RCN Reports Q1

RCN Corporation announced its results for the first quarter 2007

May 10, 2007

3 Min Read

HERNDON, Va. -- RCN Corporation (NASDAQ: RCNI - News), a leading provider of video, data, and voice services to residential and business customers, today announced its results for the first quarter 2007.

"RCN is off to a very solid start in 2007, with first quarter results demonstrating continued progress in growing financial and operating metrics," stated James F. Mooney, Chairman of RCN's board of directors. "EBITDA was strong this quarter as we combined both residential and commercial revenue growth with continued cost control, increasing our EBITDA margin to 24%, up nearly 500 basis points from last year and over 200 basis points from last quarter. RCN's residential customer metrics also remained solid - ARPC grew to $108, our bundle rate was steady at 67%, and we continued to improve churn. In addition, we launched a tender offer and consent solicitation related to our second-lien notes, a key step in enabling our previously announced initiative to return $350 million to $400 million of capital to stockholders. We believe that continued execution against our balanced strategy of revenue growth, margin expansion, and active asset portfolio management will position RCN well for another successful year in 2007."

First Quarter 2007 Results

RCN's results for both 2006 and 2007 exclude results from RCN's California properties, due to the sale of RCN's San Francisco assets and the discontinuation of operations in Los Angeles. First quarter 2006 results include results of acquired CEC operations beginning March 17, 2006.

  • Total revenue of $153 million increased from $136 million in the first quarter of 2006 and $151 million in the fourth quarter of 2006. The increase versus the year-ago period was driven by 141% growth in commercial revenue, due primarily to the acquisition of CEC, and 5% growth in core residential revenue, resulting from an increase in average revenue per customer (ARPC) to $108, as well as the addition of approximately 10,000 new customers and 33,000 revenue generating units (RGUs).

  • EBITDA of $36 million increased 41% from $26 million in the first quarter of 2006 and 12% from $32 million in the fourth quarter of 2006, driven by higher revenue as well as continued decreases in SG&A as a percent of revenue, resulting from reductions in headcount, third party support costs, property taxes and other corporate expenses. EBITDA is a non-GAAP financial measure - see "Non-GAAP Measures" below.

  • Capital expenditures were $26 million compared to $14 million in the first quarter of 2006 and $28 million in the fourth quarter of 2006.

  • RCN ended the quarter with $203 million in outstanding debt and $161 million in cash, cash equivalents, and short-term investments.

  • RCN had approximately 407,000 customers as of March 31, 2007 versus 406,000 as of December 31, 2006 and 397,000 customers as of March 31, 2006.

Peter D. Aquino, President and Chief Executive Officer of RCN, stated, "The first quarter represents another consistent growth quarter in residential customers and connections, led by an impressive 38% penetration in the Triple Play. In addition, RCN Business Solutions is delivering the benefits of the CEC acquisition. The progress and synergies contributed by both business units are driving sustainable improvement in our financial results. Regarding video, we are proud to announce that RCN has digitized our complete programming line-up, well ahead of our MSO competition. This differentiator is driving higher satisfaction in picture quality across the spectrum and freeing up bandwidth for additional channels, a la carte programming, and HD on our robust 860MHz network. We continue to add high speed data connections, by offering the best combination of price and speed across all of our markets. We also completed the acquisition of 112 on-net buildings for our commercial group, primarily in Boston, and look forward to attracting both enterprise and carrier customers throughout our building portfolio - now numbering close to 1,000. RCN is accelerating both our residential and commercial expansion efforts through new construction in all markets, capitalizing on our fiber density in the northeast corridor and Chicago metro markets. RCN is positioned for a strong year with all engines running in growth mode and focused on both organic and strategic projects."

RCN Corp.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like