Consolidated Communications Holdings, Inc. (CNSL)
Q3 2009 Earnings Call Transcript
November 5, 2009 11:00 am ET
Matthew Smith – Treasurer and Director, Finance
Bob Currey – President and CEO
Steve Childers – SVP and CFO
Barry Sine – Capstone Investments
Gray Powell – Wells Fargo Securities
Michael Nelson – Soleil Securities
Donna Jaegers – D.A. Davidson
Dennis Weaver [ph] – Maverick Industry [ph]
Frank Louthan – Raymond James
Previous Statements by CNSL
» Consolidated Communications Holdings, Inc. Q4 2008 Earnings Call Transcript
» Consolidated Communications Inc Q3 2008 Earnings Call Transcript
» Consolidated Communications Holdings, Inc. Q2 2008 Earnings Call Transcript
Mr. Smith, you may begin the conference.
Thank you, Demetris, and good morning everyone. I am Matt Smith, Treasurer and Director of Finance. And with me on the call today are Bob Currey, President and Chief Executive Officer, and Steve Childers, Chief Financial Officer. Thank you for joining us on this third quarter 2009 earnings call. After their prepared remarks, we'll conduct a question-and-answer session.
I will now review the Safe Harbor provisions of the 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.
Thanks, Matt. Good morning to all of you and thanks for joining us today. The third quarter was a strong quarter both financially and operationally, especially considering the competitive and economic challenges that exist today. We delivered our best ever IPTV growth with 1800 subscriber additions, a solid DSL increase of 2100, and our best access line results since the first quarter of 2008. Our cash available for dividends of 19.9 million and payout ratio of 58.1 continued to provide a comfortable cushion for our dividend. Additionally, our pair bonding rollout is proceeding as planned and the market response is very positive.
Revenue for the period was 101.6 million and adjusted EBITDA was 47.3 million. When you exclude the non-cash benefit of 1.8 million related to the access dispute resolution in the second quarter, adjusted EBITDA increased by $1 million sequentially. This improvement is directly related to the cost savings initiatives that we implemented in the first half of the year. Steve will discuss the financials in more detail later in this call.
In regard to our operating results, customer demand for our broadband products continues to be very strong in all of our markets. Our IPTV service had strong growth with the 1800 subscriber adds resulting in a 9.1% increase for the quarter and 39.2% for the last 12 months. The solid DSL increase of 2100 lines resulted in a 2.2% growth for the quarter and 9.7% over the last 12 months. During the quarter, we also added nearly 700 ILEC VoIP lines bringing that total subscriber account to 8600.
Access lines declined by 1.7% in the quarter which was the lowest quarterly loss since the cable competitive launches five quarters ago. The trend is exactly what we anticipated. We do not expect to experience a sustained spike again and the improvement should continue. As we discussed on last quarter's calls, the pair bonding technology deployment is well underway. It allowed us to pass an additional 18,000 homes with our IPTV product during the quarter and we will pass another 18,000 homes in the fourth quarter. The market is responding well to both the IPTV expansion and the additional bandwidth available to broadband customers.
In addition, we are very excited about a new wireless device tied to our IPTV service. This new technology along with pair bonding gives us the ability to better size the capacity needs of each and every customer with a quicker install resulting in an overall reduction of cost. In nearly every new installation, we are using this in home wireless device along with individual set top boxes to scale the service to the number of TVs, HD streams, and DVR boxes that our customers desire. Through this technology, it can all be done with limited wiring, providing a more efficient and importantly a more friendly customer installation. Again, the response from our customers has been excellent.
Before I turn it over to Steve, let me update you on the commercial developments that we have also discussed on our past calls. In our Cranberry, Pennsylvania market, the Westinghouse project has nearly completed its facilities construction and about half of the planned 3000 employees have moved in. The remaining half are scheduled to move in stages over the next six months. We are providing a diverse set of services to these new facilities and they're already one of our top three commercial accounts in Pennsylvania.