- Increased commercial and carrier revenue by 4.2% year
over year led by our Metro Ethernet services
- Delivered over 2,000 net data adds in the quarter and a
3.2% year over year increase in pro forma data and internet
revenues
- Successfully closed on the acquisition of Enventis
expanding and diversifying into an additional five
states
- Generated $4.5 million in synergies at close and an
additional $1.0 million by year-end
- Repurchased $72.8 million of senior notes due 2020
resulting in approximately $4.0 million of annualized interest
savings
Consolidated Communications Holdings, Inc. (Nasdaq:CNSL) reported
results for the fourth quarter and full year 2014.
Fourth quarter financial summary:
- Pro forma revenue was $192.6 million.
- Net cash from continuing operations was $54.4 million.
- Pro forma Adjusted EBITDA was $80.6 million.
- Dividend payout ratio was 63.4%.
"Consolidated's fourth quarter capped off another solid year for
the Company," said Bob Udell, President and Chief Executive
Officer. "Our strategic focus on delivering high bandwidth data
services and solutions to businesses and consumers has continued
our successful transition to a broadband driven company. During the
quarter, we added over 2,000 net data connections and increased the
percentage of revenues from business and broadband to 80% of total
revenues."
"We are excited about the opportunities with the Enventis
acquisition and are continuing to execute on our integration and
synergy plans. The combined business has greater scale and creates
opportunities for growth and expansion, all of which provide
benefits to our shareholders, customers and employees," Udell
concluded.
Operating Statistics at December 31, 2014, Compared to
Pro Forma December 31, 2013.
|
|
|
|
|
Period Ended December 31, |
|
|
|
2014 |
2013 |
Increase/(decrease) |
% |
|
|
|
|
|
Data connections |
289,658 |
281,079 |
8,579 |
3.1% |
Video connections |
122,832 |
122,292 |
540 |
0.5% |
Voice connections |
436,962 |
458,065 |
(21,103) |
(4.6%) |
Total connections |
849,452 |
861,436 |
(11,984) |
(1.4%) |
"During September, we raised and escrowed $200.0 million in 6.5%
unsecured senior notes due 2022," said Steve Childers, Chief
Financial Officer. "At the close of the Enventis acquisition,
we used approximately $150.0 million of the new bond proceeds to
retire Enventis' debt. During the fourth quarter, we used
excess bond proceeds of $50.0 million, as well as cash on hand and
the revolver to fund two repurchases of our 10 7/8% unsecured
senior notes due 2020. In total, we retired $72.8 million
principal amount of the 2020 notes, which will result in
approximately $4.0 million in annualized cash interest
savings."
Cash Available to Pay Dividends
For the quarter, cash available to pay dividends, or CAPD, was
$24.6 million, and the dividend payout ratio was 63.4%. At
December 31, 2014, cash and cash equivalents were $6.7
million. Pro forma capital expenditures for the quarter were
$35.4 million.
Pro Forma Financial Results for the Fourth
Quarter
- Revenues were $192.6 million, compared to $194.2 million for
the fourth quarter of 2013. Increases in data and internet
revenues and subsidies were more than offset by declines in local
calling and network access revenues.
- Income from operations was $25.9 million, compared to $22.4
million in the fourth quarter of 2013. The increase was
primarily due to synergy realization from the Enventis acquisition
and efficiency improvements.
- Interest expense, net was $22.3 million, compared to $22.0
million for the same period last year. The increase was mostly
attributable to the $200.0 million in senior notes due 2022 raised
for the Enventis acquisition and held in escrow for approximately
six weeks prior to the close of the acquisition.
- Other income, net was a loss of $5.3 million, compared to
income of $3.1 million for the same period in 2013. The fourth
quarter of 2014 included a $13.8 million loss on the extinguishment
of debt for bond repurchases compared to a $7.7 million loss on
extinguishment of debt for the successful refinancing of our
secured bank facility in the fourth quarter of 2013. Cash
distributions from our Verizon Wireless partnerships were $9.2
million compared to $10.5 million for the fourth quarter of
2013.
- Adjusted diluted net income per share excludes items in the
manner described in the table provided in this
release. Adjusted diluted net income per share for the current
quarter was $0.16 compared to $0.15 for the prior year
period. In addition to the loss on the extinguishment of debt,
the current period also included material transaction related
costs. Prior to the adjustments, diluted net loss per common
share was $0.12 compared to net income of $0.04 in the fourth
quarter of 2013.
- Adjusted EBITDA was $80.6 million compared to $82.3 million for
the same period in 2013.
- The total net debt to last twelve month adjusted EBITDA
coverage ratio was 4.15 times to one.
Pro Forma Financial Results the Twelve Months Ended
December 31, 2014
- Revenues were $790.7 million and adjusted EBITDA was $328.1
million.
GAAP Financial Results for the Fourth
Quarter
- In the fourth quarter under Generally Accepted Accounting
Principles (GAAP), revenues were $186.0 million, income from
operations was $15.6 million and net loss was $10.7 million, or
$0.22 per share.
- GAAP results include approximately $10.8 million in pre-tax
acquisition and transaction related costs and $13.8 million in a
pre-tax loss on extinguishment of debt.
Financial Guidance
The Company is providing the following full year
guidance. The table below reflects pro forma results for the
full year of 2014.
|
|
|
|
2015
Guidance |
2014 Pro Forma
Results |
|
|
|
Cash Interest Expense |
$78.0 million to $81.0 million |
$81.4 million |
Cash Income Taxes |
$4.0 million to $8.0 million |
$12.4 million |
Capital Expenses* |
$122.0 million to $129.0 million |
$131.3 million |
*2015 capital guidance includes $5.2
million of integration related expenses.
Dividend Payments
On February 20, 2015, the Company's board of directors declared
its next quarterly dividend of $0.38738 per common share, which is
payable on May 1, 2015 to stockholders of record at the close of
business on April 15, 2015. This will represent the 39th
consecutive quarterly dividend paid by the Company.
Conference Call Information
The Company will host a conference call today at 11:00 a.m.
Eastern Time / 10:00 a.m. Central Time to discuss fourth quarter
and full year earnings and developments with respect to the
Company. The call is being webcast and archived on the
"Investor Relations" section of the Company's website at
http://www.consolidated.com. If you do not have internet
access, the conference call dial-in number is 1-877-374-3981 with
pass code 66508698. International parties can access the call
by dialing 1-253-237-1158. A telephonic replay of the
conference call will also be available starting three hours after
completion of the call until March 5, 2015 at midnight Eastern
Time. To hear the replay, parties in the United States and
Canada should call 1-855-859-2056 and international parties should
call 1-404-537-3406.
Use of Non-GAAP Financial Measures
This press release, as well as the conference call, includes
disclosures regarding "EBITDA", "adjusted EBITDA", "cash available
to pay dividends" and the related "dividend payout ratio", "total
net debt to last twelve month adjusted EBITDA coverage ratio",
"adjusted diluted net income per share" and "adjusted net income
attributable to common stockholders", all of which are non-GAAP
financial measures and described in this section as not being in
compliance with Regulation S-X. Accordingly, they should not
be construed as alternatives to net cash from operating or
investing activities, cash and cash equivalents, cash flows from
operations, net income or net income per share as defined by GAAP
and are not, on their own, necessarily indicative of cash available
to fund cash needs as determined in accordance with GAAP. In
addition, not all companies use identical calculations, and the
non-GAAP financial measures may not be comparable to other
similarly titled measures of other companies. A reconciliation
of the differences between these non-GAAP financial measures and
the most directly comparable financial measures presented in
accordance with GAAP is included in the tables that follow.
Adjusted EBITDA is comprised of EBITDA, adjusted for certain
items as permitted or required by the lenders under our credit
agreement in place at the end of each quarter in the periods
presented. The tables that follow include an explanation of
how adjusted EBITDA is calculated for each of the periods presented
with the reconciliation to net income. EBITDA is defined as
net earnings before interest expense, income taxes, depreciation
and amortization on a historical basis.
Cash available to pay dividends represents adjusted EBITDA plus
cash interest income less (1) cash interest expense, (2) capital
expenditures and (3) cash income taxes; this calculation differs in
certain respects from the similar calculation used in our credit
agreement.
We present adjusted EBITDA, cash available to pay dividends and
the related dividend payout ratio for several
reasons. Management believes adjusted EBITDA, cash available
to pay dividends and the dividend payout ratio are useful as a
means to evaluate our ability to fund our estimated uses of cash
(including interest on our debt) and pay dividends. In addition, we
have presented adjusted EBITDA, cash available to pay dividends and
the dividend payout ratio to investors in the past because they are
frequently used by investors, securities analysts and other
interested parties in the evaluation of companies in our industry,
and management believes presenting them here provides a measure of
consistency in our financial reporting. Adjusted EBITDA and cash
available to pay dividends, referred to as Available Cash in our
credit agreement, are also components of the restrictive covenants
and financial ratios contained in our credit agreement that
requires us to maintain compliance with these covenants and limit
certain activities, such as our ability to incur debt and to pay
dividends. The definitions in these covenants and ratios are
based on adjusted EBITDA and cash available to pay dividends after
giving effect to specified charges. In addition, adjusted
EBITDA, cash available to pay dividends and the dividend payout
ratio provide our board of directors with meaningful information to
determine, with other data, assumptions and considerations, our
dividend policy and our ability to pay dividends under the
restrictive covenants in our credit agreement and to measure our
ability to service and repay debt. We present the related
"total net debt to last twelve month adjusted EBITDA coverage
ratio" principally to put other non-GAAP measures in context and
facilitate comparisons by investors, security analysts and others;
this ratio differs in certain respects from the similar ratio used
in our credit agreement. These measures differ in certain
respects from the ratios used in our Senior Notes
indenture.
These non-GAAP financial measures have certain
shortcomings. In particular, adjusted EBITDA does not
represent the residual cash flows available for discretionary
expenditures, since items such as debt repayment and interest
payments are not deducted from such measure. Similarly, while
we may generate cash available to pay dividends, we are not
required to use any such cash to pay dividends, and the payment of
any dividends is subject to declaration by our board of directors,
compliance with applicable law and the terms of our credit
agreement. Because adjusted EBITDA is a component of the
dividend payout ratio and the ratio of total net debt to last
twelve month adjusted EBITDA, these measures are also subject to
the material limitations discussed above. In addition, the
ratio of total net debt to last twelve month adjusted EBITDA is
subject to the risk that we may not be able to use the cash on the
balance sheet to reduce our debt on a dollar-for-dollar basis.
Management believes these ratios are useful as a means to evaluate
our ability to incur additional indebtedness in the
future.
We present the non-GAAP measures adjusted diluted net income per
share and adjusted diluted net income attributable to common
stockholders because our net income and net income per share are
regularly affected by items that occur at irregular intervals or
are non-cash items. We believe that disclosing these measures
assists investors, securities analysts and other interested parties
in evaluating both our company over time and the relative
performance of the companies in our industry.
About Consolidated
Consolidated Communications Holdings, Inc. is a leading
communications provider within its eleven state operations.
Headquartered in Mattoon, IL, the Company has been providing
services in many of its markets for over a century. The Company
leverages its advanced fiber optic network and multiple data
centers to offer a wide range of communications services, including
data, voice, video, managed services, cloud computing and wireless
backhaul.
Safe Harbor
The Securities and Exchange Commission ("SEC") encourages
companies to disclose forward-looking information so that investors
can better understand a company's future prospects and make
informed investment decisions. Certain statements in this
press release are forward-looking statements and are made pursuant
to the safe harbor provisions of the Securities Litigation Reform
Act of 1995. These forward-looking statements reflect, among
other things, our current expectations, plans, strategies, and
anticipated financial results. There are a number of risks,
uncertainties, and conditions that may cause our actual results to
differ materially from those expressed or implied by these
forward-looking statements. These risks and uncertainties
include our ability to successfully integrate Enventis' operations
and realize the synergies from the acquisition, as well as a number
of factors related to our business, including economic and
financial market conditions generally and economic conditions in
our service areas; various risks to shareholders of not receiving
dividends and risks to our ability to pursue growth opportunities
if we continue to pay dividends according to the current dividend
policy; various risks to the price and volatility of our common
stock; changes in the valuation of pension plan assets; the
substantial amount of debt and our ability to repay or refinance it
or incur additional debt in the future; our need for a significant
amount of cash to service and repay the debt and to pay dividends
on the common stock; restrictions contained in our debt agreements
that limit the discretion of management in operating the business;
regulatory changes, including changes to subsidies, rapid
development and introduction of new technologies and intense
competition in the telecommunications industry; risks associated
with our possible pursuit of acquisitions; system failures; losses
of large customers or government contracts; risks associated with
the rights-of-way for the network; disruptions in the relationship
with third party vendors; losses of key management personnel and
the inability to attract and retain highly qualified management and
personnel in the future; changes in the extensive governmental
legislation and regulations governing telecommunications providers
and the provision of telecommunications services;
telecommunications carriers disputing and/or avoiding their
obligations to pay network access charges for use of our network;
high costs of regulatory compliance; the competitive impact of
legislation and regulatory changes in the telecommunications
industry; and liability and compliance costs regarding
environmental regulations. A detailed discussion of these and other
risks and uncertainties that could cause actual results and events
to differ materially from such forward-looking statements are
discussed in more detail in our filings with the Securities and
Exchange Commission, including our reports on Form 10-K and Form
10-Q. Many of these circumstances are beyond our ability to
control or predict. Moreover, forward-looking statements
necessarily involve assumptions on our part. These
forward-looking statements generally are identified by the words
"believe", "expect", "anticipate", "estimate", "project", "intend",
"plan", "should", "may", "will", "would", "will be", "will
continue" or similar expressions. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements
of Consolidated Communications Holdings, Inc. and its subsidiaries
to be different from those expressed or implied in the
forward-looking statements. All forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements that
appear throughout this press release. Furthermore,
forward-looking statements speak only as of the date they are made.
Except as required under the federal securities laws or the
rules and regulations of the Securities and Exchange Commission, we
disclaim any intention or obligation to update or revise publicly
any forward-looking statements. You should not place undue
reliance on forward-looking statements.
- Tables Follow –
|
|
|
Consolidated
Communications Holdings, Inc. |
Condensed Consolidated
Balance Sheets |
(Dollars in thousands, except
par value) |
(Unaudited) |
|
|
|
|
December
31, |
December
31, |
|
2014 |
2013 |
|
|
|
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 6,679 |
$ 5,551 |
Accounts receivable, net |
77,536 |
52,033 |
Income tax receivable |
18,940 |
9,796 |
Deferred income taxes |
13,374 |
7,960 |
Prepaid expenses and other current
assets |
17,616 |
12,380 |
Total current assets |
134,145 |
87,720 |
|
|
|
Property, plant and equipment, net |
1,135,333 |
885,362 |
Investments |
115,376 |
113,099 |
Goodwill |
765,806 |
603,446 |
Other intangible assets |
50,292 |
40,084 |
Deferred debt issuance costs, net and other
assets |
19,313 |
17,667 |
Total assets |
$ 2,220,265 |
$ 1,747,378 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 15,277 |
$ 4,885 |
Advance billings and customer
deposits |
31,933 |
25,934 |
Dividends payable |
19,510 |
15,520 |
Accrued compensation |
32,581 |
22,252 |
Accrued interest |
6,784 |
3,524 |
Accrued expense |
39,698 |
35,173 |
Current portion of long-term debt and
capital lease obligations |
9,849 |
9,751 |
Current portion of derivative
liability |
443 |
660 |
Total current liabilities |
156,075 |
117,699 |
|
|
|
Long-term debt and capital lease
obligations |
1,356,753 |
1,212,134 |
Deferred income taxes |
243,576 |
179,859 |
Pension and other post-retirement
obligations |
122,367 |
75,754 |
Other long-term liabilities |
14,581 |
9,593 |
Total liabilities |
1,893,352 |
1,595,039 |
|
|
|
Shareholders' equity: |
|
|
Common stock, par value $0.01 per share;
100,000,000 shares authorized, 50,364,579 and 40,065,246,
shares outstanding as of December 31, 2014 and December
31, 2013, respectively |
504 |
401 |
Additional paid in capital |
357,139 |
148,433 |
Accumulated other comprehensive loss,
net |
(35,556) |
(1,000) |
Noncontrolling interest |
4,826 |
4,505 |
Total shareholders' equity |
326,913 |
152,339 |
Total liabilities and shareholders'
equity |
$ 2,220,265 |
$ 1,747,378 |
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Condensed Consolidated
Statements of Income |
(Dollars in thousands, except
per share amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ 186,014 |
$ 147,956 |
$ 635,738 |
$ 601,577 |
Operating expenses: |
|
|
|
|
Cost of services and products |
75,008 |
55,678 |
242,661 |
222,452 |
Selling, general and administrative
expenses |
42,691 |
35,029 |
140,636 |
135,414 |
Acquisition and other transaction
costs |
9,822 |
64 |
11,817 |
776 |
Depreciation and amortization |
42,920 |
34,968 |
149,435 |
139,274 |
Income from operations |
15,573 |
22,217 |
91,189 |
103,661 |
Other income (expense): |
|
|
|
|
Interest expense, net of interest
income |
(22,257) |
(19,838) |
(82,537) |
(85,767) |
Loss on extinguishment of debt |
(13,785) |
(7,657) |
(13,785) |
(7,657) |
Other income, net |
8,446 |
10,787 |
33,548 |
37,239 |
Income (loss) from continuing operations
before income taxes |
(12,023) |
5,509 |
28,415 |
47,476 |
Income tax expense (benefit) |
(1,353) |
2,293 |
13,027 |
17,512 |
Income (loss) from continuing
operations |
(10,670) |
3,216 |
15,388 |
29,964 |
|
|
|
|
|
Income (loss) from discontinued operations,
net of tax |
-- |
-- |
-- |
(156) |
Gain on sale of discontinued operations, net
of tax |
-- |
-- |
-- |
1,333 |
Total discontinued operations |
-- |
-- |
-- |
1,177 |
|
|
|
|
|
Net income (loss) |
(10,670) |
3,216 |
15,388 |
31,141 |
Less: net income attributable to
noncontrolling interest |
36 |
76 |
321 |
330 |
|
|
|
|
|
Net income (loss) attributable to common
shareholders |
$ (10,706) |
$ 3,140 |
$ 15,067 |
$ 30,811 |
|
|
|
|
|
Net income (loss) per common share - basic
and diluted |
|
|
|
|
Income (loss) from continuing
operations |
$ (0.22) |
$ 0.08 |
$ 0.35 |
$ 0.73 |
Income from discontinued operations, net
of tax |
-- |
-- |
-- |
0.03 |
Net income (loss) per basic and diluted
common share attributable to common shareholders |
$ (0.22) |
$ 0.08 |
$ 0.35 |
$ 0.76 |
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Pro Forma Condensed
Consolidated Statements of Income |
(Dollars in thousands, except
per share amounts) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
Pro Forma |
Pro Forma |
Pro Forma |
Pro Forma |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ 192,648 |
$ 194,158 |
$ 790,745 |
$ 790,777 |
Operating expenses: |
|
|
|
|
Operating expenses (exclusive of
depreciation and amortization) |
121,878 |
124,957 |
499,093 |
500,902 |
Depreciation and amortization |
44,896 |
46,824 |
186,978 |
186,697 |
Income from operations |
25,874 |
22,377 |
104,674 |
103,178 |
Other income (expense): |
|
|
|
|
Interest expense, net of interest
income |
(22,266) |
(21,958) |
(87,820) |
(94,246) |
Loss on extinguishment of debt |
(13,785) |
(7,657) |
(13,785) |
(7,657) |
Other income, net |
8,446 |
10,787 |
33,548 |
37,239 |
Income (loss) from before income
taxes |
(1,731) |
3,549 |
36,617 |
38,514 |
Income tax expense |
4,245 |
1,605 |
17,969 |
14,226 |
Net Income (loss) |
(5,976) |
1,944 |
18,648 |
24,288 |
Less: net income attributable to
noncontrolling interest |
36 |
76 |
321 |
330 |
|
|
|
|
|
Net income (loss) attributable to common
shareholders |
$ (6,012) |
$ 1,868 |
$ 18,327 |
$ 23,958 |
|
|
|
|
|
Net income (loss) per common
share attributable to common shareholders |
|
|
Net income (loss) per common share -
basic and diluted |
$ (0.12) |
$ 0.04 |
$ 0.37 |
$ 0.48 |
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Condensed Consolidated
Statements of Cash Flows |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
OPERATING ACTIVITIES |
|
|
|
|
Net income (loss) |
$ (10,670) |
$ 3,216 |
$ 15,388 |
$ 31,141 |
Loss from discontinued operations, net of
tax |
-- |
-- |
-- |
(1,177) |
Net income from continuing
operations |
(10,670) |
3,216 |
15,388 |
29,964 |
Adjustments to reconcile net income to
cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
42,920 |
34,968 |
149,435 |
139,274 |
Deferred income taxes |
11,202 |
15,791 |
10,244 |
16,045 |
Cash distributions from wireless
partnerships in excess of/(less than) earnings |
996 |
47 |
212 |
(2,949) |
Non- cash stock-based compensation |
964 |
794 |
3,636 |
3,028 |
Amortization of deferred financing |
1,250 |
506 |
4,364 |
2,209 |
Loss on extinguishment of debt |
13,785 |
7,657 |
13,785 |
7,657 |
Other adjustments, net |
1,381 |
179 |
2,973 |
1,788 |
Changes in operating assets and
liabilities, net |
(7,407) |
(19,264) |
(12,252) |
(28,486) |
Net cash provided by continuing
operations |
54,421 |
43,894 |
187,785 |
168,530 |
Net cash used in discontinued
operations |
-- |
(179) |
-- |
(4,174) |
Net cash provided by operating
activities |
54,421 |
43,715 |
187,785 |
164,356 |
INVESTING ACTIVITIES |
|
|
|
|
Business acquisition, net of cash
acquired |
(139,558) |
-- |
(139,558) |
-- |
Purchase of property, plant and
equipment, net |
(32,960) |
(26,779) |
(108,998) |
(107,363) |
Purchase of investments |
(100) |
(165) |
(100) |
(403) |
Proceeds from sale of assets |
232 |
219 |
1,795 |
330 |
Restricted cash related to
acquisition |
149,917 |
-- |
-- |
-- |
Net cash used in continuing
operations |
(22,469) |
(26,725) |
(246,861) |
(107,436) |
Net cash provided by discontinued
operations |
-- |
-- |
-- |
2,331 |
Net cash used in investing
activities |
(22,469) |
(26,725) |
(246,861) |
(105,105) |
FINANCING ACTIVITIES |
|
|
|
|
Proceeds from bond offering |
-- |
-- |
200,000 |
-- |
Restricted cash on bond offering |
54,886 |
-- |
-- |
|
Proceeds on issuance of long-term
debt |
52,000 |
932,450 |
80,000 |
989,450 |
Payment of capital lease obligation |
(222) |
(148) |
(703) |
(516) |
Payment on long-term debt |
(30,275) |
(927,031) |
(63,100) |
(990,961) |
Partial redemption of senior notes due
2020 |
(84,127) |
-- |
(84,127) |
-- |
Repurchase and retirement of common
stock |
(1,856) |
(887) |
(1,856) |
(887) |
Payment on financing costs |
(4,731) |
(6,576) |
(7,438) |
(6,576) |
Other |
(231) |
-- |
(231) |
|
Dividends on common stock |
(15,607) |
(15,538) |
(62,341) |
(62,064) |
Net cash provided by (used in) financing
activities |
(30,163) |
(17,730) |
60,204 |
(71,554) |
Net change in cash and cash equivalents |
1,789 |
(740) |
1,128 |
(12,303) |
Cash and cash equivalents at beginning of
period |
4,890 |
6,291 |
5,551 |
17,854 |
Cash and cash equivalents at end of
period |
$ 6,679 |
$ 5,551 |
$ 6,679 |
$ 5,551 |
|
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Consolidated Revenue by
Category |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
PRO
FORMA |
|
Q4'13 |
Q1'14 |
Q2'14 |
Q3'14 |
Q4'14 |
|
|
|
|
|
|
Local calling service |
30,831 |
30,436 |
30,980 |
30,472 |
29,905 |
Network access revenues |
30,138 |
30,044 |
29,252 |
28,439 |
28,370 |
Subsidies |
12,928 |
14,667 |
14,851 |
14,040 |
14,348 |
Long distance services |
5,837 |
5,964 |
5,922 |
5,778 |
5,613 |
Data and internet service |
79,626 |
79,951 |
81,696 |
82,031 |
82,153 |
Equipment sales and services |
13,992 |
12,248 |
17,407 |
22,224 |
11,008 |
Other services |
20,806 |
20,578 |
20,652 |
20,465 |
21,251 |
Total |
194,158 |
193,888 |
200,760 |
203,449 |
192,648 |
|
|
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Schedule of Adjusted
EBITDA Calculation |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
Three Months
Ended |
|
|
December
31, |
December
31, |
December 31,
2014 |
|
|
Pro forma |
Pro forma |
Pro forma |
Pro forma |
Including
Enventis |
|
|
2014 |
2013 |
2014 |
2013 |
10/16 -
12/31 |
|
Net income from continuing operations |
$ (5,976) |
$ 1,944 |
$ 18,648 |
$ 24,288 |
$ (10,670) |
|
Add (subtract): |
|
|
|
|
|
|
Income tax expense (benefit) |
4,245 |
1,605 |
17,969 |
14,226 |
(1,353) |
|
Interest expense, net |
22,266 |
21,958 |
87,820 |
94,246 |
22,257 |
|
Depreciation and amortization |
44,896 |
46,824 |
186,978 |
186,697 |
42,920 |
|
EBITDA |
65,431 |
72,331 |
311,415 |
319,457 |
53,154 |
|
|
|
|
|
|
|
|
Adjustments to EBITDA (1): |
|
|
|
|
|
|
Other, net (2) |
(8,860) |
(9,238) |
(36,048) |
(30,608) |
1,757 |
|
Loss on extinguishment of debt |
13,785 |
7,657 |
13,785 |
7,657 |
13,785 |
|
Investment distributions (3) |
9,244 |
10,517 |
34,600 |
34,833 |
9,244 |
|
Non-cash compensation (4) |
1,014 |
1,001 |
4,301 |
3,851 |
964 |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ 80,614 |
$ 82,268 |
$ 328,053 |
$ 335,190 |
$ 78,904 |
|
|
|
|
|
|
|
|
Footnotes for Adjusted
EBITDA: |
|
|
|
|
|
|
(1) These adjustments
reflect those required or permitted by the lenders under our credit
agreement. |
|
(2) Other, net includes the
equity earnings from our investments, dividend income, income
attributable to noncontrolling interests in subsidiaries,
acquisition and non-recurring related costs and certain
miscellaneous items. |
|
(3) Includes all cash
dividends and other cash distributions received from our
investments. |
|
(4) Represents compensation
expenses in connection with our Restricted Share Plan, which
because of the non-cash nature of the expenses are excluded from
adjusted EBITDA. |
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Cash Available to Pay
Dividends |
(Dollars in thousands) |
(Unaudited) |
|
|
|
|
Including Enventis
for |
Pro Forma including Enventis
for |
|
10/16 - 12/31 |
10/1 - 12/31 |
Adjusted EBITDA |
$ 78,904 |
$ 80,614 |
|
|
|
- Cash interest expense |
(21,171) |
(21,408) |
- Capital expenditures |
(32,960) |
(35,414) |
- Cash income taxes |
(146) |
(146) |
|
|
|
Cash available to pay dividends |
$ 24,627 |
$ 23,646 |
|
|
|
Dividends Paid |
$ 15,607 |
$ 16,620 |
Payout Ratio |
63.4% |
70.3% |
|
|
|
* The above calculation excludes
the principal payments on the amortization of our debt |
|
|
Consolidated
Communications Holdings, Inc. |
Total Net Debt to LTM
Adjusted EBITDA Ratio |
(Dollars in thousands) |
(Unaudited) |
|
|
Summary of Outstanding Debt |
|
Term loan, net of discount $3,948 |
$ 896,952 |
Revolving loan |
39,000 |
Senior unsecured notes due 2020, net of
discount of $1,121 |
226,097 |
Senior unsecured notes due 2022 |
200,000 |
Capital leases |
4,553 |
Total debt as of December 31, 2014 |
$ 1,366,602 |
Less cash on hand |
(6,679) |
Total net debt as of December 31, 2014 |
$ 1,359,923 |
|
|
Adjusted EBITDA for the last twelve
months ended December 31, 2014 |
$ 328,053 |
|
|
Total Net Debt to last twelve months Adjusted
EBITDA |
4.15x |
|
|
|
|
|
Consolidated
Communications Holdings, Inc. |
Adjusted Net
Income and Net Income Per Share |
(in thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
Three
Months Ended |
Twelve
Months Ended |
|
December
31, |
December
31, |
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
Net income (loss) |
$ (5,976) |
$ 1,944 |
$ 18,648 |
$ 24,288 |
Transaction and severance related costs, net
of tax |
823 |
637 |
1,626 |
3,454 |
Loss on extinguishment of debt |
12,233 |
4,472 |
7,471 |
4,832 |
Loss related to sale of building, net of
tax |
-- |
-- |
401 |
-- |
Gain on the sale of discontinued operations,
net of tax |
-- |
-- |
-- |
(1,333) |
Non-cash stock compensation, net of tax |
900 |
585 |
2,331 |
2,430 |
Adjusted net income |
$ 7,980 |
$ 7,638 |
$ 30,478 |
$ 33,671 |
|
|
|
|
|
Weighted average number of shares
outstanding |
50,053 |
49,934 |
50,030 |
49,908 |
Adjusted diluted net income per share |
$ 0.16 |
$ 0.15 |
$ 0.61 |
$ 0.67 |
|
|
|
|
|
* Calculations above assume a
11.3% and 41.6% effective tax rate for the three months ended
December 31, 2014 and 2013, respectively and 45.8% and 36.9% for
the twelve months ended December 31, 2014 and 2013,
respectively. |
|
|
|
Consolidated
Communications Holdings, Inc. |
Key Operating
Statistics |
(Unaudited) |
|
|
|
|
|
Pro Forma |
|
December 31, |
September 30, |
|
2014 |
2014 |
ILEC access lines |
|
|
Residential |
151,359 |
154,596 |
Business |
118,149 |
120,102 |
Total local access lines |
269,508 |
274,698 |
Quarterly change |
(1.9%) |
|
|
|
|
Voice Connections (non-ILEC)
[1,2] |
|
|
Residential |
72,145 |
73,890 |
Business |
95,309 |
94,072 |
Total voice connections |
167,454 |
167,962 |
Quarterly change |
(0.3%) |
|
|
|
|
Data and Internet Connections
[2] |
289,658 |
287,625 |
Quarterly change |
0.7% |
|
Res. penetration of marketable
homes |
30.6% |
30.7% |
|
|
|
Video Connections [2] |
122,832 |
123,252 |
Quarterly change |
(0.3%) |
|
Res. penetration of marketable
homes |
20.9% |
21.0% |
|
|
|
Total Connections |
849,452 |
853,537 |
Quarterly change |
(0.5%) |
|
|
|
|
Network Stats - Marketable
Homes |
|
|
Fiber homes |
208,311 |
206,665 |
HFC homes |
94,617 |
94,609 |
Copper homes |
452,997 |
452,997 |
Total |
755,925 |
754,271 |
|
|
|
Note: The figures in the
table, excluding ILEC access lines, do not entirely include
SureWest business subscribers. |
|
|
|
[1] These include voice lines
outside the ILECs and Voice-over-IP inside the ILECs. |
[2] These connections are both
residential and business (excluding SureWest business
subscribers). They include services both inside and outside
the ILECs. |
CONTACT: Matt Smith
Treasurer and VP of Finance & IR
217-258-2959
matthew.smith@consolidated.com
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