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WOW! Reports Results for the Fiscal Year Ended December 31, 2014WOW! Internet, Cable & Phone ("WOW!"), a leading, fully-integrated provider of residential and commercial high-speed data, video and telephony services to customers in the United States, today reported financial and operating results for the fourth quarter and year ended December 31, 2014. Financial & Operating Highlights (1) For the fourth quarter ended December 31, 2014, WOW! reported Total Revenue of $309.2 million and Adjusted EBITDA of $107.7 million representing (i) a sequential increase in Total Revenue of $7.2 million (or 2.4%) and a sequential increase in Adjusted EBITDA of $7.2 million (or 7.2%) over the Pro Forma third quarter ended September 30, 2014, and (ii) a year-over-year increase in Total Revenue of $19.4 million (or 6.7%) and a year-over-year increase in Adjusted EBITDA of $6.7 million (or 6.6%) over the Pro Forma fourth quarter ended December 31, 2013. For the year ended December 31, 2014, WOW! reported Total Revenue of $1,264.3 million and Adjusted EBITDA of $438.1 million. Pro Forma Total Revenue and Pro Forma Adjusted EBITDA for the year ended December 31, 2014 was $1,208.9 million and $412.3 million, respectively, a year-over-year increase in Pro Forma Total Revenue of $62.9 million (or 5.5%) and a year-over-year increase in Pro Forma Adjusted EBITDA of $3.3 million (or 0.8%) from the Pro Forma Total Revenue and Pro Forma Adjusted EBITDA for the year ended December 31, 2013. Conference Call WOW! will host a conference call on Tuesday, March 31, 2015 at 11:00 am Eastern to discuss the operating and financial results contained in this press release. Conference call information is as follows:
A recording of the conference call will be available approximately two hours after the completion of the call until April 28, 2015. Dial in # for this replay is (855) 859-2056. Additionally, a copy of the transcript will be available approximately forty-eight hours after the call, at www.wowway.com/investor-relations. About WOW! WOW! is one of the nation's leading providers of high-speed Internet, cable TV, and phone serving communities in the U.S. Our operating philosophy is to deliver an employee and customer experience that lives up to its name. WOW! is privately owned and controlled by Avista Capital Partners. For more information, please visit www.wowway.com.
The condensed consolidated statements of operations above and the information in this press release should be read in conjunction with our Form 10-K for the year ended December 31, 2014 filed with the U.S. Securities and Exchange Commission ("SEC") on March 27, 2015. For ease of use, references in this press release to "WOW! Internet, Cable & Phone" or "WOW!" mean WideOpenWest Finance, LLC and its consolidated subsidiaries. Forward-Looking Statements This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements. Forward-looking statements are not guarantees of future performance and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms. The forward-looking statements included in this release are made as of the date hereof. Except as required by law, we assume no obligation to publicly update any forward-looking statement, even if new information becomes available in the future. Actual results may differ materially from those expected because of various risks and uncertainties, many of which are beyond our control. You should review our filings with the SEC, including the section titled "Risk Factors" contained in our Annual Report on Form 10-K filed with the SEC on March 27, 2015. Definitions of Non-GAAP Financial Measures and Operating Metrics We have included certain non-GAAP financial measures in this press release including Adjusted EBITDA. We believe that these non-GAAP measures enhance an investor's understanding of our financial performance. We believe that these non-GAAP measures are useful financial metrics to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business. We believe that these non-GAAP measures provide investors with useful information for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. We use these non-GAAP measures for business planning purposes and in measuring our performance relative to that of our competitors. We believe these non-GAAP measures are measures commonly used by investors to evaluate our performance and that of our competitors. Adjusted EBITDA is defined by WOW! as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized on derivative instruments, management fees to related party, the write-up or write-off/disposal of any asset, debt modification expenses, loss on extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensation expense) and certain other income and expenses, as further defined in our credit facilities. Adjusted EBITDA is not a presentation made in accordance with generally accepted accounting principles in the United States of America ("GAAP") and our use of the term Adjusted EBITDA varies from others in our industry. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity. Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA:
See "Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures" and the accompanying tables below for reconciliations of Adjusted EBITDA to our net income (loss), which is the most directly comparable GAAP financial measure. Furthermore, Adjusted EBITDA in this release is sometimes presented on a Pro Forma basis, giving effect to our Bluemile asset acquisition on September 27, 2013, the increase in our investment in AAB on May 1, 2014 and the sale of our South Dakota systems on September 30, 2014 as if such transactions had been completed at the beginning of each period presented (see "Unaudited Pro Forma Condensed Combined Financial, Operating & Customer Information" below for a complete discussion). In addition, we use the following operating and customer metrics in this release:
Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures The following two tables provide an unaudited reconciliation of our net income (loss) to Adjusted EBITDA for the respective quarters ended:
The following table provides an unaudited reconciliation of our net income (loss) to Adjusted EBITDA for the respective years ended:
Unaudited Pro Forma Condensed Combined Financial, Operating & Customer Information The unaudited pro forma condensed combined statement of operations and operating and customer information for the periods presented herein has been prepared giving effect to our acquisition of certain Bluemile, Inc. ("Bluemile") assets on September 27, 2013, the increase in our investment in Anne Arundel Broadband ("AAB") on May 1, 2014 and the sale of our South Dakota systems ("South Dakota") on September 30, 2014 as if such transactions had been completed at the beginning of the periods presented by applying pro forma adjustments to the individual historical unaudited condensed consolidated financial statements and operating and customer information of Bluemile, AAB and South Dakota. Accordingly, the unaudited pro forma condensed combined financial, operating and customer information presented herein includes the unaudited financial results, operating and customer information for Bluemile for the period January 1, 2013 to September 26, 2013, the unaudited financial results, operating and customer information for AAB for the periods from January 1, 2013 to December 31, 2013 and from January 1, 2014 to April 30, 2014 and excludes the unaudited financial results, operating and customer information for South Dakota for the period January 1, 2013 to December 31, 2013 and from January 1, 2014 to September 30, 2014. The historical consolidated financial, operating and customer information has been adjusted to give effect to pro forma events that are (1) directly attributable to such transactions, (2) factually supportable and (3) expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial, operating and customer information is for informational purposes only and does not represent what our results of operations, operating and customer information would have been if the transactions had occurred at any date, nor does such information project the results of operations for any future period. The unaudited pro forma condensed combined statements of operations do not reflect non-recurring charges that have been incurred in connection with the transactions, including any related financing fees, legal fees, broker fees and accounting fees. The following two tables provide an unaudited reconciliation of our Total Revenue to Pro Forma Total Revenue for the respective quarters ended:
The following table provides an unaudited reconciliation of our Total Revenue to Pro Forma Total Revenue for the respective years ended:
The following two tables provide an unaudited reconciliation of our Adjusted EBITDA to Pro Forma Adjusted EBITDA for the respective quarters ended:
The following table provides an unaudited reconciliation of our Adjusted EBITDA to Pro Forma Adjusted EBITDA for the respective years ended:
The unaudited pro forma financial statements should be read in conjunction with the information contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations," the consolidated financial statements and the accompanying notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the SEC on March 27, 2015. The following table provides an unaudited reconciliation of our previously reported operating, total customer, subscriber and Total RGU data to Pro Forma operating, total customer, subscriber and RGU data for the respective quarters ended giving effect to the increase in our investment in AAB on May 1, 2014 and the sale of South Dakota on September 30, 2014 as if such transactions had been completed at the beginning of the periods presented:
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