BURLINGTON, Mass., Feb. 25, 2014 (GLOBE NEWSWIRE) -- Endurance International Group Holdings, Inc. (Nasdaq:EIGI), a leading provider of cloud-based platform solutions designed to help small and medium-sized businesses succeed online, today reported financial results for the fourth quarter and full year ended December 31, 2013.
"We're excited to report another great quarter, capping off a truly historic year for our company. We demonstrated strong organic revenue growth while increasing adjusted EBITDA and unlevered free cash flow. Our company's strategy is based on two simple principles: adding more high quality subscribers to our platform and selling our subscribers more value added solutions. During the year, we added over 279,000 net new subscribers, bringing our total number of subscribers to just over 3.5 million. Further, we continued to increase our average revenue per subscriber (ARPS), which grew to $13.15 for the quarter," commented Hari Ravichandran, CEO and Founder of Endurance International Group.
Fourth Quarter Highlights
- Revenue increased 17% to $136.4 million compared to $117.0 million for the fourth quarter of 2012.
- Adjusted EBITDA increased 40% to $46.2 million compared to $33.1 million for the fourth quarter of 2012.
- Net loss attributable to Endurance International Group Holdings, Inc. was $67.5 million, or $(0.57) per diluted share, compared to a net loss of $72.6 million, or $(0.75) per diluted share, for the fourth quarter of 2012. The net loss included the impact of $33.6 million of IPO related charges.
- Unlevered free cash flow (UFCF) increased 37% to $37.5 million, compared to $27.4 million for the fourth quarter of 2012.
- Free cash flow (FCF) more than doubled in the fourth quarter of 2013 to $18.9 million, compared to $7.7 million for the fourth quarter of 2012.
- Total subscribers were approximately 3.502 million as of December 31, 2013, a sequential increase of approximately 62,000 from 3.440 million as of September 30, 2013, and a year-over-year increase of approximately 279,000 from 3.223 million as of December 31, 2012.
- ARPS was $13.15 for the fourth quarter of 2013, representing a sequential increase of $0.01 from $13.14 for the third quarter of 2013. Apart from acquisitions completed in 2012, ARPS grew 9%, or $0.96, to $11.54 for the fourth quarter of 2013 from $10.58 for the fourth quarter of 2012.
- Monthly recurring revenue (MRR) retention rate remained at 99%, consistent with our MRR retention rate for the third quarter of 2013 and the fourth quarter of 2012.
Full Year 2013 Highlights
- Revenue increased 78% to $520.3 million compared to $292.2 million for 2012. Adjusted revenue increased 11% to $528.1 million compared to $474.1 million for 2012. Apart from acquisitions completed in 2012, adjusted revenue grew 17%, from $272.9 million for 2012 to $318.2 million for 2013.
- Adjusted EBITDA increased 55% to $207.9 million compared to $133.7 million for 2012.
- Net loss attributable to Endurance International Group Holdings, Inc. was $159.2 million, or $(1.55) per basic and diluted share, compared to a net loss attributable to common shareholders of $139.3 million, or $(1.44) per basic and diluted share, for 2012.
- UFCF increased 64% to $166.5 million, compared to $101.7 million for 2012.
- FCF increased 69% to $83.4 million, compared to $49.4 million for 2012.
Adjusted revenue, Adjusted EBITDA, UFCF, FCF and ARPS are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most comparable measure calculated in accordance with GAAP is provided in the financial statement tables included at the end of this press release. An explanation of these measures is also provided below under the heading "Use of Non-GAAP Financial Measures".
On November 25, 2013, the company refinanced its bank debt, repaying its $315 million second lien term loan using proceeds from its initial public offering, cash on hand and an incremental first lien term loan facility. The new facility consists of a single tranche of first lien term debt of $1.05 billion, which will lower the company's annualized term loan interest expense by approximately $35 million, based on the current loan balance and interest rates.
Recent Developments
On January 23, 2014, Endurance closed its acquisition of the web presence business of Directi Holdings, substantially expanding our footprint into emerging markets.
2014 Guidance
The company is providing fiscal year 2014 guidance as follows:
- Adjusted Revenue of approximately $630-635 million, including $145-147 million in the first quarter;
- Adjusted EBITDA of approximately $230-235 million, including $55-57 million in the first quarter; and
- UFCF of approximately $180-190 million, including $42-44 million in the first quarter.
Conference Call and Webcast Information
Endurance International Group's fourth quarter and full year 2013 teleconference and webcast is scheduled to begin at 4:30 p.m. ET on Tuesday, February 25, 2014. To participate on the live call, analysts and investors should dial (888) 734-0328 at least ten minutes prior to the call. Endurance International Group will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the Company's website at http://ir.enduranceinternational.com/.
Use of Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, we use certain "non-GAAP financial measures" described below to evaluate the operating and financial performance of our business, identify trends affecting our business, develop projections and make strategic business decisions. Generally, a non-GAAP financial measure is a numerical measure of a company's operating performance, financial position or cash flow that includes or excludes amounts that are included or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor the non-GAAP financial measures described below, and we believe they are helpful to investors, because we believe they reflect the operating performance of our business and help management and investors gauge our ability to generate cash flow, excluding some recurring and non-recurring expenses that are included in the most directly comparable measures calculated and presented in accordance with GAAP.
We are including one non-GAAP financial measure in this earnings release, FCF, that we have not previously provided. We believe that reporting FCF will be helpful to investors because we believe FCF helps investors to gauge our ability to generate cash flow after taking into consideration cash interest associated with our indebtedness. In addition, in connection with adding this financial measure, we have revised the definitions of adjusted net income and adjusted EBITDA previously reported in our final prospectus filed with the SEC on October 25, 2013 pursuant to Rule 424(b) under the Securities Act in connection with our initial public offering and our Form 10-Q for the period ended September 30, 2013 filed with the SEC on December 6, 2013, since we believe that including these revisions is appropriate in order to reconcile cash flows from (used in) operating activities to FCF.
We believe that our revisions to the amounts previously reported for adjusted net income and adjusted EBITDA are not material.
Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to adjustments for integration and restructuring expenses. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on our reported financial results. Furthermore, interest expense, which is excluded from some of our non-GAAP measures, has been and will continue to be for the foreseeable future a significant recurring expense in our business. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. We urge you to review the reconciliations of our non-GAAP financial measures to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate our business.
Adjusted Net Income
Adjusted net income is a non-GAAP financial measure that we calculate as consolidated net income (loss) plus (i) changes in deferred revenue inclusive of purchase accounting adjustments related to acquisitions, amortization, stock-based compensation expense, loss of unconsolidated entities, net loss on sale of property and equipment, expenses related to integration of acquisitions and restructurings, any dividend-related payments accounted for as compensation expense, transaction expenses and charges including costs associated with certain litigation matters and preparation for our initial public offering, less (ii) earnings of unconsolidated entities and net gain on sale of property and equipment, and (iii) the estimated tax effects of the foregoing adjustments. Due to our history of acquisitions and financings, we have incurred accounting charges and expenses that obscure the operating performance of our business. We believe that adjusting for these items and the use of adjusted net income is useful to investors in evaluating the performance of our company.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we calculate as adjusted net income plus interest expense, depreciation, and change in income tax expense (benefit). We manage our business based on the cash collected from our subscribers and the cash required to acquire and service those subscribers. We believe highlighting cash collected and cash spent in a given period is valuable insight for an investor to gauge the overall health of our business. Under GAAP, although subscription fees are paid in advance, we recognize the associated revenue over the subscription term, which does not fully reflect short-term trends in our operating results.
Unlevered Free Cash Flow
Unlevered free cash flow, or UFCF, is a non-GAAP financial measure that we calculate as adjusted EBITDA plus change in operating assets and liabilities (other than deferred revenue) net of acquisitions less capital expenditures and income taxes excluding deferred tax. We believe the most useful indicator of our operating performance is the cash generating potential of our company prior to any accounting charges related to our acquisitions. We have substantial indebtedness primarily as a result of the December 2011 acquisition of a controlling interest in our company by investment funds and entities affiliated with Warburg Pincus and Goldman Sachs and a substantial dividend payment in November 2012. We also believe that because our business has meaningful data center and related infrastructure requirements, the level of capital expenditures required to run our business is an important factor for investors. We believe UFCF is a useful measure that captures the effects of these issues.
Free Cash Flow
Free cash flow, or FCF, is a non-GAAP financial measure that we calculate as unlevered free cash flow less interest expense. We believe that this presentation of free cash flow provides investors with an additional indicator of our ability to generate positive cash flows after meeting our obligations with regards to payment of interest on our outstanding indebtedness.
Adjusted Revenue
Adjusted revenue is a non-GAAP financial measure that we calculate as GAAP revenue adjusted to exclude the impact of any fair value adjustments to deferred revenue resulting from acquisitions and to include the revenue generated from subscribers we added through business acquisitions as if those acquired subscribers had been our subscribers since the beginning of the period presented. We believe that excluding fair value adjustments to deferred revenue is useful to investors because it shows our revenue prior to purchase accounting adjustments related to our acquisitions, and that including revenue from acquired subscribers in this manner provides a helpful comparison of the organic revenue generated from our subscribers from period to period.
Average Revenue per Subscriber
Average revenue per subscriber, or ARPS, is a non-GAAP financial measure that we calculate as the amount of adjusted revenue we recognize from subscribers in a period divided by the average of the number of total subscribers at the beginning of the period and at the end of the period. We believe ARPS is an indicator of our ability to optimize our mix of products and services and pricing, and sell products and services to new and existing subscribers.
Forward-Looking Statements
This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning our financial guidance for fiscal year 2014 and our expectations regarding future interest expense. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates", "confident", "position", variations of such words or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that these plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks set forth under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on December 6, 2013 and other reports we file with the SEC. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
About Endurance International Group
Endurance International Group is a leading provider of cloud-based platform solutions designed to help small and medium-sized businesses succeed online. Less than 20 years old, Endurance serves over 3.5 million subscribers through a family of brands that includes Bluehost, HostGator, Domain.com, FatCow, iPage, BigRock and MOJO Marketplace. Endurance is headquartered in Burlington, Massachusetts, has a presence in Asia and the Americas, and employs over 2,600 people. Endurance provides a comprehensive suite of over 150 products and services that includes web presence and mobile sites, email and e-commerce solutions, as well as more advanced offerings, such as SEO services, scalable computing, security, storage and backup, online marketing and productivity solutions. For more information, please visit www.endurance.com.
Endurance International Group and the compass logo are trademarks of The Endurance International Group, Inc. Other brand names of Endurance International Group are trademarks of The Endurance International Group, Inc. or its subsidiaries.
| Endurance International Group Holdings, Inc. | ||
| Consolidated Balance Sheets | ||
| (unaudited) | ||
| (in thousands, except share and per share amounts) | ||
| December 31, | December 31, | |
| 2012 | 2013 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 23,245 | $ 66,815 |
| Restricted cash | 888 | 1,983 |
| Accounts receivable | 5,824 | 7,160 |
| Deferred tax asset—short term | 12,093 | 12,981 |
| Prepaid expenses and other current assets | 26,093 | 29,862 |
| Total current assets | 68,143 | 118,801 |
| Property and equipment—net | 34,604 | 49,715 |
| Goodwill | 936,746 | 984,207 |
| Other intangible assets—net | 480,690 | 406,140 |
| Deferred financing costs | 1,481 | 430 |
| Investment | 10,227 | 6,535 |
| Other assets | 6,245 | 15,110 |
| Total assets | $ 1,538,136 | $ 1,580,938 |
| Liabilities, redeemable non-controlling interest and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 8,007 | $ 7,950 |
| Accrued expenses | 31,267 | 35,433 |
| Deferred revenue | 151,078 | 194,196 |
| Current portion of notes payable | 23,000 | 10,500 |
| Deferred consideration—short term | 52,878 | 24,437 |
| Other current liabilities | 5,766 | 6,796 |
| Total current liabilities | 271,996 | 279,312 |
| Long-term deferred revenue | 36,291 | 55,298 |
| Notes payable—long term | 1,107,000 | 1,036,875 |
| Deferred tax liability—long term | 27,579 | 26,171 |
| Deferred consideration | 24,501 | 4,207 |
| Other liabilities | 614 | 3,041 |
| Total liabilities | $ 1,467,981 | $ 1,404,904 |
| Redeemable non-controlling interest | — | 20,772 |
| Commitments and contingencies | ||
| Stockholders' equity (deficit): | ||
|
Preferred Stock—par value $0.0001; 5,000,000 shares authorized; no shares issued or outstanding |
— | — |
|
Common Stock—par value $0.0001; 500,000,000 shares authorized; 105,187,363 and 124,788,853 shares issued at December 31, 2012 and December 31, 2013, respectively; 96,745,992 and 124,766,544 outstanding at December 31, 2012 and December 31, 2013, respectively |
11 | 13 |
| Additional paid-in capital | 509,714 | 754,720 |
| Accumulated other comprehensive loss | — | (55) |
| Accumulated deficit | (439,570) | (598,757) |
| Total stockholders' equity attributable to Endurance International Group Holdings, Inc. | 70,155 | 155,921 |
| Non-controlling interest in consolidated subsidiary | — | (659) |
| Total stockholders' equity | 70,155 | 155,262 |
| Total liabilities, redeemable non-controlling interest and stockholders' equity | $ 1,538,136 | $ 1,580,938 |
| Endurance International Group Holdings, Inc. | ||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||
| (unaudited) | ||||
| (in thousands) | ||||
|
Three Months ended December 31, |
Year Ended December 31, |
|||
| 2012 | 2013 | 2012 | 2013 | |
| Revenue | $ 117,035 | $ 136,420 | $ 292,156 | $ 520,296 |
| Cost of revenue | 87,119 | 87,758 | 237,179 | 350,103 |
| Gross profit | 29,916 | 48,662 | 54,977 | 170,193 |
| Operating expense: | ||||
| Sales and marketing | 23,952 | 30,458 | 83,110 | 117,689 |
| Engineering and development | 6,723 | 5,561 | 13,803 | 23,205 |
| General and administrative | 22,844 | 48,242 | 48,411 | 92,347 |
| Total operating expense | 53,519 | 84,261 | 145,324 | 233,241 |
| Loss from operations | (23,603) | (35,599) | (90,347) | (63,048) |
| Other expense: | ||||
| Interest income | 16 | 61 | 34 | 122 |
| Interest expense | (88,560) | (32,338) | (126,165) | (98,449) |
| Total other expense—net | (88,544) | (32,277) | (126,131) | (98,327) |
| Loss before income taxes and equity earnings of unconsolidated entities | (112,147) | (67,876) | (216,478) | (161,375) |
| Income tax expense (benefit) | (39,580) | (2,169) | (77,203) | (3,596) |
| Loss before equity earnings of unconsolidated entities | (72,567) | (65,707) | (139,275) | (157,779) |
| Equity loss of unconsolidated entities, net of tax | 23 | 2,426 | 23 | 2,067 |
| Net loss | $ (72,590) | $ (68,133) | $ (139,298) | $ (159,846) |
| Net loss attributable to non-controlling interest | — | (659) | — | (659) |
| Net loss attributable to Endurance International Group Holdings, Inc. | (72,590) | (67,474) | $ (139,298) | $ (159,187) |
| Comprehensive loss: | ||||
| Foreign currency translation adjustments | — | (31) | — | (55) |
| Total comprehensive loss | $ (72,590) | $ (67,505) | $ (139,298) | $ (159,242) |
| Net loss per share attributable to Endurance International Group Holdings, Inc.– basic and diluted | $ (0.75) | $ (0.57) | $ (1.44) | $ (1.55) |
| Weighted-average number of common shares used in computing net loss per share attributable to Endurance International Group Holdings, Inc.– basic and diluted | 96,576,438 | 117,770,547 | 96,562,674 | 102,698,773 |
| Endurance International Group Holdings, Inc. | ||||
| Consolidated Statements of Cash Flows | ||||
| (unaudited) | ||||
| (in thousands) | ||||
|
Three Months Ended December 31, |
Year Ended December 31, |
|||
| 2012 | 2013 | 2012 | 2013 | |
| Cash flows from operating activities: | ||||
| Net loss | $ (72,590) | $ (68,133) | $ (139,298) | $ (159,846) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
| Depreciation of property and equipment | 2,884 | 5,545 | 6,869 | 18,615 |
| Amortization of other intangible assets | 30,846 | 27,134 | 88,118 | 105,915 |
| Amortization of deferred financing costs | 39,592 | 2,579 | 43,405 | 2,768 |
| Amortization of net present value of deferred consideration | 587 | 197 | 1,093 | 1,590 |
| Stock-based compensation | 823 | 9,658 | 2,308 | 10,763 |
| Deferred tax benefit | (39,981) | (2,638) | (77,610) | (4,777) |
| Loss on sale of property and equipment | 467 | (23) | 469 | 309 |
| Loss of unconsolidated entities | 23 | 2,426 | 23 | 2,067 |
| (Benefit) loss on change in deferred consideration | (466) | (466) | ||
| Financing costs expensed | 28,672 | 10,833 | 29,281 | 10,833 |
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | 1,900 | (701) | (268) | (1,075) |
| Prepaid expenses and other current assets | (4,016) | 3,275 | (22,199) | (7,147) |
| Accounts payable and accrued expenses | 13,007 | (2,099) | 19,058 | 2,020 |
| Deferred revenue | 10,495 | 6,552 | 104,069 | 51,047 |
| Net cash provided by (used in) operating activities | 12,709 | (5,861) | 55,318 | 32,616 |
| Cash flows from investing activities | ||||
| Business acquired in purchase transaction, net of cash acquired | (1,937) | (22,339) | (299,165) | (38,659) |
| Proceeds from sale of assets | — | — | — | 23 |
| Cash paid for minority investment | 111 | — | (250) | — |
| Purchases of property and equipment | (16,270) | (8,139) | (28,163) | (33,523) |
| Purchases of intangible assets | — | (182) | — | (751) |
| Proceeds from sale of property and equipment | 12 | 41 | 127 | 54 |
| Net (deposits) and withdrawals of principal balances in restricted cash accounts | 3,715 | 53 | 3,947 | (231) |
| Net cash used in investing activities | (14,369) | (30,566) | (323,504) | (73,087) |
| Cash flows from financing activities: | ||||
| Proceeds from issuance of term loan | 1,115,000 | 1,055,000 | 1,925,000 | 1,145,000 |
| Proceeds from borrowing of revolver | 15,000 | — | 15,000 | 57,000 |
| Repayment of term loan | (808,325) | (1,206,399) | (1,160,000) | (1,212,625) |
| Repayment of revolver | — | — | — | (72,000) |
| Payment of financing costs | (30,192) | (11,272) | (52,890) | (12,552) |
| Deferred consideration | (2) | (2,529) | (7,237) | (55,635) |
| Proceeds from issuance of common stock | — | 252,612 | 100 | 252,612 |
| Issuance costs of common stock | — | (17,512) | — | (17,512) |
| Payment of dividends on common stock | (289,479) | — | (289,479) | — |
| Issuance costs of series E preferred stock | — | — | (53) | — |
| Redemption of series E preferred stock | — | — | (150,000) | — |
| Dividends paid on series E preferred stock | — | — | (5,963) | — |
| Net cash provided by financing activities | 2,002 | 69,900 | 274,478 | 84,288 |
| Net effect of exchange rate on cash and cash equivalents | — | (41) | — | (247) |
| Net increase in cash and cash equivalents | 342 | 33,432 | 6,292 | 43,570 |
| Cash and cash equivalents: | ||||
| Beginning of period | 22,903 | 33,383 | 16,953 | 23,245 |
| End of period | $ 23,245 | $ 66,815 | $ 23,245 | $ 66,815 |
| Supplemental cash flow information: | ||||
| Interest paid | $ 37,375 | $ 31,788 | $ 70,176 | $ 100,856 |
| Income taxes paid | $ (33) | $ 152 | $ 796 | $ 1,502 |
The following table reflects the reconciliation of adjusted net income, adjusted EBITDA, UFCF and FCF to net loss calculated in accordance with GAAP (unaudited; all data in thousands).
|
Three Months Ended December 31, |
Year Ended December 31, |
|||
| 2012 | 2013 | 2012 | 2013 | |
| Net loss | $ (72,590) | $ (68,133) | $ (139,298) | $ (159,846) |
| Stock-based compensation | 823 | 9,658 | 2,308 | 10,763 |
| (Gain) loss on sale of property and equipment | 467 | (23) | 469 | 309 |
| Loss of unconsolidated entities | 23 | 2,426 | 23 | 2,067 |
| Dividend-related payments | 9,765 | — | 9,765 | — |
| Amortization of intangible assets | 30,846 | 27,134 | 88,118 | 105,915 |
| Amortization of deferred financing costs | 39,592 | 2,579 | 43,405 | 2,768 |
| Changes in deferred revenue (inclusive of impact of purchase accounting) | 10,495 | 6,552 | 104,069 | 51,047 |
| Loan prepayment penalty | 10,883 | 6,300 | 10,883 | 6,300 |
| Transaction expenses and charges | 1,470 | 27,579 | 12,119 | 38,736 |
| Integration and restructuring expenses | — | 5,368 | 294 | 45,594 |
| Tax-affected impact of adjustments | (39,662) | (756) | (103,968) | (5,929) |
| Adjusted net income (1) | $ (7,888) | $ 18,684 | $ 28,187 | $ 97,724 |
| Depreciation | 2,884 | 5,545 | 6,869 | 18,615 |
| Income tax expense (benefit)) | 82 | (1,413) | 26,765 | 2,333 |
| Interest expense, net (net of impact of amortization of deferred financing costs) | 38,069 | 23,398 | 71,843 | 89,259 |
| Adjusted EBITDA (2) | $ 33,147 | $ 46,214 | $ 133,664 | $ 207,931 |
| Change in operating assets and liabilities, net of acquisitions | 10,891 | (93) | (3,409) | (6,770) |
| Capital expenditures | (16,270) | (8,139) | (28,163) | (33,523) |
| Income tax (excluding deferred tax) | (401) | (469) | (407) | (1,181) |
| Unlevered free cash flow | $ 27,367 | $ 37,513 | $ 101,685 | $ 166,457 |
| Net cash interest paid (net of change in accrued loan interest) | (19,654) | (18,652) | (52,280) | (83,025) |
| Free cash flow | $ 7,713 | $ 18,861 | $ 49,405 | $ 83,432 |
| (1) The definition for adjusted net income has been revised to include adjustments for loss of unconsolidated entities and net gain or loss on sale of property and equipment. In addition, the transaction expenses and charges line item includes legal and professional expenses previously separately reported, and the integration and restructuring expenses line item includes severance previously separately reported. |
| (2) The definition for adjusted EBITDA has been revised to reflect the revision to the definition of adjusted net income and to exclude all income taxes, including changes in deferred income taxes. Previously, adjusted EBITDA excluded only changes in deferred income taxes. |
The following table reflects the reconciliation of GAAP operating cash flow to FCF (unaudited; all data in thousands):
|
Three Months Ended December 31, |
Year Ended December 31, |
|||
| 2012 | 2013 | 2012 | 2013 | |
| Cash provided (used) by operating activities (3) | $ 12,709 | $ (5,862) | $ 55,318 | $ 32,616 |
| Less: | ||||
| Capital expenditures | (16,270) | (8,139) | (28,163) | (33,523) |
| Plus: | ||||
| Costs excluded in free cash flow net of costs also excluded in operating cash flow: | ||||
| Dividend related payments | 9,765 | — | 9,765 | — |
| Transaction expenses and charges | 1,509 | 27,494 | 12,191 | 38,745 |
| Integration and restructuring expenses per table above | — | 5,368 | 294 | 45,594 |
| Free cash flow (3) | $ 7,713 | $ 18,861 | $ 49,405 | $ 83,432 |
| (3) Our operating cash flow and our transaction expenses for the year ended December 31, 2013 include approximately $24.9 million of cash payments to our Chief Executive Officer and other employees that were paid upon the closing of our initial public offering and $2.3 million of offering expenses. |
The following table reflects the reconciliation of ARPS and adjusted revenue to revenue calculated in accordance with GAAP (unaudited; all data in thousands, except ARPS data):
|
Three Months Ended December 31, |
Year Ended December 31, |
|||
| 2012 | 2013 | 2012 | 2013 | |
| Revenue | $ 117,035 | $ 136,420 | $ 292,156 | $ 520,296 |
| Purchase accounting adjustment | 6,816 | 529 | 64,123 | 7,311 |
| Pre-acquisition revenue from acquired properties | 1,399 | — | 117,836 | 512 |
| Adjusted revenue | $ 125,250 | $ 136,949 | $ 474,115 | $ 528,119 |
| Total subscribers | 3,223 | 3,502 | 3,223 | 3,502 |
| ARPS | $ 13.14 | $ 13.15 | $ 12.92 | $ 13.09 |
| Adjusted revenue attributable to 2012 acquisitions | $ 50,896 | $ 53,797 | $ 201,205 | $ 209,950 |
| Adjusted revenue excluding revenue attributable to 2012 acquisitions | $ 74,354 | $ 83,152 | $ 272,910 | $ 318,169 |
| Total subscribers excluding subscribers attributable to 2012 acquisitions | 2,224 | 2,372 | 2,224 | 2,372 |
| ARPS excluding 2012 acquisitions | $ 11.19 | $ 11.75 | $ 10.58 | $ 11.54 |