SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2003
Commission File Number: 0-29227
Mediacom Communications Corporation
(Exact name of Registrant as specified in its charter)
| Delaware |
06-1566067 | |
| (State of incorporation) |
(I.R.S. Employer Identification Number) |
100 Crystal Run Road
Middletown, NY 10941
(Address of principal executive offices)
(845) 695-2600
(Registrant’s telephone number)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨
As of April 30, 2003 there were 89,718,915 shares of Class A common stock and 28,913,145 shares of Class B common stock outstanding.
MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2003
PART I
You should carefully review the information contained in this Quarterly Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission (the “SEC”). In this Quarterly Report, we state our beliefs of future events and of our future financial performance. In some cases, you can identify those so-called “forward-looking statements” by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of those words and other comparable words. You should be aware that those statements are only our predictions. Actual events or results may differ materially. In evaluating those statements, you should specifically consider various factors, including the risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2002 and other reports or documents that we file from time to time with the SEC. Those factors may cause our actual results to differ materially from any of our forward-looking statements. All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by this cautionary statement.
PART I
MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All dollar amounts in 000’s)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Cash and cash equivalents |
$ |
19,279 |
|
$ |
31,224 |
| ||
| Investments |
|
4,712 |
|
|
4,070 |
| ||
| Subscriber accounts receivable, net of allowance for doubtful accounts of $3,391 and $3,789, respectively |
|
56,809 |
|
|
56,205 |
| ||
| Prepaid expenses and other assets |
|
13,420 |
|
|
10,278 |
| ||
| Investment in cable television systems: |
||||||||
| Inventory, net |
|
17,221 |
|
|
18,795 |
| ||
| Property, plant and equipment, net of accumulated depreciation of $701,097 and $631,427, respectively |
|
1,459,646 |
|
|
1,465,034 |
| ||
| Intangible assets, net of accumulated amortization of $279,414 and $275,125, respectively |
|
2,062,648 |
|
|
2,072,404 |
| ||
| Total investment in cable television systems |
|
3,539,515 |
|
|
3,556,233 |
| ||
| Other assets, net of accumulated amortization of $19,521 and $17,966, respectively |
|
44,681 |
|
|
45,964 |
| ||
| Total assets |
$ |
3,678,416 |
|
$ |
3,703,974 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| LIABILITIES |
||||||||
| Debt |
$ |
3,040,000 |
|
$ |
3,019,000 |
| ||
| Accounts payable and accrued expenses |
|
289,123 |
|
|
305,172 |
| ||
| Deferred revenue |
|
35,595 |
|
|
33,261 |
| ||
| Total liabilities |
|
3,364,718 |
|
|
3,357,433 |
| ||
| STOCKHOLDERS’ EQUITY |
||||||||
| Class A common stock, $.01 par value; 300,000,000 shares authorized; 91,255,659 shares issued and 89,718,915 shares outstanding as of March 31, 2003 and 91,068,774 shares issued and 89,532,030 shares outstanding as of December 31, 2002 |
|
913 |
|
|
911 |
| ||
| Class B common stock, $.01 par value; 100,000,000 shares authorized; 28,913,145 and 28,991,456 shares issued and outstanding as of March 31, 2003 and December 31, 2002, respectively |
|
289 |
|
|
290 |
| ||
| Additional paid in capital |
|
981,865 |
|
|
981,343 |
| ||
| Accumulated deficit |
|
(663,406 |
) |
|
(630,040 |
) | ||
| Treasury stock, at cost, 1,536,744 shares of Class A common stock |
|
(5,963 |
) |
|
(5,963 |
) | ||
| Total stockholders’ equity |
|
313,698 |
|
|
346,541 |
| ||
| Total liabilities and stockholders’ equity |
$ |
3,678,416 |
|
$ |
3,703,974 |
| ||
1
MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in 000’s, except per share data)
(Unaudited)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ |
242,775 |
|
$ |
219,547 |
| ||
| Costs and expenses: |
||||||||
| Service costs |
|
94,510 |
|
|
91,670 |
| ||
| Selling, general and administrative expenses |
|
47,371 |
|
|
40,979 |
| ||
| Corporate expenses |
|
3,699 |
|
|
3,085 |
| ||
| Depreciation and amortization |
|
78,166 |
|
|
70,858 |
| ||
| Non-cash stock charges relating to corporate expenses |
|
— |
|
|
958 |
| ||
| Operating income |
|
19,029 |
|
|
11,997 |
| ||
| Interest expense, net |
|
48,706 |
|
|
46,687 |
| ||
| Loss (gain) on derivative instruments, net |
|
1,092 |
|
|
(2,569 |
) | ||
| Other expenses |
|
2,397 |
|
|
3,044 |
| ||
| Net loss before provision for income taxes |
|
(33,166 |
) |
|
(35,165 |
) | ||
| Provision for income taxes |
|
200 |
|
|
25 |
| ||
| Net loss |
$ |
(33,366 |
) |
$ |
(35,190 |
) | ||
| Loss per share |
$ |
(0.28 |
) |
$ |
(0.29 |
) | ||
| Weighted average common shares outstanding |
|
118,525 |
|
|
119,892 |
| ||
2
MEDIACOM COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts in 000’s)
(Unaudited)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ |
(33,366 |
) |
$ |
(35,190 |
) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: |
||||||||
| Depreciation and amortization |
|
78,166 |
|
|
70,858 |
| ||
| Loss (gain) on derivative instruments, net |
|
1,092 |
|
|
(2,569 |
) | ||
| Vesting of management stock |
|
— |
|
|
958 |
| ||
| Deferred income taxes |
|
— |
|
|
(125 |
) | ||
| Amortization of deferred financing costs |
|
1,555 |
|
|
1,610 |
| ||
| Changes in assets and liabilities, net of effects from acquisitions: |
||||||||
| Subscriber accounts receivable, net |
|
(604 |
) |
|
(3,748 |
) | ||
| Prepaid expenses and other assets |
|
(3,142 |
) |
|
(1,092 |
) | ||
| Accounts payable and accrued expenses |
|
(17,783 |
) |
|
(35,851 |
) | ||
| Deferred revenue |
|
2,334 |
|
|
(3,282 |
) | ||
| Net cash flows provided by (used in) operating activities |
|
28,252 |
|
|
(8,431 |
) | ||
| CASH FLOWS USED IN INVESTING ACTIVITIES: |
||||||||
| Capital expenditures |
|
(70,003 |
) |
|
(89,005 |
) | ||
| Acquisitions of cable television systems |
|
— |
|
|
(6,548 |
) | ||
| Sale of cable system |
|
8,960 |
|
|
— |
| ||
| Other investment activities |
|
(405 |
) |
|
(1,072 |
) | ||
| Net cash flows used in investing activities |
|
(61,448 |
) |
|
(96,625 |
) | ||
| CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: |
||||||||
| New borrowings |
|
136,250 |
|
|
172,000 |
| ||
| Repayment of debt |
|
(115,250 |
) |
|
(106,000 |
) | ||
| Proceeds from issuance of common stock in employee stock purchase plan and options exercised |
|
523 |
|
|
728 |
| ||
| Financing costs |
|
(272 |
) |
|
(200 |
) | ||
| Net cash flows provided by financing activities |
|
21,251 |
|
|
66,528 |
| ||
| Net decrease in cash and cash equivalents |
|
(11,945 |
) |
|
(38,528 |
) | ||
| CASH AND CASH EQUIVALENTS, beginning of period |
|
31,224 |
|
|
63,307 |
| ||
| CASH AND CASH EQUIVALENTS, end of period |
$ |
19,279 |
|
$ |
24,779 |
| ||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
||||||||
| Cash paid during the period for interest |
$ |
75,000 |
|
$ |
75,583 |
| ||
3