Insight Announces Third Quarter 2007 Results

Monday, November 5th, 2007
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  • Revenue of $362.3 million, an increase of 14% over Q3 2006
  • Adjusted Operating Income before Depreciation and Amortization of $143.6 million, an increase of 15% over Q3 2006
  • Capital expenditures of $76.5 million
  • Free Cash Flow of $13.6 million, an increase of $17.9 million over Q3 2006
  • Total Customer Relationships of 1,449,400 at September 30, 2007, an increase of 54,000 compared to 1,395,400 at September 30, 2006
  • Total Revenue Generating Units (“RGUs”) of 2,993,700 at September 30, 2007, an increase of 385,000, or 15%, from September 30, 2006, comprised of:
    • Basic customer net gain of 21,100, an improvement of 4,700 from Q3 2006 net gain of 16,400, and the best Q3 performance in the company’s history. Total basic customers at quarter end were 1,362,100, representing a 3.3% annual growth rate in basic customers from September 30, 2006
    • High-speed Internet (“HSI”) customer net gain of 47,900, an increase over net additions in Q3 2006 of 44,800 and matching the best net gain performance in the company’s history. Total HSI customers at quarter end were 722,800, a penetration of 29% of HSI homes passed.
    • Digital customer net gain of 26,100, an increase over net additions in Q3 2006 of 25,500. Total digital customers at quarter end were 687,600, a penetration of 53% of the company’s digital universe.
    • Telephone customer net gain of 44,000, surpassing Q2 2007 as the company’s best growth quarter ever, and compared to net additions in Q3 2006 of 5,700. Total telephone customers at quarter end were 221,200, a penetration of 11% of the company’s telephone universe.
  • As of September 30, 2007, 98% of the company’s customers were passed by two-way, 750 MHz or higher capacity upgraded network.

NEW YORK — Insight Communications Company today announced financial results for the quarter ended September 30, 2007.

Operating Results for the Three Months Ended September 30, 2007 Compared to the Three Months Ended September 30, 2006

Revenue for the three months ended September 30, 2007, totaled $362.3 million, an increase of 14% over the prior year, due primarily to RGU growth across all of Insight’s services, as well as video rate increases. High-speed Internet service revenue increased 28% over the prior year, which was primarily attributable to an increased customer base, partially offset by promotional discounts. Insight added a net 47,900 high-speed Internet customers during the quarter to end at 722,800 customers.

Basic cable service revenue increased 6% due to an increased customer base and video rate increases, partially offset by promotional discounts. In addition, digital service revenue increased 22% over the prior year due to an increased customer base and a $1.23 increase in digital average revenue per customer (“ARPU”). Insight added a net 26,100 digital customers during the quarter to end at 687,600 customers.

Insight has been increasing its customer growth and retention efforts by increasing spending on sales and marketing efforts, emphasizing bundling and enhancing and differentiating its video services with video-on-demand, high-definition television and digital video recorders. The company is also continuing to focus on improving customer satisfaction through higher service levels and increased customer education of product offerings.

To increase its bundling opportunities and extend its growth potential in future years, the company successfully rolled out its telephone product in eight previously unserved districts during the second half of 2006 and in January 2007. As a result, the company added a net 44,000 telephone customers during the quarter to end at 221,200 customers.

Total Customer Relationships were 1,449,400 as of September 30, 2007, an increase of 54,000 from 1,395,400 as of September 30, 2006. Total Customer Relationships represent the number of customers who receive one or more of Insight’s products (i.e., basic cable, high-speed Internet or telephone) without regard to which product they purchase.

In the quarter ended September 30, 2007, Insight added 139,100 RGUs, which represent the sum of basic, digital, high-speed Internet and telephone customers, and as of September 30, 2007, had 2,993,700 RGUs, an increase of 15% from September 30, 2006.

RGUs by category were as follows (in thousands):

  September 30, 2007 September 30, 2006
Basic 1,362.1 1,318.8
High-speed Internet 722.8 579.3
Digital 687.6 597.7
Telephone 221.2 112.9
  Total RGUs 2,993.7 2,608.7