Cable One Reports Third Quarter 2023 Results

Rhea-AI Summary

Cable One, Inc. reported financial results for Q3 2023. Revenues decreased by 1.0% to $420.3 million compared to the same quarter last year. Net income was $39.5 million, a decrease of 44.1%. Adjusted EBITDA increased by 2.4% to $230.0 million. Cash flows from operating activities decreased by 16.9% to $180.2 million. Residential data revenues increased by 5.8%. The company repurchased shares and paid dividends during the quarter.

Positive

• Revenues decreased by 1.0% to $420.3 million compared to the same quarter last year.
• Net income was $39.5 million, a decrease of 44.1%.
• Adjusted EBITDA increased by 2.4% to $230.0 million.
• Cash flows from operating activities decreased by 16.9% to $180.2 million.
• Residential data revenues increased by 5.8%.
• The company repurchased shares and paid dividends during the quarter.

Negative

• None.

PHOENIX--(BUSINESS WIRE)-- Cable One, Inc. (NYSE: CABO) (the “Company” or “Cable One”) today reported financial and operating results for the quarter ended September 30, 2023.

	Three Months Ended September 30,
(dollars in thousands)	2023				2022				$ Change				% Change
Revenues	$	420,348			$	424,718			$	(4,370	)		(1.0	)%
Net income	$	39,472			$	70,607			$	(31,135	)		(44.1	)%
Net profit margin		9.4	%			16.6	%
Cash flows from operating activities	$	180,152			$	216,708			$	(36,556	)		(16.9	)%
Adjusted EBITDA(1)	$	230,000			$	224,620			$	5,380			2.4	%
Adjusted EBITDA margin(1)		54.7	%			52.9	%
Capital expenditures	$	77,815			$	100,515			$	(22,700	)		(22.6	)%
Adjusted EBITDA less capital expenditures(1)	$	152,185			$	124,105			$	28,080			22.6	%

“Our high margin data services product lines continue to perform admirably, with residential data services revenues growing 5.8% year-over-year,” said Julie Laulis, Cable One President and CEO. “Coupled with a reduction in capital expenditures in the third quarter enabled by multiple years of efficient capital investment and significant network capacity, our free cash flow conversion was robust, even in a subdued growth environment.”

Third Quarter 2023 Highlights:

• Net income was $39.5 million in the third quarter of 2023 compared to $70.6 million in the third quarter of 2022. Adjusted EBITDA was $230.0 million in the third quarter of 2023 compared to $224.6 million in the third quarter of 2022. Net profit margin was 9.4% and Adjusted EBITDA margin was 54.7%.
• Net cash provided by operating activities was $180.2 million in the third quarter of 2023 compared to $216.7 million in the third quarter of 2022. Adjusted EBITDA less capital expenditures was $152.2 million in the third quarter of 2023 compared to $124.1 million in the third quarter of 2022.
• Total revenues were $420.3 million in the third quarter of 2023 compared to $424.7 million in the third quarter of 2022. Year-over-year, residential data revenues increased 5.8%.
• Residential data average monthly revenue per unit (“ARPU”) was $85.69 for the third quarter of 2023, an increase of $5.23, or 6.5%, from the prior year quarter.
• The Company repurchased 23,875 shares of its common stock at an aggregate cost of $16.5 million, representing 0.4% of outstanding shares at the beginning of the quarter, and paid $16.7 million in dividends during the third quarter of 2023. The Company had $143.1 million of remaining share repurchase authorization as of September 30, 2023.
• The Company repaid $50.0 million under its revolving credit facility (the "Revolver") during the third quarter of 2023, bringing total repayments under the Revolver to $100.0 million during 2023.

_______________
(1)		Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA less capital expenditures are defined in the section of this press release entitled “Use of Non-GAAP Financial Measures.” Adjusted EBITDA and Adjusted EBITDA less capital expenditures are reconciled to net income, Adjusted EBITDA margin is reconciled to net profit margin and Adjusted EBITDA less capital expenditures is also reconciled to net cash provided by operating activities. Refer to the “Reconciliations of Non-GAAP Measures” tables within this press release.

Third Quarter 2023 Financial Results Compared to Third Quarter 2022

Revenues decreased $4.4 million, or 1.0%, to $420.3 million for the third quarter of 2023 due primarily to decreases in residential video and residential voice revenues, partially offset by an increase in residential data and other revenues.

Net income was $39.5 million in the third quarter of 2023 compared to $70.6 million in the prior year quarter. Net income for the third quarter of 2023 reflected interest expense of $43.4 million, a $7.0 million increase year-over-year. Net income for the third quarter of 2023 included a $23.9 million non-cash loss on fair value adjustment associated with the call and put options to acquire the remaining equity interests in Mega Broadband Investments Holdings LLC (the "MBI Net Option"). Net income for the third quarter of 2022 included a $2.8 million non-cash gain on fair value adjustment associated with the MBI Net Option fair value adjustment. Net income for the third quarter of 2023 also included an $8.4 million net loss from our pro rata share of earnings in equity method investments compared to minimal earnings in the third quarter of 2022. Net profit margin was 9.4% in the third quarter of 2023 compared to 16.6% in the prior year quarter.

Adjusted EBITDA was $230.0 million and $224.6 million for the third quarter of 2023 and 2022, respectively. Adjusted EBITDA for the third quarter of 2023 reflected lower programming and franchise expenses as a result of video customer losses. Adjusted EBITDA margin increased to 54.7% in the third quarter of 2023 from 52.9% in the prior year quarter.

Net cash provided by operating activities was $180.2 million in the third quarter of 2023 compared to $216.7 million in the third quarter of 2022. The decrease was driven by the timing of working capital changes along with higher income tax and interest payments, partially offset by an increase in Adjusted EBITDA. Capital expenditures for the third quarter of 2023 totaled $77.8 million compared to $100.5 million for the third quarter of 2022. Adjusted EBITDA less capital expenditures for the third quarter of 2023 was $152.2 million compared to $124.1 million in the prior year quarter.

Liquidity and Capital Resources

At September 30, 2023, the Company had $239.6 million of cash and cash equivalents on hand compared to $215.2 million at December 31, 2022. The Company’s debt balance was approximately $3.7 billion and $3.8 billion at September 30, 2023 and December 31, 2022, respectively. The Company had $388.0 million of borrowings and $612.0 million available for borrowing under its Revolver as of September 30, 2023.

The Company paid $16.7 million in dividends to stockholders and repurchased 23,875 shares of its common stock at an aggregate cost of $16.5 million during the third quarter of 2023. The Company had $143.1 million of remaining share repurchase authorization as of September 30, 2023.

The Company repaid $50.0 million under its Revolver during the third quarter of 2023, bringing total repayments under the Revolver to $100.0 million during 2023.

The Company’s capital expenditures by category for the three months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended September 30,
	2023				2022
Customer premise equipment(1)	$	10,635			$	26,177
Commercial(2)		8,760				8,515
Scalable infrastructure(3)		4,711				10,750
Line extensions(4)		13,058				10,195
Upgrade/rebuild(5)		11,744				24,877
Support capital(6)		28,907				20,001
Total	$	77,815			$	100,515

_______________
(1)		Customer premise equipment includes costs incurred at customer locations, including installation costs and customer premise equipment (e.g., modems and set-top boxes).
(2)		Commercial includes costs related to securing business services customers and PSUs, including small and medium-sized businesses and enterprise customers.
(3)		Scalable infrastructure includes costs not related to customer premise equipment to secure growth of new customers and PSUs or provide service enhancements (e.g., headend equipment).
(4)		Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(5)		Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(6)		Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles) and capitalized internal labor costs not associated with customer installation activities.

Conference Call

Cable One will host a conference call with the financial community to discuss results for the third quarter of 2023 on Thursday, November 2, 2023, at 5 p.m. Eastern Time (ET).

The conference call will be available via an audio webcast on the Cable One Investor Relations website at ir.cableone.net or by dialing 1-888-330-2398 (International: 1-240-789-2709) and using the access code 12023. Participants should register for the webcast or dial in for the conference call shortly before 5 p.m. ET.

A replay of the call will be available from November 2, 2023 until November 16, 2023 at ir.cableone.net.

Additional Information Available on Website

The information in this press release should be read in conjunction with the condensed consolidated financial statements and notes thereto contained in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023, which will be posted on the “SEC Filings” section of the Cable One Investor Relations website at ir.cableone.net when it is filed with the Securities and Exchange Commission (the “SEC”). Investors and others interested in more information about Cable One should consult the Company’s website, which is regularly updated with financial and other important information about the Company.

Use of Non-GAAP Financial Measures

The Company uses certain measures that are not defined by generally accepted accounting principles in the United States (“GAAP”) to evaluate various aspects of its business. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital expenditures and capital expenditures as a percentage of Adjusted EBITDA are non-GAAP financial measures and should be considered in addition to, not as superior to, or as a substitute for, net income, net profit margin, net cash provided by operating activities or capital expenditures as a percentage of net income reported in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA less capital expenditures are reconciled to net income, Adjusted EBITDA margin is reconciled to net profit margin and capital expenditures as a percentage of Adjusted EBITDA is reconciled to capital expenditures as a percentage of net income. Adjusted EBITDA less capital expenditures is also reconciled to net cash provided by operating activities. These reconciliations are included in the “Reconciliations of Non-GAAP Measures” tables within this press release.

“Adjusted EBITDA” is defined as net income plus interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance and contract termination costs, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on asset sales and disposals, system conversion costs, equity method investment (income) loss, other (income) expense and other unusual items, as provided in the “Reconciliations of Non-GAAP Measures” tables within this press release. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company’s business as well as other non-cash or special items and is unaffected by the Company’s capital structure or investment activities. This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the Company’s cash cost of debt financing. These costs are evaluated through other financial measures.

“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by total revenues.

“Adjusted EBITDA less capital expenditures,” when used as a liquidity measure, is calculated as net cash provided by operating activities excluding the impact of capital expenditures, interest expense, income tax provision, changes in operating assets and liabilities, change in deferred income taxes and other unusual items, as provided in the “Reconciliations of Non-GAAP Measures” tables within this press release.

“Capital expenditures as a percentage of Adjusted EBITDA” is defined as capital expenditures divided by Adjusted EBITDA.

The Company uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital expenditures and capital expenditures as a percentage of Adjusted EBITDA to assess its performance, and it also uses Adjusted EBITDA less capital expenditures as an indicator of its ability to fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under the Company’s credit agreement and the indenture governing the Company’s non-convertible senior unsecured notes to determine compliance with the covenants contained in the credit agreement and the ability to take certain actions under the indenture governing the non-convertible senior unsecured notes. Adjusted EBITDA, capital expenditures as a percentage of Adjusted EBITDA, and Adjusted EBITDA less capital expenditures are also significant performance measures used by the Company in its incentive compensation programs. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.

The Company believes that Adjusted EBITDA, Adjusted EBITDA margin and capital expenditures as a percentage of Adjusted EBITDA are useful to investors in evaluating the operating performance of the Company. The Company believes that Adjusted EBITDA less capital expenditures is useful to investors as it shows the Company’s performance while taking into account cash outflows for capital expenditures and is one of several indicators of the Company’s ability to service debt, make investments and/or return capital to its stockholders.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital expenditures, capital expenditures as a percentage of Adjusted EBITDA and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in the Company’s industry, although the Company’s measures of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA less capital expenditures and capital expenditures as a percentage of Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies.

About Cable One

Cable One, Inc. (NYSE:CABO) is a leading broadband communications provider committed to connecting customers and communities to what matters most. Through Sparklight® and the associated Cable One family of brands, the Company serves more than one million residential and business customers in 24 states as of September 30, 2023. Powered by a fiber-rich network, the Cable One family of brands provide residential customers with a wide array of connectivity and entertainment services, including Gigabit speeds, advanced Wi-Fi and video. For businesses ranging from small and mid-market up to enterprise, wholesale and carrier, the Company offers scalable, cost-effective solutions that enable businesses of all sizes to grow, compete and succeed.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This communication may contain “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions and projections about the Company’s industry, business, strategy, acquisitions and strategic investments, dividend policy, financial results and financial condition. Forward-looking statements often include words such as “will,” “should,” “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Company’s actual results may vary materially from those expressed or implied in its forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by the Company or on its behalf. Important factors that could cause the Company’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors, which are discussed in the Company’s latest Annual Report on Form 10-K as filed with the SEC:

• rising levels of competition from historical and new entrants in the Company’s markets;
• recent and future changes in technology, and the Company's ability to develop, deploy and operate new technologies, service offerings and customer service platforms;
• the Company’s ability to continue to grow its residential data and business services revenues and customer base;
• increases in programming costs and retransmission fees;
• the Company’s ability to obtain hardware, software and operational support from vendors;
• risks that the Company may fail to realize the benefits anticipated as a result of the Company's purchase of the remaining interests in Hargray Acquisition Holdings, LLC that the Company did not already own;
• risks relating to existing or future acquisitions and strategic investments by the Company;
• risks that the implementation of the Company’s new enterprise resource planning system disrupts business operations;
• the integrity and security of the Company’s network and information systems;
• the impact of possible security breaches and other disruptions, including cyber-attacks;
• the Company’s failure to obtain necessary intellectual and proprietary rights to operate its business and the risk of intellectual property claims and litigation against the Company;
• legislative or regulatory efforts to impose network neutrality and other new requirements on the Company’s data services;
• additional regulation of the Company’s video and voice services;
• the Company’s ability to renew cable system franchises;
• increases in pole attachment costs;
• changes in local governmental franchising authority and broadcast carriage regulations;
• the potential adverse effect of the Company’s level of indebtedness on its business, financial condition or results of operations and cash flows;
• the restrictions the terms of the Company’s indebtedness place on its business and corporate actions;
• the possibility that interest rates will continue to rise, causing the Company’s obligations to service its variable rate indebtedness to increase significantly;
• the transition away from London Interbank Offered Rate and the adoption of alternative reference rates;
• risks associated with the Company’s convertible indebtedness;
• the Company’s ability to continue to pay dividends;
• provisions in the Company’s charter, by-laws and Delaware law that could discourage takeovers and limit the judicial forum for certain disputes;
• adverse economic conditions, labor shortages, supply chain disruptions, changes in rates of inflation and the level of move activity in the housing sector;
• pandemics, epidemics or disease outbreaks, such as the COVID-19 pandemic, have, and may continue to, disrupt the Company's business and operations, which could materially affect the Company's business, financial condition, results of operations and cash flows;
• lower demand for the Company's residential data and business services products;
• fluctuations in the Company’s stock price;
• dilution from equity awards, convertible indebtedness and potential future convertible debt and stock issuances;
• damage to the Company’s reputation or brand image;
• the Company’s ability to retain key employees (whom we refer to as associates);
• the Company’s ability to incur future indebtedness;
• provisions in the Company’s charter that could limit the liabilities for directors; and
• the other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including but not limited to those described under "Risk Factors" in its latest Annual Report on Form 10-K as filed with the SEC.

Any forward-looking statements made by the Company in this communication speak only as of the date on which they are made. The Company is under no obligation, and expressly disclaims any obligation, except as required by law, to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.

CABLE ONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
		Three Months Ended September 30,
(dollars in thousands, except per share data)		2023				2022				Change				% Change
Revenues
Residential data		$	247,420			$	233,834			$	13,586			5.8	%
Residential video			62,295				80,525				(18,230	)		(22.6	)%
Residential voice			9,080				10,494				(1,414	)		(13.5	)%
Business services			75,575				75,847				(272	)		(0.4	)%
Other			25,978				24,018				1,960			8.2	%
Total Revenues			420,348				424,718				(4,370	)		(1.0	)%
Costs and Expenses:
Operating (excluding depreciation and amortization)			109,682				120,487				(10,805	)		(9.0	)%
Selling, general and administrative			92,726				86,018				6,708			7.8	%
Depreciation and amortization			82,918				87,222				(4,304	)		(4.9	)%
(Gain) loss on asset sales and disposals, net			2,492				2,952				(460	)		(15.6	)%
Total Costs and Expenses			287,818				296,679				(8,861	)		(3.0	)%
Income from operations			132,530				128,039				4,491			3.5	%
Interest expense			(43,384	)			(36,389	)			(6,995	)		19.2	%
Other income (expense), net			(20,536	)			834				(21,370	)		NM
Income before income taxes and equity method investment income (loss), net			68,610				92,484				(23,874	)		(25.8	)%
Income tax provision			20,694				21,891				(1,197	)		(5.5	)%
Income before equity method investment income (loss), net			47,916				70,593				(22,677	)		(32.1	)%
Equity method investment income (loss), net			(8,444	)			14				(8,458	)		NM
Net income		$	39,472			$	70,607			$	(31,135	)		(44.1	)%
Net Income per Common Share:
Basic		$	7.03			$	12.10			$	(5.07	)		(41.9	)%
Diluted		$	6.81			$	11.53			$	(4.72	)		(40.9	)%
Weighted Average Common Shares Outstanding:
Basic			5,611,278				5,836,731				(225,453	)		(3.9	)%
Diluted			6,026,285				6,261,257				(234,972	)		(3.8	)%
Unrealized gain (loss) on cash flow hedges and other, net of tax		$	18,569			$	47,251			$	(28,682	)		(60.7	)%
Comprehensive income		$	58,041			$	117,858			$	(59,817	)		(50.8	)%
_______________
NM = Not meaningful.

CABLE ONE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands, except par values)		September 30, 2023				December 31, 2022
Assets
Current Assets:
Cash and cash equivalents		$	239,632			$	215,150
Accounts receivable, net			86,331				74,383
Prepaid and other current assets			68,417				57,172
Total Current Assets			394,380				346,705
Equity investments			1,127,185				1,195,221
Property, plant and equipment, net			1,747,474				1,701,755
Intangible assets, net			2,612,119				2,666,585
Goodwill			928,947				928,947
Other noncurrent assets			101,670				74,677
Total Assets		$	6,911,775			$	6,913,890
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities		$	171,970			$	164,518
Deferred revenue			27,260				23,706
Current portion of long-term debt			19,019				55,931
Total Current Liabilities			218,249				244,155
Long-term debt			3,679,618				3,752,591
Deferred income taxes			974,344				966,821
Other noncurrent liabilities			236,831				192,350
Total Liabilities			5,109,042				5,155,917
Stockholders' Equity
Preferred stock ($0.01 par value; 4,000,000 shares authorized; none issued or outstanding)			—				—
Common stock ($0.01 par value; 40,000,000 shares authorized; 6,175,399 shares issued; and 5,616,921 and 5,766,011 shares outstanding as of September 30, 2023 and December 31, 2022, respectively)			62				62
Additional paid-in capital			599,973				578,154
Retained earnings			1,727,014				1,624,406
Accumulated other comprehensive income (loss)			72,369				50,031
Treasury stock, at cost (558,478 and 409,388 shares held as of September 30, 2023 and December 31, 2022, respectively)			(596,685	)			(494,680	)
Total Stockholders' Equity			1,802,733				1,757,973
Total Liabilities and Stockholders' Equity		$	6,911,775			$	6,913,890

CABLE ONE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Three Months Ended September 30,
(in thousands)		2023				2022
Cash flows from operating activities:
Net income		$	39,472			$	70,607
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			82,918				87,222
Non-cash interest expense, net			2,213				2,354
Equity-based compensation			10,235				5,860
Change in deferred income taxes			(4,362	)			2,890
(Gain) loss on asset sales and disposals, net			2,492				2,952
Equity method investment (income) loss, net			8,444				(14	)
Fair value adjustments			25,421				2,704
Changes in operating assets and liabilities:
Accounts receivable, net			(11,720	)			12,125
Prepaid and other current assets			12,096				(7,629	)
Accounts payable and accrued liabilities			16,864				31,826
Deferred revenue			(953	)			498
Other			(2,968	)			5,313
Net cash provided by operating activities			180,152				216,708
Cash flows from investing activities:
Cash paid for debt and equity investments			(816	)			(2,000	)
Capital expenditures			(77,815	)			(100,515	)
Change in accrued expenses related to capital expenditures			8,609				(1,110	)
Proceeds from sales of property, plant and equipment			360				3,290
Proceeds from sales of equity investments			56,730				—
Net cash used in investing activities			(12,932	)			(100,335	)
Cash flows from financing activities:
Payments on long-term debt			(55,039	)			(8,542	)
Repurchases of common stock			(16,495	)			(115,322	)
Payment of withholding tax for equity awards			(89	)			(105	)
Dividends paid to stockholders			(16,699	)			(16,663	)
Net cash used in financing activities			(88,322	)			(140,632	)
Change in cash and cash equivalents			78,898				(24,259	)
Cash and cash equivalents, beginning of period			160,734				279,978
Cash and cash equivalents, end of period		$	239,632			$	255,719
Supplemental cash flow disclosures:
Cash paid for interest, net of capitalized interest		$	35,000			$	26,259
Cash paid for income taxes, net of refunds received		$	15,037			$	(5,696	)

CABLE ONE, INC. RECONCILIATIONS OF NON-GAAP MEASURES (Unaudited)
		Three Months Ended September 30,
(dollars in thousands)		2023				2022				$ Change				% Change
Net income		$	39,472			$	70,607			$	(31,135	)		(44.1	)%
Net profit margin			9.4	%			16.6	%
Plus: Interest expense			43,384				36,389				6,995			19.2	%
Income tax provision			20,694				21,891				(1,197	)		(5.5	)%
Depreciation and amortization			82,918				87,222				(4,304	)		(4.9	)%
Equity-based compensation			10,235				5,860				4,375			74.7	%
Severance and contract termination costs			1,217				—				1,217			NM
(Gain) loss on deferred compensation			—				(45	)			45			(100.0	)%
Acquisition-related costs			409				281				128			45.6	%
(Gain) loss on asset sales and disposals, net			2,492				2,952				(460	)		(15.6	)%
System conversion costs			199				311				(112	)		(36.0	)%
Equity method investment (income) loss, net			8,444				(14	)			8,458			NM
Other (income) expense, net			20,536				(834	)			21,370			NM
Adjusted EBITDA		$	230,000			$	224,620			$	5,380			2.4	%
Adjusted EBITDA margin			54.7	%			52.9	%
Less: Capital expenditures		$	77,815			$	100,515			$	(22,700	)		(22.6	)%
Capital expenditures as a percentage of net income			197.1	%			142.4	%
Capital expenditures as a percentage of Adjusted EBITDA			33.8	%			44.7	%
Adjusted EBITDA less capital expenditures		$	152,185			$	124,105			$	28,080			22.6	%
_______________
NM = Not meaningful.

		Three Months Ended September 30,
(dollars in thousands)		2023				2022				$ Change				% Change
Net cash provided by operating activities		$	180,152			$	216,708			$	(36,556	)		(16.9	)%
Capital expenditures			(77,815	)			(100,515	)			22,700			(22.6	)%
Interest expense			43,384				36,389				6,995			19.2	%
Non-cash interest expense			(2,213	)			(2,354	)			141			(6.0	)%
Income tax provision			20,694				21,891				(1,197	)		(5.5	)%
Changes in operating assets and liabilities			(13,319	)			(42,133	)			28,814			(68.4	)%
Change in deferred income taxes			4,362				(2,890	)			7,252			NM
(Gain) loss on deferred compensation			—				(45	)			45			(100.0	)%
Acquisition-related costs			409				281				128			45.6	%
Severance and contract termination costs			1,217				—				1,217			NM
System conversion costs			199				311				(112	)		(36.0	)%
Fair value adjustments			(25,421	)			(2,704	)			(22,717	)		NM
Other (income) expense, net			20,536				(834	)			21,370			NM
Adjusted EBITDA less capital expenditures		$	152,185			$	124,105			$	28,080			22.6	%
_______________
NM = Not meaningful.

CABLE ONE, INC. OPERATING STATISTICS (Unaudited)
		As of September 30,
(in thousands, except percentages and ARPU data)		2023				2022				Change				% Change
Homes Passed			2,754.4				2,693.7				60.7			2.3	%
Residential Customers			994.6				1,020.0				(25.4	)		(2.5	)%
Data PSUs			958.8				965.4				(6.6	)		(0.7	)%
Video PSUs			140.5				190.3				(49.9	)		(26.2	)%
Voice PSUs			81.7				95.0				(13.3	)		(14.0	)%
Total residential PSUs			1,181.0				1,250.7				(69.8	)		(5.6	)%
Business Customers			102.7				102.1				0.6			0.6	%
Data PSUs			98.6				96.4				2.2			2.3	%
Video PSUs			8.4				11.8				(3.3	)		(28.2	)%
Voice PSUs			40.0				41.0				(1.1	)		(2.6	)%
Total business services PSUs			147.0				149.2				(2.2	)		(1.5	)%
Total Customers			1,097.3				1,122.1				(24.8	)		(2.2	)%
Total non-video			946.1				916.9				29.2			3.2	%
Percent of total			86.2	%			81.7	%						4.5	%
Data PSUs			1,057.4				1,061.8				(4.4	)		(0.4	)%
Video PSUs			148.9				202.1				(53.2	)		(26.3	)%
Voice PSUs			121.6				136.0				(14.4	)		(10.6	)%
Total PSUs			1,327.9				1,399.9				(72.0	)		(5.1	)%
Penetration
Data			38.4	%			39.4	%						(1.0	)%
Video			5.4	%			7.5	%						(2.1	)%
Voice			4.4	%			5.0	%						(0.6	)%
Share of Third Quarter Revenues
Residential data			58.9	%			55.1	%						3.8	%
Business services			18.0	%			17.9	%						0.1	%
Total			76.8	%			72.9	%						3.9	%
ARPU - Third Quarter
Residential data(1)		$	85.69			$	80.46			$	5.23			6.5	%
Residential video(1)		$	143.27			$	134.47			$	8.80			6.5	%
Residential voice(1)		$	36.34			$	36.08			$	0.26			0.7	%
Business services(2)		$	245.90			$	248.19			$	(2.29	)		(0.9	)%

_______________
Note:		All totals, percentages and year-over-year changes are calculated using exact numbers. Minor differences may exist due to rounding.
(1)		ARPU values represent the applicable quarterly residential service revenues (excluding installation and activation fees) divided by the corresponding average of the number of PSUs at the beginning and end of each period, divided by three, except that for any PSUs added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the pro-rated average number of PSUs during such period.
(2)		ARPU values represent quarterly business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, divided by three, except that for any business customer relationships added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent business services revenues divided by the pro-rated average number of business customer relationships during such period.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231102205880/en/

Trish Niemann

Vice President, Communications Strategy

602-364-6372

patricia.niemann@cableone.biz

Todd Koetje

Chief Financial Officer

investor_relations@cableone.biz

Source: Cable One, Inc.

FAQ

What were Cable One's Q3 2023 revenues?

Cable One's Q3 2023 revenues were $420.3 million.

What was Cable One's net income in Q3 2023?

Cable One's net income in Q3 2023 was $39.5 million.

How did Cable One's Adjusted EBITDA perform in Q3 2023?

Cable One's Adjusted EBITDA increased by 2.4% to $230.0 million in Q3 2023.

What was the change in cash flows from operating activities for Cable One in Q3 2023?

Cash flows from operating activities decreased by 16.9% to $180.2 million in Q3 2023.

How much did residential data revenues increase by in Q3 2023?

Residential data revenues increased by 5.8% in Q3 2023.

Did Cable One repurchase shares or pay dividends in Q3 2023?

Yes, Cable One repurchased shares and paid dividends during Q3 2023.