Telecom Ramblings

PR Archives:  LatestBy Company By Date


Press Release -- November 7th, 2014
Source: Cogent Communications
Tags:

Cogent Communications Reports Third Quarter 2014 Results and Increases Regular Quarterly Dividend on Common Stock

WASHINGTON, Nov. 7, 2014 /PRNewswire/ --

Financial and Business Highlights

  • Service revenue for Q3 2014 of $95.7 million – an increase of 9.0% from $87.8 million for Q3 2013 and an increase of 1.1% from $94.6 million for Q2 2014
    • On a constant currency basis, service revenue increased by 1.8% from Q2 2014 to Q3 2014 and increased by 9.3% from Q3 2013 to Q3 2014
  • Cogent approves a 3.3% increase to its regular quarterly dividend to $0.31 per common share to be paid on December 12, 2014 to shareholders of record on November 26, 2014
  • Cogent increases the amount under its return of capital program from a minimum of $10.5 million per quarter to a minimum of $12.0 million per quarter to be used for share repurchases or special dividends
  • Under Cogent's return of capital program, Cogent purchased 476,000 shares of its common stock for $15.9 million during Q3 2014 at an average price of $33.51 per share
  • EBITDA, as adjusted, for Q3 2014 of $33.7 million – an increase of 9.9% from $30.7 million for Q3 2013 and an increase of 0.8% from $33.5 million for Q2 2014
  • EBITDA, as adjusted, margin was 35.3% for Q3 2014, 35.0% for Q3 2013 and 35.4% for Q2 2014
  • Legal fees included in SG&A expenses and associated with defending net neutrality increased by $1.7 million from Q3 2013 to Q3 2014 and increased by $0.6 million from Q2 2014 to Q3 2014
  • Cash and cash equivalents were $311.8 million at September 30, 2014
  • There were 2,090 buildings on the Cogent network at the end of Q3 2014
  • There were 44,630 customer connections on the Cogent network at the end of Q3 2014 – an increase of 15.5% from 38,639 customer connections at the end of Q3 2013 and an increase of 3.1% from 43,287 customer connections at the end of Q3 2014

Cogent Communications Holdings, Inc. (CCOI) today announced  service revenue of $95.7 million for the three months ended September 30, 2014, an increase of 9.0% from $87.8 million for the three months ended September 30, 2013 and an increase of 1.1% from $94.6 million for the three months ended June 30, 2014.  The impact of foreign exchange negatively impacted service revenue growth from Q3 2013 to Q3 2014 by $0.2 million and negatively impacted service revenue growth from Q2 2014 to Q3 2014 by $0.7 million.  On a constant currency basis, service revenue grew by 9.3% from Q3 2013 to Q3 2014 and grew by 1.8% from Q2 2014 to Q3 2014.

View photo

.

Cogent Communications Logo.

On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent facilities. On-net revenue was $71.1 million for the three months ended September 30, 2014; an increase of 10.1% over $64.5 million for the three months ended September 30, 2013 and an increase of 0.9% over $70.4 million for the three months ended June 30, 2014.

Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to Cogent's network. Off-net revenue was $24.3 million for the three months ended September 30, 2014; an increase of 6.9% over $22.8 million for the three months ended September 30, 2013 and an increase of 2.0% over $23.9 million for the three months ended June 30, 2014.

Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell.  Non-core revenue was $0.3 million for the three months ended September 30, 2014, $0.4 million for the three months ended September 30, 2013 and $0.4 million for the three months ended June 30, 2014.

Non-GAAP gross profit increased by 9.8% from $50.4 million for the three months ended September 30, 2013 to $55.4 million for the three months ended September 30, 2014 and increased by 0.5% from $55.1 million for the three months ended June 30, 2014.  Non-GAAP gross profit margin percentage was 57.9% for the three months ended September 30, 2014, 57.5% for the three months ended September 30, 2013 and 58.3% for the three months ended June 30, 2014.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, increased by 9.9% from $30.7 million for the three months ended September 30, 2013 to $33.7 million for the three months ended September 30, 2014 and increased by 0.8% from $33.5 million for the three months ended June 30, 2014.   EBITDA, as adjusted, margin was 35.3% for the three months ended September 30, 2014, 35.0% for the three months ended September 30, 2013, and 35.4% for the three months ended June 30, 2014.

Basic and diluted net income (loss) per share was $(0.00) for the three months ended September 30, 2014, $0.05 for the three months ended September 30, 2013 and $0.03 for the three months ended June 30, 2014.

Total customer connections increased by 15.5% from 38,639 as of September 30, 2013 to 44,630 as of September 30, 2014 and increased by 3.1% from 43,287 as of June 30, 2014.  On-net customer connections increased by 15.8% from 33,310 as of September 30, 2013 to 38,559 as of September 30, 2014 and increased by 3.1% from 37,411 as of June 30, 2014.  Off-net customer connections increased by 16.5% from 4,886 as of September 30, 2013 to 5,694 as of September 30, 2014 and increased by 3.8% from 5,486 as of June 30, 2014.  Non-core customer connections were 377 as of September 30, 2014, 443 as of September 30, 2013 and 390 as of June 30, 2014.

The number of on-net buildings increased by 135 on-net buildings from 1,955 on-net buildings as of September 30, 2013 to 2,090 on-net buildings as of September 30, 2014 and increased by 33 on-net buildings  from 2,057 on-net buildings as of June 30, 2014.

Quarterly Dividend Increase Approved

On November 3, 2014, Cogent's board approved a dividend of $0.31 per common share payable on December 12, 2014 to shareholders of record on November 26, 2014. The fourth quarter 2014 regular dividend of $0.31 per share represents an increase of 3.3% from the third quarter 2014 regular dividend of $0.30 per share.

During the quarter ended September 30, 2014 Cogent purchased 476,000 shares of its common stock for $15.9 million at an average price per share of $33.51 under Cogent's return of capital program.  Under Cogent's return of capital program, Cogent plans on returning additional capital to its shareholders each quarter through either stock buybacks or a special dividend or a combination of stock buybacks and a special dividend.  The aggregate payment under this program was a minimum of $10.5 million each quarter and this amount is in addition to Cogent's regular quarterly dividend payments.  Since the amount paid for stock buybacks in the third quarter was more than $10.5 million Cogent will not make a special dividend payment in the fourth quarter under its return of capital program.  Cogent has increased the amount under its return of capital program to a minimum of $12.0 million per quarter beginning in the fourth quarter of 2014 to be used for share repurchases or special dividends.  The return of capital program is planned to continue until Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio reaches 2.50. Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio was 2.22 at September 30, 2014 and was 1.99 at June 30, 2014.

The payment of any future dividends and any other returns of capital will be at the discretion of Cogent's board of directors and may be reduced, eliminated or increased and will be dependent upon Cogent's financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by Cogent's board of directors.

Conference Call and Website Information
Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on November 7, 2014 to discuss Cogent's operating results for the third quarter of 2014 and to discuss Cogent's expectations for full year 2014.  Investors and other interested parties may access a live audio webcast of the earnings call in the "Events" section of Cogent's website atwww.cogentco.com/events.  A replay of the webcast, together with the press release, will be available on the website following the earnings call.

About Cogent Communications
Cogent Communications (CCOI) is a multinational, Tier 1 facilities-based ISP.  Cogent specializes in providing businesses with high speed Internet access, Ethernet transport, and colocation services.  Cogent's facilities-based, all-optical IP network backbone provides services in 190 markets globally.

Cogent Communications is headquartered at 1015 31st Street, NW, Washington, D.C. 20007.  For more information, visit www.cogentco.com.  Cogent Communications can be reached in the United States at (202) 295-4200 or via email at info@cogentco.com.

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

Summary of Financial and Operational Results

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Metric ($ in 000's, except share and per share data) – unaudited

On-Net revenue

$61,678

$62,693

$64,548

$66,032

$69,087

$70,409

$71,059

  % Change from previous Qtr.

2.1%

1.6%

3.0%

2.3%

4.6%

1.9%

0.9%

Off-Net revenue

$22,309

$22,604

$22,767

$23,438

$23,498

$23,859

$24,330

% Change from previous Qtr.

3.1%

1.3%

0.7%

2.9%

0.3%

1.5%

2.0%

Non-Core revenue (1)

$566

$506

$446

$389

$352

$355

$302

  % Change from previous Qtr.

-3.4%

-10.6%

-11.9%

-12.8%

-9.5%

0.9%

-14.9%

Service revenue – total

$84,553

$85,803

$87,761

$89,859

$92,937

$94,623

$95,691

  % Change from previous Qtr.

2.3%

1.5%

2.3%

2.4%

3.4%

1.8%

1.1%

Network operations expenses (2)

$37,154

$36,950

$37,327

$38,288

$38,723

$39,491

$40,293

% Change from previous Qtr.

-0.9%

-0.5%

1.0%

2.6%

1.1%

2.0%

2.0%

Non-GAAP gross margin (2)

$47,399

$48,853

$50,434

$51,571

$54,214

$55,132

$55,398

% Change from previous Qtr.

5.0%

3.1%

3.2%

2.3%

5.1%

1.7%

0.5%

Non-GAAP gross margin percentage (2)

56.1%

56.9%

57.5%

57.4%

58.3%

58.3%

57.9%

Selling, general and administrative expenses (3)

$19,106

$19,215

$19,772

$20,937

$24,392

$24,380

$24,775

  % Change from previous Qtr.

10.4%

0.6%

2.9%

5.9%

16.5%

0.0%

1.6%

Depreciation and amortization expense

$15,874

$15,900

$16,024

$16,562

$17,204

$17,301

$17,431

% Change from previous Qtr.

-1.6%

0.2%

0.8%

3.4%

3.9%

0.6%

0.8%

Equity-based compensation expense

$2,514

$2,137

$2,061

$2,007

$2,006

$1,873

$2,692

% Change from previous Qtr.

-0.7%

-15.0%

-3.6%

-2.6%

0.0%

-6.6%

43.7%

Operating  income

$9,905

$11,601

$12,577

$12,065

$12,907

$14,309

$13,614

% Change from previous Qtr.

8.0%

17.1%

8.4%

-4.1%

7.0%

10.9%

-4.9%

Net income (loss)

$361

$1,607

$2,122

$52,599

$125

$1,208

$(184)

Basic net income (loss) per common share

$0.01

$0.03

$0.05

$1.14

$0.00

$0.03

$(0.00)

Diluted net income (loss) per common share

$0.01

$0.03

$0.05

$1.10

$0.00

$0.03

$(0.00)

Weighted average common shares – basic

45,537,607

46,040,692

46,171,194

46,302,926

46,409,735

45,897,449

45,629,079

% Change from previous Qtr.

0.1%

1.1%

0.3%

0.3%

0.2%

-1.1%

-0.6%

Weighted average common shares – diluted

46,435,677

46,769,184

46,823,167

48,800,560

46,907,360

46,294,966

45,629,079

% Change from previous Qtr.

2.1%

0.7%

0.1%

4.2%

-3.9%

-1.3%

-1.4%

EBITDA, as adjusted (4)

$28,295

$29,638

$30,703

$31,548

$32,117

$33,483

$33,737

  % Change from previous Qtr.

-0.9%

4.7%

3.6%

2.8%

1.8%

4.3%

0.8%

EBITDA, as adjusted margin (4)

33.5%

34.5%

35.0%

35.1%

34.6%

35.4%

35.3%

Net cash provided by operating activities

$14,962

$22,703

$14,898

$29,288

$10,636

$28,395

$16,074

% Change from previous Qtr.

-53.7%

51.7%

-34.4%

96.6%

-63.7%

167.0%

-43.4%

Capital expenditures

$16,316

$12,455

$10,165

$10,095

$15,623

$15,985

$15,403

  % Change from previous Qtr.

58.6%

-23.7%

-18.4%

-0.7%

54.8%

2.3%

-3.6%

Customer Connections – end of period

On-Net

30,914

31,876

33,310

34,671

36,306

37,411

38,559

  % Change from previous Qtr.

3.5%

3.1%

4.5%

4.1%

4.7%

3.0%

3.1%

Off-Net

4,591

4,728

4,886

5,088

5,244

5,486

5,694

% Change from previous Qtr.

2.8%

3.0%

3.3%

4.1%

3.1%

4.6%

3.8%

Non-Core (1)

463

453

443

415

397

390

377

  % Change from previous Qtr.

-1.7%

-2.2%

-2.2%

-6.3%

-4.3%

-1.8%

-3.3%

Total

35,968

37,057

38,639

40,174

41,947

43,287

44,630

  % Change from previous Qtr.

3.3%

3.0%

4.3%

4.0%

4.4%

3.2%

3.1%

Other – end of period

Buildings On-Net

1,890

1,921

1,955

1,990

2,024

2,057

2,090

Employees

619

633

673

706

724

760

768

(1)   Consists of legacy services of companies whose assets or businesses were acquired by Cogent, primarily including voice services (only provided in Toronto, Canada).

(2)   Network operations expense excludes equity-based compensation expense of $155, $126, $114, $112, $113, $114 and $114 in the three month periods ended March 31, 2013 through September 30, 2014, respectively.  Non-GAAP gross margin represents service revenue less network operations expense, excluding equity-based compensation and amounts shown separately (depreciation expense).

(3)   Excludes equity-based compensation expense of $2,359, $2,011, $1,947, $1,895, $1,893, $1,759 and $2,578 in the three month periods ended March 31, 2013 through September 30, 2014, respectively.

(4)   See schedule of non-GAAP metrics below for definition and reconciliation to GAAP measures. EBITDA, as adjusted, includes net gains (losses) from asset related transactions of $2, $41, $914, $2,295, $2,731 and $3,114 in the three months ended March 31, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, respectively.

Schedule of Non-GAAP Measures

EBITDA and EBITDA, as adjusted

EBITDA represents net cash flows from operating activities plus changes in operating assets and liabilities, cash interest expense and income tax expense.  Management believes the most directly comparable measure to EBITDA calculated in accordance with generally accepted accounting principles in the United States, or GAAP, is cash flows provided by operating activities.

EBITDA, as adjusted, represents EBITDA plus net gains (losses) on asset related transactions. The Company believes EBITDA, as adjusted, is a useful measure of its ability to service debt, fund capital expenditures and expand its business.  EBITDA, as adjusted, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information. The Company also believes that EBITDA is a frequently used measure by securities analysts, investors, and other interested parties in their evaluation of issuers.

EBITDA and EBITDA, as adjusted, are not recognized terms under GAAP and accordingly, should not be viewed in isolation or as a substitute for the analysis of results as reported under GAAP, but rather as a supplemental measure to GAAP. For example, EBITDA is not intended to reflect the Company's free cash flow, as it does not consider certain current or future cash requirements, such as capital expenditures, contractual commitments, and changes in working capital needs, interest expenses and debt service requirements. The Company's calculations of EBITDA and EBITDA, as adjusted, may also differ from the calculation of EBITDA and EBITDA, as adjusted, by its competitors and other companies and as such, its utility as a comparative measure is limited.

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES
EBITDA, as adjusted, is reconciled to cash flows provided by operating activities in the table below.

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

($ in 000's) – unaudited

Net cash flows provided by operating activities

$14,962

$22,703

$14,898

$29,288

$10,636

$28,395

$16,074

Changes in operating assets and liabilities

5,365

(1,446)

6,771

(8,158)

9,048

(10,061)

1,563

Cash interest expense and income tax expense

7,966

8,381

8,993

9,504

10,138

12,418

12,986

Gains on asset related transactions

2

-

41

914

2,295

2,731

3,114

EBITDA, as adjusted

$28,295

$29,638

$30,703

$31,548

$32,117

$33,483

$33,737

Impact of foreign currencies ("constant currency" impact) on change in sequential quarterly service revenue

($ in 000's) – unaudited

Q3 2014

Service revenue, as reported – Q3 2014

$95,691

Impact of foreign currencies on service revenue

664

Service revenue -  Q3 2014, as adjusted (1)

$96,355

Service revenue, as reported – Q2 2014

$94,623

Constant currency increase from Q2 2014 to Q3 2014 - (Service revenue, as adjusted for Q3 2014 less service revenue, as reported for Q2 2014)

$1,732

Percent increase (Constant currency increase from Q2 2014 to Q3 2014 divided by service revenue, as reported for Q2 2014)

1.8%

(1)   Service revenue, as adjusted, is determined by translating the service revenue for the three months ended September 30, 2014 at the average foreign currency exchange rates for the three months ended June 30, 2014. The Company believes that disclosing quarterly revenue growth without the impact of foreign currencies on service revenue is a useful measure of revenue growth. Service revenue, as adjusted, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Impact of foreign currencies ("constant currency" impact) on change in prior year quarterly service revenue

($ in 000's) – unaudited

Q3 2014

Service revenue, as reported – Q3 2014

$95,691

Impact of foreign currencies on service revenue

203

Service revenue -  Q3 2014, as adjusted (2)

$95,894

Service revenue, as reported – Q3 2013

$87,761

Constant currency increase from Q3 2013 to Q3 2014 - (Service revenue, as adjusted for Q3 2014 less service revenue, as reported for Q3 2013)

$8,133

Percent increase (Constant currency increase from Q3 2013 to Q3 2014 divided by service revenue, as reported for Q3 2013)

9.3%

(2)   Service revenue, as adjusted, is determined by translating the service revenue for the three months ended September 30, 2014 at the average foreign currency exchange rates for the three months ended September 30, 2013. The Company believes that disclosing quarterly revenue growth without the impact of foreign currencies on service revenue is a useful measure of revenue growth. Service revenue, as adjusted, is an integral part of the internal reporting and planning system used by management as a supplement to GAAP financial information.

Net debt to trailing 12 months EBITDA, as adjusted, ratio

Under Cogent's return of capital program Cogent plans on returning an additional at least $10.5 million to its shareholders each quarter through either stock buybacks or a special dividend or a combination of stock buybacks and a special dividend.  The aggregate payment under this program was at least $10.5 million each quarter and this amount is in addition to Cogent's regular quarterly dividend payments.  Cogent has increased the amount under its return of capital program to at least $12.0 million beginning in the fourth quarter of 2014.  The program is planned to continue until Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio reaches 2.50. Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio was 1.99 at June 30, 2014 and 2.22 at September 30, 2014 as shown below.

($ in 000's) – unaudited

As of June 30, 2014

As of September 30, 2014

Cash and cash equivalents

$349,835

$311,779

Debt

Capital leases – current portion

8,341

8,980

Capital leases – long term

155,899

153,495

Senior unsecured notes

200,000

200,000

Senior secured notes – par value

240,000

240,000

Total debt

604,240

602,475

Total net debt

254,405

290,696

Trailing 12 months EBITDA, as adjusted

127,851

130,885

Total net debt to trailing 12 months EBITDA, as adjusted

1.99

2.22

Cogent's SEC filings are available online via the Investor Relations section of www.cogentco.com or on the Securities and Exchange Commission's website at www.sec.gov.

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2014 AND DECEMBER 31, 2013

(IN THOUSANDS, EXCEPT SHARE DATA)

September 30,
2014

December 31,
2013

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

311,779

$

304,866

Accounts receivable, net of allowance for doubtful accounts of $2,012 and $1,871, respectively

31,770

30,628

Prepaid expenses and other current assets

20,705

18,777

Total current assets

364,254

354,271

Property and equipment, net

357,699

341,193

Deferred tax assets - noncurrent

49,175

50,861

Deposits and other assets - $392 and $448 restricted, respectively

13,333

8,776

Total assets

$

784,461

$

755,101

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

16,303

$

14,098

Accrued liabilities

31,257

31,465

Convertible senior notes - current portion, net of discount of $3,099

88,879

Current maturities, capital lease obligations

8,980

9,252

Total current liabilities

56,540

143,694

Senior secured notes including premium of $4,535 and $5,423, respectively

244,535

245,423

Senior unsecured notes

200,000

Capital lease obligations, net of current maturities

153,495

152,527

Other long term liabilities

21,227

19,965

Total liabilities

675,797

561,609

Commitments and contingencies:

Stockholders' equity:

Common stock, $0.001 par value; 75,000,000 shares authorized; 46,449,080 and 47,334,218 shares issued and outstanding, respectively

46

47

Additional paid-in capital

467,846

508,256

Accumulated other comprehensive income — foreign currency translation

(3,404)

2,136

Accumulated deficit

(355,824)

(316,947)

Total stockholders' equity

108,664

193,492

Total liabilities and stockholders' equity

$

784,461

$

755,101

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND SEPTEMBER 30, 2013

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Three Months
Ended
September 30, 2014

Three Months
Ended
September 30, 2013

(Unaudited)

(Unaudited)

Service revenue

$

95,691

$

87,761

Operating expenses:

Network operations (including $114 and $114 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below)

40,407

37,441

Selling, general, and administrative (including $2,578 and $1,947 of equity-based compensation expense, respectively)

27,353

21,719

Gain on equipment transaction

(3,114)

Depreciation and amortization

17,431

16,024

Total operating expenses

82,077

75,184

Operating income

13,614

12,577

Interest income and other, net

140

292

Interest expense

(12,662)

(10,568)

Income before income taxes

1,092

2,301

Income tax benefit provision

(1,276)

(179)

Net income

$

(184)

$

2,122

Comprehensive (loss) income:

Net (loss) income

$

(184)

$

2,122

Foreign currency translation adjustment

(5,034)

2,341

Comprehensive (loss) income

$

(5,218)

$

4,463

Net (loss) income per common share:

Basic and diluted net (loss) income per common share

$

(0.00)

$

0.05

Dividends declared per common share

$

0.30

$

0.14

Weighted-average common shares - basic

45,629,079

46,171,194

Weighted-average common shares - diluted

45,629,079

46,823,167

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND SEPTEMBER 30, 2013

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Nine Months
Ended
September 30, 2014

Nine Months
Ended
September 30, 2013

(Unaudited)

(Unaudited)

Service revenue

$

283,252

$

258,118

Operating expenses:

Network operations (including $341 and $395 of equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below)

118,848

111,825

Selling, general, and administrative (including $6,229 and $6,317 of equity-based compensation expense, respectively)

79,775

64,410

Gains on equipment transactions

(8,140)

Depreciation and amortization

51,937

47,798

Total operating expenses

242,420

224,033

Operating income

40,832

34,085

Interest income and other, net

544

1,537

Interest expense

(37,756)

(30,653)

Income before income taxes

3,620

4,969

Income tax provision

(2,471)

(879)

Net income

$

1,149

$

4,090

Comprehensive (loss) income:

Net income

$

1,149

$

4,090

Foreign currency translation adjustment

(5,540)

874

Comprehensive (loss) income

$

(4,391)

$

4,964

Net income per common share:

Basic and diluted net income per common share

$

0.02

$

0.09

Dividends declared per common share

$

0.86

$

0.39

Weighted-average common shares - basic

46,111,192

46,145,642

Weighted-average common shares - diluted

46,526,523

46,905,154

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND SEPTEMBER 30, 2013

(IN THOUSANDS)

Three months
Ended
September 30, 2014

Three months
Ended
September 30, 2013

(Unaudited)

(Unaudited)

Cash flows from operating activities:

Net income (loss)

$

(184)

$

2,122

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

17,432

16,024

Amortization of debt discount and premium

(286)

1,503

Equity-based compensation expense (net of amounts capitalized)

2,692

2,061

(Gains) losses – equipment transactions  other, net

(2,821)

(147)

Deferred income taxes

1,139

214

Changes in operating assets and liabilities:

Accounts receivable

889

(1,100)

Prepaid expenses and other current assets

788

1,926

Accounts payable, accrued liabilities and other long-term liabilities

(3,206)

(8,125)

Deposits and other assets

(369)

420

Net cash provided by operating activities

16,074

14,898

Cash flows from investing activities:

Purchases of property and equipment

(15,403)

(10,165)

Proceeds from dispositions of assets

-

40

Net cash used in investing activities

(15,403)

(10,125)

Cash flows from financing activities:

Dividends paid

(13,792)

(6,512)

Purchases of common stock

(15,943)

Net proceeds from issuance of senior secured notes

69,882

Proceeds from exercises of stock options

137

237

Principal payments of capital lease obligations

(7,293)

(1,885)

Net cash (used in) provided by financing activities

(36,891)

61,772

Effect of exchange rates changes on cash

(1,836)

945

Net (decrease) increase in cash and cash equivalents

(38,056)

67,440

Cash and cash equivalents, beginning of period

349,835

237,335

Cash and cash equivalents, end of period

$

311,779

$

304,775

COGENT COMMUNICATIONS HOLDINGS, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND SEPTEMBER 30, 2013

(IN THOUSANDS)

Nine months
Ended
September 30, 2014

Nine months
Ended
September 30, 2013

(Unaudited)

(Unaudited)

Cash flows from operating activities:

Net income

$

1,149

$

4,090

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

51,937

47,798

Amortization of debt discount and premium

2,269

4,696

Equity-based compensation expense (net of amounts capitalized)

6,570

6,712

(Gains) losses – equipment transactions and other, net

(7,780)

(24)

Deferred income taxes

1,911

418

Changes in operating assets and liabilities:

Accounts receivable

(2,081)

(4,509)

Prepaid expenses and other current assets

(2,890)

(2,767)

Accounts payable, accrued liabilities and other long-term liabilities

4,616

(4,478)

Deposits and other assets

(596)

627

Net cash provided by operating activities

55,105

52,563

Cash flows from investing activities:

Purchases of property and equipment

(47,010)

(38,936)

Proceeds from dispositions of assets

91

42

Net cash used in investing activities

(46,919)

(38,894)

Cash flows from financing activities:

Dividends paid

(40,026)

(18,146)

Purchases of common stock

(48,027)

Repayment of convertible senior notes

(91,978)

Net proceeds from issuance of senior secured notes

69,882

Net proceeds from issuance of senior unsecured notes

195,824

Proceeds from exercises of stock options

438

974

Principal payments of capital lease obligations

(15,439)

(8,930)

Net cash provided by financing activities

792

43,780

Effect of exchange rates changes on cash

(2,065)

41

Net increase in cash and cash equivalents

6,913

57,490

Cash and cash equivalents, beginning of period

304,866

247,285

Cash and cash equivalents, end of period

$

311,779

$

304,775

Except for historical information and discussion contained herein, statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions.  The statements in this release are based upon the current beliefs and expectations of Cogent's management and are subject to significant risks and uncertainties.  Actual results may differ from those set forth in the forward-looking statements.  Numerous factors could cause or contribute to such differences, including future economic instability in the global economy or a contraction of the capital markets which could affect spending on Internet services and our ability to engage in financing activities; the impact of changing foreign exchange rates (in particular the Euro to USD and Canadian dollar to USD exchange rates) on the translation of our non-USD denominated revenues, expenses, assets and liabilities; legal and operational difficulties in new markets; the imposition of a requirement that we contribute to the U.S. Universal Service Fund and similar funds in other countries; changes in government policy and/or regulation, including net neutrality rules  by the United States Federal Communications Commission and in the area of data protection; increasing competition leading to lower prices for our services; our ability to attract new customers and to increase and maintain the volume of traffic on our network; the ability to maintain our Internet peering arrangements on favorable terms; our reliance on an equipment vendor, Cisco Systems Inc., and the potential for hardware or software problems associated with such equipment; the dependence of our network on the quality and dependability of third-party fiber providers; our ability to retain certain customers that comprise a significant portion of our revenue base; the management of network failures and/or disruptions; and outcomes in litigation as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the fiscal year ended December 31, 2013 and our quarterly report on Form 10-Q for the quarter ended September 30, 2014 to be filed with the Securities and Exchange Commission. Cogent undertakes no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.

Logo - http://photos.prnewswire.com/prnh/20020204/DCM032LOGO

PR Archives: Latest, By Company, By Date