Jones Intercable Inc. said last week that it achieved
double-digit cash-flow growth in the fourth quarter and it stayed ahead of industry
averages, with 3.1 percent internal subscriber growth during 1997.
The company also said it is continuing its steady
acquisition of systems that it manages in limited partnerships. It has agreed to buy
systems in Palmdale and Littlerock, Calif., for a total of about $125 million, after Jones
receives a $24 million distribution fee as general partner in Palmdale. The systems have
some 70,000 combined subscribers
After the system buys close, Jones will own about 950,000
of its 1.5 million subscribers.
Adjusting for system sales and acquisitions, Jones'
revenue rose by $4.8 million, or 5 percent, in the fourth quarter, while its operating,
general and administrative expenses rose 2 percent. The cash-flow rise was $3.8 million on
a pro forma basis.
For the year, cash flow was up $16.1 million, or 12
percent, on a pro forma basis. Overall, cash flow rose by $23.5 million, or 17 percent, to
$158.7 million from $135.2 million in 1996.
In the quarter, revenue rose 26 percent, to $96.2 million
from $76.4 million in
the fourth quarter of 1996. Cash flow rose 30 percent in
total for the quarter, to $41.5 million from $31.9 million in the same period a year ago,
because of system acquisitions.
Jones' yearly net loss declined by $10.7 million, or
17 percent, to $51.9 million in
1997, equal to $1.50 per share of stock, from $62.7 million
($2 per share) the year before. Gains from asset sales accounted for the difference.
Noncable revenue dropped to $8.7 million in 1997 from $28.5
million in 1996, mostly because of noncable subsidiaries that were sold in 1996.
Subscriber-fee revenue jumped 34 percent, to $333.8 million
in 1997 from $248.6 million in 1996, mostly because of system acquisitions. On a pro forma
basis, subscriber fees were up 8 percent, due to rate increases and to Jones'
internal subscriber-growth rate.
Jones also reported in its 10-K annual report, filed last
week at the Securities and Exchange Commission, that its nasty spat with key shareholder
BCI Telecom Holdings Inc. (BTH) is scheduled to be heard in federal court March 23.
BTH -- which owns about 31 percent of Jones after investing
around $290 million in the Englewood, Colo.-based MSO -- sued three Jones entities and
chairman Glenn Jones in February in a dispute over the Jones Internet Channel
BTH is owned by Bell Canada's parent, BCE Inc. It
charged that Jones engaged in "self-dealing" by signing a long-term agreement
with JIC's parent, Jones International Ltd. Glenn Jones controls both Jones
Intercable and Jones International. BTH's stake is only in Jones Intercable.
Had Jones launched a competing data-over-cable service like
@Home Network or Time Warner Cable's Road Runner, it could have generated significant
"fees, or even equity stakes," for the cable operator and its shareholders, BTH
contended. Instead, Jones entered into a long-term agreement under which it would offer
JIC to 350,000 Jones Intercable subscribers by the end of this year.
According to BTH, the Internet-service agreement should
have been presented to a special committee of Jones Intercable's directors, including
three directors appointed by BTH.
BTH's suit, in U.S. District Court in Denver, seeks
damages and a preliminary injunction that would stop Jones Intercable from making JIC
available to other subscribers. A hearing on that injunction request is scheduled for