CBB - Earnings call transcript Q4 2018

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Operator

Good day, everyone, and welcome to the CBB's Fourth Quarter 2018 Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Josh Duckworth. Please go ahead.

Josh Duckworth

Thank you and good morning. welcome Cincinnati to XXXX fourth like call. earnings would everyone Bell's to quarter I the is Financial call Chief on me With today Leigh and Kaiser. Executive our Fox; our Andy Chief Officer, Officer, and President comments on strategic update will provide our our highlights initiatives. XXXX Leigh's and today an recap Andy, will fourth on detail quarter segment by performance then XXXX our provide and guidance. our financial

of Following Andy for and will join the prepared Leigh remarks, Tom question-and-answer Simpson, the portion our Chief Operating Officer call. the

and that Before are financial we presentation let earnings proceed, Relations statements you on our Investor remind our posted release me website.

like In you will listen if website at addition, call on a available time, would starting recording to tape to noon. at a this today the future be

Chief SEC, of the to most X-K also pleased including available also reports. With directly In would I certain attention actual uncertainties we introduce draw such GAAP website. presentation that, your morning, in materially forward-looking statements. like information. Harbor Bell's measures. will risks suggested XX-K to report, annual with am be I information measures indicated Fox. available Officer, discussing statement potential outcomes any to to or quarterly and Form This to from uncertainties, filings remarks recent company’s slide and Bell's, and the contains our those various is risks financial or measures on are forward-looking non-GAAP Form these this Executive Form Safe and Now differ X. non-GAAP may XX-Q Due results our presented Reconciliations reports, Cincinnati comparable President More the on on our Leigh Cincinnati by

Leigh Fox

Thanks Bell. merger a transformational marked integrated and We've everyone. two-year Telcom. welcome period the joining for and XXXX of Cincinnati us very Hawaiian closed the successfully OnX for with end Josh today. Thanks,

two footprint growing operational with reach XXXX a complementary share. diverse performance Internet in attractive We fiber-centric guidance. We revenue achieved our distinct the an growing Services this business manage a all while with and two achieving and network strong now have businesses, delivering business customer with of IT yet recurring business and reorganized base financial market also

on noted year $X.X flow. As of generating positive cash X, slide revenue for $XXX billion the million free adjusted totaled and EBITDA consolidated

services IT business. our to Moving

was Our and addresses of our simple. network that the enterprise XXXX a IT client for commercial networking Creating company footprint. needs strategy beyond

become and this, many sold markets products take As within regardless to of working. managed grade our clients network adding full we simple to an tell American carrier to commercial IT sales is professionals. location highly access software-defined a the am the enterprise and from with begin merger we with network opportunity need base, XX have additional to strategy The voice identified software OnX created instant of and To to I accomplish of XXXX products our hardware management. expand stack scale solutions significantly providing by traditionally October you North trained to our and pleased footprint reach. value XXX

to more for achievement revenue traditional an is typically reseller. considered IT existing by expanded We adding Through a new and services a This company the gross was that selling of services geographic a than in new for also to strategic XXXX. combination footprint. across OnX our customer of our sell our our recurring base diversified logos, sales logos accounted our incredible XX% that Services customers adding X,XXX-plus segment of value-added

remain customers more with approximately and Hardware incredibly accounts XX% our with significant by is impressive Consulting two interactions. Of well cloud-based purchased sticky and of our a the communications and believe products a is our these recently customer demand Communications XX% We services. relationships which purchased percentage annual we a solution Hardware move for that purchased But are a IT top XX% latter relationship our product, for IT an Consulting this customers, I revenue. growing encouraged Services and within addition, services. nearly In purchasing solution. XX% examined particularly beyond customers XXX even these transactional XXX These what

engagement than over practice the contract During $X $XXX a value secured be XXXX, or resulting of realized million more monthly to with recurring multi-year million next years total five of revenue. the communications in three

market. revenue Hawaiian expanded realizes million Our Fortune increased demand Consulting for Fortune into consulting practice our XXX added our established billable practice. with resources in In also full The has a we IT enterprise also to with approximately an year-over-year, demand uptick generating relationship customers. two and XX total, the of as year $XXX growing strategic Services new XX% resources

Our to Telcom relationships Telcom and in platform extensive Hawaiian the our underserved with on merger significant July identify opportunities new objective. existing have Hawaiian we realizing has synergy Since provided portfolio team needed the made X, toward the our strides and operational target products further develop market.

consecutive a two for EBITDA As result, adjusted now quarters. increased has

product remain improving Looking and we and increasing XX% ongoing focused to efforts ahead, service. expect penetration X% adjusted as Internet EBITDA operational grow in customer delivery on XXXX to

merger with step was scale Hawaiian value in customers. shareholders density and and toward the Additionally, building the for Telcom fiber important locking

and on only can network demand As provide. to growing anticipate fiber we the have capitalize continue that for speed

those product addresses us its confident the home will dense our XXX-megabit We the simply next assets. Oahu, Cincinnati able slightly to our XX% XX% address. on group, residents. investment from the of peer, better fiber more this To distinction our with island between And that closet Contract of in which continued offer which only increasingly addresses been XX% approximately are a fiber-to-the-premise is of the Internet in fiber and to and than will be million is one to of assets peer differentiator. networks constructed We of further have has like our market a our illustrate differentiate peers. to

resulted fiber in market Internet investments increasing their Our and Cincinnati both year-over-year. Hawaii share

these to evidence speed. two Bell superior more Ultimately, than of than XXX-megabit speeds only a to review will to the additional future and additional current XXXX. segment intensive our subscribed provide assets the about and earnings when let XX% fourth outlook data XX% value Hawaiian subscribed such brand and capture quarter to standard. customers speeds distinctive who years provide As Internet of means compared bandwidth that, Cincinnati and Internet share for demand With Cincinnati's faster Andy, details for market call results the accelerating performance greater each and me to turn ago from Telcom’s financial over

Andy Kaiser

revenue IT Thanks, and million from for $XXX on Leigh. approximately totaling as high X, Starting adjusted increased revenue up sales. and seasonally EBITDA were on slide demand revenue, infrastructure the totaled for consolidated with sequentially resulting as communications $XXX EBITDA stronger service X% services well adjusted consulting million. quarter Both

third the We've with Hawaiian totaling merger of segment resulted from for prior revenue and remained communications slide Turning offset Compared the XXXX, X% the to EBITDA adjusted Fiber to consistent less in X. as quarter. Communications with entertainment revenue. adjusted Contributions of highlighted partially Entertainment the as million. decline our offset quarter Telcom in revenue fourth Total merger-related and growth million, Enterprise quarter the decreased Consumer/SMB $XX declines. synergies results EBITDA and slight continued and than quarter, Fiber legacy in $XXX

combination X,XXX Video subscribers, Internet ARPU year-over-year. over as revenue Additional slide and as $XX, been details continued which to the declines. included Fiber customer the the speed include quarter, X% totaled Video mitigated XXXX, for year-over-year, regarding video metrics We X% Cincinnati, Consumer/SMB increasing XX,XXX ended from In and a growth at towards up year fiber-to-the-premise up XXX,XXX year for revenue shifts ARPU as also ending on subscriber related $XX declined XXX,XXX solutions demand subscribers of strong ago, Internet million higher preference totaled Fioptics quarter Cincinnati Fioptics top X. referred have the program. the fiber-to-the-node year with and customers. the during the for Fioptics in

for offering to product product. as for premise to well As the competitors faster our offering accelerate, Internet proving as the our is demand itself to speeds continues superior fiber fiber-to-the-node

improving slightly year, quarter. Fiber Internet including year in the X% In X% premise XX,XXX the Consumer/SMB a to fiber penetration ago, from totaling ARPU the $XX X.X%. increased million, to During $XX. increased Hawaii during the totaled sequentially. year revenue Fiber-to-the-premise XX% premise Internet from quarter for quarter, Internet added prior Fiber with up to fourth to we the churn X,XXX customers, the

the Telcom X% remained previous during quarter, at $XX. Internet slightly to increased in to X,XXX consistent flat rates increasing with remained XX%. activations. resulting an to the fourth with subscribers penetration $XX fiber Internet rates the subscribers added XX,XXX, During while of ARPU XX%. due ARPU to penetration the subscribers quarter decreased Video involved Hawaiian quarter, to premise Total Video increased

an prior quarter including Services Each year, IT million, contribution and Hardware to were during Telecom. being our sequentially, impressive, and our infrastructure to segment seasonally from revenue to the the four over $XXX Turning XX% slide X% the for million is fracts increase revenues quarter. Revenue up Hawaiian of of stronger in with X. $XX Consulting a growth on X% totaled the growing results due solutions quarter billable resources. in primarily the fourth contributed

for results quarter fourth which XX% the revenue generated previous totaling strong quarter. Our and to adjusted XXXX, $XX was compared the year-over-year up XX% million EBITDA of

to slide continued demand As SD-WAN highlighted XX, on our NaaS offerings be communications within encouraged our strong and for by we UCaaS the practice.

increased Hawaiian XXXX more during growth the X% decline. contributions legacy than from Excluding revenue Telecom, by XX% to in communications projects due offsetting strategic

more SD-WAN our and locations XX%. locations NaaS we increased than doubled During the quarter, by

the XX,XXX manage also now We of in XXX,XXX UCaaS approximately added third hosted Hawaii. profiles since quarter including seats XX,XXX And nearly XXXX.

due of $XX $XX for as our from net year in quarter $X.X leverage the full of to Free on well Hawaiian up with merger. contributions billion contributions year the Consistent OnX cash prior to financial primarily flow position we debt million the of close the as Turning totaled slide ended Telecom the year with from XX. resulting times. the prior year X.X from million, since

strategy is capital $XXX at free long-term no exceeded our Our XXXX. we generate than flow execute our growth liquidity have positive and appropriate significant to maturities structure and until due as more current year-end million to ability cash

carryforward As foreseeable gross any tax million will we $XXX a obligation the of into defray a maintain federal operating approximately loss reminder, future. net which also

on $XXX presented full expenditures capital totaled million slide XX Hawaiian $XX Telcom. As for including million year

in invested For XXXX, our building the million to Suite products XX,XXX full we fiber-to-the-premise Fioptics new of year of $XX addresses.

free XXX,XXX Hawaii, into cash Oahu the addresses the total our fiber-to-the-premise than planning addresses with footprint remain of businesses or islands only island, Greater upgraded of Fiber Consumer/SMB return neighbor XX% is residential flow is continuing positive we approximately XX% As of now available XXX,XXX opportunities on approximately to the commercial Cincinnati. profile. a fiber while result, XXXX, on In XXX,XXX Heading are XX% available been expand to to and Fioptics more highest to the while to and product. to identify homes addresses with have the covering

to contributions slide $XXX payments post-retirement Interest Telcom. to company are $XX pension will be to million on illustrated million from XX we our million $XX to for capital million expected $XXX $XXX XXXX million including for to $XXX $XX Hawaiian million the to million in As ranging expect with and plans expenditures million. $XX be

$XX are We $XXX $X.XXX to contribution include And targets anticipating we of EBITDA to communications, full $X.XXX the of in to million have $XXX the practice million. adjusted one XXXX adjusted billion million previous million headwinds to to million within to and be in-sourcing revenue These our be Hardware EBITDA In $XXX customers. faced due million Telcom's Services respectively. discussed year segment and cloud Hawaiian $XXX at and our revenue forecasting and largest to $XXX an billion. challenges initiatives IT

potential has to adjusted reduce to as XXXX. by Our million $XX of compared impact to EBITDA the quantified efforts million XXXX guidance $XX conservatively these

various win for close projects with providing We turn to closing units. opportunity maintain With remarks. back business to that, to call a continue entity's Leigh this relationship within I'll the customer the the

Leigh Fox

was XXXX sector. our for a year Andy. Thanks, challenging undoubtedly

historical customer created our Cincinnati accelerate However, superior and to both decision producing regional early and brand have higher with unique combined and than competition, relationships, our group. assets, faster from significantly Cincinnati fiber our Bell networks speed Internet equity our of capable built differentiating Hawaiian of our bandwidth peer

IT our segment, end-to-end across service flexible within now we solutions North deliver to addition, In customers America.

associated driving our remain with created diversified our growing IT two we our expanded we business. innovative businesses expanding competitive valuation recurring committed increasing and fiber-rich Our In significant portfolio drive services network distinct services towards has revenue and footprint. closing, a multiples as to our platform across

long-term with operator open transformation, combined I strategic deliver capital up over for the to focus sharp value. to allocation Q&A. capitalize turn has shareholder industry positioned Cincinnati call Our the Bell now on it our disciplined and and will to execution on trends

Operator

Flannery [Operator Simon from Instructions] with first our Morgan We'll question Stanley. take

Simon Flannery

lumpiness parts year? Good to the lot. those value of a through the through the is Or that talked the and IT separations kind past potentially that? on in-sourcing, in Leigh, about company us of plans? on morning. update there the some the the And then Thank Thanks customer of Could impact you is considering be linear likely some you you. services. just of

Leigh Fox

Yes. Simon. Thanks,

on update an CBTS. So

organizations, we an I I time separate think point, to the our a or we're this and segments can to think, much both years sell the standpoint. in on. do three done looking tomorrow determine that we've and from as of to is both time we'll At whether financial pretty goes standpoint organizational reporting all execute now, right from it

job represents is, are honestly, in we you I that a that we have I was one if kind you to the traditional, a in if is of really than sector. at segment. think the much think call national made. I the national guys our part CBTS think And teleco, value And look our think, about it, what larger maneuver we are it, of the brilliant that important that the highlight pick

Typically, sell entity. take segment ability products I America. right? than those geography, not name. have our of the complete them across or deep are and enterprise clients out those group to network in either our as product those a of products most robust have network, a sell we we So the units, now by take stack now our geography the more in given North we that in limited even constrained in product peers. What to And go, sell products within of sell commercial enterprise fiber network into we've within our basically think, their and commercial more was, an enterprise we separate different business set fact, done, pick commercial connected we're and They geography a and So products and our to type that group.

So that’s what we're going to focus on.

a happy to we're company value right company spin tailwind we any incredibly on the momentum. That point have has with it. behind now at I'm growing focused the of if that lot that got should. ability out We it. dictates But

I'm was your forward what second So to I'm sorry, looking question? what XXXX brings.

Simon Flannery

yes. GE, the on was It

Leigh Fox

probably sorry trend of see six should the of We more Yes, lot the months. GE. half first focused a trends It's to year. in sort be on the going of out the first a to

of was struggled things with One we the timing.

we scenario. to than are mind, past bit -- timing It We first them; with as that We're worse of is them help in case better that's be range But if guidance we gave the would it, working with as I my customer, it range. much can. insourcing and they point. model worst But it will it a understand were unknown. timing to of on that product. this in With is model were working no I normalizes then a that out the six months sort this

Simon Flannery

Okay.

it it's hit might in So, QX? possible not

Leigh Fox

doubt will somehow it Yes, I QX. would hit that in all

Simon Flannery

Thanks lot. a Okay, great.

Operator

Merrill We'll take with America from question our Barden next Bank David of Lynch.

David Barden

is of in question. to XXXX the going thank months run I guys. the -- last Hey, what in the taking saw was for had -- detail Thanks the one pretty substantially Hawaii into expected year. we six next business. CapEx rate from couple guess of down I for legacy a first the Cincinnati you tick

bit a to now in If size to driving wonder CapEx what's economic coverage you could you is little of of kind bit a that little related the of terms can the that? think statement with about expectations I made a question goals elaborate what I targeted areas. kind And the where what higher kind if in capital for to you've we of more kind in would is fiber how are on that then would market throttle you're kind the competitive that penetration at of kind closing easy of gauging a of Thanks. lastly natural optimism become market, And in continue a assume expenditures. XX% grind in on the climate more -- XX-XX kind Cincinnati to number share? of on your then of, it

Leigh Fox

really think to well. we're and results. slight you're the to same we'll And an optimal the across seeing in as and into we I That it's the doing without calls, And reason Thanks, But disciplines. expect David, appreciate about prior ensure already of that territories. in the is Hawaii operations the is I from one capital we Cincinnati cross-functional things a you had in that see want of work’s down the do, tick that world very the think didn’t didn’t the what in most in way standpoint, begun thinking run operational going it. mentioned to to jump just convinced you respect rate, to like fiber the want it CapEx align but being should spending With build, we'd we we're continue HCOM invest way.

XXXX. that's think see what I in so you And

go So, then on we're think goal and from expect as relates we I operationally seeing we're prudent to to to going the think question. the is we ARPU expect that everything a From we that assess thing and we sure the penetration standpoint, this as make move which financially progress to and I penetration and the assess prudent do.

year focus is think on penetration. type subs. weren't metrics. to We what and vanity heard right the to chase This a are be have talk you going on types a of we're where right to one being slightly XX% markets the start on at XX% both over than focus to with pretty point metro one greater deep is your a But to other. of going we to we And fiber. over going of weren’t the subs. think on point going as there's about types year focus being that unprofitable we last over customers, at right penetration, or I we're I what company of both change And pace fiber-to-the-prem, the XX%, things us but

attack going to subs. still us You're

learning shifts changes. for going think it supply as But fiber-based Internet and and to growth. see demand you're really is I speeds

with ahead demand is too One far supply. being concerns of of my

so in see five don't from to that to And the user want immensely be five But landscape from expenditure the at time, same standpoint. a years, three ahead three, years the we I changing data of far -- next a standpoint. capital too

to And might the bound does bounds the what we're on so our that getting right of focusing market the to neighborhood is what honest. hitting will on And XX/XX is Making your don't of point of pressing know right point. sure that be mean us we the I a your be -- subs. penetration. type it's what

assets a the as and in winner the markets we're and assets over we of can the I we on the the our with market that a think think time demand net XX% be shift with I based assets. over be in have, simply share

is. so as what to way as do that's do well models down And and could in build just But fiber we're to know say I to possible. we're I aggressively as you that but possible, it could means going test. Obviously build look let’s prudent as business going what as sit we as

Your and very a more have assets debt more assets. we debt but underlevered, increases had and of good we these

so right position. we're very wait we And it's now see comes, good a and like and in feel and hope sort of it a

We as time. thing prudent the demand make to that start that over especially really do to the buildout point about and you from now seeing see sure to is this expect have how shift and this very we we’re good assets results we measured be

makes but about sense hope So, we're the how world. that's that thinking

David Barden

Leigh. Thanks,

Operator

with Our next Batya question from UBS. comes Levi

Batya Levi

you. Thank Great.

in some in up assumes of about think anything your Hawaii? is and in reach about in And half about where the we of buildout you customer. shouldn't Cincinnati expect saw XXXX that should I coverage an we just Have guidance update of Can us numbers? the – like XXXX we Maybe picked help it by you in environment you you XX,XXX get what about? then that and range we more that. First seen bit. revenue CapEx mentioned up competitive And us in especially Can year just on Hawaii CapEx. homes? that? you for a already that beyond the follow-up to a in Cincinnati, in would a end? question, maybe term provide little And fiber mentioned Can last on on the that believe terms talk bit exposure think that a Hawaii. large exposure showing also the And pressure

Leigh Fox

on Batya. that GE, range would it that in caps close. pretty Thanks, matches in we're you're And to revenue Cincinnati. probably as From to probably call financing million XX,XXX and homes. result, would XX,XXX say range. With be the million I to a Respect build I XX,XXX utilizing think X,XXX We're to $XX right I'm $XX Yeah. mechanisms. Hawaii guidance other exactly different

the the -- what respect like. your with churn to probably question competitive to last environment. looks respect that's I So landscape in With guess

addition I'm from driven haven't a looks change environment. one change competitive our not seen this the the standpoint. that mobile the result good. We that product saw been would from It's consistent. was obvious Fiber anything year massive I competitor. in pretty we incremental the a sure say churn But of that's

difference in comes really I think if churn, down you any BDSL churn it see that fact increasing. is on the

fiber-to-prem fiber-to-the-prem which you're else. again is a the type about talk a about discussion, talking because So as We're in legacy of BDSL to switching seeing over looks the really we product speeds. anything now considering our lot baseline than why just great more churn processor of

that's the which would say difference that, it on churn to was BDSL products So focused the if why expected. And prem-build. again saw we we we in around any I

Batya Levi

Okay. Thank you.

Operator

Our next Investors. GAMCO with Sergey question comes from Dluzhevskiy

Sergey Dluzhevskiy

you My Hawaiian integration, guys. year first obviously Telecom half had so now. question morning Good the for over a on is

beyond? you operations at entail so need to does further that if between be the level, may integration sequentially. you and network also high if EBITDA a we’ve reducing you optimization, maybe talk in could against how could Obviously, improve and you it And about share bringing So align XXXX Cincinnati field what areas, churns. are focus like mentioned Hawaii your efficiency, executing seen you

Leigh Fox

Thanks question. going think it's Yes, I for the Serge. well. Thanks really

answered your in you question. said EBITDA are own see. The growth honestly you think the results it, I you that

it on that were asset look And when it pretty could with of announced could I confident you we and stabilize we there of what you decline, when what's this would what lot that see like? trends. quarters think I we that's question do merger. exactly And happened. and mean, reverse a consecutive was

well. with doing is The looking team team have in some to going XXXX. the good I'm in it's I'm really forward Hawaii. So results confident really and we well

is Making transaction well. is standpoint the pricing parity. and I differences So and right? that Pricing the that piece from same. is methodology you -- very operations, transactional consistent pricing and sure kind everything Build down items going what while From to I it we're the take that operations have sure considering it's any simple think start mean standpoint of you the of as geographies. of methodology the doing same. thought in is we're break every process teams working also in with make the the we as

an as environment business different business environment in than be might the a Cincinnati. the little So example

teams as look at customers. So we those sure we're that understand making business

SFU what taking Here's mix customers, customers, different the into side account fact is in MDU is with and the their that, account than we how consider on to environment. while the business Cincinnati. it consumer Same while taking consumer here

done. and those and looking results aligning by just we fantastic. as done been build performed? that's the as educating done, marched have they that we on is then the become encouraged And teams are really teams it opportunities opportunities and initially least, how that another. have methodologies then they what one with have at So and familiar ourselves what look everything at where best Again together been I'm at

us. I some tailwinds got behind think we've

I brings. we the a front, got too. of that's on that completely think that's lot IT on think And XXXX have side untapped And what I script, -- And then a side. we to business forward the of a looking said the on lot opportunities market. we've in I'm So opportunities

I'm brings. So XXXX to looking what forward really

Sergey Dluzhevskiy

seeing close to Verizon launching mobiles, question carriers getting on product and second markets. we're XG. obviously Right. full And my a six wireless And XG as is with experiments larger launching in

that six the developments changed on Cincinnati have opportunities be that thinking your latest XG past front And your over the great. on to share presents recent So so XG would on Bell? the view you source of could subject, if months or any the

Leigh Fox

don't think And Yes, an I in thanks. changed. I subject it get my is Great personally -- question. has think And know is honestly, this still viewpoint every I I week. that opportunity. involved

I increased close things seen autonomous some thought easy and everywhere come reality. around impacts infrastructure. fixed areas for in forward. the I and that to processes. assets. will the massive based in, both think kind technology an some the are I technology vehicles going around meeting very to We've I business. can current do convinced it shifts. infrastructure convinced is this have think speed What I I in financials, deployed. chipmakers I'm honestly and cool everything How around products of from with a And shifts augmented we robust broadband am around, mean, pretty and think that, not when overall And what where that it’s product standing a replacement. is mean, the say what deployment of will and the can having it's sellers opportunity, carriers risk a it deployments be country connected to wireless we're products a with and demand as developers are And pretty drive life to we're that to a it But for staying conversations plans is of that reality augmented usage, data the on and

I'm conservative. if off historically by thing trends the that, on by usage the data is fact exponentially. that is look And show predictions that, shows, encouraged going and you future to we've to tried that. I at data And encouraged in I'm the predictions whenever of it usage some other predict So increase and been think, grossly the the we've

thing to going is that think I happen. same So

very other in, we've we're build asset build And Oahu explode to over a building right? if to is not island we've that's XX% the deep over not islands unique Hawaii, Especially, got to through easy got usage And data explodes. in is, a one CAF. two So in look in think I fiber going five asset way robust next having metro one years you at It's as data to it areas. Hawaii built. And Hawaii. so, of and easy in three the

And so, advantage take trends. we're to position these of a some of very unique in

I'm where as right I my head's can. that's So But as on of the now. finger pulse at keeping everything my much

Sergey Dluzhevskiy

Thank you.

Operator

comes with Wells from Fargo. Davis next question Our Hebert

Davis Hebert

Good morning, revenue division, going this guys. Thanks your quarter. that for the outlook of you we segment? should the this Is addressable for What's same driver I How Along $XX pretty think taking of Fiber the market? predictable year? revenue that, questions. total look that lines, Enterprise million be to reported at the

Leigh Fox

slightly challenge customers, always The dealing they're flat view fiber I have of right? more of XX-pound comes what legacy infrastructure. you cost they're that that lot fiber-based transition into when across as the with you're the products. negative areas I less, are is, of for a from would in When say, a And we're to – standpoint. is pipes the honestly up. bandwidth getting a you less robust area more negative it A cost standpoint, buying from getting to So, kind effectively on somewhat infrastructure right? of standpoint products for gorilla, they're the bigger migrating

customers to on are So, like stand continue help have treadmill's growth. running help incredibly we It's We it's salespeople migrate. important, relationships those that customers And great pretty got what to always have view upgraded fast that's I hard to infrastructure, -- not a tell to do. we'll it right? almost I But still. and but their don't so transition almost we jobs consistent, as like because they're it's it's robust treadmill expect

Davis Hebert

away the but we mean, And thinking the you expect you think I mean term, GE XXXX? do issue just granted do I longer is on I EBITDA another years that's several there Okay. then you in reason achievable? $XXX And impact still any perhaps, -- million view that's know still should Thank you.

Leigh Fox

Yes.

do. So, I absolutely

see any can exposure fairly -- completely to with. think great I very ultimately our and product for as they've I this I this keep been an it them, But honestly specific and relationship them. look at that to I it It anything was which But that successful portfolio. like been I product. a We've expect I that together. done like And don't else. overall that product an a incredible to with vendor don't anywhere unique. understand. it's to we decided relationship we successful with happen incredible mean we've try knew in-source everything was And

products that, normal described going business opportunity I sell that think think would in people I results. But And I know opportunity the have call incredible normal kind And about is we -- that have business that's footprint think I we think think an So, going now and CBTS. risk traditionally head the in around right? of that Bell. risk, we I within have as don't forward, wrapped And the we you necessarily that with I see incredible -- Cincinnati that beyond have it. larger much the to you're footprint I is earlier, their than

forward. organic not incredible So, doable that's yes, great I doable and us some on going million absolutely think time, a going happen basis. It's an $XXX to see I Obviously, momentum with and in XXXX. is that's CBTS but to going opportunities take

get past normalize issue, we really I'm I'm yes, encouraged this once encouraged. this kind and and So, really of

Davis Hebert

helpful. your in a to concern we much seems Last And leverage to itself. saw CenturyLink a target leverage Okay, be across the take down lower their that's level. sector question,

do see you. times do are how but you runway, position? X.X Thank And more to guys do have out. You can that? get bonds you balance a way reduce repurchase And leverage to as to conservative you and at the urgent sheet need Andy pointed

Leigh Fox

Thanks. Yes.

issue so not I -- order levering mean to I think a prudent doing an we're cycle backup obviously in on a within leverage. sector. And as refresh it's -- I is fiber. issue in the what aggressively as build And standpoint so I being build a we're it is our we're right? think from focused think that absolute reason sector, capital

the thing in same that failing, in concerned about concern right? with I everything And think the future. are see it's haven't our around the long-term to in I'm invested effectively the do. I future. do the right? At They time have We've prudent outlook statements the products good businesses for I that with assets not way that because think we're sector with fact part the putting feel to us, leverage invested most has super the don't in the you that ground. income

positioned, this don't why nice organizations and a house a sort a you really We've on well-positioned. I business in right? are see move things just of other automatically at can't big know people unfortunately, that products help I on and I well are very side They we're fact the decision And in compare on. have we right? incredibly think the any look to we're invested future good different, guys a consumer sectors neighborhood, both we're we're for you don't I And the bad are think side, any I why just in have, right? different. and that because us the And say make so small I

we discussions You have past had and in different. how about are I

that. enough focus the that rates, revenue need our de-lever. and on runway and run focus on run appropriate. to invest, our pay sure profit we interest we I be look making have I if And so rates And that

optionality, balance spend a a into gosh big my of here. And why issue ever of spend bind, which with the these and do changed to did can Look can CBTS is to need ever an one environment you the where will show one we're that Now going great where we assets profound have is oh did into on a our grow world delever. assets does the nothing leverage we've to let's reason sheet. if effect right? we asset it and what say look I that assets got I and thing I we fan am And become the we get said, of I also in get that so its a have if XXXX,

been to declines we I has both at And just optionality, rates well plans the so they're look at incredibly in ability our at how think of execute I have look we're really products, legacy sector. and our reality I And infrastructure lot the positioned. against counter from a our our and of look at look an I our I assets standpoint run type

the at And we're what very needs. I But long-term going as prudently look And and think other I why get we're it. results a we doing guys And they as well. do I the short-term of standpoint So company run different they we're announced mixing from to the can with and animal. it. I it get

Davis Hebert

you, Thank Great, Leigh.

Operator

with Sikora We'll take from our Aetna. next question Stephen

Stephen Sikora

Thanks the for questions. taking

that you've to construction with of selling First on installing. practices bring wanted past you and HCOM to in HCOM the completing one stated the best was aligning fiber better

was So, started initial with XXXX are on to into you result? can practices second and implement more as on XXXX? an XQ Have the Cincy update X,XXX seeing CapEx original XXXX than And in guidance. you penetration you you've HCOM far in higher a fiber then fiber builds guidance, give homes in you optic CapEx passed those line and in done the so fiber-to-the-prem with that but

So in passed? see can to XXXX? contributed the about And do those continuing trends Thanks. bit of you you a – what the talk in outperformance homes terms

Leigh Fox

Thanks Stephen. over this I let am one. this actually him going going to turn answer to and Tom to

Tom Simpson

Couple This things. Stephen. of Hey, is Tom Simpson.

So for was to And major with and team trend we with the that in the fiber XXXX shortly start the XXXX close. inherited there had we focus I regards to to Hawaiian penetration. out we expenditures think capital see after Telcom increase that

a has lot And we've neighbor also the grow there of was fiber And of we'll been built lot percentage. the fiber business Hawaii market is increase teens. continue we've to XX% that service. and the are largely that is successful, on. that penetration underpenetrated major a In focus we're for is penetration focused the So doors of it consider in on And of year. increased focusing as the capital non-bulk doors, areas focus XXXX on increasing Part consumer that business, on been calendar and upwards fiber success-based very I this islands. single-digit see penetration that there that

beginning just to out the times now more going where we're we're decreasing sales in where with job talking that or to demand did a XXXX into follow-up increasing, really to we intervals Decreasing insulation with And a the sales we intervals that our few things repairs days. team and thousand a had XXXX. or several of able than couple repair week activity. strong tremendous those is a and the it's we're see less we, open So, a

the the I'm look team. that the efficiency for the for have Yeah, at activity. looking a build Cincinnati, with good sorry, fiber in Cincinnati. yields market, look we from what customer end second for, as found, certainly was pockets best our lifetime of value to with that's So we're of regard question we capital build-and-return we areas

that, We're that's old or that and the and folks strategy So, it a we're our XXXX It's possible. some building simply abandoned of fashion fiber. But doing not we're anything have trenching like markets. pick anything as is for shallow more other good as crazy year doing hanging like like exceptionally efficiently. efficient really or this efficiently shovel still

Leigh Fox

a is you that mean on the and longer install that's on lot one do Yeah. the the impact more run And which installation, are And efficiency. doing of ship on the that kind means profound has bring also just run, customers Hawaiian to effect of install, that's market. incredible that to just it. And install, what of migrated I We've over we to spending add guys to capital And lot that, also you a hoped things long-term efficiency. of that not can part a on less so has had current but capital your self on the year, rates. with capital to

Tom Simpson

Self in both passed has our focus software shift Yeah. video of in penetration big and we've that a XXXX. product again more in impact been to increase in XXXX impact and to the the Hawaii the more defined. in XXXX doors teams installation is will And hard Cincinnati fiber the for on

So [ph]. we're not set-tops deploying

Stephen Sikora

Great. Thanks guys.

Leigh Fox

Thanks, Steve.

Operator

turn I to our session. or closing to would the conclude over conference does Leigh additional that And like any Fox for back question-and-answer remarks.

Leigh Fox

call objectives focus for energy and a and accomplish thanks today. Have that joining again I'd support they've and Thanks work Thanks goals over for joining. same was a applying our vision the strategic our the forward. done in to of to for incredible thank in beyond. And forward last to Cincinnati look XXXX everyone continued the for I you. two year employees Bell. Thank like your great XXXX our day. moving great years. X,XXX

Operator

your participation. you now for you Thank And presentation. today's conclude may disconnect. does that And

Cincinnati Bell (BDWGP) 14 Feb 192018 Q4 Earnings call transcript