Long Term Stocks
11/9/2009 5:01 AM ET
(RTTNews) -
After having survived years of red ink, cable operator Knology Inc. (KNOL: News ) is now forging its way to become a consistent net income producer. The company delivered solid results for the third quarter last week.
Knology offers video, voice, high-speed data and broadband carrier services to both residential and business customers in 12 markets -- 10 markets in the Southeastern U.S. and 2 in the upper Midwestern U.S. In addition to bundled package offerings, the company also offers unbundled services. A bundled service is a combination of two or more services like internet, phone and television.
Knology has its roots in The Interstate and Valley Telephone Company, which was founded in 1896. Knology was initially formed in 1994 by a telecommunications holding company ITC Holding Co. Inc and in 1999, merged with Interstate and Valley Telephone Co. Knology went public in December 2003, about a year after emerging from Chapter 11 bankruptcy protection, pricing its IPO at $9 per share.
Since 2003, the company's net loss attributable to stockholders has shrunk over the years, thanks to increasing revenue. Knology's net loss per share attributable to stockholders, which was $5.17 in 2003, narrowed to $3.19 in 2004, $2.33 in 2005, $1.41 in 2006, $1.25 in 2007 and $0.34 in 2008.
The company made its first-ever quarterly profit, registering earnings of $1.77 million or $0.05 per share in the third-quarter of 2007.
Knology, which reported six straight quarters of loss after its first-ever quarterly profit in the third-quarter of 2007, is just turning the corner to profitability. In the second-quarter ended June 30, 2009, the company posted GAAP net income of $1.33 million or $0.04 per share and non GAAP income of $2.9 million or $0.08 per share, on revenue of $107.9 million. The GAAP results included a non-cash charge related to the accounting treatment for the company's interest rate swaps.
For the third-quarter, whose results were reported last week, Knology posted a loss of $3.3 million or $0.09 per share wider than the year-ago quarterly loss of $2.8 million or $0.08 per share. However, excluding the non-cash charge related to the accounting treatment for the company's interest rate swaps, Knology posted a net income of $1.8 million or $0.05 per share for the third quarter of 2009, reversing the year-ago loss.
Knology derives revenues primarily from monthly charges for video, voice and Internet data services and other services principally broadband carrier services to residential and business customers.
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