Item 2.02. Results of Operations and Financial Condition
On
The information contained in this Item 2.02, as well as in Exhibit 99.1, is furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure
In connection with the offering of the Notes described in Item 8.01 below, the
Company is disclosing the information set forth below in a preliminary offering
memorandum, dated
The information contained in this Item 7.01 is furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Information included in the Offering Memorandum:
COVID-19 update
The negative impacts associated with the actions we took in response to the
pandemic continued in the third quarter of 2020, due primarily to the
now-concluded suspension of data overage fees, late charges and reconnect fees
and diminished growth in business services revenues coupled with higher labor
costs and other operating expenses. However, these reduced revenues and
additional costs are expected to be more than offset in the third quarter of
2020 by a greater-than-usual gain in residential data customers over the second
and third quarters of 2020 and the associated increase in residential data
revenues as well as lower travel costs. In addition, for the three months ended
We expect the negative impacts associated with the actions we took in response to the pandemic to largely dissipate during the fourth quarter of 2020, due primarily to the resumption of billing late charges, reconnect fees and data overage fees for a full quarter as well as the normalization of labor costs. In addition, the increase in residential data revenues associated with the significant number of residential data customers acquired during the COVID-19 pandemic is anticipated to continue during the fourth quarter of 2020. However, we continue to face various uncertainties related to the impact of the COVID-19 pandemic on the overall economy and our business, including whether we are able to sustain continued customer growth, our level of bad debt expense and if some of the expense reductions realized during the third quarter of 2020 will continue or if those expenses will return to more normal levels given the fluid situation regarding pandemic-related restrictions across the country.
MBI transactions
As of
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Concurrent financing transactions
Upsize and extension of Term Loan B-3
We recently launched an amendment with respect to our credit agreement to upsize
and extend our term "B-3" loan tranche that is scheduled to mature in
Except as described above, we do not expect there to be any material changes to the terms of the Term Loan B-3 as part of the B-3 Upsize and Extension, but the issue price of and fees related to the new loans will be subject to market conditions at or prior to the time we execute the definitive documentation for the B-3 Upsize and Extension.
There can be no assurance that we will consummate the B-3 Upsize and Extension on the terms described herein or at all. Completion of the B-3 Upsize and Extension is not conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the B-3 Upsize and Extension.
Extension of Term Loan B-2
We recently launched an amendment with respect to our credit agreement to extend
our term "B-2" loan tranche that is scheduled to mature in
Except as described above, we do not expect there to be any material changes to the terms of the Term Loan B-2 as part of the B-2 Extension. The fees related to B-2 Extension will be subject to market conditions at or prior to the time we execute the definitive documentation for the B-2 Extension.
There can be no assurance that we will consummate the B-2 Extension on the terms described herein or at all. Completion of the B-2 Extension is not conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the B-2 Extension.
Amendment and extension of Term Loan A-2 and Revolving Credit Facility
We recently launched an amendment with respect to our credit agreement to extend
the scheduled maturity of our term "A-2" loan facility (the "Term Loan A-2") and
revolving credit facility (the "Revolving Credit Facility"), increase the amount
of commitments under our Revolving Credit Facility and make certain other
amendments. As of
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Except as described above, we do not expect there to be any material changes to the terms of the Term Loan A-2 and Revolving Credit Facility as part of the RCF/A-2 Amendment and Extension Transaction. The fees related to the RCF/A-2 Amendment and Extension Transaction will be subject to market conditions at or prior to the time we execute the definitive documentation for the RCF/A-2 Amendment and Extension Transaction.
There can be no assurance that we will consummate the RCF/A-2 Amendment and Extension Transaction on the terms described herein or at all. Completion of the RCF/A-2 Amendment and Extension Transaction is not conditioned upon the completion of the offering of the Notes and the offering of the Notes is not conditioned upon the completion of the RCF/A-2 Amendment and Extension Transaction.
Item 8.01 Other Events
On
The Notes and the related guarantees have not been registered under the
Securities Act or the securities laws of any other jurisdiction and may not be
offered or sold in
This current report does not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" that involve risks and
uncertainties. These statements can be identified by the fact that they do not
relate strictly to historical or current facts, but rather are based on current
expectations, estimates, assumptions and projections about the Company's
industry, business, strategy, acquisitions and strategic investments, dividend
policy, financial results and financial condition as well as anticipated impacts
from the COVID-19 pandemic on the Company and future responses. Forward-looking
statements often include words such as "will," "should," "anticipates,"
"estimates," "expects," "projects," "intends," "plans," "believes" and words and
terms of similar substance in connection with discussions of future operating or
financial performance. As with any projection or forecast, forward-looking
statements are inherently susceptible to uncertainty and changes in
circumstances. The Company's actual results may vary materially from those
expressed or implied in its forward-looking statements. Accordingly, undue
reliance should not be placed on any forward-looking statement made by the
Company or on its behalf. Important factors that could cause the Company's
actual results to differ materially from those in its forward-looking statements
include government regulation, economic, strategic, political and social
conditions and the following factors, which are discussed in the Form 10-K and
the 2020 Form 10-Qs as filed with the
• the duration and severity of the COVID-19 pandemic and its effects on its
business, financial condition, results of operations and cash flows;
• rising levels of competition from historical and new entrants in its markets;
• recent and future changes in technology;
• its ability to continue to grow its business services products;
• increases in programming costs and retransmission fees;
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• its ability to obtain hardware, software and operational support from vendors;
• the effects of any acquisitions and strategic investments by the Company;
• risks relating to the Company's initial minority ownership position in Mega
Broadband Investments Holdings LLC ("MBI"), including its ability to appoint only a minority of members of the board of managers of MBI, the fact that the managers of MBI will not owe the same fiduciary duties to the Company that directors of a corporation would owe to stockholders, and the limited category of transactions for which the Company's consent will be needed under MBI's operating agreement;
• uncertainties related to the exercise of the call option or the put option in
the MBI investment, including the Company's ability to finance the purchase of the remaining membership interests in MBI on terms acceptable to the Company or at all;
• risks that its rebranding may not produce the benefits expected;
• damage to its reputation or brand image;
• risks that the implementation of its new enterprise resource planning system
disrupts business operations;
• adverse economic conditions;
• the integrity and security of its network and information systems;
• the impact of possible security breaches and other disruptions, including
cyber-attacks;
• its failure to obtain necessary intellectual and proprietary rights to operate
its business and the risk of intellectual property claims and litigation against the Company;
• its ability to retain key employees (who the Company refers to as associates);
• legislative or regulatory efforts to impose network neutrality and other new
requirements on its data services;
• additional regulation of its video and voice services;
• its ability to renew cable system franchises;
• increases in pole attachment costs;
• changes in local governmental franchising authority and broadcast carriage
regulations;
• the potential adverse effect of its level of indebtedness on its business,
financial condition or results of operations and cash flows;
• the restrictions the terms of its indebtedness place on its business and
corporate actions;
• the possibility that interest rates will rise, causing its obligations to
service its variable rate indebtedness to increase significantly;
• its ability to incur future indebtedness;
• fluctuations in the Company's stock price;
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• the Company's ability to continue to pay dividends;
• provisions in the Company's charter, by-laws and
discourage takeovers and limit the judicial forum for certain disputes and the liabilities for directors; and
• the other risks and uncertainties detailed from time to time in the Company's
filings with theSEC , including but not limited to the Form 10-K and the 2020 Form 10-Qs.
Any forward-looking statements made by the Company in this communication speak only as of the date on which they are made. The Company is under no obligation, and expressly disclaims any obligation, except as required by law, to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description 99.1 Press Release issued byCable One, Inc. , datedOctober 26, 2020 . 99.2 Press Release issued byCable One, Inc. , datedOctober 26, 2020 . 104 The cover page of this Current Report on Form 8-K, formatted in Inline XBRL.
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