Business Services Industry
Knology Reports Fourth Quarter and Full-Year 2004 Results
Business Wire, March 28, 2005
WEST POINT, Ga. -- Knology, Inc. (Nasdaq:KNOL):
Highlights:
--Revenue increased to $211.5 million, or 22.3% for the full year 2004.
--EBITDA, as adjusted increased to $8.7 million for the fourth quarter and $33.1 million for the year.
--Achieved in excess of 9,000 net connections for the fourth quarter, including growth in video, voice and data connections.
--Added 12,884 data connections in 2004, representing 17.5% growth.
--Grew triple-play bundle customers by over 20% in 2004 to approximately 52,000.
--Capital expenditures were $63.6 million for the year, including $28.6 million and $12.2 million, respectively in our Pinellas County, FL and Knoxville, TN markets.
Knology, Inc. (Nasdaq: KNOL) today reported financial and operating results for the fourth quarter and year ended December 31, 2004. Total revenue for the fourth quarter and full year of $52.9 million and $211.5 million, respectively, represented increases of 15.8% and 22.3% over total revenue for the same periods one year ago of $45.6 million and $172.9 million. Knology reported EBITDA, as adjusted of $8.7 million for the fourth quarter of 2004 and $33.1 million for the full year 2004 compared with EBITDA, as adjusted of $9.3 million and $33.0 million, respectively, for the same periods in 2003.
Knology reported a net loss for the fourth quarter of 2004 of $18.5 million or $0.78 per share compared with a net loss of $16.6 million or $0.94 per share for the fourth quarter of 2003. For the full year of 2004, Knology reported a net loss of $75.6 million or $3.19 per share compared with a net loss of $87.8 million or $5.17 per share in 2003.
"We were successful in growing our business in 2004 in spite of the significant challenges we encountered, including the third quarter hurricane activity and the turn-around issues we faced in our Pinellas County market," said Rodger L. Johnson, President and Chief Executive Officer of Knology, Inc. "We are particularly pleased with the achievements in the fourth quarter, including the growth in connections, revenue and EBITDA, as adjusted. The momentum we have established going into 2005 positions our business to build value for our shareholders."
Subsequent to quarter end, Knology entered into a definitive asset purchase agreement to sell its cable system located in Cerritos, California to WaveDivision Holdings, LLC for $10 million in cash, subject to customary closing adjustments. WaveDivision Holdings, LLC has been in business since 2002 and it currently serves approximately 80,000 cable TV and high-speed Internet customers in western Washington and southern California. Knology acquired the Cerritos cable system in December 2003 from Verizon Media Ventures Inc. in conjunction with its acquisition of Verizon Media's Pinellas County, Florida operations. Knology expects the sale of the Cerritos system to close in the third quarter of 2005, subject to the satisfaction of closing conditions, including receipt of regulatory approvals with respect to the municipal franchise in Cerritos, California.
In addition to reporting 2004 performance and announcing the sale of its Cerritos property, Knology also provided today guidance regarding its expected 2005 performance, including the following:
-- Revenue of approximately $230 million, representing 9% growth
-- EBITDA, as adjusted between $41 million to $43 million
-- Capital expenditures between $31 to $33 million
-- Cash interest expense of approximately $31 million
Fourth Quarter Key Operating Metrics
% Change % Change
Q4 Q3 Q4 vs. Q3 vs. Q4
2004 2004 2003 2004 2003
--------- ------- ------- ------- --------
Marketable Homes Passed 756,694 751,821 737,145 0.6% 2.7%
Connections
Cable Television 177,323 175,907 183,783 0.8% -3.5%
Telephone
On-Net 128,757 125,337 118,872 2.7% 8.3%
Off-Net 5,987 5,978 5,678 0.2% 5.4%
--------- ------- ------- ------- --------
Total Telephone 134,744 131,315 124,550 2.6% 8.2%
High-Speed Internet 86,366 82,152 73,482 5.1% 17.5%
Total On-Net Connections 392,446 383,396 376,137 2.4% 4.3%
Total Connections 398,433 389,374 381,815 2.3% 4.4%
Residential Connections 359,589 352,007 348,489 2.2% 3.2%
Business Connections 38,844 37,367 33,326 4.0% 16.6%
Average Monthly Revenue
Per Connection $ 45.42 $ 45.86 $47.37(a)
Average Monthly Connection
Churn 2.5% 3.0% 2.7%
(a) This calculation excludes the connections in Pinellas County, Florida acquired from Verizon Media.
For full descriptions of the above metrics, please refer to Non-GAAP Financial and Operating Measures on page 4 of this release.
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