000     —     

HSD customer increases

     12,000        15,000   

Phone customer increases

     3,000        6,000   
  

 

 

   

 

 

 

Quarterly PSU increases

     11,000        21,000   

Customer relationships (d)

     714,000        714,000   

Average total monthly revenue per:

    

PSU (e)

   $ 60.82      $ 59.43   

Customer relationship (f)

   $ 108.87      $ 105.61   
     March 31, 2014     March 31, 2013  

Bank credit facility

   $ 1,363,000      $ 1,644,000   

5 12% senior notes due 2021

     200,000        —     

6 38% senior notes due 2023

     300,000        300,000   
  

 

 

   

 

 

 

Total debt

   $ 1,863,000      $ 1,944,000   

Total leverage ratio (g)

     5.17     5.77

Interest coverage ratio (h)

     4.17     3.58

 

* See Tables 3 and 5.

 

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TABLE 2*

Mediacom LLC

Selected Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

     Three Months Ended
March 31,
       
     2014     2013     YoY% Change  

Video

   $ 86,946      $ 87,123        (0.2 )% 

High-speed data

     53,346        49,800        7.1

Phone

     14,330        14,894        (3.8 )% 

Business services

     17,676        15,867        11.4

Advertising

     3,441        3,335        3.2
  

 

 

   

 

 

   

 

 

 

Total revenues

   $ 175,739      $ 171,019        2.8

Service costs

     (76,648     (76,122     0.7

SG&A expenses

     (30,021     (27,932     7.5

Management fees

     (3,200     (3,000     6.7
  

 

 

   

 

 

   

 

 

 

OIBDA (a)

   $ 65,870      $ 63,965        3.0

Investment income from affiliate

     4,500        4,500        —     
  

 

 

   

 

 

   

 

 

 

Adjusted OIBDA (a)

   $ 70,370      $ 68,465        2.8

Cash interest expense (a)

     (22,965     (22,810     0.7

Capital expenditures (b)

     (24,626     (28,754     (14.4 )% 
  

 

 

   

 

 

   

 

 

 

Free cash flow (a)

   $ 22,779      $ 16,901        34.8
  

 

 

   

 

 

   

 

 

 

Adjusted OIBDA margin (i)

     40.0     40.0  

 

     March 31, 2014     March 31, 2013  

Video customers

     413,000        441,000   

High-speed data (“HSD”) customers

     438,000        420,000   

Phone customers

     180,000        169,000   
  

 

 

   

 

 

 

Primary service units (“PSUs”)

     1,031,000        1,030,000   

Video customer declines

     (4,000     (1,000

HSD customer increases

     7,000        10,000   

Phone customer increases

     1,000        3,000   
  

 

 

   

 

 

 

Quarterly PSU increases

     4,000        12,000   

Customer relationships (d)

     577,000        574,000   

Average total monthly revenue per:

    

PSU (e)

   $ 56.93      $ 55.67   

Customer relationship (f)

   $ 101.70      $ 99.57   
     March 31, 2014     March 31, 2013  

Bank credit facility

   $ 862,000      $ 922,000   

9 18% senior notes due 2019

     350,000        350,000   

7 14% senior notes due 2022

     250,000        250,000   
  

 

 

   

 

 

 

Total debt

   $ 1,462,000      $ 1,522,000   

Total leverage ratio (g)

     5.19     5.56

Interest coverage ratio (h)

     3.06     3.00

 

* See Tables 4 and 5.

 

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TABLE 3

Mediacom Broadband LLC

Reconciliation of Non-GAAP Measures

(Dollars in thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2014     2013  

Free cash flow

   $ 31,277      $ 24,899   

Capital expenditures

     32,742        31,290   

Dividend to preferred members

     4,500        4,500   

Other expense, net

     (404     (152

Changes in assets and liabilities, net

     14,416        1,354   
  

 

 

   

 

 

 

Net cash flows provided by operating activities

   $ 82,531      $ 61,891   
  

 

 

   

 

 

 

OIBDA

   $ 90,161      $ 84,233   

Depreciation and amortization

     (39,013     (38,688
  

 

 

   

 

 

 

Operating income

   $ 51,148      $ 45,545   
  

 

 

   

 

 

 

Cash interest expense

   $ 21,642      $ 23,544   

Amortization of deferred financing costs

     1,319        1,362   
  

 

 

   

 

 

 

Interest expense, net

   $ 22,961      $ 24,906   
  

 

 

   

 

 

 

TABLE 4

Mediacom LLC

Reconciliation of Non-GAAP Measures

(Dollars in thousands)

(Unaudited)

 

     Three Months Ended
March 31,
 
     2014     2013  

Free cash flow

   $ 22,779      $ 16,901   

Capital expenditures

     24,626        28,754   

Other expense, net

     (381     (422

Changes in assets and liabilities, net

     (29,696     (15,787
  

 

 

   

 

 

 

Net cash flows provided by operating activities

   $ 17,328      $ 29,446   
  

 

 

   

 

 

 

Adjusted OIBDA

   $ 70,370      $ 68,465   

Investment income from affiliate

     (4,500     (4,500
  

 

 

   

 

 

 

OIBDA

   $ 65,870      $ 63,965   

Depreciation and amortization

     (28,731     (28,316
  

 

 

   

 

 

 

Operating income

   $ 37,139      $ 35,649   
  

 

 

   

 

 

 

Cash interest expense

   $ 22,965      $ 22,810   

Amortization of deferred financing costs

     937        805   
  

 

 

   

 

 

 

Interest expense, net

   $ 23,902      $ 23,615   
  

 

 

   

 

 

 

 

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TABLE 5

Use of Non-GAAP Financial Measures

“OIBDA,” “Adjusted OIBDA,” “cash interest expense” and “free cash flow” 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. We define cash interest expense as interest expense, net, less amortization of deferred financing costs. For Mediacom Broadband LLC, we define free cash flow as OIBDA less capital expenditures, cash interest expense and dividends to preferred members. For Mediacom LLC, we define free cash flow as Adjusted OIBDA less capital expenditures and cash interest expense. OIBDA, Adjusted OIBDA, cash interest expense and free cash flow have inherent limitations as discussed below.

OIBDA and Adjusted OIBDA are some of the primary measures used by management to evaluate our performance and to forecast future results. We believe OIBDA and Adjusted OIBDA are useful for investors because it enables them to assess our performance in a manner similar to the methods used by management, and provides a measure that can be used to analyze value and compare the companies in the cable industry. A limitation of OIBDA and Adjusted OIBDA, however, is that they exclude depreciation and amortization, which represents the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management utilizes a separate process to budget, measure and evaluate capital expenditures. 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, as defined under our debt arrangements.

Free cash flow is used by management to evaluate our ability to repay debt, and to facilitate the growth of our business with internally generated funds. A limitation of free cash flow, however, is that it may be affected by the timing of our capital spending. We believe free cash flow is useful for investors for the same reasons and provides measures that can be used to analyze value and compare companies in the cable industry, although our measure of free cash flow may not be directly comparable to similar measures reported by other companies.

OIBDA, Adjusted OIBDA and free cash flow should not be regarded as alternatives to operating income or net income as indicators of operating performance, or to the statement of cash flows as measures of liquidity, nor should they be considered in isolation or as substitutes for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA and Adjusted OIBDA, and that net cash flows provided by operating activities is the most directly comparable GAAP financial measure to free cash flow.

Cash interest expense excludes the amortization of financing costs which were paid upon the financing of the relevant debt. We believe cash interest expense is useful for investors because it enables them to assess our cost of debt for the current period without including the amortization of financing costs that were previously paid. We believe interest expense, net, is the most directly comparable GAAP financial measure to cash interest expense.

For reconciliations of OIBDA, Adjusted OIBDA, cash interest expense and free cash flow to their most directly comparable GAAP financial measures, see Tables 3 and 4.

 

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Cautionary Statement Regarding Forward-Looking Statements

In this press release, we state our beliefs of future events and of our future financial performance. These forward-looking statements are not guarantees of future performance or results, and are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those we anticipate as a result of various factors, many of which are beyond our control. Factors that may cause such differences to occur include, but are not limited to: increased levels of competition; greater than anticipated programming and other service costs; our ability to generate sufficient cash flow to meet our debt service obligations; and other risks and uncertainties discussed in the most recent Annual Reports on Form 10-K for each of Mediacom Broadband LLC and Mediacom LLC. We disclaim any obligation to update any forward-looking statements contained herein, except as required by applicable federal securities laws.

NOTES:

 

(a)  See Table 5 for information about our use of Non-GAAP financial measures.
(b)  Capital expenditures exclude changes in accrued property, plant and equipment, which represented a cash source of $4.3 million and $1.8 at Mediacom Broadband LLC and Mediacom LLC, respectively, during the three months ended March 31, 2014, and a cash use of $0.5 million and $0.7 million at Mediacom Broadband LLC and Mediacom LLC, respectively, during the three months ended March 31, 2013.
(c)  Represents OIBDA as a percentage of total revenues.
(d)  Represents the total number of customers that receive at least one service, without regard to which service(s) customers purchase.
(e)  Represents average total monthly revenues for the quarter divided by average PSUs for such quarter.
(f)  Represents average total monthly revenues for the quarter divided by average customer relationships for such quarter.
(g)  For Mediacom Broadband LLC, represents total debt at quarter end divided by annualized OIBDA for the quarter. For Mediacom LLC, represents total debt at quarter end divided by annualized Adjusted OIBDA for the quarter.
(h)  For Mediacom Broadband LLC, represents OIBDA divided by cash interest expense for the quarter. For Mediacom LLC, represents Adjusted OIBDA divided by cash interest expense for the quarter.
(i)  Represents Adjusted OIBDA as a percentage of total revenues.

 

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