Increased TV subscribers by 12 percent,
recording 20th consecutive quarter of growthGrew
Next-Generation Network penetration on Oʻahu to over 24
percentSuccessfully completed end-to-end testing
of the SEA-US submarine cable systemAnnounced
merger agreement with Cincinnati Bell, increasing scale and
expanding growth opportunities
Hawaiian Telcom Holdco, Inc. (NASDAQ:HCOM) reported financial
results for its second quarter ended June 30. The highlights
are as follows:
- Revenue totaled $91.3 million, resulting in Adjusted EBITDA(1)
of $26.4 million.
- Business VoIP revenue increased 13.4 percent year-over-year,
driven by 14.2 percent growth in business VoIP lines.
- Business strategic revenue(2) increased 14.3 percent over the
last two years and now represents 40 percent of total business
revenue.
- TV revenue grew 8.1 percent year-over-year, driven by 12.0
percent subscriber growth, ending the quarter with over 43,200
Hawaiian Telcom TV subscribers. Overall Next-Generation
Network (NGN) penetration is over 24 percent, an increase from 22
percent in the same period the prior year.
- Consumer strategic revenue(2) increased 5.8 percent over the
last two years and now represents 52 percent of total consumer
revenue.
- Fiber-enabled 1,600 business addresses, 1,000 consumer
households, and 300 CAF II locations in the quarter, bringing total
fiber-enabled business addresses to 8,600, total NGN households on
O‘ahu to 204,000, and 1,200 CAF II enabled locations on the
neighbor islands.
- Incurred a net loss of $3.5 million, or $0.30 per diluted share
for the quarter, primarily related to $4.8 million in costs
associated with the refinancing of our credit facility in May.
- Successfully completed end-to-end testing of the SEA-US
transpacific fiber system linking Southeast Asia and the United
States. Ready for Service is expected in August
2017.
“We are excited about the opportunity to combine with Cincinnati
Bell and further our strategy of investing for the future,” said
Scott K. Barber, Hawaiian Telcom’s president and CEO. “Over
the past six years, we have significantly expanded the reach and
density of our next-generation fiber network, launched innovative
IP-based products and services, and as a result, strengthened our
competitive position and transformed our growth profile. This
merger will bring together two companies with nearly identical
transformation and operating strategies as well as philosophies,
cultures and customer focus. We look forward to leveraging
the combined scale and expanded product offerings, sharing best
practices and resources, continuing to invest in our
next-generation fiber network statewide, and creating future growth
opportunities. We believe this is a great combination for our
shareholders, customers, employees, and our communities.
“We are also proud of this significant achievement for the
landmark SEA-US project, the first transpacific submarine fiber
cable system directly connecting Indonesia, the Philippines, Guam,
Hawai‘i and the continental U.S. Our $25 million investment
in this system has proved to be an outstanding investment with
nearly $30 million of capacity sales to date and additional
capacity remaining to be monetized. Our joint ownership and
operation of this cable also enables us to cost-effectively meet
our own future IP bandwidth needs. With this investment, we
have furthered our strategy to invest in our network, providing our
company, our customers and our community with significant expansion
potential beyond Hawai‘i, and the unique opportunity to continue to
transform our business,” concluded Barber.
Second Quarter 2017 Results
Second quarter revenue was $91.3 million, compared to $99.5
million in the second quarter of 2016. The year-over-year
decrease was due to one-time revenues from a large government
agency recorded in the second quarter of 2016, lower enterprise
equipment sales, and revenue declines associated with legacy voice
and low-bandwidth Internet services offsetting revenue increases
from consumer video, business VoIP, and high-bandwidth business and
consumer Internet services. Adjusted EBITDA was $26.4
million, resulting in an Adjusted EBITDA margin of 28.9
percent.
Net loss for the second quarter was $3.5 million, or $0.30 per
diluted share, primarily related to $4.8 million in costs
associated with the refinancing of our credit facility in the
second quarter.
Business Revenue
Second quarter business revenue totaled $41.7 million, down $5.0
million from the same period a year ago, primarily due to $3.5
million in non-recurring revenues associated with a large
government agency recorded in the second quarter of 2016 and lower
year-over-year equipment revenue mostly related to one-time
equipment sales for a large hospitality customer in the prior year
period. Additionally, the year-over-year decline in legacy
voice and low-bandwidth Internet services contributed to the
decline in business revenue. These decreases were partly
offset by a 13.4 percent year-over-year increase in business VoIP
revenue driven by higher demand for Hawaiian Telcom’s hosted voice
and data bundle.
To support the growing demand for data bandwidth and cloud
adoption, the Company deployed fiber GPON technology to further
leverage its Next-Generation Network to nearly 1,600 additional
small business addresses in the quarter, providing customers access
to 1 Gigabit Internet service. This brings Hawaiian Telcom’s
total fiber-GPON-enabled business addresses to approximately 8,600
at the end of the second quarter.
Second quarter business strategic revenue, excluding one-time
revenues related to the large government agency mentioned above,
was consistent with the prior year period. Business strategic
revenue now represents 40 percent of total reported business
revenue, compared to 34 percent in the same period two years
ago.
Consumer Revenue
Second quarter consumer revenue totaled $33.8 million, compared
to $36.0 million in the second quarter of 2016. Revenue
growth in the quarter from Hawaiian Telcom TV and high-bandwidth
fiber Internet services was more than offset by the year-over-year
revenue decline in consumer legacy voice and low-bandwidth copper
Internet services. Second quarter consumer strategic revenue
increased nearly 1 percent year-over-year and now represents 52
percent of total consumer revenue, up from 45 percent in the same
period two years ago.
Hawaiian Telcom TV continued to be the driver of revenue growth
in the consumer channel. Video services revenue grew 8.1
percent year-over-year to $10.8 million for the quarter and has
become a $44 million and growing annualized revenue stream.
Video subscribers grew 12.0 percent during the same period and the
Company ended the second quarter with approximately 43,200
subscribers in service. When combined with approximately
6,000 additional Internet subscribers on our NGN footprint that do
not have TV service, the penetration rate in our NGN footprint is
over 24 percent, an increase from 22 percent in the same period in
the prior year. During the second quarter, the Company
fiber-enabled 1,000 additional consumer households on Oʻahu,
including success-based bulk MDU units and greenfield single-family
homes, bringing total NGN households to 204,000, or approximately
two-thirds of total marketable households on Oʻahu.
Customer demand for Hawaiian Telcom Internet continued to be
driven by TV attachment and higher data speeds. As of June
30, 2017, approximately 95 percent of all video subscribers had
double- or triple-play bundles with Internet. On Oʻahu, where
the focus of the Company’s NGN fiber investment has been and where
Hawaiian Telcom TV service is offered, total number of Internet
subscribers continues to increase year-over-year. In the
second quarter, the number of Oʻahu Internet subscribers attached
to TV grew 13.4 percent year-over-year and now represents 58
percent of total Oʻahu Internet subscribers, up from 43 percent in
the same period two years ago. Customer adoption of higher
speed offerings also continued to grow. The number of
Internet subscribers on packages with 21 Mbps to 1 Gbps speeds in
the second quarter grew 16.5 percent year-over-year. Internet
services revenue for the second quarter decreased $0.7 million from
the same period a year ago as a result of the combined effect of
promotional pricing and a decline in low-bandwidth copper Internet
subscribers.
Wholesale Revenue
Second quarter wholesale revenue totaled $12.6 million, a
decline of $0.6 million compared to second quarter 2016. The
revenue growth from wholesale high-bandwidth Ethernet services on
multi-year contracts was more than offset by the revenue decline
from certain wholesale customers disconnecting low-bandwidth, less
efficient legacy circuits on month-to-month service, as well as
reductions in rates for certain wireless carriers in exchange for
extended terms.
Operating Expenses
Operating expenses, exclusive of non-cash and special items
which are excluded from our Adjusted EBITDA calculation, decreased
$3.9 million year-over-year to $64.9 million in the second
quarter. The decrease was primarily due to lower wage costs,
reduced costs of plant maintenance, and decreased cost of goods as
a result of lower levels of equipment sales. These decreases
were partially offset by higher video content costs from increasing
numbers of TV subscribers.
Capital Expenditures and Liquidity
Capital expenditures totaled $52.6 million for the first six
months ended June 30, 2017, consistent with the same period in the
prior year. Approximately 90 percent of total capital
expenditures in the first half of 2017 was directed towards growth
and expansion initiatives, which included payments on the
transpacific undersea cable system, Connect America Fund build out,
spending on fiber-to-the-business initiative, as well as
success-based spending to support the growth of the Company’s
next-generation services. Overall, the level of capital
expenditures for 2017 is expected to be lower than in 2016 and in
the high-$80 million range.
As of June 30, 2017, the Company had $25.9 million in cash and
cash equivalents compared to $15.8 million at the end of
2016. The increase in cash is primarily related to our new
term loan financing in the second quarter. Net Debt(3) was
$288.0 million, resulting in a Net Leverage Ratio(4) as of June 30,
2017 of 2.6x. Levered Free Cash Flow(5) for the first
half of 2017 was negative $7.3 million.
Conference Call
The Company will host a conference call to discuss its second
quarter 2017 results at 8:00 a.m. (Hawaii Time), or 2:00 p.m.
(Eastern Time) on Tuesday, August 8, 2017. The accompanying
slide presentation will be available from the Investor Relations
section of the Company’s website at hawaiiantel.com prior to the
call.
To access the call, participants should dial (877) 456-0428
(US/Canada), or (615) 247-0082 (International) ten minutes prior to
the start of the call and provide passcode 58764060.
A live webcast of the conference call will be available from the
Investor Relations section of the Company’s website at
hawaiiantel.com. The webcast will be archived at the same
location.
A telephonic replay of the conference call will be available two
hours after the conclusion of the call until 5:00 p.m. (Eastern
Time) August 15, 2017. Access the replay by dialing (855)
859-2056 or (404) 537-3406 and entering passcode 58764060.
Use of Non-GAAP Financial Measures
This press release contains information about adjusted earnings
before interest, taxes, depreciation and amortization (Adjusted
EBITDA), Net Debt, Net Leverage Ratio and Levered Free Cash Flow.
These are non-GAAP financial measures used by Hawaiian Telcom
management when evaluating results of operations. Management
believes these measures also provide users of the financial
statements with additional and useful comparisons of current
results of operations with past and future periods. Non-GAAP
financial measures should not be construed as being more important
than comparable GAAP measures. Detailed reconciliations of Adjusted
EBITDA, Net Debt, Net Leverage Ratio and Levered Free Cash Flow to
comparable GAAP financial measures have been included in the tables
distributed with this release and are available in the Investor
Relations section of hawaiiantel.com.
Forward-Looking Statements
In addition to historical information, this release includes
certain statements and predictions that constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. In particular, any statement, projection
or estimate that includes or references the words “believes”,
“anticipates”, “intends”, “expected”, or any similar expression
falls within the safe harbor of forward-looking statements
contained in the Reform Act. Actual results or outcomes may
differ materially from those indicated or suggested by any such
forward-looking statement for a variety of reasons, including, but
not limited to: failures in Hawaiian Telcom’s critical back office
systems and IT infrastructure; breach of the our data security
systems; increases in the amount of capital expenditures required
to execute our business plan; the loss of certain outsourcing
agreements, or the failure of any third party to perform under
these agreements; our ability to sell capacity on the new submarine
fiber cable project; adverse changes to applicable laws and
regulations; the failure to adequately adapt to technological
changes in the telecommunications industry, including changes in
consumer technology preferences; adverse economic conditions in
Hawai‘i; the availability of lump sum distributions under our union
pension plan; limitations on the ability to utilize net operating
losses due to an ownership change under Internal Revenue Code
Section 382; the inability to service our indebtedness;
limitations imposed on our business from restrictive covenants in
the credit agreements; severe weather conditions and natural
disasters; the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement with Cincinnati Bell or conditions to the closing of the
merger may not be satisfied or waived; the failure to obtain the
approval of the Company’s stockholders or the failure to satisfy
the closing conditions; risks related to disruption of management’s
attention from the Company’s ongoing business operations due to the
proposed merger; the effect of the announcement of the merger on
the ability of the Company to retain and hire key personnel,
maintain relationships with its customers and suppliers, and
operating results and business generally; the transaction may
involve unexpected costs, liabilities or delays; the Company’s
business may suffer as a result of the uncertainty surrounding the
transaction; the outcome of any legal proceeding relating to the
transaction; the Company may be adversely affected by other
economic, business and/or competitive factors; and other risks to
consummation of the transaction, including the risk that the
transaction will not be consummated within the expected time period
or at all. More information on potential risks and
uncertainties is available in recent filings with the Securities
and Exchange Commission, including Hawaiian Telcom’s 2016 Annual
Report on Form 10-K. The information contained in this release is
as of August 8, 2017. It is anticipated that subsequent events and
developments may cause estimates to change, and the Company
undertakes no duty to update forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed merger, Hawaiian Telcom intends
to file a preliminary proxy statement and file or furnish other
relevant materials with the Securities and Exchange Commission (the
“SEC”). Once the SEC completes its review of the preliminary
proxy statement, a definitive proxy statement and a form of proxy
will be filed with the SEC and mailed to the stockholders of
Hawaiian Telcom. Cincinnati Bell also intends to file with
the SEC a registration statement on Form S-4 in connection with the
merger, which will include the definitive proxy statement and a
prospectus with respect to Cincinnati Bell’s common shares to be
issued in connection with the merger. BEFORE MAKING ANY
VOTING DECISION, HAWAIIAN TELCOM’S STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND
ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER (INCLUDING, BUT NOT LIMITED TO, THE REGISTRATION
STATEMENT ON FORM S-4 FILED BY CINCINNATI BELL) OR INCORPORATED BY
REFERENCE IN THE PROXY STATEMENT (IF ANY) BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO
THE PROPOSED MERGER. Investors and stockholders may obtain a
free copy of documents filed by Hawaiian Telcom and/or Cincinnati
Bell with the SEC at the SEC’s website at http://www.sec.gov.
In addition, investors and stockholders may obtain a free copy of
Hawaiian Telcom’s filings with the SEC from Hawaiian Telcom’s
website at http://ir.hawaiiantel.com or by directing a request to:
Hawaiian Telcom Holdco, Inc., 1177 Bishop Street, Honolulu, HI
96813, Attention: Secretary, (808) 546-4511. Investors and
stockholders may obtain a free copy of Cincinnati Bell’s filings
with the SEC from Cincinnati Bell’s website at
http://investor.cincinnatibell.com or by directing a request to:
Cincinnati Bell Inc., 221 East Fourth Street, Cincinnati, OH 45202,
Attention: Corporate Secretary, (513) 397-9900.
Participants in the Solicitation
Hawaiian Telcom, Cincinnati Bell and their respective directors
and certain of their respective executive officers and employees
may be deemed to be participants in the solicitation of proxies
from stockholders of Hawaiian Telcom in favor of the proposed
merger. Information about Hawaiian Telcom’s directors and
executive officers and their ownership of Hawaiian Telcom’s common
stock is set forth in Hawaiian Telcom’s annual report on Form 10-K
for the fiscal year ended December 31, 2016, as filed with the SEC
on March 14, 2017, and its definitive proxy statement for its 2017
annual meeting of stockholders, as filed with the SEC on Schedule
14A on March 14, 2017. Information about Cincinnati Bell’s
directors and executive officers is set forth in its definitive
proxy statement for its 2017 annual meeting of shareholders, which
was filed with the SEC on March 24, 2017. These documents are
available free of charge from the sources indicated above. Certain
directors, executive officers and employees of Hawaiian Telcom and
Cincinnati Bell may have direct or indirect interests in the
proposed merger due to securities holdings, vesting of equity
awards and rights to severance payments. Additional information
regarding the direct and indirect interests of these individuals
and other persons who may be deemed to be participants in the
solicitation will be included in the proxy statement, the
registration statement and other relevant materials with respect to
the merger that Hawaiian Telcom and Cincinnati Bell intend to file
with the SEC and furnish to the Company’s stockholders.
No Offer or Solicitation
The information in this communication is for informational
purposes only and is neither an offer to purchase, nor a
solicitation of an offer to sell, subscribe for or buy any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to or in connection with the proposed
transactions or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended and otherwise in accordance with
applicable law.
About Hawaiian Telcom
Hawaiian Telcom (NASDAQ:HCOM), headquartered in Honolulu, is
Hawai‘i’s Technology Leader, providing integrated communications,
broadband, data center and entertainment solutions for business and
residential customers. With roots in Hawai‘i beginning in 1883, the
Company offers a full range of services including Internet, video,
voice, wireless, data network solutions and security, colocation,
and managed and cloud services supported by the reach and
reliability of its next generation fiber network and a 24/7
state-of-the-art network operations center. With employees
statewide sharing a commitment to innovation and a passion for
delivering superior service, Hawaiian Telcom provides an Always
OnSM customer experience. For more information, visit
hawaiiantel.com.
(1) Adjusted EBITDA is a non-GAAP measure
defined by the Company as Net Income plus interest expense (net of
interest income and other), income taxes, depreciation and
amortization, gain on sale of property, non-cash stock and other
performance-based compensation, SystemMetrics earn-out, pension
settlement loss, severance costs and other special items. The
Company believes this non-GAAP measure is a meaningful performance
measure for investors because it is used by our Board and
management to evaluate performance, enhance comparability between
periods and make operating decisions. Our use of Adjusted
EBITDA may not be comparable to similarly titled measures used by
other companies in the telecommunications industry. A
detailed reconciliation of Adjusted EBITDA to comparable GAAP
financial measures has been included in the table distributed with
this release.
(2) Business strategic revenue, as
defined by the Company, includes data services and hosted and
managed services revenues. Data services include
high-bandwidth data products such as Ethernet, Routed Network
Services, Dedicated Internet Access, along with traditional
High-Speed Internet for business customers, VoIP, and legacy data
services such as ATM and Frame Relay. Business VoIP, also
referred to as BVoIP, is a unified hosted communications solution
for business that includes digital voice services bundled with
Internet service. Hosted and managed services include
physical colocation, virtual colocation, security, cloud services,
professional services, network management and network installation
related services. Consumer strategic
revenue, as defined by the Company, includes video
services and consumer Internet services revenues.
(3) 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 and
unamortized premium and/or discount, offset by cash and cash
equivalents. A detailed reconciliation of Net Debt has been
included in the tables distributed with this release.
(4) Net Leverage Ratio is defined by the
Company as Net Debt divided by Last Twelve Months Adjusted
EBITDA. A detailed reconciliation of Net Leverage Ratio has
been included in the tables distributed with this release.
(5) Levered Free Cash Flow provides a
useful measure of operational performance and liquidity. The
Company defines Levered Free Cash Flow as Adjusted EBITDA less cash
interest expense and capital expenditures. A detailed
reconciliation of Levered Free Cash Flow has been included in the
tables distributed with this release.
(6) Beginning in the first quarter of 2017, the Company no
longer reports data center services as a separate segment and a
separate revenue line item in the business channel. This is
as a result of the Company’s evolving strategy to increase emphasis
on bundling of strategic communications services to customers as
well as maximize the efficiency benefits of an integrated
operation. Data center services revenue has been reclassified
to the appropriate revenue line items in the business
channel. Prior period information has been revised to reflect
the current presentation.
Hawaiian Telcom Holdco, Inc. |
Consolidated Statements of Income
(Loss) |
(Unaudited, dollars in thousands, except per
share amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating revenues |
$ |
91,298 |
|
|
$ |
99,541 |
|
|
$ |
185,808 |
|
|
$ |
198,335 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues (exclusive of depreciation and amortization) |
|
40,181 |
|
|
|
40,605 |
|
|
|
81,372 |
|
|
|
83,084 |
|
Selling,
general and administrative |
|
26,608 |
|
|
|
29,554 |
|
|
|
58,003 |
|
|
|
59,419 |
|
Depreciation and amortization |
|
21,742 |
|
|
|
22,493 |
|
|
|
43,012 |
|
|
|
44,443 |
|
Total
operating expenses |
|
88,531 |
|
|
|
92,652 |
|
|
|
182,387 |
|
|
|
186,946 |
|
Operating income |
|
2,767 |
|
|
|
6,889 |
|
|
|
3,421 |
|
|
|
11,389 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
(3,819 |
) |
|
|
(4,484 |
) |
|
|
(7,812 |
) |
|
|
(8,724 |
) |
Loss on
early extinguishment of debt |
|
(4,826 |
) |
|
|
— |
|
|
|
(4,826 |
) |
|
|
— |
|
Total
other expense |
|
(8,645 |
) |
|
|
(4,484 |
) |
|
|
(12,638 |
) |
|
|
(8,724 |
) |
Income (loss) before
income tax provision (benefit) |
|
(5,878 |
) |
|
|
2,405 |
|
|
|
(9,217 |
) |
|
|
2,665 |
|
Income tax provision
(benefit) |
|
(2,402 |
) |
|
|
960 |
|
|
|
(3,788 |
) |
|
|
1,066 |
|
Net income (loss) |
$ |
(3,476 |
) |
|
$ |
1,445 |
|
|
$ |
(5,429 |
) |
|
$ |
1,599 |
|
Net income (loss) per
common share - |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.30 |
) |
|
$ |
0.13 |
|
|
$ |
(0.47 |
) |
|
$ |
0.14 |
|
Diluted |
$ |
(0.30 |
) |
|
$ |
0.13 |
|
|
$ |
(0.47 |
) |
|
$ |
0.14 |
|
Weighted average shares
used to compute net income (loss) per common share - |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
11,587,963 |
|
|
|
11,511,591 |
|
|
|
11,558,667 |
|
|
|
11,493,712 |
|
Diluted |
|
11,587,963 |
|
|
|
11,525,850 |
|
|
|
11,558,667 |
|
|
|
11,523,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
|
Consolidated Balance Sheets |
|
(Unaudited, dollars in thousands, except per
share amounts) |
|
|
|
|
June 30, |
|
December 31, |
|
|
2017 |
|
2016 |
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
25,854 |
|
|
$ |
15,821 |
|
|
Receivables, net |
|
28,030 |
|
|
|
33,377 |
|
|
Material
and supplies |
|
7,127 |
|
|
|
8,090 |
|
|
Prepaid
expenses |
|
5,898 |
|
|
|
4,093 |
|
|
Other
current assets |
|
7,292 |
|
|
|
7,229 |
|
|
Total
current assets |
|
74,201 |
|
|
|
68,610 |
|
|
Property, plant and
equipment, net |
|
601,332 |
|
|
|
595,997 |
|
|
Intangible assets,
net |
|
31,877 |
|
|
|
32,728 |
|
|
Goodwill |
|
12,104 |
|
|
|
12,104 |
|
|
Deferred income taxes,
net |
|
88,528 |
|
|
|
92,171 |
|
|
Other assets |
|
2,462 |
|
|
|
2,311 |
|
|
Total assets |
$ |
810,504 |
|
|
$ |
803,921 |
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Current
portion of long-term debt |
$ |
10,250 |
|
|
$ |
3,000 |
|
|
Accounts
payable |
|
47,920 |
|
|
|
53,506 |
|
|
Accrued
expenses |
|
10,433 |
|
|
|
15,293 |
|
|
Advance
billings and customer deposits |
|
15,095 |
|
|
|
15,013 |
|
|
Other
current liabilities |
|
6,822 |
|
|
|
6,327 |
|
|
Total
current liabilities |
|
90,520 |
|
|
|
93,139 |
|
|
Long-term debt |
|
303,636 |
|
|
|
281,699 |
|
|
Employee benefit
obligations |
|
85,367 |
|
|
|
105,930 |
|
|
Other liabilities |
|
17,324 |
|
|
|
18,239 |
|
|
Total liabilities |
|
496,847 |
|
|
|
499,007 |
|
|
Commitments and
contingencies (Note 11) |
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Common
stock, par value of $0.01 per share, 245,000,000 shares authorized
and 11,587,963 and 11,513,279 shares issued and outstanding at
June 30, 2017 and December 31, 2016, respectively |
|
116 |
|
|
|
115 |
|
|
Additional paid-in capital |
|
181,135 |
|
|
|
179,958 |
|
|
Accumulated other comprehensive loss |
|
(22,774 |
) |
|
|
(35,218 |
) |
|
Retained
earnings |
|
155,180 |
|
|
|
160,059 |
|
|
Total stockholders’
equity |
|
313,657 |
|
|
|
304,914 |
|
|
Total liabilities and
stockholders’ equity |
$ |
810,504 |
|
|
$ |
803,921 |
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
|
Consolidated Statements of Cash
Flows |
|
(Unaudited, dollars in thousands) |
|
|
|
|
Six Months Ended |
|
|
June 30, |
|
|
2017 |
|
2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income (loss) |
$ |
(5,429 |
) |
|
$ |
1,599 |
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
43,012 |
|
|
|
44,443 |
|
|
Deferred
financing amortization |
|
888 |
|
|
|
1,005 |
|
|
Loss on
early extinguishment of debt |
|
4,826 |
|
|
|
— |
|
|
Employee
retirement benefits |
|
(420 |
) |
|
|
(3,896 |
) |
|
Provision
for uncollectible receivables |
|
1,788 |
|
|
|
2,139 |
|
|
Stock
based compensation |
|
1,273 |
|
|
|
1,141 |
|
|
Deferred
income taxes |
|
(3,506 |
) |
|
|
1,377 |
|
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
Receivables |
|
3,559 |
|
|
|
1,477 |
|
|
Material
and supplies |
|
963 |
|
|
|
(104 |
) |
|
Prepaid
expenses and other current assets |
|
(1,868 |
) |
|
|
(2,594 |
) |
|
Accounts
payable and accrued expenses |
|
(3,579 |
) |
|
|
6,837 |
|
|
Advance
billings and customer deposits |
|
82 |
|
|
|
(1,593 |
) |
|
Other
current liabilities |
|
648 |
|
|
|
(385 |
) |
|
Other |
|
(1,681 |
) |
|
|
(157 |
) |
|
Net cash provided by
operating activities |
|
40,556 |
|
|
|
51,289 |
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Capital
expenditures |
|
(52,630 |
) |
|
|
(52,898 |
) |
|
Net cash used in
investing activities |
|
(52,630 |
) |
|
|
(52,898 |
) |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Proceeds
from borrowing |
|
330,000 |
|
|
|
— |
|
|
Proceeds
from installment financing |
|
1,260 |
|
|
|
1,698 |
|
|
Repayment
of capital lease and installment financing |
|
(2,225 |
) |
|
|
(1,707 |
) |
|
Repayment
of debt |
|
(300,138 |
) |
|
|
(1,500 |
) |
|
Refinancing costs |
|
(6,295 |
) |
|
|
(688 |
) |
|
Taxes
paid related to net share settlement of equity awards |
|
(495 |
) |
|
|
(351 |
) |
|
Net cash provided by
(used in) financing activities |
|
22,107 |
|
|
|
(2,548 |
) |
|
Net change in cash,
cash equivalents and restricted cash |
|
10,033 |
|
|
|
(4,157 |
) |
|
Cash, cash equivalents
and restricted cash, beginning of period |
|
21,146 |
|
|
|
34,137 |
|
|
Cash, cash equivalents
and restricted cash, end of period |
$ |
31,179 |
|
|
$ |
29,980 |
|
|
Hawaiian Telcom Holdco, Inc. |
Revenue by Category and Channel
(6) |
(Unaudited, dollars in
thousands) |
|
For Three Months |
|
|
Three Months Ended |
|
|
|
|
|
|
June 30, |
|
Change |
|
2017 |
|
2016 |
|
Amount |
|
Percentage |
Business |
|
|
|
|
|
|
|
|
|
|
Data
services: |
|
|
|
|
|
|
|
|
|
|
Ethernet
and routed network services |
$ |
4,336 |
|
$ |
4,373 |
|
$ |
(37 |
) |
|
(0.8 |
)% |
Dedicated
Internet access |
|
2,086 |
|
|
5,424 |
|
|
(3,338 |
) |
|
(61.5 |
)% |
Internet
services |
|
3,313 |
|
|
3,399 |
|
|
(86 |
) |
|
(2.5 |
)% |
BVoIP |
|
3,577 |
|
|
3,154 |
|
|
423 |
|
|
13.4 |
% |
Legacy
data services |
|
1,690 |
|
|
1,687 |
|
|
3 |
|
|
0.2 |
% |
Total
data services |
|
15,002 |
|
|
18,037 |
|
|
(3,035 |
) |
|
(16.8 |
)% |
Voice
services |
|
20,733 |
|
|
21,751 |
|
|
(1,018 |
) |
|
(4.7 |
)% |
Hosted
and managed services |
|
1,642 |
|
|
1,706 |
|
|
(64 |
) |
|
(3.8 |
)% |
Equipment
and related services |
|
4,274 |
|
|
5,178 |
|
|
(904 |
) |
|
(17.5 |
)% |
|
|
41,651 |
|
|
46,672 |
|
|
(5,021 |
) |
|
(10.8 |
)% |
Consumer |
|
|
|
|
|
|
|
|
|
|
Video
services |
|
10,806 |
|
|
9,997 |
|
|
809 |
|
|
8.1 |
% |
Internet
services |
|
6,619 |
|
|
7,328 |
|
|
(709 |
) |
|
(9.7 |
)% |
Voice
services |
|
16,406 |
|
|
18,627 |
|
|
(2,221 |
) |
|
(11.9 |
)% |
|
|
33,831 |
|
|
35,952 |
|
|
(2,121 |
) |
|
(5.9 |
)% |
Wholesale carrier
data |
|
12,601 |
|
|
13,172 |
|
|
(571 |
) |
|
(4.3 |
)% |
Other |
|
3,215 |
|
|
3,745 |
|
|
(530 |
) |
|
(14.2 |
)% |
|
$ |
91,298 |
|
$ |
99,541 |
|
$ |
(8,243 |
) |
|
(8.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
For Six Months |
|
|
Six Months Ended |
|
|
|
|
|
|
June 30, |
|
Change |
|
2017 |
|
2016 |
|
Amount |
|
Percentage |
Business |
|
|
|
|
|
|
|
|
|
|
Data
services: |
|
|
|
|
|
|
|
|
|
|
Ethernet
and routed network services |
$ |
9,127 |
|
$ |
8,501 |
|
$ |
626 |
|
|
7.4 |
% |
Dedicated
Internet access |
|
4,689 |
|
|
8,943 |
|
|
(4,254 |
) |
|
(47.6 |
)% |
Internet
services |
|
6,667 |
|
|
6,961 |
|
|
(294 |
) |
|
(4.2 |
)% |
BVoIP |
|
6,903 |
|
|
6,061 |
|
|
842 |
|
|
13.9 |
% |
Legacy
data services |
|
3,233 |
|
|
3,955 |
|
|
(722 |
) |
|
(18.3 |
)% |
Total
data services |
|
30,619 |
|
|
34,421 |
|
|
(3,802 |
) |
|
(11.0 |
)% |
Voice
services |
|
41,991 |
|
|
44,164 |
|
|
(2,173 |
) |
|
(4.9 |
)% |
Hosted
and managed services |
|
3,174 |
|
|
3,287 |
|
|
(113 |
) |
|
(3.4 |
)% |
Equipment
and related services |
|
9,717 |
|
|
9,643 |
|
|
74 |
|
|
0.8 |
% |
|
|
85,501 |
|
|
91,515 |
|
|
(6,014 |
) |
|
(6.6 |
)% |
Consumer |
|
|
|
|
|
|
|
|
|
|
Video
services |
|
21,400 |
|
|
19,424 |
|
|
1,976 |
|
|
10.2 |
% |
Internet
services |
|
13,300 |
|
|
15,053 |
|
|
(1,753 |
) |
|
(11.6 |
)% |
Voice
services |
|
33,393 |
|
|
37,682 |
|
|
(4,289 |
) |
|
(11.4 |
)% |
|
|
68,093 |
|
|
72,159 |
|
|
(4,066 |
) |
|
(5.6 |
)% |
Wholesale carrier
data |
|
25,430 |
|
|
26,934 |
|
|
(1,504 |
) |
|
(5.6 |
)% |
Other |
|
6,784 |
|
|
7,727 |
|
|
(943 |
) |
|
(12.2 |
)% |
|
$ |
185,808 |
|
$ |
198,335 |
|
$ |
(12,527 |
) |
|
(6.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
Schedule of Adjusted EBITDA
Calculation |
(Unaudited, dollars in
thousands) |
|
|
Three Months Ended |
|
Six Months Ended |
|
LTM Ended |
|
June 30, |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
Net income (loss) |
$ |
(3,476 |
) |
|
$ |
1,445 |
|
$ |
(5,429 |
) |
|
$ |
1,599 |
|
$ |
(5,922 |
) |
Income
tax provision (credit) |
|
(2,402 |
) |
|
|
960 |
|
|
(3,788 |
) |
|
|
1,066 |
|
|
(4,263 |
) |
Interest
expense and other income and expense, net |
|
8,645 |
|
|
|
4,484 |
|
|
12,638 |
|
|
|
8,724 |
|
|
21,009 |
|
Operating income |
|
2,767 |
|
|
|
6,889 |
|
|
3,421 |
|
|
|
11,389 |
|
|
10,824 |
|
Depreciation and amortization |
|
21,742 |
|
|
|
22,493 |
|
|
43,012 |
|
|
|
44,443 |
|
|
88,485 |
|
Non-cash
stock and other performance-based compensation |
|
731 |
|
|
|
789 |
|
|
1,456 |
|
|
|
1,568 |
|
|
2,834 |
|
SystemMetrics earn-out |
|
32 |
|
|
|
216 |
|
|
32 |
|
|
|
731 |
|
|
66 |
|
Pension
settlement loss |
|
314 |
|
|
|
— |
|
|
2,270 |
|
|
|
— |
|
|
3,547 |
|
Early
retirement plan severance |
|
— |
|
|
|
— |
|
|
1,743 |
|
|
|
— |
|
|
1,743 |
|
Other
special items |
|
839 |
|
|
|
396 |
|
|
1,553 |
|
|
|
786 |
|
|
3,054 |
|
Adjusted EBITDA |
$ |
26,425 |
|
|
$ |
30,783 |
|
$ |
53,487 |
|
|
$ |
58,917 |
|
$ |
110,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
Schedule of Levered Free Cash
Flow |
(Unaudited, dollars in
thousands) |
|
|
Three Months Ended |
|
Six Months Ended |
|
LTM Ended |
|
June 30, |
|
June 30, |
|
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
Adjusted EBITDA |
$ |
26,425 |
|
|
$ |
30,783 |
|
|
$ |
53,487 |
|
|
$ |
58,917 |
|
|
$ |
110,553 |
|
Cash
interest expense |
|
(4,579 |
) |
|
|
(3,858 |
) |
|
|
(8,116 |
) |
|
|
(6,350 |
) |
|
|
(15,472 |
) |
Capital
expenditures |
|
(25,388 |
) |
|
|
(24,759 |
) |
|
|
(52,630 |
) |
|
|
(52,898 |
) |
|
|
(97,573 |
) |
Levered Free Cash
Flow |
$ |
(3,542 |
) |
|
$ |
2,166 |
|
|
$ |
(7,259 |
) |
|
$ |
(331 |
) |
|
$ |
(2,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
Schedule of Net Leverage Ratio |
(Unaudited, dollars in thousands) |
|
Long-term debt as of
June 30, 2017 |
|
$ |
313,886 |
|
|
Less cash
on hand |
|
|
(25,854 |
) |
|
Total net debt as of
June 30, 2017 |
|
$ |
288,032 |
|
|
|
|
|
|
|
LTM Adjusted EBITDA as
of June 30, 2017 |
|
$ |
110,553 |
|
|
Net leverage ratio as
of June 30, 2017 |
|
|
2.6 |
|
x |
|
|
|
|
|
|
Hawaiian Telcom Holdco, Inc. |
Volume Information |
(Unaudited) |
|
|
|
June 30, |
|
Change |
|
|
2017 |
|
2016 |
|
Number |
|
Percentage |
Business |
|
|
|
|
|
|
|
|
Data
lines |
|
18,917 |
|
19,851 |
|
(934 |
) |
|
(4.7 |
)% |
BVoIP
lines |
|
20,666 |
|
18,101 |
|
2,565 |
|
|
14.2 |
% |
Voice
access lines |
|
155,743 |
|
163,860 |
|
(8,117 |
) |
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
Consumer |
|
|
|
|
|
|
|
|
Video
subscribers |
|
43,235 |
|
38,593 |
|
4,642 |
|
|
12.0 |
% |
Internet
lines |
|
90,073 |
|
91,820 |
|
(1,747 |
) |
|
(1.9 |
)% |
Voice
access lines |
|
127,134 |
|
143,441 |
|
(16,307 |
) |
|
(11.4 |
)% |
Homes
enabled for video |
|
204,000 |
|
198,000 |
|
6,000 |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
March 31, |
|
Change |
|
|
2017 |
|
2017 |
|
Number |
|
Percentage |
Business |
|
|
|
|
|
|
|
|
Data
lines |
|
18,917 |
|
19,341 |
|
(424 |
) |
|
(2.2 |
)% |
BVoIP
lines |
|
20,666 |
|
20,034 |
|
632 |
|
|
3.2 |
% |
Voice
access lines |
|
155,743 |
|
158,621 |
|
(2,878 |
) |
|
(1.8 |
)% |
|
|
|
|
|
|
|
|
|
Consumer |
|
|
|
|
|
|
|
|
Video
subscribers |
|
43,235 |
|
42,771 |
|
464 |
|
|
1.1 |
% |
Internet
lines |
|
90,073 |
|
90,693 |
|
(620 |
) |
|
(0.7 |
)% |
Voice
access lines |
|
127,134 |
|
131,142 |
|
(4,008 |
) |
|
(3.1 |
)% |
Homes
enabled for video |
|
204,000 |
|
203,000 |
|
1,000 |
|
|
0.5 |
% |
Investor Contact:
Ngoc Nguyen
(808) 546-3475
ngoc.nguyen@hawaiiantel.com
Media Contact:
Su Shin
(808) 546-2344
su.shin@hawaiiantel.com
Grafico Azioni Hawaiian Telcom Holdco, Inc. (delisted) (NASDAQ:HCOM)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Hawaiian Telcom Holdco, Inc. (delisted) (NASDAQ:HCOM)
Storico
Da Mag 2023 a Mag 2024