EX-99.1 11 a2218828zex-99_1.htm EX-99.1

Exhibit 99.1

 

 

Media Contact:

Su Shin, Hawaiian Telcom

(808) 546-2344

su.shin@hawaiiantel.com

Investor Relations Contact:

Brian Tanner, Hawaiian Telcom

(808) 546-3442

brian.tanner@hawaiiantel.com

 

 

For Immediate Release

 

Hawaiian Telcom Reports Fourth Quarter and Full Year 2013 Results

 

Achieved fourth quarter and full year revenue growth of 4.1% and 1.5%

Added a record 2,600 Hawaiian Telcom TV subscribers during fourth quarter

Expanded the reach of Hawaiian Telcom TV to 120,000 households on Oahu

Delivered fourth quarter and full year business revenue growth of 10.6% and 4.0%

 

HONOLULU (Thursday, March 13, 2014) — Hawaiian Telcom Holdco, Inc. (NASDAQ: HCOM) reported financial results for the fourth quarter and full year 2013.  The highlights of 2013 and recent accomplishments in 2014 are as follows:

 

·                  Fourth quarter and full year 2013 revenue of $100.5 million and $391.2 million, grew 4.1 percent and 1.5 percent year-over-year, respectively.  The Company’s first full year of total revenue growth since becoming a standalone company:

 

·                  Consumer revenue increased 4.2 percent and 2.5 percent year-over-year for the fourth quarter and full year 2013, respectively, driven by growth in video revenue of $2.4 million and $8.1 million, respectively.

 

·                  Added nearly 2,600 Hawaiian Telcom TV subscribers during the fourth quarter, the highest quarterly net additions to date, ending 2013 with approximately 18,400 subscribers.

 

·                  Enabled 9,000 households in the quarter, increasing its total to 120,000 households enabled, or approximately 50 percent of the marketable households on Oahu.

 

·                  Added over 1,300 high-speed Internet (HSI) subscribers during the quarter, ending the year with approximately 111,700 subscribers, up 3.8 percent year-over-year.

 

·                  Fourth quarter and full year business revenue increased 10.6 percent and 4.0 percent year-over-year, respectively, driven by growth in business data revenue, including revenue from Wavecom Solutions Corporation (Wavecom), and revenue from SystemMetrics Corporation (SystemMetrics).

 

·                  Fourth quarter and full year 2013 Adjusted EBITDA(1) of $30.7 million and $119.9 million, declined $2.5 million and $2.1 million year-over-year, respectively. The fourth quarter 2012 included a one-time net settlement gain of approximately $2.5 million associated with the acquisition of Wavecom.

 

·                  Generated fourth quarter and full year 2013 net income of $2.6 million and $10.5 million, or $0.23 and $0.95 per diluted share, respectively.

 

·                  On March 2, 2014, the Company launched new broadband packages for consumers and businesses delivered over Hawaii’s fastest Internet service, featuring download speed tiers of 100, 300 and 500 Mbps.

 

“In 2013, we continued to meet our strategic objectives by building further momentum in the key growth areas of our business,” said Eric K. Yeaman, Hawaiian Telcom’s president and CEO.  “With the investments we have made in our broadband network and next-generation services, we have transformed our growth profile and sharpened our competitive edge.”

 

“We expanded the reach of Hawaiian Telcom TV to fifty percent of the marketable households on Oahu, which positions us to capture a greater share of the consumer video and broadband market in Hawaii.  We grew our Hawaiian Telcom TV subscriber base by 87 percent in 2013 and experienced a 91 percent attachment of broadband with these customers, driving 2.5 percent growth in consumer revenues.

 


 

“In the business channel, the increased demand for additional bandwidth and our ability to offer customers next-generation services and solutions that help solve business challenges are helping to drive growth in our IP-based services.  Business data revenue was up 34 percent year-over-year in 2013, including revenue from Wavecom. We also completed the acquisition of SystemMetrics, which significantly enhances our capabilities and better positions us to address the fast-growing market for data center and cloud services in Hawaii.

 

“In the wholesale channel, we now have 289 fiber-to-the-tower (FTTT) cell sites completed and another 141 sites under contract to build.  These FTTT projects provide attractive investment returns and by strategically routing the fiber to these sites, we also extend our broadband capabilities to additional potential retail customers.

 

“We enter 2014 with strong momentum and remain excited about the opportunities we have ahead.  We plan to continue to invest in our broadband network—extending our footprint, enhancing speeds and adding advanced features and functionality across our product portfolio.  I am very pleased with the progress we are making in executing our strategic plan, and confident about the Company’s growth prospects, and our ability to drive long-term value for our shareholders,” concluded Yeaman.

 

Fourth Quarter 2013 Results

 

Fourth quarter revenue was $100.5 million, a 4.1 percent increase compared with $96.6 million in the fourth quarter of 2012.  Revenue growth in the quarter, driven by video and HSI and revenue related to the SystemMetrics and Wavecom acquisitions, more than offset the impact from a decrease in equipment and managed services revenue and a 2.4 percent decline in access lines, inclusive of Wavecom lines.  Adjusted EBITDA was $30.7 million, compared to $33.3 million in the fourth quarter of 2012.  After adjusting for a $2.5 million one-time net settlement gain in the fourth quarter 2012 associated with the acquisition of Wavecom, Adjusted EBITDA was consistent with the same period a year ago.

 

Net income for the fourth quarter of 2013 was $2.6 million, or $0.23 per diluted share, compared to net income for the fourth quarter of 2012 of $98.6 million, or $9.21 per diluted share.  Included in the 2012 amount are one-time, non-cash tax benefits of $94.1 million relating to the reduction of certain valuation allowances previously established with respect to deferred tax assets.  Excluding the one-time, non-cash tax benefits recorded in the fourth quarter of 2012, Pro Forma Net Income(2) was $4.5 million, or $0.42 per diluted share.  The year-over-year decrease was primarily due to the $2.5 million one-time net settlement gain recorded in the fourth quarter 2012.

 

Consumer Revenue

 

Fourth quarter consumer revenue totaled $36.4 million, up 4.2 percent year-over-year primarily driven by revenue growth from the Company’s Hawaiian Telcom TV and HSI services.  The Company has brought a new level of competition and choice to the people of Hawaii with its next-generation video service, which has driven the transformation of its consumer channel.

 

Video service revenue grew to $4.2 million for the quarter, up from $1.8 million in the same period a year ago, driven by the addition of approximately 8,600 subscribers in 2013, ending the year with approximately 18,400 subscribers in service.  For the quarter, approximately 9,000 additional homes were enabled, increasing the number of homes enabled to 120,000 at year-end, and subscriber penetration increased to approximately 15 percent, from approximately 14 percent at the end of the third quarter.

 

Consumer HSI revenue also was up from the same period a year ago, led by a 3.9 percent year-over-year increase in consumer HSI subscribers to approximately 91,400, which was primarily driven by high HSI pull-through rates for new video subscribers and standalone HSI additions.  As of December 31, 2013, approximately 55 percent of total video subscribers had a triple-play and approximately 91 percent had double- or triple-play bundles.  Increases driven by next-generation consumer video and HSI services were partially offset by the decline in legacy consumer access and long distance lines of 8.3 percent and 7.3 percent, respectively.

 

Business Revenue

 

Fourth quarter business revenue totaled $44.7 million, up 10.6 percent from the same period a year ago, primarily due to revenue added as a result of the SystemMetrics and Wavecom acquisitions.  Business data revenue, excluding revenue related to Wavecom, was up 10.3 percent year-over-year driven by higher demand for IP-based data services.  Also contributing to the increase was higher business HSI revenue as a result of a 4.0 percent year-over-year increase in business HSI subscribers to approximately 19,300.  These increases were partially offset by a $0.5 million decrease in equipment and managed services revenue and the year-over-year decline in legacy business access and long distance revenues.

 

Wholesale Revenue

 

Fourth quarter wholesale revenue totaled $16.0 million, down $1.8 million from the same period a year ago.  Wholesale carrier data revenue declined $1.5 million year-over-year to $14.4 million, mainly due to the elimination of previously recognized revenue that related to services provided to Wavecom.  Wholesale switched carrier access revenue declined $0.3 million year-over-year to $1.6 million, equally attributable to the overall declines in access lines and minutes of use, and the impact of intercarrier compensation reform.

 


 

Operating Expenses, Capital Expenditures and Liquidity

 

Operating expenses, exclusive of depreciation and amortization, one-time charges and non-cash stock compensation, increased $6.5 million to $69.8 million, primarily due to a one-time net settlement gain of $2.5 million associated with the acquisition of Wavecom in the fourth quarter of 2012, as well as increased direct cost of goods related to video and higher wages, partially offset by lower costs related to various vendor contracts and decreased cost of goods related to lower levels of equipment sales.

 

Full Year 2013 Results

 

Revenue was $391.2 million, a 1.5 percent increase compared with $385.5 million for the prior year, as increases driven by growth from video, HSI and new IP-based business services, and revenue related to the SystemMetrics and Wavecom acquisitions, more than offset revenue declines as a result of access line losses and lower level of sales of customer premise equipment.  Adjusted EBITDA was $119.9 million, compared to $122.0 million in 2012.  After adjusting for a $2.5 million net settlement gain in the fourth quarter 2012 associated with the acquisition of Wavecom, Adjusted EBITDA was up approximately $0.4 million from a year ago.

 

Net income for the full year 2013 was $10.5 million, or $0.95 per diluted share, compared to net income for the full year 2012, which included the one-time, non-cash tax benefit previously discussed, of $110.0 million, or $10.32 per diluted share.  Excluding the one-time, non-cash tax benefit recorded in the full year 2012, Pro Forma Net Income was $11.5 million, or $1.08 per diluted share.

 

Capital expenditures totaled $86.3 million for the full year 2013, up from $77.7 million in 2012 primarily due to greater investment in broadband network infrastructure, increased success-based spending to support the subscriber growth of Hawaiian Telcom TV and FTTT builds, as well as several large long-term, success-based projects won in the second half of the year

 

At the end of 2013, the Company had $49.6 million in cash and cash equivalents compared to $67.0 million at the end of 2012.  The reduction is primarily related to $11.9 million of cash used for the acquisition of SystemMetrics, $7.9 million of costs (including prepayment premium, original issue discount, and fees and expenses) associated with the refinancing of its $300 million term loan, higher capital expenditures, and temporary uses of working capital, partially offset by $13.1 million of net proceeds received from the sale of a parcel of land.  Net Debt(3) was $242.1 million, resulting in a Net Debt to Adjusted EBITDA ratio as of December 31, 2013 of 2.04x.

 

Conference Call

 

The Company will host a conference call to discuss its fourth quarter and full year 2013 results at 8:00 a.m. (Hawaii Time), or 2:00 p.m. (Eastern Time) on Thursday, March 13, 2014.

 

To access the call, participants should dial (866) 515-2909 (US/Canada), or (617) 399-5123 (International) ten minutes prior to the start of the call and enter passcode 97005799.

 

A live webcast of the conference call, including a slide presentation, will be available from the Investor Relations section of the Company’s website at http://hawaiiantel.com.  The webcast will be archived at the same location.

 

A telephonic replay of the conference call will be available one hour after the conclusion of the call until 11:59 p.m. (Eastern Time) March 20, 2014.  Access the replay by dialing (888) 286-8010 and entering passcode 13951337.  Alternatively, the replay can be accessed by dialing (617) 801-6888 and entering passcode 13951337.

 

Use of Non-GAAP Financial Measures

 

This press release contains information about adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Pro Forma Net Income and Net Debt. These are non-GAAP financial measures used by Hawaiian Telcom management when evaluating results of operations. Management believes these measures also provide users of the financial statements with additional and useful comparisons of current results of operations with past and future periods. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. Detailed reconciliations of Adjusted EBITDA and Net Debt to comparable GAAP financial measures have been included in the tables distributed with this release and are available in the Investor Relations section of www.hawaiiantel.com.

 


 

Forward-Looking Statements

 

In addition to historical information, this release includes certain statements and predictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  In particular, any statement, projection or estimate that includes or references the words “believes”, “anticipates”, “intends”, “expects”, or any similar expression falls within the safe harbor of forward-looking statements contained in the Reform Act.  Actual results or outcomes may differ materially from those indicated or suggested by any such forward-looking statement for a variety of reasons, including, but not limited to, Hawaiian Telcom’s ability to maintain its market position in communications services, including wireless, wireline and Internet services; general economic trends affecting the purchase or supply of communication services; world and national events that may affect the ability to provide services; changes in the regulatory environment; any rulings, orders or decrees that may be issued by any court or arbitrator; restrictions imposed under various credit facilities and debt instruments; work stoppages caused by labor disputes; adjustments resulting from year-end audit procedures; and Hawaiian Telcom’s ability to develop and launch new products and services. More information on potential risks and uncertainties is available in recent filings with the Securities and Exchange Commission, including Hawaiian Telcom’s 2013 Annual Report on Form 10-K. The information contained in this release is as of March 13, 2014. It is anticipated that subsequent events and developments may cause estimates to change.  Except as otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.

 

About Hawaiian Telcom

 

Hawaiian Telcom Holdco, Inc., headquartered in Honolulu, is Hawaii’s leading provider of integrated communications, data center and entertainment solutions for business and residential customers. With roots in Hawaii beginning in 1883, the Company offers a full range of services including voice, video, Internet, data, wireless, and advanced communication and network services supported by the reach and reliability of its network and Hawaii’s only 24/7 state-of-the-art network operations center. With employees statewide sharing a commitment to innovation and a passion for delivering superior service, Hawaiian Telcom provides an Always OnSM customer experience.  For more information, visit www.hawaiiantel.com.

 

(1)  Adjusted EBITDA is EBITDA plus non-recurring costs not expected to occur regularly in the ordinary course of business.  EBITDA is defined as net income plus interest expense (net of interest income and other), income taxes, depreciation and amortization, non-cash stock compensation and gain on sale of property.  The Company believes both of these non-GAAP measures, Adjusted EBITDA and EBITDA, are meaningful performance measures for investors because they are used by our Board and management to evaluate performance, enhance comparability between periods and make operating decisions.  Our use of Adjusted EBITDA and EBITDA may not be comparable to similarly titled measures used by other companies in the telecommunications industry.  A detailed reconciliation of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) to comparable GAAP financial measures has been included in the tables distributed with this release.

 

(2)  Pro Forma Net Income is defined as net income adjusted for the one-time, non-cash item related to the tax benefit to reverse the tax valuation allowance.  The Company believes this non-GAAP measure, Pro Forma Net Income, is a meaningful performance measure for investors because it is used by our Board and management to evaluate performance, enhance comparability between periods and make operating decisions.  Our use of Pro Forma Net Income may not be comparable to similarly titled measures used by other companies in the telecommunications industry.  A detailed reconciliation of Pro Forma Net Income to comparable GAAP financial measures has been included in the tables distributed with this release.

 

(3)  Net Debt provides a useful measure of liquidity and financial health. The Company defines Net Debt as the sum of the face amount of short-term and long-term debt and unamortized premium and/or discount, offset by cash and cash equivalents.  A detailed reconciliation of Net Debt has been included in the tables distributed with this release.

 


 

Hawaiian Telcom Holdco, Inc.

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

 

 

 

For the Year Ended

 

 

 

December 31,

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

391,150

 

$

385,498

 

$

395,156

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

163,749

 

160,226

 

159,822

 

Selling, general and administrative

 

114,875

 

108,508

 

120,390

 

Gain on sale of property

 

(6,546

)

—

 

—

 

Depreciation and amortization

 

77,301

 

70,908

 

63,806

 

 

 

 

 

 

 

 

 

Total operating expenses

 

349,379

 

339,642

 

344,018

 

 

 

 

 

 

 

 

 

Operating income

 

41,771

 

45,856

 

51,138

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense, net

 

(18,875

)

(22,183

)

(25,339

)

Loss on early extinguishment of debt

 

(3,660

)

(5,112

)

—

 

Interest income and other

 

34

 

59

 

65

 

 

 

 

 

 

 

 

 

Total other expense

 

(22,501

)

(27,236

)

(25,274

)

 

 

 

 

 

 

 

 

Income before reorganization items and income tax provision (benefit)

 

19,270

 

18,620

 

25,864

 

 

 

 

 

 

 

 

 

Reorganization items - expense

 

—

 

—

 

1,050

 

 

 

 

 

 

 

 

 

Income before income tax provision (benefit)

 

19,270

 

18,620

 

24,814

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

8,782

 

(91,362

)

(1,341

)

 

 

 

 

 

 

 

 

Net income

 

$

10,488

 

$

109,982

 

$

26,155

 

 

 

 

 

 

 

 

 

Net income per common share -

 

 

 

 

 

 

 

Basic

 

$

1.01

 

$

10.74

 

$

2.58

 

Diluted

 

$

0.95

 

$

10.32

 

$

2.41

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute net income per common share -

 

 

 

 

 

 

 

Basic

 

10,337,339

 

10,242,573

 

10,147,561

 

Diluted

 

11,093,931

 

10,660,647

 

10,843,542

 

 

 

Hawaiian Telcom Holdco, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

 

 

 

December 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

49,551

 

$

66,993

 

Receivables, net

 

34,521

 

34,082

 

Material and supplies

 

15,939

 

11,352

 

Prepaid expenses

 

3,724

 

5,161

 

Deferred income taxes

 

8,146

 

5,727

 

Other current assets

 

2,851

 

2,181

 

Total current assets

 

114,732

 

125,496

 

Property, plant and equipment, net

 

524,375

 

507,197

 

Intangible assets, net

 

40,225

 

39,075

 

Goodwill

 

12,104

 

1,569

 

Deferred income taxes

 

75,274

 

102,680

 

Other assets

 

11,305

 

9,075

 

 

 

 

 

 

 

Total assets

 

$

778,015

 

$

785,092

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Current portion of long-term debt

 

$

3,000

 

$

3,000

 

Accounts payable

 

40,228

 

36,351

 

Accrued expenses

 

18,787

 

20,537

 

Advance billings and customer deposits

 

16,122

 

15,185

 

Other current liabilities

 

6,412

 

3,961

 

Total current liabilities

 

84,549

 

79,034

 

Long-term debt

 

291,679

 

292,410

 

Employee benefit obligations

 

80,321

 

132,004

 

Other liabilities

 

8,454

 

4,784

 

Total liabilities

 

465,003

 

508,232

 

 

 

 

 

 

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock, par value of $0.01 per share, 245,000,000 shares authorized and 10,495,856 and 10,291,897 shares issued and outstanding at December 31, 2013 and 2012, respectively

 

105

 

103

 

Additional paid-in capital

 

167,869

 

165,941

 

Accumulated other comprehensive loss

 

(4,716

)

(28,450

)

Retained earnings

 

149,754

 

139,266

 

Total stockholders’ equity

 

313,012

 

276,860

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

778,015

 

$

785,092

 

 


 

Hawaiian Telcom Holdco, Inc.

Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

For the Year Ended

 

 

 

December 31,

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$

10,488

 

$

109,982

 

$

26,155

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

 

Depreciation and amortization

 

77,301

 

70,908

 

63,806

 

Loss on early extinguishment of debt

 

3,660

 

5,112

 

—

 

Gain on sale of property

 

(6,546

)

—

 

—

 

Employee retirement benefits

 

(13,224

)

(11,933

)

(9,920

)

Provision for uncollectibles

 

3,455

 

716

 

2,940

 

Stock based compensation

 

2,736

 

1,872

 

2,135

 

Deferred income taxes

 

9,617

 

(90,827

)

—

 

Reorganization items

 

—

 

—

 

1,050

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

(3,409

)

(724

)

(2,930

)

Material and supplies

 

(4,587

)

(3,161

)

240

 

Prepaid expenses and other current assets

 

456

 

(1,109

)

4,039

 

Accounts payable and accrued expenses

 

(6,518

)

3,255

 

(6,058

)

Advance billings and customer deposits

 

138

 

424

 

(276

)

Other current liabilities

 

812

 

269

 

1,421

 

Other, net

 

2,582

 

1,676

 

(990

)

Net cash provided by operating activities before reorganization items

 

76,961

 

86,460

 

81,612

 

Operating cash flows used by reorganization items

 

—

 

—

 

(2,393

)

Net cash provided by operating activities

 

76,961

 

86,460

 

79,219

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Capital expenditures

 

(86,290

)

(77,713

)

(77,992

)

Acquisitions, net of cash acquired

 

(11,858

)

(8,343

)

—

 

Proceeds on sale of property

 

13,118

 

—

 

—

 

Proceeds on sale of investments

 

—

 

746

 

—

 

Net cash used in investing activities

 

(85,030

)

(85,310

)

(77,992

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Repayment of debt including premium

 

(303,083

)

(306,750

)

—

 

Proceeds from borrowing

 

298,500

 

295,500

 

—

 

Loan refinancing costs

 

(3,442

)

(4,130

)

—

 

Proceeds from stock issuance

 

—

 

—

 

49

 

Repayments of capital lease

 

(542

)

(582

)

(582

)

Revolving loan refinancing costs

 

—

 

—

 

(253

)

Taxes paid related to net share settlement on equity awards

 

(806

)

(258

)

(25

)

Net cash used in financing activities

 

(9,373

)

(16,220

)

(811

)

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(17,442

)

(15,070

)

416

 

Cash and cash equivalents, beginning of year

 

66,993

 

82,063

 

81,647

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of year

 

$

49,551

 

$

66,993

 

$

82,063

 

 


 

Hawaiian Telcom Holdco, Inc.

Revenue by Category and Channel

(Unaudited, dollars in thousands)

 

For Three Months

 

 

 

For Three Months Ended

 

 

 

 

 

December 31,

 

Change

 

 

 

2013

 

2012

 

Amount

 

Percentage

 

 

 

 

 

 

 

 

 

 

 

Telecommunications

 

 

 

 

 

 

 

 

 

Local voice services

 

$

33,307

 

$

34,668

 

$

(1,361

)

(3.9

)%

Network access services

 

 

 

 

 

 

 

 

 

Business data

 

6,507

 

4,794

 

1,713

 

35.7

%

Wholesale carrier data

 

14,406

 

15,882

 

(1,476

)

(9.3

)%

Subscriber line access charge

 

9,232

 

9,674

 

(442

)

(4.6

)%

Switched carrier access

 

2,573

 

2,022

 

551

 

27.3

%

 

 

32,718

 

32,372

 

346

 

1.1

%

Long distance services

 

5,929

 

6,617

 

(688

)

(10.4

)%

High-Speed Internet

 

10,305

 

9,375

 

930

 

9.9

%

Video

 

4,228

 

1,823

 

2,405

 

131.9

%

Equipment and managed services

 

7,270

 

7,814

 

(544

)

(7.0

)%

Wireless

 

629

 

766

 

(137

)

(17.9

)%

Other

 

3,933

 

3,153

 

780

 

24.7

%

 

 

98,319

 

96,588

 

1,731

 

1.8

%

Data center colocation

 

2,188

 

—

 

2,188

 

NA

 

 

 

$

100,507

 

$

96,588

 

$

3,919

 

4.1

%

 

 

 

 

 

 

 

 

 

 

Channel

 

 

 

 

 

 

 

 

 

Business

 

$

44,724

 

$

40,442

 

$

4,282

 

10.6

%

Consumer

 

36,440

 

34,987

 

1,453

 

4.2

%

Wholesale

 

15,958

 

17,770

 

(1,812

)

(10.2

)%

Other

 

3,385

 

3,389

 

(4

)

(0.1

)%

 

 

$

100,507

 

$

96,588

 

$

3,919

 

4.1

%

 

 

For Twelve Months

 

 

 

For the Year Ended

 

 

 

 

 

 

 

December 31,

 

Change

 

 

 

2013

 

2012

 

Amount

 

Percentage

 

 

 

 

 

 

 

 

 

 

 

Telecommunications

 

 

 

 

 

 

 

 

 

Local voice services

 

$

137,166

 

$

141,352

 

$

(4,186

)

(3.0

)%

Network access services

 

 

 

 

 

 

 

 

 

Business data

 

25,392

 

18,946

 

6,446

 

34.0

%

Wholesale carrier data

 

59,529

 

63,192

 

(3,663

)

(5.8

)%

Subscriber line access charge

 

37,739

 

38,885

 

(1,146

)

(2.9

)%

Switched carrier access

 

7,698

 

8,883

 

(1,185

)

(13.3

)%

 

 

130,358

 

129,906

 

452

 

0.3

%

Long distance services

 

24,733

 

27,959

 

(3,226

)

(11.5

)%

High-Speed Internet

 

39,800

 

36,323

 

3,477

 

9.6

%

Video

 

13,012

 

4,883

 

8,129

 

166.5

%

Equipment and managed services

 

26,994

 

31,418

 

(4,424

)

(14.1

)%

Wireless

 

2,713

 

3,336

 

(623

)

(18.7

)%

Other

 

14,186

 

10,321

 

3,865

 

37.4

%

 

 

388,962

 

385,498

 

3,464

 

0.9

%

Data center colocation

 

2,188

 

—

 

2,188

 

NA

 

 

 

$

391,150

 

$

385,498

 

$

5,652

 

1.5

%

 

 

 

 

 

 

 

 

 

 

Channel

 

 

 

 

 

 

 

 

 

Business

 

$

170,544

 

$

163,923

 

$

6,621

 

4.0

%

Consumer

 

141,234

 

137,765

 

3,469

 

2.5

%

Wholesale

 

66,206

 

71,673

 

(5,467

)

(7.6

)%

Other

 

13,166

 

12,137

 

1,029

 

8.5

%

 

 

$

391,150

 

$

385,498

 

$

5,652

 

1.5

%

 


 

Hawaiian Telcom Holdco, Inc.

Schedule of Adjusted EBITDA Calculation

(Unaudited, dollars in thousands)

 

 

 

For Three Months Ended

 

For the Year Ended

 

 

 

December 31,

 

December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,629

 

$

98,639

 

$

10,488

 

$

109,982

 

Income tax provision (benefit)

 

3,261

 

(91,016

)

8,782

 

(91,362

)

Interest expense and other income and expense, net

 

4,157

 

5,262

 

22,501

 

27,236

 

Depreciation and amortization

 

18,769

 

18,943

 

77,301

 

70,908

 

Non-cash stock compensation

 

850

 

529

 

2,736

 

1,872

 

Gain on sale of property

 

—

 

—

 

(6,546

)

—

 

EBITDA

 

29,666

 

32,357

 

115,262

 

118,636

 

Non-recurring costs

 

695

 

910

 

2,553

 

2,565

 

Severance costs

 

—

 

—

 

712

 

752

 

Wavecom integration costs

 

374

 

—

 

1,343

 

—

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

30,735

 

$

33,267

 

$

119,870

 

$

121,953

 

 

Hawaiian Telcom Holdco, Inc.

Schedule of Pro Forma Net Income Calculation

(Unaudited, dollars in thousands)

 

 

 

For Three Months Ended

 

For the Year Ended

 

 

 

December 31, 2012

 

December 31, 2012

 

 

 

 

 

 

 

Net income

 

$

98,639

 

$

109,982

 

Impact of one-time adjustment to deferred tax asset valuation allowance

 

(94,140

)

(98,433

)

 

 

 

 

 

 

Pro forma net income

 

$

4,499

 

$

11,549

 

 

 

 

 

 

 

Pro forma net income per common share -

 

 

 

 

 

Basic

 

$

0.44

 

$

1.13

 

Diluted

 

$

0.42

 

$

1.08

 

 

Hawaiian Telcom Holdco, Inc.

Net Debt to LTM Adjusted EBITDA Ratio

(Unaudited, dollars in thousands)

 

Long-term debt as of December 31, 2013 

 

$

294,679

 

Less cash on hand

 

(49,551

)

Total Net Debt as of December 31, 2013

 

$

245,128

 

 

 

 

 

LTM Adjusted EBITDA as of December 31, 2013

 

$

119,870

 

 

 

 

 

Total Net Debt to Adjusted EBITDA

 

2.04x

 

 


 

Hawaiian Telcom Holdco, Inc.

Volume Information

(Unaudited)

 

 

 

 

 

 

 

 

 

2013 vs. 2012

 

2012 vs. 2011

 

 

 

December 31,

 

Change

 

Change

 

 

 

2013

 

2012

 

2011

 

Number

 

Percentage

 

Number

 

Percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Voice access lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

186,415

 

203,330

 

223,009

 

(16,915

)

(8.3

)%

(19,679

)

(8.8

)%

Business *

 

193,027

 

185,142

 

189,035

 

7,885

 

4.3

%

(3,893

)

(2.1

)%

Public

 

4,155

 

4,405

 

4,623

 

(250

)

(5.7

)%

(218

)

(4.7

)%

 

 

383,597

 

392,877

 

416,667

 

(9,280

)

(2.4

)%

(23,790

)

(5.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High-Speed Internet lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

91,437

 

88,016

 

84,634

 

3,421

 

3.9

%

3,382

 

4.0

%

Business

 

19,320

 

18,575

 

17,442

 

745

 

4.0

%

1,133

 

6.5

%

Wholesale

 

963

 

1,020

 

1,156

 

(57

)

(5.6

)%

(136

)

(11.8

)%

 

 

111,720

 

107,611

 

103,232

 

4,109

 

3.8

%

4,379

 

4.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long distance lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

117,282

 

126,551

 

136,921

 

(9,269

)

(7.3

)%

(10,370

)

(7.6

)%

Business *

 

79,496

 

74,781

 

76,160

 

4,715

 

6.3

%

(1,379

)

(1.8

)%

 

 

196,778

 

201,332

 

213,081

 

(4,554

)

(2.3

)%

(11,749

)

(5.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscribers

 

18,393

 

9,829

 

1,620

 

8,564

 

87.1

%

8,209

 

506.7

%

Homes Enabled

 

120,000

 

65,000

 

27,400

 

55,000

 

84.6

%

37,600

 

137.2

%

 

*     Business voice access lines and business long distance lines included approximately 9,400 and 5,500 lines, respectively as of December 31, 2013 related to the acquisition of Wavecom.