Ascent Capital Group Reports Q2 Results; Misses Analyst Estimates

Monitronics’ subscriber accounts as of June 30 increased 3.5% to 1,092,083

GREENWOOD VILLAGE, Colo. – Ascent Capital Group (NASDAQ:ASCMA), the holding company that owns Monitronics Int’l, on Monday (Aug. 10) reported $1.41 earnings per share (EPS) for the second quarter, missing the Thomson Reuters consensus estimate of 73 cents by 68 cents. The company earned $141.5 million during the quarter, compared to analyst estimates of $140.56 million.

The quarterly results were in line with expectations, delivering solid year-over-year revenue and earnings growth, Bill Fitzgerald, Ascent Capital Group Chairman and CEO, said during an investor’s call.

“Our acquisition of LiveWatch is also continuing to perform ahead of expectations and we’re very pleased with the contribution of Brad Morehead and his LiveWatch team. With its first full quarter as part of Monitronics, LiveWatch continues to provide us with strong internal account generation at lower creation costs than our dealer channel,” Fitzgerald said.

RELATED: Monitronics Acquires LiveWatch Security for $67M

On a year-over-year basis, Monitronics’ revenue increased 5.1% to $141.5 million in the quarter, and increased 4.6% to $280 million in the first six months. Pre-SAC adjusted EBITDA increased 3% to $93.4 million in the quarter and 3.5% to $186.3 million for the first half of the year, which the company said was consistent with its expectations.

Demand for Monitronics’ HomeTouch home automation services was “solid” with approximately 75% of accounts acquired during the quarter taking some level of advanced services, Mike Haislip, president and CEO of Monitronics, said during the call. At the end of the second quarter, 39% of Monitronics’ total subscribers subscribed to HomeTouch. The continued demand for these services drove average monthly RMR per subscriber to $42.02, he said. Those numbers excluded accounts acquired through LiveWatch, which have an average RMR of $28.40. New LiveWatch customers have an average RMR in the low to mid $30s, he said.

“On a year-over-year basis including LiveWatch, production for the first six months increased 43% with purchases totaling 106,816 versus 74,625 for the same period in 2014. During the second quarter Monitronics’ acquired 40,742 accounts, excluding approximately 2,900 accounts acquired through bulk buys last year, this representative a 2% increase year-over-year,” Haislip said.

Attrition in the second quarter ticked upward quarter over quarter to 13.4%. Impacting attrition during the second and the third quarter is a nonrecurring billing issue related to Monitronic’s transition to a new mailing service, according to Haislip.

“We’re also seeing a modest increase in household relocations as the housing market continues to improve. These factors, coupled with our more conservative account acquisition strategy, will likely result in attrition not declining as originally expected,” he said.

The ASCMA stock has a 50-day moving average price of $40.65 and a 200 day moving average price of $41.53. Ascent Capital Group has a 52 week low of $37.63 and a 52 week high of $65.91. The stock’s market cap is $535.28 million.

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