tw telecom reports strong results, 6.4% revenue growth for 2013, ends year with $479 million cash

By Lisa Kerner

Charlotte, N.C., Feb. 12 - tw telecom inc. had a "great" 2013, with strong strategic, operational and financial results, said chairman and chief executive officer Larissa Herda during the company's fourth-quarter and full-year 2013 earnings conference call on Wednesday.

The company achieved "solid" total revenue growth of 6.4% and reported its 37th consecutive quarter of sequential top line revenue growth.

When it came to balance sheet activities, Herda said tw telecom was "very active and effective."

"We took advantage of the attractive debt market and opportunistically refinanced over 70% of our debt from 2012 and achieved more favorable rates and terms," she said. "As part of our refinancing we settled our convertible debt in a very shareholder-friendly manner by utilizing our cash and, therefore, avoided 20 million shares of potential equity dilution."

tw telecom ended 2013 with cash, equivalents and short-term investments of about $479 million, compared to $974 million at the end of 2012, according to the earnings news release.

Total long-term debt and capital lease obligations totaled $1.92 billion at Dec. 31, compared to $1.38 billion for the prior year.

For the full year 2013, tw telecom spent $416 million on share repurchases, equating to about 10% of its shares outstanding at the end of 2012, said Herda.

During the quarter, the company spent about $104 million on share repurchases and has roughly $363 million remaining under its most recently announced $500 million share repurchase plan.

"We invested nearly $1 billion of cash, or about 30% of our total assets, as of the end of 2012 while still maintaining a strong balance sheet," said Herda of the full year.

Commenting on the fourth quarter, executive vice president and chief financial officer Mark Peters said tw telecom "delivered solid overall top line revenue growth, healthy margins and a strong bottom line."

The refinancing pushed out the nearest debt maturity to 2020 and moved others out to 2023, according to Peters.

"Due to our ongoing financial discipline, we expect in 2014 to continue to invest in the business, execute share repurchases and maintain our strong liquidity," Peters said.

Financial highlights

tw telecom reported fourth-quarter revenue of $400 million of revenue, net income of $15.4 million, basic earnings per share of $0.11 and modified EBITDA (M-EBITDA) of $140.7 million.

For the full year, the company reported $1.56 billion in revenue, $36.5 million in net income, $0.25 basic earnings per share and $552.5 million of M-EBITDA.

The company recognized $119.8 million of capital expenditures for its strategic market expansion and a related capital lease obligation in the fourth quarter, which it expects to pay over 20 years, resulting in an incremental $6.5 million of interest expense and $3.5 million of depreciation expense for the year.

For 2014, tw telecom expects total capital investments of between $440 million and $460 million.

tw telecom is a Littleton, Colo.-based provider of managed data, internet and voice networking solutions to businesses and large organizations throughout the United States.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.