HERNDON, Va. -- RCN Corporation (NASDAQ: RCNI) today announced third quarter 2009 results.
RCN Corporation is a leading provider of all-digital and high-definition video, high-speed internet, and premium voice services to residential and small-medium business customers, in Philadelphia, Lehigh Valley, PA, New York, Boston, Chicago and Washington, D.C., as well as high-capacity transport services to carrier and large enterprise customers.
"We are executing very well against our 2009 objectives, building free cash flow to $29 million year-to-date while still fueling our business for future growth," stated Peter D. Aquino, President and Chief Executive Officer. "We have successfully managed through nearly a full year of economic uncertainty, and stayed on pace to expand margins, invest in product development, and make process improvements. In our residential business, Project Analog Crush(SM) is now complete in all of our metro markets and we are midway through our Lehigh Valley Crush. By year end, RCN will be the largest MSO in the country to be 100% digital, providing over 100 HD channels, an expansive VOD library, and a robust International tier, with channel capacity for future growth. In addition, the RCN/TiVo HD DVR remains on track for a first quarter 2010 launch, and we are accelerating our DOCSIS 3.0 deployment to address the huge SMB opportunity in RCN's metro markets. In the RCN Metro segment, we continue to capture demand for high capacity bandwidth from large carrier and enterprise customers, leveraging our position as a premier regional service provider with best-in-class Metro Ethernet and on-net fiber connectivity in 5 of the top 10 metro markets in the country."
Third Quarter Review
Following are highlights of third quarter 2009 results for consolidated RCN and for the company's two reporting segments: Residential/Small-Medium Business, comprised of the RCN and RCN Business Services business units; and RCN Metro Optical Networks.
Consolidated Results
Revenue. Total revenue of $192 million increased 3% from $187 million
in the third quarter of 2008 and was flat compared to $192 million in the
second quarter of 2009.
EBITDA. EBITDA of $56.4 million increased 12% from $50 million in the
third quarter of 2008 and increased 2% from $55.5 million in the second
quarter of 2009. EBITDA margin of 29% expanded by nearly 250 basis points
from the third quarter of 2008 and 50 basis points from the second quarter
of 2009. EBITDA is a non-GAAP financial measure - see "Non-GAAP Measures"
below.
Capital Expenditures. Capital expenditures were $34 million compared
to $34 million in the third quarter of 2008 and $25 million in the second
quarter of 2009.
Free Cash Flow. Free cash flow was $11 million compared to negative
$2 million in the third quarter of 2008 and $10 million in the second
quarter of 2009. Free cash flow is a non-GAAP financial measure - see "Non-
GAAP Measures" below.
Share Repurchases. RCN repurchased nearly 85,000 shares of common
stock during the third quarter at an average price of $6.94, or an
aggregate value of $0.6 million. To date, RCN has repurchased over 2.4
million shares under its $25 million repurchase authorization, for an
aggregate value of approximately $17 million, leaving approximately $8
million remaining under the program.
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