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Consolidated Communications Holdings, Inc. (CNSL)
Q4 2008 Earnings Call Transcript
March 12, 2009 11:00 am ET
Matt Smith – Director of Investor Relations
Robert J. Currey – President & Chief Executive Officer
Steven L. Childers – Chief Financial Officer & Senior Vice President
Frank Louthan – Raymond James
Michael Rollins – Citigroup
Thomas Seitz – Barclays Capital
Donna Jaegers – DA Davidson
Previous Statements by CNSL
» Consolidated Communications Holdings, Inc. Q3 2009 Earnings Call Transcript
» Consolidated Communications Inc Q3 2008 Earnings Call Transcript
» Consolidated Communications Holdings, Inc. Q2 2008 Earnings Call Transcript
I will now turn the conference over to Mr. Matt Smith, Director of Investor Relations. Thank you. Mr. Smith you may begin the conference.
Thank you, [Lithuania] and good morning everyone. Thanks for joining us on this fourth quarter and year-end 2008 earnings conference call. With me on the call today are Bob Currey, President and Chief Executive Officer, and Steve Childers, Chief Financial Officer. After the prepared remarks, we'll conduct a question-and-answer session.
I will now review the Safe Harbor provisions of this call and then turn it over to Bob. This call may contain forward-looking statements within the meaning of the Federal Securities laws. Such forward-looking statements reflect among other things management’s current expectations, plans and strategies and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause the actual results to differ materially from those expressed or implied by these forward-looking statements. Please see our public filings with the Securities and Exchange Commission for more information about forward-looking statements and related risk factors.
In addition, during this call, we will discuss certain non-GAAP financial measures. Our earnings release for this quarter's results, which has been posted to the Investor Relations section of our website contains reconciliations of these measures to their nearest GAAP equivalent.
I will now turn the call over to Bob, who will provide an overview of our financial and operating results. Steve Childers will then provide a more detailed review of the financials. Bob?
Thanks Matt. And thank all of you for joining us today. We had a great year and I’m pleased to report another solid quarter of both operational and financial results. Let me start by discussing some of the highlights for the quarter and then move on to our accomplishments for the year. I will then get into some of the detailed operating metrics, provide an integration update and finally touch on the regulatory and economic landscape before turning it over to Steve for a more thorough financial review.
First, I’m very pleased with our strong broadband performance again this quarter, with DSL growing by 3% and reaching 35% penetration of total access lines. Our IPTV service continues to show solid growth with nearly 8% new subscribers and we passed an additional 8,000 new homes. As a result of the successful launch and customer response to HD and DVR, our ARPU on the IPTV subscribers has reached its highest point ever.
Financially, we had another solid quarter of results. Revenue for the quarter was $102.7 million with adjusted EBITDA of $46.4 million, when excluding $300,000 in Hurricane Ike expense. Our cash available for dividends was in line with our expectations and we maintained a comfortable payout ratio.
Turning now to the full year. I’m pleased to highlight a few of the many successes we had. We worked very effectively in integrating the North Pittsburg operation and ended the year by surpassing our synergy estimate of $7 million. We rolled out IPTV service in our Pennsylvania market within four months of closing the acquisition, and have had the fastest and most successful IPTV launch in our history. In addition, we increased our homes passed by 35,000 to a total of 143,000.
Our DVR service was launched in all of our markets and we added 10 new HD channels to our lineup. We’ve also added thousands of hours of video-on-demand content and expanded our local content options.
As for DSL, we began upgrading our 1 meg customers to a 3 meg product at no charge in support of our customer retention efforts and to keep pace with the growing bandwidth demand. Our residential VOIP service was launched during the year successfully gaining or retaining approximately 2,500 residential customers.
Finally, we successfully trialed pair bonding in preparation for the full rollout in the first half of 2009. We are excited about the opportunities this new technology will provide us. Expanding coverage to new customers for our broadband offerings and enhancing speeds to existing ones. I’m very proud of our team and all the employees for this extensive list of 2008 accomplishments, especially the entire recovery effort around Hurricane Ike that we detailed last quarter.
In regards to our operating performance, we delivered strong DSL and IPTV growth in the quarter and the year. DSL lines in service increased by 2,700, or 3% sequentially and by 10,500 or almost 13% for the year. IPTV subscribers increased by 1,200 or almost 8% for the quarter, and 4,400 or 36% for the year.
As for the DVR product we’ve launched in April, penetration rate continues to show a substantial growth increasing to 17% at year-end. During the quarter, we added nearly 800 ILEC of VOIP lines bringing that total subscriber count to 6,500, and growth for the year was a strong 161%.