Suddenlink Posts Q4

Q4 revenues of $398.0M grew 5.9% on a pro forma basis

March 25, 2010

4 Min Read

ST. LOUIS -- Cequel Communications Holdings I, LLC (“Cequel,” and together with its subsidiaries, the “Company” or “Suddenlink”) today reported financial and operating results for the fourth quarter and full year 2009.

“We are proud to report solid 2009 performance, despite a challenging economic environment”

Fourth Quarter and Full Year 2009 Highlights

  • Fourth quarter revenues of $398.0 million grew 5.9% on a pro forma basis and 6.2% on an actual basis compared to the prior year. Revenues for the full year of 2009 of $1.565 billion grew 7.5% on a pro forma basis and 9.0% on an actual basis compared to the prior year

  • Adjusted EBITDA (as defined herein) for the fourth quarter of $150.8 million grew 9.1% on a pro forma basis and 9.5% on an actual basis compared to the fourth quarter of the prior year. Adjusted EBITDA for the full year of 2009 was $561.0 million, an increase of 11.8% on a pro forma basis and 13.0% on an actual basis compared to the prior year.

  • Revenue generating units (“RGUs”) increased 43,900 for the fourth quarter and 185,800 year-over-year, or a 7.1% annual gain.

  • Total average monthly revenue per basic video customer for the fourth quarter was $106.19, a pro forma increase of 8.5% year-over-year.

  • Bundled customers represented 54.1% of total customer relationships, an increase of 640 basis points from one year ago, primarily from growth in triple play customer relationships, which represented 16.6% of total customer relationships at December 31, 2009.



“We are proud to report solid 2009 performance, despite a challenging economic environment,” said Suddenlink’s Chairman and Chief Executive Officer Jerry Kent. “We believe the keys to our success are our relentless focus on providing a superior level of customer care and simplifying customers’ lives through competitively priced bundles of TV, Internet, and phone products. Our capital investment program, Project Imagine, will help us retain a technological advantage over our competitors, and we’re very excited about the initial operational performance we are seeing from the investment.”

Fourth Quarter 2009 Compared to Pro Forma Fourth Quarter 2008

The financial information for the fourth quarter 2008 is presented on a pro forma basis to include the acquisition of Orbis1, LLC (d/b/a/ CoStreet Communications) (“CoStreet”), which occurred on October 15, 2008, as if that transaction had been consummated on January 1, 2008.

Fourth quarter 2009 revenues rose 5.9%, largely attributable to the growth in RGUs, offset in part by a decrease in advertising revenues.

Video revenues increased 1.8%, primarily due to customer growth in digital video and advanced video services, as well as basic video rate increases, offset in part by a lower number of basic customers. The Company lost approximately 15,400 basic customers during the fourth quarter 2009, compared to a loss of 5,800 basic customers during the fourth quarter 2008, and lost 35,800 basic customers during 2009. Digital video customers increased by 48,900 during 2009 and grew by 14,300 during fourth quarter 2009, compared with an increase of 7,500 during the same period in the prior year. At December 31, 2009, over 51% of our digital video customers were taking advanced digital services such as high definition television (“HDTV”) and/or digital video recorder (“DVR”) services, and video on demand (“VOD”) was available to approximately 59% of our digital video customers.

High-speed Internet revenues increased 8.1%, due to an increase of 75,000 residential high-speed Internet customers during 2009 and growth in commercial high-speed Internet services to small and medium sized businesses. Residential high-speed Internet customers grew by 17,800 during the fourth quarter 2009, as compared to a gain of 13,100 during the fourth quarter 2008.

Telephone revenues increased 36.1%, primarily due to an increase of 97,700 residential telephone customers during 2009, and growth in commercial telephone services to small and medium sized businesses. Residential telephone customers grew by 27,200 during the fourth quarter 2009, as compared to a gain of 21,600 during the fourth quarter 2008.

Advertising revenues decreased 14.9%, largely due to sharp decreases in local and national advertising, especially in the automotive industry, and the absence of significant political advertising revenues in the current year.

Other revenues increased 16.4% due to, among other things, increased converter rental charges for HDTV and DVR capable digital converters, and from broadcast retransmission fees, which were collected for the first time in the first quarter 2009.

Operating costs and expenses rose 4.0%, primarily due to higher programming costs, increased broadcast retransmission expenses and increased telephone service costs, offset in part by lower marketing expenses and lower circuit expenses.

Adjusted EBITDA for the fourth quarter 2009 was $150.8 million, an increase of 9.1% from the same quarter last year, resulting in an Adjusted EBITDA margin of 37.9%, an increase of 110 basis points.

Income from operations for the fourth quarter 2009 was $68.3 million, an increase of 5.7%, compared to $64.6 million for the fourth quarter 2008.

Net loss was $19.1 million for the fourth quarter 2009, compared to a net loss of $2.2 million for the fourth quarter 2008. The increase in net loss is primarily attributable to losses on the extinguishment of debt and the termination of interest rate swap contracts, associated with our November 2009 financing activities.

Suddenlink Communications

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