Cable One(CABO)2024-02-22 16:00Revenue Breakdown - In 2023, residential data services accounted for 58.4% of total revenues, business services for 18.1%, and residential video for 15.4%[79]. - Business services accounted for 18.1% of total revenues in 2023, up from 17.9% in 2022[104]. - Residential video services represented 15.4% of total revenues in 2023, down from 19.1% in 2022[107]. - Residential voice services made up 2.2% of total revenues in 2023, a decline from 2.5% in 2022[108]. Financial Performance - Net income for 2023 was $267.4 million, an increase of $33.3 million or 14.2% compared to $234.1 million in 2022[281]. - Adjusted EBITDA for 2023 was $916.9 million, reflecting a slight increase of $5.1 million or 0.6% from $911.9 million in 2022[278]. - Income tax provision for 2023 was $89.7 million, a decrease of $36.6 million or 29.0% compared to $126.3 million in 2022[268]. - The effective tax rate decreased to 21.8% in 2023 from 33.7% in 2022, primarily due to changes in valuation allowance and state blended rate adjustments[268]. - Other income, net, was $54.6 million for 2023, compared to an expense of $25.9 million in 2022, primarily due to non-cash gains and interest income[297]. Customer and Service Trends - The average residential data customer used 705 Gigabytes of data per month, with nearly 25% using over 1 Terabyte[82]. - Business data customers and revenues have seen significant growth since 2013, with expectations for continued long-term growth[67]. - Residential video services are expected to decline as the company shifts focus to higher-margin businesses, with the introduction of Sparklight® TV as an IPTV service[83]. - Residential data service revenues increased by $44.7 million or 4.8%, driven by increased customer subscriptions to premium tiers and a rate adjustment in Q2 2023[270]. - Residential video service revenues decreased by $67.2 million, or 20.7%, due to a decline in residential video subscribers[298]. - Residential voice service revenues decreased by $6.0 million, or 13.9%, primarily due to a decrease in residential voice subscribers[299]. Capital Expenditures and Investments - Approximately 69% of total capital expenditures since 2017 focused on infrastructure improvements to drive revenue and Adjusted EBITDA expansion[68]. - The company continues to invest in infrastructure to meet customer needs and remain competitive, including expanding high-speed data service in adjacent areas[84]. - The company plans to deploy DOCSIS 4.0 capabilities and new data service offerings to enhance growth in residential and business services[70]. - The company is expanding fiber-to-the-premises technology to additional areas and markets each year[105]. Regulatory and Compliance Issues - The FCC's new broadband label requirements are set to take effect on April 10, 2024, which may incur additional compliance costs for the company[136]. - The FCC adopted rules in November 2023 to prevent digital discrimination in broadband access, effective March 22, 2024, potentially impacting the company's operations[136]. - The company is subject to various federal and state data security laws, which may impose unforeseen costs related to sensitive personal information[138]. - The FCC's regulations allow for an orderly franchise renewal process, but local authorities may require additional commitments from the company[140]. - The FCC has implemented rules to expedite competitive franchise awards, which could enhance competition in the video service marketplace[141]. - The company is required to comply with the Communications Assistance for Law Enforcement Act (CALEA), ensuring law enforcement access for lawful wiretap purposes[204]. Workforce and Diversity - As of December 31, 2023, the company had 2,993 full-time and part-time associates, a decrease from 3,132 associates in 2022[93]. - The average tenure of associates at the company is nearly 11 years, indicating a stable workforce[94]. - The company is committed to diversity and inclusion, with 2,437 participants in various sessions in 2023[117]. - The company completed over 32,000 instructional hours of safety training for associates in 2023[98]. Debt and Financing - The company entered into a new credit agreement, increasing the revolving credit facility by $500.0 million to $1.0 billion and extending its maturity to February 2028[305]. - Net cash provided by operating activities decreased by $74.9 million, or 10.1%, year-over-year, primarily due to increased cash paid for income taxes and interest[300]. - Cash and cash equivalents at the end of the period were $190.3 million, down $24.9 million, or 11.6%, from the previous year[300]. - The company reported a $117.3 million year-over-year decrease in net cash used in financing activities, attributed to net proceeds from long-term debt borrowings[301]. Market Value and Stock - The aggregate market value of the company's common stock held by non-affiliates was approximately $3.7 billion as of June 30, 2023[73]. - The existence of Convertible Notes may dilute existing stockholders' ownership interests and could adversely affect the market price of the company's common stock[207].