State of Delaware
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26-2735737
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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5251 DTC Parkway, Suite 1000
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Greenwood Village, Colorado
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80111
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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PART I — FINANCIAL INFORMATION
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March 31,
2015 |
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December 31, 2014
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Assets
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Current assets:
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Cash and cash equivalents
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$
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51,079
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$
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12,612
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Restricted cash
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123
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18
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Marketable securities, at fair value
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94,854
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122,593
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Trade receivables, net of allowance for doubtful accounts of $2,296 in 2015 and $2,120 in 2014
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13,959
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13,796
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Deferred income tax assets, net
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6,346
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6,346
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Prepaid and other current assets
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9,901
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8,546
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Assets held for sale
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1,231
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18,935
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Total current assets
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177,493
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182,846
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Property and equipment, net of accumulated depreciation of $32,382 in 2015 and $30,030 in 2014
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36,407
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36,010
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Subscriber accounts, net of accumulated amortization of $794,883 in 2015 and $736,824 in 2014
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1,399,520
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1,373,630
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Dealer network and other intangible assets, net of accumulated amortization of $59,052 in 2015 and $54,077 in 2014
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41,181
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44,855
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Goodwill
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563,011
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527,502
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Other assets, net
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25,691
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27,520
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Total assets
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$
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2,243,303
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$
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2,192,363
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Liabilities and Stockholders’ Equity
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Current liabilities:
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Accounts payable
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$
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5,424
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$
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6,781
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Accrued payroll and related liabilities
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4,263
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4,077
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Other accrued liabilities
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43,876
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30,727
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Deferred revenue
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15,981
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14,945
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Holdback liability
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17,668
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19,046
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Current portion of long-term debt
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9,166
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9,166
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Liabilities of discontinued operations
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6,461
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6,401
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Total current liabilities
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102,839
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91,143
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Non-current liabilities:
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Long-term debt
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1,676,995
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1,618,324
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Long-term holdback liability
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4,816
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5,156
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Derivative financial instruments
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9,447
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5,780
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Deferred income tax liability, net
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16,882
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15,875
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Other liabilities
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16,162
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16,397
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Total liabilities
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1,827,141
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1,752,675
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Commitments and contingencies
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Stockholders’ equity:
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Preferred stock, $0.01 par value. Authorized 5,000,000 shares; no shares issued
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—
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—
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Series A common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding 12,925,910 and 13,162,095 shares at March 31, 2015 and December 31, 2014, respectively
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129
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132
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Series B common stock, $.01 par value. Authorized 5,000,000 shares; issued and outstanding 384,086 shares both at March 31, 2015 and December 31, 2014
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4
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4
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Series C common stock, $0.01 par value. Authorized 45,000,000 shares; no shares issued
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—
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—
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Additional paid-in capital
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1,433,412
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1,441,291
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Accumulated deficit
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(1,004,766
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)
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(994,931
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)
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Accumulated other comprehensive income (loss), net
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(12,617
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)
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(6,808
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)
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Total stockholders’ equity
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416,162
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439,688
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Total liabilities and stockholders’ equity
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$
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2,243,303
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$
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2,192,363
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Three Months Ended
March 31, |
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2015
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2014
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Net revenue
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$
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138,416
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132,864
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Operating expenses:
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Cost of services
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25,690
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22,090
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Selling, general, and administrative, including stock-based compensation
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27,596
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26,537
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Amortization of subscriber accounts, dealer network and other intangible assets
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63,141
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61,780
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Depreciation
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2,398
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2,758
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Restructuring charges
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—
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547
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Gain on disposal of operating assets
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(1,050
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)
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—
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117,775
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113,712
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Operating income
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20,641
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19,152
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Other income (expense), net:
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Interest income
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516
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878
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Interest expense
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(29,781
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)
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(28,773
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)
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Other income, net
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926
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986
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(28,339
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)
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(26,909
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)
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Loss from continuing operations before income taxes
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(7,698
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)
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(7,757
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)
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Income tax expense from continuing operations
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(1,977
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)
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(1,621
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)
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Net loss from continuing operations
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(9,675
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)
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(9,378
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)
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Discontinued operations:
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Loss from discontinued operations
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(160
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)
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(354
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)
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Income tax expense from discontinued operations
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—
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—
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Loss from discontinued operations, net of income tax
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(160
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)
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(354
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)
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Net loss
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(9,835
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)
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(9,732
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)
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Other comprehensive income (loss):
|
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Foreign currency translation adjustments
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(277
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)
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55
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Unrealized holding gains (losses) on marketable securities, net
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(1,069
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)
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|
345
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|
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Unrealized loss on derivative contracts, net
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(4,463
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)
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(1,671
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)
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Total other comprehensive loss, net of tax
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(5,809
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)
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(1,271
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)
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Comprehensive loss
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$
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(15,644
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)
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(11,003
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)
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Basic and diluted loss per share:
|
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Continuing operations
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$
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(0.73
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)
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(0.68
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)
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Discontinued operations
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(0.01
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)
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(0.02
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)
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Net loss
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$
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(0.74
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)
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(0.70
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)
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Three Months Ended
March 31, |
|||||
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2015
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2014
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Cash flows from operating activities:
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Net loss
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$
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(9,835
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)
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(9,732
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)
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Adjustments to reconcile net loss to net cash provided by operating activities:
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Loss from discontinued operations, net of income tax
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160
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354
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Amortization of subscriber accounts, dealer network and other intangible assets
|
63,141
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|
|
61,780
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|
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Depreciation
|
2,398
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|
|
2,758
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Stock-based compensation
|
1,626
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|
|
1,662
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Deferred income tax expense
|
1,021
|
|
|
877
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|
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Gain on disposal of operating assets
|
(1,050
|
)
|
|
—
|
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Long-term debt amortization
|
1,163
|
|
|
1,063
|
|
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Other non-cash activity, net
|
3,435
|
|
|
2,850
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
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Trade receivables
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(2,265
|
)
|
|
(2,719
|
)
|
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Prepaid expenses and other assets
|
(607
|
)
|
|
(441
|
)
|
|
Payables and other liabilities
|
6,292
|
|
|
10,866
|
|
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Operating activities from discontinued operations, net
|
(100
|
)
|
|
(234
|
)
|
|
Net cash provided by operating activities
|
65,379
|
|
|
69,084
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Capital expenditures
|
(2,728
|
)
|
|
(1,938
|
)
|
|
Cost of subscriber accounts acquired
|
(61,053
|
)
|
|
(53,789
|
)
|
|
Cash paid for acquisition, net of cash acquired
|
(56,343
|
)
|
|
—
|
|
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Proceeds from sale of marketable securities
|
27,020
|
|
|
—
|
|
|
Increase in restricted cash
|
(105
|
)
|
|
(79
|
)
|
|
Proceeds from the disposal of operating assets
|
18,813
|
|
|
—
|
|
|
Other investing activities
|
—
|
|
|
(25
|
)
|
|
Net cash used in investing activities
|
(74,396
|
)
|
|
(55,831
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from long-term debt
|
91,400
|
|
|
42,900
|
|
|
Payments on long-term debt
|
(33,892
|
)
|
|
(27,192
|
)
|
|
Payments of financing costs
|
(551
|
)
|
|
—
|
|
|
Stock option exercises
|
—
|
|
|
665
|
|
|
Purchases and retirement of common stock
|
(9,473
|
)
|
|
(14,664
|
)
|
|
Bond hedge and warrant transactions, net
|
—
|
|
|
—
|
|
|
Other financing activities
|
—
|
|
|
—
|
|
|
Net cash provided by financing activities
|
47,484
|
|
|
1,709
|
|
|
Net increase in cash and cash equivalents
|
38,467
|
|
|
14,962
|
|
|
Cash and cash equivalents at beginning of period
|
12,612
|
|
|
44,701
|
|
|
Cash and cash equivalents at end of period
|
$
|
51,079
|
|
|
59,663
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
State taxes received, net
|
$
|
—
|
|
|
10
|
|
Interest paid
|
14,750
|
|
|
11,963
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Accumulated
Other
|
|
Total
|
|||||||||
|
Preferred
|
|
Common Stock
|
|
Paid-in
|
|
Accumulated
|
|
Comprehensive
|
|
Stockholders’
|
|||||||||||||
|
Stock
|
|
Series A
|
|
Series B
|
|
Series C
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Equity
|
|||||||||
Balance at December 31, 2014
|
$
|
—
|
|
|
132
|
|
|
4
|
|
|
—
|
|
|
1,441,291
|
|
|
(994,931
|
)
|
|
(6,808
|
)
|
|
439,688
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,835
|
)
|
|
—
|
|
|
(9,835
|
)
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,809
|
)
|
|
(5,809
|
)
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,891
|
|
|
—
|
|
|
—
|
|
|
1,891
|
|
|
Value of shares withheld for tax liability
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
Purchases and retirement of common stock
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(9,470
|
)
|
|
—
|
|
|
—
|
|
|
(9,473
|
)
|
|
Balance at March 31, 2015
|
$
|
—
|
|
|
129
|
|
|
4
|
|
|
—
|
|
|
1,433,412
|
|
|
(1,004,766
|
)
|
|
(12,617
|
)
|
|
416,162
|
|
Cash
|
$
|
784
|
|
Trade receivables
|
273
|
|
|
Other current assets
|
599
|
|
|
Property and equipment
|
362
|
|
|
Subscriber accounts
|
24,900
|
|
|
Other intangible asset
|
1,300
|
|
|
Goodwill
|
35,509
|
|
|
Current liabilities
|
(6,600
|
)
|
|
Fair value of consideration transferred
|
$
|
57,127
|
|
|
Three Months Ended March 31,
|
|||||
|
2015
|
|
2014
|
|||
Beginning balance
|
$
|
122,593
|
|
|
129,496
|
|
Purchases
|
—
|
|
|
—
|
|
|
Sales at cost basis (a)
|
(26,670
|
)
|
|
—
|
|
|
Realized and unrealized gains (losses), net
|
(1,069
|
)
|
|
345
|
|
|
Ending balance
|
$
|
94,854
|
|
|
129,841
|
|
|
|
Three Months Ended March 31,
|
|||||
|
2015
|
|
2014
|
|||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
Beginning balance
|
$
|
(1,788
|
)
|
|
1,498
|
|
Unrealized gains (losses), net of income tax of $0
|
(719
|
)
|
|
345
|
|
|
Realized gain recognized into earnings, net of income tax of $0 (a)
|
(350
|
)
|
|
—
|
|
|
Ending balance
|
$
|
(2,857
|
)
|
|
1,843
|
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Interest payable
|
$
|
27,837
|
|
|
$
|
15,594
|
|
Income taxes payable
|
4,524
|
|
|
3,577
|
|
||
Legal accrual
|
1,038
|
|
|
872
|
|
||
Other
|
10,477
|
|
|
10,684
|
|
||
Total Other accrued liabilities
|
$
|
43,876
|
|
|
$
|
30,727
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Ascent Capital 4.00% Convertible Senior Notes due July 15, 2020
|
$
|
78,420
|
|
|
$
|
77,531
|
|
Monitronics 9.125% Senior Notes due April 1, 2020
|
585,242
|
|
|
585,251
|
|
||
Monitronics term loans, mature March 23, 2018, LIBOR plus 3.25%, subject to a LIBOR floor of 1.00%
|
892,199
|
|
|
894,208
|
|
||
Monitronics $315 million revolving credit facility, matures December 22, 2017, LIBOR plus 3.75%, subject to a LIBOR floor of 1.00%
|
130,300
|
|
|
70,500
|
|
||
|
1,686,161
|
|
|
1,627,490
|
|
||
Less current portion of long-term debt
|
(9,166
|
)
|
|
(9,166
|
)
|
||
Long-term debt
|
$
|
1,676,995
|
|
|
$
|
1,618,324
|
|
|
As of
March 31, 2015 |
|
As of
December 31, 2014 |
||||
Principal
|
$
|
103,500
|
|
|
$
|
103,500
|
|
Unamortized discount
|
(25,080
|
)
|
|
(25,969
|
)
|
||
Carrying value
|
$
|
78,420
|
|
|
$
|
77,531
|
|
Remainder of 2015
|
$
|
6,875
|
|
2016
|
9,166
|
|
|
2017
|
139,466
|
|
|
2018
|
870,800
|
|
|
2019
|
—
|
|
|
2020
|
688,500
|
|
|
Thereafter
|
—
|
|
|
Total principal payments
|
$
|
1,714,807
|
|
Less:
|
|
|
|
Unamortized discounts and premium, net
|
28,646
|
|
|
Total debt on condensed consolidated balance sheet
|
$
|
1,686,161
|
|
Notional
|
|
Effective Date
|
|
Fixed
Rate Paid
|
|
Variable Rate Received
|
||
$
|
533,500,000
|
|
|
March 28, 2013
|
|
1.884%
|
|
3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
|
141,375,000
|
|
|
March 28, 2013
|
|
1.384%
|
|
3 mo. USD-LIBOR-BBA, subject to a 1.00% floor (a)
|
|
110,521,357
|
|
|
September 30, 2013
|
|
1.959%
|
|
3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
|
|
110,521,357
|
|
|
September 30, 2013
|
|
1.850%
|
|
3 mo. USD-LIBOR-BBA, subject to a 1.00% floor
|
|
(a)
|
On March 25, 2013, Monitronics negotiated amendments to the terms of these interest rate swap agreements, which were entered into in March 2012 (the "Existing Swap Agreements," as amended, the “Amended Swaps”). The Amended Swaps are held with the same counterparties as the Existing Swap Agreements. Upon entering into the Amended Swaps, Monitronics simultaneously dedesignated the Existing Swap Agreements and redesignated the Amended Swaps as cash flow hedges for the underlying change in the swap terms. The amounts previously recognized in Accumulated other comprehensive income (loss) relating to the dedesignation are recognized in Interest expense over the remaining life of the Amended Swaps.
|
|
Three Months Ended March 31,
|
|||||
|
2015
|
|
2014
|
|||
Effective portion of loss recognized in Accumulated other comprehensive loss
|
$
|
(6,268
|
)
|
|
(3,371
|
)
|
Effective portion of loss reclassified from Accumulated other comprehensive loss into Net loss (a)
|
$
|
(1,805
|
)
|
|
(1,700
|
)
|
Ineffective portion of amount of loss recognized into Net loss on interest rate swaps (a)
|
$
|
(84
|
)
|
|
(1
|
)
|
|
•
|
Level 1 - Quoted prices for identical instruments in active markets.
|
•
|
Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets.
|
•
|
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (a)
|
$
|
3,842
|
|
|
—
|
|
|
—
|
|
|
$
|
3,842
|
|
||
Investments in marketable securities (b)
|
90,904
|
|
|
3,950
|
|
|
—
|
|
|
94,854
|
|
||||
Derivative financial instruments - assets (c)
|
—
|
|
|
257
|
|
|
—
|
|
|
257
|
|
||||
Derivative financial instruments - liabilities
|
—
|
|
|
(9,447
|
)
|
|
—
|
|
|
(9,447
|
)
|
||||
Total
|
$
|
94,746
|
|
|
$
|
(5,240
|
)
|
|
$
|
—
|
|
|
$
|
89,506
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds (a)
|
$
|
8,492
|
|
|
—
|
|
|
—
|
|
|
$
|
8,492
|
|
||
Investments in marketable securities (b)
|
117,765
|
|
|
4,828
|
|
|
—
|
|
|
122,593
|
|
||||
Derivative financial instruments - assets (c)
|
—
|
|
|
1,123
|
|
|
—
|
|
|
1,123
|
|
||||
Derivative financial instruments - liabilities
|
—
|
|
|
(5,780
|
)
|
|
—
|
|
|
(5,780
|
)
|
||||
Total
|
$
|
126,257
|
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
126,428
|
|
|
(a)
|
Included in cash and cash equivalents on the condensed consolidated balance sheets.
|
(b)
|
Level 1 investments primarily consist of diversified corporate bond funds. The Level 2 security represents one investment in a corporate bond. All investments are classified as available-for-sale securities.
|
(c)
|
Included in Other assets, net on the condensed consolidated balance sheets.
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
Long term debt, including current portion:
|
|
|
|
|
|
||
Carrying value
|
$
|
1,686,161
|
|
|
$
|
1,627,490
|
|
Fair value (a)
|
1,677,474
|
|
|
1,590,809
|
|
|
(a)
|
The fair value is based on market quotations from third party financial institutions and is classified as Level 2 in the hierarchy.
|
|
December 31, 2014
|
|
Additions
|
|
Payments
|
|
March 31, 2015
|
||||||
2013 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
||
Severance and retention
|
$
|
134
|
|
|
—
|
|
|
(134
|
)
|
|
$
|
—
|
|
|
December 31, 2013
|
|
Additions
|
|
Payments
|
|
March 31, 2014
|
||||||
2013 Restructuring Plan
|
|
|
|
|
|
|
|
||||||
Severance and retention
|
$
|
1,570
|
|
|
547
|
|
|
(504
|
)
|
|
$
|
1,613
|
|
|
Series A
Common Stock
|
|
Series B
Common Stock
|
||
Balance at December 31, 2014
|
13,162,095
|
|
|
384,086
|
|
Issuance of restricted stock awards
|
6,285
|
|
|
—
|
|
Restricted stock forfeitures and tax withholding
|
(13,302
|
)
|
|
—
|
|
Repurchases and retirements of Series A shares
|
(229,168
|
)
|
|
—
|
|
Balance at March 31, 2015
|
12,925,910
|
|
|
384,086
|
|
|
Foreign
currency
translation
adjustments
|
|
Unrealized
holding
gains
and losses on
marketable
securities, net (a)
|
|
Unrealized
gains and
losses on
derivative
instruments,
net (b)
|
|
Accumulated
other
comprehensive
income (loss)
|
||||||
As of December 31, 2014
|
$
|
(215
|
)
|
|
(1,788
|
)
|
|
(4,805
|
)
|
|
$
|
(6,808
|
)
|
Loss through Accumulated other comprehensive loss
|
(277
|
)
|
|
(719
|
)
|
|
(6,268
|
)
|
|
(7,264
|
)
|
||
Reclassifications of loss (gain) into Net loss
|
—
|
|
|
(350
|
)
|
|
1,805
|
|
|
1,455
|
|
||
As of March 31, 2015
|
$
|
(492
|
)
|
|
(2,857
|
)
|
|
(9,268
|
)
|
|
$
|
(12,617
|
)
|
|
(a)
|
Amounts reclassified into net loss are included in Other income, net on the condensed consolidated statement of operations. See note 4, Investments in Marketable Securities, for further information.
|
(b)
|
Amounts reclassified into net loss are included in Interest expense on the condensed consolidated statement of operations. See note 8, Derivatives, for further information.
|
|
Three Months Ended
March 31, |
||||
|
2015
|
|
2014
|
||
Weighted average Series A and Series B shares — basic and diluted
|
13,266,941
|
|
|
13,808,344
|
|
•
|
general business conditions and industry trends;
|
•
|
macroeconomic conditions and their effect on the general economy and on the U.S. housing market, in particular single family homes which represent Monitronics’ largest demographic;
|
•
|
uncertainties in the development of our business strategies, including market acceptance of new products and services;
|
•
|
the competitive environment in which we operate, in particular increasing competition in the alarm monitoring industry from larger existing competitors and new market entrants, including telecommunications and cable companies;
|
•
|
the development of new services or service innovations by competitors;
|
•
|
Monitronics’ ability to acquire and integrate additional accounts, including competition for dealers with other alarm monitoring companies which could cause an increase in expected subscriber acquisition costs;
|
•
|
integration of acquired assets and businesses;
|
•
|
the regulatory environment in which we operate, including the multiplicity of jurisdictions and licensing requirements to which Monitronics is subject and the risk of new regulations, such as the increasing adoption of “false alarm” ordinances;
|
•
|
technological changes which could result in the obsolescence of currently utilized technology and the need for significant upgrade expenditures, including the phase-out of 2G networks by cellular carriers;
|
•
|
the trend away from the use of public switched telephone network lines and resultant increase in servicing costs associated with alternative methods of communication;
|
•
|
the operating performance of Monitronics’ network, including the potential for service disruptions at both the main monitoring facility and back-up monitoring facility due to acts of nature or technology deficiencies;
|
•
|
the outcome of any pending, threatened, or future litigation, including potential liability for failure to respond adequately to alarm activations;
|
•
|
the ability to continue to obtain insurance coverage sufficient to hedge our risk exposures, including as a result of acts of third parties and/or alleged regulatory violations;
|
•
|
changes in the nature of strategic relationships with original equipment manufacturers, dealers and other Monitronics business partners;
|
•
|
the reliability and creditworthiness of Monitronics’ independent alarm systems dealers and subscribers;
|
•
|
changes in Monitronics’ expected rate of subscriber attrition;
|
•
|
the availability and terms of capital, including the ability of Monitronics to obtain additional funds to grow its business;
|
•
|
Monitronics’ high degree of leverage and the restrictive covenants governing its indebtedness; and
|
•
|
availability of qualified personnel.
|
|
|
Twelve Months Ended
March 31, |
|
||||
|
|
2015
|
|
2014
|
|
||
Beginning balance of accounts
|
|
1,046,785
|
|
|
818,335
|
|
|
Accounts acquired
|
|
190,542
|
|
|
357,855
|
|
|
Accounts canceled
|
|
(139,824
|
)
|
|
(118,688
|
)
|
|
Canceled accounts guaranteed by dealer and acquisition adjustments (a)
|
|
(6,691
|
)
|
(b)
|
(10,717
|
)
|
(c)
|
Ending balance of accounts
|
|
1,090,812
|
|
|
1,046,785
|
|
|
Monthly weighted average accounts
|
|
1,060,524
|
|
|
962,527
|
|
|
Attrition rate - Unit
|
|
(13.2
|
)%
|
|
(12.3
|
)%
|
|
Attrition rate - RMR (d)
|
|
(13.0
|
)%
|
|
(12.0
|
)%
|
|
|
(a)
|
Includes canceled accounts that are contractually guaranteed to be refunded from holdback.
|
(b)
|
Includes an increase of 1,503 subscriber accounts associated with multi-site subscribers that were considered single accounts prior to the completion of the Security Networks integration in April 2014.
|
(c)
|
Includes 2,046 subscriber accounts that were proactively canceled during the third quarter of 2013 because they were active with both Monitronics and Security Networks.
|
(d)
|
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.
|
|
|
Three Months Ended
March 31, |
|||||
|
|
2015
|
|
2014
|
|||
Net revenue
|
|
$
|
138,416
|
|
|
132,864
|
|
Cost of services
|
|
25,690
|
|
|
22,090
|
|
|
Selling, general, and administrative
|
|
27,596
|
|
|
26,537
|
|
|
Amortization of subscriber accounts, dealer network and other intangible assets
|
|
63,141
|
|
|
61,780
|
|
|
Restructuring charges
|
|
—
|
|
|
547
|
|
|
Interest expense
|
|
(29,781
|
)
|
|
(28,773
|
)
|
|
Income tax expense from continuing operations
|
|
(1,977
|
)
|
|
(1,621
|
)
|
|
Net loss from continuing operations
|
|
(9,675
|
)
|
|
(9,378
|
)
|
|
Net loss
|
|
(9,835
|
)
|
|
(9,732
|
)
|
|
|
|
|
|
|
|||
Adjusted EBITDA
(a)
|
|
|
|
|
|
|
|
Monitronics business Adjusted EBITDA
|
|
$
|
91,667
|
|
|
89,275
|
|
Corporate Adjusted EBITDA
|
|
(947
|
)
|
|
(1,331
|
)
|
|
Total Adjusted EBITDA
|
|
$
|
90,720
|
|
|
87,944
|
|
Adjusted EBITDA as a percentage of Net revenue
|
|
|
|
|
|
|
|
Monitronics business
|
|
66.2
|
%
|
|
67.2
|
%
|
|
Corporate
|
|
(0.7
|
)%
|
|
(1.0
|
)%
|
|
(a)
|
See reconciliation to net loss from continuing operations below.
|
|
December 31, 2014
|
|
Additions
|
|
Payments
|
|
March 31, 2015
|
||||||
2013 Restructuring Plan
|
|
|
|
|
|
|
|
|
|
|
|
||
Severance and retention
|
$
|
134
|
|
|
—
|
|
|
(134
|
)
|
|
$
|
—
|
|
|
December 31, 2013
|
|
Additions
|
|
Payments
|
|
March 31, 2014
|
||||||
2013 Restructuring Plan
|
|
|
|
|
|
|
|
||||||
Severance and retention
|
$
|
1,570
|
|
|
547
|
|
|
(504
|
)
|
|
$
|
1,613
|
|
|
|
Three Months Ended
March 31, |
|||||
|
|
2015
|
|
2014
|
|||
Total Adjusted EBITDA
|
|
$
|
90,720
|
|
|
87,944
|
|
Amortization of subscriber accounts, dealer network and other intangible assets
|
|
(63,141
|
)
|
|
(61,780
|
)
|
|
Depreciation
|
|
(2,398
|
)
|
|
(2,758
|
)
|
|
Stock-based compensation
|
|
(1,626
|
)
|
|
(1,662
|
)
|
|
Restructuring charges
|
|
—
|
|
|
(547
|
)
|
|
Radio conversion costs
|
|
(523
|
)
|
|
—
|
|
|
LiveWatch acquisition related costs
|
|
(946
|
)
|
|
—
|
|
|
LiveWatch acquisition contingent bonus charges
|
|
(519
|
)
|
|
—
|
|
|
Security Networks integration related costs
|
|
—
|
|
|
(1,059
|
)
|
|
Interest income
|
|
516
|
|
|
878
|
|
|
Interest expense
|
|
(29,781
|
)
|
|
(28,773
|
)
|
|
Income tax expense from continuing operations
|
|
(1,977
|
)
|
|
(1,621
|
)
|
|
Net loss from continuing operations
|
|
$
|
(9,675
|
)
|
|
(9,378
|
)
|
Year of Maturity
|
|
Fixed Rate
Derivative
Instruments (a)
|
|
Variable Rate
Debt
|
|
Fixed Rate
Debt
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Amounts in thousands)
|
||||||||||||||
Remainder of 2015
|
|
$
|
—
|
|
|
$
|
6,875
|
|
|
$
|
—
|
|
|
$
|
6,875
|
|
2016
|
|
—
|
|
|
9,166
|
|
|
—
|
|
|
9,166
|
|
||||
2017
|
|
—
|
|
|
139,466
|
|
|
—
|
|
|
139,466
|
|
||||
2018
|
|
9,190
|
|
|
870,800
|
|
|
—
|
|
|
879,990
|
|
||||
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2020
|
|
—
|
|
|
—
|
|
|
688,500
|
|
|
688,500
|
|
||||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
9,190
|
|
|
$
|
1,026,307
|
|
|
$
|
688,500
|
|
|
$
|
1,723,997
|
|
|
(a)
|
The derivative financial instruments reflected in this column include four interest rate swaps, all with a maturity date of March 23, 2018. As a result of these interest rate swaps, the interest rate on the borrowings under the Credit Facility term loans have been effectively converted from a variable rate to a weighted average fixed rate of
5.06%
. See notes 7, 8 and 9 to our condensed consolidated financial statements included in this quarterly report for further information.
|
Period
|
|
Total number of
shares
purchased
(surrendered) (1)
|
|
|
|
Average price
paid per share
|
|
Total Number of
Shares (or Units)
Purchased as Part
of Publicly
Announced Plans
or Programs
|
|
Maximum Number (or
Approximate Dollar
Value) or Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
|
|
|
||||
1/1/2015 - 1/31/2015
|
|
696
|
|
|
(2)
|
|
$
|
52.11
|
|
|
—
|
|
|
|
|
|
2/1/2014 - 2/28/2015
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
3/1/2015 - 3/31/2015
|
|
235,570
|
|
|
(2)
|
|
41.33
|
|
|
—
|
|
|
|
|
(1)
|
|
Total
|
|
236,266
|
|
|
|
|
$
|
41.37
|
|
|
—
|
|
|
|
|
|
|
(1)
|
On June 16, 2011, the Company announced that it received authorization to implement a share repurchase program, pursuant to which it may purchase up to $25,000,000 of its shares of Series A Common Stock, par value $0.01, from time to time. On November 14, 2013, the Company’s Board of Directors authorized the repurchase of an additional $25,000,000 of its Series A Common Stock. On November 10, 2014, the Company announced the Board of Directors' authorization of a further increase of $25,000,000 to the Company's share repurchase program. As of
March 31, 2015
, 1,290,864 shares of Series A Common Stock had been purchased, at an average price paid of $53.90 per share, pursuant to these authorizations. As of
March 31, 2015
, the remaining availability under the Company's existing share repurchase program will enable the Company to purchase up to an aggregate of approximately
$5,422,000
of Series A Common Stock. The Company may also purchase shares of its Series B Common Stock, par value $0.01 per share, under the remaining availability of the program.
|
(2)
|
Includes 696 and 6,402 shares withheld in payment of withholding taxes by certain of our employees upon vesting of their restricted share awards.
|
4.1
|
|
Form of Amendment No. 4 to the Credit Agreement, dated February 17, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto. *
|
4.2
|
|
Form of Amendment No. 5 to the Credit Agreement, dated April 9, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-34176) filed with the Securities and Exchange Commission on April 15, 2015).
|
10.1
|
|
Ascent Capital Group, Inc. 2015 Omnibus Incentive Plan (the "Omnibus Incentive Plan") (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 (File No. 333-203043) filed with the Securities and Exchange Commission on March 26, 2015).
|
10.2
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan.*
|
31.1
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Rule 13a-14(a)/15d-14(a) Certification. *
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31.2
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Rule 13a-14(a)/15d-14(a) Certification. *
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32
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Section 1350 Certification. **
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101.INS
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XBRL Instance Document. *
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101.SCH
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XBRL Taxonomy Extension Schema Document. *
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document. *
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document. *
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document. *
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document. *
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*
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Filed herewith.
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**
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Furnished herewith.
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ASCENT CAPITAL GROUP, INC.
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Date:
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May 8, 2015
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By:
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/s/ William R. Fitzgerald
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William R. Fitzgerald
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Chairman of the Board, Director and Chief Executive Officer
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Date:
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May 8, 2015
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By:
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/s/ Michael R. Meyers
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Michael R. Meyers
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Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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4.1
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Form of Amendment No. 4 to the Credit Agreement, dated February 17, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto. *
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4.2
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Form of Amendment No. 5 to the Credit Agreement, dated April 9, 2015, by and among Monitronics International, Inc., Bank of America, N.A., individually and as administrative agent, and the certain lenders party thereto (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (File No. 001-34176) filed with the Securities and Exchange Commission on April 15, 2015).
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10.1
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Ascent Capital Group, Inc. 2015 Omnibus Incentive Plan (the "Omnibus Incentive Plan") (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 (File No. 333-203043) filed with the Securities and Exchange Commission on March 26, 2015).
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10.2
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Form of Performance-Based Restricted Stock Unit Award Agreement under the Omnibus Incentive Plan.*
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31.1
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Rule 13a-14(a)/15d-14(a) Certification. *
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31.2
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Rule 13a-14(a)/15d-14(a) Certification. *
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32
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Section 1350 Certification. **
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101.INS
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XBRL Instance Document. *
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101.SCH
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XBRL Taxonomy Extension Schema Document. *
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document. *
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document. *
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document. *
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document. *
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*
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Filed herewith.
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**
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Furnished herewith.
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(1)
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the acquisition by any person or group (excluding John C. Malone, and/or any family member(s) of the foregoing and/or any company, partnership, trust or other entity or investment vehicle controlled by such persons or the holdings of which are for the primary benefit or any of such persons (collectively, the “Permitted Holders”)) of ownership of stock of the Company that, together with stock already held by such person or group, constitutes more than 50% of the total fair market value or more than 50% of the total voting power of the stock of the Company;
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(2)
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the acquisition by any person or group (other than the Permitted Holders), in a single transaction or in multiple transactions all occurring during the twelve (12)-month period ending on the date of the most recent acquisition by such person or group, assets from the Company that have a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; or
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(3)
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the acquisition by any person or group (other than the Permitted Holders), in a single transaction or in multiple transactions all occurring during the twelve (12)-month period ending on the date of the most recent acquisition by such person or group, of ownership of stock of the Company possessing 30% or more of the total voting power of the stock of Company or the replacement of
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Date:
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May 8, 2015
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/s/ William R. Fitzgerald
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William R. Fitzgerald
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Chairman, President and Chief Executive Officer
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Date:
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May 8, 2015
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/s/ Michael R. Meyers
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Michael R. Meyers
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Senior Vice President and Chief Financial Officer
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Dated:
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May 8, 2015
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/s/ William R. Fitzgerald
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William R. Fitzgerald
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Chairman, President and Chief Executive Officer
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Dated:
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May 8, 2015
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/s/ Michael R. Meyers
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Michael R. Meyers
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Senior Vice President and Chief Financial Officer
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(Principal Financial and Accounting Officer)
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