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WOW! REPORTS SECOND QUARTER 2022 RESULTS

·9 min read

High-Speed Data Revenue from continuing operations of $102.6 million, up 4% compared to the second quarter of 2021

ENGLEWOOD, Colo., Aug. 5, 2022 /PRNewswire/ -- WideOpenWest, Inc. ("WOW!" or the "Company") (NYSE: WOW), one of the nation's leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers, today announced financial and operating results for the second quarter ended June 30, 2022.

(PRNewsfoto/WOW! Internet, Cable & Phone)
(PRNewsfoto/WOW! Internet, Cable & Phone)

Second Quarter 2022 Highlights (1)(2)

  • Total Revenue from continuing operations of $176.1 million, a decrease of $5.8 million or 3%, compared to the second quarter of 2021

  • HSD Revenue from continuing operations totaled $102.6 million, an increase of $3.9 million, or 4%, compared to the second quarter of 2021

  • Net Income from continuing operations was $4.0 million for the quarter ended June 30, 2022

  • Net Profit Margin was 2.3% compared to 4.3% for the second quarter of 2021

  • Pro Forma Adjusted EBITDA was a record $70.6 million, an increase of $6.3 million, or 10%, compared to the second quarter of 2021

  • Pro Forma Adjusted EBITDA Margin was a record 40.1% compared to 35.3% for the second quarter of 2021

  • Added 2,200 HSD RGUs

  • Announced the launch of 1.2 Gig speeds across entire footprint

  • Greenfield progress on track and construction has begun in Central Florida

"I am pleased with our second quarter results which reflect the strength of our broadband-first strategy and the progress we have made on our strategic initiatives as we delivered record Adjusted EBITDA and Adjusted EBITDA margin," said Teresa Elder, WOW!'s CEO. "We continue to meet our operational goals as we grow our high-speed data subscriber base, increase edge-out penetration and accelerate our Greenfield expansion."

"Our HSD revenue grew 4% from the same period last year and Pro Forma Adjusted EBITDA grew by nearly 10% from last year, to a record high $70.6 million and a record Pro Forma Adjusted EBITDA margin of 40.1%," said John Rego, WOW!'s CFO. "The combination of HSD revenue growth and the realization of strategic efficiencies has brought our Pro Forma Adjusted Margin very close to the levels attained prior to last year's divestitures."

Revenue
Total Revenue from continuing operations was $176.1 million for the quarter ended June 30, 2022, down $5.8 million, or 3%, as compared to the corresponding period in 2021.

Total Subscription Revenue from continuing operations for the quarter ended June 30, 2022 was $163.2 million, down $5.4 million, or 3%, as compared to the corresponding period in 2021. The decrease is primarily driven by a shift in service offering mix as we continue to experience a reduction in Video and Telephony RGUs, partially offset by an increase in average revenue per unit ("ARPU") as HSD customers continue to purchase higher speed tiers coupled with HSD and Video rate increases issued in the first quarter of 2022 and an increase in volume attributable exclusively to the addition of HSD subscribers.

(1)

Refer to "Non-GAAP Financial Measures" "Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures," and "Subscriber Information" in this Press Release for definitions and information related to Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA margin and reconciliation of non-GAAP measures to the closest comparable GAAP measures and why our management thinks it is beneficial to present such non-GAAP measures.

(2)

During the second half of 2021, the Company completed of the sale of five of its service areas. For presentation purposes, the financial results of these five service areas were classified as discontinued operations. Refer to tables that follow for the reconciliation of continuing and discontinued operations.

 

Other Business Services Revenue from continuing operations totaled $5.4 million for the quarter ended June 30, 2022, down $0.3 million as compared to the corresponding period in 2021. The decrease is primarily due to a decrease in data center revenue.

Other Revenue from continuing operations totaled $7.5 million for the quarter ended June 30, 2022, down $0.1 million as compared to the corresponding period in 2021, primarily related to decreases in advertising and line assurance revenue partially offset by an increase in late fee revenue.

Costs and Expenses
Operating Expenses (excluding Depreciation and Amortization) from continuing operations totaled $83.0 million for the quarter ended June 30, 2022, down $12.1 million, or 13%, compared to the corresponding period in 2021 primarily driven by decreases in direct operating expenses, specifically programming expense, which aligns with the reduction in Video RGUs between periods and lower bad debt expense, partially offset by decreases in capital eligible expenses. Selling, General, and Administrative expenses from continuing operations totaled $39.3 million for the quarter ended June 30, 2022, down $6.2 million, or 14%, compared to the corresponding period in 2021 primarily attributable to decreases in costs associated with digital transformation initiatives, marketing, and legal and professional services expenses, partially offset by an increase in stock compensation expense.

Net Income
Net Income for the quarter ended June 30, 2022 was $4.0 million as compared to $12.4 million for the quarter ended June 30, 2021. Net Profit Margin was 2.3% for the quarter ended June 30, 2022 as compared to 4.3% for the quarter ended June 30, 2021.

Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA for the quarter ended June 30, 2022 was $70.6 million, an increase of $6.3 million, compared to the corresponding period in 2021. Pro Forma Adjusted EBITDA margin was 40.1% for the quarter ended June 30, 2022 as compared to 35.3% for the quarter ended June 30, 2021.

Subscribers
WOW! reported Total Subscribers from continuing operations of 536,600 as of June 30, 2022, an increase of 6,100, or 1%, compared to June 30, 2021, up 1,900 compared to March 31, 2022. HSD RGUs totaled 517,200 as of June 30, 2022, an increase of 9,300 or 2%, compared to June 30, 2021, up 2,200 compared to March 31, 2022.

Edge-Outs
Edge-Out Projects from continuing operations reached a total of 78,900 homes passed and 19,700 Subscribers since inception.

The 2020 Edge-Out projects from continuing operations include 800 Subscribers, which represents 23.5% penetration on such nodes. The 2021 Edge-Out projects from continuing operations include 800 Subscribers, which represents 40.0% penetration on such nodes. The 2022 Edge-Out projects from continuing operations include 100 Subscribers, which represents 14.3% penetration on such nodes.

Capital Expenditures
Capital Expenditures from continuing operations totaled $34.7 million for the quarter ended June 30, 2022, representing a $6.8 million decrease compared to the quarter ended June 30, 2021. The decrease is primarily related to a reduction network enhancement and customer premise equipment ("CPE") expenditures partially offset by increases in line extensions as we focus on expanding our network.

Capital Expenditures from continuing operations for the quarter ended June 30, 2022 equates to 20% of Total Revenue from continuing operations for the quarter ended June 30, 2022.

Liquidity and Leverage
As of June 30, 2022, the total outstanding amount of long-term debt and finance lease obligations was $738.5 million, and cash and cash equivalents were $49.9 million. Total Net Leverage as of June 30, 2022, was 2.6X in line with the first quarter of 2022 on a LTM Pro Forma Adjusted EBITDA basis and undrawn revolver capacity totaled $245.6 million.

Third Quarter and Full Year 2022 Guidance








Q3 2022


Full Year 2022

HSD Revenue


$102.0 - $106.0 million


$415.0 - $419.0 million

Total Revenue


$171.0 - $175.0 million


$704.0 - $708.0 million

Adjusted EBITDA


$66.0 - $69.0 million


$281.0 - $284.0 million






HSD net additions


1,000 - 3,000


12,000 - 15,000

 

Webcast
WOW! will host a webcast on Friday, August 5, 2022, at 8:00 a.m. ET to discuss the financial and operating results contained in this press release. The conference call and webcast will be broadcast live on the Company's investor relations website at ir.wowway.com. Those parties interested in participating can use the information as follows:










Call Date:

Friday, August 5, 2022


Call Time:

8:00 a.m. Eastern


Dial In:

(888) 330-3556


International:

(646) 960-0826


Conf. ID:

4844814












 

A replay of the call will be available on August 5, 2022, at 11:00 a.m. ET, on the investor relations website or by telephone. To access the telephone replay, which will be available until August 19, 2022, at 11:59 p.m. ET, please dial (800) 770-2030 or (647) 362-9199 and use conference ID 4844814.

.

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)










June 30, 


December 31,



2022


2021



(in millions, except share data)

Assets







Current assets







Cash and cash equivalents


$

49.9


$

193.2

Accounts receivable—trade, net of allowance for doubtful accounts of $2.4 and $4.3, respectively



39.3



40.9

Accounts receivable—other, net



12.6



17.2

Prepaid expenses and other



40.7



30.7

Total current assets



142.5



282.0

Right-of-use lease assets—operating



16.2



17.2

Property, plant and equipment, net



711.6



722.3

Franchise operating rights



620.1



620.1

Goodwill



225.1



225.1

Intangible assets subject to amortization, net



1.5



1.7

Other non-current assets



41.1



38.3

Total assets


$

1,758.1


$

1,906.7

Liabilities and stockholders' equity







Current liabilities







Accounts payable—trade


$

42.0


$

50.3

Accrued interest



0.8



0.8

Current portion of long-term lease liability—operating



4.9



5.1

Accrued liabilities and other



70.0



218.7

Current portion of long-term debt and finance lease obligations



18.3



17.9

Current portion of unearned service revenue



27.9



28.1

Total current liabilities



163.9



320.9

Long-term debt and finance lease obligations—less current portion and debt issuance costs



720.2



723.5

Long-term lease liability—operating



12.9



13.8

Deferred income taxes, net



253.7



257.6

Other non-current liabilities



21.0



20.1

Total liabilities



1,171.7



1,335.9

Commitments and contingencies







Stockholders' equity:







Preferred stock, $0.01 par value, 100,000,000 shares authorized; 0 shares issued and outstanding





Common stock, $0.01 par value, 700,000,000 shares authorized; 96,899,442 and 96,225,910 issued
as of June 30, 2022 and December 31, 2021, respectively; 87,732,085 and 87,392,088 outstanding
as of June 30, 2022 and December 31, 2021, respectively



1.0



1.0

Additional paid-in capital



360.4



348.5

Accumulated income



320.2



310.5

Treasury stock at cost, 9,167,357 and 8,833,822 shares as of June 30, 2022 and December 31, 2021,
respectively



(95.2)



(89.2)

Total stockholders' equity



586.4



570.8

Total liabilities and stockholders' equity


$

1,758.1


$

1,906.7

 

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED

(unaudited)






















Three months ended


Three months ended



June 30, 2022


June 30, 2021



Continued


Discontinued


Total


Continued


Discontinued


Total



(in millions, except share data)

Revenue:



















HSD


$

102.6


$


$

102.6


$

98.7


$

57.7


$

156.4

Video



47.7





47.7



55.3



36.4



91.7

Telephony



12.9





12.9



14.6



6.7



21.3

Total subscription services revenue



163.2





163.2



168.6



100.8



269.4

Other business services



5.4





5.4



5.7



0.4



6.1

Other



7.5





7.5



7.6



4.2



11.8

Total revenue



176.1





176.1



181.9



105.4



287.3




















Costs and expenses:



















Operating (excluding depreciation and amortization)



83.0





83.0



95.1



37.6



132.7

Selling, general and administrative



39.3





39.3



45.5



2.8



48.3

Depreciation and amortization



43.9