Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN)
announced second quarter 2021 financial and operating results.
Highlights
- Completed the sale of Wireless
assets and operations to T-Mobile for $1.94 billion in cash on July
1, 2021.
- Declared a Special Dividend of
$18.75 per share on July 2, 2021 payable on August 2, 2021.
- Broadband data net adds were
approximately 3,900 including 1,645 for Glo Fiber and 372 for Beam,
respectively.
- Revenue and Adjusted OIBDA grew
11.7% and 29.6%, respectively.
- Earnings per diluted share for
continuing operations grew to $0.04 compared to a loss of $0.01 per
diluted share in the second quarter 2020.
- Total Broadband homes and
businesses passed grew sequentially 19,000 or 7.3% to approximately
279,000.
“Our transformation into a broadband-centric
company is now complete with the closing of the sale of our
Wireless assets and operations to T-Mobile on July 1, 2021. As a
result of the successful sale, we are very pleased to return over
$936 million in value to our shareholders via a special dividend,”
said President and CEO, Christopher E. French. “We made strong
progress in the second quarter in growing our broadband networks
and data subscribers and reducing our operating expenses to align
with our broadband and tower businesses. The combination of these
actions has led to outstanding revenue and Adjusted OIBDA growth
rates in the second quarter and have positioned us well for
sustainable growth in future periods.”
Shentel's second-quarter earnings conference call will be
webcast at 8:00 a.m. ET on Friday, July 30, 2021. The webcast
and related materials will be available on Shentel’s Investor
Relations website at https://investor.shentel.com/.
Consolidated Second Quarter 2021 Results
- Revenue in the second quarter of
2021 grew 11.7% to $60.7 million, compared with the second quarter
of 2020, due to the growth of 12.2% in Broadband and 8.3% in Tower
segments.
- Adjusted OIBDA in the second
quarter of 2021 grew 29.6% to $16.3 million, compared with the
second quarter of 2020, due to growth in Broadband and Tower of
2.5% and 9.3%, respectively. Corporate expenses declined 30.0% from
the same period a year ago due to lower compensation, legal and
professional fees.
- Operating income in the second
quarter of 2021 was $2.7 million compared with a loss of $1.9
million in the second quarter of 2020.
- Earnings from continuing operations
per diluted share was $0.04 in the second quarter of 2021 and
earnings from discontinued operations grew 74.6% to $1.03 per
diluted share from the second quarter of 2020.
Broadband
- Total broadband data Revenue
Generating Units ("RGUs") as of June 30, 2021, were 111,475,
representing 20.3% year over year growth. Penetration for incumbent
cable, Glo Fiber and Beam were 49%, 15% and 4%, respectively,
compared to 44%, 10% and 0%, respectively, as of June 30, 2020.
Total Glo Fiber and Beam passings grew year over year by
approximately 33,200 and 21,800, respectively.
- Broadband revenue in the second
quarter of 2021 grew $6.1 million or 12.2% to $56.2 million
compared with $50.1 million in the second quarter of 2020,
primarily driven by a $6.3 million or 16.7% increase in Residential
& SMB revenue on a 20.3% increase in broadband data RGUs. RLEC
revenue declined by $0.4 million, or 8.8%, to $3.7 million,
primarily driven by the migration of DSL subscribers to our
Broadband cable modem service, and lower governmental support. We
expect RLEC revenue to continue to decline.
- Broadband operating expenses in the
second quarter of 2021 were $47.7 million compared to $40.6 million
in the second quarter of 2020, driven by costs incurred to support
the growth of Glo Fiber and Beam fixed wireless, including a $1.4
million increase in depreciation, a $1.2 million increase in
compensation and commissions expenses primarily from increased
staffing, a $1.0 million increase in software and professional fees
due to enhancements in our back-office systems, a $0.7 million
increase in maintenance and line costs from growth in our network,
a $0.6 million increase in advertising, a $0.5 million increase in
telemarketing fees, a $0.5 million increase in franchise and
regulatory fees, and a $0.5 million increase in programming
fees.
- Broadband Adjusted OIBDA in the second quarter of 2021 grew
2.5% to $20.3 million, compared with $19.8 million for the second
quarter of 2020.
- Broadband Operating income in the second quarter of 2021 was
$8.5 million, compared to $9.5 million in the second quarter of
2020.
Tower
- Tower revenue in the second quarter
of 2021 grew 8.3% to $4.6 million, compared with the second quarter
of 2020, due to an 8.5% increase in tenants.
- Tower Adjusted OIBDA in the
second quarter of 2021 grew 9.3% to $3.0 million, compared with
$2.7 million for the second quarter of 2020, due to revenue growth
and steady expenses.
- Tower operating income in the
second quarter of 2021 was $2.5 million, compared to $2.2 million
in the second quarter of 2020.
Other Information
- On July 1, 2021, pursuant to the
previously announced Asset Purchase Agreement, dated May 28, 2021,
between Shentel and T-Mobile USA, Inc. (“T-Mobile”), Shentel
completed the sale of its Wireless assets and operations to
T-Mobile for cash consideration of approximately $1.94 billion,
inclusive of the approximately $60 million settlement of the waived
management fees by Sprint Corporation, an indirect subsidiary of
T-Mobile, and net of certain transaction expenses (the
“Transaction”).
- The Company currently expects the
after-tax proceeds from the Transaction to be approximately $1.5
billion. The Company used approximately $684 million of the
proceeds to fully repay all outstanding principal amounts under,
and terminate, the then-existing credit agreement (the "Prior
Credit Agreement") and to fully repay and terminate the interest
rate swaps. The remainder of the proceeds will be used to fund a
special dividend of $18.75 per share on the issued and outstanding
shares of the Company's common stock (the "Special Dividend").
- On July 1, 2021, we entered into a
new Credit Agreement (the “New Credit Agreement”) with various
financial institutions party thereto. The New Credit Agreement
provides for three credit facilities, in an aggregate amount equal
to $400 million: (i) a $100 million five-year revolving credit
facility, (ii) a $150 million five-year delay draw amortizing term
loan and (iii) a $150 million seven-year delay draw amortizing term
loan. We have not made any borrowing under the New Credit Agreement
as of the date of this press release. We do not currently expect to
draw upon any portion of the New Credit Agreement until the fourth
quarter of 2021.
- On July 2, 2021, the Company’s
Board of Directors declared a special dividend of $18.75 per share
on the issued and outstanding shares of the Company’s common stock
(the “Special Dividend”). The Special Dividend is payable on August
2, 2021 to shareholders of record as of the close of business on
July 13, 2021. Since the Special Dividend is more than 25% of the
current share price, in accordance with NASDAQ rules, the
ex-dividend date will be August 3, 2021, the first business day
after the payment date. The Company currently expects approximately
$14.5 million of the Special Dividend to be reinvested in shares of
the Company’s common stock via the Company’s Dividend Reinvestment
Plan. The reinvested dividends are expected to be used to purchase
shares of the Company’s common stock in market transactions during
the thirty days following the dividend payment date. The total
payout to Shentel shareholders, before any reinvestment via the
Company’s Dividend Reinvestment Plan, will be approximately $937
million.
- The Company currently expects to
incur approximately $5.1 million of severance expense during 2021,
with approximately $2.1 million attributable to continuing
operations and $3.0 million related to discontinued operations.
Approximately $1.2 million of severance expense was recognized
during the first half of 2021, with $0.7 million related to
continuing operations and $0.5 million related to discontinued
operations. The remaining severance expenses are expected to be
incurred in the third quarter of 2021 following the sale of our
Wireless operations. The workforce reduction is expected to
decrease the Company's annualized run-rate operating expenses for
continuing operations by approximately $4 million.
- Cash and cash equivalents grew
sequentially $19.6 million to $248.8 million as of June 30,
2021 driven by strong cash flow from discontinued operations.
Giving effect to the closing of the Transaction, the Special
Dividend, termination of the Prior Credit Agreement, and the
execution of the New Credit Agreement, as if those events had
occurred on June 30, 2021, the Company would have had approximately
$480 million of liquidity on a pro forma basis.
- Capital expenditures were $79.6
million for the six months ended June 30, 2021 compared with $52.9
million in the comparable 2020 period. The $26.7 million increase
in capital expenditures was primarily due to higher spending in the
Broadband segment driven by the expansion of Glo Fiber and
Beam.
2021 OutlookThe Company is
reaffirming the full-year 2021 guidance as summarized below:
($ in millions) |
|
Year Ending December 31, |
|
Year EndedDecember 31,2019 |
|
% Change2020 to 2021Midpoint |
|
% Change2019 to 2020 |
|
|
2021 |
|
2020 |
|
|
|
|
|
Guidance |
|
Actual |
|
|
|
|
|
Low |
|
High |
|
|
|
|
|
Revenue |
|
$ |
241 |
|
|
$ |
248 |
|
|
$ |
221 |
|
|
$ |
207 |
|
|
10.6 |
% |
|
6.8 |
% |
Operating Income (loss) |
|
$ |
7 |
|
|
$ |
14 |
|
|
$ |
(1 |
) |
|
$ |
(1 |
) |
|
nm |
|
|
— |
% |
Adjusted OIBDA |
|
$ |
69 |
|
|
$ |
76 |
|
|
$ |
57 |
|
|
$ |
49 |
|
|
27.2 |
% |
|
16.3 |
% |
Capital Expenditures |
|
$ |
157 |
|
|
$ |
168 |
|
|
$ |
120 |
|
|
$ |
67 |
|
|
35.4 |
% |
|
79.1 |
% |
Adjusted OIBDA is a non-GAAP financial measure
that is not determined in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP"). Reconciliations of this non-GAAP
financial measures are provided in this press release after the
consolidated financial statements.
Conference Call and Webcast
Teleconference Information:
Date: July 30, 2021
Time: 8:00 A.M. (ET) Dial in
number: 1-888-695-7639
Password: 7086645Audio
webcast: http://investor.shentel.com/
An audio replay of the call will be available
approximately two hours after the call is complete, through
August 29, 2021 by calling (855) 859-2056.
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 7,000 route
miles of fiber and 223 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, 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 Company Jim Volk
Senior Vice President and Chief
Financial Officer 540-984-5168
Jim.Volk@emp.shentel.com
|
|
|
|
|
SHENANDOAH
TELECOMMUNICATIONS COMPANY AND SUBSIDIARIESUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
|
|
(in thousands, except per
share amounts) |
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Service revenue and other |
$ |
60,700 |
|
|
$ |
54,336 |
|
|
|
$ |
120,391 |
|
|
$ |
107,470 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of services |
24,335 |
|
|
22,181 |
|
|
|
47,618 |
|
|
42,498 |
|
Selling, general and administrative |
20,320 |
|
|
22,092 |
|
|
|
40,473 |
|
|
44,188 |
|
Restructuring expense |
43 |
|
|
— |
|
|
|
661 |
|
|
— |
|
Depreciation and amortization |
13,299 |
|
|
11,930 |
|
|
|
26,565 |
|
|
24,015 |
|
Total operating expenses |
57,997 |
|
|
56,203 |
|
|
|
115,317 |
|
|
110,701 |
|
Operating income (loss) |
2,703 |
|
|
(1,867 |
) |
|
|
5,074 |
|
|
(3,231 |
) |
Other income: |
|
|
|
|
|
|
|
Other income, net |
1,338 |
|
|
1,271 |
|
|
|
2,938 |
|
|
2,020 |
|
Income (loss) before income taxes |
4,041 |
|
|
(596 |
) |
|
|
8,012 |
|
|
(1,211 |
) |
Income tax expense (benefit) |
2,185 |
|
|
(60 |
) |
|
|
3,107 |
|
|
(825 |
) |
Income (loss) from continuing operations |
1,856 |
|
|
(536 |
) |
|
|
4,905 |
|
|
(386 |
) |
Income from discontinued operations, net of tax |
51,566 |
|
|
29,783 |
|
|
|
100,038 |
|
|
42,913 |
|
Net income |
$ |
53,422 |
|
|
$ |
29,247 |
|
|
|
$ |
104,943 |
|
|
$ |
42,527 |
|
|
|
|
|
|
|
|
|
Net income per share, basic
and diluted: |
|
|
|
|
|
|
|
Basic - Income (loss) from continuing operations |
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
|
$ |
0.10 |
|
|
$ |
(0.01 |
) |
Basic - Income from discontinued operations, net of tax |
$ |
1.03 |
|
|
$ |
0.59 |
|
|
|
$ |
2.00 |
|
|
$ |
0.86 |
|
Basic net income per share |
$ |
1.07 |
|
|
$ |
0.58 |
|
|
|
$ |
2.10 |
|
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
Diluted - Income (loss) from continuing operations |
$ |
0.04 |
|
|
$ |
(0.01 |
) |
|
|
$ |
0.10 |
|
|
$ |
(0.01 |
) |
Diluted - Income from discontinued operations, net of tax |
$ |
1.03 |
|
|
$ |
0.59 |
|
|
|
$ |
2.00 |
|
|
$ |
0.86 |
|
Diluted net income per share |
$ |
1.07 |
|
|
$ |
0.58 |
|
|
|
$ |
2.10 |
|
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
49,945 |
|
|
49,902 |
|
|
|
49,945 |
|
|
49,878 |
|
Weighted average shares outstanding, diluted |
50,075 |
|
|
49,902 |
|
|
|
50,067 |
|
|
49,878 |
|
|
SHENANDOAH
TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(in thousands) |
|
|
June 30,2021 |
|
December 31,2020 |
|
|
|
|
Cash and cash equivalents |
$ |
248,789 |
|
|
$ |
195,397 |
|
Other current assets |
79,162 |
|
|
80,024 |
|
Current assets held for
sale |
1,101,193 |
|
|
1,133,294 |
|
Total current assets |
1,429,144 |
|
|
1,408,715 |
|
|
|
|
|
Investments |
13,793 |
|
|
13,769 |
|
Property, plant and equipment,
net |
495,599 |
|
|
440,427 |
|
Intangible assets, net and
Goodwill |
106,345 |
|
|
106,759 |
|
Operating lease right-of-use
assets |
54,254 |
|
|
50,387 |
|
Deferred charges and other
assets, net |
16,097 |
|
|
11,650 |
|
Total assets |
$ |
2,115,232 |
|
|
$ |
2,031,707 |
|
|
|
|
|
Current liabilities held for
sale |
$ |
423,008 |
|
|
$ |
452,202 |
|
Total current liabilities |
733,530 |
|
|
755,859 |
|
Other liabilities |
270,907 |
|
|
241,252 |
|
Total shareholders’
equity |
687,787 |
|
|
582,394 |
|
Total liabilities and shareholders’ equity |
$ |
2,115,232 |
|
|
$ |
2,031,707 |
|
|
SHENANDOAH
TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
Six Months EndedJune 30, |
(in thousands) |
2021 |
|
2020 |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
104,943 |
|
|
$ |
42,527 |
|
Income from operations of discontinued operations, net of tax |
100,038 |
|
|
42,913 |
|
Income (loss) from continuing operations |
4,905 |
|
|
(386 |
) |
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation |
26,144 |
|
|
23,694 |
|
Amortization of intangible assets |
421 |
|
|
321 |
|
Bad debt expense |
448 |
|
|
436 |
|
Stock based compensation expense, net of amount capitalized |
834 |
|
|
4,169 |
|
Deferred income taxes |
3,251 |
|
|
(499 |
) |
Other adjustments |
(649 |
) |
|
(73 |
) |
Changes in assets and liabilities |
(7,180 |
) |
|
1,641 |
|
Net cash provided by operating activities – continuing
operations |
28,174 |
|
|
29,303 |
|
Net cash provided by operating activities – discontinued
operations |
125,011 |
|
|
99,636 |
|
Net cash provided by operating activities |
153,185 |
|
|
128,939 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(79,562 |
) |
|
(52,888 |
) |
Proceeds from sale of assets and other |
189 |
|
|
(936 |
) |
Net cash used in investing activities – continuing operations |
(79,373 |
) |
|
(53,824 |
) |
Net cash used in investing activities – discontinued
operations |
(928 |
) |
|
(13,716 |
) |
Net cash used in investing activities |
(80,301 |
) |
|
(67,540 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Taxes paid for equity award issuances |
(1,627 |
) |
|
(2,182 |
) |
Other |
(804 |
) |
|
(95 |
) |
Net cash used in financing activities – continuing operations |
(2,431 |
) |
|
(2,277 |
) |
Net cash used in financing activities – discontinued
operations |
(17,061 |
) |
|
(17,061 |
) |
Net cash used in financing activities |
(19,492 |
) |
|
(19,338 |
) |
|
|
|
|
Net increase in cash and cash equivalents |
53,392 |
|
|
42,061 |
|
Cash and cash equivalents, beginning of period |
195,397 |
|
|
101,651 |
|
Cash and cash equivalents, end of period |
$ |
248,789 |
|
|
$ |
143,712 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
MeasuresAdjusted OIBDA
Adjusted OIBDA represents Operating income
before depreciation, amortization of intangible assets, stock-based
compensation and certain other items of revenue, expense, gain or
loss not reflective of our operating performance, which may or may
not be recurring in nature.
Adjusted OIBDA is a non-GAAP financial measure
that we use to evaluate our operating performance in comparison to
our competitors. Management believes that analysts and investors
use Adjusted OIBDA as a supplemental measure of operating
performance to facilitate comparisons with other telecommunications
companies. This measure isolates and evaluates operating
performance by excluding the cost of financing (e.g., interest
expense), as well as the non-cash depreciation and amortization of
past capital investments, non-cash share-based compensation
expense, and certain other items of revenue, expense, gain or loss
not reflective of our operating performance.
Adjusted OIBDA has limitations as an analytical
tool and should not be considered in isolation or as a substitute
for operating income, net income or any other measure of financial
performance reported in accordance with GAAP.
The following tables reconcile Adjusted OIBDA to
operating income, which we consider to be the most directly
comparable GAAP financial measure:
Three Months Ended
June 30, 2021 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income (loss) from continuing operations |
|
$ |
8,492 |
|
|
$ |
2,509 |
|
|
$ |
(8,298 |
) |
|
$ |
2,703 |
|
Depreciation |
|
11,577 |
|
|
449 |
|
|
1,075 |
|
|
13,101 |
|
Amortization |
|
198 |
|
|
— |
|
|
— |
|
|
198 |
|
OIBDA |
|
20,267 |
|
|
2,958 |
|
|
(7,223 |
) |
|
16,002 |
|
Stock compensation expense |
|
— |
|
|
— |
|
|
192 |
|
|
192 |
|
Deal advisory fees |
|
1 |
|
|
— |
|
|
27 |
|
|
28 |
|
Restructuring expense |
|
27 |
|
|
— |
|
|
16 |
|
|
43 |
|
Adjusted OIBDA |
|
$ |
20,295 |
|
|
$ |
2,958 |
|
|
$ |
(6,988 |
) |
|
$ |
16,265 |
|
Three Months Ended
June 30, 2020 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income (loss) from continuing operations |
|
$ |
9,500 |
|
|
$ |
2,229 |
|
|
$ |
(13,596 |
) |
|
$ |
(1,867 |
) |
Depreciation |
|
10,140 |
|
|
477 |
|
|
1,146 |
|
|
11,763 |
|
Amortization |
|
167 |
|
|
— |
|
|
— |
|
|
167 |
|
OIBDA |
|
19,807 |
|
|
2,706 |
|
|
(12,450 |
) |
|
10,063 |
|
Stock compensation expense |
|
— |
|
|
— |
|
|
1,430 |
|
|
1,430 |
|
Deal advisory fees |
|
— |
|
|
— |
|
|
1,060 |
|
|
1,060 |
|
Adjusted OIBDA |
|
$ |
19,807 |
|
|
$ |
2,706 |
|
|
$ |
(9,960 |
) |
|
$ |
12,553 |
|
Six Months Ended June
30, 2021 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income (loss) from continuing operations |
|
$ |
18,919 |
|
|
$ |
5,211 |
|
|
$ |
(19,056 |
) |
|
$ |
5,074 |
|
Depreciation |
|
23,115 |
|
|
930 |
|
|
2,099 |
|
|
26,144 |
|
Amortization |
|
421 |
|
|
— |
|
|
— |
|
|
421 |
|
OIBDA |
|
42,455 |
|
|
6,141 |
|
|
(16,957 |
) |
|
31,639 |
|
Stock compensation expense |
|
— |
|
|
— |
|
|
834 |
|
|
834 |
|
Deal advisory fees |
|
116 |
|
|
— |
|
|
136 |
|
|
252 |
|
Restructuring expense |
|
132 |
|
|
— |
|
|
529 |
|
|
661 |
|
Adjusted OIBDA |
|
$ |
42,703 |
|
|
$ |
6,141 |
|
|
$ |
(15,458 |
) |
|
$ |
33,386 |
|
Six Months Ended June
30, 2020 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income (loss) from continuing operations |
|
$ |
20,162 |
|
|
$ |
4,024 |
|
|
$ |
(27,417 |
) |
|
$ |
(3,231 |
) |
Depreciation |
|
20,020 |
|
|
947 |
|
|
2,727 |
|
|
23,694 |
|
Amortization |
|
321 |
|
|
— |
|
|
— |
|
|
321 |
|
OIBDA |
|
40,503 |
|
|
4,971 |
|
|
(24,690 |
) |
|
20,784 |
|
Stock compensation expense |
|
— |
|
|
— |
|
|
4,169 |
|
|
4,169 |
|
Deal advisory fees |
|
— |
|
|
— |
|
|
1,970 |
|
|
1,970 |
|
Adjusted OIBDA |
|
$ |
40,503 |
|
|
$ |
4,971 |
|
|
$ |
(18,551 |
) |
|
$ |
26,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 Outlook – Adjusted
OIBDA
($ in millions) |
|
Year Ending December 31, |
|
Year EndedDecember 31,2019 |
|
|
2021 |
|
2020 |
|
|
|
Guidance |
|
Actual |
|
|
|
Low |
|
High |
|
|
|
Operating Income (loss) |
|
$ |
7 |
|
|
$ |
14 |
|
|
$ |
(1 |
) |
|
$ |
(1 |
) |
Depreciation |
|
$ |
53 |
|
|
$ |
53 |
|
|
$ |
48 |
|
|
$ |
46 |
|
Amortization |
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
1 |
|
Stock compensation
expense |
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
3 |
|
Deal advisory fees |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3 |
|
|
$ |
— |
|
Restructuring expense and
other |
|
$ |
2 |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
— |
|
Adjusted OIBDA |
|
$ |
69 |
|
|
$ |
76 |
|
|
$ |
57 |
|
|
$ |
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Results
Three Months Ended June 30,
2021:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB |
|
$ |
43,989 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
43,989 |
|
Commercial Fiber |
|
6,531 |
|
|
— |
|
|
— |
|
|
6,531 |
|
RLEC & Other |
|
3,605 |
|
|
— |
|
|
— |
|
|
3,605 |
|
Tower lease |
|
— |
|
|
2,019 |
|
|
— |
|
|
2,019 |
|
Service revenue and other |
|
54,125 |
|
|
2,019 |
|
|
— |
|
|
56,144 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
2,102 |
|
|
2,595 |
|
|
(141 |
) |
|
4,556 |
|
Total revenue |
|
56,227 |
|
|
4,614 |
|
|
(141 |
) |
|
60,700 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
23,127 |
|
|
1,318 |
|
|
(110 |
) |
|
24,335 |
|
Selling, general and administrative |
|
12,806 |
|
|
338 |
|
|
7,176 |
|
|
20,320 |
|
Restructuring expense |
|
27 |
|
|
— |
|
|
16 |
|
|
43 |
|
Depreciation and amortization |
|
11,775 |
|
|
449 |
|
|
1,075 |
|
|
13,299 |
|
Total operating expenses |
|
47,735 |
|
|
2,105 |
|
|
8,157 |
|
|
57,997 |
|
Operating income (loss) |
|
$ |
8,492 |
|
|
$ |
2,509 |
|
|
$ |
(8,298 |
) |
|
$ |
2,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
2020
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB |
|
$ |
37,684 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
37,684 |
|
Commercial Fiber |
|
6,282 |
|
|
— |
|
|
— |
|
|
6,282 |
|
RLEC & Other |
|
3,982 |
|
|
— |
|
|
— |
|
|
3,982 |
|
Tower lease |
|
— |
|
|
1,829 |
|
|
— |
|
|
1,829 |
|
Service revenue and other |
|
47,948 |
|
|
1,829 |
|
|
— |
|
|
49,777 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
2,185 |
|
|
2,430 |
|
|
(56 |
) |
|
4,559 |
|
Total revenue |
|
50,133 |
|
|
4,259 |
|
|
(56 |
) |
|
54,336 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
20,861 |
|
|
1,315 |
|
|
5 |
|
|
22,181 |
|
Selling, general and administrative |
|
9,465 |
|
|
238 |
|
|
12,389 |
|
|
22,092 |
|
Depreciation and amortization |
|
10,307 |
|
|
477 |
|
|
1,146 |
|
|
11,930 |
|
Total operating expenses |
|
40,633 |
|
|
2,030 |
|
|
13,540 |
|
|
56,203 |
|
Operating income (loss) |
|
$ |
9,500 |
|
|
$ |
2,229 |
|
|
$ |
(13,596 |
) |
|
$ |
(1,867 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2021:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB |
|
$ |
86,919 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
86,919 |
|
Commercial Fiber |
|
12,916 |
|
|
— |
|
|
— |
|
|
12,916 |
|
RLEC & Other |
|
7,236 |
|
|
— |
|
|
— |
|
|
7,236 |
|
Tower lease |
|
— |
|
|
4,169 |
|
|
— |
|
|
4,169 |
|
Service revenue and other |
|
107,071 |
|
|
4,169 |
|
|
— |
|
|
111,240 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
4,310 |
|
|
5,110 |
|
|
(269 |
) |
|
9,151 |
|
Total revenue |
|
111,381 |
|
|
9,279 |
|
|
(269 |
) |
|
120,391 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
45,263 |
|
|
2,566 |
|
|
(211 |
) |
|
47,618 |
|
Selling, general and administrative |
|
23,531 |
|
|
572 |
|
|
16,370 |
|
|
40,473 |
|
Restructuring expense |
|
132 |
|
|
— |
|
|
529 |
|
|
661 |
|
Depreciation and amortization |
|
23,536 |
|
|
930 |
|
|
2,099 |
|
|
26,565 |
|
Total operating expenses |
|
92,462 |
|
|
4,068 |
|
|
18,787 |
|
|
115,317 |
|
Operating income (loss) |
|
$ |
18,919 |
|
|
$ |
5,211 |
|
|
$ |
(19,056 |
) |
|
$ |
5,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2020:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB |
|
$ |
74,693 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
74,693 |
|
Commercial Fiber |
|
12,482 |
|
|
— |
|
|
— |
|
|
12,482 |
|
RLEC & Other |
|
8,026 |
|
|
— |
|
|
— |
|
|
8,026 |
|
Tower lease |
|
— |
|
|
3,626 |
|
|
— |
|
|
3,626 |
|
Service revenue and other |
|
95,201 |
|
|
3,626 |
|
|
— |
|
|
98,827 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
4,718 |
|
|
4,363 |
|
|
(438 |
) |
|
8,643 |
|
Total revenue |
|
99,919 |
|
|
7,989 |
|
|
(438 |
) |
|
107,470 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
40,247 |
|
|
2,254 |
|
|
(3 |
) |
|
42,498 |
|
Selling, general and administrative |
|
19,169 |
|
|
764 |
|
|
24,255 |
|
|
44,188 |
|
Depreciation and amortization |
|
20,341 |
|
|
947 |
|
|
2,727 |
|
|
24,015 |
|
Total operating expenses |
|
79,757 |
|
|
3,965 |
|
|
26,979 |
|
|
110,701 |
|
Operating income (loss) |
|
$ |
20,162 |
|
|
$ |
4,024 |
|
|
$ |
(27,417 |
) |
|
$ |
(3,231 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information
Broadband Operating
Statistics
|
June 30,2021 |
|
June 30,2020 |
Broadband homes and businesses passed (1) |
278,952 |
|
|
220,442 |
|
Incumbent Cable (2) |
210,787 |
|
|
207,269 |
|
Glo Fiber |
46,368 |
|
|
13,173 |
|
Beam |
21,797 |
|
|
— |
|
|
|
|
|
Broadband customer
relationships (3) |
116,987 |
|
|
101,816 |
|
|
|
|
|
Residential & SMB
RGUs: |
|
|
|
Broadband Data |
111,475 |
|
|
92,695 |
|
Incumbent Cable (2) |
103,465 |
|
|
91,364 |
|
Glo Fiber |
7,169 |
|
|
1,331 |
|
Beam |
841 |
|
|
— |
|
Video (2) |
51,355 |
|
|
53,153 |
|
Voice (2) |
34,664 |
|
|
32,252 |
|
Total Residential & SMB
RGUs (excludes RLEC) |
197,494 |
|
|
178,100 |
|
|
|
|
|
Residential & SMB
Penetration (4) |
|
|
|
Broadband Data |
40.0 |
% |
|
42.0 |
% |
Incumbent Cable |
49.1 |
% |
|
44.1 |
% |
Glo Fiber |
15.5 |
% |
|
10.1 |
% |
Beam |
3.9 |
% |
|
— |
% |
Video |
18.4 |
% |
|
24.1 |
% |
Voice |
14.4 |
% |
|
16.5 |
% |
|
|
|
|
Fiber route miles |
7,041 |
|
|
6,478 |
|
Total fiber miles (5) |
440,236 |
|
|
346,969 |
|
__________________________________
(1) |
|
Homes and businesses are considered passed (“homes passed”) if we
can connect them to our network without further extending the
distribution system. Homes passed is an estimate based upon the
best available information. Homes passed will vary among video,
broadband data and voice services. |
(2) |
|
The Company acquired Canaan Cable
on December 31, 2020 adding 1,100 homes passed, 512 data RGUs, 324
video RGUs and 164 voice RGUs. |
(3) |
|
Customer relationships represent
the number of billed customers who receive at least one of our
services. |
(4) |
|
Penetration is calculated by
dividing the number of users by the number of homes passed or
available homes, as appropriate. |
(5) |
|
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 EndedJune 30, |
|
Six Months EndedJune 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Residential and SMB
Revenue: |
|
|
|
|
|
|
|
Broadband |
$ |
25,714 |
|
|
$ |
21,003 |
|
|
$ |
50,298 |
|
|
$ |
40,836 |
|
Incumbent Cable |
24,177 |
|
|
20,802 |
|
|
47,641 |
|
|
40,570 |
|
Glo Fiber |
1,394 |
|
|
201 |
|
|
2,462 |
|
|
266 |
|
Beam |
143 |
|
|
— |
|
|
195 |
|
|
— |
|
Video |
15,611 |
|
|
14,938 |
|
|
31,263 |
|
|
29,759 |
|
Voice |
2,893 |
|
|
2,808 |
|
|
5,792 |
|
|
5,634 |
|
Discounts and adjustments |
(229 |
) |
|
(1,065 |
) |
|
(434 |
) |
|
(1,536 |
) |
Total
Revenue |
$ |
43,989 |
|
|
$ |
37,684 |
|
|
$ |
86,919 |
|
|
$ |
74,693 |
|
|
|
|
|
|
|
|
|
Average
RGUs: |
|
|
|
|
|
|
|
Broadband Data |
109,656 |
|
|
89,780 |
|
|
107,403 |
|
|
87,335 |
|
Incumbent Cable |
102,688 |
|
|
88,970 |
|
|
101,403 |
|
|
86,796 |
|
Glo Fiber |
6,308 |
|
|
810 |
|
|
5,551 |
|
|
539 |
|
Beam |
660 |
|
|
— |
|
|
449 |
|
|
— |
|
Video |
51,715 |
|
|
53,111 |
|
|
52,076 |
|
|
53,053 |
|
Voice |
33,993 |
|
|
32,039 |
|
|
33,462 |
|
|
31,816 |
|
|
|
|
|
|
|
|
|
ARPU:
(1) |
|
|
|
|
|
|
|
Broadband |
$ |
78.17 |
|
|
$ |
77.98 |
|
|
$ |
78.05 |
|
|
$ |
77.93 |
|
Incumbent Cable |
$ |
78.48 |
|
|
$ |
77.94 |
|
|
$ |
78.30 |
|
|
$ |
77.90 |
|
Glo Fiber |
$ |
73.66 |
|
|
$ |
82.72 |
|
|
$ |
73.92 |
|
|
$ |
82.25 |
|
Beam |
$ |
72.22 |
|
|
$ |
— |
|
|
$ |
72.38 |
|
|
$ |
— |
|
Video |
$ |
100.62 |
|
|
$ |
93.75 |
|
|
$ |
100.06 |
|
|
$ |
93.49 |
|
Voice |
$ |
28.37 |
|
|
$ |
29.21 |
|
|
$ |
28.85 |
|
|
$ |
29.51 |
|
__________________________________
(1) |
|
Average Revenue Per RGU calculation = (Residential & SMB
Revenue * 1,000) / average RGUs / 3 months |
Tower Operating Statistics
|
June 30,2021 |
|
June 30,2020 |
Macro tower sites |
223 |
|
|
220 |
|
Tenants (1) |
448 |
|
|
413 |
|
Average tenants per tower |
1.9 |
|
|
1.8 |
|
__________________________________
(1) |
|
Includes 239 and 206 intercompany tenants for our Wireless
operations, (reported as a discontinued operation), and Broadband
operations, as of June 30, 2021 and 2020, respectively. |
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