Atlantic Broadband Finance, LLC Reports 2011 First Quarter Financial Results and Conference Call

QUINCY, Mass.--(BUSINESS WIRE)--Atlantic Broadband Finance, LLC (“Atlantic Broadband” or “the Company”) reported today financial results for the period ended March 31, 2011.

Revenue for the three months ended March 31, 2011 was $81.1 million as compared to $77.6 million for the three months ended March 31, 2010, an increase of $3.5 million or 4.5%. This increase was mainly the result of (i) an increase in high-speed data revenue of $1.3 million or 9.2% from continued marketing focus for this service offering driving HSD subscriber growth; (ii) a $0.7 million increase in telephone revenue generated by increases in subscriber levels and (iii) a $1.1 million increase in commercial revenue as we continue to expand our non-residential customer base through targeted marketing efforts. We expect revenues to continue to increase resulting from subscriber growth in our residential digital and residential and commercial high-speed data and telephone service offerings.

Operating expenses for the three months ended March 31, 2011 were $36.2 million as compared to $35.8 million for the same period in 2010. The $0.4 million or 1.1% increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with increased HSD and telephone direct costs. We expect operating expenses to continue to increase at moderate levels as growth in total revenue generating units will result in increased direct expenses, while technical and customer support levels should remain relatively stable.

Selling, general and administrative expenses for the three months ended March 31, 2011 were $12.0 million as compared to $10.2 million for the three months ended March 31, 2010, an increase of $1.8 million. This increase is the result of the incurrence of $2.8 million in fees associated with the Company’s March 2011 Senior Debt re-pricing, offset by reductions of $0.8 million in general and administrative costs mainly related to certain one-time bonus payments made in 2010 coupled with reduction in employee benefit and insurance costs, as well as a $0.2 million decrease in sales and marketing expenses due to lower levels of spending as we apply more targeted marketing campaigns. We expect to see flat expense trends in selling, general and administrative expenses as we maintain consistent levels of spending in these expense categories.

Summary Financial Results:

The following tables summarize financial results for the three month periods ended March 31, 2011 and 2010:

Subscriber information
	3/31/11		12/31/10		3/31/10
EBU's (Equivalent Basic Units)	199,645		201,706		210,982
Digital Subscribers	95,264		92,671		87,379
HSD Residential Subscribers	147,306		143,476		139,238
Telephone Residential Subscribers	69,186		68,340		64,538
Homes Passed	509,930		509,720		506,517
Internet-ready Homes Passed	501,059		502,119		498,916
Telephone-ready Homes Passed	499,137		497,052		490,092
Basic Subscribers	264,393		265,955		275,301
Basic Penetration of Homes Passed	51.8	%	52.2	%	54.4	%
Digital Penetration of Basic Subscribers	36.0	%	34.8	%	31.7	%
HSD Penetration of Internet-ready Homes Passed	29.4	%	28.6	%	27.9	%
Telephone Penetration of telephone-ready Homes Passed	13.9	%	13.7	%	13.2	%

Operating results
		Three Months Ended March 31.
		2011				2010
		Amount		%		Amount		%
		(dollars in thousands)
Revenue:
	Video	$	40,871	50.4	%	$	40,708	52.4	%
	High Speed Data		15,894	19.6			14,550	18.7
	Telephone		7,292	9.0			6,518	8.4
	Advertising Sales		1,920	2.3			1,893	2.4
	Commercial		9,088	11.2			7,971	10.3
	Other		6,060	7.5			6,023	7.8
Total revenue		$	81,125	100.0	%	$	77,663	100.0	%
Costs and expenses:
	Operating (excluding depreciation and
	amortization and other items listed below)		36,162	44.6	%		35,821	46.1	%
	Selling, general and administrative		12,042	14.8	%		10,151	13.1	%
	Depreciation and amortization		10,987	13.5	%		10,401	13.4	%
	Income from operations		21,934				21,290

Reconciliation of Income from operations to EBITDA (in thousands):
		Three Months
		Ended
		March 31, 2011
Income from operations		$	21,934
Plus:	Depreciation and amortization		10,987
EBITDA		$	32,921

Liquidity and Cash Flow:

Total debt outstanding at March 31, 2011 was $690.0 million and cash balances were $5.5 million at quarter end. On an annualized basis, EBITDA for the trailing six months ended March 31, 2011, adjusted for certain expenditures as defined in the Company’s credit agreement totaling $8.5 million, the majority of this relating to fees associated with our November 2010 Senior Facility re-financing and our March 2011 Senior Debt re-pricing, resulted in a total leverage ratio as defined in said credit agreement of approximately 4.8x.

Conference Call:

The Company will host a conference call at 11:00 am EDT on Friday May 20, 2011 to discuss the financial results. To access the conference call, interested parties may dial [phone] and provide the conference passcode # 270-569-22. A replay will be available through June 3, 2011 by dialing [phone] and providing the passcode # 567-793-76.

Note Regarding Forward-Looking Statements:

Statements in this release that are “forward-looking statements” are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as “intends”, “expects”, “expected”, “anticipates” or variations of such words and similar expressions are intended to identify such forward-looking statements. Key risks are described in the Company’s report filed with the Securities and Exchange Commission (SEC).