GCI Reports Third Quarter 2010 Financial Results
-- Consolidated revenue of $171.5 million
-- Adjusted EBITDA of $62.7 million
-- Net income of $7.6 million or $0.14 per diluted share
-- Increase in stock repurchase program and repurchase of common stock
ANCHORAGE, Alaska, Nov. 3, 2010 /PRNewswire-FirstCall/ -- General Communication, Inc. ("GCI") (Nasdaq: GNCMA) today reported its third quarter 2010 results with revenues increasing to $171.5 million and adjusted EBITDA increasing to a record $62.7 million. After the close of the third quarter, GCI repurchased approximately 7.5 million GCI shares held by Arctic Slope Regional Corporation ("ASRC").
Revenues for the third quarter increased 13.7 percent over revenues of $150.8 million in the third quarter of 2009 and adjusted EBITDA increased $12.4 million or 24.8 percent over the third quarter 2009 EBITDA of $50.3 million. EBITDA margin for the third quarter of 2010 improved to 36.6 percent as compared to 33.3 percent in the prior year.
Net income for the third quarter of 2010 totaled $7.6 million or earnings per diluted share of $0.14 and compares to net income of $4.3 million, or earnings per diluted share of $0.08 for the same period of 2009.
"Four years ago, GCI undertook a major investment program to take advantage of substantial growth opportunities in the Alaska market, particularly mobile wireless service. GCI's financial results for the third quarter as well as for the year-to-date confirm that our decision to reinvest in the state was the right thing to do," said GCI president Ron Duncan. "Fueled by that investment program, all of GCI's business lines are performing very well, and we are on our way to another year of record high revenues and adjusted EBITDA."
"GCI's strong financial performance, particularly our growing free cash flow, and strengthening customer metrics gave us confidence to pursue the repurchase of the GCI shares held by ASRC last month. The transaction is a win for both companies. ASRC has met its return objectives on its GCI investment over the past 2 1/2 years, and GCI has reduced its total shares outstanding by 13.6 percent."
GCI's third quarter 2010 EBITDA was favorably affected by $3.8 million of refunds received as a result of settling billing disputes with several vendors that reduced cost of goods sold for the quarter. The increases in contribution margin resulting from the vendor refunds were offset in part by $1.9 million in accrued airplane accident expenses.
GCI's third quarter 2010 revenues increased $9.2 million or 5.7 percent over total revenues of $162.3 million in the second quarter of 2010. Adjusted EBITDA increased $5.4 million or 9.4 percent over adjusted EBITDA of $57.4 million in the second quarter of 2010 in spite of the fact that the second quarter of 2010 included a $3.0 million net revenue adjustment mostly attributable to a change in USF estimates.
"GCI originally guided to revenues of $610 million to $620 million and adjusted EBITDA of $200 to $204 million for the year 2010," said Duncan. "The company's practice is to provide guidance only on an annual basis. Continued success in consumer, improvements in commercial, and stabilizing trends in network access, however, lead us to conclude that GCI will exceed its revenue and adjusted EBITDA guidance for the year."
-- In October of 2010, GCI repurchased 7,486,240 shares of its Class A
common stock for $10.16 per share in a privately negotiated transaction
with ASRC. The purchase price of approximately $76 million was funded by
available cash and a $30 million temporary draw on the company's
revolving facility. The $30 million revolver loan is expected to be
repaid before year end.
-- GCI is the second largest wireless provider in Alaska with 136,500
wireless subscribers at the end of the third quarter of 2010, an
increase of 5,300 wireless subscribers from the end of the second
quarter of 2010.
-- Consumer revenues for the third quarter of 2010 totaled $88.7 million, a
18.3 percent increase over the third quarter of 2009 and an increase of
6.8 percent over the second quarter of 2010, excluding $4.1 million in
USF estimate changes in the second quarter of 2010.
-- GCI had 144,700 access lines at the end of the third quarter of 2010,
representing an estimated 36 percent share of the total access line
market in Alaska. Access lines increased by 1,700 lines over the third
quarter of 2009 and decreased by 700 lines from the second quarter of
-- GCI's facilities-based access lines totaled 109,500, representing 76
percent of its total access lines at the end of the third quarter of
2010, a decrease of 200 lines from the second quarter of 2010 and an
increase of 5,100 lines when compared to the end of the third quarter of
the prior year.
-- GCI had 115,200 consumer and commercial cable modem customers at the end
of the third quarter of 2010, an increase of 900 over the 114,300 cable
modem customers at the end of the second quarter 2010. Average monthly
revenue per cable modem for the third quarter of 2010 was $50.61, an
increase of 16.6 percent over the $43.42 figure posted in the third
quarter of 2009 and an increase of 8.4 percent over the $46.69 figure
posted for the second quarter of 2010.
-- In October of 2010, GCI's Board of Directors amended GCI's stock
repurchase program to authorize the company to repurchase up to $100
million worth of its outstanding shares. The ASRC transaction reduces
the amount available under the program by approximately $76 million.
Depending on company performance, market conditions, liquidity, and
subject to board oversight GCI may continue repurchasing its own shares.
GCI will hold a conference call to discuss the quarter's results on Thursday, November 4, 2010 beginning at 2 p.m. (Eastern). To access the briefing on November 4, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-324-6913 (International callers should dial 1-212-287-1671) and identify your call as "GCI." In addition to the conference call, 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 800-262-4859, access code 7461 (International callers should dial 203-369-3220).
Full text and tables can be found at www.gci.com.
GCI is the largest telecommunications company in Alaska. GCI's cable plant, which provides voice, video, and broadband data services, passes 90 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 satellite network provides communications services to small towns and communities throughout rural Alaska. GCI's newly constructed statewide mobile wireless network seamlessly links urban and rural Alaska for the first time in the state's history.
A pioneer in bundled services, GCI is the top provider of voice, data, and video 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.
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 Form 10-K and 10-Q filed with the Securities and Exchange Commission.
SOURCE General Communication, Inc.