WOW! REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS
- 4% increase in full-year High-Speed Data Revenue to $430.4 million in 2023
- 6% decrease in fourth-quarter Total Revenue to $168.8 million compared to 2022
- Net Loss of $43.5 million and $287.7 million for the quarter and year ended December 31, 2023
- Adjusted EBITDA of $71.2 million for the fourth quarter, a decrease of 4.6% from 2022
- Total Subscribers of 504,100 as of December 31, 2023, a decrease of 26,500 from 2022
- Market Expansion with 48,400 new homes passed in 2023, adding 7,400 Subscribers
- Capital Expenditures of $268.9 million in 2023, a 61% increase from 2022
- Total outstanding long-term debt of $934.5 million and cash and cash equivalents of $23.4 million as of December 31, 2023
- 6% decrease in fourth-quarter Total Revenue compared to 2022
- Net Loss of $43.5 million and $287.7 million for the quarter and year ended December 31, 2023
- Adjusted EBITDA decrease of $3.4 million and $4.7 million for the quarter and year ended December 31, 2023 compared to 2022
- Total Subscribers decrease of 26,500 as of December 31, 2023 compared to 2022
Insights
The reported full-year high-speed data (HSD) revenue growth of 4% for WideOpenWest, Inc. (WOW) is a positive indicator within the broadband sector, suggesting an increased demand for higher-speed internet services. This growth, despite a broader decline in total revenue and net losses, points to a strategic pivot towards broadband as a core service offering. The increase in HSD revenue is likely a result of both rate increases and a shift to higher speed tiers by consumers, reflecting a trend towards greater data consumption and the necessity of reliable high-speed internet for both residential and business customers.
However, the reported net loss of $287.7 million for the year, driven by a substantial non-cash impairment charge, raises concerns about the company's asset valuation and future profitability. The impairment suggests a reassessment of the company's intangible assets' value, possibly due to a changing competitive landscape or revised growth expectations. This write-down may affect investor confidence and could lead to a reassessment of the company's stock by the market. The increased capital expenditures, which are focused on network expansion, indicate a long-term investment in infrastructure that could lead to future revenue growth but also reflect immediate financial pressure and increased debt levels.
WOW's strategic market expansion, which added 48,400 new homes in 2023, represents a significant investment in growth. The penetration rates reported for their Edge-Out projects, particularly the impressive 47.6% for the 2021 projects, demonstrate effective market entry and customer acquisition strategies. These expansion efforts are essential for sustaining long-term growth, especially in an industry where customer base expansion is critical for scaling operations and leveraging fixed network costs.
However, the decrease in total subscribers and the reduction in Video and Telephony Residential Subscriber Units (RGUs) reflect broader industry trends, where consumers are moving away from traditional cable television and landline services towards streaming and mobile communications. The company's ability to adapt to these market shifts by focusing on its broadband services, which are increasingly becoming the primary offering, will be crucial for its future success.
The reported Adjusted EBITDA margin of 40.1% indicates a relatively healthy operational performance in the context of the telecommunications industry, where margins can be significantly impacted by large-scale infrastructure investments and customer acquisition costs. The slight margin improvement year-over-year suggests that WOW is managing its operational costs effectively, even as it continues to invest heavily in capital expenditures for network expansion. This operational efficiency must be maintained to support the company's growth ambitions, particularly as it faces a challenging macroeconomic environment with rising interest rates and potential economic headwinds that could affect consumer spending and investment capabilities.
Full year High-Speed Data Revenue of
Financial Highlights (1)
- Fourth quarter Total Revenue of
$168.8 million $11.7 million 6% , compared to the fourth quarter of 2022 - Full year Total Revenue of
$686.7 million $18.2 million 3% , compared to the corresponding period of 2022 - Fourth quarter HSD Revenue totaled
$108.7 million $1.6 million 1% compared to fourth quarter of 2022 - Full year HSD Revenue totaled
$430.4 million $18.3 million 4% , compared to the corresponding period of 2022 - Net Loss was
$43.5 million $287.7 million - Fourth quarter Adjusted EBITDA was
$71.2 million $3.4 million 4.6% , compared to the fourth quarter of 2022 - Full year Adjusted EBITDA was
$275.4 million $4.7 million 1.7% , compared to the corresponding period of 2022 - Passed approximately 48,400 new homes in
Central Florida andSouth Carolina as well as Edge-outs through December 31, 2023
(1) | Refer to "Non-GAAP Financial Measures" "Unaudited Reconciliations of GAAP Measures to Non-GAAP Measures," and "Subscriber Information" in this Press Release for definitions and information related to Adjusted EBITDA and reconciliation of non-GAAP measures to the closest comparable GAAP measures and why our management thinks it is beneficial to present such non-GAAP measures. |
"We continue to make great progress in our expansion markets, passing 48,400 homes in 2023, including nearly 23,000 in the fourth quarter, the most robust quarterly expansion of our network in our 25-year history, which puts us in a strong position to grow our footprint and subscriber base in 2024," said Teresa Elder, WOW!'s CEO. "The momentum in our new markets is also helping to drive our financial results which included a four percent increase in our HSD revenue in 2023."
"Our financial results this year continue to reflect the progress we are making as a broadband-first company including full-year HSD revenue growth and an Adjusted EBITDA Margin of
Revenue
Total Revenue was
Total Subscription Revenue for the quarter and year ended December 31, 2023 was
Other Business Services Revenue from continuing operations totaled
Other Revenue totaled
Costs and Expenses
Operating Expenses (excluding Depreciation and Amortization) totaled
Selling, General, and Administrative totaled
Net Loss
Net Loss for the quarter and year ended December 31, 2023 was
Adjusted EBITDA
Adjusted EBITDA for the quarter and year ended December 31, 2023 was
Subscribers
WOW! reported Total Subscribers of 504,100 as of December 31, 2023, a decrease of 26,500 compared to December 31, 2022, down 13,300 compared to September 30, 2023. HSD RGUs totaled 490,100 as of December 31, 2023, a decrease of 21,500 compared to December 31, 2022, down 13,300 compared to September 30, 2023.
Market Expansion
Market Expansion projects reached a total of 48,400 additional homes passed at December 31, 2023, including 30,400 additional homes in Greenfield markets and 18,000 additional new homes passed through Edge-Outs, as compared to the year ended December 31, 2022. These initiatives added 7,400 Subscribers in 2023 which represents a
The 2021 Edge-Out projects include 1,000 Subscribers, which represents
Capital Expenditures
Capital Expenditures totaled
Liquidity and Leverage
As of December 31, 2023, the total outstanding amount of long-term debt and finance lease obligations was
First Quarter 2024 Guidance
Q1 2024 | ||
HSD Revenue | ||
Total Revenue | ||
Adjusted EBITDA | ||
HSD net additions | (2,000) - (500) |
Webcast
WOW! will host a webcast on Wednesday, March 13, 2024, at 8:00 a.m. Eastern to discuss the operating and financial results contained in this press release. The conference call and webcast will be broadcast live on the Company's investor relations website at ir.wowway.com. Those parties interested in participating can use the information as follows:
Call Date: | Wednesday, March 13, 2024 | Call Time: | 8:00 a.m. Eastern | |||
Dial In: | (800) 715-9871 | International: | (646) 307-1963 | |||
Conf. ID: | 9830786 | |||||
A replay of the call will be available on the investor relations website or by telephone. To access the telephone replay, which will be available until March 27, 2024 at 11:59 p.m. ET, please dial (800) 770-2030 or (609) 800-9909 and use conference ID 9830786.
WIDEOPENWEST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||
December 31, | December 31, | |||||
2023 | 2022 | |||||
(in millions, except share data) | ||||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 23.4 | $ | 31.0 | ||
Accounts receivable—trade, net of allowance for doubtful accounts of | 38.8 | 39.9 | ||||
Accounts receivable—other, net | 9.5 | 12.2 | ||||
Prepaid expenses and other | 38.5 | 37.8 | ||||
Total current assets | 110.2 | 120.9 | ||||
Right-of-use lease assets—operating | 20.1 | 15.0 | ||||
Property, plant and equipment, net | 830.4 | 725.8 | ||||
Franchise operating rights | 278.3 | 585.1 | ||||
Goodwill | 225.1 | 225.1 | ||||
Intangible assets subject to amortization, net | 1.0 | 1.3 | ||||
Other non-current assets | 49.6 | 44.2 | ||||
Total assets | $ | 1,514.7 | $ | 1,717.4 | ||
Liabilities and stockholders' equity | ||||||
Current liabilities | ||||||
Accounts payable—trade | $ | 59.5 | $ | 46.1 | ||
Accrued interest | 1.6 | 0.1 | ||||
Current portion of long-term lease liability—operating | 4.3 | 4.9 | ||||
Accrued liabilities and other | 60.0 | 68.7 | ||||
Current portion of long-term debt and finance lease obligations | 18.8 | 17.7 | ||||
Current portion of unearned service revenue | 25.4 | 27.2 | ||||
Total current liabilities | 169.6 | 164.7 | ||||
Long-term debt and finance lease obligations—less current portion and debt issuance costs | 915.7 | 725.0 | ||||
Long-term lease liability—operating | 18.0 | 11.6 | ||||
Deferred income taxes, net | 125.7 | 225.3 | ||||
Other non-current liabilities | 27.5 | 15.7 | ||||
Total liabilities | 1,256.5 | 1,142.3 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Preferred stock, | — | — | ||||
Common stock, of December 31, 2023 and December 31, 2022, respectively; 83,557,786 and 86,417,733 outstanding as of December 31, 2023 and December 31, 2022, respectively | 1.0 | 1.0 | ||||
Additional paid-in capital | 391.8 | 374.7 | ||||
Accumulated income | 20.3 | 308.0 | ||||
Treasury stock at cost, 15,036,843 and 10,412,579 shares as of December 31, 2023 and December 31, 2022, respectively | (154.9) | (108.6) | ||||
Total stockholders' equity | 258.2 | 575.1 | ||||
Total liabilities and stockholders' equity | $ | 1,514.7 | $ | 1,717.4 | ||
WIDEOPENWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND YEAR ENDED (unaudited) | |||||||||||||
Three months ended | Year ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
(in millions, except for share data) | |||||||||||||
Revenue: | |||||||||||||
HSD | $ | 108.7 | $ | 107.1 | $ | 430.4 | $ | 412.1 | |||||
Video | 35.0 | 43.6 | 157.6 | 185.2 | |||||||||
Telephony | 11.8 | 12.4 | 47.6 | 51.4 | |||||||||
Total subscription services revenue | 155.5 | 163.1 | 635.6 | 648.7 | |||||||||
Other business services | 5.3 | 5.1 | 21.0 | 21.2 | |||||||||
Other | 8.0 | 12.3 | 30.1 | 35.0 | |||||||||
Total revenue | 168.8 | 180.5 | 686.7 | 704.9 | |||||||||
Costs and expenses: | |||||||||||||
Operating (excluding depreciation and amortization) | 71.7 | 77.6 | 301.0 | 327.0 | |||||||||
Selling, general and administrative | 33.8 | 48.1 | 200.4 | 165.4 | |||||||||
Depreciation and amortization | 51.9 | 45.3 | 193.5 | 178.2 | |||||||||
Impairment losses on intangibles | 47.0 | 35.0 | 306.8 | 35.0 | |||||||||
204.4 | 206.0 | 1,001.7 | 705.6 | ||||||||||
Loss from operations | (35.6) | (25.5) | (315.0) | (0.7) | |||||||||
Other income (expense): | |||||||||||||
Interest expense | (20.0) | (12.9) | (71.1) | (38.7) | |||||||||
Other income, net | 0.4 | 0.9 | 2.3 | 16.6 | |||||||||
Loss from operations before provision for income tax | (55.2) | (37.5) | (383.8) | (22.8) | |||||||||
Income tax benefit | 11.7 | 24.8 | 96.1 | 20.3 | |||||||||
Net loss | $ | (43.5) | $ | (12.7) | $ | (287.7) | $ | (2.5) | |||||
Basic | |||||||||||||
Basic | $ | (0.54) | $ | (0.15) | $ | (3.53) | $ | (0.03) | |||||
Diluted | $ | (0.54) | $ | (0.15) | $ | (3.53) | $ | (0.03) | |||||
Weighted-average common shares outstanding | |||||||||||||
Basic | 80,999,350 | 83,993,031 | 81,595,766 | 83,930,984 | |||||||||
Diluted | 80,999,350 | 83,993,031 | 81,595,766 | 83,930,984 | |||||||||
WIDEOPENWEST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||
Year ended | ||||||
December 31, | ||||||
2023 | 2022 | |||||
(in millions) | ||||||
Cash flows from operating activities: | ||||||
Net (loss) income | $ | (287.7) | $ | (2.5) | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 193.1 | 179.3 | ||||
Deferred income taxes | (99.6) | (32.2) | ||||
Provision for doubtful accounts | 12.7 | 6.0 | ||||
Loss (gain) on sale of assets, net | 0.3 | — | ||||
Loss (gain) on sale of operating assets, net | 0.4 | (1.1) | ||||
Amortization of debt issuance costs and discount | 1.7 | 1.7 | ||||
Impairment losses on intangibles | 306.8 | 35.0 | ||||
Non-cash compensation | 16.8 | 25.8 | ||||
Other non-cash items | (0.2) | (0.1) | ||||
Changes in operating assets and liabilities: | ||||||
Receivables and other operating assets | (15.0) | (14.3) | ||||
Payables and accruals | 5.8 | (163.8) | ||||
Net cash provided by operating activities | $ | 135.1 | $ | 33.8 | ||
Cash flows from investing activities: | ||||||
Capital expenditures | (268.9) | (167.2) | ||||
Other investing activities | 0.1 | 1.4 | ||||
Net cash (used in) provided by investing activities | $ | (268.8) | $ | (165.8) | ||
Cash flows from financing activities: | ||||||
Proceeds from issuance of long-term debt, net | $ | 202.0 | $ | 9.0 | ||
Payments on long-term debt and finance lease obligations | (29.6) | (19.8) | ||||
Purchase of shares | (46.3) | (19.4) | ||||
Net cash provided by (used in) financing activities | $ | 126.1 | $ | (30.2) | ||
Increase (decrease) in cash and cash equivalents | (7.6) | (162.2) | ||||
Cash and cash equivalents, beginning of period | 31.0 | 193.2 | ||||
Cash and cash equivalents, end of period | $ | 23.4 | $ | 31.0 | ||
Supplemental disclosures of cash flow information: | ||||||
Cash paid during the periods for interest | $ | 67.5 | $ | 37.8 | ||
Cash paid during the periods for income taxes | $ | 10.9 | $ | 147.5 | ||
Cash received during the periods for refunds of income taxes | $ | 5.0 | $ | 1.7 | ||
Non-cash operating activities: | ||||||
Operating lease additions | $ | 11.0 | $ | 2.7 | ||
Non-cash financing activities: | ||||||
Finance lease additions | $ | 16.3 | $ | 10.3 | ||
Other financing arrangements | 1.5 | — | ||||
Capital expenditures within accounts payable and accruals | $ | 42.6 | $ | 32.0 | ||
About WOW!
WOW! is one of the nation's leading broadband providers, with an efficient and high-performing network that passes nearly 2 million residential, business and wholesale consumers. WOW! provides services in 16 markets, primarily in the Midwest and Southeast, including
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical facts contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as "may," "intend," "might," "will," "should," "could," "would," "anticipate," "expect," "believe," "estimate," "plan," "project," "predict," "potential," or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control that could cause our actual results to differ materially from those in the forward-looking statements. These factors and other risks that could cause our actual results to differ materially are set forth in the section entitled "Risk Factors" in our Annual Report filed on Form 10-K with the Securities and Exchange Commission ("SEC") and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.
Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures in this release, including Adjusted EBITDA. These terms, as defined herein, are not intended to be considered in isolation, as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in
We believe that these non-GAAP measures enhance an investor's understanding of our financial performance. We believe that these non-GAAP measures are useful financial metrics to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business. We believe that these non-GAAP measures provide investors with useful information for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake Capital Expenditures. We use these non-GAAP measures for business planning purposes and in measuring our performance relative to that of our competitors. We believe these non-GAAP measures are measures commonly used by investors to evaluate our performance and that of our competitors.
Adjusted EBITDA eliminates the impact of expenses that do not relate to overall business performance and is defined by WOW! as net income (loss) before interest expense, income taxes, depreciation and amortization (including impairments), impairment losses on intangibles and goodwill, write-off of any asset, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including stock compensation expense) and certain other income and expenses. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAP as measures of operating performance, operating cash flows or liquidity.
Refer to "Reconciliations of GAAP Measures to Non-GAAP Measures" and the accompanying tables below for a reconciliation of Adjusted EBITDA to Net Income and Adjusted EBITDA margin to Net Profit margin which are the most directly comparable corresponding GAAP financial measures.
Subscriber Information
The Company uses the terms defined below throughout this release.
Homes passed are reported as the number of serviceable addresses, such as single residence homes, apartments and condominium units, and businesses passed by our broadband network and listed in our database.
We deliver multiple services to our customers, as such we report Total Subscribers as the number of Subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD Subscribers, Video Subscribers and Telephony Subscribers as a Revenue Generating Unit ("RGU").
While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products and services and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.
WIDEOPENWEST, INC. AND SUBSIDIARIES Reconciliations of GAAP Measures to Non-GAAP Measures (unaudited) | ||||||||||||
The following table provides a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to Net (Loss) Income and Net Profit Margin for the | ||||||||||||
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
(in millions) | ||||||||||||
Net loss | $ | (43.5) | $ | (12.7) | $ | (287.7) | $ | (2.5) | ||||
Net Profit Margin | (25.8) % | (7.0) % | (41.9) % | (0.4) % | ||||||||
Plus: Depreciation and amortization | 51.9 | 45.3 | 193.5 | 178.2 | ||||||||
Impairment losses on intangibles | 47.0 | 35.0 | 306.8 | 35.0 | ||||||||
Interest expense | 20.0 | 12.9 | 71.1 | 38.7 | ||||||||
Non-recurring professional fees, M&A integration and restructuring expense | 4.9 | 12.5 | 27.8 | 41.8 | ||||||||
Patent litigation settlement | — | — | 45.4 | — | ||||||||
Non-cash stock compensation | 2.9 | 7.3 | 16.8 | 25.8 | ||||||||
Other income, net | (0.3) | (0.9) | (2.2) | (16.6) | ||||||||
Income tax benefit | (11.7) | (24.8) | (96.1) | (20.3) | ||||||||
Adjusted EBITDA | $ | 71.2 | $ | 74.6 | $ | 275.4 | $ | 280.1 | ||||
Adjusted EBITDA Margin | 42.2 % | 41.3 % | 40.1 % | 39.7 % | ||||||||
WIDEOPENWEST, INC. AND SUBSIDIARIES Capital Expenditures and Subscriber Information (unaudited) | ||||||||||||
The following table provides additional information regarding our Capital Expenditures for the | ||||||||||||
Three months ended | Year ended | |||||||||||
December 31, | December 31, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
(in millions) | ||||||||||||
Scalable infrastructure | $ | 35.4 | $ | 15.6 | $ | 80.1 | $ | 39.4 | ||||
Customer premise equipment | 17.4 | 16.5 | 65.7 | 64.6 | ||||||||
Line extensions | 13.1 | 10.1 | 70.2 | 26.8 | ||||||||
Support capital and other | 14.7 | 10.5 | 52.9 | 36.4 | ||||||||
Total | $ | 80.6 | $ | 52.7 | $ | 268.9 | $ | 167.2 | ||||
Capital expenditures included in total related to: | ||||||||||||
Greenfields | $ | 33.8 | $ | 10.7 | $ | 105.0 | $ | 21.5 | ||||
Edge-outs | $ | 3.4 | $ | 1.3 | $ | 13.4 | $ | 4.7 | ||||
Business services | $ | 3.6 | $ | 2.5 | $ | 14.0 | $ | 11.6 | ||||
The following table provides an unaudited summary of our continuing operations subscriber information: | ||||||||||
December 31, | March 31, | June 30, | September 30, | December 31, | ||||||
2022 | 2023 | 2023 | 2023 | 2023 | ||||||
Homes Passed | 1,886,000 | 1,885,700 | 1,892,600 | 1,905,600 | 1,932,200 | |||||
Total Subscribers | 530,600 | 527,300 | 522,400 | 517,400 | 504,100 | |||||
HSD RGUs | 511,600 | 508,700 | 507,800 | 503,400 | 490,100 | |||||
Video RGUs | 123,200 | 117,100 | 110,000 | 100,800 | 90,800 | |||||
Telephony RGUs | 89,900 | 87,700 | 85,300 | 82,700 | 79,500 | |||||
Total RGUs | 724,700 | 713,500 | 703,100 | 686,900 | 660,400 | |||||
Additional Information Available on Website:
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which will be posted on our investor relations website at ir.wowway.com, when it is filed with the SEC. A slide presentation to accompany the conference call and a trending schedule containing historical customer and financial data will also be available on our website.
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SOURCE WideOpenWest, Inc.
FAQ
What was WOW's full-year High-Speed Data Revenue in 2023?
How did WOW's fourth-quarter Total Revenue change in 2023 compared to 2022?
What were WOW's Net Loss figures for the quarter and year ended December 31, 2023?
What was WOW's Adjusted EBITDA for the fourth quarter of 2023?
How many Total Subscribers did WOW have as of December 31, 2023?
What was WOW's Capital Expenditures in 2023?
What was WOW's total outstanding long-term debt and cash and cash equivalents as of December 31, 2023?
