UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 9, 2013
MONITRONICS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Texas |
|
333-110025 |
|
74-2719343 |
(State or other jurisdiction of |
|
(Commission |
|
(I.R.S. Employer |
incorporation or organization) |
|
File Number) |
|
Identification No.) |
2350 Valley View Lane, # 100
Dallas, Texas 75234
(Address of principal executive offices and zip code)
Registrants telephone number, including area code: (972) 243-7443
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On May 9, 2013, Ascent Capital Group, Inc. (Ascent), the parent company of Monitronics International, Inc. (Monitronics), issued a press release setting forth information, including financial information, which is intended to supplement the financial statements and related Managements Discussion and Analysis of Financial Condition and Results of Operations contained in Ascents Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, which Ascent filed with the Securities and Exchange Commission on May 10, 2013.
The information furnished pursuant to this Form 8-K (including the exhibit hereto) shall not be considered filed under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any of the filings of Ascent or Monitronics under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless Ascent or Monitronics expressly states in such filing that such information is to be considered filed or incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release issued by Ascent Capital Group, Inc. on May 9, 2013 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 14, 2013
|
MONITRONICS INTERNATIONAL, INC. | ||
|
| ||
|
|
| |
|
By: |
/s/ William E. Niles | |
|
|
Name: |
William E. Niles |
|
|
Title: |
Executive Vice President and Secretary |
Exhibit 99.1
ASCENT CAPITAL GROUP ANNOUNCES FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2013
Englewood, CO May 9, 2013 Ascent Capital Group, Inc. (Ascent or the Company) (Nasdaq: ASCMA) has reported results for the three months ended March 31, 2013. Ascent is a holding company that owns Monitronics International, Inc. (Monitronics), one of the nations largest and fastest-growing home security alarm monitoring companies.
Headquartered in Dallas, Texas, Monitronics provides security alarm monitoring services to more than 818,000 residential and commercial customers as of March 31, 2013. Monitronics long-term monitoring contracts provide high margin recurring revenue that results in predictable and stable cash flow.
Highlights(1):
· Ascents net revenue for the three months ended March 31, 2013 increased 22.3%, driven by increases in Monitronics subscriber accounts and increases in average recurring monthly revenue (RMR) per subscriber
· Ascents Adjusted EBITDA(2) for the three months ended March 31, 2013 increased 27.2%
· Ascents balance sheet remains strong with $222.3 million of cash and marketable securities
· Monitronics Adjusted EBITDA for the three months ended March 31, 2013 increased 22.9%
· Monitronics subscriber accounts as of March 31, 2013 increased 15.8% to 818,335
· Monitronics average RMR per subscriber as of March 31, 2013 increased 5.3% to $39.74
· Monitronics completed the repricing of its Senior Secured Credit Facility and amended its interest rate swap arrangements
· Monitronics expects the repricing will result in a pro forma annualized interest expense savings of approximately $8.1 million
Ascent Chairman and Chief Executive Officer, Bill Fitzgerald stated, The business is off to a solid start in 2013 with Monitronics reporting strong double-digit growth in subscribers, revenue and Adjusted EBITDA in the first quarter. Monitronics also successfully completed the repricing of its Senior Secured Credit Facility which will provide significant annual cost savings as well as increased flexibility to invest in future growth.
At the holding company level, we remain focused on acquisitions in the alarm monitoring and related security industry and are confident we will identify and execute on new opportunities that will drive attractive returns for our shareholders.
Mike Haislip, President and Chief Executive Officer of Monitronics said, We delivered another solid performance in the first quarter with 22 percent growth in revenue and 23 percent growth in Adjusted EBITDA. We also saw a 15.8% increase in total subscriber accounts. As previously predicted, attrition levels increased modestly in the quarter given the age of accounts in our portfolio and an increase in disconnects due to relocations as the housing market continues its recovery. Our predictive data indicates that we should expect an increase in attrition through the second and third quarters of 2013 before moderating in the fourth quarter. Finally, our suite of advanced services continued to be an attractive option for subscribers with 48 percent of new customers in the quarter signing up for some form of home automation or interactive services. Despite the increase in telecom and field service costs associated with these services, they continue to provide our business with strong revenue and RMR growth.
(1) Comparisons are year-over-year unless otherwise specified.
(2) For a definition of Adjusted EBITDA and applicable reconciliations, see the Appendix to this release. Ascents net income for the three months ended March 31, 2013 totaled $2.8 million compared to a net loss of $5.1 million for the three months ended March 31, 2012.
Three Months Ended March 31, 2013 Results
Ascent Capital Group, Inc.
For the three months ended March 31, 2013, Ascent reported net revenue of $100.2 million, an increase of 22.3% compared to $81.9 million for the three months ended March 31, 2012. This increase in net revenue is primarily attributable to increases in Monitronics subscriber accounts and average RMR per subscriber.
Ascents total cost of services for the three months ended March 31, 2013 increased 37.5% to $15.2 million. This increase is primarily due to an increased number of accounts monitored across the cellular network and a higher number of customers receiving interactive and home automation services, which result in higher operating and service costs.
Selling, general & administrative (SG&A) costs for the three months ended March 31, 2013 increased 10.8% to $19.7 million, primarily attributable to increases in Monitronics SG&A expenses. The increase in Monitronics SG&A is primarily attributable to increased payroll expenses of approximately $1.0 million. Additionally, Ascents consolidated stock-based compensation expense increased approximately $528,000 over the corresponding prior year period, related to restricted stock and option awards granted to certain employees.
For the three months ended March 31, 2013, Ascents Adjusted EBITDA increased 27.2% to $71.3 million. This increase in Adjusted EBITDA is primarily due to revenue growth at Monitronics, partially offset by higher operating and service costs.
For the three months ended March 31, 2013, Ascent recorded a one-time pre-tax gain of $3.2 million related to the divestiture of an equity investment tied to the Companys legacy businesses. Ascent also divested $1.1 million in legacy real estate assets resulting in a one-time pre-tax gain of $141,000 during the three months ended March 31, 2013.
Ascent reported net income from continuing operations for the three months ended March 31, 2013 of $2.3 million, compared to a net loss of $4.9 million in the three months ended March 31, 2012.
Monitronics International
For the three months ended March 31, 2013, Monitronics reported net revenue of $100.2 million, an increase of 22.3% compared to $81.9 million for the three months ended March 31, 2012. The increase in net revenue is attributable to a 15.8% increase in the number of subscriber accounts and a 5.3% increase in average RMR per subscriber to $39.74 as of March 31, 2013.
Monitronics total cost of services for the three months ended March 31, 2013 increased 37.5% to $15.2 million. The increase for the three months ended March 31, 2013 is primarily attributable to an increased number of accounts monitored across the cellular network and an increase in interactive and home automation services, resulting in higher operating and service costs.
Monitronics SG&A costs for the three months ended March 31, 2013 increased 10.8% to $15.9 million compared to the prior year period. The increased Monitronics SG&A costs are primarily attributable to increased payroll expenses of approximately $1.0 million.
Monitronics Adjusted EBITDA for the three months ended March 31, 2013 was $69.4 million, an increase of 22.9% over the three months ended March 31, 2012. The increase in Adjusted EBITDA for the quarter is primarily due to revenue and subscriber growth. Monitronics Adjusted EBITDA as a percentage of revenue was 69.3% in the first quarter of 2013, compared to 69.0% for the three months ended March 31, 2012.
Monitronics reported net income for the three months ended March 31, 2013 of $1.3 million compared to a net loss of $3.8 million in the prior year period.
The table below presents subscriber data for the twelve months ended March 31, 2013:
|
|
Twelve Months Ended |
| ||
|
|
2013 |
|
2012 |
|
|
|
|
|
|
|
Beginning balance of accounts |
|
706,881 |
|
680,120 |
|
Accounts purchased (a) |
|
206,665 |
|
110,801 |
|
Accounts canceled (b) |
|
(92,696 |
) |
(78,806 |
) |
Canceled accounts guaranteed to be refunded from holdback |
|
(2,515 |
) |
(5,234 |
) |
Ending balance of accounts |
|
818,335 |
|
706,881 |
|
Monthly weighted average accounts |
|
759,180 |
|
695,150 |
|
Attrition rate |
|
(12.2 |
)% |
(11.3 |
)% |
For the three months ended March 31, 2013, Monitronics purchased 28,460 subscriber accounts, compared to 24,174 subscriber accounts in the three months ended March 31, 2012. Purchases from Monitronics core account generation engine, or the accounts that Monitronics buys from authorized dealers on a recurring basis, remained strong this quarter, up 11.5 percent over the same quarter in 2012.
Monitronics trailing twelve month attrition for the period ended March 31, 2013 increased to 12.2% from 11.3% for the twelve months ended March 31, 2012. As expected, attrition levels increased due to the age of accounts in our portfolio and an increase in disconnections due to higher household relocations.
Credit Facility Repricing
On March 25, 2013, Monitronics completed the repricing of its Senior Secured Credit Facility, which is comprised of a $150.0 million revolver and a Term Loan B under which $688.8 million remains outstanding. The repriced facility will now have an interest rate of LIBOR plus 3.25% with a LIBOR floor of 1.00% for the Term Loan B and an interest rate of LIBOR plus 3.75% with a LIBOR floor of 1.00% for the revolver. Concurrently, Monitronics extended the maturity of its Senior Secured Revolving Credit Facility by nine months to December 22, 2017.
In conjunction with the repricing, Monitronics also amended its interest rate swap arrangements resulting in a new weighted average fixed interest rate of 5.0% on its Term Loan B, as compared to 6.2% formerly. Monitronics expects that the repricing will result in pro forma annualized interest expense savings of approximately $8.1 million.
Ascent Liquidity and Capital Resources
At March 31, 2013, on a consolidated basis, Ascent had $100.4 million of cash and cash equivalents, $2.6 million of restricted cash and $142.9 million of marketable securities. The Company may use a portion of these assets to decrease debt obligations, fund stock repurchases, or fund strategic acquisitions or investment opportunities.
During the three months ended March 31, 2013, Monitronics used cash of $46.0 million to fund purchases of subscriber accounts net of holdback and guarantee obligations.
At March 31, 2013, the existing long-term debt of Monitronics includes the principal balance of $1.1 billion under its Senior Notes, Credit Facility, and Credit Revolver. The Senior Notes have an outstanding principal balance of $410.0 million as of March 31, 2013 and mature on April 1, 2020. The Credit Facility term loan has an outstanding principal balance of $688.8 million as of March 31, 2013 and requires principal payments of $1.7 million per quarter with the remaining outstanding balance becoming due on March 23, 2018. The Credit Facility revolver has an outstanding balance of $21.5 million as of March 31, 2013 and becomes due on December 22, 2017.
Conference Call
Ascent will hold a conference call today at 5:00 p.m. ET. To access the call please dial (888) 462-5915 from the United States, or (760) 666-3831 from outside the U.S. The conference call I.D. number is 57694409.
A replay of the call can be accessed through May 16, 2013 by dialing (800) 585-8367 from the U.S., or (404) 537-3406 from outside the U.S. The conference call I.D. number is 57694409.
This call will also be available as a live webcast which can be accessed at Ascents Investor Relations Website at http://www.ascentcapitalgroupinc.com/Investor-Relations.aspx.
Forward Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, acquisition opportunities, market potential, consumer demand for interactive and home automation services, the integration of acquired assets and businesses, estimated interest expense savings, future financial prospects and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of our services, technological innovations in the alarm monitoring industry, competitive issues, continued access to capital on terms acceptable to Ascent, our ability to capitalize on acquisition opportunities, general market and economic conditions, and changes in law and government regulations. These forward-looking statements speak only as of the date of this press release, and Ascent expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Ascents expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Ascent, including the most recent Form 10-K and 10-Q, for additional information about Ascent and about the risks and uncertainties related to Ascents business which may affect the statements made in this press release.
About Ascent Capital Group, Inc.
Ascent is a holding company and owns 100 percent of its operating subsidiary, Monitronics, one of the nations largest, fastest-growing home security alarm monitoring companies, headquartered in Dallas, TX, and certain former subsidiaries of Ascent Media Group, LLC.
###
Contact:
Erica Bartsch
Sloane & Company
212-446-1875
ebartsch@sloanepr.com
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Amounts in thousands, except share amounts
(unaudited)
|
|
March 31, |
|
December 31, |
| ||
|
|
2013 |
|
2012 |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
100,404 |
|
$ |
78,422 |
|
Restricted cash |
|
2,640 |
|
2,640 |
| ||
Marketable securities, at fair value |
|
142,906 |
|
142,587 |
| ||
Trade receivables, net of allowance for doubtful accounts of $1,477 in 2013 and $1,436 in 2012 |
|
11,434 |
|
10,891 |
| ||
Deferred income tax assets, net |
|
3,780 |
|
3,780 |
| ||
Income taxes receivable |
|
132 |
|
132 |
| ||
Prepaid and other current assets |
|
13,482 |
|
15,989 |
| ||
Assets held for sale |
|
7,389 |
|
7,205 |
| ||
Total current assets |
|
282,167 |
|
261,646 |
| ||
|
|
|
|
|
| ||
Property and equipment, net of accumulated depreciation of $31,138 in 2013 and $30,570 in 2012 |
|
54,163 |
|
56,491 |
| ||
Subscriber accounts, net of accumulated amortization of $350,282 in 2013 and $308,487 in 2012 |
|
992,374 |
|
987,975 |
| ||
Dealer network, net of accumulated amortization of $23,100 in 2013 and $20,580 in 2012 |
|
27,333 |
|
29,853 |
| ||
Goodwill |
|
349,227 |
|
349,227 |
| ||
Other assets, net |
|
23,669 |
|
22,634 |
| ||
Assets of discontinued operations |
|
54 |
|
54 |
| ||
Total assets |
|
$ |
1,728,987 |
|
$ |
1,707,880 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
|
$ |
5,872 |
|
$ |
3,664 |
|
Accrued payroll and related liabilities |
|
2,340 |
|
3,504 |
| ||
Other accrued liabilities |
|
37,859 |
|
27,181 |
| ||
Deferred revenue |
|
9,831 |
|
10,327 |
| ||
Purchase holdbacks |
|
11,077 |
|
10,818 |
| ||
Current portion of long-term debt |
|
6,905 |
|
6,950 |
| ||
Liabilities of discontinued operations |
|
6,980 |
|
7,369 |
| ||
Total current liabilities |
|
80,864 |
|
69,813 |
| ||
|
|
|
|
|
| ||
Non-current liabilities: |
|
|
|
|
| ||
Long-term debt |
|
1,108,632 |
|
1,101,433 |
| ||
Derivative financial instruments |
|
12,039 |
|
12,359 |
| ||
Deferred income tax liability, net |
|
8,235 |
|
8,187 |
| ||
Other liabilities |
|
5,437 |
|
5,990 |
| ||
Total liabilities |
|
1,215,207 |
|
1,197,782 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders equity: |
|
|
|
|
| ||
Preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued |
|
|
|
|
| ||
Series A common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding 13,398,279 and 13,389,821 shares at March 31, 2013 and December 31, 2012, respectively |
|
134 |
|
134 |
| ||
Series B common stock, $.01 par value. Authorized 5,000,000 shares; issued and outstanding 736,833 and 737,166 shares at March 31, 2013 and December 31, 2012, respectively |
|
7 |
|
7 |
| ||
Series C common stock, $.01 par value. Authorized 45,000,000 shares; no shares issued |
|
|
|
|
| ||
Additional paid-in capital |
|
1,455,422 |
|
1,453,700 |
| ||
Accumulated deficit |
|
(931,453 |
) |
(934,213 |
) | ||
Accumulated other comprehensive loss |
|
(10,330 |
) |
(9,530 |
) | ||
Total stockholders equity |
|
513,780 |
|
510,098 |
| ||
Total liabilities and stockholders equity |
|
$ |
1,728,987 |
|
$ |
1,707,880 |
|
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Amounts in thousands, except share amounts
(unaudited)
|
|
Three months ended |
| |||
|
|
2013 |
|
2012 |
| |
|
|
|
|
|
| |
Net revenue |
|
$ |
100,158 |
|
81,881 |
|
|
|
|
|
|
| |
Operating expenses: |
|
|
|
|
| |
Cost of services |
|
15,202 |
|
11,059 |
| |
Selling, general, and administrative, including stock-based and long-term incentive compensation |
|
19,737 |
|
17,807 |
| |
Amortization of subscriber accounts and dealer network |
|
44,315 |
|
38,081 |
| |
Depreciation |
|
1,914 |
|
1,906 |
| |
Gain on sale of operating assets, net |
|
(3,391 |
) |
(737 |
) | |
|
|
77,777 |
|
68,116 |
| |
|
|
|
|
|
| |
Operating income |
|
22,381 |
|
13,765 |
| |
|
|
|
|
|
| |
Other income (expense), net: |
|
|
|
|
| |
Interest income |
|
980 |
|
891 |
| |
Interest expense |
|
(21,143 |
) |
(11,640 |
) | |
Realized and unrealized loss on derivative financial instruments |
|
|
|
(2,044 |
) | |
Refinancing expense |
|
|
|
(6,241 |
) | |
Other income, net |
|
870 |
|
1,022 |
| |
|
|
(19,293 |
) |
(18,012 |
) | |
|
|
|
|
|
| |
Income (loss) from continuing operations before income taxes |
|
3,088 |
|
(4,247 |
) | |
Income tax expense from continuing operations |
|
(774 |
) |
(683 |
) | |
Net income (loss) from continuing operations |
|
2,314 |
|
(4,930 |
) | |
|
|
|
|
|
| |
Discontinued operations: |
|
|
|
|
| |
Earnings (loss) from discontinued operations |
|
446 |
|
(284 |
) | |
Income tax expense |
|
|
|
|
| |
Earnings (loss) from discontinued operations, net of income tax |
|
446 |
|
(284 |
) | |
|
|
|
|
|
| |
Net income (loss) |
|
2,760 |
|
(5,214 |
) | |
|
|
|
|
|
| |
Other comprehensive income (loss): |
|
|
|
|
| |
Foreign currency translation adjustments |
|
(375 |
) |
221 |
| |
Unrealized holding gain (loss) on marketable securities |
|
(684 |
) |
1,959 |
| |
Unrealized gain (loss) on derivative contracts |
|
259 |
|
(2,405 |
) | |
Total other comprehensive income (loss), net of tax |
|
(800 |
) |
(225 |
) | |
|
|
|
|
|
| |
Comprehensive income (loss) |
|
$ |
1,960 |
|
(5,439 |
) |
|
|
|
|
|
| |
Basic earnings (loss) per share: |
|
|
|
|
| |
Continuing operations |
|
$ |
0.17 |
|
(0.35 |
) |
Discontinued operations |
|
0.03 |
|
(0.02 |
) | |
Net Income (loss) |
|
$ |
0.20 |
|
(0.37 |
) |
|
|
|
|
|
| |
Diluted earnings (loss) per share: |
|
|
|
|
| |
Continuing operations |
|
$ |
0.16 |
|
(0.35 |
) |
Discontinued operations |
|
0.03 |
|
(0.02 |
) | |
Net Income (loss) |
|
$ |
0.19 |
|
(0.37 |
) |
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Amounts in thousands
(unaudited)
|
|
Three months ended |
| |||
|
|
March 31, |
| |||
|
|
2013 |
|
2012 |
| |
|
|
|
|
|
| |
Cash flows from operating activities: |
|
|
|
|
| |
Net income (loss) |
|
$ |
2,760 |
|
(5,214 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
| |
Loss (earnings) from discontinued operations, net of income tax |
|
(446 |
) |
284 |
| |
Amortization of subscriber accounts and dealer network |
|
44,315 |
|
38,081 |
| |
Depreciation |
|
1,914 |
|
1,906 |
| |
Stock based compensation |
|
1,820 |
|
1,292 |
| |
Deferred income tax expense |
|
109 |
|
134 |
| |
Unrealized gain on derivative financial instruments |
|
|
|
(6,793 |
) | |
Refinancing expense |
|
|
|
6,241 |
| |
Gain on sale of operating assets, net |
|
(3,391 |
) |
(737 |
) | |
Long-term debt amortization |
|
192 |
|
3,915 |
| |
Other non-cash activity, net |
|
2,330 |
|
1,481 |
| |
Changes in assets and liabilities: |
|
|
|
|
| |
Trade receivables |
|
(1,876 |
) |
(413 |
) | |
Prepaid expenses and other assets |
|
2,087 |
|
(110 |
) | |
Payables and other liabilities |
|
10,671 |
|
(854 |
) | |
Operating activities from discontinued operations, net |
|
57 |
|
(252 |
) | |
|
|
|
|
|
| |
Net cash provided by operating activities |
|
60,542 |
|
38,961 |
| |
|
|
|
|
|
| |
Cash flows from investing activities: |
|
|
|
|
| |
Capital expenditures |
|
(1,277 |
) |
(902 |
) | |
Purchases of subscriber accounts |
|
(46,043 |
) |
(37,380 |
) | |
Purchases of marketable securities |
|
(1,003 |
) |
(98,172 |
) | |
Decrease in restricted cash |
|
|
|
51,420 |
| |
Proceeds from the sale of operating assets |
|
4,547 |
|
4,984 |
| |
|
|
|
|
|
| |
Net cash used in investing activities |
|
(43,776 |
) |
(80,050 |
) | |
|
|
|
|
|
| |
Cash flows from financing activities: |
|
|
|
|
| |
Proceeds from long-term debt |
|
24,700 |
|
967,200 |
| |
Repayments of long-term debt |
|
(17,738 |
) |
(976,000 |
) | |
Payments of deferred financing costs and refinancing costs |
|
(1,746 |
) |
(42,940 |
) | |
|
|
|
|
|
| |
Net cash provided by (used in) financing activities |
|
5,216 |
|
(51,740 |
) | |
|
|
|
|
|
| |
Net increase (decrease) in cash and cash equivalents |
|
21,982 |
|
(92,829 |
) | |
|
|
|
|
|
| |
Cash and cash equivalents at beginning of period |
|
78,422 |
|
183,558 |
| |
|
|
|
|
|
| |
Cash and cash equivalents at end of period |
|
$ |
100,404 |
|
90,729 |
|
|
|
|
|
|
| |
Supplemental cash flow information: |
|
|
|
|
| |
State taxes paid |
|
$ |
|
|
17 |
|
Interest paid |
|
10,437 |
|
6,893 |
|
Adjusted EBITDA
We define Adjusted EBITDA as net income before interest expense, interest income, income taxes, depreciation, amortization (including the amortization of subscriber accounts and dealer network), realized and unrealized gain/(loss) on derivative instruments, restructuring charges, stock-based and other non-cash long-term incentive compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of our businesses, including our businesses ability to fund their ongoing acquisition of subscriber accounts, their capital expenditures and to service their debt. In addition, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to certain adjustments, by which Monitronics covenants are calculated under the agreements governing their debt obligations. Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles, should not be construed as an alternative to net income or loss and is indicative neither of our results of operations nor of cash flows available to fund all of our cash needs. It is, however, a measurement that we believe is useful to investors in analyzing our operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Adjusted EBITDA is a non-GAAP financial measure. As companies often define non-GAAP financial measures differently, Adjusted EBITDA as calculated by us should not be compared to any similarly titled measures reported by other companies.
The following table provides a reconciliation of Ascents total Adjusted EBITDA to net loss from continuing operations (amounts in thousands):
Ascent (consolidated)
|
|
Three months ended |
| |||
|
|
March 31, |
| |||
|
|
2013 |
|
2012 |
| |
|
|
|
|
|
| |
Total Adjusted EBITDA |
|
$ |
71,300 |
|
56,066 |
|
Amortization of subscriber accounts and dealer network |
|
(44,315 |
) |
(38,081 |
) | |
Depreciation |
|
(1,914 |
) |
(1,906 |
) | |
Stock-based and long-term incentive compensation |
|
(1,820 |
) |
(1,292 |
) | |
Realized and unrealized loss on derivative instruments |
|
|
|
(2,044 |
) | |
Refinancing costs |
|
|
|
(6,241 |
) | |
Interest income |
|
980 |
|
891 |
| |
Interest expense |
|
(21,143 |
) |
(11,640 |
) | |
Income tax expense from continuing operations |
|
(774 |
) |
(683 |
) | |
|
|
|
|
|
| |
Net income (loss) from continuing operations |
|
$ |
2,314 |
|
(4,930 |
) |
The following table provides a reconciliation of Monitronics Adjusted EBITDA to net income (loss) (amounts in thousands):
Monitronics
|
|
Three months ended |
| |||
|
|
March 31, |
| |||
|
|
2013 |
|
2012 |
| |
|
|
|
|
|
| |
Total Adjusted EBITDA |
|
$ |
69,414 |
|
56,484 |
|
Amortization of subscriber accounts and dealer network |
|
(44,315 |
) |
(38,081 |
) | |
Depreciation |
|
(1,488 |
) |
(1,302 |
) | |
Stock-based and long-term incentive compensation |
|
(361 |
) |
(299 |
) | |
Realized and unrealized loss on derivative instruments |
|
|
|
(2,044 |
) | |
Refinancing costs |
|
|
|
(6,241 |
) | |
Interest expense |
|
(21,127 |
) |
(11,622 |
) | |
Income tax expense |
|
(774 |
) |
(667 |
) | |
|
|
|
|
|
| |
Net income (loss) |
|
$ |
1,349 |
|
(3,772 |
) |