Strong operational performance delivered consistent Revenue and
Adjusted EBITDA positioning the company to upgrade more than
300,000 locations to Gigabit speeds in 2021
Company to upgrade 1.6 million locations as part of its
accelerated plan to extend fiber coverage to over 70% of its
footprint by 2025
Global refinancing extends maturities, lowers leverage and
increases liquidity
Fourth Quarter 2020 Highlights (compared to fourth
quarter 2019)
- Revenue totaled $326.1 million, generating increased Adjusted
EBITDA of $132.3 million, up 1.1%
- Commercial and carrier data-transport revenue grew 3.2%
- Consumer broadband revenue grew 2.8%, representing seven
consecutive quarters of year over year growth
- Net cash from operating activities was $67.6 million; cash on
hand totaled $155.6 million
- Net debt leverage improved to 3.39x, from 4.33x at Dec. 31,
2019
- Capital expenditures totaled $65.3 million, reflecting an
accelerated spend supporting preparations for the 2021 fiber
network expansion
Full-Year 2020 Highlights (compared to full-year
2019)
- Revenue totaled $1.30 billion, a decline of 2.4%
- Adjusted EBITDA totaled $529.2 million, an improvement of
1.1%
- Commercial and carrier data-transport revenue grew 1.9%
- Consumer broadband revenue grew 2.3%
- Free cash flow totaled $197.9 million, an increase of $131.7
million
- Fiber lit buildings increased 11% and more than 1,000
fiber-route miles were built
- Capital expenditures totaled $217.6 million supporting
success-based, fiber projects and broadband network
investments
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the
“Company” or “Consolidated”) reported results for the fourth
quarter and full-year 2020.
“We finished the year with strong performance which included
growing consumer broadband revenue for the seventh consecutive
quarter, and robust data-transport revenue growth of 3.2% in the
fourth quarter,” said Bob Udell, president and chief executive
officer at Consolidated Communications. “Our fiber build plans are
well underway.”
“We are heading into 2021 with solid momentum,” added Udell. “We
have a fully funded growth plan, which is supported by our robust
capital structure and the strategic partnership we secured in the
fourth quarter with Searchlight Capital. Our long-term outlook is
very positive. We are confident in our ability to upgrade more than
300,000 passings in 2021 as we execute on our fiber build plan and
bring highly competitive, gigabit broadband services to 70% of our
footprint by 2025.”
Financial Results for the Fourth Quarter
- Revenue totaled $326.1 million, a decline of 1.5% compared to
the fourth quarter 2019. This reflects a 250 basis point
improvement compared to the prior year. Data and transport service
revenue increased 3.2% or $2.9 million. Broadband revenue increased
2.8% or $1.8 million. Voice services revenue rate of decline across
all customer channels improved 1.4% or $1.7 million. Network access
revenues declined $1.7 million primarily due to a decrease in
special access.
- Income from operations totaled $21 million in the fourth
quarter, a decline of $5.7 million. The year-over-year change was
primarily due to a 1.5% revenue decline and transaction costs of
$7.6 million related to the Searchlight investment. These costs
were partially offset by a decrease of $10.8 million in
depreciation and amortization expense where certain acquired assets
became fully depreciated.
- Net interest expense was $48.4 million, an increase of $15
million, as a result of the recapitalization of the balance sheet
associated with the Oct. 2, 2020 refinancing and the receipt of the
$350 million Searchlight strategic investment. Interest expense
increased $3.5 million due to the higher mix of 6.5% Senior notes
in the Company’s external debt. Non-cash interest on the
Searchlight note combined with amortization of deferred financing
costs and the discount totaled $10.1 million. The Company expects
to make Payment in Kind (PIK) interest payments on the Searchlight
note through at least 2022.
- As part of the quarterly valuation of the Searchlight
contingent payment right, the Company recognized a gain of $23.8
million in the fourth quarter related to a change in the fair value
of contingent payment obligations as of Dec. 31, 2020. Upon receipt
of all approvals and the completion of the second close which is
expected in 2021, this contingent payment right will convert to
common stock.
- Cash distributions from the Company’s wireless partnerships
totaled $9.5 million, an increase of $2.5 million from a year
ago.
- Other income, net was $12.2 million compared to expense of
$286,000 one year ago. The change included a $2.5 million increase
in investment income from the Company’s minority interest in
wireless partnerships and a reduction in non-operating pension/OPEB
expense of $8.8 million. The latter was the result of a non-cash
pension settlement charge of $6.7 million in 2019.
- On a GAAP basis, net loss was $6.8 million, compared to a loss
of $5.8 million for the same period a year ago. GAAP net loss per
share was ($0.09). Adjusted diluted net income (loss) per share
excludes certain items as outlined in the table provided in this
release. Adjusted diluted net income per share was $0.12 in the
fourth quarter of 2020, compared to $0.01 in the fourth quarter of
2019.
- Adjusted EBITDA was $132.3 million, an increase of 1.1% from
the fourth quarter a year ago.
- The total net debt leverage ratio was 3.39x, an improvement
from 4.33x at Dec. 31, 2019.
- Capital expenditures totaled $65.3 million in the fourth
quarter driven by success-based opportunities across all customer
channels as well as preparations for the 2021 fiber build
expansion.
Full Year 2020 Results
- Operating revenue totaled $1.30 billion, down 2.4% from fiscal
year 2019. This reflects an overall 200 basis point improvement
compared to the prior year.
- Total operating expenses were reduced 3.5% or $30.4 million
primarily driven by reduced labor costs, lower expense associated
with integration efforts and continued operating efficiencies.
- Net cash from operating activities was $365 million.
- Adjusted EBITDA was $529.2 million. Adjusted diluted net income
per share was $0.78.
- Capital expenditures totaled $217.6 million in 2020 supporting
success-based, fiber projects and broadband network
investments.
On Oct. 2, 2020, Consolidated closed on stage one of
Searchlight’s investment and received $350 million of the aggregate
$425 million. Concurrent with Searchlight’s investment,
Consolidated completed a global refinancing in which it raised
$2.25 billion in new secured debt at attractive rates, including a
$250 million revolving credit facility. On Jan. 15, 2021 the
Company secured an additional $150 million term loan financing on
substantially the same terms as the October refinancing.
2021 Outlook
For 2021, Consolidated Communications is providing outlook based
on the Company’s new fiber build plan and current capital
structure.
- Capital expenditures are expected to be in a range of $400
million to $420 million, reflecting a higher level of spending to
support the build plan.
- Adjusted EBITDA is expected to be in a range of $500 million to
$510 million, lower than 2020 primarily due to the start-up and
acceleration of the fiber build expansion plan.
- Cash interest expense is expected to be in a range of $142
million to $152 million, reflecting the current debt
structure.
- Cash income taxes are expected to be in a range of $2 million
to $4 million.
Conference Call
Consolidated’s fourth-quarter earnings conference call will be
webcast today at 10 a.m. ET. The live webcast and materials will be
available on the Investor Relations section of the Company’s
website at http://ir.consolidated.com. The live conference call
dial-in number for investors and analysts is 833-794-0898,
conference ID 3278619. A telephonic replay of the conference call
will be available through Mar. 4 and can be accessed by calling
800-585-8367, enter ID 3278619.
About Consolidated Communications
Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a
leading broadband and business communications provider serving
consumers, businesses, and wireless and wireline carriers across
rural and metro communities and a 23-state service area. Leveraging
an advanced fiber network spanning 46,600 fiber route miles,
Consolidated Communications offers a wide range of communications
solutions, including: high-speed Internet, data, phone, security,
managed services, cloud services and wholesale, carrier solutions.
From our first connection 125 years ago, Consolidated is dedicated
to turning technology into solutions, connecting people and
enriching how they work and live. Visit www.consolidated.com for
more information.
Use of Non-GAAP Financial Measures
This press release, as well as the conference call, includes
disclosures regarding “EBITDA,” “adjusted EBITDA,” “total net debt
to last 12 month adjusted EBITDA ratio” or “Net debt leverage
ratio,” “free cash flow” and “adjusted diluted net income (loss)
per share,” all of which are non-GAAP financial measures and
described in this section as not being in compliance with
Regulation S-X. Accordingly, they should not be construed as
alternatives to net cash from operating or investing activities,
cash and cash equivalents, cash flows from operations, net income
or net income per share as defined by GAAP and are not, on their
own, necessarily indicative of cash available to fund cash needs as
determined in accordance with GAAP. In addition, not all companies
use identical calculations, and the non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies. A reconciliation of the differences between these
non-GAAP financial measures and the most directly comparable
financial measures presented in accordance with GAAP is included in
the tables that follow.
Adjusted EBITDA is comprised of EBITDA, adjusted for certain
items as permitted or required by the lenders under our credit
agreement in place at the end of each quarter in the periods
presented. The tables that follow include an explanation of how
adjusted EBITDA is calculated for each of the periods presented
with the reconciliation to net income. EBITDA is defined as net
earnings before interest expense, income taxes, depreciation and
amortization on a historical basis.
We present adjusted EBITDA for several reasons. Management
believes adjusted EBITDA is useful as a means to evaluate our
ability to fund our estimated uses of cash (including interest on
our debt). In addition, we have presented adjusted EBITDA to
investors in the past because it is frequently used by investors,
securities analysts and other interested parties in the evaluation
of companies in our industry, and management believes presenting it
here provides a measure of consistency in our financial reporting.
Adjusted EBITDA, referred to as Available Cash in our credit
agreement, is also a component of the restrictive covenants and
financial ratios contained in our credit agreement that requires us
to maintain compliance with these covenants and limit certain
activities, such as our ability to incur debt. The definitions in
these covenants and ratios are based on adjusted EBITDA after
giving effect to specified charges. In addition, adjusted EBITDA
provides our board of directors with meaningful information, with
other data, assumptions and considerations, to measure our ability
to service and repay debt. We present the related “total net debt
to last 12 month adjusted EBITDA ratio” or “Net debt leverage
ratio” principally to put other non-GAAP measures in context and
facilitate comparisons by investors, security analysts and others;
this ratio differs in certain respects from the similar ratio used
in our credit agreement. These measures differ in certain respects
from the ratios used in our senior notes indenture.
These non-GAAP financial measures have certain shortcomings. In
particular, adjusted EBITDA does not represent the residual cash
flows available for discretionary expenditures, since items such as
debt repayment and interest payments are not deducted from such
measure. Because adjusted EBITDA is a component of the ratio of
total net debt to last twelve month adjusted EBITDA, these measures
are also subject to the material limitations discussed above. In
addition, the ratio of total net debt to last twelve month adjusted
EBITDA is subject to the risk that we may not be able to use the
cash on the balance sheet to reduce our debt on a dollar-for-dollar
basis. Management believes this ratio is useful as a means to
evaluate our ability to incur additional indebtedness in the
future.
Free cash flow represents net cash provided by operating
activities adjusted for capital expenditures, cash dividends, and
proceeds received from the sale of assets, refinancing and
investment. Free cash flow is a measure of operating cash flows
available for corporate purposes after providing sufficient fixed
asset additions. The tables that follow include a calculation of
free cash flow for each of the periods presented with a
reconciliation to net cash provided by operating activities. Free
cash flow provides useful information to investors in the
evaluation of our operating performance and liquidity.
We present the non-GAAP measure “adjusted diluted net income
(loss) per share” because our net income (loss) and net income
(loss) per share are regularly affected by items that occur at
irregular intervals or are non-cash items. We believe that
disclosing these measures assists investors, securities analysts
and other interested parties in evaluating both our company over
time and the relative performance of the companies in our
industry.
Safe Harbor
Certain statements in this press release are forward-looking
statements and are made pursuant to the safe harbor provisions of
the Securities Litigation Reform Act of 1995. These forward-looking
statements reflect, among other things, our current expectations,
plans, strategies, and anticipated financial results. There are a
number of risks, uncertainties, and conditions that may cause our
actual results to differ materially from those expressed or implied
by these forward-looking statements. These risks and uncertainties
include a number of factors related to our business, including the
uncertainties relating to the impact of the novel coronavirus
(COVID-19) pandemic on the Company’s business, results of
operations, cash flows, stock price and employees; the possibility
that any of the anticipated benefits of the strategic investment
from Searchlight or our refinancing of outstanding debt, including
our senior secured credit facilities, will not be realized; the
outcome of any legal proceedings that may be instituted against the
Company or its directors; the ability to obtain regulatory
approvals and meet other closing conditions to the investment on a
timely basis or at all, including the risk that regulatory
approvals required for the investment are not obtained subject to
conditions that are not anticipated or that could adversely affect
the Company or the expected benefits of the investment; the
anticipated use of proceeds of the strategic investment; economic
and financial market conditions generally and economic conditions
in our service areas; various risks to the price and volatility of
our common stock; changes in the valuation of pension plan assets;
the substantial amount of debt and our ability to repay or
refinance it or incur additional debt in the future; our need for a
significant amount of cash to service and repay the debt
restrictions contained in our debt agreements that limit the
discretion of management in operating the business; regulatory
changes, including changes to subsidies, rapid development and
introduction of new technologies and intense competition in the
telecommunications industry; risks associated with our possible
pursuit of acquisitions; system failures; cyber-attacks,
information or security breaches or technology failure of ours or
of a third party; losses of large customers or government
contracts; risks associated with the rights-of-way for the network;
disruptions in the relationship with third party vendors; losses of
key management personnel and the inability to attract and retain
highly qualified management and personnel in the future; changes in
the extensive governmental legislation and regulations governing
telecommunications providers and the provision of
telecommunications services; new or changing tax laws or
regulations; telecommunications carriers disputing and/or avoiding
their obligations to pay network access charges for use of our
network; high costs of regulatory compliance; the competitive
impact of legislation and regulatory changes in the
telecommunications industry; and liability and compliance costs
regarding environmental regulations; and risks associated with
discontinuing paying dividends on our common stock. A detailed
discussion of these and other risks and uncertainties that could
cause actual results and events to differ materially from such
forward-looking statements are discussed in more detail in our
filings with the SEC, including our reports on Form 10-K and Form
10-Q. Many of these circumstances are beyond our ability to control
or predict. Moreover, forward-looking statements necessarily
involve assumptions on our part. These forward-looking statements
generally are identified by the words “believe,” “expect,”
“anticipate,” “estimate,” “project,” “intend,” “plan,” “should,”
“may,” “will,” “would,” “will be,” “will continue” or similar
expressions. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company and its
subsidiaries to be different from those expressed or implied in the
forward-looking statements. All forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements that
appear throughout this press release. Furthermore, forward-looking
statements speak only as of the date they are made. Except as
required under the federal securities laws or the rules and
regulations of the SEC, we disclaim any intention or obligation to
update or revise publicly any forward-looking statements. You
should not place undue reliance on forward-looking statements.
Tag: [Consolidated-Communications-Earnings]
Consolidated Communications Holdings, Inc. Condensed
Consolidated Balance Sheets (Dollars in thousands, except share
and per share amounts) (Unaudited)
December 31,
December 31,
2020
2019
ASSETS Current assets: Cash and cash equivalents $
155,561
$
12,395
Accounts receivable, net
137,646
120,016
Income tax receivable
1,072
2,669
Prepaid expenses and other current assets
46,382
41,787
Total current assets
340,661
176,867
Property, plant and equipment, net
1,760,152
1,835,878
Investments
111,665
112,717
Goodwill
1,035,274
1,035,274
Customer relationships, net
113,418
164,069
Other intangible assets
10,557
10,557
Other assets
135,573
54,915
Total assets $
3,507,300
$
3,390,277
LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable $
25,283
$
30,936
Advance billings and customer deposits
49,544
45,710
Accrued compensation
74,957
57,069
Accrued interest
21,194
7,874
Accrued expense
81,931
75,406
Current portion of long-term debt and finance lease obligations
17,561
27,301
Total current liabilities
270,470
244,296
Long-term debt and finance lease obligations
1,932,666
2,250,677
Deferred income taxes
171,021
173,027
Pension and other post-retirement obligations
300,373
302,296
Convertible security interest
238,701
—
Contingent payment right
123,241
—
Other long-term liabilities
81,600
72,730
Total liabilities
3,118,072
3,043,026
Shareholders' equity: Common stock, par value $0.01 per
share; 100,000,000 shares authorized, 79,227,607 and 71,961,045,
shares outstanding as of December 31, 2020 and December 31, 2019,
respectively
792
720
Additional paid-in capital
525,673
492,246
Accumulated deficit
(34,514
)
(71,217
)
Accumulated other comprehensive loss, net
(109,418
)
(80,868
)
Noncontrolling interest
6,695
6,370
Total shareholders' equity
389,228
347,251
Total liabilities and shareholders' equity $
3,507,300
$
3,390,277
Consolidated Communications Holdings, Inc. Condensed
Consolidated Statements of Operations (Dollars in thousands,
except per share amounts) (Unaudited)
Three Months
Ended Year Ended December 31, December 31,
2020
2019
2020
2019
Net revenues $
326,124
$
331,035
$
1,304,028
$
1,336,542
Operating expenses: Cost of services and products
138,927
136,201
560,644
574,936
Selling, general and administrative expenses
77,682
76,473
275,361
299,088
Acquisition and other transaction costs
7,646
—
7,646
—
Depreciation and amortization
80,840
91,642
324,864
381,237
Income from operations
21,029
26,719
135,513
81,281
Other income (expense): Interest expense, net of interest income
(48,376
)
(33,390
)
(143,591
)
(136,660
)
Gain (loss) on extinguishment of debt
(18,498
)
3,140
(18,264
)
4,510
Change in fair value of contingent payment rights
23,802
—
23,802
—
Other income, net
12,249
(286
)
50,778
27,224
Income (loss) before income taxes
(9,794
)
(3,817
)
48,238
(23,645
)
Income tax expense (benefit)
(2,956
)
2,005
10,936
(3,714
)
Net income (loss)
(6,838
)
(5,822
)
37,302
(19,931
)
Less: net income attributable to noncontrolling interest
82
166
325
452
Net income (loss) attributable to common shareholders $
(6,920
)
$
(5,988
)
$
36,977
$
(20,383
)
Net income (loss) per basic and diluted common shares
attributable to common shareholders $
(0.09
)
$
(0.08
)
$
0.47
$
(0.29
)
Consolidated Communications Holdings, Inc. Condensed
Consolidated Statements of Cash Flows (Dollars in thousands)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
OPERATING ACTIVITIES Net income (loss) $
(6,838
)
$
(5,822
)
$
37,302
$
(19,931
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
80,840
91,642
324,864
381,237
Deferred income taxes
8,386
(5,888
)
8,386
(5,249
)
Cash distributions from wireless partnerships in excess of (less
than) earnings
(157
)
(340
)
844
(1,901
)
Pension and post-retirement contributions in excess of expense
(7,635
)
(246
)
(37,301
)
(24,507
)
Non-cash, stock-based compensation
2,046
1,596
7,533
6,836
Amortization of deferred financing costs and discounts
4,243
1,253
7,871
4,932
Loss (gain) on extinguishment of debt
10,863
(3,140
)
10,629
(4,510
)
Gain on change in fair value of contingent payment rights
(23,802
)
—
(23,802
)
—
Other adjustments, net
9,859
696
5,374
1,487
Changes in operating assets and liabilities, net
(10,175
)
10,708
23,280
702
Net cash provided by operating activities
67,630
90,459
364,980
339,096
INVESTING ACTIVITIES Purchase of property, plant and equipment, net
(65,348
)
(47,860
)
(217,563
)
(232,203
)
Proceeds from sale of assets
94
375
7,071
14,718
Proceeds from sale of investments
—
—
426
329
Other
—
(213
)
—
(663
)
Net cash used in investing activities
(65,254
)
(47,698
)
(210,066
)
(217,819
)
FINANCING ACTIVITIES Proceeds on bond offering
750,000
—
750,000
—
Proceeds from issuance of long-term debt
1,231,250
43,000
1,271,250
195,000
Proceeds from issuance of common stock
350,000
—
350,000
—
Payment of finance lease obligations
(1,777
)
(2,776
)
(9,020
)
(12,519
)
Payment on long-term debt
(1,774,075
)
(52,587
)
(1,867,838
)
(195,350
)
Retirement of senior notes
(440,509
)
(23,818
)
(444,717
)
(49,804
)
Payment of financing costs
(59,139
)
—
(59,139
)
—
Share repurchases for minimum tax withholding
(812
)
(363
)
(812
)
(363
)
Dividends on common stock
—
—
—
(55,445
)
Other
(1,472
)
—
(1,472
)
—
Net cash used in financing activities
53,466
(36,544
)
(11,748
)
(118,481
)
Net change in cash and cash equivalents
55,842
6,217
143,166
2,796
Cash and cash equivalents at beginning of period
99,719
6,178
12,395
9,599
Cash and cash equivalents at end of period $
155,561
$
12,395
$
155,561
$
12,395
Consolidated Communications Holdings, Inc. Consolidated
Revenue by Category (Dollars in thousands) (Unaudited)
Three Months Ended Year Ended December
31, December 31,
2020
2019
2020
2019
Commercial and carrier: Data and transport services (includes VoIP)
$
92,781
$
89,905
$
362,078
$
355,325
Voice services
44,862
46,510
181,700
188,322
Other
12,128
12,500
45,155
52,894
149,771
148,915
588,933
596,541
Consumer: Broadband (VoIP and Data)
66,253
64,474
263,059
257,083
Video services
17,547
19,838
74,343
81,378
Voice services
41,431
44,238
170,503
180,839
125,231
128,550
507,905
519,300
Subsidies
17,402
18,122
71,989
72,440
Network access
31,314
33,056
125,261
138,056
Other products and services
2,406
2,392
9,940
10,205
Total operating revenue $
326,124
$
331,035
$
1,304,028
$
1,336,542
Consolidated Communications Holdings, Inc. Consolidated
Revenue Trend by Category (Dollars in thousands) (Unaudited)
Three Months Ended
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Commercial and carrier: Data and transport services (includes VoIP)
$
92,781
$
90,153
$
89,572
$
89,572
$
89,905
Voice services
44,862
45,343
45,775
45,720
46,510
Other
12,128
10,909
10,406
11,712
12,500
149,771
146,405
145,753
147,004
148,915
Consumer: Broadband (VoIP and Data)
66,253
67,163
65,567
64,076
64,474
Video services
17,547
18,452
19,213
19,131
19,838
Voice services
41,431
42,775
43,121
43,176
44,238
125,231
128,390
127,901
126,383
128,550
Subsidies
17,402
18,064
18,069
18,454
18,122
Network access
31,314
32,009
30,473
31,465
33,056
Other products and services
2,406
2,198
2,980
2,356
2,392
Total operating revenue $
326,124
$
327,066
$
325,176
$
325,662
$
331,035
Consolidated Communications Holdings, Inc. Schedule of
Adjusted EBITDA Calculation (Dollars in thousands) (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2020
2019
2020
2019
Net income (loss) $
(6,838
)
$
(5,822
)
$
37,302
$
(19,931
)
Add (subtract): Income tax expense (benefit)
(2,956
)
2,005
10,936
(3,714
)
Interest expense, net
48,376
33,390
143,591
136,660
Depreciation and amortization
80,840
91,642
324,864
381,237
EBITDA
119,422
121,215
516,693
494,252
Adjustments to EBITDA (1): Other, net (2)
17,518
3,914
14,238
17,754
Investment income (accrual basis)
(9,793
)
(7,483
)
(41,062
)
(38,088
)
Investment distributions (cash basis)
9,483
6,986
41,529
35,809
Pension/OPEB expense (benefit)
(1,062
)
7,797
(4,169
)
11,487
Loss (gain) on extinguishment of debt
18,498
(3,140
)
18,264
(4,510
)
Change in fair value of contingent payment right
(23,802
)
—
(23,802
)
—
Non-cash compensation (3)
2,046
1,596
7,533
6,836
Adjusted EBITDA $
132,310
$
130,885
$
529,224
$
523,540
Notes:
(1) These adjustments reflect
those required or permitted by the lenders under our credit
agreement.
(2) Other, net includes income
attributable to noncontrolling interests, acquisition and
non-recurring related costs, and certain miscellaneous items.
(3) Represents compensation
expenses in connection with our Restricted Share Plan, which
because of the non-cash nature of the expenses are excluded from
adjusted EBITDA.
Consolidated Communications Holdings, Inc. Total Net Debt
to LTM Adjusted EBITDA Ratio (Dollars in thousands) (Unaudited)
December 31,
2020
Summary of Outstanding Debt: Term loans, net of discount $18,181 $
1,228,694
Senior secured notes due 2028
750,000
Finance leases
17,467
Total debt as of December 31, 2020
1,996,161
Less deferred debt issuance costs
(45,934
)
Less cash on hand
(155,561
)
Total net debt as of December 31, 2020 $
1,794,666
Adjusted EBITDA for the twelve months ended December 31,
2020 $
529,224
Total Net Debt to last twelve months Adjusted EBITDA
3.39x
Consolidated Communications Holdings, Inc. Schedule of
Free Cash Flow Calculation (Dollars in thousands) (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2020
2019
2020
2019
Net cash provided by operating activities $
67,630
$
90,459
$
364,980
$
339,096
Add (subtract): Capital expenditures
(65,348
)
(47,860
)
(217,563
)
(232,203
)
Dividends paid
—
—
—
(55,445
)
Proceeds from the sale of assets
94
375
7,071
14,718
Net proceeds from refinancing and Searchlight investment
43,420
—
43,420
—
Free cash flow $
45,796
$
42,974
$
197,908
$
66,166
Consolidated Communications Holdings, Inc. Reconciliation
of Net Income to Adjusted EBITDA Guidance (Dollars in millions)
(Unaudited)
Twelve Months Ended December
31, 2021 Range Low High Net income
$
30
$
45
Add: Income tax expense
11
16
Interest expense, net
150
145
Depreciation and amortization
305
300
EBITDA
496
506
Adjustments to EBITDA (1): Other, net (2)
1
1
Pension/OPEB expense
(4
)
(4
)
Non-cash compensation (3)
7
7
Adjusted EBITDA
$
500
$
510
Notes:
(1) These adjustments reflect
those required or permitted by the lenders under our credit
agreement.
(2) Other, net includes income
attributable to noncontrolling interests, cash distributions less
equity earnings from our investments, dividend income, acquisition
and non-recurring related costs and certain miscellaneous
items.
(3) Represents compensation
expenses in connection with our Restricted Share Plan, which
because of the non-cash nature of the expenses are excluded from
adjusted EBITDA.
Consolidated Communications Holdings, Inc. Adjusted Net
Income (Loss) and Net Income (Loss) Per Share (Dollars in
thousands, except per share amounts) (Unaudited)
Three
Months Ended Year Ended December 31, December
31,
2020
2019
2020
2019
Net income (loss) $
(6,838
)
$
(5,822
)
$
37,302
$
(19,931
)
Integration and severance related costs, net of tax
13,171
5,712
13,201
17,449
Storm costs (recoveries), net of tax
172
105
71
(171
)
Loss (gain) on extinguishment of debt, net of tax
13,674
(2,289
)
13,501
(3,288
)
Change in fair value of contingent payment rights
(23,802
)
—
(23,802
)
—
Non-cash interest expense for Searchlight note including
amortization of discount and fees
10,131
—
10,131
—
Non-cash interest expense for swaps, net of tax
(175
)
(112
)
(727
)
(28
)
Change in deferred tax rate
(6
)
686
(6
)
686
Other, tax
1,346
1,227
1,346
1,865
Non-cash stock compensation, net of tax
1,512
1,163
5,568
4,983
Adjusted net income (loss) $
9,185
$
670
$
56,585
$
1,565
Weighted average number of shares outstanding
77,515
70,909
72,752
70,837
Adjusted diluted net income (loss) per share $
0.12
$
0.01
$
0.78
$
0.02
Notes:
Calculations above assume a 26.1%
effective tax rate for the three months and year ended December 31,
2020 and 27.1% effective tax rate for the three months and year
ended December 31, 2019.
Consolidated Communications Holdings, Inc. Key Operating
Statistics (Unaudited)
December 31,
September 30,
% Change
December 31,
% Change
2020
2020
in Qtr
2019
YOY
Voice Connections
779,590
794,333
(1.9%)
835,997
(6.7%)
Data and Internet Connections
792,200
792,211
(0.0%)
784,165
1.0%
Video Connections
76,041
77,854
(2.3%)
84,171
(9.7%)
Business and Broadband as % of total revenue (1)
76.5
%
75.9
%
0.9%
75.8
%
1.0%
Fiber route network miles (long-haul, metro and FTTH) (2)
46,664
46,326
0.7%
37,511
24.4%
On-net buildings
13,564
13,202
2.7%
12,264
10.6%
Consumer Customers
554,763
562,587
(1.4%)
582,818
(4.8%)
Consumer ARPU $
75.25
$
76.07
(1.1%)
$
73.52
2.4%
Notes:
(1) Business and Broadband
revenue % includes: commercial/carrier, equipment sales and
service, directory, consumer broadband and special access.
(2) FTTH miles added to fiber
route network miles beginning in Q2 2020, which were previously not
included. Prior period amounts have not been restated to the
current period presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225005255/en/
Investor and Media Contact Jennifer Spaude, Consolidated
Communications Phone: 507-386-3765
jennifer.spaude@consolidated.com
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