Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN)
announced third quarter 2022 financial and operating results.
Third Quarter 2022 Highlights
- Glo Fiber data net adds were
approximately 4,000, an increase of 90.1% over the third quarter
2021 and 19.3% over the second quarter 2022.
- Revenue grew 7.5% to $66.9 million
over the same period a year ago driven by 127.6% and 3.8% growth in
Glo Fiber and incumbent cable data RGUs, respectively.
- Glo Fiber homes and businesses
passed grew 16.4% sequentially to approximately 131,000.
“We had another record quarter for Glo Fiber net
additions and we reached another important milestone in the third
quarter with our Glo Fiber service contributing positive
incremental Adjusted EBITDA for the first time since our launch of
service three years ago,” said President and CEO, Christopher E.
French. "We continue to build momentum against our competition and
believe we are well positioned to continue to win market share with
our fiber-to-the-home platform, strong liquidity position and
de-levered balance sheet."
Shentel's third-quarter earnings conference call
will be webcast at 8:30 a.m. ET on Wednesday, November 2,
2022. The webcast and related materials will be available on
Shentel’s Investor Relations website at
https://investor.shentel.com/
Consolidated Third Quarter 2022
Results
- Revenue in the third quarter of
2022 grew 7.5% to $66.9 million compared with the third quarter of
2021, due to Broadband segment revenue growth of 7.7% and Tower
segment revenue growth of 5.1%.
- Loss from continuing operations per
share was $0.05 in the third quarter of 2022 compared with income
per share from continuing operations of $0.13 in the third quarter
of 2021. The decline was due primarily to higher depreciation from
shortening the remaining life of Beam fixed assets and a lower
non-cash tax benefit.
- Adjusted EBITDA in the third
quarter of 2022 of $19.0 million was consistent with the third
quarter of 2021, due to Tower segment growth of 15.0% offset by
5.3% higher Corporate expenses.
Broadband
- During the third quarter of 2022,
the Company entered into a definitive asset purchase agreement (the
"Spectrum Purchase Agreement") with a wireless carrier pursuant to
which the Company agreed to sell certain spectrum licenses and
leases utilized in the Company's Beam branded fixed wireless
service for total consideration of approximately $21.1 million
(the "Spectrum Transaction"). The total consideration will be
composed of $17.3 million cash and approximately
$3.8 million of liabilities to be assumed by the wireless
carrier. The Spectrum Transaction is expected to close in the first
half of 2023 subject to the receipt of regulatory approvals and
other customary closing conditions. As a result of the Spectrum
Transaction, the Company plans to cease its Beam operations at the
remaining Beam fixed wireless sites upon or prior to the closing of
the Spectrum Transaction. As a result of the cease of Beam service
and related decommissioning of the remaining Beam fixed wireless
sites after they cease operations, the Company has revised the
useful lives for these sites to reflect operation through the cease
of service date, resulting in the acceleration of depreciation for
the related assets. Finally, as a result of the Spectrum Purchase
Agreement, the Company re-classified the remaining Beam assets and
liabilities as held for sale and is no longer reporting Beam
customers in its Broadband Revenue Generating Units ("RGUs").
- Total broadband data Revenue
Generating Units ("RGUs") as of September 30, 2022, were
130,238, representing 13.9% year over year growth. Penetration for
incumbent cable and Glo Fiber were 52% and 16%, respectively,
compared to 50% and 15%, respectively, as of September 30, 2021.
Total Glo Fiber passings grew year over year by approximately
70,100.
- Broadband revenue in the third
quarter of 2022 grew $4.5 million, or 7.7%, to $62.4 million
compared with $57.9 million in the third quarter of 2021, primarily
driven by a $3.9 million, or 8.7%, increase in Residential and
Small and Medium Business ("SMB") revenue due to a 127.6% and 3.8%
increase, respectively, in Glo Fiber and incumbent cable broadband
data RGUs.
- Cost of services increased
approximately $1.9 million, or 7.6%, compared with the three months
ended September 30, 2021 due to increases in compensation and
maintenance expenses. Compensation increased due to higher salary
and wages, medical expenses and headcount to support Glo Fiber
expansion. Maintenance increased due to higher cable replacement,
fuel and field engineering costs.
- Selling, general and administrative
expense increased $2.0 million, or 17.2%, compared with the three
months ended September 30, 2021, due primarily to higher
compensation expense, advertising, bad debt and property taxes.
Compensation increased due to higher salary and wages, medical
expenses and headcount to support Glo Fiber expansion.
- Depreciation and amortization
expense increased $4.6 million, or 37.5%, compared with the three
months ended September 30, 2021, primarily as a result of our
network expansion of our Glo Fiber network and due to the
acceleration of depreciation associated with Beam assets as
discussed above.
- Broadband operating income in the
third quarter of 2022 was $4.8 million, compared to $9.4 million in
the third quarter of 2021, due primarily to higher
depreciation.
- Broadband Adjusted EBITDA in the
third quarter of 2022 was $22.2 million, consistent with the third
quarter of 2021.
Tower
- Revenue increased approximately
$0.2 million, or 5.1%, for the three months ended September 30,
2022 compared with the three months ended September 30, 2021,
primarily due to an increase in revenue per tenant.
- Tower operating income in the third
quarter of 2022 was $2.6 million, compared to $2.2 million in the
third quarter of 2021.
- Tower Adjusted EBITDA in the
third quarter of 2022 grew 15.1% to $3.0 million, compared with
$2.6 million for the third quarter of 2021.
Other Information
- As of September 30, 2022, our
cash and cash equivalents totaled $33.0 million and the
availability under our delayed draw term loans and revolving line
of credit was $375.0 million, for total available liquidity of
$408.0 million. On July 1, 2022, we borrowed a total of
$25.0 million in term loans. We expect to draw the remaining
$275 million in delay draw term loans by June 30, 2023.
- Capital expenditures were $132.4
million for the nine months ended September 30, 2022 compared with
$118.8 million in the comparable 2021 period. The $13.6 million
increase in capital expenditures was primarily due to higher
spending in the Broadband segment driven by the expansion of our
Glo Fiber network.
Conference Call and Webcast
Date: Wednesday, November 2, 2022Time: 8:30
A.M. (ET)Dial in number: 833-630-1956A live webcast of the call
will be available on the “Investor Relations” page of the Company’s
website at http://investor.shentel.com/.
A replay of the call will be available for a
limited time on the Investor Relations page of the Company’s
website.
About Shenandoah
Telecommunications
Shenandoah Telecommunications Company (Shentel)
provides broadband services through its high speed,
state-of-the-art cable, fiber optic and fixed wireless networks to
customers in the Mid-Atlantic United States. The Company’s services
include: broadband internet, video, and voice; fiber optic
Ethernet, wavelength and leasing; and tower colocation leasing. The
Company owns an extensive regional network with over 8,000 route
miles of fiber and over 200 macro cellular towers. For more
information, please visit www.shentel.com.
This release contains forward-looking statements
about Shentel regarding, among other things, its business strategy,
its prospects and its financial position. These statements can be
identified by the use of forward-looking terminology such as
“believes,” “estimates,” “expects,” “intends,” “may,” “will,”
“should,” “could,” or “anticipates” or the negative or other
variation of these or similar words, or by discussions of strategy
or risks and uncertainties. The forward-looking statements are
based upon management’s beliefs, assumptions and current
expectations and may include comments as to Shentel’s beliefs and
expectations as to future events and trends affecting its business
that are necessarily subject to uncertainties, many of which are
outside Shentel’s control. Although management believes that the
expectations reflected in the forward-looking statements are
reasonable, forward-looking statements are not, and should not be
relied upon as, a guarantee of future performance or results, nor
will they necessarily prove to be accurate indications of the times
at which such performance or results will be achieved, and actual
results may differ materially from those contained in or implied by
the forward-looking statements as a result of various factors. A
discussion of other factors that may cause actual results to differ
from management’s projections, forecasts, estimates and
expectations is available in Shentel’s filings with the Securities
and Exchange Commission. Those factors may include natural
disasters, pandemics and outbreaks of contagious diseases and other
adverse public health developments, such as COVID-19, changes in
general economic conditions including high inflation, increases in
costs, changes in regulation and other competitive factors. The
forward-looking statements included are made only as of the date of
the statement. Shentel undertakes no obligation to revise or update
such statements to reflect current events or circumstances after
the date hereof, or to reflect the occurrence of unanticipated
events, except as required by law.
CONTACTS: Shenandoah Telecommunications CompanyJim
Volk Senior Vice President and Chief Financial
Officer540-984-5168Jim.Volk@emp.shentel.com
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIES |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE (LOSS) INCOME |
(in thousands, except per share amounts) |
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Service revenue and other |
$ |
66,924 |
|
|
$ |
62,244 |
|
|
$ |
197,359 |
|
|
$ |
182,635 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of services exclusive of depreciation and amortization |
|
27,477 |
|
|
|
25,747 |
|
|
|
80,572 |
|
|
|
73,819 |
|
Selling, general and administrative |
|
22,227 |
|
|
|
20,238 |
|
|
|
69,152 |
|
|
|
60,711 |
|
Restructuring expense |
|
641 |
|
|
|
1,160 |
|
|
|
1,031 |
|
|
|
1,821 |
|
Impairment expense |
|
477 |
|
|
|
— |
|
|
|
4,884 |
|
|
|
99 |
|
Depreciation and amortization |
|
17,873 |
|
|
|
14,248 |
|
|
|
47,008 |
|
|
|
40,714 |
|
Total operating expenses |
|
68,695 |
|
|
|
61,393 |
|
|
|
202,647 |
|
|
|
177,164 |
|
Operating (loss) income |
|
(1,771 |
) |
|
|
851 |
|
|
|
(5,288 |
) |
|
|
5,471 |
|
Other (expense) income: |
|
|
|
|
|
|
|
Other (expense) income, net |
|
(1,208 |
) |
|
|
138 |
|
|
|
(1,967 |
) |
|
|
3,076 |
|
(Loss) income from continuing operations before income taxes |
|
(2,979 |
) |
|
|
989 |
|
|
|
(7,255 |
) |
|
|
8,547 |
|
Income tax benefit |
|
(251 |
) |
|
|
(5,506 |
) |
|
|
(699 |
) |
|
|
(2,519 |
) |
(Loss) income from continuing operations |
|
(2,728 |
) |
|
|
6,495 |
|
|
|
(6,556 |
) |
|
|
11,066 |
|
Discontinued operations: |
|
|
|
|
|
|
|
(Loss) income from discontinued operations, net of tax |
|
— |
|
|
|
(406 |
) |
|
|
— |
|
|
|
99,632 |
|
Gain on the sale of discontinued operations, net of tax |
|
— |
|
|
|
886,732 |
|
|
|
— |
|
|
|
886,732 |
|
Total income from discontinued operations, net of tax |
|
— |
|
|
|
886,326 |
|
|
|
— |
|
|
|
986,364 |
|
Net (loss) income |
|
(2,728 |
) |
|
|
892,821 |
|
|
|
(6,556 |
) |
|
|
997,430 |
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
Unrealized income on interest rate hedge, net of tax |
|
— |
|
|
|
3,620 |
|
|
|
— |
|
|
|
4,706 |
|
Comprehensive (loss) income |
$ |
(2,728 |
) |
|
$ |
896,441 |
|
|
$ |
(6,556 |
) |
|
$ |
1,002,136 |
|
|
|
|
|
|
|
|
|
Net (loss) income per share, basic and diluted: |
|
|
|
|
|
|
|
Basic - (Loss) income from continuing operations |
$ |
(0.05 |
) |
|
$ |
0.13 |
|
|
$ |
(0.13 |
) |
|
$ |
0.22 |
|
Basic - Income from discontinued operations, net of tax |
$ |
— |
|
|
$ |
17.73 |
|
|
$ |
— |
|
|
$ |
19.73 |
|
Basic net (loss) income per share |
$ |
(0.05 |
) |
|
$ |
17.86 |
|
|
$ |
(0.13 |
) |
|
$ |
19.95 |
|
|
|
|
|
|
|
|
|
Diluted - (Loss) income from continuing operations |
$ |
(0.05 |
) |
|
$ |
0.13 |
|
|
$ |
(0.13 |
) |
|
$ |
0.22 |
|
Diluted - Income from discontinued operations, net of tax |
$ |
— |
|
|
$ |
17.68 |
|
|
$ |
— |
|
|
$ |
19.67 |
|
Diluted net (loss) income per share |
$ |
(0.05 |
) |
|
$ |
17.81 |
|
|
$ |
(0.13 |
) |
|
$ |
19.89 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
50,183 |
|
|
|
49,984 |
|
|
|
50,153 |
|
|
|
49,984 |
|
Weighted average shares outstanding, diluted |
|
50,183 |
|
|
|
50,120 |
|
|
|
50,153 |
|
|
|
50,136 |
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(in thousands) |
September 30,2022 |
|
December 31,2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
33,033 |
|
$ |
84,344 |
Accounts receivable, net of allowance for doubtful accounts of $371
and $352, respectively |
|
23,592 |
|
|
22,005 |
Income taxes receivable |
|
29,457 |
|
|
30,188 |
Prepaid expenses and other |
|
11,915 |
|
|
29,830 |
Current assets held for sale |
|
19,742 |
|
|
— |
Total current assets |
|
117,739 |
|
|
166,367 |
Investments |
|
12,784 |
|
|
13,661 |
Property, plant and equipment, net |
|
641,407 |
|
|
554,162 |
Intangible assets, net and goodwill |
|
81,612 |
|
|
69,853 |
Operating lease right-of-use assets |
|
55,749 |
|
|
56,414 |
Deferred charges and other assets |
|
13,167 |
|
|
10,298 |
Non-current assets held for sale |
|
— |
|
|
19,978 |
Total assets |
$ |
922,458 |
|
$ |
890,733 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current maturities of long-term debt, net of unamortized loan
fees |
$ |
105 |
|
$ |
— |
Accounts payable |
|
35,836 |
|
|
28,542 |
Advanced billings and customer deposits |
|
11,443 |
|
|
11,128 |
Accrued compensation |
|
10,721 |
|
|
9,653 |
Current operating lease liabilities |
|
2,962 |
|
|
3,318 |
Accrued liabilities and other |
|
14,040 |
|
|
14,611 |
Current liabilities held for sale |
|
3,834 |
|
|
38 |
Total current liabilities |
|
78,941 |
|
|
67,290 |
Long-term debt, less current maturities, net of unamortized loan
fees |
|
24,869 |
|
|
— |
Other long-term liabilities: |
|
|
|
Deferred income taxes |
|
84,639 |
|
|
86,014 |
Asset retirement obligations |
|
9,727 |
|
|
9,615 |
Benefit plan obligations |
|
7,711 |
|
|
8,216 |
Non-current operating lease liabilities |
|
52,001 |
|
|
51,692 |
Other liabilities |
|
22,059 |
|
|
21,824 |
Non-current liabilities held for sale |
|
— |
|
|
3,807 |
Total other long-term liabilities |
|
176,137 |
|
|
181,168 |
Commitments and contingencies (Note 12) |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, no par value, authorized 96,000; 50,098 and 49,965
issued and outstanding at September 30, 2022 and December 31,
2021, respectively |
|
— |
|
|
— |
Additional paid in capital |
|
56,143 |
|
|
49,351 |
Retained earnings |
|
586,368 |
|
|
592,924 |
Total shareholders’ equity |
|
642,511 |
|
|
642,275 |
Total liabilities and shareholders’ equity |
$ |
922,458 |
|
$ |
890,733 |
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIES |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
Cash flows from operating activities: |
|
|
|
Net (loss) income |
$ |
(6,556 |
) |
|
$ |
997,430 |
|
Income from discontinued operations, net of tax |
|
— |
|
|
|
986,364 |
|
(Loss) income from continuing operations |
|
(6,556 |
) |
|
|
11,066 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
47,008 |
|
|
|
40,714 |
|
Stock-based compensation expense |
|
7,299 |
|
|
|
1,953 |
|
Impairment expense |
|
4,884 |
|
|
|
99 |
|
Deferred income taxes |
|
(1,374 |
) |
|
|
4,180 |
|
Bad debt expense |
|
1,252 |
|
|
|
755 |
|
Other, net |
|
1,638 |
|
|
|
(31 |
) |
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
1,157 |
|
|
|
(1,195 |
) |
Current income taxes |
|
731 |
|
|
|
(6,870 |
) |
Operating lease assets and liabilities, net |
|
618 |
|
|
|
(214 |
) |
Other assets |
|
(1,056 |
) |
|
|
(8,066 |
) |
Accounts payable |
|
(608 |
) |
|
|
(5,626 |
) |
Other deferrals and accruals |
|
1,212 |
|
|
|
(5,193 |
) |
Net cash provided by operating activities - continuing
operations |
|
56,205 |
|
|
|
31,572 |
|
Net cash provided by operating activities - discontinued
operations |
|
— |
|
|
|
121,067 |
|
Net cash provided by operating activities |
|
56,205 |
|
|
|
152,639 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
|
(132,357 |
) |
|
|
(118,800 |
) |
Proceeds from sale of investments |
|
793 |
|
|
|
90 |
|
Proceeds from sale of assets and other |
|
922 |
|
|
|
110 |
|
Net cash used in investing activities - continuing operations |
|
(130,642 |
) |
|
|
(118,600 |
) |
Net cash provided by investing activities - discontinued
operations |
|
— |
|
|
|
1,944,063 |
|
Net cash (used in) provided by investing activities |
|
(130,642 |
) |
|
|
1,825,463 |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from credit facility borrowings |
|
25,000 |
|
|
|
— |
|
Taxes paid for equity award issuances |
|
(986 |
) |
|
|
(1,627 |
) |
Dividends paid, net of dividends reinvested |
|
— |
|
|
|
(936,850 |
) |
Payments for debt issuance costs |
|
— |
|
|
|
(841 |
) |
Payments for financing arrangements and other |
|
(888 |
) |
|
|
(1,081 |
) |
Net cash provided by (used in) financing activities - continuing
operations |
|
23,126 |
|
|
|
(940,399 |
) |
Net cash used in financing activities - discontinued
operations |
|
— |
|
|
|
(700,556 |
) |
Net cash provided by (used in) financing activities |
|
23,126 |
|
|
|
(1,640,955 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(51,311 |
) |
|
|
337,147 |
|
Cash and cash equivalents, beginning of period |
|
84,344 |
|
|
|
195,397 |
|
Cash and cash equivalents, end of period |
$ |
33,033 |
|
|
$ |
532,544 |
|
|
|
|
|
Supplemental Disclosures of Cash Flow
Information |
|
|
|
Interest paid |
$ |
243 |
|
|
$ |
10,397 |
|
Income taxes paid |
$ |
— |
|
|
$ |
24,900 |
|
Non-GAAP Financial
MeasuresAdjusted EBITDA
The Company defines Adjusted EBITDA as net
income (loss) from continuing operations calculated in accordance
with GAAP, adjusted for the impact of depreciation and
amortization, impairment, other income (expense), net, interest
income, interest expense, income tax expense (benefit), stock
compensation expense, transaction costs related to acquisition and
disposition events (including professional advisory fees,
integration costs, and related compensatory matters), restructuring
expense, tax on equity award vesting and exercise events, and other
non-comparable items. A reconciliation of net income (loss) from
continuing operations, which is the most directly comparable GAAP
financial measure, to Adjusted EBITDA is provided below herein.
Adjusted EBITDA margin is the Company’s
calculation of Adjusted EBITDA, divided by revenue calculated in
accordance with GAAP.
The Company uses Adjusted EBITDA and Adjusted
EBITDA margin as supplemental measures of performance to evaluate
operating effectiveness and assess its ability to increase revenues
while controlling expense growth and the scalability of the
Company’s business growth strategy. Adjusted EBITDA is also a
significant performance measure used by the Company in its
incentive compensation programs. The Company believes that the
exclusion of the expense and income items eliminated in calculating
Adjusted EBITDA and Adjusted EBITDA margin provides management and
investors a useful measure for period-to-period comparisons of the
Company’s core operating results by excluding items that are not
comparable across reporting periods or that do not otherwise relate
to the Company’s ongoing operations. Accordingly, the Company
believes that Adjusted EBITDA and Adjusted EBITDA margin provide
useful information to investors and others in understanding and
evaluating the Company’s operating results. However, use of
Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has
limitations, and investors and others should not consider them in
isolation or as substitutes for analysis of our financial results
as reported under GAAP. In addition, other companies may calculate
Adjusted EBITDA and Adjusted EBITDA margin or similarly titled
measures differently, which may reduce their usefulness as
comparative measures.
Three Months Ended September 30, 2022 |
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) from continuing operations |
|
$ |
4,752 |
|
|
$ |
2,590 |
|
|
$ |
(10,070 |
) |
|
$ |
(2,728 |
) |
Depreciation and amortization |
|
|
16,791 |
|
|
|
445 |
|
|
|
637 |
|
|
|
17,873 |
|
Impairment expense |
|
|
477 |
|
|
|
— |
|
|
|
— |
|
|
|
477 |
|
Other expense (income), net |
|
|
58 |
|
|
|
— |
|
|
|
1,150 |
|
|
|
1,208 |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(251 |
) |
|
|
(251 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,771 |
|
|
|
1,771 |
|
Restructuring charges and other |
|
|
169 |
|
|
|
— |
|
|
|
472 |
|
|
|
641 |
|
Adjusted EBITDA |
|
$ |
22,247 |
|
|
$ |
3,035 |
|
|
$ |
(6,291 |
) |
|
$ |
18,991 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
36 |
% |
|
|
65 |
% |
|
N/A |
|
|
28 |
% |
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) from continuing operations |
|
$ |
9,337 |
|
|
$ |
2,163 |
|
|
$ |
(5,005 |
) |
|
$ |
6,495 |
|
Depreciation and amortization |
|
|
12,211 |
|
|
|
468 |
|
|
|
1,569 |
|
|
|
14,248 |
|
Other expense (income), net |
|
|
63 |
|
|
|
— |
|
|
|
(201 |
) |
|
|
(138 |
) |
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(5,506 |
) |
|
|
(5,506 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,119 |
|
|
|
1,119 |
|
Restructuring charges and other |
|
|
676 |
|
|
|
6 |
|
|
|
2,048 |
|
|
|
2,730 |
|
Adjusted EBITDA |
|
$ |
22,287 |
|
|
$ |
2,637 |
|
|
$ |
(5,976 |
) |
|
$ |
18,948 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
38 |
% |
|
|
59 |
% |
|
N/A |
|
|
30 |
% |
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) from continuing operations |
|
$ |
16,921 |
|
|
$ |
7,628 |
|
|
$ |
(31,105 |
) |
|
$ |
(6,556 |
) |
Depreciation and amortization |
|
|
42,724 |
|
|
|
1,562 |
|
|
|
2,722 |
|
|
|
47,008 |
|
Impairment expense |
|
|
4,884 |
|
|
|
— |
|
|
|
— |
|
|
|
4,884 |
|
Other expense (income), net |
|
|
177 |
|
|
|
— |
|
|
|
1,790 |
|
|
|
1,967 |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(699 |
) |
|
|
(699 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
7,299 |
|
|
|
7,299 |
|
Restructuring charges and other |
|
|
629 |
|
|
|
— |
|
|
|
402 |
|
|
|
1,031 |
|
Adjusted EBITDA |
|
$ |
65,335 |
|
|
$ |
9,190 |
|
|
$ |
(19,591 |
) |
|
$ |
54,934 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
36 |
% |
|
|
65 |
% |
|
N/A |
|
|
28 |
% |
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) from continuing operations |
|
$ |
27,670 |
|
|
$ |
7,374 |
|
|
$ |
(23,978 |
) |
|
$ |
11,066 |
|
Depreciation and amortization |
|
|
35,648 |
|
|
|
1,398 |
|
|
|
3,668 |
|
|
|
40,714 |
|
Impairment expense |
|
|
99 |
|
|
|
— |
|
|
|
— |
|
|
|
99 |
|
Other expense (income), net |
|
|
195 |
|
|
|
— |
|
|
|
(3,271 |
) |
|
|
(3,076 |
) |
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(2,519 |
) |
|
|
(2,519 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,953 |
|
|
|
1,953 |
|
Restructuring charges and other |
|
|
924 |
|
|
|
6 |
|
|
|
2,713 |
|
|
|
3,643 |
|
Adjusted EBITDA |
|
$ |
64,536 |
|
|
$ |
8,778 |
|
|
$ |
(21,434 |
) |
|
$ |
51,880 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
38 |
% |
|
|
64 |
% |
|
N/A |
|
|
28 |
% |
Segment Results
Three Months Ended September 30,
2022:
(in thousands) |
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
Residential & SMB |
$ |
48,700 |
|
$ |
— |
|
$ |
— |
|
|
$ |
48,700 |
|
Commercial Fiber |
|
9,522 |
|
|
— |
|
|
— |
|
|
|
9,522 |
|
RLEC & Other |
|
4,139 |
|
|
— |
|
|
— |
|
|
|
4,139 |
|
Tower lease |
|
— |
|
|
4,610 |
|
|
— |
|
|
|
4,610 |
|
Service revenue and other |
|
62,361 |
|
|
4,610 |
|
|
— |
|
|
|
66,971 |
|
Intercompany revenue and other |
|
25 |
|
|
67 |
|
|
(139 |
) |
|
|
(47 |
) |
Total revenue |
|
62,386 |
|
|
4,677 |
|
|
(139 |
) |
|
|
66,924 |
|
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
26,193 |
|
|
1,384 |
|
|
(100 |
) |
|
|
27,477 |
|
Selling, general and administrative |
|
13,946 |
|
|
258 |
|
|
8,023 |
|
|
|
22,227 |
|
Restructuring expense |
|
169 |
|
|
— |
|
|
472 |
|
|
|
641 |
|
Impairment expense |
|
477 |
|
|
— |
|
|
— |
|
|
|
477 |
|
Depreciation and amortization |
|
16,791 |
|
|
445 |
|
|
637 |
|
|
|
17,873 |
|
Total operating expenses |
|
57,576 |
|
|
2,087 |
|
|
9,032 |
|
|
|
68,695 |
|
Operating income (loss) |
$ |
4,810 |
|
$ |
2,590 |
|
$ |
(9,171 |
) |
|
$ |
(1,771 |
) |
Three Months Ended September 30,
2021:
(in thousands) |
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
Residential & SMB |
$ |
44,783 |
|
$ |
— |
|
$ |
— |
|
|
$ |
44,783 |
Commercial Fiber |
|
9,059 |
|
|
— |
|
|
— |
|
|
|
9,059 |
RLEC & Other |
|
3,972 |
|
|
— |
|
|
— |
|
|
|
3,972 |
Tower lease |
|
— |
|
|
4,356 |
|
|
— |
|
|
|
4,356 |
Service revenue and other |
|
57,814 |
|
|
4,356 |
|
|
— |
|
|
|
62,170 |
Revenue for service provided to the discontinued Wireless
operations |
|
99 |
|
|
93 |
|
|
(118 |
) |
|
|
74 |
Total revenue |
|
57,913 |
|
|
4,449 |
|
|
(118 |
) |
|
|
62,244 |
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
24,333 |
|
|
1,504 |
|
|
(90 |
) |
|
|
25,747 |
Selling, general and administrative |
|
11,898 |
|
|
314 |
|
|
8,026 |
|
|
|
20,238 |
Restructuring expense |
|
71 |
|
|
— |
|
|
1,089 |
|
|
|
1,160 |
Depreciation and amortization |
|
12,211 |
|
|
468 |
|
|
1,569 |
|
|
|
14,248 |
Total operating expenses |
|
48,513 |
|
|
2,286 |
|
|
10,594 |
|
|
|
61,393 |
Operating income (loss) |
$ |
9,400 |
|
$ |
2,163 |
|
$ |
(10,712 |
) |
|
$ |
851 |
Nine Months Ended September 30,
2022:
(in thousands) |
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
Residential & SMB |
$ |
143,512 |
|
$ |
— |
|
$ |
— |
|
|
$ |
143,512 |
|
Commercial Fiber |
|
27,924 |
|
|
— |
|
|
— |
|
|
|
27,924 |
|
RLEC & Other |
|
11,952 |
|
|
— |
|
|
— |
|
|
|
11,952 |
|
Tower lease |
|
— |
|
|
13,971 |
|
|
— |
|
|
|
13,971 |
|
Service revenue and other |
|
183,388 |
|
|
13,971 |
|
|
— |
|
|
|
197,359 |
|
Intercompany revenue and other |
|
124 |
|
|
255 |
|
|
(379 |
) |
|
|
— |
|
Total revenue |
|
183,512 |
|
|
14,226 |
|
|
(379 |
) |
|
|
197,359 |
|
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
76,801 |
|
|
4,054 |
|
|
(283 |
) |
|
|
80,572 |
|
Selling, general and administrative |
|
41,376 |
|
|
982 |
|
|
26,794 |
|
|
|
69,152 |
|
Restructuring expense |
|
629 |
|
|
— |
|
|
402 |
|
|
|
1,031 |
|
Impairment expense |
|
4,884 |
|
|
— |
|
|
— |
|
|
|
4,884 |
|
Depreciation and amortization |
|
42,724 |
|
|
1,562 |
|
|
2,722 |
|
|
|
47,008 |
|
Total operating expenses |
|
166,414 |
|
|
6,598 |
|
|
29,635 |
|
|
|
202,647 |
|
Operating income (loss) |
$ |
17,098 |
|
$ |
7,628 |
|
$ |
(30,014 |
) |
|
$ |
(5,288 |
) |
Nine Months Ended September 30,
2021:
(in thousands) |
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
Residential & SMB |
$ |
131,702 |
|
$ |
— |
|
$ |
— |
|
|
$ |
131,702 |
Commercial Fiber |
|
21,975 |
|
|
— |
|
|
— |
|
|
|
21,975 |
RLEC & Other |
|
11,208 |
|
|
— |
|
|
— |
|
|
|
11,208 |
Tower lease |
|
— |
|
|
8,525 |
|
|
— |
|
|
|
8,525 |
Service revenue and other |
|
164,885 |
|
|
8,525 |
|
|
— |
|
|
|
173,410 |
Revenue for service provided to the discontinued Wireless
operations |
|
4,409 |
|
|
5,203 |
|
|
(387 |
) |
|
|
9,225 |
Total revenue |
|
169,294 |
|
|
13,728 |
|
|
(387 |
) |
|
|
182,635 |
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
70,050 |
|
|
4,070 |
|
|
(301 |
) |
|
|
73,819 |
Selling, general and administrative |
|
35,429 |
|
|
886 |
|
|
24,396 |
|
|
|
60,711 |
Restructuring expense |
|
203 |
|
|
— |
|
|
1,618 |
|
|
|
1,821 |
Impairment expense |
|
99 |
|
|
— |
|
|
— |
|
|
|
99 |
Depreciation and amortization |
|
35,648 |
|
|
1,398 |
|
|
3,668 |
|
|
|
40,714 |
Total operating expenses |
|
141,429 |
|
|
6,354 |
|
|
29,381 |
|
|
|
177,164 |
Operating income (loss) |
$ |
27,865 |
|
$ |
7,374 |
|
$ |
(29,768 |
) |
|
$ |
5,471 |
Supplemental Information
Broadband Operating
Statistics
|
September 30,2022 |
|
September 30,2021 |
Broadband homes and businesses passed (1) |
342,741 |
|
|
271,849 |
|
Incumbent Cable |
211,829 |
|
|
211,013 |
|
Glo Fiber |
130,912 |
|
|
60,836 |
|
|
|
|
|
Residential & Small and Medium Business ("SMB") RGUs: |
|
|
|
Broadband Data |
130,238 |
|
|
114,388 |
|
Incumbent Cable |
109,132 |
|
|
105,116 |
|
Glo Fiber |
21,106 |
|
|
9,272 |
|
Video |
48,092 |
|
|
50,652 |
|
Voice |
39,801 |
|
|
34,592 |
|
Total Residential & SMB RGUs (excludes RLEC) |
218,131 |
|
|
199,632 |
|
|
|
|
|
Residential & SMB Penetration (2) |
|
|
|
Broadband Data |
38.0 |
% |
|
42.1 |
% |
Incumbent Cable |
51.5 |
% |
|
49.8 |
% |
Glo Fiber |
16.1 |
% |
|
15.2 |
% |
Video |
14.0 |
% |
|
18.6 |
% |
Voice |
12.2 |
% |
|
13.6 |
% |
|
|
|
|
Fiber route miles |
8,072 |
|
|
7,219 |
|
Total fiber miles (3) |
622,095 |
|
|
469,387 |
|
______________________________________________________
(1) |
|
Homes and businesses are considered passed (“passings") if we can
connect them to our network without further extending the
distribution system. Passings is an estimate based upon the best
available information. Passings will vary among video, broadband
data and voice services. |
(2) |
|
Penetration is calculated by
dividing the number of users by the number of passings or available
homes, as appropriate. |
(3) |
|
Total fiber miles are measured by
taking the number of fiber strands in a cable and multiplying that
number by the route distance. For example, a 10 mile route
with 144 fiber strands would equal 1,440 fiber miles. |
Broadband - Residential and SMB ARPU |
|
|
|
|
|
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Residential and SMB Revenue: |
|
|
|
|
|
|
|
Broadband |
$ |
30,670 |
|
$ |
26,590 |
|
|
$ |
88,887 |
|
$ |
76,693 |
|
Incumbent Cable |
|
26,502 |
|
|
24,780 |
|
|
|
78,488 |
|
|
72,421 |
|
Glo Fiber |
|
4,168 |
|
|
1,810 |
|
|
|
10,399 |
|
|
4,272 |
|
Video |
|
14,914 |
|
|
15,391 |
|
|
|
45,465 |
|
|
46,654 |
|
Voice |
|
3,041 |
|
|
2,968 |
|
|
|
8,951 |
|
|
8,760 |
|
Discounts, adjustments and other |
|
75 |
|
|
(166 |
) |
|
|
209 |
|
|
(405 |
) |
Total Revenue |
$ |
48,700 |
|
$ |
44,783 |
|
|
$ |
143,512 |
|
$ |
131,702 |
|
|
|
|
|
|
|
|
|
Average RGUs: |
|
|
|
|
|
|
|
Broadband Data |
|
127,579 |
|
|
112,338 |
|
|
|
123,271 |
|
|
108,749 |
|
Incumbent Cable |
|
108,481 |
|
|
104,150 |
|
|
|
107,603 |
|
|
102,319 |
|
Glo Fiber |
|
19,098 |
|
|
8,188 |
|
|
|
15,668 |
|
|
6,430 |
|
Video |
|
48,456 |
|
|
50,921 |
|
|
|
49,016 |
|
|
51,691 |
|
Voice |
|
39,659 |
|
|
34,789 |
|
|
|
37,653 |
|
|
33,904 |
|
|
|
|
|
|
|
|
|
ARPU: (1) |
|
|
|
|
|
|
|
Broadband |
$ |
80.05 |
|
$ |
78.85 |
|
|
$ |
80.03 |
|
$ |
78.33 |
|
Incumbent Cable |
$ |
81.43 |
|
$ |
79.31 |
|
|
$ |
81.05 |
|
$ |
78.64 |
|
Glo Fiber |
$ |
72.75 |
|
$ |
73.69 |
|
|
$ |
73.74 |
|
$ |
73.82 |
|
Video |
$ |
102.59 |
|
$ |
100.75 |
|
|
$ |
103.06 |
|
$ |
100.28 |
|
Voice |
$ |
25.56 |
|
$ |
28.44 |
|
|
$ |
26.41 |
|
$ |
28.71 |
|
______________________________________________________
(1) |
|
Average
Revenue Per RGU calculation = (Residential & SMB Revenue *
1,000) / average RGUs / 3 months |
Tower Operating Statistics
|
September 30,2022 |
|
September 30,2021 |
Macro tower sites |
222 |
|
223 |
Tenants |
457 |
|
470 |
Average tenants per tower |
2.0 |
|
2.0 |
Shenandoah Telecommunica... (NASDAQ:SHEN)
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