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

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Posted November 10, 2011

QUINCY, Mass.--(BUSINESS WIRE)-- Atlantic Broadband Finance, LLC (“Atlantic Broadband” or the “Company”) reported today financial results for the period ended September 30, 2011.

Revenue for the three months ended September 30, 2011 was $82.2 million as compared to $79.2 million for the three months ended September 30, 2010, an increase of $3.0 million or 3.8%. This increase was mainly the result of (i) an increase in high-speed data revenue of $1.2 million or 7.6% from continued marketing focus for this service offering driving HSD subscriber growth; (ii) a $0.5 million increase in telephone revenue generated by increases in subscriber levels and (iii) a $1.2 million increase in commercial revenue as we continue to expand our non-residential customer base through targeted marketing efforts.

Operating expenses for the three months ended September 30, 2011 were $36.0 million as compared to $34.8 million for the same period in 2010. The $1.2 million increase was mainly the result of increased programming costs in conjunction with annual contractual increases, increased HSD and telephone direct costs associated with higher subscriber levels in both residential and commercial subscribers, offset by reductions in direct operating costs such as maintenance and telephone expenses with reductions in these areas resulting from past infrastructure investments in our technical plant and operating facilities.

Selling, general and administrative expenses for the three months ended September 30, 2011 were $9.5 million as compared to $9.7 million for the three months ended September 30, 2010, a decrease of $0.2 million. This decrease is the result of reductions in general and administrative costs mainly related to certain one-time bonus payments made in 2010.

Revenue for the nine months ended September 30, 2011 was $245.9 million as compared to $236.3 million for the nine months ended September 30, 2010, an increase of $9.6 million or 4.1%. This increase was mainly the result of (i) a $3.7 million or 8.2% increase in high-speed data revenue resulting from continued marketing focus for this service offering driving HSD subscriber growth; (ii) a $1.9 million increase in telephone revenue generated by this service offering through subscriber growth and (iii) a $3.5 million increase in commercial revenue as we continue to expand our non-residential customer base through targeted marketing efforts.

Operating expenses for the nine months ended September 30, 2011 were $108.1 million as compared to $106.2 million for the same period in 2010. The $1.9 million increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with the incurrence of higher levels of direct costs associated with our continued expansion of high speed data and cable telephony services, offset by reductions in direct operating costs such as maintenance and telephone expenses with reductions in these areas resulting from past infrastructure investments in our technical plant and operating facilities.

Selling, general and administrative expenses for the nine months ended September 30, 2011 were $30.9 million as compared to $29.3 million for the nine months ended September 30, 2010, an increase of $1.6 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 reductions in employee benefit and insurance costs, as well as a $0.3 million decrease in sales and marketing expenses due to lower levels of spending as we apply more targeted marketing campaigns.

Liquidity and Cash Flow:

Total debt outstanding at September 30, 2011 was $657.2 million and cash balances were $5.6 million at quarter end. On an annualized basis, EBITDA for the six months ended September 30, 2011, adjusted for certain expenditures as defined in the Company’s credit agreement totaling $0.3 million, resulted in a total leverage ratio as defined in said credit agreement of approximately 4.4 x.

Summary Financial Results:

The following tables summarize financial results for the three and nine month periods ended September 30, 2011:

Subscriber information

         
9/30/11 12/31/10 9/30/10
 
EBU's (Equivalent Basic Units) 193,058 201,706 204,264
Digital Subscribers 94,984 92,671 89,767
HSD Residential Subscribers 147,493 143,476 140,362
Telephone Residential Subscribers 70,880 68,340 67,463
Homes Passed 510,503 509,720 509,159
Internet-ready Homes Passed 501,632 502,119 501,558
Telephone-ready Homes Passed 499,703 497,052 493,377
Basic Subscribers 257,937 265,955 268,762
 
Basic Penetration of Homes Passed 50.5% 52.2% 52.8%
Digital Penetration of Basic Subscribers 36.8% 34.8% 33.4%
HSD Penetration of Internet-ready Homes Passed 29.4% 28.6% 28.0%
Telephone Penetration of telephone-ready Homes Passed 14.2% 13.7% 13.7%
 
         
Three Months Ended September 30, Nine Months Ended September 30,
2011   2010 2011     2010
Amount   %   Amount % Amount   % Amount   %
(dollars in thousands) (dollars in thousands)
Revenue:      
 
Video $40,610 49.4% $40,778 51.5% $122,868 50.0% $123,054 52.1%
High Speed Data 16,326 19.9 15,172 19.2 48,452 19.7 44,766 18.9
Telephone 7,438 9.0 6,916 8.7 22,128 9.0 20,180 8.5
Advertising Sales 1,881 2.3 1,921 2.4 5,731 2.3 5,740 2.4
Commercial 9,715 11.8 8,483 10.7 28,227 11.5 24,710 10.5
Other 6,200   7.6 5,955   7.5 18,519   7.5 17,893   7.6
 
Total revenue $82,170 100.0% $79,225 100.0% $245,925 100.0% $236,343 100.0%
 
Costs and expenses:
 

Operating (excluding depreciation and
amortization and other items listed below) 36,031 43.8% 34,776 43.9% 108,058 43.9% 106,188 44.9%
Selling, general and administrative 9,510 11.6% 9,658 12.2% 30,915 12.6% 29,284 12.4%
Depreciation and amortization 11,139 13.6% 10,774 13.6% 33,177 13.5% 31,824 13.5%
 
Income from operations 25,490 24,017 73,775 69,047
 
Other Income (expenses):
 
Interest expense, net (9,918) (10,632) (31,078) (31,717)
 
Net Income $15,572 $13,385 $42,697 $37,330
 

Operating results

Reconciliation of Income from operations to EBITDA (in thousands):

         
Three Months Nine Months
Ended Ended
September 30, 2011 September 30, 2011
 
Income from operations $ 25,490 $ 73,775
Plus: Depreciation and amortization 11,139 33,177
EBITDA $ 36,629 $ 106,952
 

Conference Call:

The Company will host a conference call at 11:00 a.m. EST on Tuesday, November 15, 2011 to discuss the financial results. To access the conference call, interested parties may dial (800) 688-0796 and provide the conference passcode “714 150 64” to the attendant. A replay will be available through November 29, 2011 by dialing (888) 286-8010 and using the passcode “866 940 39”.

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 of 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).



CONTACT:

Atlantic Broadband Finance, LLC
Patrick Bratton
Chief Financial Officer
(617) 786-8800

KEYWORDS:   United States  North America  Massachusetts

INDUSTRY KEYWORDS:   Technology  Telecommunications

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