July 31, 2013
FOR IMMEDIATE RELEASE
-- Consolidated revenue of $189.7 million
-- Adjusted EBITDA of $62.1 million
-- Net income of $4.2 million or $0.10 per diluted share
ANCHORAGE, Alaska, July 31, 2013 /PRNewswire/ -- General Communication, Inc. ("GCI") (NASDAQ: GNCMA) today reported its second quarter 2013 results with consolidated revenues of $189.7 million, adjusted EBITDA of $62.1 million, and net income of $4.2 million or $0.10 per diluted share.
For the second quarter of 2013, revenue increased $13.6 million or 8 percent over the second quarter of 2012 revenue of $176.1 million. Adjusted EBITDA increased $2.7 million or 5 percent over the second quarter of 2012 EBITDA of $59.4 million. Net income increased 5 percent compared to second quarter of 2012 net income of $4.0 million.
For the first six months of 2013, revenue increased $27.9 million or 8 percent over the first six months of 2012 revenue of $348.0 million. Adjusted EBITDA increased $6.5 million or 6 percent over the first six months of 2012 EBITDA of $114.3 million. Net income increased $2.0 million or 37 percent over the first six months of 2012 net income of $5.4 million.
"GCI has continued to provide growth and improvement in the second quarter," said Ron Duncan, GCI president and chief executive officer. "We continue to perform well with respect to both the operational metrics and financial performance."
On July 22, 2013, the Company closed The Alaska Wireless Network (AWN) transaction, which had been previously announced.
"Having now resolved the many steps in the regulatory process, we are now fully engaged in the implementation process for AWN," continued Mr. Duncan. "We expect that our AWN network will provide the fastest, most geographically extensive, and the most reasonably priced wireless services for Alaska subscribers."
Wireless revenues of $35.6 million for the second quarter of 2013 increased $5.2 million or 17% when compared to the second quarter of 2012. Wireless Adjusted EBITDA of $14.3 million increased $1.7 million or 13 percent compared to the second quarter of 2012. This segment represents the wholesale provision of wireless service, as well as roaming revenues.
GCI served 142,900 wireless subscribers at the end of the second quarter 2013, representing a total subscriber growth of 1 percent over the second quarter of 2012. The results for the quarter, compared to last year, reflect a 7,300 reduction in Lifeline customers, due to FCC changes in the program. This reduction, however, was offset by a 9,200 or 9 percent increase in non-Lifeline customers, and an overall 6 percent increase to average monthly revenue per wireless subscriber.
Wireline – Consumer:
Consumer revenues of $68.5 million for the second quarter of 2013 increased 1 percent over the same period of 2012. Adjusted EBITDA of $18.9 million for the second quarter of 2013 increased $0.7 million or 4 percent compared to the second quarter of 2012. Increases in data and wireless revenues offset the decreases in voice and video revenues.
During the quarter, the Company announced several improvements, enhancements and new programs:
- GCI TV Powered by TIVO: GCI provides the only TV service in Alaska that offers a digital video recorder (DVR) through which consumers can record up to six channels simultaneously, in areas where GCI offers TIVO service.
- GCI GO: GCI was the first Alaska based TV service provider to offer HBO GO and MAX GO, an offering that may expand by year end to as many as 25 networks.
- Tier 1 Internet expansion: GCI upgraded two additional communities to Tier 1 service, enabling up to 22 mbps internet service.
- HD Expansion: GCI added two more networks to the HD platform, Lifetime HD and Lifetime Movie Network HD.
Wireline - Business Services:
Business Services revenues of $56.9 million for the second quarter of 2013 increased 12 percent over the same period in 2012. Adjusted EBITDA of $18.2 million represented a 9 percent improvement over the same period in 2012. The revenue improvements were driven by growth in wireline, while wireless showed a slight decline.
During the quarter, revenues benefited from the strength of oil and gas sector exploration, development efforts in Cook Inlet and the Chukchi Sea, as well as continuing contracts with wholesale customers.
Wireline - Managed Broadband:
Managed Broadband revenues for the second quarter of 2013 totaled $28.8 million, an increase of 6 percent over the second quarter of 2012. Adjusted EBITDA of $10.8 million represented a 9 percent decline over the same period in 2012. The year-over-year growth of revenue is due to continuing investment in terrestrial broadband facilities in rural Alaska and success in acquiring additional telemedicine and distance learning customers. These revenue gains have not yet translated into EBITDA gains, due to the continued high cost of developing new services and providing existing services in this area.
During the quarter, the Company announced that GCI will complete the extension of its terrestrial broadband network, TERRA, to Nome by the end of this year and to Kotzebue by the end of 2014.
On April 30, 2013, GCI Holdings, Inc., a wholly owned subsidiary of GCI, closed on a $390 million senior secured credit facility, which was an amendment to its previous facility. The facility provides up to $240.0 million of delayed draw term loans and a $150.0 million revolving credit facility. To complete the AWN transaction mentioned above, subsequent to the quarter close, the Company drew $100 million from the term loan capacity. The facility will mature on April 30, 2018.
GCI repurchased nearly 740,000 shares of its Class A common stock in the second quarter of 2013 at an average price per share of $8.59. GCI is authorized to repurchase $98.4 million of its shares depending on company performance, market conditions, liquidity, leverage and subject to board oversight. At the end of the second quarter of 2013 GCI had approximately 40.8 million Class A and B shares outstanding.
SG&A expenses for the second quarter of 2013 totaled $63.9 million, an increase of $3.8 million or 6 percent as compared to $60.0 million for the second quarter of 2012. As a percentage of revenues, SG&A expenses remained at 34 percent in the second quarter of 2013, compared with the same period in 2012.
GCI's second quarter 2013 capital expenditures totaled $50.4 million.
In anticipation of implementing the AWN transaction, we have changed our segment reporting methodology. Effective the first of this year, we are now organized in two segments, Wireless and Wireline.
The Wireless segment's revenue is derived from wholesale wireless services and roaming revenue, which includes revenue that was previously reported in the historical Consumer, Network Access, and Commercial segments.
The Wireline segment's revenue represents all of our other services and products, including retail wireless, and includes three major customer groups: Consumer, Business Services and Managed Broadband. The comparative figures for 2012 have been recast to be consistent with the new segment presentation.
GCI will hold a conference call to discuss the quarter's results on Thursday, August 1, 2013 beginning at 2 p.m. (Eastern). To access the briefing, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-989-7597 (International callers should dial 1-517-308-9016) and identify your call as "GCI." In addition to the dial-up access, GCI will make available net conferencing. To access the call via net conference, log on to www.gci.com and follow the instructions. A replay of the call will be available for 72-hours by dialing 888-566-0408, access code 7461 (International callers should dial 1-402-998-0597.)
GCI is the largest telecommunications company in Alaska. GCI's cable plant, which provides broadband data services, video, and voice, passes 78 percent of Alaska households. GCI operates Alaska's most extensive terrestrial/subsea fiber optic network which connects not only Anchorage but also Fairbanks and Juneau/Southeast Alaska to the lower 48 states with a diversely routed, protected fiber network. GCI's TERRA-Southwest fiber/microwave system links 65 communities in the Bristol Bay and Yukon-Kuskokwim Delta to Anchorage bringing terrestrial broadband Internet access to the region for the first time. GCI's satellite network provides communications services to small towns and communities throughout rural Alaska. GCI's statewide mobile wireless network seamlessly links urban and rural Alaska.
A pioneer in bundled services, GCI is the top provider of data, video and voice services to Alaska consumers with a 70 percent share of the consumer broadband market. GCI is also the leading provider of communications services to enterprise customers, particularly large enterprise customers with complex data networking needs. More information about GCI can be found at www.gci.com/about
Forward Looking Statement Disclosure
The foregoing contains forward looking statements regarding GCI's expected results that are based on management's expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI's control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI's cautionary statement sections of Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
Unaudited Balance Statements, Income Statements, Supplemental statements and Key Performance Indicators charts/spreadsheets included in pdf.