Knology Sells Cerritos System4/03/2005 8:00 PM Eastern
West Point, Ga.— WaveDivision Holdings LLC will buy Knology Inc.’s 8,000-subscriber system in Cerritos, Calif., for $10 million in cash, Knology said last week.
Orange Broadband Inc. had terminated an agreement to purchase the system from Knology in January.
Knology bought the Cerritos system in December 2003 from Verizon Media Ventures Inc., as part of a larger $17 million deal in which it also acquired systems in Pinellas County, Fla., with about 53,000 subscribers.
WaveDivision — operating as Wave Broadband and led by former Millennium Digital Media executive Steven Weed — currently serves some 80,000 cable-TV and high-speed-data subscribers in western Washington and Southern California.
The Cerritos system came to Knology as part of a purchase, from a Verizon Communications unit, of systems that also included about 53,000 customers in Pinellas County, Fla.
Verizon had the Cerritos system as a remnant of the merger of Bell Atlantic Corp. and GTE Corp. that created Verizon.
GTE had operated its groundbreaking interactive-TV service GTE MainStreet in Cerritos — but for Knology, it was far from existing core markets in the Southeast.
In other news, Knology — which reorganized debt under Chapter 11 of the U.S. Bankruptcy Code in late 2003 and executed an initial public offering of stock in January 2004 — reported financial results for the fourth quarter of 2004 and the full year.
Revenue for the quarter and full year of $52.9 million and $211.5 million, respectively, represented increases of 15.8% and 22.3%, respectively, compared with the year-ago totals of $45.6 million and $172.9 million.
The operator reported adjusted earnings before interest, taxes, debt and amortization of $8.7 million for the fourth quarter and $33.1 million for the full year, versus $9.3 million and $33 million, respectively, for the same periods in 2003.
Knology reported a fourth-quarter net loss of $18.5 million, or $0.78 per share, compared with $16.6 million ($0.94) in the previous year-period. The company’s full-year net loss was $75.6 million, or $3.19 per share, versus $87.8 million ($5.17) 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 turnaround issues we faced in our Pinellas County market,” CEO Rodger L. Johnson said in a prepared statement.