HomeMy WebLinkAboutMemo - Mail Packet - 3/19/2024 - 6. Memorandum From Chad Crager Re Staff Report Follow Up – Connexion Financial Forecast.Connexion Broadband Services
222 Laporte Ave
PO Box 580, Fort Collins, CO 80522
970-207-7870
fcconnexion.com
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MEMORANDUM
Date: March 11, 2024
To: Mayor and City Councilmembers
Through: Kelly DiMartino, City Manager
From: Chad Crager, Broadband Executive Director
CC: Travis Storin, Chief Financial Officer
Jeff Rochford, Broadband FP&A Manager
Subject: Staff Report Follow Up - Connexion Financial Forecast
BOTTOM LINE
As a follow up to the February 13, 2024 Connexion Staff Report, additional information was requested
regarding Connexion financials. The charts below stem from the rolling cash flow forecast that is updated
monthly with up-to-date actual values for revenues, costs of goods sold, operating expenses, and capital
expenditures, as well as the scheduled principal and interest payments related to our bond debts.
BACKGROUND
The actual financial results, coupled with assumptions regarding rates of installs, customer adoption, pricing
and product offering result in a forward-looking view for multiple years. Consider these charts and projections
to be forward-looking in nature and subject to change.
As a capital-intensive start-up in a competitive market, it was expected that Connexion would operate at a cash
flow deficit for a time after its inception. As the buildout of multi-dwelling units begins to substantially finish by
the end of 2024, we expect the rate of ongoing capital expenditures to decline significantly in 2025 and still
more in 2026. In 2027, we project to have a positive $2.3M in cash flow, even after all interest and principal of
debt payments.
DocuSign Envelope ID: 23705BC4-413E-4126-B447-3A23C18A8A5D
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Figure 1: Connexion Actual and Projected Annual Cash Flows - Note that cash flows in are primarily revenues and do not include bond
proceeds while cash flows out include operating expenses, capital expenses, and debt principal and interest payments.
Figure 2: Connexion Profit and Loss Actuals and Projection - Profit and Loss, or Income Statements include gross revenues, costs of
goods sold, and operating expenses, the latter inclusive of interest payments and depreciation but no principal payments.
DocuSign Envelope ID: 23705BC4-413E-4126-B447-3A23C18A8A5D