Cincinnati Bell Reports First Quarter 2020 Results

Loading...
Loading...

HIGHLIGHTS

  • Cincinnati Bell entered into a merger agreement with Macquarie Infrastructure Partners ("MIP") to be acquired for $2.9 billion – transaction price represents a 101% premium to the closing price on December 20, 20191
  • Revenue totaled $380 million, consistent with the prior year
  • Operating loss of $20 million, includes the $25 million break-up fee paid in connection with the termination of Cincinnati Bell's previously announced merger agreement with Brookfield
  • Adjusted EBITDA2 increased 4% year-over-year, totaling $102 million
  • Cash provided by operating activities totaled $29 million with free cash flow3 of $12 million
  • Entertainment and Communications revenue totaled $244 million, generating Adjusted EBITDA of $91 million
  • IT Services and Hardware revenue totaled $142 million, generating Adjusted EBITDA of $13 million

Cincinnati Bell Inc. CBB, today announced financial results for the first quarter of 2020.

Leigh Fox, President and Chief Executive Officer of Cincinnati Bell, commented, "We started the year with strong momentum and great performance. Heading into the second quarter, we recognize there will be volatility resulting from the COVID-19 pandemic and have identified opportunities to mitigate the impact. We remain confident the team will execute on our initiatives and deliver solid results."

Mr. Fox continued, "Our agreement to be acquired by MIP is an important milestone for Cincinnati Bell, with the transaction price of $15.50 per share reflecting the robust process executed to ensure maximum value for all of our stakeholders. This is an exciting opportunity for the Company and we look forward to continuing to engage with MIP to ensure a successful close."

 
1

The last trading day prior to the date when Cincinnati Bell's original merger agreement with Brookfield was executed.

CONSOLIDATED RESULTS

  • Consolidated revenue totaled $380 million, consistent with the prior year
  • Operating income of $5 million, excluding the $25 million break-up fee paid in connection with the termination of Cincinnati Bell's previously announced merger agreement with Brookfield Infrastructure ("Brookfield") in order to enter into the merger agreement with MIP
  • Adjusted EBITDA totaled $102 million for the first quarter of 2020, up 4% compared to a year ago

Entertainment and Communications Segment

  • Entertainment and Communications revenue totaled $244 million for the first quarter of 2020
    • Cincinnati revenue totaled $167 million in the first quarter
      • Fioptics revenue totaled $89 million for the first quarter, up 2% year-over-year
      • FTTP internet subscribers totaled 224,300 at the end of the first quarter, adding 5,100 customers during the quarter
      • FTTP is available to approximately 60% of Greater Cincinnati, or 486,600 addresses
    • Hawaii revenue totaled $77 million in the first quarter of 2020
      • Consumer / SMB Fiber revenue totaled $21 million in the first quarter, down $1 million from the prior year
      • FTTP internet subscribers totaled 56,400, adding 1,000 new customers during the quarter
      • FTTP is available to approximately 35% of Hawaii, or 174,900 addresses
  • Adjusted EBITDA was $91 million for the first quarter of 2020, up 1% year-over-year

IT Services and Hardware Segment

  • IT Services and Hardware revenue totaled $142 million for the first quarter of 2020
    • Communications revenue was $51 million in the first quarter, up $4 million year-over-year
    • Consulting revenue totaled $42 million for the first quarter, up $3 million year-over-year
    • Cloud revenue was $22 million in the first quarter, up $1 million from the prior year, excluding the impact of insourcing initiatives from General Electric Company ("GE") completed during the second quarter of 2019
    • Infrastructure Solutions revenue totaled $28 million in the first quarter, up $2 million from a year ago
  • Adjusted EBITDA was $13 million for the first quarter, up $6 million year-over-year, excluding the impact of GE's insourcing initiatives

Macquarie Infrastructure Partners Transaction Details

On March 13, 2020, Cincinnati Bell Inc. ("Cincinnati Bell" or "the Company"), together with MIP, announced an agreement through which a MIP-controlled subsidiary will acquire all outstanding shares of Cincinnati Bell for $15.50 per share in a cash transaction valued at approximately $2.9 billion, including debt (the "Transaction").

The Transaction follows the determination by Cincinnati Bell's Board of Directors, after consultation with its legal and financial advisors, that the MIP proposal constituted a "Superior Company Proposal" as defined in Cincinnati Bell's previously announced merger agreement with Brookfield. Consistent with that determination and following the expiration of the negotiation period during which Brookfield declined to propose an amendment to the merger agreement, Cincinnati Bell terminated that agreement. In connection with the termination, Cincinnati Bell has paid Brookfield a $25 million break-up fee.

MIP is a fund managed by Macquarie Infrastructure and Real Assets ("MIRA"). Certain Special Opportunities funds ("Ares Funds") managed by the Private Equity Group of Ares Management Corporation ARES ("Ares Management") have agreed to provide equity financing for the Transaction.

MIRA is one of the world's leading alternative asset managers and a highly experienced investor in the communications infrastructure industry. For more than two decades, MIRA has partnered with investors, governments and communities to manage, develop and enhance assets relied on by more than 100 million people each day. As of September 30, 2019, MIRA managed $135.6 billion in assets that are essential to the sustainable development of economies and communities, including; 155 portfolio businesses, ~600 properties and 4.7 million hectares of farmland.

Ares Management is a leading global alternative investment manager operating three integrated businesses across Credit, Private Equity and Real Estate. Ares Management's global platform had $149 billion of assets under management as of December 31, 2019 and employs approximately 1,200 employees in over 20 offices in more than 10 countries.

The Transaction is expected to close in the first half of 2021. It has received unanimous approval of Cincinnati Bell's Board of Directors and is subject to customary closing conditions, including Cincinnati Bell shareholder approval and regulatory approval.

INVESTOR RELATIONS CONTACT:
Kei Lawson, 513-565-0510
E-mail: Takeitha.Lawson@cinbell.com

or

MEDIA CONTACT:
Josh Pichler, 513-565-0310
E-mail: Josh.Pichler@cinbell.com

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed acquisition of the Company by MIRA. In connection with the proposed acquisition, the Company has filed relevant materials with the U.S. Securities and Exchange Commission (the "SEC"), including the definitive proxy statement filed on March 25, 2020 and mailed to holders of the Company's common shares and 6 3⁄4% cumulative convertible preferred shares beginning on March 31, 2020 (the "Proxy Statement"). Shareholders of the Company are urged to read all relevant documents filed with the SEC, including the Proxy Statement, because they will contain important information about the proposed merger and the parties to the proposed merger. Investors and shareholders are able to obtain the documents (once available) free of charge at the SEC's website at www.sec.gov, or free of charge from the Company at investor.cincinnatibell.com or by directing a request to the Company's Investor Relations Department at 1-800-345-6301 or investorrelations@cinbell.com.

Participants in the Solicitation

The Company and its directors, executive officers, other members of management and employees, under SEC rules, may be deemed to be "participants" in the solicitation of proxies from the shareholders in favor of the proposed merger with MIRA. Information regarding the interests of these participants which may, in some cases, be different than those of the shareholders generally, is included in the Proxy Statement, the Company's Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 19, 2019, and its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on February 24, 2020. These documents may be obtained free of charge from the sources indicated above.

Safe Harbor Note

This release may contain "forward-looking" statements, as defined in federal securities laws including the Private Securities Litigation Reform Act of 1995, which are based on our current expectations, estimates, forecasts and projections. Statements that are not historical facts, including statements concerning plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to acquisitions and restructuring, business trends, statements regarding the proposed merger with MIRA ("the merger") and the expected timetable for completing the merger, are forward-looking statements. Words such as "expects," "anticipates," "predicts," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "endeavors," "strives," "will," "may," "proposes," "potential," "could," "should," "outlook," or variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, anticipated growth and trends in businesses, and other characterizations of future events or circumstances are forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report. The following important factors, among other things, could cause or contribute to actual results being materially and adversely different from those described or implied by such forward-looking statements, including, but not limited to:

  • those discussed in this release;
  • we operate in highly competitive industries, and customers may not continue to purchase products or services, which would result in reduced revenue and loss of market share;
  • we may be unable to grow our revenues and cash flows despite the initiatives we have implemented;
  • failure to anticipate the need for and introduce new products and services or to compete with new technologies may compromise our success in the telecommunications industry;
  • our access lines, which generate a significant portion of our cash flows and profits, are decreasing in number and if we continue to experience access line losses similar to the past several years, our revenues, earnings and cash flows from operations may be adversely impacted;
  • our failure to meet performance standards under our agreements could result in customers terminating their relationships with us or customers being entitled to receive financial compensation, which would lead to reduced revenues and/or increased costs;
  • we generate a substantial portion of our revenue by serving a limited geographic area;
  • a large customer accounts for a significant portion of our accounts receivable and the loss or significant reduction in business from this customer would cause operating results to decline and could negatively impact profitability and cash flows;
  • maintaining our telecommunications networks requires significant capital expenditures, and our inability or failure to maintain our telecommunications networks could have a material impact on our market share and ability to generate revenue;
  • increases in broadband usage may cause network capacity limitations, resulting in service disruptions or reduced capacity for customers;
  • we may be liable for material that content providers distribute on our networks;
  • cyber attacks or other breaches of network or other information technology security could have an adverse effect on our business;
  • natural disasters, terrorists acts or acts of war could cause damage to our infrastructure and result in significant disruptions to our operations;
  • the regulation of our businesses by federal and state authorities may, among other things, place us at a competitive disadvantage, restrict our ability to price our products and services and threaten our operating licenses;
  • we depend on a number of third party providers, and the loss of, or problems with, one or more of these providers may impede our growth or cause us to lose customers;
  • a failure of back-office information technology systems could adversely affect our results of operations and financial condition;
  • if we fail to extend or renegotiate our collective bargaining agreements with our labor unions when they expire or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed;
  • the loss of any of the senior management team or attrition among key sales associates could adversely affect our business, financial condition, results of operations and cash flows;
  • our debt could limit our ability to fund operations, raise additional capital, and fulfill our obligations, which, in turn, would have a material adverse effect on our businesses and prospects generally;
  • our indebtedness imposes significant restrictions on us; we depend on our loans and credit facilities to provide for our short-term financing requirements in excess of amounts generated by operations, and the availability of those funds may be reduced or limited;
  • the servicing of our indebtedness is dependent on our ability to generate cash, which could be impacted by many factors beyond our control;
  • we depend on the receipt of dividends or other intercompany transfers from our subsidiaries and investments;
  • the trading price of our common shares may be volatile, and the value of an investment in our common shares may decline;
  • the uncertain economic environment, including uncertainty in the U.S. and world securities markets, could impact our business and financial condition;
  • our future cash flows could be adversely affected if we are unable to fully realize our deferred tax assets;
  • adverse changes in the value of assets or obligations associated with our employee benefit plans could negatively impact shareowners' deficit and liquidity;
  • third parties may claim that we are infringing upon their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products;
  • third parties may infringe upon our intellectual property, and we may expend significant resources enforcing our rights or suffer competitive injury; we could be subject to a significant amount of litigation, which could require us to pay significant damages or settlements;
  • we could incur significant costs resulting from complying with, or potential violations of, environmental, health and human safety laws;
  • the risk that unexpected costs will be incurred;
  • risks and uncertainties relating to the merger, including the timing and likelihood of completion of the merger, including the failure to receive, on a timely basis or otherwise, the approval of our shareholders for the merger; the possibility that competing offers or acquisition proposals for the Company will be made; the possibility that any or all of the various conditions to the consummation of the merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the merger, including in circumstances which would require us to pay a termination fee or other expenses; the effect of the announcement or pendency of the merger on our ability to retain and hire key personnel, our ability to maintain relationships with our customers, suppliers and others with whom we do business, or our operating results and business generally; risks related to diverting management's attention from the Company's ongoing business operations; and the risk that shareholder litigation in connection with the merger may result in significant costs of defense, indemnification and liability;
  • risks and uncertainties related to the effect of the recent global outbreak of COVID-19 and related government, private sector and individual consumer responsive actions on the Company's business operations, employee availability, financial performance, liquidity and cash flow;
  • the other risks and uncertainties detailed in our filings with the SEC, including our Form 10-K report, Form 10-Q reports and Form 8-K reports; and
  • other factors outside the Company's control.

These forward-looking statements are based on information, plans and estimates as of the date hereof and there may be other factors that may cause our actual results to differ materially from these forward-looking statements. We assume no obligation to update the information contained in this release except as required by applicable law.

Use of Non-GAAP Financial Measures

This press release contains information about adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted EBITDA margin, net debt, net income (loss) applicable to common shareholders excluding special items and free cash flow. These are non-GAAP financial measures used by Cincinnati Bell management when evaluating results of operations and cash flow. Management believes these measures also provide users of the financial statements with additional and useful comparisons of current results of operations and cash flows with past and future periods. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. Detailed reconciliations of these non-GAAP financial measures to comparable GAAP financial measures have been included in the tables distributed with this release and are available in the Investor Relations section of www.cincinnatibell.com.

Loading...
Loading...

2Adjusted EBITDA provides a useful measure of operational performance. The Company defines Adjusted EBITDA as GAAP operating income plus depreciation, amortization, stock-based compensation, restructuring and severance related charges, (gain) loss on sale or disposal of assets, transaction and integration costs, transaction related employee retention agreements, asset impairments, and other special items. Adjusted EBITDA should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with the measure as defined by other companies.

Adjusted EBITDA margin provides a useful measure of operational performance. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with the measure as defined by other companies.

3Free cash flow provides a useful measure of operational performance, liquidity and financial health. The Company defines free cash flow as cash provided by (used in) operating activities, adjusted for restructuring and severance related payments, transaction and integration payments, less capital expenditures and preferred stock dividends. Free cash flow should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities, or the change in cash on the balance sheet and may not be comparable with free cash flow as defined by other companies. Although the Company feels there is no comparable GAAP measure for free cash flow, the attached financial information reconciles cash provided by operating activities to free cash flow.

Net debt provides a useful measure of liquidity and financial health. The Company defines net debt as the sum of the face amount of short-term and long-term debt, unamortized premium and/or discount and unamortized note issuance costs, offset by cash and cash equivalents.

Net income (loss) applicable to common shareholders excluding special items in total and per share provides a useful measure of operating performance. Net income (loss) applicable to common shareholders excluding special items should not be considered as an alternative to comparable GAAP measures of profitability and may not be comparable with net income (loss) excluding special items as defined by other companies.

About Cincinnati Bell Inc.

With headquarters in Cincinnati, Ohio, Cincinnati Bell Inc. CBB delivers integrated communications solutions to residential and business customers over its fiber-optic and copper networks including high-speed internet, video, voice and data. Cincinnati Bell provides service in areas of Ohio, Kentucky, Indiana and Hawaii. In addition, enterprise customers across the United States and Canada rely on CBTS and OnX, wholly-owned subsidiaries, for efficient, scalable office communications systems and end-to-end IT solutions. For more information, please visit www.cincinnatibell.com. The information on the Company's website is not incorporated by reference in this press release.

 

Cincinnati Bell Inc.

Consolidated Statements of Operations

(Unaudited)

(Dollars in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

Change

 

 

2020

 

2019

 

$

 

%

Revenue

 

$

380.0

 

 

$

379.6

 

 

$

0.4

 

 

 

0

%

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

193.7

 

 

 

197.7

 

 

 

(4.0

)

 

 

(2

)%

Selling, general and administrative

 

 

88.0

 

 

 

86.1

 

 

 

1.9

 

 

 

2

%

Depreciation and amortization

 

 

74.2

 

 

 

79.4

 

 

 

(5.2

)

 

 

(7

)%

Restructuring and severance related charges

 

 

15.2

 

 

 

3.3

 

 

 

11.9

 

 

n/m

 

Transaction and integration costs

 

 

29.1

 

 

 

3.0

 

 

 

26.1

 

 

n/m

 

Operating (loss) income

 

 

(20.2

)

 

 

10.1

 

 

 

(30.3

)

 

n/m

 

Interest expense

 

 

33.7

 

 

 

35.1

 

 

 

(1.4

)

 

 

(4

)%

Other components of pension and postretirement benefit plans expense

 

 

2.6

 

 

 

2.6

 

 

 

-

 

 

 

0

%

Other income, net

 

 

(0.8

)

 

 

(1.0

)

 

 

0.2

 

 

 

(20

)%

Loss before income taxes

 

 

(55.7

)

 

 

(26.6

)

 

 

(29.1

)

 

n/m

 

Income tax (benefit) expense

 

 

(21.7

)

 

 

0.3

 

 

 

(22.0

)

 

n/m

 

Net loss

 

 

(34.0

)

 

 

(26.9

)

 

 

(7.1

)

 

 

26

%

Preferred stock dividends

 

 

2.6

 

 

 

2.6

 

 

 

-

 

 

 

-

 

Net loss applicable to common shareowners

 

$

(36.6

)

 

$

(29.5

)

 

$

(7.1

)

 

 

24

%

Basic and diluted net loss per common share

 

$

(0.72

)

 

$

(0.59

)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

50.5

 

 

 

50.3

 

 

 

 

 

 

 

 

 

- Diluted

 

 

50.5

 

 

 

50.3

 

 

 

 

 

 

 

 

 

 

Cincinnati Bell Inc.

Entertainment and Communications Income Statement

(Unaudited)

(Dollars in millions)

 

 

 

Three Months Ended

March 31,

 

Change

 

 

2020

 

2019

 

$

 

%

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

243.8

 

 

$

250.3

 

 

$

(6.5

)

 

 

(3

)%

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

108.0

 

 

 

115.3

 

 

 

(7.3

)

 

 

(6

)%

Selling, general and administrative

 

 

45.0

 

 

 

44.5

 

 

 

0.5

 

 

 

1

%

Depreciation and amortization

 

 

63.9

 

 

 

62.7

 

 

 

1.2

 

 

 

2

%

Restructuring and severance related charges

 

 

14.8

 

 

 

3.3

 

 

 

11.5

 

 

n/m

 

Total operating costs and expenses

 

 

231.7

 

 

 

225.8

 

 

 

5.9

 

 

 

3

%

Operating income

 

$

12.1

 

 

$

24.5

 

 

$

(12.4

)

 

 

(51

)%

 

 

 

Three Months Ended

 

Three Months Ended

 

 

March 31, 2020

 

March 31, 2019

 

 

Cincinnati

 

Hawaii

 

Total

 

Cincinnati

 

Hawaii

 

Total

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

$

40.9

 

 

$

8.5

 

 

$

49.4

 

 

$

37.4

 

 

$

7.9

 

 

$

45.3

 

Video

 

 

38.8

 

 

 

9.9

 

 

 

48.7

 

 

 

40.2

 

 

 

11.5

 

 

 

51.7

 

Voice

 

 

8.9

 

 

 

2.7

 

 

 

11.6

 

 

 

9.2

 

 

 

2.8

 

 

 

12.0

 

Other

 

 

0.3

 

 

 

0.2

 

 

 

0.5

 

 

 

0.3

 

 

 

0.2

 

 

 

0.5

 

Total Consumer / SMB Fiber

 

 

88.9

 

 

 

21.3

 

 

 

110.2

 

 

 

87.1

 

 

 

22.4

 

 

 

109.5

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

21.2

 

 

 

10.4

 

 

 

31.6

 

 

 

21.1

 

 

 

9.2

 

 

 

30.3

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

24.4

 

 

 

13.9

 

 

 

38.3

 

 

 

26.0

 

 

 

15.9

 

 

 

41.9

 

Voice

 

 

29.5

 

 

 

26.9

 

 

 

56.4

 

 

 

33.0

 

 

 

28.4

 

 

 

61.4

 

Other

 

 

3.2

 

 

 

4.1

 

 

 

7.3

 

 

 

3.5

 

 

 

3.7

 

 

 

7.2

 

Total Legacy

 

 

57.1

 

 

 

44.9

 

 

 

102.0

 

 

 

62.5

 

 

 

48.0

 

 

 

110.5

 

Total Entertainment & Communications

 

$

167.2

 

 

$

76.6

 

 

$

243.8

 

 

$

170.7

 

 

$

79.6

 

 

$

250.3

 

* Represents Fioptics in Cincinnati

 

Cincinnati Bell Inc.

Entertainment and Communications Metric Information

(Unaudited)

(In thousands)

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Cincinnati Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet FTTP *

 

 

224.3

 

 

 

219.2

 

 

 

214.6

 

 

 

210.8

 

 

 

207.6

 

Internet FTTN *

 

 

30.0

 

 

 

31.4

 

 

 

32.5

 

 

 

34.0

 

 

 

35.7

 

Total Fioptics Internet

 

 

254.3

 

 

 

250.6

 

 

 

247.1

 

 

 

244.8

 

 

 

243.3

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video FTTP *

 

 

111.2

 

 

 

112.7

 

 

 

113.5

 

 

 

114.5

 

 

 

115.2

 

Video FTTN *

 

 

21.9

 

 

 

22.4

 

 

 

23.0

 

 

 

23.5

 

 

 

24.0

 

Total Fioptics Video

 

 

133.1

 

 

 

135.1

 

 

 

136.5

 

 

 

138.0

 

 

 

139.2

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fioptics Voice Lines

 

 

105.3

 

 

 

106.8

 

 

 

108.0

 

 

 

108.8

 

 

 

109.0

 

Fioptics Units Passed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units Passed FTTP *

 

 

486.6

 

 

 

484.8

 

 

 

482.0

 

 

 

480.1

 

 

 

477.6

 

Units Passed FTTN *

 

 

138.6

 

 

 

138.6

 

 

 

138.6

 

 

 

138.7

 

 

 

138.5

 

Total Fioptics Units Passed

 

 

625.2

 

 

 

623.4

 

 

 

620.6

 

 

 

618.8

 

 

 

616.1

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ethernet Bandwidth (Gb)

 

 

5,487

 

 

 

5,228

 

 

 

5,006

 

 

 

4,672

 

 

 

4,540

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL

 

 

63.3

 

 

 

64.0

 

 

 

65.9

 

 

 

67.9

 

 

 

69.6

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Voice Lines

 

 

191.2

 

 

 

196.8

 

 

 

202.9

 

 

 

210.3

 

 

 

218.0

 

* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)
 

Cincinnati Bell Inc.

Entertainment and Communications Metric Information

(Unaudited)

(In thousands)

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Hawaii Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet FTTP *

 

 

56.4

 

 

 

55.4

 

 

 

54.6

 

 

 

53.7

 

 

 

52.7

 

Internet FTTN *

 

 

12.4

 

 

 

12.8

 

 

 

13.2

 

 

 

13.4

 

 

 

13.9

 

Total Consumer / SMB Fiber Internet

 

 

68.8

 

 

 

68.2

 

 

 

67.8

 

 

 

67.1

 

 

 

66.6

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video FTTP *

 

 

29.6

 

 

 

30.6

 

 

 

31.8

 

 

 

33.0

 

 

 

33.5

 

Video FTTN *

 

 

11.5

 

 

 

12.1

 

 

 

13.2

 

 

 

13.9

 

 

 

14.3

 

Total Consumer / SMB Fiber Video

 

 

41.1

 

 

 

42.7

 

 

 

45.0

 

 

 

46.9

 

 

 

47.8

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer / SMB Fiber Voice Lines

 

 

29.9

 

 

 

30.0

 

 

 

30.1

 

 

 

30.1

 

 

 

30.3

 

Consumer / SMB Fiber Units Passed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units Passed FTTP *

 

 

174.9

 

 

 

173.5

 

 

 

170.6

 

 

 

169.2

 

 

 

168.1

 

Units Passed FTTN *

 

 

72.5

 

 

 

72.9

 

 

 

72.8

 

 

 

72.9

 

 

 

73.4

 

Total Consumer / SMB Fiber Units Passed

 

 

247.4

 

 

 

246.4

 

 

 

243.4

 

 

 

242.1

 

 

 

241.5

 

Enterprise Fiber

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ethernet Bandwidth (Gb)

 

 

3,619

 

 

 

3,651

 

 

 

3,424

 

 

 

2,924

 

 

 

2,413

 

Legacy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DSL

 

 

41.1

 

 

 

42.9

 

 

 

44.3

 

 

 

45.7

 

 

 

47.2

 

Voice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Voice Lines

 

 

173.0

 

 

 

177.1

 

 

 

183.0

 

 

 

187.6

 

 

 

192.8

 

* Fiber-to-the-Premise (FTTP), Fiber-to-the-Node (FTTN)

 

Cincinnati Bell Inc.

IT Services and Hardware Income Statement and Metric Information

(Unaudited)

(Dollars in millions)

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

March 31,

 

Change

 

 

2020

 

2019

 

$

 

%

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

142.3

 

 

$

136.3

 

 

$

6.0

 

 

 

4

%

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products

 

 

91.6

 

 

 

89.2

 

 

 

2.4

 

 

 

3

%

Selling, general and administrative

 

 

38.3

 

 

 

37.2

 

 

 

1.1

 

 

 

3

%

Depreciation and amortization

 

 

10.3

 

 

 

16.7

 

 

 

(6.4

)

 

 

(38

)%

Restructuring and severance related charges

 

 

0.4

 

 

 

-

 

 

 

0.4

 

 

n/m

 

Total operating costs and expenses

 

 

140.6

 

 

 

143.1

 

 

 

(2.5

)

 

 

(2

)%

Operating income (loss)

 

$

1.7

 

 

$

(6.8

)

 

$

8.5

 

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

$

41.9

 

 

$

38.9

 

 

$

3.0

 

 

 

8

%

Cloud

 

 

21.5

 

 

 

24.4

 

 

 

(2.9

)

 

 

(12

)%

Communications

 

 

51.2

 

 

 

47.4

 

 

 

3.8

 

 

 

8

%

Infrastructure Solutions

 

 

27.7

 

 

 

25.6

 

 

 

2.1

 

 

 

8

%

Total IT Services and Hardware Revenue

 

$

142.3

 

 

$

136.3

 

 

$

6.0

 

 

 

4

%

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2020

 

2019

 

2019

 

2019

 

2019

Consulting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Billable Resources

 

 

1,222

 

 

 

1,034

 

 

 

1,007

 

 

 

1,039

 

 

 

1,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NaaS Locations

 

 

4,593

 

 

 

4,047

 

 

 

3,492

 

 

 

2,988

 

 

 

2,550

 

SD - WAN Locations

 

 

2,337

 

 

 

2,197

 

 

 

1,849

 

 

 

1,743

 

 

 

1,002

 

Hosted UCaaS Profiles

 

 

277,092

 

 

 

274,654

 

 

 

270,335

 

 

 

254,679

 

 

 

244,482

 

 

Cincinnati Bell Inc.

Net Debt (Non-GAAP)

(Unaudited)

(Dollars in millions)

 

 

 

March 31,

 

December 31,

 

 

2020

 

2019

Receivables Facility

 

$

164.6

 

 

$

131.5

 

Credit Agreement - Tranche B Term Loan due 2024

 

 

591.0

 

 

 

592.5

 

Credit Agreement - Revolving Credit Facility

 

 

55.0

 

 

 

57.0

 

7 1/4% Senior Notes due 2023

 

 

22.3

 

 

 

22.3

 

7% Senior Notes due 2024

 

 

625.0

 

 

 

625.0

 

8% Senior Notes due 2025

 

 

350.0

 

 

 

350.0

 

Cincinnati Bell Telephone Notes

 

 

87.9

 

 

 

87.9

 

Other financing lease agreements

 

 

4.1

 

 

 

5.2

 

Finance lease liabilities

 

 

69.6

 

 

 

73.8

 

Net unamortized premium

 

 

1.3

 

 

 

1.3

 

Unamortized note issuance costs

 

 

(21.8

)

 

 

(22.9

)

Total debt

 

 

1,949.0

 

 

 

1,923.6

 

Less: Cash and cash equivalents

 

 

(10.6

)

 

 

(11.6

)

Net debt (Non-GAAP)

 

$

1,938.4

 

 

$

1,912.0

 

 

Cincinnati Bell Inc.

Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)

(Unaudited)

(Dollars in millions)

 

 

 

Three Months Ended March 31, 2020

 

 

Entertainment &

Communications

 

IT Services &

Hardware

 

Corporate

 

Total

Company

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(34.0

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21.7

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33.7

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.8

)

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

12.1

 

 

$

1.7

 

 

$

(34.0

)

 

$

(20.2

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

63.9

 

 

 

10.3

 

 

 

-

 

 

 

74.2

 

Restructuring and severance related charges

 

 

14.8

 

 

 

0.4

 

 

 

-

 

 

 

15.2

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

29.1

 

 

 

29.1

 

Employee contract termination costs

 

 

0.3

 

 

 

0.8

 

 

 

-

 

 

 

1.1

 

Transaction related employee retention agreements

 

 

-

 

 

 

-

 

 

 

0.6

 

 

 

0.6

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1.7

 

 

 

1.7

 

Adjusted EBITDA (Non-GAAP)

 

$

91.1

 

 

$

13.2

 

 

$

(2.6

)

 

$

101.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

37

%

 

 

9

%

 

 

-

 

 

 

27

%

 

 

Three Months Ended March 31, 2019

 

 

Entertainment &

Communications

 

IT Services &

Hardware

 

Corporate

 

Total

Company

Net loss (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(26.9

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.3

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35.1

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1.0

)

Other components of pension and postretirement benefit plans expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) (GAAP)

 

$

24.5

 

 

$

(6.8

)

 

$

(7.6

)

 

$

10.1

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

62.7

 

 

 

16.7

 

 

 

-

 

 

 

79.4

 

Restructuring and severance related charges

 

 

3.3

 

 

 

-

 

 

 

-

 

 

 

3.3

 

Transaction and integration costs

 

 

-

 

 

 

-

 

 

 

3.0

 

 

 

3.0

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

1.8

 

 

 

1.8

 

Adjusted EBITDA (Non-GAAP)

 

$

90.5

 

 

$

9.9

 

 

$

(2.8

)

 

$

97.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin (Non-GAAP)

 

 

36

%

 

 

7

%

 

 

-

 

 

 

26

%

Year-over-year dollar change in Adjusted EBITDA

 

 

0.6

 

 

 

3.3

 

 

 

0.2

 

 

 

4.1

 

Year-over-year percentage change in Adjusted EBITDA

 

 

1

%

 

 

33

%

 

 

(7

)%

 

 

4

%

 

Cincinnati Bell Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in millions)

 

 

 

Three Months Ended

 

 

March 31,

 

 

2020

 

2019

Cash provided by operating activities

 

$

29.1

 

 

$

56.8

 

Capital expenditures

 

 

(50.9

)

 

 

(56.5

)

Other, net

 

 

-

 

 

 

(0.1

)

Cash used in investing activities

 

 

(50.9

)

 

 

(56.6

)

Net increase (decrease) in corporate credit and receivables facilities with initial maturities less than 90 days

 

 

31.1

 

 

 

(3.8

)

Repayment of debt

 

 

(6.2

)

 

 

(4.5

)

Debt issuance costs

 

 

-

 

 

 

(0.1

)

Dividends paid on preferred stock

 

 

(2.6

)

 

 

(2.6

)

Other, net

 

 

(1.1

)

 

 

(0.8

)

Cash provided by (used in) financing activities

 

 

21.2

 

 

 

(11.8

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(0.4

)

 

 

0.1

 

Net decrease in cash and cash equivalents

 

 

(1.0

)

 

 

(11.5

)

Cash and cash equivalents at beginning of period

 

 

11.6

 

 

 

15.4

 

Cash and cash equivalents at end of period

 

$

10.6

 

 

$

3.9

 

 

 

 

 

 

 

 

 

 

Reconciliation of Cash Provided by Operating Activities (GAAP) to

 

 

 

 

 

 

 

 

Free Cash Flow (Non-GAAP)

 

 

 

 

 

 

 

 

Cash provided by operating activities

 

$

29.1

 

 

$

56.8

 

Adjustments:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(50.9

)

 

 

(56.5

)

Restructuring and severance related payments

 

 

8.3

 

 

 

6.8

 

Preferred stock dividends

 

 

(2.6

)

 

 

(2.6

)

Transaction and integration costs

 

 

27.8

 

 

 

1.8

 

Free cash flow (Non-GAAP)

 

$

11.7

 

 

$

6.3

 

Income tax (refunds) payments

 

$

(1.1

)

 

$

1.1

 

 

Cincinnati Bell Inc.

Capital Expenditures

(Unaudited)

(Dollars in millions)

 

 

 

Three Months Ended

 

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

June 30,

2019

 

March 31,

2019

Entertainment and Communications

 

$

44.4

 

 

$

51.0

 

 

$

51.3

 

 

$

47.9

 

 

$

51.1

 

IT Services and Hardware

 

 

6.5

 

 

 

5.5

 

 

 

5.4

 

 

 

6.1

 

 

 

5.4

 

Corporate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

0.1

 

 

 

-

 

Total capital expenditures

 

$

50.9

 

 

$

56.5

 

 

$

56.7

 

 

$

54.1

 

 

$

56.5

 

 

Cincinnati Bell Inc.

Reconciliation of Net (Loss) Income Applicable to Common Shareholders (GAAP) to Net Income (Loss) Applicable to Common Shareholders, Excluding Special Items (Non-GAAP) and Adjusted Diluted Earnings Per Share (Non-GAAP)

(Unaudited)

(Dollars in millions, except per share amounts)

 

 

 

Three Months Ended

 

 

March 31, 2020

 

March 31, 2019

Net loss applicable to common shareholders (GAAP)

 

$

(36.6

)

 

$

(29.5

)

Special items:

 

 

 

 

 

 

 

 

Restructuring and severance related charges

 

 

15.2

 

 

 

3.3

 

Transaction and integration costs

 

 

29.1

 

 

 

3.0

 

Income tax effect of special items *

 

 

2.3

 

 

 

(0.9

)

Total special items

 

 

46.6

 

 

 

5.4

 

Net income (loss) applicable to common shareowners, excluding special items (Non-GAAP)

 

$

10.0

 

 

$

(24.1

)

Weighted average diluted shares outstanding**

 

 

51.2

 

 

 

50.3

 

Diluted loss per common share (GAAP)

 

$

(0.72

)

 

$

(0.59

)

Adjusted diluted earnings (loss) per common share (Non-GAAP)

 

$

0.20

 

 

$

(0.48

)

*

Special items have been tax effected utilizing the normalized effective tax rate for the period, with the exception of transaction and integration costs, which are treated as a discrete item.

**

Weighted average diluted shares outstanding based on net income (loss) applicable to common shareowners, excluding special items (Non-GAAP).

 

Loading...
Loading...
Posted In: Press Releases
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...