Insight Communications Announces Fourth Quarter and Year-End 2000 Results; Interactive Digital Drives Impressive Quarterly Growth.Business Editors NEW YORK--(BUSINESS WIRE)--March 8, 2001 Insight Communications Insight Communications is the ninth largest cable operator in the United States with approximately 1.4 million customer relationships in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. Company (Nasdaq: ICCI ICCI Insight Communications Company Inc. (stock symbol) ICCI International Conference on Computing and Information ICCI International Conference on Cognitive Informatics ICCI Islamic Chamber of Commerce and Industry ) announced today financial results for the three months and year ended December December: see month. 31, 2000. For the year ended December 31, 2000 revenue totaled $476.2 million, a 96.2% increase over the prior year, largely reflecting the acquisition of the Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. systems on October October: see month. 1, 1999 and the consolidation of the Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. subsidiary. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. increased 85.4% to $214.1 million. For the three months ended December 31, 2000 revenue and operating cash flow totaled $123.2 million and $56.3 million, respectively, slightly ahead of expectations. Sequentially, revenue increased 3.3% in the fourth quarter over the third quarter as a result of a 2.7% increase in RGUs (revenue generating units). The average monthly revenue per customer increased 3.0% to $44.77 for the fourth quarter, largely reflecting RGU RGU The Robert Gordon University (Aberdeen, Scotland) RGU Responsible Governmental Unit RGU Revenue-Generating Unit growth as well as increases in advertising sales. "2000 was a pivotal year for us as we transformed our company from one that delivers plain old television into a full service telecommunications company See telecom company. . During the year we substantially completed our rebuilds so that by the end of the year 94% of our customers were served by state-of-the-art networks. We lead the industry in exploiting these networks' capabilities, offering our customers a better way to watch television. Our interactive digital service, including video on demand, has more than met our expectations," stated Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. S. Willner, Insight's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "On the heels of our rebuilds, we launched our signature interactive digital product so that by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. we had the product available to over 750,000 customers with over 100,000 subscribing and with new additions topping 10,000 per month. We have continued to deliver on the promise of the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. bundle and have launched our first AT&T-branded voice telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. service in Louisville, Kentucky  “Louisville” redirects here. For other uses, see Louisville (disambiguation). ." "One of our most important achievements in 2000 was our continued delivery of excellent customer service. In fact, 73% of our customers rate our service either a 4 or a 5 on a scale of 1 to 5, a ranking that, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Peter Hart For the computer scientist and pioneer in artificial intelligence, see . Peter Hart is a Canadian historian, specialising in modern Irish history. Life Hart was born and raised in St. John's, Newfoundland. Research poll, puts us near the top of our industry. We believe that our success is based upon investing in technology, delivering services of value, and providing excellent customer service. We are well-positioned for 2001 and beyond," Willner concluded. Effective January January: see month. 1, 2001, Insight concluded a series of transactions with AT&T Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). which resulted in the addition of 350,000 customers served and the consolidation of Insight's wholly-owned systems into Insight Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , the 50/50 joint venture with AT&T Broadband. The systems acquired are located in central Illinois Central Illinois is a region of the U.S. state of Illinois that consists of the entire central section of the state, divided in thirds from north to south. It is an area of mostly flat prairie. , serving second and third tier markets including Peoria Peoria (pēôr`ēə). 1 City (1990 pop. 50,618), Maricopa co., central Ariz., a suburb of Phoenix; settled 1897, inc. 1954. , Springfield Springfield. 1 City (1990 pop. 105,227), state capital and seat of Sangamon co., central Ill., on the Sangamon River; settled 1818, inc. as a city 1840. , Bloomington Bloomington. 1 City (1990 pop. 51,972), seat of McLean co., central Ill.; inc. 1839. The economy is based on farming; electrical equipment is also manufactured. and Champaign-Urbana. Concurrent with the transaction, Insight Midwest concluded a financing raising $1.750 billion in a revolving credit/term loan. At close, $1.4 billion was drawn and used primarily to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. existing debt as well as debt associated with the expansion of the partnership. "The acquisition of the Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. systems is consistent with our strategy of owning markets where we can leverage technical clusters and market size to deploy a bundle of entertainment and telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. efficiently," Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness D. Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. , Insight's Chief Operating and Financial Officer, stated. "Importantly with our bank financing, we are fully funded for all of our capital needs, including telephone." Operating Data Results Revenues increased 96.2% to $476.2 million for the year ended December 31, 2000 compared to $242.7 million for the year ended December 31, 1999 due primarily to the Kentucky acquisition and the consolidation of Insight Ohio. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue generated by the Kentucky systems approximated $173.4 million, or 74.3% of the consolidated revenue increase and Insight Ohio accounted for $49.7 million, or 21.3% of the consolidated revenue increase. Revenues per customer per month averaged $42.92 for the year ended December 31, 2000 compared to $38.44 for the year ended December 31, 1999, primarily reflecting an increase in average monthly basic revenue per customer of $2.45. Average monthly basic revenue per customer averaged $29.72 during the year ended December 31, 2000 compared to $27.27 during the comparable period of 1999, reflecting rate increases associated with the completion of rebuilds. In addition, increased revenue for new services, namely high-speed data and interactive digital video, provided for $2.36 per customer per month for the year ended December 31, 2000. Programming and other operating costs operating costs npl → gastos mpl operacionales increased 132.3% to $167.2 million for the year ended December 31, 2000 compared to $72.0 million for the year ended December 31, 1999. The incremental expense generated by the Kentucky systems approximated $62.3 million accounting for 65.4% of the consolidated expense increase and the consolidation of Insight Ohio accounted for approximately $19.0 million or 20.0% of the consolidated expense increase. Excluding these systems, these costs increased by approximately $13.9 million accounting for approximately 14.6% of the total increase, primarily as a result of increased programming rates and additional programming carried by the systems. Selling, general and administrative expenses increased 72.0% to $94.9 million for the year ended December 31, 2000 compared to $55.2 million for the year ended December 31, 1999. The incremental expense generated by the Kentucky systems approximated $25.5 million accounting for 64.1% of the consolidated expense increase, and the consolidation of Insight Ohio accounted for approximately $10.6 million or 26.6% of the consolidated expense increase. Excluding these systems, these costs increased by approximately $3.6 million accounting for approximately 9.3% of the total increase, primarily reflecting increased marketing activity and corporate expenses associated with new product introductions. Depreciation and amortization expense increased 80.7% to $236.2 million for the year ended December 31, 2000 compared to $131.3 million for the year ended December 31, 1999. This increase was primarily due to the acquisitions and addition of the cable systems discussed above and additional capital expenditures associated with the rebuilds of our systems, partially offset by a decrease in depreciation expense attributable to a change in estimate as of January 1, 2000 which resulted in assets being depreciated Depreciated may refer to:
For the year ended December 31, 2000, an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $22.1 million was incurred as compared to an operating loss of $35.1 million for the year ended December 31, 1999, primarily for the reasons set forth above. The operating loss for 1999 includes a one-time non-cash compensation expense of $19.3 million which was recorded in the third quarter of 1999. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased 108.6% to $269.3 million for the year ended December 31, 2000 as compared to $129.1 million for the year ended December 31, 1999. Interest expense, net increased 117.8% to $109.8 million for the year ended December 31, 2000 compared to $50.4 million for the year ended December 31, 1999. The increase was primarily due to higher average outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. related to the Kentucky acquisition and the consolidation of Insight Ohio. Average debt outstanding during the year ended December 31, 2000 was $1.3 billion at an average interest rate of 8.8%. The benefit for income taxes was $33.8 million for the year ended December 31, 2000. For the year ended December 31, 1999, the tax provision was $31.6 million, which consisted primarily of a one-time, non-recurring charge recorded for deferred taxes upon the exchange of the limited partnership interests in Insight LP for our common stock at the time of our initial public offering. For the year ended December 31, 2000, the net loss was $42.9 million for the reasons set forth above. Investment Activity For the year ended December 31, 2000, we spent $262.2 million in capital expenditures largely to support our network rebuild, digital converter (1) A device that changes one set of codes, modes, sequences or frequencies to a different set. See A/D converter. (2) A device that changes current from 60Hz to 50Hz and vice versa. purchases and to a lesser extent, telephony. It is anticipated that during 2001, we will spend approximately $300 million in capital expenditures, including capital expenditures required for the deployment of telephony. We will be able to fund these capital expenditures through cash generated from operations and borrowings under our credit facility. 2001 Guidance In 2001, we expect operating cash flow to approximate $328 million representing an increase of 11-12% in their rebuilt Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). and Kentucky properties, and a 7-8% increase in the recently acquired Illinois systems. We expect to spend approximately $300 million on capital which includes capital for rebuilds in Illinois, telephone deployment, and continued interactive digital expansion. For the first quarter, we expect revenues of approximately $169 million and operating cash flow of approximately $75 million, representing increases of 47% and 52%, respectively, reflecting continued ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. growth and the Illinois acquisition. Insight Communications (NASDAQ: ICCI) is the 8th largest cable operator in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , serving approximately 1.4 million subscribers. The company is highly concentrated in the four contiguous Adjacent or touching. Contrast with fragmentation. See contiguous file. states of Illinois, Kentucky, Indiana and Ohio. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering analog and digital video, high-speed data and the recent deployment of voice telephony in selected markets to its customers. Any statements in this press release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those the Company anticipates. Factors that could have a material and adverse impact on actual results are described in Insight's Registration Statement on form S-1 declared effective by the Securities and Exchange Commission on July 21, 1999. All forward-looking statements in this press release are qualified by reference to the cautionary statements included in Insight's Registration Statement.
INSIGHT COMMUNICATIONS COMPANY, INC.
SUPPLEMENTAL INFORMATION
FOR THE YEARS AND QUARTERS ENDED DECEMBER 31, 1999 & 2000
(in thousands)
Insight Inc. Columbus
Year Ended December 31, 1999 FY '99 FY '99
---------------------------- ------ ------
Revenues $ 242,693 $ 46,747
System Cash Flow $ 117,674 $ 20,563
System Cash Flow (Margin) 48.5% 44.0%
Corporate Overhead $ (9,608)
Management Fee Income (Expense) $ 7,473 $ (1,435)
Operating Cash Flow $ 115,539 $ 19,128
Operating Cash Flow (Margin) 47.6% 40.9%
Capital Expenditures $ 135,929 $ 26,656
Total Debt & Preferred Interests $ 1,233,000 $ 186,556
Year Ended December 31, 2000 FY '00 FY '00
---------------------------- ------ ------
Revenues $ 476,186 $ 49,749
System Cash Flow $ 227,938 $ 20,171
System Cash Flow (Margin) 47.9% 40.5%
Corporate Overhead $ (14,981)
Management Fee Income (Expense) $ 1,145 $ (1,493)
Operating Cash Flow $ 214,102 $ 18,678
Operating Cash Flow (Margin) 45.0% 37.5%
Capital Expenditures $ 262,208 $ 35,975
Total Debt & Preferred Interests $ 1,552,804 $ 205,281
Quarter Ended December 31, 1999 Q4 '99 Q4 '99
------------------------------- ------ ------
Revenues $ 103,932 $ 11,551
System Cash Flow $ 51,231 $ 4,800
System Cash Flow (Margin) 49.3% 41.6%
Corporate Overhead $ (3,337) -
Management Fee Income (Expense) $ 482 $ 343
Operating Cash Flow $ 48,376 $ 4,457
Operating Cash Flow (Margin) 46.5% 38.6%
Capital Expenditures $ 63,008 $ 10,647
Quarter Ended December 31, 2000 Q4 '00 Q4 '00
------------------------------- ------ ------
Revenues $ 123,179 $ 13,372
System Cash Flow $ 60,051 $ 5,249
System Cash Flow (Margin) 48.8% 39.3%
Corporate Overhead $ (4,160) -
Management Fee Income (Expense) $ 431 $ 391
Operating Cash Flow $ 56,323 $ 4,859
Operating Cash Flow (Margin) 45.7% 36.3%
Capital Expenditures $ 66,880 $ 26,656
NOTE: The Columbus system was consolidated into the results of Insight
Inc. for the year ended December 31, 2000 but was not consolidated for
the year ended December 31, 1999.
INSIGHT COMMUNICATIONS COMPANY, INC.
QUARTERLY OPERATING STATISTICS
FOR THE QUARTERS ENDED DECEMBER 31, 1999,
SEPTEMBER 30, 2000, DECEMBER 31, 2000
INSIGHT CONSOLIDATED 4Q99 3Q00 4Q00 FY00
-------------------- ---- ---- ---- ----
Cable
Homes Passed (000's) 1,511.6 1,578.0 1,573.7
Basic Cable Customers (000's) 929.7 915.0 919.3
Basic Cable Penetration 61.5% 58.0% 58.4%
Customer Revenues
(in thousands)
Recurring $102,362.0 $104,273.3 $105,740.7 $412,425.5
PPV $ 2,511.1 $ 2,031.6 $ 2,544.7 $ 9,781.3
Advertising $ 8,492.9 $ 8,127.2 $ 10,595.3 $ 34,934.1
Other $ 5,106.9 $ 4,852.8 $ 4,298.4 $ 19,045.6
Total Monthly Recurring
Revenue per Customer $ 36.70 $ 37.99 $ 38.34 $ 37.38
Total Monthly Revenue
per Customer $ 42.48 $ 43.46 $ 44.77 $ 42.92
High Speed Data
"Modem Ready" Homes
Passed (000's) 542.3 1,053.9 1,204.1
Customers (000's) 8.3 23.7 30.3
"Modem Ready" Penetration 1.5% 2.2% 2.5%
Digital Cable
Digital Universe (000's) 557.0 667.2 777.0
Digital Customers (000's) 46.9 73.2 103.3
Penetration 8.4% 11.0% 13.3%
THE COLUMBUS SYSTEM 4Q99 3Q00 4Q00 FY00
------------------- ---- ---- ---- ----
Cable
Homes Passed (000's) 178.3 183.2 184.4
Basic Cable Customers (000's) 84.2 84.7 85.4
Basic Cable Penetration 47.2% 46.2% 46.3%
Customer Revenues
(in thousands)
Recurring $ 8,984.0 $ 10,011.8 $ 10,424.8 $ 39,229.8
PPV $ 446.2 $ 363.1 $ 438.3 $ 1,763.3
Advertising $ 1,106.6 $ 1,066.6 $ 1,443.5 $ 4,781.4
Other $ 1,015.4 $ 1,006.3 $ 1,065.5 $ 3,974.5
Total Monthly Recurring
Revenue per Customer $ 35.48 $ 39.40 $ 40.68 $ 38.27
Total Monthly Revenue
per Customer $ 45.61 $ 48.99 $ 52.40 $ 48.87
High Speed Data
"Modem Ready" Homes
Passed (000's) - 78.4 109.0
Customers (000's) - 2.9 4.9
"Modem Ready" Penetration - 3.7% 4.5%
Digital Cable
Digital Universe (000's) 12.1 35.1 47.8
Digital Customers (000's) 1.1 9.7 13.4
Penetration 9.1% 27.6% 28.1%
INSIGHT COMMUNICATIONS, INC.
PRO FORMA STATEMENT OF OPERATIONS
For the years ended December 31, 2000 and 1999
(Dollars in Thousands)
2000 1999
Pro Forma Pro Forma
Insight Insight
Communications Communications
Including Including $ %
Insight Ohio Insight Ohio Change Change
----------------------------------------------
Revenues 659,927 620,447 $ 39,480 6.4%
Costs & expenses:
Programming and
other operating costs 245,768 208,291 37,477 18.0%
Selling, general and
administrative 112,578 130,989 (18,411) -14.1%
Non-cash compensation
and related charges - 19,285 (19,285) -100.0%
Depreciation and
amortization 330,321 326,658 3,663 1.1%
--------------------------------------------
Operating loss (28,740) (64,776) 36,036 -55.6%
Interest expense, net (191,620) (188,557) (3,063) 1.6%
Other income (expense) (714) 13,965 (14,679) -105.1%
--------------------------------------------
Loss before minority
interest and
equity losses of
investees (221,074) (239,368) 18,294 -7.6%
============================================
Cash flow 301,581 281,167 $ 20,414 7.3%
Cash flow margin 45.7% 45.3%
As of
Operating Statistics: December 31, 2000
--------------------- -----------------------
Homes passed 2,310,200
Basic service customers 1,399,700
Basic service penetration 60.6%
Digital-ready homes 1,064,000
Digital service customers 152,100
Digital service penetration 14.3%
Cable modem service customers 51,800
The above statements reflect the acquisition of the Illinois systems
as if they had occurred on January 1 of the year presented.
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