Market Overview

Mediacom Communications Reports Combined Results for Third Quarter 2020

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MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months ended September 30, 2020.

Mediacom Combined Results for Third Quarter 2020*

  • Revenues were $538.6 million, a 5.5% increase from the prior year period
  • Adjusted OIBDA was $228.9 million, a 15.4% increase from the prior year period
  • Free cash flow was $138.9 million, a 41.0% increase from the prior year period
  • High-speed data ("HSD") customers were 1,425,000, an 8.3% increase from September 30, 2019
  • Net debt of $1,857.5 billion, a $427.0 million reduction from September 30, 2019
  • Net leverage ratio of 2.03x, compared to 2.88x at September 30, 2019
  • Interest coverage ratio of 27.08x, compared to 8.28x at September 30, 2019
  • Average borrowing costs of 1.7%, compared to 4.1% for the prior year period
  • Available cash and unused revolving credit lines exceeded $673 million at September 30, 2020

"Despite challenges posed by the coronavirus pandemic and the devastating windstorms and hurricanes impacting certain markets we serve, our dedicated and hard-working frontline employees rose to the task of helping Mediacom deliver outstanding results this quarter, both operationally and financially," stated Rocco B. Commisso, Mediacom's founder, Chairman and CEO.

"With Adjusted OIBDA growth of 15.4%, Mediacom registered the best quarterly performance in its 25-year history, driven in large part by record high-speed data customer gains. Our investment-grade balance sheet strengthened even more, with the net leverage ratio reducing to 2.0x. Moreover, we expect to generate at least $525 million of free cash flow in 2020, representing an all-time high.

"Looking longer term, with CBRS spectrum rights acquired in the recent FCC auction, we are excited about the opportunity to provide fixed wireless broadband to hundreds of thousands of unserved or underserved households in close proximity to our existing footprint beginning in the second half of 2021, furthering our deliberate transition to a data-centric business model," concluded Mr. Commisso.

__________________________________
* See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow and Table 5 for footnotes.

TABLE 1*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

 

Three Months Ended

September 30,

 

 

2020

 

2019

 

YoY% Change

High-speed data ("HSD")

$

238,724

 

$

213,058

 

12.0

%

Video

 

177,620

 

 

184,027

 

(3.5

%)

Phone

 

29,396

 

 

29,876

 

(1.6

%)

Business services

 

75,997

 

 

72,053

 

5.5

%

Advertising

 

16,838

 

 

11,566

 

45.6

%

Total revenues

$

538,575

 

$

510,580

 

5.5

%

Service costs

 

(216,825

)

 

(216,201

)

0.3

%

SG&A expenses

 

(80,541

)

 

(84,926

)

(5.2

%)

Management fees

 

(13,000

)

 

(11,500

)

13.0

%

OIBDA (a)

$

228,209

 

$

197,953

 

15.3

%

Non-cash, share based compensation

 

707

 

 

384

 

84.1

%

Adjusted OIBDA (a)

$

 

228,916

 

 

 

$

 

198,337

 

 

 

15.4

%

Cash interest expense (a)

 

(8,454

)

 

(23,960

)

(64.7

%)

Capital expenditures

 

(81,555

)

 

(75,890

)

7.5

%

Free cash flow (a)

$

138,907

 

$

98,487

 

41.0

%

 

 

 

 

Adjusted OIBDA margin (b)

 

42.5

%

 

38.8

%

 

 

 

 

 

 

 

 

 

 

September 30, 2020

September 30, 2019

YoY% Change

HSD customers

 

1,425,000

 

 

1,316,000

 

8.3

%

Video customers

 

663,000

 

 

729,000

 

(9.1

%)

Phone customers

 

599,000

 

 

616,000

 

(2.8

%)

Primary service units ("PSUs")

 

2,687,000

 

 

2,661,000

 

1.0

%

 

 

 

 

HSD customer increases

 

29,000

 

 

13,000

 

 

Video customer declines

 

(13,000

)

 

(18,000

)

 

Phone customer declines

 

(3,000

)

 

Quarterly PSU increases (declines)

 

13,000

 

 

(5,000

)

 

 

 

 

 

Customer relationships (c)

 

1,429,000

 

 

1,367,000

 

4.5

%

 

 

 

 

Average total monthly revenue per:

 

 

 

PSU (d)

$

66.97

 

$

63.90

 

4.8

%

Customer relationship (e)

$

126.74

 

$

124.46

 

1.8

%

 

 

 

 

 

 

 

 

 

September 30, 2020

September 30, 2019

 

Bank credit facility

$

1,890,000

 

$

2,265,000

 

 

5½% senior notes due 2021

 

50,000

 

 

Total debt (f)

$

1,890,000

 

$

2,315,000

 

 

Cash

 

(32,484

)

 

(30,476

)

 

Net debt

$

1,857,516

 

$

2,284,524

 

 

 

 

 

 

Net leverage ratio (g)

2.03

x

2.88

x

Interest coverage ratio (h)

27.08

x

8.28

x

 

______________________________
* See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow and Table 5 for footnotes.
 

TABLE 2*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

Three Months Ended

September 30, 2020

 

Mediacom

Broadband

Mediacom

LLC

Eliminations

Mediacom

Combined

High-speed data ("HSD")

$

126,820

 

$

111,904

 

$

238,724

 

Video

 

94,438

 

 

83,182

 

 

177,620

 

Phone

 

15,684

 

 

13,712

 

 

29,396

 

Business services

 

45,541

 

 

30,456

 

 

75,997

 

Advertising

 

14,542

 

 

2,296

 

 

16,838

 

Total revenues

$

297,025

 

$

241,550

 

$

538,575

 

Service costs

 

(115,756

)

 

(101,069

)

 

(216,825

)

SG&A expenses

 

(48,215

)

 

(32,326

)

 

(80,541

)

Management fees

 

(7,800

)

 

(5,200

)

 

(13,000

)

OIBDA (a)

$

125,254

 

$

102,955

 

$

228,209

 

Investment income from affiliate

 

4,500

 

(4,500

)

Non-cash share-based compensation

 

374

 

 

333

 

 

707

 

Adjusted OIBDA (a)

$

125,628

 

$

107,788

 

(4,500

)

$

228,916

 

Cash interest expense (a)

 

(4,037

)

 

(4,417

)

 

(8,454

)

Capital expenditures

 

(41,255

)

 

(40,300

)

 

(81,555

)

Dividend to preferred members

 

(4,500

)

4,500

 

Free cash flow (a)

$

75,836

 

$

63,071

 

$

138,907

 

 

 

 

 

 

 

 

 

 

 

 

Mediacom

Broadband

Mediacom

LLC

Mediacom

Combined

HSD customers

 

781,000

 

 

644,000

 

 

 

1,425,000

 

Video customers

 

361,000

 

 

302,000

 

 

 

663,000

 

Phone customers

 

328,000

 

 

271,000

 

 

 

599,000

 

Primary service units ("PSUs")

 

1,470,000

 

 

1,217,000

 

 

 

2,687,000

 

 

 

 

 

 

HSD customer increases

 

14,000

 

 

15,000

 

 

 

29,000

 

Video customer declines

 

(9,000

)

 

(4,000

)

 

 

(13,000

)

Phone customer declines

 

(3,000

)

 

 

(3,000

)

Quarterly PSU increases

 

2,000

 

 

11,000

 

 

 

13,000

 

 

 

 

 

 

Customer relationships (c)

 

784,000

 

 

645,000

 

 

 

1,429,000

 

 

 

 

 

 

Average total monthly revenue per:

 

 

 

 

PSU (d)

$

67.40

 

$

66.46

 

 

$

66.97

 

Customer relationship (e)

$

127.10

 

$

126.30

 

 

$

126.74

 

 

 

 

 

 

 

 

 

 

 

 

Mediacom

Broadband

Mediacom

LLC

Mediacom

Combined

Bank credit facility

$

911,875

 

$

978,125

 

 

$

1,890,000

 

5½% senior notes due 2021

 

Total debt (f)

$

911,875

 

$

978,125

 

 

$

1,890,000

 

Cash

 

(14,884

)

 

(17,600

)

 

 

(32,484

)

Net debt

$

896,991

 

$

960,525

 

 

$

1,857,516

 

 

 

 

 

 

Net leverage ratio (g)

1.79

x

2.23

x

 

2.03

x

Interest coverage ratio (h)

31.12

x

24.40

x

 

27.08

x

__________________________________

* See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow and Table 5 for footnotes.

Due to rounding of Mediacom Broadband and Mediacom LLC results, slight differences may exist with actual Mediacom Combined results.

TABLE 3*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

 

Three Months Ended

September 30, 2019

 

Mediacom

Broadband

Mediacom

LLC

Eliminations

Mediacom

Combined

 

High-speed data ("HSD")

$

115,238

 

$

97,820

 

$

213,058

 

 

Video

 

99,538

 

 

84,489

 

 

184,027

 

 

Phone

 

16,150

 

 

13,726

 

 

29,876

 

 

Business services

 

43,878

 

 

28,175

 

 

72,053

 

 

Advertising

 

9,706

 

 

1,860

 

 

11,566

 

 

Total revenues

$

284,510

 

$

226,070

 

$

510,580

 

 

Service costs

 

(116,634

)

 

(99,567

)

 

(216,201

)

 

SG&A expenses

 

(51,257

)

 

(33,669

)

 

(84,926

)

 

Management fees

 

(6,900

)

 

(4,600

)

 

(11,500

)

 

OIBDA (a)

$

109,719

 

$

88,234

 

$

197,953

 

 

Investment income from affiliate

 

4,500

 

(4,500

)

 

Non-cash share-based compensation

 

204

 

 

180

 

 

384

 

 

Adjusted OIBDA (a)

$

109,923

 

$

92,914

 

(4,500

)

$

198,337

 

 

Cash interest expense (a)

 

(12,919

)

 

(11,041

)

 

(23,960

)

 

Capital expenditures

 

(39,987

)

 

(35,903

)

 

(75,890

)

 

Dividend to preferred members

 

(4,500

)

4,500

 

 

Free cash flow (a)

$

52,517

 

$

45,970

 

$

98,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mediacom

Broadband

Mediacom

LLC

Mediacom

Combined

 

HSD customers

 

726,000

 

 

590,000

 

 

 

1,316,000

 

 

Video customers

 

400,000

 

 

329,000

 

 

 

729,000

 

 

Phone customers

 

340,000

 

 

276,000

 

 

 

616,000

 

 

Primary service units ("PSUs")

 

1,466,000

 

 

1,195,000

 

 

 

2,661,000

 

 

 

 

 

 

 

 

HSD customer increases

 

5,000

 

 

8,000

 

 

 

13,000

 

 

Video customer declines

 

(12,000

)

 

(6,000

)

 

 

(18,000

)

 

Phone customer (declines) increases

 

(1,000

)

 

1,000

 

 

 

Quarterly PSU (declines) increases

 

(8,000

)

 

3,000

 

 

 

(5,000

)

 

 

 

 

 

 

 

Customer relationships (c)

 

757,000

 

 

610,000

 

 

 

1,367,000

 

 

 

 

 

 

 

 

Average total monthly revenue per:

 

 

 

 

 

PSU (d)

$

64.51

 

$

63.14

 

 

$

63.90

 

 

Customer relationship (e)

$

125.03

 

$

123.74

 

 

$

124.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mediacom

Broadband

Mediacom

LLC

Mediacom

Combined

 

Bank credit facility

$

1,147,250

 

$

1,117,750

 

 

$

2,265,000

 

 

5½% senior notes due 2021

 

50,000

 

 

 

50,000

 

 

Total debt (f)

$

1,197,250

 

$

1,117,750

 

 

$

2,315,000

 

 

Cash

 

(15,588

)

 

(14,888

)

 

 

(30,476

)

 

Net debt

$

1,181,662

 

$

1,102,862

 

 

$

2,284,524

 

 

 

 

 

 

 

 

Net leverage ratio (g)

2.69

x

2.97

x

 

2.88

x

 

Interest coverage ratio (h)

8.51

x

8.42

x

 

8.28

x

 

____________________________
* See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow and Table 5 for footnotes.
Due to rounding of Mediacom Broadband and Mediacom LLC results, slight differences may exist with actual Mediacom Combined results.

TABLE 4

Use of Non-GAAP Financial Measures

"OIBDA," "Adjusted OIBDA," "cash interest expense" and "free cash flow" are not financial measures calculated in accordance with generally accepted accounting principles ("GAAP") in the United States. We define OIBDA as operating income before depreciation and amortization and Adjusted OIBDA as OIBDA plus investment income from affiliate and excluding non-cash share-based compensation. OIBDA and Adjusted OIBDA may not be comparable to similarly titled measures used by other companies, which may have different depreciation and amortization policies, and are key components in our covenant calculations.

We define cash interest expense as interest expense, net, less amortization of deferred financing costs. Cash interest expense excludes the amortization of financing costs which were paid upon the financing of the relevant debt.

For Mediacom Broadband LLC, we define free cash flow as Adjusted OIBDA less capital expenditures, cash interest expense and dividends to preferred members. For Mediacom LLC, we define free cash flow as Adjusted OIBDA less capital expenditures and cash interest expense. Free cash flow may not be comparable to similarly titled measures reported by other companies.

Reference to "Mediacom Combined" reflects the combined results of Mediacom Broadband LLC and Mediacom LLC, eliminating intercompany amounts.

TABLE 5

Footnotes

 

(a)

See Table 4 for information regarding our use of non-GAAP financial measures.

(b)

Represents Adjusted OIBDA as a percentage of total revenues.

(c)

Represents the total number of customers that take at least one service, without regard to which service(s) customers purchase.

(d)

Represents average total monthly revenues for the period divided by average PSUs for such period.

(e)

Represents average total monthly revenues for the period divided by average customer relationships for such period.

(f)

Total debt excludes the effect of deferred financing costs, net.

(g)

Represents net debt at period end divided by annualized Adjusted OIBDA for the period.

(h)

Represents Adjusted OIBDA divided by cash interest expense for the period.

About Mediacom

Mediacom Communications Corporation is the 5th largest cable operator in the U.S. serving over 1.4 million customers in smaller markets primarily in the Midwest and Southeast. Mediacom offers a wide array of information, communications and entertainment services to households and businesses, including video, high-speed data, phone, and home security and automation. Through Mediacom Business, the company provides innovative broadband solutions to commercial and public sector customers of all sizes, and sells advertising and production services under the OnMedia brand. More information about Mediacom is available at www.mediacomcable.com.

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