Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN)
announced third quarter 2020 financial and operating results.
Third Quarter 2020 Highlights
- Strong Broadband data net additions of 6,000 with Glo Fiber
contributing 1,500
- Executed Glo Fiber franchise agreements in six new markets in
Maryland, Pennsylvania, Virginia and West Virginia
- Launched fixed wireless broadband service in the counties of
Albemarle and Rockingham, Virginia, in October 2020 under the brand
name of Beam
- Acquired CBRS spectrum for $16.1 million
- As previously announced, T-Mobile exercised its option to
purchase our Wireless segment on August 26, 2020
- The Wireless segment’s financial results will be presented as
discontinued operations in the Company’s Consolidated Financial
Statements effective with the date of the purchase option
- As previously announced, our Board of Directors declared a cash
dividend of $0.34 per share representing a 17.2% increase over the
2019 dividend.
"Our Broadband business had another quarter of
strong operating results with continued demand for our high speed
Internet services. We are very excited by the early results
of Glo Fiber with a record quarter of net additions and high
customer interest following our launch of Beam in October.
Based on our track record of success, we plan to accelerate our
investments in these new initiatives to increase our Broadband
addressable market to over 700,000 homes passed and serve as a
catalyst for delivering sustainable long-term growth. Solid
operating results along with our strong cash flow generation in
2020, supports returning value to our shareholders with our
increased dividend," said President and CEO, Christopher E. French.
“With T-Mobile’s exercise of the purchase option of our wireless
business, we are focused on the upcoming Wireless appraisal process
and the transition to a broadband centric company.”
Shentel's third-quarter earnings conference call
will be webcast at 8:30 a.m. ET on Friday, November 6, 2020.
The webcast and related materials will be available on Shentel’s
Investor Relations website at https://investor.shentel.com.
Wireless Update
- On April 1, 2020, T-Mobile
announced the completion of its business combination with Sprint
and subsequently delivered to the Company a notice of Network
Technology Conversion, Brand Conversion and Combination Conversion
(a “Conversion Notice”) pursuant to the terms of the Company’s
affiliate agreement with Sprint. On August 26, 2020, T-Mobile
exercised its option to purchase all of the assets and operations
of our Wireless segment for 90% of the Entire Business Value as
defined under our affiliate agreement with Sprint PCS and
determined pursuant to the appraisal process set forth
therein. As described in more detail in the Company’s 2019
Annual Report on Form 10-K, our Wireless segment has been an
affiliate of Sprint since 1999.
- On August 24, 2020, the Company
delivered to T-Mobile a notice of dispute relating to the appraisal
framework and other contractual terms related to T-Mobile’s
acquisition of our discontinued Wireless operations. On
November 3, 2020, the parties aligned in principle to resolve such
disputed items including:
- The valuation date to be utilized by the appraisers will be
July 1, 2020.
- The appraisers will assume the T-Mobile / Sprint merger did not
occur, Shentel remains an affiliate of Sprint under the affiliate
agreement with continued access to the brands and spectrum and all
impacts from the Sprint / T-Mobile integration shall be
disregarded.
- It is currently expected that the appraisers will complete
their valuation of Entire Business Value on or about January 20,
2021.
- The transaction is currently expected to close in the second
quarter of 2021, subject to timely completion of the appraisal
process and receipt of customary regulatory approvals.
- The Wireless segment’s financial
results will be presented as discontinued operations for all
periods presented in the Company’s Consolidated Statements of
Comprehensive Income and Cash Flows effective with the date of the
purchase option. Prior comparative periods will also be
retrospectively recast and presented as discontinued
operations. The related assets and liabilities are presented
as held for sale in the Company’s Consolidated Balance
Sheets.
Consolidated Third Quarter 2020 Results
- Revenue in the third quarter of
2020 was $55.2 million compared with $51.8 million in the third
quarter of 2019, due to the growth of $2.0 million and $1.4 million
in the Broadband and Tower segments, respectively.
- Adjusted OIBDA in the third quarter
of 2020 increased $2.5 million to $14.6 million compared with $12.1
million in 2019 due primarily to growth in Towers and a reduction
in corporate expenses.
- Operating income was consistent
with third quarter 2019.
- Earnings from continuing operations
per diluted share grew $0.01 to $0.03 and earnings from
discontinued operations grew 148.1% to $0.67 per diluted share from
the same period a year ago.
Broadband
- Broadband Data Revenue Generating
Units ("RGUs") grew 6,069 to end the third quarter 2020 with 98,764
or 19.8% year over year growth.
- Incumbent cable broadband added
4,598 Data RGUs in the third quarter 2020 and data penetration grew
year over year from 40.0% to 46.2% driven by strong demand for high
speed Internet and the enhanced value of our Powerhouse rate
card. Churn declined 9 basis points year over year to 1.88%
and included approximately 25 basis points of churn related to
non-pay subscribers from the second quarter that were affected by
Covid-19 for whom we temporarily suspended disconnection.
Excluding the suspended non-pay disconnects, churn would have been
1.73%. Broadband average revenue per user (“ARPU”) increased
$0.19 to $77.66 in the third quarter 2020 compared to the prior
year period driven by subscribers upgrading to rate plans with
faster speeds.
- Glo Fiber added 1,471 Data RGUs in
the third quarter 2020 and market penetration grew to 12.5% driven
by strong demand for high speed Internet fiber-based services and
differentiated local customer service. Broadband churn and
ARPU were 0.98% and $80.25, respectively, in the third quarter
2020. Total Glo Fiber passings grew approximately 9,000
sequentially from the second quarter 2020 to 22,347.
- Broadband revenue in the third
quarter of 2020 increased $2.0 million or 4.2% to $50.7 million
compared with $48.7 million in the third quarter of 2019, primarily
driven by a $3.8 million increase in Cable Residential and SMB
revenue partially offset by a $0.9 million decrease in RLEC
revenues and $0.5 million decline in Fiber Enterprise and Wholesale
revenues. Cable Residential and SMB revenue growth was driven
primarily by 19.8% year over year growth in broadband subscribers.
Fiber Enterprise and Wholesale revenue decline was due to lower
amortized revenue.
- Broadband operating expenses in the
third quarter of 2020 were $41.2 million compared to $37.4 million
in the third quarter of 2019. The increase was primarily due to
increases in compensation expense of $2.3 million as a result
of Glo Fiber and Beam start-up staffing and higher incentive
accrual from strong operating results and $1.5 million increase in
depreciation and amortization expense due to the expansion of our
network.
- Broadband Adjusted OIBDA in the
third quarter of 2020 decreased 1.3% to $19.6 million, compared
with $19.9 million for the third quarter of 2019 due primarily to
lower amortized Fiber Enterprise and Wholesale revenue from upfront
fees and the dilution associated with start-up costs from Glo Fiber
and Beam fixed wireless.
- Broadband Operating income in the
third quarter of 2020 was $9.5 million, compared to $11.2 million
in the third quarter of 2019.
Tower
- Total macro towers, small cells and
tenants were 222, 8 and 414, respectively, as of September 30, 2020
as compared to 221, zero and 380, respectively, as of September 30,
2019.
- Tower revenue in the third quarter
of 2020 grew 43.3% to $4.5 million, compared with $3.1 million for
the third quarter of 2019. This increase was due to a 8.9% increase
in tenants and a 37.9% increase in average revenue per tenant
driven by amendments to intercompany leases effected in the first
quarter of 2020.
- Tower operating expenses in the
third quarter of 2020 was $2.1 million, compared to $1.8 million in
the quarter of 2019.
- Tower Adjusted OIBDA in the
third quarter of 2020 grew 42.9% to $2.9 million, compared with
$2.0 million for the third quarter of 2019.
- Tower operating income in the third
quarter of 2020 was $2.4 million, compared to $1.3 million for the
third quarter of 2019.
Other Information
- Capital expenditures were $82.7
million for the nine months ended September 30, 2020 compared with
$48.8 million in the comparable 2019 period. The $33.9 million
increase in capital expenditures was primarily due to higher
spending in the Broadband segment driven by our Glo Fiber market
expansion.
- Outstanding debt at September 30,
2020 totaled $696.4 million, net of unamortized loan costs,
compared to $720.1 million as of December 31, 2019. As of
September 30, 2020, the Company had liquidity of
approximately $259.1 million, including $75.0
million of revolving line of credit availability.
Free cash flow, normalized free cash flow and
Adjusted OIBDA are non-GAAP financial measures that are not
determined in accordance with US generally accepted accounting
principles. Reconciliations of these non-GAAP financial measures
are provided in this press release after the consolidated financial
statements.
Conference Call and Webcast
Teleconference Information:
Date: November 6, 2020 Time: 8:30 A.M.
(ET)Dial in number: 1-888-695-7639
Password: 9885265 Audio
webcast: http://investor.shentel.com/
An audio replay of the call will be available
approximately two hours after the call is complete, through
December 6, 2020 by calling (855) 859-2056.
About Shenandoah
Telecommunications
Shenandoah Telecommunications Company (Shentel)
provides a broad range of diversified communications services
through its high speed, state-of-the-art wireless, cable, fiber
optic and fixed wireless networks to customers in the Mid-Atlantic
United States. The Company’s services include: wireless voice and
data; broadband internet, video, and digital voice; fiber optic
Ethernet, wavelength and leasing; telephone voice and digital
subscriber line; and tower colocation leasing. Shentel is the
exclusive personal communications service (“PCS”) Affiliate of
Sprint in a multi-state area covering large portions of central and
western Virginia, south-central Pennsylvania, West Virginia, and
portions of Maryland, Kentucky, and Ohio. For more information,
please visit www.shentel.com.
This release contains forward-looking statements
that are subject to various risks and uncertainties. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of unforeseen factors.
A discussion of factors that may cause actual results to differ
from management's projections, forecasts, estimates and
expectations, is available in the Company’s filings with the SEC.
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.
CONTACTS: Shenandoah Telecommunications
Company Jim Volk
Senior Vice President - Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.comOr
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203-972-9200
jnesbett@institutionalms.com
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except per share
amounts)
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Service revenue and other |
$ |
55,173 |
|
|
$ |
51,814 |
|
|
$ |
162,643 |
|
|
$ |
153,285 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of services |
22,669 |
|
|
20,947 |
|
|
65,167 |
|
|
62,030 |
|
Selling, general and administrative |
20,039 |
|
|
19,445 |
|
|
64,227 |
|
|
57,600 |
|
Depreciation and amortization |
11,995 |
|
|
10,741 |
|
|
36,010 |
|
|
33,807 |
|
Total operating expenses |
54,703 |
|
|
51,133 |
|
|
165,404 |
|
|
153,437 |
|
Operating income (loss) |
470 |
|
|
681 |
|
|
(2,761 |
) |
|
(152 |
) |
Other income: |
|
|
|
|
|
|
|
Other income, net |
1,083 |
|
|
994 |
|
|
3,103 |
|
|
3,328 |
|
Income before income taxes |
1,553 |
|
|
1,675 |
|
|
342 |
|
|
3,176 |
|
Income tax expense
(benefit) |
141 |
|
|
507 |
|
|
(684 |
) |
|
(108 |
) |
Income from continuing operations |
1,412 |
|
|
1,168 |
|
|
1,026 |
|
|
3,284 |
|
Income from discontinued operations, net of tax |
33,509 |
|
|
13,186 |
|
|
76,422 |
|
|
38,130 |
|
Net income |
$ |
34,921 |
|
|
$ |
14,354 |
|
|
$ |
77,448 |
|
|
$ |
41,414 |
|
|
|
|
|
|
|
|
|
Net income per share, basic
and diluted: |
|
|
|
|
|
|
|
Basic - Income from continuing operations |
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
Basic - Income from discontinued operations, net of tax |
$ |
0.67 |
|
|
$ |
0.27 |
|
|
$ |
1.53 |
|
|
$ |
0.76 |
|
Basic net income per
share |
$ |
0.70 |
|
|
$ |
0.29 |
|
|
$ |
1.55 |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
Diluted - Income from continuing operations |
$ |
0.03 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.07 |
|
Diluted - Income from discontinued operations, net of tax |
$ |
0.67 |
|
|
$ |
0.27 |
|
|
$ |
1.53 |
|
|
$ |
0.76 |
|
Diluted net income per
share |
$ |
0.70 |
|
|
$ |
0.29 |
|
|
$ |
1.55 |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, basic |
49,911 |
|
|
49,857 |
|
|
49,889 |
|
|
49,827 |
|
Weighted average shares
outstanding, diluted |
50,105 |
|
|
50,129 |
|
|
50,049 |
|
|
50,110 |
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(in thousands)
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
Cash and cash equivalents |
$ |
184,050 |
|
|
$ |
101,651 |
|
Other current assets |
78,340 |
|
|
85,093 |
|
Current assets held for
sale |
1,148,601 |
|
|
55,109 |
|
Total current assets |
1,410,991 |
|
|
241,853 |
|
|
|
|
|
Investments |
13,034 |
|
|
12,388 |
|
Property, plant and equipment,
net |
413,602 |
|
|
363,087 |
|
Intangible assets, net and
Goodwill |
103,856 |
|
|
88,241 |
|
Operating lease right-of-use
assets |
48,844 |
|
|
42,568 |
|
Deferred charges and other
assets, net |
10,972 |
|
|
9,267 |
|
Non-current assets held for
sale |
— |
|
|
1,141,498 |
|
Total assets |
$ |
2,001,299 |
|
|
$ |
1,898,902 |
|
|
|
|
|
Current liabilities held for
sale |
470,943 |
|
|
$ |
54,246 |
|
Total current liabilities |
761,167 |
|
|
$ |
99,331 |
|
Long-term debt, less current
maturities |
— |
|
|
688,464 |
|
Non-current liabilities held
for sale |
— |
|
|
379,036 |
|
Other liabilities |
221,007 |
|
|
205,397 |
|
Total shareholders’
equity |
548,182 |
|
|
472,428 |
|
Total liabilities and shareholders’ equity |
$ |
2,001,299 |
|
|
$ |
1,898,902 |
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(in thousands)
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
Cash flows from
operating activities: |
|
|
|
Net income |
77,448 |
|
|
41,414 |
|
Income from operations of discontinued operations, net of tax |
76,422 |
|
|
38,130 |
|
Income from continuing operations |
1,026 |
|
|
3,284 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation |
35,522 |
|
|
33,500 |
|
Amortization of intangible assets |
488 |
|
|
307 |
|
Bad debt expense |
514 |
|
|
1,215 |
|
Stock based compensation expense, net of amount capitalized |
5,306 |
|
|
2,769 |
|
Deferred income taxes |
(279 |
) |
|
— |
|
Other adjustments |
(349 |
) |
|
(2,703 |
) |
Changes in assets and liabilities |
2,572 |
|
|
(6,889 |
) |
Net cash provided by operating activities – continuing
operations |
44,800 |
|
|
31,483 |
|
Net cash provided by operating activities – discontinued
operations |
182,499 |
|
|
161,976 |
|
Net cash provided by operating
activities |
227,299 |
|
|
193,459 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(82,740 |
) |
|
(48,826 |
) |
Cash disbursed for acquisitions |
— |
|
|
(10,000 |
) |
Cash disbursed for FCC spectrum licenses |
(16,118 |
) |
|
(16,742 |
) |
Proceeds from sale of assets and other |
252 |
|
|
100 |
|
Net cash used in investing activities – continuing operations |
(98,606 |
) |
|
(75,468 |
) |
Net cash used in investing activities – discontinued
operations |
(17,794 |
) |
|
(58,156 |
) |
Net cash used in investing activities |
(116,400 |
) |
|
(133,624 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Taxes paid for equity award issuances |
(2,182 |
) |
|
(2,912 |
) |
Other |
(727 |
) |
|
72 |
|
Net cash used in financing activities – continuing operations |
(2,909 |
) |
|
(2,840 |
) |
Net cash used in financing activities – discontinued
operations |
(25,591 |
) |
|
(44,666 |
) |
Net cash used in financing activities |
(28,500 |
) |
|
(47,506 |
) |
Net increase in cash and cash equivalents |
82,399 |
|
|
12,329 |
|
Cash and cash equivalents, beginning of period |
101,651 |
|
|
85,086 |
|
Cash and cash equivalents, end of period |
$ |
184,050 |
|
|
$ |
97,415 |
|
|
|
|
|
Non-GAAP Financial Measures
Adjusted OIBDA
Adjusted OIBDA represents Operating income from
continuing operations 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, which may or may not
be recurring in nature.
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 U.S. Generally Accepted
Accounting Principles (“GAAP”).
The following tables reconcile Adjusted OIBDA to
operating income from continuing operations, which we consider to
be the most directly comparable GAAP financial measure:
Three Months Ended
September 30, 2020 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income from continuing operations |
|
$ |
9,486 |
|
|
$ |
2,421 |
|
|
$ |
(11,437 |
) |
|
$ |
470 |
|
Depreciation |
|
9,939 |
|
|
467 |
|
|
1,422 |
|
|
11,828 |
|
Amortization |
|
167 |
|
|
— |
|
|
— |
|
|
167 |
|
OIBDA |
|
19,592 |
|
|
2,888 |
|
|
(10,015 |
) |
|
12,465 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
1,137 |
|
|
1,137 |
|
Deal advisory fees |
|
— |
|
|
— |
|
|
1,032 |
|
|
1,032 |
|
Adjusted OIBDA |
|
$ |
19,592 |
|
|
$ |
2,888 |
|
|
$ |
(7,846 |
) |
|
$ |
14,634 |
|
Three Months Ended
September 30, 2019 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income from continuing operations |
|
$ |
11,242 |
|
|
$ |
1,330 |
|
|
$ |
(11,891 |
) |
|
$ |
681 |
|
Depreciation |
|
8,472 |
|
|
691 |
|
|
1,433 |
|
|
10,596 |
|
Amortization |
|
145 |
|
|
— |
|
|
— |
|
|
145 |
|
OIBDA |
|
19,859 |
|
|
2,021 |
|
|
(10,458 |
) |
|
11,422 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
723 |
|
|
723 |
|
Adjusted OIBDA |
|
$ |
19,859 |
|
|
$ |
2,021 |
|
|
$ |
(9,735 |
) |
|
$ |
12,145 |
|
Nine Months Ended
September 30, 2020 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
Operating income from continuing operations |
|
$ |
29,650 |
|
|
$ |
6,444 |
|
|
$ |
(38,855 |
) |
|
$ |
(2,761 |
) |
Depreciation |
|
29,960 |
|
|
1,414 |
|
|
4,148 |
|
|
35,522 |
|
Amortization |
|
488 |
|
|
— |
|
|
— |
|
|
488 |
|
OIBDA |
|
60,098 |
|
|
7,858 |
|
|
(34,707 |
) |
|
33,249 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
5,306 |
|
|
5,306 |
|
Deal advisory fees |
|
— |
|
|
— |
|
|
3,002 |
|
|
3,002 |
|
Adjusted OIBDA |
|
$ |
60,098 |
|
|
$ |
7,858 |
|
|
$ |
(26,399 |
) |
|
$ |
41,557 |
|
Nine Months Ended
September 30, 2019 |
|
|
|
|
|
|
|
|
(in
thousands) |
|
Broadband |
|
Tower |
|
Corporate Eliminations |
|
Consolidated |
Operating income from continuing operations |
|
$ |
33,206 |
|
|
$ |
3,755 |
|
|
$ |
(37,113 |
) |
|
$ |
(152 |
) |
Depreciation |
|
26,936 |
|
|
2,102 |
|
|
4,462 |
|
|
33,500 |
|
Amortization |
|
307 |
|
|
— |
|
|
— |
|
|
307 |
|
OIBDA |
|
60,449 |
|
|
5,857 |
|
|
(32,651 |
) |
|
33,655 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
2,769 |
|
|
2,769 |
|
Adjusted OIBDA |
|
$ |
60,449 |
|
|
$ |
5,857 |
|
|
$ |
(29,882 |
) |
|
$ |
36,424 |
|
Segment Results
Three Months Ended September 30,
2020:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Cable, residential and SMB (1) |
|
$ |
37,469 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
37,469 |
|
Fiber, enterprise and wholesale |
|
4,707 |
|
|
— |
|
|
— |
|
|
4,707 |
|
Rural local exchange carrier |
|
4,426 |
|
|
— |
|
|
— |
|
|
4,426 |
|
Installation and other |
|
2,008 |
|
|
— |
|
|
— |
|
|
2,008 |
|
Tower lease |
|
— |
|
|
1,864 |
|
|
— |
|
|
1,864 |
|
Service revenue and other |
|
48,610 |
|
|
1,864 |
|
|
— |
|
|
50,474 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
2,100 |
|
|
2,637 |
|
|
(38 |
) |
|
4,699 |
|
Total revenue |
|
50,710 |
|
|
4,501 |
|
|
(38 |
) |
|
55,173 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
21,326 |
|
|
1,283 |
|
|
60 |
|
|
22,669 |
|
Selling, general and administrative |
|
9,792 |
|
|
330 |
|
|
9,917 |
|
|
20,039 |
|
Depreciation and amortization |
|
10,106 |
|
|
467 |
|
|
1,422 |
|
|
11,995 |
|
Total operating expenses |
|
41,224 |
|
|
2,080 |
|
|
11,399 |
|
|
54,703 |
|
Operating income (loss) |
|
$ |
9,486 |
|
|
$ |
2,421 |
|
|
$ |
(11,437 |
) |
|
$ |
470 |
|
__________________(1) SMB refers to
Small and Medium Businesses.
Three Months Ended September 30,
2019:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Cable, residential and SMB |
|
$ |
33,696 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
33,696 |
|
Fiber, enterprise and wholesale |
|
5,163 |
|
|
— |
|
|
— |
|
|
5,163 |
|
Rural local exchange carrier |
|
5,080 |
|
|
— |
|
|
— |
|
|
5,080 |
|
Installation and other |
|
2,073 |
|
|
— |
|
|
— |
|
|
2,073 |
|
Tower lease |
|
— |
|
|
1,851 |
|
|
— |
|
|
1,851 |
|
Service revenue and other |
|
46,012 |
|
|
1,851 |
|
|
— |
|
|
47,863 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
2,669 |
|
|
1,289 |
|
|
(7 |
) |
|
3,951 |
|
Total revenue |
|
48,681 |
|
|
3,140 |
|
|
(7 |
) |
|
51,814 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
20,032 |
|
|
927 |
|
|
(12 |
) |
|
20,947 |
|
Selling, general and administrative |
|
8,790 |
|
|
192 |
|
|
10,463 |
|
|
19,445 |
|
Depreciation and amortization |
|
8,617 |
|
|
691 |
|
|
1,433 |
|
|
10,741 |
|
Total operating expenses |
|
37,439 |
|
|
1,810 |
|
|
11,884 |
|
|
51,133 |
|
Operating income (loss) |
|
$ |
11,242 |
|
|
$ |
1,330 |
|
|
$ |
(11,891 |
) |
|
$ |
681 |
|
Nine Months Ended September 30,
2020:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Cable, residential and SMB |
|
$ |
108,242 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
108,242 |
|
Fiber, enterprise and wholesale |
|
15,858 |
|
|
— |
|
|
— |
|
|
15,858 |
|
Rural local exchange carrier |
|
13,784 |
|
|
— |
|
|
— |
|
|
13,784 |
|
Installation and other |
|
5,928 |
|
|
— |
|
|
— |
|
|
5,928 |
|
Tower lease |
|
— |
|
|
5,490 |
|
|
— |
|
|
5,490 |
|
Service revenue and other |
|
143,812 |
|
|
5,490 |
|
|
— |
|
|
149,302 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
6,818 |
|
|
7,000 |
|
|
(477 |
) |
|
13,341 |
|
Total revenue |
|
150,630 |
|
|
12,490 |
|
|
(477 |
) |
|
162,643 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
61,572 |
|
|
3,537 |
|
|
58 |
|
|
65,167 |
|
Selling, general and administrative |
|
28,960 |
|
|
1,095 |
|
|
34,172 |
|
|
64,227 |
|
Depreciation and amortization |
|
30,448 |
|
|
1,414 |
|
|
4,148 |
|
|
36,010 |
|
Total operating expenses |
|
120,980 |
|
|
6,046 |
|
|
38,378 |
|
|
165,404 |
|
Operating income (loss) |
|
$ |
29,650 |
|
|
$ |
6,444 |
|
|
$ |
(38,855 |
) |
|
$ |
(2,761 |
) |
Nine Months Ended September 30,
2019:
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate &Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Cable, residential and SMB |
|
$ |
99,703 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
99,703 |
|
Fiber, enterprise and wholesale |
|
14,912 |
|
|
— |
|
|
— |
|
|
14,912 |
|
Rural local exchange carrier |
|
15,899 |
|
|
— |
|
|
— |
|
|
15,899 |
|
Installation and other |
|
6,002 |
|
|
— |
|
|
— |
|
|
6,002 |
|
Tower lease |
|
— |
|
|
5,365 |
|
|
— |
|
|
5,365 |
|
Service revenue and other |
|
136,516 |
|
|
5,365 |
|
|
— |
|
|
141,881 |
|
Revenue for service provided to the discontinued Wireless
operations |
|
7,597 |
|
|
3,830 |
|
|
(23 |
) |
|
11,404 |
|
Total revenue |
|
144,113 |
|
|
9,195 |
|
|
(23 |
) |
|
153,285 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
59,348 |
|
|
2,704 |
|
|
(22 |
) |
|
62,030 |
|
Selling, general and administrative |
|
24,316 |
|
|
634 |
|
|
32,650 |
|
|
57,600 |
|
Depreciation and amortization |
|
27,243 |
|
|
2,102 |
|
|
4,462 |
|
|
33,807 |
|
Total operating expenses |
|
110,907 |
|
|
5,440 |
|
|
37,090 |
|
|
153,437 |
|
Operating income (loss) |
|
$ |
33,206 |
|
|
$ |
3,755 |
|
|
$ |
(37,113 |
) |
|
$ |
(152 |
) |
Supplemental Information
Broadband Operating
Statistics
|
|
September 30,2020 |
|
September 30,2019 |
Broadband homes passed (1)
(2) |
|
230,002 |
|
|
206,262 |
|
Incumbent Cable |
|
207,655 |
|
|
206,262 |
|
Glo Fiber |
|
22,347 |
|
|
— |
|
|
|
|
|
|
Broadband customer
relationships (3) |
|
106,314 |
|
|
94,356 |
|
|
|
|
|
|
Residential and SMB RGUs: |
|
|
|
|
Broadband |
|
98,764 |
|
|
82,413 |
|
Incumbent Cable |
|
95,962 |
|
|
82,413 |
|
Glo Fiber |
|
2,802 |
|
|
— |
|
Video |
|
53,647 |
|
|
55,015 |
|
Voice |
|
33,019 |
|
|
30,956 |
|
Total Cable and Glo Fiber
RGUs |
|
185,430 |
|
|
168,384 |
|
|
|
|
|
|
Residential and SMB
Penetration (4) |
|
|
|
|
Broadband |
|
42.9 |
% |
|
40.0 |
% |
Incumbent Cable |
|
46.2 |
% |
|
40.0 |
% |
Glo Fiber penetration |
|
12.5 |
% |
|
— |
% |
Video |
|
23.3 |
% |
|
26.7 |
% |
Voice |
|
15.5 |
% |
|
16.3 |
% |
|
|
|
|
|
Residential and SMB ARPU
(5) |
|
|
|
|
Broadband |
|
$ |
77.71 |
|
|
$ |
77.47 |
|
Incumbent Cable |
|
$ |
77.66 |
|
|
$ |
77.47 |
|
Glo Fiber |
|
$ |
80.03 |
|
|
$ |
— |
|
Video |
|
$ |
93.08 |
|
|
$ |
89.32 |
|
Voice |
|
$ |
29.61 |
|
|
$ |
30.68 |
|
|
|
|
|
|
Fiber route miles |
|
6,705 |
|
|
5,864 |
|
Total fiber miles (6) |
|
367,154 |
|
|
311,702 |
|
__________________(1) Homes and businesses
are considered passed (“homes passed”) if we can connect them to
our distribution system without further extending the transmission
lines. Homes passed is an estimate based upon the best
available information. Homes passed have access to video, broadband
and voice services.(2) Includes approximately 16,600 RLEC
homes passed where we are the dual incumbent telephone and cable
provider.(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)
Average Revenue Per Customer calculation = (Residential & SMB
Revenue * 1,000) / average customer relationships / 3
months(6) 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 Ended September 30, |
|
|
2020 |
|
2019 |
Residential and SMB
Revenue: |
|
|
|
|
Broadband |
|
$ |
22,261 |
|
|
$ |
18,809 |
|
Incumbent Cable |
|
21,770 |
|
|
18,809 |
|
Glo Fiber |
|
491 |
|
|
— |
|
Video |
|
14,823 |
|
|
15,030 |
|
Voice |
|
2,894 |
|
|
2,839 |
|
Discounts and adjustments |
|
(2,509 |
) |
|
(2,982 |
) |
Total
Revenue |
|
$ |
37,469 |
|
|
$ |
33,696 |
|
|
|
|
|
|
Quarterly Average
RGUs: |
|
|
|
|
Broadband |
|
95,485 |
|
|
80,931 |
|
Incumbent Cable |
|
93,440 |
|
|
80,931 |
|
Glo Fiber |
|
2,045 |
|
|
— |
|
Video |
|
53,085 |
|
|
56,092 |
|
Voice |
|
32,581 |
|
|
30,850 |
|
|
|
|
|
|
ARPU (Quarter to
date): |
|
|
|
|
Broadband |
|
$ |
77.71 |
|
|
$ |
77.47 |
|
Incumbent Cable |
|
$ |
77.66 |
|
|
$ |
77.47 |
|
Glo Fiber |
|
$ |
80.03 |
|
|
$ |
— |
|
Video |
|
$ |
93.08 |
|
|
$ |
89.32 |
|
Voice |
|
$ |
29.61 |
|
|
$ |
30.68 |
|
Tower Operating Statistics:
|
|
September 30, 2020 |
|
September 30, 2019 |
Macro towers owned |
|
222 |
|
|
221 |
|
Small cell sites |
|
8.0 |
|
|
— |
|
Tenants (1) |
|
414 |
|
|
380 |
|
Average tenants per tower |
|
1.8 |
|
|
1.7 |
|
__________________(1) Includes 208 and 177 intercompany
tenants for our Wireless segment as of September 30, 2020 and 2019,
respectively.
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