Adelphia Costs Rise in March

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Adelphia Communications Corp. enjoyed a 2% sequential monthly increase in revenue in March, but cash flow declined 5.6%, mainly because of higher capital expenditures and selling, general and administrative costs.

Revenue was $287.1 million in March, up from $280 million in February. Cash flow was $75.3 million, down from $79.8 million in the previous month.

UBS Warburg cable debt and equity analyst Aryeh Bourkoff said it was likely that the MSO is beefing up marketing and system-upgrade programs. SG&A rose to $71.9 million, about 25% above the $57.5 million spent in February.

Capital expenditures in March rose 28.4%, to $65.8 million from $47.1 million in February.

Adelphia sought Chapter 11 bankruptcy protection in June and is required to file monthly operating reports with the court.

Last week, the bankruptcy court approved a severance package for former Adelphia chief financial officer Christopher Dunstan that will pay him about $714,000.

Dunstan joined Adelphia last May, shortly after former CFO Timothy Rigas, former chairman John Rigas and former executive vice president of operations Michael Rigas resigned amid a massive accounting scandal. The Rigases, along with former assistant treasurer Michael Mulcahey and former vice president of finance James Brown, were indicted on fraud charges in September. Brown pleaded guilty to three counts of fraud in November, in exchange for his testimony at trial. The Rigases and Mulcahey have pleaded not guilty. A trial is set for January.

Dunstan officially resigned in March, just prior to Adelphia's hiring former 360Networks chief financial officer Vanessa Ames Wittman as executive vice president and CFO.

Dunstan received a $493,750 completion bonus, six months' salary as a severance payment and unused vacation time.

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