Ascent Capital Group, Inc.
Aug 9, 2016

Ascent Capital Group Announces Financial Results for the Three and Six Months Ended June 30, 2016

ENGLEWOOD, Colo., Aug. 09, 2016 (GLOBE NEWSWIRE) -- Ascent Capital Group, Inc. ("Ascent" or the "Company") (Nasdaq:ASCMA) has reported results for the three and six months ended June 30, 2016. Ascent is a holding company that owns Monitronics International, Inc. ("Monitronics"), the nation's second largest home security alarm monitoring company.

Headquartered in Dallas, Texas, Monitronics provides security alarm monitoring services to nearly 1.1 million residential and commercial customers as of June 30, 2016. Monitronics' long-term monitoring contracts provide high margin recurring revenue that results in predictable and stable cash flow.

Highlights1:

Ascent Chairman and Chief Executive Officer, Bill Fitzgerald stated, "The business performed consistent with expectations in the quarter and I continue to be pleased with Jeff's progress with the business; building out his team, refining his operating goals and strategies, and driving improved performance metrics.

"During the quarter Ascent purchased 389,179 shares or 3.2% of our equity, evidencing our continued belief in the long range prospects of the business."

Jeffery Gardner, President and Chief Executive Officer of Monitronics said, "We continued to execute against our operational objectives in the second quarter, further strengthening our free cash flow profile and delivering meaningful improvements in dealer economics through continued reductions in creation costs. We also made great strides in lead generation opportunities, most notably with Monitronics' announcing an exclusive partnership with the AAA Alliance Club as well as being named the exclusive AARP-branded provider for professionally installed residential security systems.  Our LiveWatch business also continues to scale nicely, delivering solid growth at lower creation multiples. Finally, we continue to place a unique focus on providing the highest levels of customer service and also made several strategic hires in the first half of the year that add depth and experience to our team. I remain confident that we are taking the right steps through the initiatives we are implementing and the foundation we have already built, there is great opportunity ahead."

_________________________
1 Comparisons are year-over-year unless otherwise specified.

Results for the Three Months Ended June 30, 2016

For the three months ended June 30, 2016, Ascent reported net revenue of $143.7 million, an increase of 1.5%. For the six months ended June 30, 2016, Ascent reported net revenue of $286.9 million, an increase of 2.5%. The increases in net revenue are attributable to an increase in Monitronics' average RMR per subscriber to $42.70 as of June 30, 2016 and the inclusion of a full first quarter's impact of LiveWatch revenue for the six months ended June 30, 2016.

Ascent's total cost of services for the three months ended June 30, 2016 was flat at $27.6 million. Ascent's total cost of services for the six months ended June 30, 2016 increased 8.2% to $57.1 million.  The increase for the six months ended June 30, 2016 is attributable to higher cellular service costs, increased lead generation fees at Monitronics and the inclusion of a full first quarter's impact of LiveWatch's cost of services. LiveWatch's cost of services includes expensed equipment costs associated with the creation of new subscribers of $2.1 million and $4.3 million for three and six months ended June 30, 2016, respectively, as compared to $1.8 million and $2.5 million for the three and six months ended June 30, 2015, respectively.

Ascent's selling, general & administrative ("SG&A") costs for the three months ended June 30, 2016, increased 8.2% to $32.1 million and increased 12.2% to $64.3 million for the six months ended June 30, 2016. The increases in SG&A is attributable to higher subscriber acquisition costs incurred at LiveWatch, increased salaries, wages and benefits at Monitronics and, for the six months ended June 30, 2016, the impact of a full first quarter of LiveWatch SG&A costs not related to account creation. Subscriber acquisition costs, which consist of LiveWatch marketing and sales expense, were $3.7 million and $7.5 million in the three and six months ended June 30, 2016, respectively, as compared to $2.8 million and $3.8 million in the three and six months ended June 30, 2015, respectively.

Ascent's Adjusted EBITDA decreased 0.6% to $87.0 million for the three months ended June 30, 2016 and decreased 3.5% to $172.1 million for the six months ended June 30, 2016. Monitronics' Adjusted EBITDA decreased 1.5% to $88.6 million during the three months ended June 30, 2016 and decreased 3.3% to $175.7 million in the six months ended June 30, 2016. Monitronics' Adjusted EBITDA as a percentage of net revenue for the three and six months ended June 30, 2016 was 61.7% and 61.2%, respectively, compared to 63.6% and 64.9% for the three and six months ended June 30, 2015, respectively. The decline is primarily attributable to the higher expensed creation costs within LiveWatch.

Ascent's Pre-SAC Adjusted EBITDA for the three months ended June 30, 2016 increased 0.9% to $91.8 million and decreased 0.6% to $181.7 million in the six months ended June 30, 2016. Monitronics' Pre-SAC Adjusted EBITDA for the three and six months ended June 30, 2016 totaled $93.4 million and $185.3 million, compared to $93.4 million and $186.3 million for the three and six months ended June 30, 2015, respectively. Monitronics' Pre-SAC Adjusted EBITDA as a percentage of Pre-SAC net revenue for the three and six months ended June 30, 2016 was 65.5% and 65.1%, respectively, compared to 66.6% and 66.9% in the three and six months ended June 30, 2015, respectively. For a reconciliation of Adjusted EBITDA to Pre-SAC Adjusted EBITDA for Monitronics, please see the Appendix of this release.

Ascent reported a net loss from continuing operations for the three and six months ended June 30, 2016 of $22.2 million and $45.4 million, respectively, compared to net loss from continuing operations of $18.5 million and $28.2 million in the respective prior year periods.

Monitronics reported a net loss for the three and six months ended June 30, 2016 of $16.5 million and $36.7 million, respectively, compared to a net loss of $16.0 million and $24.3 million in the prior year periods.

    
  Twelve Months Ended
June 30,
 
  2016 2015 
Beginning balance of accounts 1,092,083  1,055,701  
Accounts acquired 148,620  188,416  
Accounts canceled (150,703) (142,951) 
Canceled accounts guaranteed by dealer and other adjustments (a)   (15,078)(b)(9,083) 
Ending balance of accounts 1,074,922  1,092,083  
Monthly weighted average accounts 1,085,600  1,069,860  
Attrition rate - Unit 13.9% 13.4% 
Attrition rate - RMR (c) 12.5% 13.2% 
Core Attrition (d) 13.2% 12.6%   

_________________________
(a) Includes canceled accounts that are contractually guaranteed to be refunded from holdback.
(b) Includes an estimated 7,200 accounts included in our Radio Conversion Program that canceled in excess of their expected attrition.
(c) The recurring monthly revenue ("RMR") of canceled accounts follows the same definition as subscriber unit attrition as noted above.  RMR attrition is defined as the RMR of canceled accounts in a given period, adjusted for the impact of price increases or decreases in that period, divided by the weighted average of RMR for that period.
(d) Core Attrition reflects the long-term attrition characteristics of Monitronics base by excluding the one-time bulk buy of 113,000 accounts from Pinnacle Security in 2012 and 2013.

Monitronics' core account portfolio unit attrition rate for the twelve months ended June 30, 2016, which excludes attrition of the Pinnacle Security accounts and 2G cancellations, was 13.2%, compared to 12.6% for the twelve months ended June 30, 2015. Overall unit attrition increased from 13.4% for the twelve months ended June 30, 2015 to 13.9% for the twelve months ended June 30, 2016. The increase in attrition is primarily the result of an increase in the number of subscriber accounts reaching the end of their initial contract term in the period.  Overall attrition reflects the impact of the Pinnacle Security bulk buys, where Monitronics purchased approximately 113,000 accounts from Pinnacle Security in 2012 and 2013, which are now experiencing normal end-of-term attrition. We believe core attrition best reflects the long run characteristics of our customer base.

During the three months ended June 30, 2016 and 2015, Monitronics acquired 37,284 and 40,742 subscriber accounts, respectively. Accounts acquired for the three months ended June 30, 2016 reflect bulk buys of approximately 6,300 accounts.

Ascent Liquidity and Capital Resources

At June 30, 2016, on a consolidated basis, Ascent had $86.3 million of cash, cash equivalents and marketable securities. A portion of these assets may be used to decrease debt obligations or fund stock repurchases, strategic acquisitions or investment opportunities.

At June 30, 2016, the existing long-term debt includes the principal balance of $1.8 billion under the Monitronics' Senior Notes, Credit Facility term loans, Credit Facility revolver and Ascent's Convertible Notes. The Convertible Notes have an outstanding principal balance of $96.8 million as of June 30, 2016 and mature July 15, 2020. The Senior Notes have an outstanding principal balance of $585.0 million as of June 30, 2016 and mature on April 1, 2020. The Credit Facility term loans have an outstanding principal balance of $946.9 million as of June 30, 2016 and require principal payments of approximately $1.4 million per quarter with $403.8 million becoming due on March 23, 2018 and the remaining amount becoming due April 9, 2022. As of June 30, 2016, the Credit Facility revolver has an outstanding balance of $154.5 million which becomes due on December 22, 2017 and unused availability of $160.5 million.

Conference Call

Ascent will host a call today, Tuesday, August 9, 2016 at 5:00 pm ET. To access the call please dial (888) 462-5915 from the United States, or (760) 666-3831 from outside the U.S. The conference call I.D. number is 59285579. Participants should dial in 5 to 10 minutes before the scheduled time and must be on a touch-tone telephone to ask questions.

A replay of the call can be accessed through September 9, 2016 by dialing (800) 585-8367 from the U.S., or (404) 537-3406 from outside the U.S. The conference call I.D. number is 59285579.

This call will also be available as a live webcast which can be accessed at Ascent's Investor Relations Website at http://ir.ascentcapitalgroupinc.com/index.cfm.

Forward Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, including development of and access to multiple sales channels, market potential and expansion, consumer demand for interactive and home automation services, account creation and related costs, subscriber attrition, anticipated account generation at LiveWatch, future financial prospects, and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of our services, technological innovations in the alarm monitoring industry, competitive issues, continued access to capital on terms acceptable to Ascent and/or Monitronics, our ability to capitalize on acquisition opportunities, general market and economic conditions and changes in law and government regulations. These forward-looking statements speak only as of the date of this press release, and Ascent expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Ascent's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Ascent, including the most recent Forms 10-K and 10-Q for additional information about Ascent and about the risks and uncertainties related to Ascent's business which may affect the statements made in this press release.

About Ascent Capital Group, Inc.

Ascent Capital Group, Inc., (NASDAQ:ASCMA) is a holding company that owns 100 percent of its operating subsidiary, Monitronics International Inc., and through Monitronics, LiveWatch Security, LLC. Ascent also retains ownership of certain commercial real estate assets. Monitronics, headquartered in Dallas, TX, is the nation's second largest home security alarm monitoring company, providing security alarm monitoring services to more than one million residential and commercial customers in the United States, Canada and Puerto Rico through its network of nationwide, independent Authorized Dealers. LiveWatch Security, LLC ®, is a Do-It-Yourself ("DIY") home security firm, offering professionally monitored security services through a direct-to-consumer sales channel. For more information on Ascent, see http://ascentcapitalgroupinc.com/.

 
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Amounts in thousands, except share amounts
(unaudited)
 
 June 30,
 2016
 December 31,
 2015
Assets   
Current assets:   
Cash and cash equivalents$5,140  $5,577 
Restricted cash  55 
Marketable securities, at fair value81,131  87,052 
Trade receivables, net of allowance for doubtful accounts of $2,530 in 2016 and $2,762 in 201513,884  13,622 
Prepaid and other current assets8,738  10,702 
Assets held for sale5,687  6,265 
Total current assets114,580  123,273 
Property and equipment, net of accumulated depreciation of $36,335 in 2016 and $32,158 in 201531,998  32,440 
Subscriber accounts, net of accumulated amortization of $1,094,016 in 2016 and $975,795 in 20151,410,669  1,423,538 
Dealer network and other intangible assets, net of accumulated amortization of $78,493 in 2016 and $73,578 in 201521,739  26,654  
Goodwill563,549  563,549 
Other assets, net3,526  3,851 
   Total assets$2,146,061  $2,173,305 
Liabilities and Stockholders' Equity    
Current liabilities:   
Accounts payable$8,168  $8,660 
Accrued payroll and related liabilities4,407  4,385 
Other accrued liabilities33,116  31,573 
Deferred revenue16,202  16,207 
Holdback liability14,212  16,386 
Current portion of long-term debt5,500  5,500 
Liabilities of discontinued operations3,500  3,500 
Total current liabilities85,105  86,211 
Non-current liabilities:   
Long-term debt1,737,683  1,713,868 
Long-term holdback liability3,614  3,786 
Derivative financial instruments30,073  13,470 
Deferred income tax liability, net15,710  13,646 
Other liabilities12,567  17,555 
   Total liabilities1,884,752  1,848,536 
Commitments and contingencies   
Stockholders' equity:   
Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued   
Series A common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding 11,944,209 and 12,301,248 shares at June 30, 2016 and December 31, 2015, respectively  119   123 
Series B common stock, $.01 par value. Authorized 5,000,000 shares; issued and outstanding 382,359 shares both at June 30, 2016 and December 31, 20154  4 
Series C common stock, $0.01 par value. Authorized 45,000,000 shares; no shares issued   
Additional paid-in capital1,414,096  1,417,895 
Accumulated deficit(1,123,737) (1,078,315)
Accumulated other comprehensive loss, net(29,173) (14,938)
Total stockholders' equity261,309  324,769 
   Total liabilities and stockholders' equity$2,146,061  $2,173,305 
 
See accompanying notes to condensed consolidated financial statements.
 


 
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Amounts in thousands, except per share amounts
(unaudited)
 
 Three Months Ended
 June 30,
 Six Months Ended
 June 30,
 2016 2015 2016 2015
Net revenue$143,656  141,543  $286,924  279,959 
Operating expenses:       
Cost of services27,637  27,603  57,112  52,770 
Selling, general and administrative, including stock-based compensation32,133  29,685  64,251   57,281 
Radio conversion costs7,596  450  16,675  973 
Amortization of subscriber accounts, dealer network and other intangible assets  61,937  63,526  123,259  126,667 
Depreciation2,114  2,585  4,177  4,983 
Gain on disposal of operating assets  (104)   (1,154)
 131,417  123,745  265,474  241,520 
Operating income12,239  17,798  21,450  38,439 
Other income (expense), net:       
Interest income588  746  1,045  1,262 
Interest expense(31,587) (30,893) (63,011) (60,674)
Refinancing expense   (4,468)   (4,468)
Other income (expense), net(1,677) 351   (1,319) 1,277 
 (32,676)  (34,264) (63,285) (62,603)
Loss from continuing operations before income taxes(20,437) (16,466) (41,835) (24,164)
Income tax expense from continuing operations(1,765) (2,030) (3,587) (4,007)
Net loss from continuing operations(22,202) (18,496) (45,422) (28,171)
Discontinued operations:       
Income (loss) from discontinued operations, net of income tax of $0  87    (73)
Net loss(22,202) (18,409) (45,422) (28,244)
Other comprehensive income (loss):       
Foreign currency translation adjustments(354) 346  (556) 69 
Unrealized holding gain (loss) on marketable securities, net2,959  (884) 2,863  (1,953)
Unrealized gain (loss) on derivative contracts, net(4,697) 1,002  (16,542) (3,461)
Total other comprehensive income (loss), net of tax(2,092) 464  (14,235) (5,345)
Comprehensive loss$(24,294) (17,945) $(59,657) (33,589)
        
Basic and diluted income (loss) per share:       
Continuing operations$(1.80) (1.41) $(3.66) (2.14)
Discontinued operations  0.01     
Net loss$(1.80) (1.40) $(3.66) (2.14)
              
Weighted average Series A and Series B shares - basic and diluted 12,364,767  13,110,540   12,407,830  13,188,309 
Total issued and outstanding Series A and Series B shares at period end                    12,326,568  13,302,140 
 
See accompanying notes to condensed consolidated financial statements.
 


 
ASCENT CAPITAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Amounts in thousands
(unaudited)
 
 Six Months Ended
 June 30,
 2016 2015
Cash flows from operating activities:   
Net loss$(45,422) (28,244)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Loss from discontinued operations, net of income tax  73 
Amortization of subscriber accounts, dealer network and other intangible assets    123,259  126,667 
Depreciation4,177  4,983 
Stock-based compensation 3,445  3,182 
Deferred income tax expense2,105  2,050 
Gain on disposal of operating assets  (1,154)
Amortization of debt discount and deferred debt costs5,315  5,055 
Refinancing expense  4,468 
Bad debt expense5,083  4,645 
Other non-cash activity, net3,236  1,531 
Changes in assets and liabilities:   
Trade receivables(5,395) (4,440)
Prepaid expenses and other assets2,197  (2,195)
Subscriber accounts - deferred contract costs(1,294)  
Payables and other liabilities(5,567) (6,342)
Operating activities from discontinued operations, net  40 
   Net cash provided by operating activities91,139   110,319 
Cash flows from investing activities:   
Capital expenditures(3,100) (8,168)
Cost of subscriber accounts acquired(106,805) (129,544)
Cash paid for acquisition, net of cash acquired  (56,343)
Purchases of marketable securities(5,036) (24,448)
Proceeds from sale of marketable securities11,950  31,004 
Decrease (increase) in restricted cash 55  (35)
Proceeds from the disposal of operating assets  20,173 
   Net cash used in investing activities(102,936) (167,361)
Cash flows from financing activities:   
Proceeds from long-term debt88,200   674,050 
Payments on long-term debt(69,700) (605,990)
Payments of financing costs  (6,232)
Purchases and retirement of common stock(7,140) (9,473)
   Net cash provided by financing activities11,360  52,355 
   Net decrease in cash and cash equivalents(437) (4,687)
Cash and cash equivalents at beginning of period5,577  12,612 
Cash and cash equivalents at end of period$5,140  7,925 
Supplemental cash flow information:   
State taxes paid, net$2,758  3,485 
Interest paid57,043  55,149 
 
See accompanying notes to condensed consolidated financial statements.
 

Adjusted EBITDA

We evaluate the performance of our operations based on financial measures such as revenue and "Adjusted EBITDA."  Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization (including the amortization of subscriber accounts, dealer network and other intangible assets), stock-based compensation, and other non-cash or nonrecurring charges.   Ascent Capital believes that Adjusted EBITDA is an important indicator of the operational strength and performance of its business, including the business' ability to fund its ongoing acquisition of subscriber accounts, to fund its capital expenditures and to service its debt.  In addition, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance.   Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to certain adjustments, by which Monitronics' covenants are calculated under the agreements governing their debt obligations.  Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles ("GAAP"), should not be construed as an alternative to net income or loss and is indicative neither of our results of operations nor of cash flows available to fund all of our cash needs.  It is, however, a measurement that Ascent Capital believes is useful to investors in analyzing its operating performance.  Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP.  Adjusted EBITDA is a non-GAAP financial measure.  As companies often define non-GAAP financial measures differently, Adjusted EBITDA as calculated by Ascent Capital should not be compared to any similarly titled measures reported by other companies.

Pre-SAC Adjusted EBITDA

LiveWatch is a direct-to-consumer business, and as such recognizes certain revenue and expenses associated with subscriber acquisition (subscriber acquisition costs, or "SAC"). This is in contrast to Monitronics, which capitalizes payments to dealers to acquire accounts. "Pre-SAC Adjusted EBITDA" is a measure that eliminates the impact of acquiring accounts at the LiveWatch business that is recognized in operating income. Pre-SAC Adjusted EBITDA is defined as total Adjusted EBITDA excluding LiveWatch's SAC and the related revenue. We believe Pre-SAC Adjusted EBITDA is a meaningful measure of the Company's financial performance in servicing its customer base. Pre-SAC Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Pre-SAC Adjusted EBITDA is a non-GAAP financial measure. As companies often define non-GAAP financial measures differently, Pre-SAC Adjusted EBITDA as calculated by Monitronics should not be compared to any similarly titled measures reported by other companies.

The following table provides a reconciliation of Ascent's net loss from continuing operations to total Adjusted EBITDA to Pre-SAC Adjusted EBITDA for the periods indicated (amounts in thousands):

 
 Three Months Ended
 June 30,
 Six Months Ended
 June 30,
 2016 2015  2016 2015
Net loss from continuing operations$(22,202) (18,496) $(45,422) (28,171)
Amortization of subscriber accounts, dealer network and other intangible assets  61,937  63,526  123,259  126,667 
Depreciation2,114  2,585  4,177  4,983  
Stock-based compensation1,750  1,557  3,445  3,182 
Radio conversion costs7,596  450  16,675  973 
LiveWatch acquisition related costs      946 
LiveWatch acquisition contingent bonus charges1,092  1,276  1,992  1,795 
Reduction in force separation costs    245    
Rebranding marketing program64    237   
Other-than-temporary impairment losses on marketable securities1,904    1,904   
Interest income(588) (746) (1,045) (1,262)
Interest expense31,587  30,893   63,011  60,674 
Refinancing expense  4,468     4,468 
Income tax expense from continuing operations1,765  2,030  3,587  4,007 
Adjusted EBITDA87,019  87,543  172,065  178,262 
Gross subscriber acquisition cost expenses5,821  4,644  11,820  6,276 
Revenue associated with subscriber acquisition cost(1,050) (1,171) (2,175) (1,667)
Pre-SAC Adjusted EBITDA$91,790  91,016  $181,710  182,871 
 

The following table provides a reconciliation of Monitronics' net loss to total Adjusted EBITDA to Pre-SAC Adjusted EBITDA for the periods indicated (amounts in thousands):

 
 Three Months Ended
 June 30,
 Six Months Ended
 June 30,
 2016 2015 2016 2015
Net loss$(16,509) (15,987) $(36,719) (24,321)
Amortization of subscriber accounts, dealer network and other intangible assets  61,937  63,526  123,259   126,667 
Depreciation2,025  2,484  4,000  4,781 
Stock-based compensation667  455  1,189  829 
Radio conversion costs7,596  450  16,675  973 
LiveWatch acquisition related costs      946 
LiveWatch acquisition contingent bonus charges1,092  1,276  1,992  1,795 
Reduction in force separation costs    245   
Rebranding marketing program64    237   
Interest expense30,024  31,291  61,248  61,531 
Refinancing expense  4,468    4,468 
Income tax expense1,743  2,011   3,533  3,972 
Adjusted EBITDA88,639  89,974  175,659  181,641 
Gross subscriber acquisition cost expenses5,821  4,644  11,820  6,276 
Revenue associated with subscriber acquisition cost(1,050) (1,171) (2,175) (1,667)
Pre-SAC Adjusted EBITDA$93,410   93,447  $185,304  186,250 
 

_________________________
Presented below is the reconciliation of Net revenue for Monitronics and Ascent Capital to Pre-SAC net revenue (amounts in thousands):

 
 Three Months Ended
 June 30,
 Six Months Ended
 June 30,
 2016 2015 2016 2015
Net revenue, as reported$143,656  141,543  $286,924  279,959 
LiveWatch revenue related to SAC  (1,050 ) (1,171) (2,175) (1,667)
Pre-SAC net revenue$142,606  140,372  $284,749  278,292 
 

RMR Attrition:

The Company overstated RMR attrition and understated average RMR per subscriber for the periods ended September 30, 2015, December 31, 2015, and March 31, 2016 by an immaterial amount.   Future filings that include prior period disclosures for RMR attrition will be corrected, as needed, when filed. The following summarizes the impact of the RMR attrition adjustments:

 
 March 31, 2016 December 31, 2015 September 30, 2015
RMR Attrition          
As reported  13.4%  13.7%  13.6%
As Adjusted     12.8%  13.4%  13.4%
Variance 0.6%  0.3%  0.2%
            

Management concluded the effect on average RMR per subscriber was de minimus and no further action is required. 

Contact:

Erica Bartsch

Sloane & Company

212-446-1875

ebartsch@sloanepr.com

Primary Logo

Source: Ascent Capital Group

News Provided by Acquire Media