Strong digital and high-speed data additions helped fuel a 5.8% rise in revenue and a 9.6% hike in cash flow at Suddenlink Communications in the fourth quarter.
Revenue for the period was $489.7 million, up 5.8% compared to the prior year. Adjusted EBITDA was $189.5 million, a 9.6% increase from the same period in 2010. Excluding the impact of certain non-recurring expenses primarily associated with the acquisition and integration of NPG Cable, Adjusted EBITDA for the fourth quarter would have increased 9.2% compared to the prior year.
"Our continued focus on providing a superior level of customer care has allowed us to report excellent 2011 financial and operating results, including pro forma revenue growth of 7.1% and EBITDA growth of 8.9%," said Suddenlink chairman and CEO Jerry Kent in a statement. "In addition, we grew residential customer relationships, or the total number of homes we serve, for the second consecutive year. Our track record of delivering consistently outstanding results was rewarded with our recent successful closing of a $2.7 billion credit facility that was well-received in the bank market."
Suddenlink added about 14,200 residential high-speed data customers, 12,500 telephony customers and 13,700 digital video subscribers in the period. Basic video subscribers declined by 16,100 customers in the quarter, compared to a loss of about 9.800 basic customers in the prior year.
Commercial revenue grew 15.3% in the quarter to $57.8 million in the period.
While revenue continues to grow, Suddenlink said its three-year upgrade program, dubbed Project Imagine, will be completed later this year. The $350 million project was more than 81% complete at the end of 2011, and brings additional video on demand, HDTV and high-speed Internet capacity to Suddenlink customers.
The mid-market MSOs advanced services initiatives are moving forward, McMillin noted, adding that Suddenlink signed on 27,400 digital video recorder customers for the full year, pushing penetration to 47.7%. HSD penetration crossed 33.3% for the year and telephony penetration was at 18.6% for the year. Overall advanced services penetration was about 62.5% for the company.
On a conference call with analysts - Suddenlink is privately held but has some publicly traded debt - Kent said that video losses were impacted by a rate increase the company implemented in the quarter (averaging about 4.6%) and DirecTV's NFL Sunday Ticket promotion, where the satellite giant offered new customers one free year of the premium sports package if they committed to its Choice Extra level of service or higher. That promotion ended in November.
But Kent said Suddenlink wasn't giving up any yardage to video competitors, adding that the completion of Project Imagine should give the MSO an edge.
"We're looking to stay ahead of the game," Kent said, pointing to its Suddenlink2Go online video service, which has had 3.4 million video streams since it launched in early June, and its TiVo Premiere product, a multi-room DVR that allows customers to tape 600 hours of programming.
Kent was optimistic about Suddenlink's future.
"We're in St. Louis today, it's a beautiful day, there's not a cloud in the sky, it's sunny, there's no real wind," Kent said on the conference call. "I would say our operations are pretty much like the weather here today."
