Phone And Data Prop Up Mediacom Revenues


Cable operator Mediacom Communications' revenues increased 7.4% in the second quarter on surges in phone and data services, while video revenues rose marginally as basic-video subscribers decreased in the quarter.

Revenues in the second quarter rose 7.4% to $324.7 million from $302.4 million in the same period last year on the back of strong growth in telephone and data. Telephone revenues were up $7.4 million, or 126%, to $13.3 million, while data increased by $11.37 million, or 19.6%, to $69.405 million. Video revenues increased 1.6% to $226 million.

Operating income before accounting for depreciation and amortization (OIBDA) was up 3.8% to $119.3 million from $114.9 million in Q2 2006, but the OIBDA margin decreased to 36.7% from 38%. Operating income after depreciation and amortization was up 1.9% to $60.96 million from $59.85 million. The OI margin was lower at 18.8% from 19.8%.

The company recorded a net loss in the quarter of $6.6 million compared with net income of $5.7 million in Q2 2006.

The company recorded negative free cash flow of $2.7 million for the quarter ended June 30. In the same quarter in 2006, free cash flow was $824,000.

Total customer relationships dropped by 17,000 from the first quarter to 1.413 million, while revenue-generating units (RGUs) increased 18,000 sequentially to 2.633 million. The average revenue per unit increased to $41.25 per month in the second quarter from $39.43 in the first quarter.

Basic-video subscribers decreased 18,000 from the first quarter to 1.413 million, while digital subscribers increased by 2,000 to 532,000, causing the digital penetration rate to tick up to 39.6% in Q2 from 38.9%.

The company’s data customers grew by 13,000 to 613,000 in the second quarter after growing by 22,000 in Q1. The data-penetration rate is nearly flat from the first quarter at 21.6% but is up from 18.3% in Q2 2006.

Telephone customers jumped by 21,000, or 17%, in the quarter to 144,000. Phone penetration grew to 5.9% from 5.2%.

The average monthly revenue per basic subscriber increased to $80 from $74.85 in the first quarter.

Mediacom revised its full-year-2007 guidance. Revenue growth is now pegged in a range of 7%-8% from 8%-9% as previously estimated. Adjusted OIBDA growth for the year is put at 6%-7% from 7%-8%. The capital-expenditure guidance remains unchanged at $215 million.

The company, which has $3.1 billion in outstanding debt and recorded $60 million in interest expense in the second quarter, addressed its capital position in the release Tuesday.

"Given the recent turbulence in the credit markets, we are pleased to report that in this quarter, we attained our lowest level of financial leverage since early 2001,” Mediacom chairman and CEO Rocco B. Commisso said in a statement, “and we maintain a strong financial position with $800 million of unused and available long-term credit commitments.”