WOW! REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

Full year High-Speed Data Revenue of $430.4 million, up 4% from 2022

ENGLEWOOD, Colo., March 13, 2024 /PRNewswire/ -- WideOpenWest, Inc. ("WOW!" or the "Company") (NYSE: WOW), one of the nation's leading broadband providers, with an efficient, high-performing network that passes nearly 2.0 million residential, business and wholesale consumers, today announced financial and operating results for the quarter and year ended December 31, 2023.

Financial Highlights (1)

• Fourth quarter Total Revenue of $168.8 million, a decrease of $11.7 million, or 6%, compared to the fourth quarter of 2022
• Full year Total Revenue of $686.7 million, a decrease of $18.2 million, or 3%, compared to the corresponding period of 2022
• Fourth quarter HSD Revenue totaled $108.7 million, an increase of $1.6 million, or 1% compared to fourth quarter of 2022
• Full year HSD Revenue totaled $430.4 million, an increase of $18.3 million, or 4%, compared to the corresponding period of 2022
• Net Loss was $43.5 million and $287.7 million for the quarter and year ended December 31, 2023
• Fourth quarter Adjusted EBITDA was $71.2 million, a decrease of $3.4 million, or 4.6%, compared to the fourth quarter of 2022
• Full year Adjusted EBITDA was $275.4 million, a decrease of $4.7 million, or 1.7%, compared to the corresponding period of 2022
• Passed approximately 48,400 new homes in Central Florida and South Carolina as well as Edge-outs through December 31, 2023

"We continue to make great progress in our expansion markets, passing 48,400 homes in 2023, including nearly 23,000 in the fourth quarter, the most robust quarterly expansion of our network in our 25-year history, which puts us in a strong position to grow our footprint and subscriber base in 2024," said Teresa Elder, WOW!'s CEO. "The momentum in our new markets is also helping to drive our financial results which included a four percent increase in our HSD revenue in 2023."

"Our financial results this year continue to reflect the progress we are making as a broadband-first company including full-year HSD revenue growth and an Adjusted EBITDA Margin of 40.1%," said John Rego, WOW!'s CFO. "With continued HSD ARPU growth and record fourth quarter Adjusted EBITDA margins, we are seeing significant momentum as we move into 2024."

Revenue
Total Revenue was $168.8 million and $686.7 million for the quarter and year ended December 31, 2023, down $11.7 million and $18.2 million as compared to the corresponding periods in 2022.

Total Subscription Revenue for the quarter and year ended December 31, 2023 was $155.5 million and $635.6 million, down $7.6 million, or 5%, and $13.1 million, or 2%, as compared to the corresponding periods in 2022. The decreases were 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 across all services. These decreases were partially offset by increases in average revenue per unit ("ARPU"), driven by rate increases issued in 2023, coupled with the increased purchases of higher HSD speed tiers.

Other Business Services Revenue from continuing operations totaled $5.3 million and $21.0 million for the quarter and year ended December 31, 2023, up $0.2 million, or 4%, and down $0.2 million, or 1%, as compared to the corresponding periods in 2022. The increase during the quarter-to-date period was due to slight increases in wholesale revenue and the decrease for the year-to-date period was primarily due to decreases in data center revenue, partially offset by increases in wholesale revenue.

Other Revenue totaled $8.0 million and $30.1 million for the quarter and year ended December 31, 2023, down $4.3 million, or 35%, and $4.9 million, or 14%, compared to the corresponding periods in 2022. The decreases are primarily due to decreases in advertising, other miscellaneous and line assurance revenue, partially offset by an increase in paper statement fee revenue. During the quarter and year ended December 31, 2022, the Company had a one-time receipt of government grant revenue.

Costs and Expenses
Operating Expenses (excluding Depreciation and Amortization) totaled $71.7 million and $301.0 million for the quarter and year ended December 31, 2023, down $5.9 million, or 8%, and $26.0 million, or 8%, compared to the corresponding periods in 2022. The decrease is primarily driven by decreases in direct operating expense, specifically programming expense, which aligns with the reduction in Video RGUs between periods and increases in capital labor and decreases in compensation expense, partially offset by increases in bad debt expense and hardware and software expenses.

Selling, General, and Administrative totaled $33.8 million and $200.4 million for the quarter and year ended December 31, 2023, down $14.3 million, or 30%, and up $35.0 million, or 21%, compared to the corresponding periods in 2022. The decrease for the quarter-to-date period is primarily due to decreases in restructuring costs related to employee severance, compensation expense, and stock compensation, partially offset by professional service fees. The increase for the year-to-date period is primarily driven by the patent litigation settlement and increases in restructuring costs related to employee severance and professional fees, partially offset by decreases in stock compensation and certain cash compensation expenses.

Net Loss
Net Loss for the quarter and year ended December 31, 2023 was $43.5 million and $287.7 million, compared to $12.7 million and $2.5 million for the quarter and year ended December 31, 2022. The net profit margin was (25.8)% and (41.9)% for the quarter and year ended December 31, 2023 as compared to a net profit margin of (7.0%) and (0.4%) for the quarter and year ended December 31, 2022. Net Loss for the quarter and year ended December 31, 2023 was primarily driven by the $47.0 million and $306.8 million non-cash impairment charge on intangible assets, respectively.

Adjusted EBITDA
Adjusted EBITDA for the quarter and year ended December 31, 2023 was $71.2 million and $275.4 million, a decrease of $3.4 million and $4.7 million, compared to the corresponding periods in 2022. Adjusted EBITDA Margin was 42.2% and 40.1% for the quarter and year ended December 31, 2023 as compared to 41.3% and 39.7% for the quarter and year ended December 31, 2022.

Subscribers
WOW! reported Total Subscribers of 504,100 as of December 31, 2023, a decrease of 26,500 compared to December 31, 2022, down 13,300 compared to September 30, 2023. HSD RGUs totaled 490,100 as of December 31, 2023, a decrease of 21,500 compared to December 31, 2022, down 13,300 compared to September 30, 2023.

Market Expansion
Market Expansion projects reached a total of 48,400 additional homes passed at December 31, 2023, including 30,400 additional homes in Greenfield markets and 18,000 additional new homes passed through Edge-Outs, as compared to the year ended December 31, 2022. These initiatives added 7,400 Subscribers in 2023 which represents a 15.3% total penetration rate across market expansion projects in 2023.

The 2021 Edge-Out projects include 1,000 Subscribers, which represents 47.6% penetration on such nodes. The 2022 Edge-Out projects include 900 Subscribers, which represents 31.0% penetration on such nodes.

Capital Expenditures
Capital Expenditures totaled $268.9 million for the year ended December 31, 2023, representing a $101.7 million, or 61%, increase compared to the year ended December 31, 2022. The increase is primarily related to an increase in line extensions and scalable infrastructure as we focus on expanding our network through our greenfield initiatives. Core Capital Expenditures, or total capital expenditures excluding expansion capital expenditures, equated to 20% of Total Revenue for the year ended December 31, 2023.

Liquidity and Leverage
As of December 31, 2023, the total outstanding amount of long-term debt and finance lease obligations was $934.5 million, and cash and cash equivalents were $23.4 million. Total Net Leverage as of December 31, 2023 was 3.3x on a LTM Adjusted EBITDA basis and undrawn revolver capacity totaled $44.3 million.

First Quarter 2024 Guidance

Webcast
WOW! will host a webcast on Wednesday, March 13, 2024, at 8:00 a.m. Eastern to discuss the operating and financial 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:

A replay of the call will be available on the investor relations website or by telephone. To access the telephone replay, which will be available until March 27, 2024 at 11:59 p.m. ET, please dial (800) 770-2030 or (609) 800-9909 and use conference ID 9830786.

About WOW!
WOW! is one of the nation's leading broadband providers, with an efficient and high-performing network that passes nearly 2 million residential, business and wholesale consumers. WOW! provides services in 16 markets, primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Georgia and Florida, including the new all-fiber network in Central Florida. With an expansive portfolio of advanced services, including high-speed Internet services, cable TV, home phone, mobile 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 10 times by the National Association for Business Resources as a Best & Brightest Company to Work For in the Nation, winning the award for the last six consecutive years and making the 2022 Top 101 National Winners list. Visitwowway.com for more information.

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.

Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures in this release, including Adjusted EBITDA. 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.

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.

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.

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.

Subscriber Information
The Company uses the terms defined below throughout this release.

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.

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").

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.

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 Annual Report on Form 10-K for the year ended December 31, 2023, which will be posted on our investor relations website at ir.wowway.com, when it is filed with 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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SOURCE WideOpenWest, Inc.