Windstream Holdings Inc. (fka WINMQ)

[MGStocks]

Windstream reports fourth-quarter, full-year 2018 results

http://news.windstream.com/news-releases/news-release-details/windstream-reports-fourth-quarter-full-year-2018-results

Friday 15 March 2019

Windstream Holdings, Inc. (USOTC:WINMQ)

Windstream Holdings
Grew broadband customer base for third consecutive quarter
Achieved continued growth in SD-WAN and Enterprise strategic sales
Generated $2 billion in Adjusted OIBDAR for the year


Windstream Holdings, Inc., a leading provider of advanced network communications and technology solutions, today reported fourth-quarter and full-year 2018 results.

Windstream grew its Kinetic broadband customer base for the third consecutive quarter, adding 6,000 new subscribers in the fourth quarter. The company added 14,400 new broadband customers for the year, which is a significant improvement from a loss of 45,000 customers in 2017.

“Overall, we had a strong, transformational year in 2018. We continue to benefit from investments in our network infrastructure that enable us to deliver faster internet speeds to more customers. We have delivered 12 consecutive months of broadband subscriber growth through February of this year, and we expect that growth to continue throughout the year,” said Tony Thomas, president and chief executive officer of Windstream.

Windstream’s Enterprise segment continued to see strong growth in strategic products and services, which represent approximately $180 million in annualized revenues and are growing at approximately 70 percent year-over-year. Windstream is the largest SD-WAN service provider in the country, with more than 1,800 customers in over 15,000 locations nationwide and growing.

Windstream generated $1.97 billion in Adjusted OIBDAR for the year, a decline of two percent year-over-year and a significant improvement from a decline of 5.5 percent for the year prior.

“As we enter 2019, we will continue to focus on improving our sales productivity, reducing churn across all of our business units, improving the customer experience and maintaining our laser-focus on aggressive cost management and operational efficiencies. We are confident we will emerge from the financial restructuring process as a healthier and even stronger company than we are today, and we are excited about the opportunities that lie ahead of us,” Thomas said.

Results under GAAP

For the fourth quarter, total revenues and sales were $1.39 billion and total service revenues were $1.38 billion compared to $1.50 billion and $1.48 billion respectively year-over-year. The company reported operating income of $64 million in the quarter compared to an operating loss of $1.79 billion in the same period a year ago. The company reported a net loss of $549 million or a loss of $12.92 per share in the quarter compared to a net loss of $1.84 billion or a loss of $51.28 per share a year ago.

For 2018, total revenues and sales were $5.71 billion and total service revenues were $5.64 billion compared to $5.85 billion and $5.76 billion respectively year-over-year. The company reported operating income of $297 million in 2018 compared to an operating loss of $1.60 billion in 2017. The company reported a net loss of $723 million or a loss of $17.72 per share in 2018 compared to a net loss of $2.12 billion or a loss of $62.66 per share in 2017.

Note: During the fourth quarter of 2017, the company recorded a $1.84 billion non-cash goodwill impairment charge related to its ILEC Consumer & Small Business and Wholesale segments.

ILEC Consumer and Small Business service revenues were $455 million in the fourth quarter, a 4 percent decline year-over-year, and $1.85 billion, a decline of 5 percent from 2017. Contribution margin was $268 million or 58 percent in the fourth quarter and $1.09 billion or 58 percent for the year.

Enterprise service revenues were $704 million in the fourth quarter, a decrease of 7 percent year-over-year, and $2.88 billion for the year, essentially flat from 2017. Contribution margin was $160 million or approximately 23 percent in the fourth quarter and $628 million or 21 percent for the year.

Wholesale service revenues were $175 million in the fourth quarter, a decrease of 7 percent year-over-year, and $722 million for the year, a decline of 4 percent from 2017. Contribution margin was $123 million or 70 percent in the fourth quarter and $507 million or 70 percent for the year.

CLEC Consumer service revenues, which primarily consists of EarthLink’s consumer Internet business, were $43 million in the fourth quarter, a decline of 17 percent year-over-year, and $181 million for the year, an increase of 3 percent from 2017. Contribution margin was $23 million or 55 percent in the fourth quarter and $102 million or 56 percent for the year.

Note: On Dec. 31, 2018, Windstream completed the sale of substantially all of the CLEC Consumer business. The consumer operations sold consisted solely of the former EarthLink consumer business that Windstream acquired in February 2017.

Adjusted Results of Operations

Adjusted total revenues and sales were $1.39 billion in the fourth quarter, a decline of 7 percent from the same period a year ago, and $5.71 billion for the year, a decline of 5 percent from 2017.

Adjusted service revenues were $1.38 billion in the fourth quarter, a decrease of 7 percent year-over-year, and $5.64 billion for the year, a decline of 5 percent from 2017.

Adjusted OIBDAR was $472 million in the fourth quarter, a decrease of 9 percent year-over-year, and $1.97 billion for the year, a decline of less than 2 percent from 2017.

Note: Fourth-quarter and full-year 2018 Adjusted OIBDAR includes a $22 million cash expense contribution to the company’s 401(k) program. The cash contribution is a result of the company’s voluntary filing for restructuring and was not anticipated in the company’s financial guidance since the company’s matching contribution historically was made in common stock. Excluding the contribution, Adjusted OIBDAR was $494 million in the fourth quarter, a decline of 5 percent year-over-year, and $1.997 billion for the year, a decline of less than 1 percent from 2017.

ILEC Consumer and Small Business service revenues were $455 million in the fourth quarter, a 4 percent decline year-over-year, and $1.85 billion for the year, a decline of 5 percent from 2017. Contribution margin was $268 million or 58 percent in the fourth quarter and $1.09 billion or 58 percent for 2018.

Enterprise service revenues were $704 million in the fourth quarter, a decrease of 7 percent year-over-year, and $2.88 billion for the year, a decrease of 3 percent from 2017. Contribution margin was $160 million or approximately 23 percent in the fourth quarter and $628 million or 21 percent for 2018.

Wholesale service revenues were $176 million in the fourth quarter, a decrease of 8 percent year-over-year, and $722 million for the year, a decline of 7 percent from 2017. Contribution margin was $123 million or 70 percent in the fourth quarter and $507 million or 70 percent for 2018.

CLEC Consumer service revenues were $43 million in the fourth quarter, a decline of 17 percent year-over-year, and $181 million for the year, a decrease of 12 percent from 2017. Contribution margin was $23 million or 55 percent in the fourth quarter and $102 million or 56 percent for 2018.

Adjusted capital expenditures were $207 million in the fourth quarter compared to $172 million in the same period a year ago and $783 million for 2018 compared to $839 million for 2017.

The company generated $133 million in adjusted free cash flow for 2018.

Note: Excluding the $22 million cash contribution to the company’s 401(k) program, adjusted free cash flow was $155 million for 2018.

Adjusted results of operations are based on the combined historical financial information of Windstream and EarthLink for all periods presented. The adjusted results assume the merger was completed on Jan. 1, 2017. Operating results for Broadview, MASS Communications and ATC are included beginning on July 28, 2017; March 27, 2018; and Aug. 31, 2018, respectively the dates of acquisitions. A reconciliation of adjusted results to the comparable GAAP measures is included in the financial information presented below. Additional supplemental quarterly financial information is available on the company’s website at investor.windstream.com.

Management Call and Webcast

Management will provide pre-recorded remarks on the company’s results at 7:30 a.m. CDT on March 15. The remarks will be available via webcast on the company’s investor relations website at investor.windstream.com. Financial, statistical and other information related to the remarks also will be posted on the site. Management will not be hosting a Q&A.

http://news.windstream.com/news-releases/news-release-details/windstream-reports-fourth-quarter-full-year-2018-results