Docoh
Loading...

CABO Cable One

Participants
Steven Cochran Senior Vice President and Chief Financial Officer
Julia Laulis President and Chief Executive Officer
Philip Cusick JPMorgan
Brandon Nispel KeyBanc Capital Markets
Stephan Bisson Wolfe Research
Clay Griffin MoffettNathanson
John Kornreich JK Media
Robert Majek Raymond James
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and welcome to the Cable One Earnings Report Q4 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Steven Cochran. Please go ahead.

Steven Cochran

Sarah. you, Thank welcome year and One’s quarter fourth Good earnings to call. full XXXX and afternoon Cable

We’re have results. glad review we to you join as us our

today’s statements proceed, may and we I’d to you Before like expectations. contain to relating that forward-looking future events remind discussion

find in Cable actual except You under filings. One our differ recent factors a results today’s in no could or events law, projections to its alter result whether future by expressly required is obligation, these of SEC as from listed that disclaims obligation earnings otherwise. to new information, cause can or One’s materially release any statements, and and Cable update forward-looking as

U.S. financial most directly of this website financial a found at ir.cableone.net. Additionally, today’s the are include measures call remarks earnings Principles. to measures GAAP our measures certain in will or Reconciliations of Accepted our discussed Generally release Accounting conformity on non-GAAP not be can discussion with comparable that presented in on

Joining is me Laulis. our CEO, Julia on President and today’s call

the me With that, Julia. to call over let turn

Julia Laulis

and to work proud Steven this look past full a hard moment for to Good performance. much from XXXX. performance busy Steven. us our able we It like without to in I for XXXX joining some have off of call. been their would take providing by so our year to exceptionally was would I’ll year. thank recap a kick before of and a you our accomplish you, very associates, not thank dedication, afternoon my Then highlights a and XXXX. remarks Thank will I’m today’s give sharing ahead financial

company a things most. us One not Sparklight. to This seamlessly the consumer-facing from cable embodies from to briefly business simply some they rather our an HSD-centric To care that rebrand connects to change, transformation provider traditional highlights, customers our saw a was recap XXXX name Cable about

footprint. divide across the rural work continue and bridge our to to further communities digital We

remember, Cable in may and XXXX, XXXX, of more speeds passed. our gigabit in legacy gig you service gig now than we As to our markets more service across communities In homes footprint. deployed our in than XX% One XXX launched offer we we NewWave

pleased On adjusted from activities integration capture to was our margin the EBITDA original ahead and all the that NewWave, completed virtually run I’m those XXXX, we we close of the acquisition. fully share growth by to schedule. nicely us markets as rate sets which additional realize subject of synergies expansion in of up the This

in In XXXX, Communications, data, On Communications, the voice Then enterprise M&A year. ways. a Meanwhile, January purchase and companies our enables fiber fiber that In active has business. Clearwave and which many video an we further expanded customer business we solutions. Both acquired network are footprint Clearwave front, excellent we and in services strategies, products. Fidelity our XXXX customers Fidelity’s demographics of an to was similar segment. us supply share fit enhanced case, October, premier finalized with business

and in go mind are Fidelity on results, unless call, reporting consolidated in we numbers Clearwave we noted. that our our later including through As otherwise the keep

Looking ahead strategy and follow continue business. we to the to balanced cash to grow will our XXXX, deploy

capital combination As investment markets, for to before, and opportunities looking entails projects we’ve growth. in well acquisition of long-term that broadband-related as said rural drive as a intended

increases adjusted delivered quarter EBITDA XX.X% in a performance, are XX%. total again of pleased of once strong and revenues have to year-over-year We of including

well and long-term as margin business quarter for illustrate strategy increased year-over-year XXX growth, EBITDA focused that our XXXX. to expansion. fourth to of adjusted adjusted consistently deliver Our EBITDA continue top-line execution These points both results XX.X% and basis the as

strategic time, anticipate investments. consistent quarter-to-quarter further be we margin make as see to that it expect expansion and we we necessarily continued over will operational not do While

driven increase HSD by revenues, We in in together residential a HSD ARPU. experienced unit residential residential an XX.X% a with increase increase XX.X% HSD quarterly X.X% in

X.X%, X.X% were to acquired up a and impact or ARPU XX.X% Clearwave was XX.X% and year-over-year, of residential respectively, services leading growth HSD revenues unit excluding residential operations, X.X%. HSD Quarterly the business Excluding Fidelity. from of and revenue growth

work We’re very to business proud services results. of team the our these achieve doing is

growth before pricing that about choice. were our spoken changes to implemented and at help beginning which designed of We’ve packaging the were XXXX, customer fuel through

expectations and to customer that need. HSD flexible simplified reliable, has service, We exceeded for see and our value-priced and our continue and packaging pricing need serving

month. quarter, data fourth usage the increased the prior gigabits than our year versus average XX% XXX more a In roughly to

sell-ins increased X data versus to During option these customers new period, with has are tier. tier almost HSD our $XX impact at same value a self-selecting proposition, $XX XXX of to of nearly starter customers our $XX meg choosing of XX% our The Fidelity, and or X rates our combined their plans, to growth. that of improved behind unlimited excluding X.X% rate caused our full churn and subscriber from in service new and grew modem our growth accelerated organic a HSD without in our rental-related adjustments. packaging HSD rate residential X.X% decrease in unit us, With XXXX, pricing and XXXX any X.X% a year into ARPU

previously, up are wrapping we our mentioned NewWave As efforts. integration

companies, learning We systems and other applying and our programming past the including agreements. years have the upgrading plans, best spent practices aligning X.X and combined of integrating

pricing we and legacy NewWave months, Sparklight over mapping begin will the packages. customers to In on coming packaging existing

and continue to change this XXXX. to grow expect NewWave’s ARPU contribution We into throughout XXXX

short-term While in see it a possible, also is churn. will increase we

these in our Sparklight thank markets goes integration our big efforts are of rebrand to NewWave planning we Additionally, out efforts. evolved in all to new you XXXX; a complete associates in

our have are begin we in down similar what in winds excited Fidelity to work integration efforts and markets. learned build on we NewWave, As

synergies in years. of $XX we has million approximately topic up integration incremental cost and the spending the rate run million over to next earnest realizing anticipate Fidelity, and On three begun planning of of capital $XX

closely As we’ve Cable of previously, mirrors business One. Fidelity’s mentioned out model

their associates continue accelerate and we of with the work So, we Fidelity said, networks. as a integrate best our into closely both standardize practices will anticipate to assimilation we our transition relatively insight gain companies. that seamless and With to

Marketing differentiation, new I turn Vice where With Senior like the Vice and served over XXXX. since to and marketing, Steven, sales of He confident more to Obermeyer, he Communications, as management he advantage. will we Before Marketing of I’m strengthen market moment us Jim President consumer I’d in Charter XX call a joins a than our asset to take from and to experience years work our of brand Sales. competitive President as be tremendous welcome

And more our now, will quarter results. provide details fourth on Steven

Steven Cochran

representing Thanks, $XXX.X $XXX.X year to million, Julia. XX.X% quarter produced quarter again, were fourth for million once an the increase. XXXX The compared the of prior quarter, Revenues financial results. solid in

was revenue HSD revenue XX.X% of increase a this mentioned, by fueled and increase Julia XX.X%. residential a As of increase service business

Clearwave increased Excluding and year-over-year. X.X% revenue operations, Fidelity total

quarter revenues quarter, million. Net a diluted year $XX.X or in XXX was share basis fourth fourth point income Net the million, fully million, in a or income basis $X.XX the of per was XX.X% $XXX.X improvement. on quarter, were $XX.X per compared expenses of prior share. the XX% Operating in to revenues

year Selling, XXX of fourth the million, $XX.X of revenues or general were a point $XX.X expenses XX.X% the administrative and prior improvement. in XX.X% quarter, or to revenues quarter, million, basis compared in

$XXX.X from quarter. $XXX.X million increased the fourth in XX% for was EBITDA prior the million and quarter Adjusted year

a going points inclusive operations. XX.X% increased full XXX to of in EBITDA that Fidelity this Keep XX.X%. from quarter mind year-over-year basis adjusted margin of Our is

million to spent XX.X% EBITDA the for and related shareholders. quarter capital Year-to-date, to incremental operations. percentage XX.X% In million expenditures When expenditures XX.X% quarter capital and fourth integrations, $XX.X our of fourth dividends $XXX.X related to XXXX, the in as of totaled excluding includes which expenditures which $XX XXXX, million Clearwave of adjusted the Capital XX.X% of adjusted a on revenues. revenues. equates and Fidelity a Clearwave as percentage and we million the paid CapEx, of of $XX.X to we NewWave were EBITDA

was term was December against cash liquidity quarter providing of From a netting adjusted on after times, had cash our us debt-to-last approximately generate with on Overall, XX free $X.X billion we our cash hand of $XXX and EBITDA loan At annualized continue significant liquidity. million hand ample flow. end, approximately borrowings. to X.X debt at debt balance of we consisting standpoint, quarter as

We of our also for available year-end. revolving credit have under $XXX.X borrowing million facility as

call, our loan also which A on $XXX closed used delayed price term in the cash on mentioned X. acquisition, on last post-closing of million the $XXX.X adjustments. after drew together draw X, on and purchase we I million full The cash the with proceeds hand Fidelity October fund customary amount our October As to was

I to questions. items before other few A we discuss take wanted

changes. of timing the note rate our of to I First, wanted make

Our annual be not implemented of was rate March year. video implemented last February this year, in until will of adjustment, which

in expense While most increases took effect our years. and programming on both retransmission contracted January X of

year-over-year. will the differences We first results of quarter both and the impact expect comparability sequentially timing these

have believe not effect growth. adjusted EBITDA do we However, our it will on an full-year

At expect about believe Second, future intensity growth. most network same running additional legacy to capital associated to returns capital, we as with we and decline. highest drive comes of time, the compelling that from the our our and therefore, think fiber building use expanding we the expenditures, capital business

and In future related for expect recent expansion hope XXXX, integration so we spent we well. connection have and activity grow XXXX. number with capital network incremental in acquisitions that deploy we’ll possible we approximately to million our $XX to to do as to M&A likely in Furthermore,

year-to-year, the providing will opportunities a of expansion and we and not capital going intensity. integration projection be from are that our quarter-to-quarter capital Given consistent not forward,

means M&A, of that are financing, on use but or maintain business we investments. our a not and subject debt looking transaction purchasing, with expand companies include cash, only actively the exploring as in the it at, This of acquisitions deploy equity depending the on flexibility both partnering includes situation. Lastly, strategic capital and and variety the we space to further to also

ready for are questions. we Sarah, now

Operator

you. Thank

question-and-answer the Philip with first will We go JPMorgan. begin comes Instructions] from Cusick Please ahead. now [Operator Our session. question

Philip Cusick

you you coming give a Steven, plans on unlimited of plans? the couple up $XX stole today? those. you and what’s The Can questions taking the the of at mix base in unlimited, customers pick Thanks. on of the guys. And nice end. us Hey, there my higher a percent even saw

Julia Laulis

of plans, – over short sell-in, period. it’s Julia. taking Phil, can’t. in no, I new are Yeah. XX% higher The answer is, Over terms

means And that either $XX, of don’t breakout. we or tier. breakout the have So individual I the But each share $XX don’t $XXX.

your was question what – unlimited unlimited? And

Philip Cusick

percent – today? is base Just of the how unlimited taking what

Julia Laulis

plans existing and pricing. on half migrating onto new working Well, over XX%. have the both we’re totally at our the and CABO the NewWave sell-in Right customers on new customers, now is legacy about the we packaging of

that So, number. have we’ll happens, when a

Philip Cusick

there why of the Understood. Is increase? other delay video sort just Okay. business? Is than And way price changing? anything something regular

Julia Laulis

on basically of – possible, given feel extent when a what of both get XX, together a retrans over us. in not them to packaging, we along customers can’t – good the No. December our our the pricing passing it is rate that about, programmers talked to we passed before the way taking where just that And the which that legacy along And given and we as doing conscientious rate migrations happened It’s adjustment, then, are on we pocketbooks we matter like our customers’ priority as NewWave. new are packaging, numbers took in well migrations moving the adjustment. existing new rate CABO video a the to and we’re are

Philip Cusick

you regular intensity back terms like way that Understood. CapEx, down of sounds of should sort in come the And maintaining – to going network. of capital lastly, it the said

Steven Cochran

Yeah.

So, the business. legacy

Philip Cusick

we as should dollars well? that terms that’s Yeah. assume of in And

Steven Cochran

business. is I we mean, say. of I Well, of that the It’s keep the nature to just one because on adding harder to think

things legacy really into a harder getting Cable percent think the as you the to then want a dollar those about that, numbers as could if are tied you – argument we but amount track think to to I So, that One, the talk more add make total. the I

Philip Cusick

Understood. Thanks, guys.

Operator

KeyBanc Our Please comes Nispel go Brandon next from question ahead. with Capital Markets.

Brandon Nispel

us market Julia, years. questions. of Can is that in portfolio those you One obviously of couple churn market? maybe along to there year? churn the us differences a the acceleration think year-over-year. the just how footprints to to lower of expect continue to sense churn potential maybe and added Cable to subscriber churn. and that you about you able churn over And a talk might drive Can the in give be if NewWave base bit then little higher you you different I you’ve some last of next a Thanks. Couple Thanks. down did legacy profiles call a into accelerating lines, sort mentioned you out

Julia Laulis

Brandon. Sure,

said, I that I think and that well, I growth. – to packaging helping what pricing fuel exactly think new the is

my our That So, more is more continue extent we to expectation. platform, the that growth. that we that move to and see base of will to

legacy at to something NewWave was In not terms to churn, related NewWave transitioning has basically of that the sustainable. many being and that bundles offered cost and that pricing is In are potential packaging. that’s specifically new cases,

folks not So, see will rate palpable. that might you those be adjustments

the but at HSD And specifics, churn on Our there One, goal that churn. but our across Cable save looking some churn in I that I’m those, get customer is into say properties, be will to the is to we might low. not expect incredibly legacy going

and it to more churn One-related short mirror Does with that. alike their help? example. One, come Fidelity procedures and experienced may the becomes line more NewWave, starts as that in run for Cable Cable as policies in to collections, higher

Brandon Nispel

Thank you. color. Great

Operator

next Bisson ahead. Stephan Please Our go from with question comes Research. Wolfe

Stephan Bisson

afternoon. Good

Is the through bit increase. of later the video from try still size? couple The idea? about programming increase, a Just a your me. know talk historically that cost you push price little to the I entirety you can

Steven Cochran

Yes.

Julia Laulis

Exactly.

Stephan Bisson

then, thought or that like either the rate to about have something be you increase for Comcast might your Easy value just customers provide for? one. of acquisition a you HSD-only able product to And additional Flex to charge

Julia Laulis

We’ve thought Stephan. it, about

I growing we’re and Comcast at going the as goes. we’ve and to them talked think now have they’ve we on it is can see we right wait launched – maybe that and friends and business how focus to our

I do in of get place video, like are where a in on we think anything our that we’re hesitant might control destiny. exists to not us

Stephan Bisson

what on at out back this that help might connectivity I Any on interesting Understood. and those the of but haul was fiber And of like? Any investments. strategic via end of then regarding or build? Is also M&A guess? then lastly, it’s kind look additional kind commentary the kind color what there,

Steven Cochran

fiber and near-net, that ways from there’s most existing of to things to get think footprint, can I your of always like fiber tower, to more be in be kinds I putting not think it we’re that then the it’s looking And network. using expand can ground our an customers. anchor to finding There – all net, expand tenant. the fiber

states. like think I of but for so, business lots candidly that, We piece. that specifically see And of any and dissimilar look all – Clearwave’s what things XX model to through strategic – from is continuing that’s let’s investment whole and is and lots for that, around markets the not opportunities that

Stephan Bisson

Thanks That’s color. for great. Yeah. the

Steven Cochran

Sure.

Operator

Our next question comes from Please ahead. Clay Griffin with MoffettNathanson. go

Clay Griffin

Look, WOW which drop instead? service we’ve It’s there and video on for Yeah. virtual offering a Clay dropping Is afternoon. Craig good Hey, today. and consider only your at would Google a seen you videos. point alternative

Julia Laulis

no intention video might we revenues, It’s It’s as not a our change future, video to time. us revenues drop got been data for flows, nice product? but and the now in we It services. down and deliver high-speed not cash with video at outright. the business right How in going declines this the the drop plans to mix but that

Clay Griffin

Okay. Thanks.

Operator

from Our John go next ahead. Please comes JK question Kornreich with Media.

John Kornreich

last somewhat the of was when couple Company. the HSD? you questions, price might your explicit A all to you. when Thank close But naive on that And mix… I’m because Hi. not increase

Julia Laulis

October of XXXX.

John Kornreich

please? again, it Say

Julia Laulis

of October XXXX.

John Kornreich

XXXX?

Julia Laulis

Yes.

John Kornreich

plans is for there no this year? assume I And

Julia Laulis

this no. at Not time,

John Kornreich

Okay.

Julia Laulis

nice being point, some is a but growth ARPU growth growth possibility always that this warranted. getting through are and We if unit at

Steven Cochran

significantly and clearly usage in and customers use more capacity And more and to grow allowing continues we data to invest up.

logically point. recoup so some without we’ve it that. been And able at to this you to But grow point

John Kornreich

is Is of penetration be XX Why your it XX me, cable given X.X% your higher shouldn’t demographics? X%, unit broadband excuse points than growth, below other companies? because to points simply

Julia Laulis

No. of our strategy. It’s because

have orientation guess, certainly growth. We And a not our have around lifetime we cash saying, a subs. we think – I what value count flows is we subscriber

a we go don’t it’s share subscriber it’s market don’t believe we gain. – for pure therefore, every and So,

John Kornreich

later, are your than on the margins, presentation I York look Wall might was that New and six ago, couldn’t far or at less Tom at aside, are about quote in they cable meeting concerned, why him, Thank which higher One slide has Kudos it’s XX and higher cable companies Okay. other all years services. to Street about or on business because as points points years companies. you. high-speed investors presented and five video, little care XX as data

in if to know don’t investor Tom is can you. kudos one I Sun, but says, tell them you So, resting the

Julia Laulis

talk last we we saw meet. week I about him and time every it

John Kornreich

That’s all Thanks I lot. a have.

Julia Laulis

Thank you.

Operator

question ahead. Please from James. Raymond next with go Our comes Louthan Frank

Robert Majek

Frank Are is Hey, Thank spectrum? Rob guys any CBRS guys. in the This of on actually. you for interested you.

Steven Cochran

Yeah.

options what’s think I going different on at well. various monitor going all don’t the we’ll obviously think this a would what’s keep definitely of there. with point, watching programs government-type we I ourselves But kinds bidder. and call on as

So...

Robert Majek

thanks. Great,

Operator

any concludes would for conference This the question-and-answer remarks. I turn to session. back Laulis closing over like to Julia our

Julia Laulis

I associates we great year. want We Sarah. look our today’s us all. of another again quarter. call thank and for you, next to appreciate Thanks, to Thank forward speaking to quarter everyone you all joining for and

Operator

today’s concluded. you now has conference for The presentation. Thank attending

may You disconnect. now