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 |
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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 |
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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): |
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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 (800) 688-0796 and provide the conference passcode # 270-569-22. A replay will be available through June 3, 2011 by dialing (866) 233-1854 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).