Mediacom Has Strong Q4
Basic Subscriber Losses Decline In Period
Mike Farrell -- Multichannel News, 2/25/2009 2:30:13 PM
Despite the foundering economy, Mediacom Communications reported strong fourth-quarter results, growing revenue and cash flow by more than 8% in the period, while keeping basic-subscriber losses below the prior year's levels.
Revenue at the ninth largest MSO in the country rose 8.3% to $360.2 million in the quarter and adjusted operating income before interest, depreciation and amortization rose 8.4% to $129.6 million.
The operator, which serves mid-sized markets, also managed to improve basic subscriber losses in the period - 6,000 compared versus 7,000 in 2007 - and grew digital customers by 19,000 in the period. High-speed internet subscribers grew by 11,000, while phone customers increased by 9,000 customers.
Mediacom did not want to give specific guidance for 2009, but said in a statement that it expected to grow revenue and cash flow despite the tough economy. One financial metric that will see a big increase is free cash flow ---cash flow after interest payments and taxes are made, which should rise to about $1 per share in 2009, versus less than 10 cents per share in 2008.
The main reasons for the big boost in free cash flow are lower capital expenditures -- capex is expected to decline 20% to 25% in 2009 -- and a recent deal the company did with one of its early shareholders to buy-in about 30% of its own stock. That deal, with Morris Communications, effectively reduced the number of outstanding shares at Mediacom, which also helped in the free cash flow per share increase.
On a conference call with analysts, Mediacom chairman and CEO Rocco Commisso said that in light of the sluggish economy, Mediacom would freeze its senior management salaries in 2009 and look for other ways to keep costs down.
Commisso noted that Mediacom has a long history of watching what it spends: he mentioned on the call that the $1.5 million a certain former banking executive spent on renovating his office would have paid the rent for Mediacom's corporate headquarters in Middletown, N.Y. for four years.
"We're very, very careful in how we spend our money," Commisso said
Commisso added that while he remains cautious for 2009 that is mostly because of the uncertainty that surrounds the current economy.
"In relation to most of the other businesses out there, I'm very happy to be in our business," Commisso said, adding that while other industries and companies have had to endure major layoffs last year, Mediacom actually increased its employment base in 2008.
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