WOW WideOpenWest Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): August 8, 2023

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WideOpenWest, Inc.

(Exact name of registrant as specified in its Charter)

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(720) 479-3500

Registrant’s telephone number, including area code

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Not applicable

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

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Item 2.02. Results of Operations and Financial Condition.

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On August 8, 2023, WideOpenWest, Inc. (the “Company”) issued a press release announcing its results for the period ended June 30, 2023. A copy of the press release is attached as Exhibit 99.1 to this report.

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The information under this Item 2.02 and Exhibit 99.1 is furnished by the Company in accordance with the rules of the Securities and Exchange Commission. This information shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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Item 9.01. Financial Statements and Exhibits.

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* Filed herewith.

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 99.1

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WOW! REPORTS SECOND QUARTER 2023 RESULTS

Second Quarter 2023 High-Speed Data Revenue of $106.7 million, up 4% from Second Quarter 2022

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ENGLEWOOD, Colo. (August 8, 2023) – WideOpenWest, Inc. (“WOW!” or the “Company”) (NYSE: WOW), one of the nation's leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers, today announced financial and operating results for the second quarter ended June 30, 2023.

Second Quarter 2023 Highlights ⁽¹⁾

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"We have added more homes this year than we added over the past three years combined, and the pace of construction and penetration is accelerating in new markets and Edge-outs. Additionally, HSD net adds are improving in our legacy footprint," said Teresa Elder, WOW!’s CEO. "We are excited about our partnership with YouTube TV which represents the next stage of our transition to a broadband-first business."

"We continue to experience revenue growth in our HSD business which increased 4% from last year, driving our incremental contribution margin higher," said John Rego, WOW!’s CFO. "As we add more homes in new markets, grow HSD ARPU and continue aggressively managing our cost base, we expect to see accelerating EBITDA growth and we remain confident in our ability to execute."

Revenue

Total Revenue was $172.6 million for the quarter ended June 30, 2023, down $3.5 million, or 2%, as compared to the corresponding period in 2022.

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Total Subscription Revenue for the quarter ended June 30, 2023 was $160.4 million, down $2.8 million, or 2%, as compared to the corresponding period in 2022. The decrease is primarily driven by a shift in service offering mix as we continue to experience a reduction in Video and Telephony RGUs, coupled with a decrease in volume.  The decrease is partially offset by an increase in average revenue per unit (“ARPU”) as HSD customers upgrade to higher speed offerings; coupled with rate increases.

Other Business Services Revenue totaled $5.1 million for the quarter ended June 30, 2023, down $0.3 million as compared to the corresponding period in 2022. The decrease is primarily due to a decrease in data center revenue.

Other Revenue totaled $7.1 million for the quarter ended June 30, 2023, down $0.4 million as compared to the corresponding period in 2022 primarily due to decreases in advertising and line assurance revenue, partially offset by an increase in paper statement revenue.

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Costs and Expenses

Operating Expenses (excluding Depreciation and Amortization) totaled $75.6 million for the quarter ended June 30, 2023, down $7.4 million, or 9%, compared to the corresponding period in 2022, primarily driven by decreases in direct operating expense, specifically programming expense, which aligns with the reduction in Video RGUs between periods, and lower operating expenses related to the Transition Services Agreement that are offset in Other Income. Selling, General, and Administrative expenses totaled $43.6 million for the quarter ended June 30, 2023, up $4.3 million (inclusive of upfront operating expenses of $1.1 million relating to our network expansion), or 11%, compared to the corresponding period in 2022, primarily attributable to an increase in restructuring costs related to employee severance charges.  

Net Loss

Net Loss for the quarter ended June 30, 2023 was $101.7 million as compared to net income of $4.0 million for the quarter ended June 30, 2022. Net Profit Margin was (58.9)% for the quarter ended June 30, 2023 as compared to 2.3% for the quarter ended June 30, 2022. Net Loss for the quarter ended June 30, 2023 was primarily driven by the $128.1 million non-cash impairment charge on intangible assets.

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Adjusted EBITDA

Adjusted EBITDA for the quarter ended June 30, 2023, was $68.1 million, a decrease of $2.5 million, compared to the corresponding period in 2022. Adjusted EBITDA margin was 39.5% for the quarter ended June 30, 2023, as compared to 40.1% for the quarter ended June 30, 2022.

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Subscribers

WOW! reported Total Subscribers of 522,400 as of June 30, 2023, a decrease of 14,200, or 3%, compared to June 30, 2022, down 4,900 compared to March 31, 2023. HSD RGUs totaled 507,800 as of June 30, 2023, a decrease of 9,400 or 2%, compared to June 30, 2022, and down 900 compared to March 31, 2023.

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Market Expansion  

Market Expansion projects reached a total of 92,800 homes passed and 23,200 Subscribers since inception.

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The 2021 Edge-Out projects include 900 Subscribers, which represents 45.0% penetration on such nodes. The 2022 Edge-Out projects include 900 Subscribers, which represents 31.0% penetration on such nodes. The 2023 vintage includes both Edge-Out projects and Greenfield expansion. The Edge-out projects include 1,800 Subscribers, which represents 23.4% penetration on such nodes and the Greenfield projects include 800 Subscribers, which represents 20.0% penetration on such nodes.

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Capital Expenditures

Capital Expenditures totaled $63.6 million for the quarter ended June 30, 2023, representing a $28.9 million increase compared to the quarter ended June 30, 2022. The increase is primarily related to increases in costs related to our market expansion in locations adjacent and nonadjacent to our existing network.

Capital Expenditures equates to 37% of Total Revenue for the quarter ended June 30, 2023.

Liquidity and Leverage

As of June 30, 2023, the total outstanding amount of long-term debt and finance lease obligations was $868.1 million, and cash and cash equivalents were $23.0 million. Total Net Leverage as of June 30, 2023, was 3.1x on a LTM Adjusted EBITDA basis and undrawn revolver capacity totaled $106.4 million.

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Share Repurchase Program

As of June 30, 2023, we completed our share repurchase program with a total of 4.9 million shares for approximately $50.4 million (including commissions).

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Third Quarter and Full Year 2023 Guidance

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Webcast

WOW! will host a webcast and conference call on Tuesday, August 8, 2023, at 8:00 a.m. ET to discuss the financial and operating results contained in this press release. The conference call and webcast will be broadcast live on the Company’s investor relations website at ir.wowway.com. Those parties interested in participating can use the information as follows:

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A replay of the call will be available on August 8, 2023, at 11:00 a.m. ET, on the investor relations website or by telephone. To access the telephone replay, which will be available until August 22, 2023, at 11:59 p.m. ET, please dial (800) 770-2030 or (647) 362-9199 and use conference ID 4844814.

WIDEOPENWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED

(unaudited)

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WIDEOPENWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

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About WOW!

WOW! is one of the nation’s leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers. WOW! provides services in 15 markets, primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Florida and Georgia. With an expansive portfolio of advanced services, including high-speed Internet services, cable TV, phone, business data, voice, and cloud services, the company is dedicated to providing outstanding service at affordable prices. WOW! also serves as a leader in exceptional human resources practices, having been recognized nine times by the National Association for Business Resources as a Best & Brightest Company to Work For, winning the award for the last five consecutive years. Visit www.wowway.com for more information.

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Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release that are not historical facts contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events. Forward-looking statements include all statements that are not historical fact and can be identified by terms such as “may,” “intend,” “might,” “will,” “should,” “could,” “would,” “anticipate,” “expect,” “believe,” “estimate,” “plan,” “project,” “predict,” “potential,” or the negative of these terms. Although these forward-looking statements reflect our good-faith belief and reasonable judgment based on current information, these statements are qualified by important factors, many of which are beyond our control that could cause our actual results to differ materially from those in the forward-looking statements. These factors and other risks that could cause our actual results to differ materially are set forth in the section entitled “Risk Factors” in our Annual Report filed on Form 10-K with the Securities and Exchange Commission (“SEC”) and other reports subsequently filed with the SEC. Given these uncertainties, you should not place undue reliance on any such forward-looking statements. The forward-looking statements included in this report are made as of the date hereof or the date specified herein, based on information available to us as of such date. Except as required by law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future.

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Non-GAAP Financial Measures

The Company has included certain non-GAAP financial measures in this release, including Adjusted EBITDA and Adjusted EBITDA margin. These terms, as defined herein, are not intended to be considered in isolation, as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”). These terms may vary from the use of similar terms by other companies in our industry due to different methods of calculation and therefore are not necessarily comparable.

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We believe that these non-GAAP measures enhance an investor’s understanding of our financial performance. We believe that these non-GAAP measures are useful financial metrics to assess our operating performance from period to period by excluding certain items that we believe are not representative of our core business. We believe that these non-GAAP measures provide investors with useful information for assessing the comparability between periods of our ability to generate cash from operations sufficient to pay taxes, to service debt and to undertake Capital Expenditures. We use these non-GAAP measures for business planning purposes and in measuring our performance relative to that of our competitors. We believe these non-GAAP measures are measures commonly used by investors to evaluate our performance and that of our competitors.

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Adjusted EBITDA eliminates the impact of expenses that do not relate to overall business performance and is defined by WOW! as net income (loss) before interest expense, income taxes, depreciation and amortization (including impairments), impairment losses on intangibles and goodwill, write-off of any asset, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including stock compensation expense) and certain other income and expenses. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAP as measures of operating performance, operating cash flows or liquidity.

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Refer to “Reconciliations of GAAP Measures to Non-GAAP Measures” and the accompanying tables below for a reconciliation of Adjusted EBITDA to Net Income and Adjusted EBITDA margin to Net Profit margin which are the most directly comparable corresponding GAAP financial measures.

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Subscriber Information

The Company uses the terms defined below throughout this release.

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Homes passed are reported as the number of serviceable addresses, such as single residence homes, apartments and condominium units, and businesses passed by our broadband network and listed in our database.

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We deliver multiple services to our customers, as such we report Total Subscribers as the number of Subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD Subscribers, Video Subscribers and Telephony Subscribers as a Revenue Generating Unit (“RGU”).

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While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products and services and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.

WIDEOPENWEST, INC. AND SUBSIDIARIES

Reconciliations of GAAP Measures to Non-GAAP Measures

(unaudited)

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The following table provides a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to Net (Loss) Income and Net Profit Margin for the periods presented:

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WIDEOPENWEST, INC. AND SUBSIDIARIES

Capital Expenditures and Subscriber Information

(unaudited)

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The following table provides additional information regarding our Capital Expenditures for the periods presented:

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The following table provides an unaudited summary of our continuing operations subscriber information:

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Additional Information Available on Website:

The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which will be posted on of our investor relations website at ir.wowway.com, when it is filed with the Securities and Exchange Commission (the "SEC"). A slide presentation to accompany the conference call and a trending schedule containing historical customer and financial data will also be available on our website.

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Contact:
Andrew Posen
Vice President, Head of Investor Relations
303-927-4935
andrew.posen@wowinc.com

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Debra Havins

Vice President, Corporate Communications

720-527-8214

debra.havins@wowinc.com