DALLAS — Ascent Capital Group (Nasdaq: ASCMA), the holding company that owns Monitronics Int’l, reported first quarter net revenue of $132.9 million for the three months ended March 31, an increase of 32.7% compared to $100.2 million for the same period the previous year.
The company said its subscriber accounts as of March 31 increased nearly 28% to 1,046,785 from 818,335 year-over-year, with an average recurring monthly revenue (RMR) per subscriber up 3.5% to $41.15. Monitronics acquired roughly 204,000 accounts in its Security Networks acquisition, which was completed in August 2013. The company finished transitioning Security Networks’ accounts and operations from Florida to its headquarters, based here, in April.
“We originally projected that operational efficiencies from the combined business would drive $4 to $6 million in annual cost savings, and we are on track to exceed those estimates,” Mike Haislip, president and CEO of Monitronics, stated in a press release. “We are excited about where our business stands and its future prospects.”
Despite the positive performance, in its earnings report, released May 8, Ascent management noted that severe winter weather periodically stifled Monitronics dealers’ lead generation activities across the nation. During the first quarter period, Monitronics’ attrition level increased from 12.2% to 12.3%, and was unchanged from year-end.
Ascent’s stock price has declined marginally in recent months. It traded down 4.61% on May 8, hitting $61.39. The stock has a one-year low of $63.65 and a one-year high of $89.04. The downward trend is due in part to a misperception that Monitronics is being directly affected by increased competition from telcos, cablecoms and other recent entrants into the residential security and home automation market, according to a research report by Jeff Kessler of Imperial Capital.
“Ascent has not seen any significant direct impact on its sales or attrition levels as a result of the competition from cable/telcos entering the market. The traditional security companies still remain the main competitors of Ascent,” Kessler wrote.
Imperial Capital said it is maintaining its outperform rating for Ascent with a one-year price target of $94 or about 43% above the recent share price.