CABO 8-K
Cable One, Inc. (CABO)
8-K
2020-10-26
For: 2020-10-26
View Original
Added on
April 06, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 26, 2020
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s Telephone Number, Including Area Code: (602 ) 364-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. |
Results of Operations and Financial Condition
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On October 26, 2020, Cable One, Inc. (“we,” “us,” “our” or the “Company”) issued a press release announcing certain preliminary estimated results for
the quarter ended September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
The information contained in this Item 2.02, as well as in Exhibit 99.1, is furnished and shall not be deemed to be “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 7.01 |
Regulation FD Disclosure
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In connection with the offering of the Notes described in Item 8.01 below, the Company is disclosing the information set forth below in a preliminary
offering memorandum, dated October 26, 2020 (the “Offering Memorandum”). The information in this current report should be read in conjunction with the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December
31, 2019 (the “Form 10-K”), the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 (the “First Quarter 2020 Form 10-Q”) and June 30, 2020 (together with the First Quarter 2020 Form 10-Q, the “2020 Form 10-Qs”), respectively, and
the information under the “Cautionary Statement Regarding Forward-Looking Statements” in the Form 10-K, as modified hereby.
The information contained in this Item 7.01 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or
otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Information included in the Offering Memorandum:
COVID-19 update
The negative impacts associated with the actions we took in response to the pandemic continued in the third quarter of 2020, due primarily to the
now-concluded suspension of data overage fees, late charges and reconnect fees and diminished growth in business services revenues coupled with higher labor costs and other operating expenses. However, these reduced revenues and additional costs
are expected to be more than offset in the third quarter of 2020 by a greater-than-usual gain in residential data customers over the second and third quarters of 2020 and the associated increase in residential data revenues as well as lower travel
costs. In addition, for the three months ended September 30, 2020, we expect to record sequentially lower bad debt expense as collections of receivables were better than originally estimated.
We expect the negative impacts associated with the actions we took in response to the pandemic to largely dissipate during the fourth quarter of 2020,
due primarily to the resumption of billing late charges, reconnect fees and data overage fees for a full quarter as well as the normalization of labor costs. In addition, the increase in residential data revenues associated with the significant
number of residential data customers acquired during the COVID-19 pandemic is anticipated to continue during the fourth quarter of 2020. However, we continue to face various uncertainties related to the impact of the COVID-19 pandemic on the
overall economy and our business, including whether we are able to sustain continued customer growth, our level of bad debt expense and if some of the expense reductions realized during the third quarter of 2020 will continue or if those expenses
will return to more normal levels given the fluid situation regarding pandemic-related restrictions across the country.
MBI transactions
As of September 30, 2020, Mega Broadband Investments Holdings LLC (“MBI”) provided service to more than 200,000 data customers out of approximately
640,000 homes passed with a video penetration rate of approximately 10%. In addition, MBI’s network has upgraded systems and a high-capacity plant with more than 15,800 network plant miles, including over 4,100 fiber route miles, capable of
delivering Gigabit speeds across its footprint, in each case as of September 30, 2020. MBI’s last quarter annualized revenue (calculated as MBI’s revenue for the three months ended September 30, 2020 multiplied by four) was approximately $258
million, and its commercial revenue as a percentage of total revenue for the three months ended September 30, 2020 was approximately 17%.
Concurrent financing transactions
Upsize and extension of Term Loan B-3
We recently launched an amendment with respect to our credit agreement to upsize and extend our term “B-3” loan tranche that is scheduled to mature in
January 2026 (the “Term Loan B-3”). As of June 30, 2020, the aggregate outstanding principal amount of our Term Loan B-3 was approximately $321.8 million. We are seeking to upsize the Term Loan B-3 by approximately $300.0 million aggregate
principal amount and extend the scheduled maturity of the entire tranche to the date in 2027 that is the seventh anniversary of the effective date of the amendment (the “B-3 Upsize and Extension”). We expect to use the net proceeds of the B-3
Upsize and Extension, together with cash on hand, to repay all $485.0 million aggregate principal amount of our outstanding term “B-1” loans scheduled to mature in May 2024 (the “Term Loan B-1”).
Except as described above, we do not expect there to be any material changes to the terms of the Term Loan B-3 as part of the B-3 Upsize and Extension,
but the issue price of and fees related to the new loans will be subject to market conditions at or prior to the time we execute the definitive documentation for the B-3 Upsize and Extension.
There can be no assurance that we will consummate the B-3 Upsize and Extension on the terms described herein or at all. Completion of the B-3 Upsize
and Extension is not conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the B-3 Upsize and Extension.
Extension of Term Loan B-2
We recently launched an amendment with respect to our credit agreement to extend our term “B-2” loan tranche that is scheduled to mature in January
2026 (the “Term Loan B-2”). As of June 30, 2020, the aggregate outstanding principal amount of our Term Loan B-2 was approximately $246.9 million. We are seeking to extend the scheduled maturity of our Term Loan B-2 to the date in 2027 that is the
seventh anniversary of the effective date of the amendment (the “B-2 Extension”).
Except as described above, we do not expect there to be any material changes to the terms of the Term Loan B-2 as part of the B-2 Extension. The fees
related to B-2 Extension will be subject to market conditions at or prior to the time we execute the definitive documentation for the B-2 Extension.
There can be no assurance that we will consummate the B-2 Extension on the terms described herein or at all. Completion of the B-2 Extension is not
conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the B-2 Extension.
Amendment and extension of Term Loan A-2 and Revolving Credit Facility
We recently launched an amendment with respect to our credit agreement to extend the scheduled maturity of our term “A-2” loan facility (the “Term Loan
A-2”) and revolving credit facility (the “Revolving Credit Facility”), increase the amount of commitments under our Revolving Credit Facility and make certain other amendments. As of June 30, 2020, we had approximately $685.3 million aggregate
principal amount of Term Loan A-2 outstanding and $350.0 million aggregate principal amount of commitments under our Revolving Credit Facility, and each facility is scheduled to mature in May 2024. We are seeking to (i) increase the aggregate
principal amount of commitments under our Revolving Credit Facility by up to $150.0 million to $500.0 million, (ii) extend the scheduled maturity of our Term Loan A-2 and Revolving Credit Facility to the date in 2025 that is the fifth anniversary
of the effective date of the amendment and (iii) reset the amortization schedule of the Term Loan A-2 so that the Term Loan A-2 will amortize in equal quarterly installments at a rate (expressed as a percentage of the outstanding principal amount
on the effective date of the amendment) of 2.5% per annum for each of the first two years following the effective date of the amendment, 5.0% per annum for the third year following the date of the effective date of the amendment, 7.5% per annum for
the fourth year following the effective date of the amendment and 12.5% per annum for the fifth year following the effective date of the amendment (in each case subject to customary adjustments in the event of any prepayment), with the balance due
upon maturity (collectively, the “RCF/A-2 Amendment and Extension Transaction”).
Except as described above, we do not expect there to be any material changes to the terms of the Term Loan A-2 and Revolving Credit Facility as part of
the RCF/A-2 Amendment and Extension Transaction. The fees related to the RCF/A-2 Amendment and Extension Transaction will be subject to market conditions at or prior to the time we execute the definitive documentation for the RCF/A-2 Amendment and
Extension Transaction.
There can be no assurance that we will consummate the RCF/A-2 Amendment and Extension Transaction on the terms described herein or at all. Completion
of the RCF/A-2 Amendment and Extension Transaction is not conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the RCF/A-2 Amendment and Extension Transaction.
| Item 8.01 |
Other Events
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On October 26, 2020, the Company issued a press release announcing the commencement of a private offering of senior notes (the “Notes”) in a
transaction exempt from registration under the Securities Act. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be
offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This current report does not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any sale of the
securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “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 as well as anticipated impacts from the COVID-19 pandemic on the Company and future responses. 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 Form 10-K and the 2020 Form 10-Qs as filed with the SEC:
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the duration and severity of the COVID-19 pandemic and its effects on its business, financial condition, results of operations and cash flows;
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rising levels of competition from historical and new entrants in its markets;
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recent and future changes in technology;
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its ability to continue to grow its business services products;
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increases in programming costs and retransmission fees;
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its ability to obtain hardware, software and operational support from vendors;
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the effects of any acquisitions and strategic investments by the Company;
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risks relating to the Company’s initial minority ownership position in Mega Broadband Investments Holdings LLC (“MBI”), including its ability to appoint only a
minority of members of the board of managers of MBI, the fact that the managers of MBI will not owe the same fiduciary duties to the Company that directors of a corporation would owe to stockholders, and the limited category of transactions
for which the Company’s consent will be needed under MBI’s operating agreement;
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uncertainties related to the exercise of the call option or the put option in the MBI investment, including the Company’s ability to finance the purchase of the remaining
membership interests in MBI on terms acceptable to the Company or at all;
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risks that its rebranding may not produce the benefits expected;
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damage to its reputation or brand image;
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risks that the implementation of its new enterprise resource planning system disrupts business operations;
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adverse economic conditions;
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the integrity and security of its network and information systems;
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the impact of possible security breaches and other disruptions, including cyber-attacks;
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its failure to obtain necessary intellectual and proprietary rights to operate its business and the risk of intellectual property claims and litigation against the Company;
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its ability to retain key employees (who the Company refers to as associates);
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legislative or regulatory efforts to impose network neutrality and other new requirements on its data services;
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additional regulation of its video and voice services;
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its ability to renew cable system franchises;
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increases in pole attachment costs;
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changes in local governmental franchising authority and broadcast carriage regulations;
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the potential adverse effect of its level of indebtedness on its business, financial condition or results of operations and cash flows;
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the restrictions the terms of its indebtedness place on its business and corporate actions;
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the possibility that interest rates will rise, causing its obligations to service its variable rate indebtedness to increase significantly;
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its ability to incur future indebtedness;
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fluctuations in the Company’s stock price;
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the Company’s ability to continue to pay dividends;
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provisions in the Company’s charter, by-laws and Delaware law that could discourage takeovers and limit the judicial forum for certain disputes and the liabilities for directors;
and
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the other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including but not limited to the Form 10-K and the 2020 Form 10-Qs.
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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.
| Item 9.01. |
Financial Statements and Exhibits.
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Exhibit No.
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Description
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104
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The cover page of this Current Report on Form 8-K, formatted in Inline XBRL.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Cable One, Inc.
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By:
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/s/ Peter N. Witty
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Name:
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Peter N. Witty
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Title:
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Senior Vice President, General Counsel and Secretary
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Date: October 26, 2020
Exhibit 99.1
Cable One Reports Preliminary Estimated Third Quarter 2020 Results
October 26, 2020 – PHOENIX – (BUSINESS WIRE) – Cable One, Inc. (NYSE: CABO) (the
“Company” or “Cable One”) today provided preliminary estimated results for the quarter ended September 30, 2020. The Company is making this announcement because
the same information will be provided to potential investors in connection with a proposed offering of debt securities.
Preliminary Estimated Financial Results for the Quarter Ended September 30, 2020
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The Company expects revenues to be in the range of $333 million to $339 million.
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The Company expects net income to be in the range of $62 million to $66 million.
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The Company expects Adjusted EBITDA(1) to be in the range of $170 million to $174 million.
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Adjusted EBITDA is defined in the section of this press release entitled “Use of Non-GAAP Financial
Measures”. Refer to the “Reconciliation of Non-GAAP Measure” table within this press release for a reconciliation of Adjusted EBITDA to net
income.
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Residential Data Subscriber Information for the Quarter Ended September 30, 2020
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Residential data subscribers grew by approximately 26,000 on a sequential basis during the quarter ended September 30, 2020, which included approximately 5,000 subscribers from the
Company’s acquisition of Valu-Net LLC on July 1, 2020.
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Conference Call
As previously announced, Cable One will host a conference call with the financial community to discuss its final results for the third quarter of 2020 on Thursday, November
5, 2020, at 5 p.m. Eastern Time (ET). The conference call will be available via a live audio webcast on the Cable One Investor Relations website at ir.cableone.net or by dialing 1-844-378-6483 (Canada: 1-855-669-9657 or
International: 1-412-542-4178). Participants should register for the webcast or dial in for the conference call shortly before 5 p.m. ET. Cable One will issue a press release reporting its final results for the third quarter after market close on
Thursday, November 5, 2020.
Note Regarding Preliminary Estimated Financial Results
The Company’s preliminary estimates of the consolidated financial data included in this press release are based solely on information available to it as of the date hereof
and are inherently uncertain and subject to change. The Company has provided a range for the preliminary estimated financial data included in this press release because its closing procedures for the third quarter of 2020 are not yet complete. The
Company’s preliminary estimates contained in this press release are forward-looking statements. The Company’s actual results remain subject to the completion of management’s final review and the Company’s other closing procedures. Accordingly, you
should not place undue reliance on this preliminary financial data, which may differ materially from the actual results for the third quarter.
These preliminary estimates are not a comprehensive statement of the Company’s consolidated financial results for the third quarter of 2020, and should not be viewed as a
substitute for full financial statements prepared in accordance with GAAP (as defined below). In addition, these preliminary estimates for the third quarter of 2020 are not necessarily indicative of the results to be achieved in any future period.
The Company’s actual financial results for the third quarter of 2020 may differ from these preliminary estimates due to the completion of its financial closing procedures, final adjustments and other developments that may arise between the date
hereof and the time that financial information for the third quarter of 2020 is finalized.
The preliminary financial data included in this press release have been prepared by, and are the responsibility of, the Company’s management. The Company’s independent
registered public accounting firm has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to this preliminary financial data, nor has it expressed any opinion or any other form of assurance with respect thereto.
Use of Non-GAAP Financial Measures
The Company uses Adjusted EBITDA, a measure that is not defined by generally accepted accounting principles in the United States (“GAAP”), to evaluate various aspects of
its business. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP. See the “Reconciliation of Non-GAAP Measure” table within this press release for a reconciliation of Adjusted EBITDA to net income.
“Adjusted EBITDA” is defined as net income plus interest expense, income tax provision (benefit), depreciation and amortization, equity-based compensation, severance
expense, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, other (income) expense and other unusual expenses, as provided in the “Reconciliation of Non-GAAP Measure” table 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.
The Company uses Adjusted EBITDA to assess its performance. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under
the Company’s credit facilities to determine compliance with the covenants contained in the Company’s credit agreement. Adjusted EBITDA is also a significant performance measure used by the Company in its annual incentive compensation program.
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 is useful to investors in evaluating the operating performance of the Company. 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 measure 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 serving more than 900,000 residential and business customers in 21 states through its Sparklight®
and Clearwave™ brands. Sparklight provides consumers with a wide array of connectivity and entertainment services, including high-speed internet and advanced Wi-Fi solutions, cable television and phone service. Sparklight Business and
Clearwave provide scalable and cost-effective products for businesses ranging in size from small to mid-market, in addition to enterprise, wholesale and carrier customers.
Contacts
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Trish Niemann
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Steven Cochran
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Senior Director, Corporate Communications
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Senior Vice President and Chief Financial Officer
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602-364-6372
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This communication contains “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 as well as anticipated impacts from the COVID-19 pandemic on the Company and future responses. 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, Form 10-Q for the quarterly period ended March 31, 2020 (“First Quarter 2020 Form 10-Q”) and the Form 10-Q for the quarterly period ended June 30, 2020
(together with the First Quarter 2020 Form 10-Q, the “2020 Form 10-Qs”) as filed with the SEC:
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the duration and severity of the COVID-19 pandemic and its effects on its business, financial condition, results of operations and cash flows;
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rising levels of competition from historical and new entrants in its markets;
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recent and future changes in technology;
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its ability to continue to grow its business services products;
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increases in programming costs and retransmission fees;
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its ability to obtain hardware, software and operational support from vendors;
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the effects of any acquisitions and strategic investments by the Company;
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risks relating to the Company’s initial minority ownership position in Mega Broadband Investments Holdings LLC (“MBI”), including its ability to appoint only a minority of members of
the board of managers of MBI, the fact that the managers of MBI will not owe the same fiduciary duties to the Company that directors of a corporation would owe to stockholders, and the limited category of transactions for which the Company’s
consent will be needed under MBI’s operating agreement;
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uncertainties related to the exercise of the call option or the put option in the MBI investment, including the Company’s ability to finance the purchase of the remaining membership
interests in MBI on terms acceptable to the Company or at all;
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risks that its rebranding may not produce the benefits expected;
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damage to its reputation or brand image;
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risks that the implementation of its new enterprise resource planning system disrupts business operations;
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adverse economic conditions;
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the integrity and security of its network and information systems;
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the impact of possible security breaches and other disruptions, including cyber-attacks;
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its failure to obtain necessary intellectual and proprietary rights to operate its business and the risk of intellectual property claims and litigation against the Company;
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its ability to retain key employees (who the Company refers to as associates);
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legislative or regulatory efforts to impose network neutrality and other new requirements on its data services;
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additional regulation of its video and voice services;
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its ability to renew cable system franchises;
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increases in pole attachment costs;
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changes in local governmental franchising authority and broadcast carriage regulations;
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the potential adverse effect of its level of indebtedness on its business, financial condition or results of operations and cash flows;
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the restrictions the terms of its indebtedness place on its business and corporate actions;
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the possibility that interest rates will rise, causing its obligations to service its variable rate indebtedness to increase significantly;
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its ability to incur future indebtedness;
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fluctuations in the Company’s stock price;
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the Company’s ability to continue to pay dividends;
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provisions in the Company’s charter, by-laws and Delaware law that could discourage takeovers and limit the judicial forum for certain disputes and the liabilities for directors; and
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the other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including but not limited to its latest Annual Report on Form 10-K and the 2020
Form 10-Qs.
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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.
Reconciliation of Non-GAAP Measure
The following table presents a reconciliation of the Company’s preliminary estimated Adjusted EBITDA to preliminary estimated net income, the most comparable GAAP financial
measure, for the three months ended September 30, 2020 and 2019, respectively.
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For the three months ended
September 30,
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Low
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High
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(unaudited)
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(estimated)
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(actual)
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(in millions)
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Net income
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$
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62
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$
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66
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$
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50
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Plus: Interest expense
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18
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18
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16
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Income tax provision
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16
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16
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16
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Depreciation and amortization
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71
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71
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49
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Equity-based compensation
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4
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4
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3
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Severance expense
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-
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-
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0
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Loss on deferred compensation
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0
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0
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0
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Acquisition-related costs
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1
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1
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1
|
|||||||||
|
Loss on asset sales and disposals, net
|
2
|
2
|
2
|
|||||||||
|
System conversion costs
|
0
|
0
|
1
|
|||||||||
|
Rebranding costs
|
1
|
1
|
3
|
|||||||||
|
Other income, net
|
(3
|
)
|
(3
|
)
|
(2
|
)
|
||||||
|
Adjusted EBITDA
|
$
|
170
|
$
|
174
|
$
|
140
|
||||||
__________________
*Amounts may not sum due to rounding.
Exhibit 99.2
Cable One Announces Private Offering of $500 Million of Senior Notes
October 26, 2020 – PHOENIX – (BUSINESS WIRE) – Cable One, Inc. (NYSE: CABO) (“Cable One” or the “Company”) today announced the commencement of a private offering (the
“Offering”) of $500 million aggregate principal amount of senior notes due 2030 (the “Notes”), subject to market and other conditions.
Cable One intends to use the net proceeds of the Offering for general corporate purposes, which may include acquisitions and strategic investments, including its
previously announced investment in Mega Broadband Investments Holdings LLC.
The Notes and the guarantees thereof will be offered in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”). The Notes and the guarantees thereof will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in
reliance on Regulation S under the Securities Act.
The Notes and the guarantees thereof have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes, nor shall there be any sale of the Notes in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No assurance can be made that the Offering will be consummated on its
proposed terms or at all.
Contacts
|
Trish Niemann
|
Steven Cochran
|
|
Senior Director, Corporate Communications
|
Senior Vice President and Chief Financial Officer
|
|
602-364-6372
|
|
|
|
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 as well as anticipated impacts from the COVID-19 pandemic on the Company and future responses. 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, Form 10-Q for the quarterly period ended March 31,
2020 (“First Quarter 2020 Form 10-Q”) and the Form 10-Q for the quarterly period ended June 30, 2020 (the “Second Quarter 2020 10-Q” and, together with the First Quarter 2020 Form 10-Q, the “2020 Form 10-Qs”) as filed with the SEC:
| ● |
the duration and severity of the COVID-19 pandemic and its effects on its business, financial condition, results of operations and cash flows;
|
| ● |
rising levels of competition from historical and new entrants in its markets;
|
| ● |
recent and future changes in technology;
|
| ● |
its ability to continue to grow its business services products;
|
| ● |
increases in programming costs and retransmission fees;
|
| ● |
its ability to obtain hardware, software and operational support from vendors;
|
| ● |
the effects of any acquisitions and strategic investments by the Company;
|
| ● |
risks relating to the Company’s initial minority ownership position in Mega Broadband Investments Holdings LLC (“MBI”), including its ability to appoint only a minority of members of
the board of managers of MBI, the fact that the managers of MBI will not owe the same fiduciary duties to the Company that directors of a corporation would owe to stockholders, and the limited category of transactions for which the Company’s
consent will be needed under MBI’s operating agreement;
|
| ● |
uncertainties related to the exercise of the call option or the put option in the MBI investment, including the Company’s ability to finance the purchase of the remaining membership
interests in MBI on terms acceptable to the Company or at all;
|
| ● |
risks that its rebranding may not produce the benefits expected;
|
| ● |
damage to its reputation or brand image;
|
| ● |
risks that the implementation of its new enterprise resource planning system disrupts business operations;
|
| ● |
adverse economic conditions;
|
| ● |
the integrity and security of its network and information systems;
|
| ● |
the impact of possible security breaches and other disruptions, including cyber-attacks;
|
| ● |
its failure to obtain necessary intellectual and proprietary rights to operate its business and the risk of intellectual property claims and litigation against the Company;
|
| ● |
its ability to retain key employees (who the Company refers to as associates);
|
| ● |
legislative or regulatory efforts to impose network neutrality and other new requirements on its data services;
|
| ● |
additional regulation of its video and voice services;
|
| ● |
its 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 its level of indebtedness on its business, financial condition or results of operations and cash flows;
|
| ● |
the restrictions the terms of its indebtedness place on its business and corporate actions;
|
| ● |
the possibility that interest rates will rise, causing its obligations to service its variable rate indebtedness to increase significantly;
|
| ● |
its ability to incur future indebtedness; and
|
| ● |
the other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including but not limited to its latest Annual Report on Form 10-K and the 2020
Form 10-Qs.
|
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. The Company may not consummate the Offering described in this press
release and, if the Offering is consummated, cannot provide any assurances regarding the final terms of the Offering or its ability to effectively apply the net proceeds as described above.