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Shenandoah Telecommunications Company Reports Second Quarter 2023 Results

Shenandoah Telecommunications Co
Shenandoah Telecommunications Co

EDINBURG, Va., Aug. 02, 2023 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN) announced second quarter 2023 financial and operating results.

Second Quarter 2023 Highlights

  • Glo Fiber Markets added approximately 4,000 subscribers; 20.7% higher than the second quarter of 2022.

  • Consolidated revenue grew 8.1% to $71.3 million compared to the second quarter of 2022. Glo Fiber Markets revenue grew 101.3% to $8.2 million and Broadband revenue grew 8.6% to $66.7 million over the same period.

  • Consolidated net income was $1.8 million in the second quarter of 2023, compared with net loss of $3.2 million in the second quarter of 2022.

  • Consolidated Adjusted EBITDA grew 21.1% to $22.5 million compared to the second quarter of 2022. Broadband Adjusted EBITDA grew 18.4% to $26.1 million over the same period.

ANNUNCIO PUBBLICITARIO

“I am pleased with our solid execution of our Fiber First growth plan and the continued scaling of our fiber network. Broadband Adjusted EBITDA margin was 39% compared to 36% in the same period a year ago. We expect margins to increase as our Glo Fiber penetration rate grows,” said President and CEO, Christopher E. French.

Shentel’s second-quarter earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, August 2, 2023. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/.

Consolidated Second Quarter 2023 Results

  • Revenue in the second quarter of 2023 grew 8.1% to $71.3 million compared with the second quarter of 2022, due to Broadband segment revenue growth of 8.6%.

  • Net income per share was $0.04 in the second quarter of 2023 compared with net loss per share of $0.06 in the second quarter of 2022.

  • Adjusted EBITDA was $22.5 million in the second quarter of 2023 compared with $18.6 million in the second quarter of 2022 due to Broadband segment growth of 18.4% and Tower segment growth of 3.7%.

Broadband

  • Total Cable Markets and Glo Fiber Markets broadband data Revenue Generating Units (“RGUs”) as of June 30, 2023 were 142,247, representing 13.8% year-over-year growth. Penetration for Cable Markets and Glo Fiber Markets as of June 30, 2023 were 51% and 18%, respectively, compared to 51% and 15%, respectively, as of June 30, 2022. Total Glo Fiber Markets passings grew year-over-year by 70,342 from 112,505 to 182,847.

  • Broadband revenue in the second quarter of 2023 grew $5.3 million, or 8.6%, to $66.7 million compared with $61.4 million in the second quarter of 2022, primarily driven by a $4.1 million, or 101.3%, increase in Residential & Small and Medium Business (“SMB”) - Glo Fiber Markets revenue. Residential & SMB - Glo Fiber Markets increased due to a 91.8% increase in broadband data RGUs. In addition, Residential & SMB - Cable Markets revenue grew $0.6 million, or 1.3%, due to a 1.4% increase in data RGUs and 2.1% increase in data ARPU. Commercial Fiber revenue increased $0.9 million, or 9.8%, primarily due to $0.5 million in recurring revenue driven by 19.6% increase in connections and $0.4 million in T-Mobile non-recurring early termination fees. T-Mobile disconnected 22 backhaul circuits during the second quarter as part of their previously announced rationalization of the former Sprint network. The Company expects 151 additional backhaul disconnects in 2023 as part of the network rationalization.

  • Cost of services decreased approximately $0.7 million, or 2.7%, compared with the three months ended June 30, 2022 due to higher capitalized labor and lower medical benefit costs, partially offset by higher line costs due to the expansion of the network into new markets and mobile switching centers of wireless carrier customers.

  • Selling, general and administrative expense increased $2.0 million, or 14.1%, compared with the three months ended June 30, 2022, due primarily to higher advertising costs associated with the Company’s expansion of Glo Fiber and a change in strategy to drive more gross subscriber additions to low cost sales channels, as well as higher bad debt expense.

  • Shentel recorded impairment charges of $0.8 million during the three months ended June 30, 2023, compared with $4.1 million of impairment charges for the three months ended June 30, 2022. Impairment charges for the three months ended June 30, 2023 were primarily a result of colocation lease right-of-use assets that are no longer expected to be used and have no alternative use, while impairment charges in the three months ended June 30, 2022 were primarily a result of the Company’s expected decommissioning of Beam fixed wireless sites.

  • Depreciation and amortization expense increased $2.1 million, or 15.6%, compared with the three months ended June 30, 2022, primarily as a result of the Company’s expansion of its Glo Fiber network.

  • Broadband operating income was $9.7 million in the second quarter of 2023, compared to $4.1 million in the second quarter of 2022.

  • Broadband Adjusted EBITDA was $26.1 million in the second quarter of 2023 compared to $22.0 million in the second quarter of 2022.

Tower

  • Revenue for the three months ended June 30, 2023 was consistent with revenue for the three months ended June 30, 2022.

  • Tower operating income was $2.5 million in the second quarter of 2023, compared to $2.3 million in the second quarter of 2022.

  • Tower Adjusted EBITDA in the second quarter of 2023 grew 3.7% to $3.0 million, compared with $2.9 million for the second quarter of 2022.

Other Information

  • As of June 30, 2023, our cash and cash equivalents totaled $26.3 million and the availability under our delayed draw term loans and revolving line of credit was $275.0 million, for total available liquidity of $301.3 million. We expect to draw the remaining $175.0 million in delayed draw term loans by December 31, 2023.

  • Capital expenditures were $136.2 million for the six months ended June 30, 2023 compared with $88.7 million in the comparable 2022 period. The $47.5 million increase in capital expenditures was primarily due to higher spending in the Broadband segment to enable our Glo Fiber market expansion.

Earnings Call Webcast

Date: Wednesday, August 2, 2023
Time: 8:30 A.M. (ET)
Listen via Internet: https://investor.shentel.com/ 

A replay of the call will be available for a limited time on the Investor Relations page of the Company’s website.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art cable and fiber optic 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 9,000 route miles of fiber and over 220 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, including our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Reports on Form 10-Q. Those factors may include natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, changes in general economic conditions including high inflation, increases in costs, changes in regulation and other competitive factors. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.

CONTACTS:

Shenandoah Telecommunications Company
Jim Volk
Senior Vice President and Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Service revenue and other

$

71,341

 

 

$

66,021

 

 

$

143,027

 

 

$

130,435

 

Operating expenses:

 

 

 

 

 

 

 

Cost of services exclusive of depreciation and amortization

 

26,076

 

 

 

26,756

 

 

 

52,643

 

 

 

53,095

 

Selling, general and administrative

 

25,691

 

 

 

23,090

 

 

 

52,300

 

 

 

46,925

 

Restructuring expense

 

 

 

 

454

 

 

 

 

 

 

390

 

Impairment expense

 

836

 

 

 

4,068

 

 

 

1,020

 

 

 

4,407

 

Depreciation and amortization

 

16,369

 

 

 

14,790

 

 

 

31,967

 

 

 

29,135

 

Total operating expenses

 

68,972

 

 

 

69,158

 

 

 

137,930

 

 

 

133,952

 

Operating income (loss)

 

2,369

 

 

 

(3,137

)

 

 

5,097

 

 

 

(3,517

)

Other income (expense):

 

 

 

 

 

 

 

Other income (expense), net

 

177

 

 

 

(589

)

 

 

1,294

 

 

 

(759

)

Income (loss) before income taxes

 

2,546

 

 

 

(3,726

)

 

 

6,391

 

 

 

(4,276

)

Income tax expense (benefit)

 

756

 

 

 

(501

)

 

 

2,535

 

 

 

(448

)

Net income (loss)

$

1,790

 

 

$

(3,225

)

 

$

3,856

 

 

$

(3,828

)

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

Unrealized income on interest rate hedge, net of tax

 

2,127

 

 

 

 

 

 

2,127

 

 

 

 

Comprehensive income (loss)

$

3,917

 

 

$

(3,225

)

 

$

5,983

 

 

$

(3,828

)

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted:

 

 

 

 

 

 

 

Basic net income (loss) per share

$

0.04

 

 

$

(0.06

)

 

$

0.08

 

 

$

(0.08

)

 

 

 

 

 

 

 

 

Diluted net income (loss) per share

$

0.04

 

 

$

(0.06

)

 

$

0.08

 

 

$

(0.08

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding, basic

 

50,366

 

 

 

50,157

 

 

 

50,330

 

 

 

50,133

 

Weighted average shares outstanding, diluted

 

50,693

 

 

 

50,157

 

 

 

50,569

 

 

 

50,133

 

 

 

 

 

 

 

 

 


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30,
2023

 

December 31,
2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

26,304

 

 

$

44,061

 

Accounts receivable, net of allowance for doubtful accounts of $726 and $776, respectively

 

15,344

 

 

 

20,615

 

Income taxes receivable

 

4,647

 

 

 

29,755

 

Prepaid expenses and other

 

12,874

 

 

 

11,509

 

Current assets held for sale

 

19,742

 

 

 

22,622

 

Total current assets

 

78,911

 

 

 

128,562

 

Investments

 

13,016

 

 

 

12,971

 

Property, plant and equipment, net

 

786,446

 

 

 

687,553

 

Goodwill and intangible assets, net

 

81,270

 

 

 

81,515

 

Operating lease right-of-use assets

 

52,258

 

 

 

53,859

 

Deferred charges and other assets

 

15,557

 

 

 

13,259

 

Total assets

$

1,027,458

 

 

$

977,719

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current maturities of long-term debt, net of unamortized loan fees

$

1,056

 

 

$

648

 

Accounts payable

 

41,238

 

 

 

49,173

 

Advanced billings and customer deposits

 

12,359

 

 

 

12,425

 

Accrued compensation

 

7,532

 

 

 

9,616

 

Current operating lease liabilities

 

3,076

 

 

 

2,829

 

Accrued liabilities and other

 

12,766

 

 

 

17,906

 

Current liabilities held for sale

 

3,804

 

 

 

3,824

 

Total current liabilities

 

81,831

 

 

 

96,421

 

Long-term debt, less current maturities, net of unamortized loan fees

 

123,795

 

 

 

74,306

 

Other long-term liabilities:

 

 

 

Deferred income taxes

 

87,830

 

 

 

84,600

 

Asset retirement obligations

 

10,187

 

 

 

9,932

 

Benefit plan obligations

 

4,035

 

 

 

3,758

 

Non-current operating lease liabilities

 

49,872

 

 

 

50,477

 

Other liabilities

 

20,483

 

 

 

20,218

 

Total other long-term liabilities

 

172,407

 

 

 

168,985

 

Commitments and contingencies (Note 13)

 

 

 

Shareholders’ equity:

 

 

 

Common stock, no par value, authorized 96,000; 50,264 and 50,110 issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

Additional paid in capital

 

62,888

 

 

 

57,453

 

Retained earnings

 

584,410

 

 

 

580,554

 

Accumulated other comprehensive income, net of taxes

 

2,127

 

 

 

 

Total shareholders’ equity

 

649,425

 

 

 

638,007

 

Total liabilities and shareholders’ equity

$

1,027,458

 

 

$

977,719

 


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

 

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

(in thousands)

Six Months Ended
June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

3,856

 

 

$

(3,828

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

31,967

 

 

 

29,135

 

Stock-based compensation expense, net of amount capitalized

 

6,320

 

 

 

5,528

 

Impairment expense

 

1,020

 

 

 

4,407

 

Deferred income taxes

 

2,491

 

 

 

(392

)

Other, net

 

1,118

 

 

 

1,985

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

4,499

 

 

 

4,430

 

Current income taxes

 

25,108

 

 

 

 

Operating lease assets and liabilities, net

 

408

 

 

 

414

 

Other assets

 

1,937

 

 

 

(1,902

)

Accounts payable

 

(3,012

)

 

 

127

 

Other deferrals and accruals

 

(5,912

)

 

 

(1,180

)

Net cash provided by operating activities

 

69,800

 

 

 

38,724

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(136,158

)

 

 

(88,706

)

Proceeds from sale of assets and other

 

508

 

 

 

279

 

Net cash used in investing activities

 

(135,650

)

 

 

(88,427

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from credit facility borrowings

 

50,000

 

 

 

 

Payments for debt issuance costs

 

(300

)

 

 

 

Taxes paid for equity award issuances

 

(1,317

)

 

 

(835

)

Payments for financing arrangements and other

 

(290

)

 

 

(471

)

Net cash provided by (used in) financing activities

 

48,093

 

 

 

(1,306

)

Net decrease in cash and cash equivalents

 

(17,757

)

 

 

(51,009

)

Cash and cash equivalents, beginning of period

 

44,061

 

 

 

84,344

 

Cash and cash equivalents, end of period

$

26,304

 

 

$

33,335

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information

 

 

 

Interest paid

$

3,111

 

 

$

 

Income tax refunds received, net

$

25,481

 

 

$

 


Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

The Company defines Adjusted EBITDA as net income (loss) calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment, other income (expense), net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs, and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events, and other non-comparable items. A reconciliation of net income (loss), which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is provided below herein.

Adjusted EBITDA margin is the Company’s calculation of Adjusted EBITDA, divided by revenue calculated in accordance with GAAP.

The Company uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of performance to evaluate operating effectiveness and assess its ability to increase revenues while controlling expense growth and the scalability of the Company’s business growth strategy. Adjusted EBITDA is also a significant performance measure used by the Company in its incentive compensation programs. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating the Company’s operating results. However, use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and investors and others should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies may calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

(in thousands)

 

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

Net income (loss)

 

$

9,613

 

 

$

2,487

 

 

$

(10,310

)

 

$

1,790

 

Depreciation and amortization

 

 

15,490

 

 

 

538

 

 

 

341

 

 

 

16,369

 

Impairment expense

 

 

836

 

 

 

 

 

 

 

 

 

836

 

Other expense (income), net

 

 

62

 

 

 

 

 

 

(239

)

 

 

(177

)

Income tax benefit

 

 

 

 

 

 

 

 

756

 

 

 

756

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,603

 

 

 

2,603

 

Restructuring charges and other

 

 

71

 

 

 

 

 

 

230

 

 

 

301

 

Adjusted EBITDA

 

$

26,072

 

 

$

3,025

 

 

$

(6,619

)

 

$

22,478

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

39

%

 

 

64

%

 

N/A

 

 

32

%


Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

(in thousands)

 

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

Net income (loss)

 

$

4,042

 

 

$

2,285

 

 

$

(9,552

)

 

$

(3,225

)

Depreciation and amortization

 

 

13,396

 

 

 

633

 

 

 

761

 

 

 

14,790

 

Impairment expense

 

 

4,068

 

 

 

 

 

 

 

 

 

4,068

 

Other expense (income), net

 

 

65

 

 

 

 

 

 

524

 

 

 

589

 

Income tax benefit

 

 

 

 

 

 

 

 

(501

)

 

 

(501

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,385

 

 

 

2,385

 

Restructuring charges and other

 

 

443

 

 

 

 

 

 

11

 

 

 

454

 

Adjusted EBITDA

 

$

22,014

 

 

$

2,918

 

 

$

(6,372

)

 

$

18,560

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

36

%

 

 

62

%

 

N/A

 

 

28

%


Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

(in thousands)

 

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

Net income (loss)

 

$

20,887

 

 

$

4,908

 

 

$

(21,939

)

 

$

3,856

 

Depreciation and amortization

 

 

30,173

 

 

 

1,051

 

 

 

743

 

 

 

31,967

 

Impairment expense

 

 

1,020

 

 

 

 

 

 

 

 

 

1,020

 

Other expense (income), net

 

 

124

 

 

 

 

 

 

(1,418

)

 

 

(1,294

)

Income tax benefit

 

 

 

 

 

 

 

 

2,535

 

 

 

2,535

 

Stock-based compensation

 

 

 

 

 

 

 

 

6,320

 

 

 

6,320

 

Restructuring charges and other

 

 

202

 

 

 

 

 

 

230

 

 

 

432

 

Adjusted EBITDA

 

$

52,406

 

 

$

5,959

 

 

$

(13,529

)

 

$

44,836

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

39

%

 

 

64

%

 

N/A

 

 

31

%


Six Months Ended June 30, 2022

 

 

 

 

 

 

 

 

(in thousands)

 

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

Net income (loss)

 

$

12,169

 

 

$

5,038

 

 

$

(21,035

)

 

$

(3,828

)

Depreciation and amortization

 

 

25,933

 

 

 

1,117

 

 

 

2,085

 

 

 

29,135

 

Impairment expense

 

 

4,407

 

 

 

 

 

 

 

 

 

4,407

 

Other expense (income), net

 

 

119

 

 

 

 

 

 

640

 

 

 

759

 

Income tax benefit

 

 

 

 

 

 

 

 

(448

)

 

 

(448

)

Stock-based compensation

 

 

 

 

 

 

 

 

5,528

 

 

 

5,528

 

Restructuring charges and other

 

 

460

 

 

 

 

 

 

(70

)

 

 

390

 

Adjusted EBITDA

 

$

43,088

 

 

$

6,155

 

 

$

(13,300

)

 

$

35,943

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

36

%

 

 

64

%

 

N/A

 

 

28

%


Segment Results

Three Months Ended June 30, 2023:

(in thousands)

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

External revenue

 

 

 

 

 

 

 

Residential & SMB - Cable Markets1

$

44,403

 

 

$

 

 

$

 

 

$

44,403

 

Residential & SMB - Glo Fiber Markets1

 

8,164

 

 

 

 

 

 

 

 

 

8,164

 

Commercial Fiber

 

10,253

 

 

 

 

 

 

 

 

 

10,253

 

Tower lease

 

 

 

 

4,715

 

 

 

 

 

 

4,715

 

RLEC & Other

 

3,806

 

 

 

 

 

 

 

 

 

3,806

 

Service revenue and other

 

66,626

 

 

 

4,715

 

 

 

 

 

 

71,341

 

Intercompany revenue and other

 

51

 

 

 

38

 

 

 

(89

)

 

 

 

Total revenue

 

66,677

 

 

 

4,753

 

 

 

(89

)

 

 

71,341

 

Operating expenses

 

 

 

 

 

 

 

Cost of services

 

24,752

 

 

 

1,379

 

 

 

(55

)

 

 

26,076

 

Selling, general and administrative

 

15,924

 

 

 

349

 

 

 

9,418

 

 

 

25,691

 

Impairment expense

 

836

 

 

 

 

 

 

 

 

 

836

 

Depreciation and amortization

 

15,490

 

 

 

538

 

 

 

341

 

 

 

16,369

 

Total operating expenses

 

57,002

 

 

 

2,266

 

 

 

9,704

 

 

 

68,972

 

Operating income (loss)

$

9,675

 

 

$

2,487

 

 

$

(9,793

)

 

$

2,369

 


Three Months Ended June 30, 2022:

(in thousands)

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

External revenue

 

 

 

 

 

 

 

Residential & SMB - Cable Markets1

$

43,843

 

 

$

 

 

$

 

 

$

43,843

 

Residential & SMB - Glo Fiber Markets1

 

4,056

 

 

 

 

 

 

 

 

 

4,056

 

Commercial Fiber

 

9,340

 

 

 

 

 

 

 

 

 

9,340

 

Tower lease

 

 

 

 

4,615

 

 

 

 

 

 

4,615

 

RLEC & Other

 

4,124

 

 

 

 

 

 

 

 

 

4,124

 

Service revenue and other

 

61,363

 

 

 

4,615

 

 

 

 

 

 

65,978

 

Intercompany revenue and other

 

49

 

 

 

87

 

 

 

(93

)

 

 

43

 

Total revenue

 

61,412

 

 

 

4,702

 

 

 

(93

)

 

 

66,021

 

Operating expenses

 

 

 

 

 

 

 

Cost of services

 

25,440

 

 

 

1,378

 

 

 

(62

)

 

 

26,756

 

Selling, general and administrative

 

13,958

 

 

 

406

 

 

 

8,726

 

 

 

23,090

 

Restructuring expense

 

443

 

 

 

 

 

 

11

 

 

 

454

 

Impairment expense

 

4,068

 

 

 

 

 

 

 

 

 

4,068

 

Depreciation and amortization

 

13,396

 

 

 

633

 

 

 

761

 

 

 

14,790

 

Total operating expenses

 

57,305

 

 

 

2,417

 

 

 

9,436

 

 

 

69,158

 

Operating income (loss)

$

4,107

 

 

$

2,285

 

 

$

(9,529

)

 

$

(3,137

)


Six Months Ended June 30, 2023:

(in thousands)

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

External revenue

 

 

 

 

 

 

 

Residential & SMB - Cable Markets1

$

89,159

 

 

$

 

 

$

 

 

$

89,159

 

Residential & SMB - Glo Fiber Markets1

 

15,167

 

 

 

 

 

 

 

 

 

15,167

 

Commercial Fiber

 

21,951

 

 

 

 

 

 

 

 

 

21,951

 

Tower lease

 

 

 

 

9,253

 

 

 

 

 

 

9,253

 

RLEC & Other

 

7,497

 

 

 

 

 

 

 

 

 

7,497

 

Service revenue and other

 

133,774

 

 

 

9,253

 

 

 

 

 

 

143,027

 

Intercompany revenue and other

 

106

 

 

 

76

 

 

 

(182

)

 

 

 

Total revenue

 

133,880

 

 

 

9,329

 

 

 

(182

)

 

 

143,027

 

Operating expenses

 

 

 

 

 

 

 

Cost of services

 

50,181

 

 

 

2,571

 

 

 

(109

)

 

 

52,643

 

Selling, general and administrative

 

31,495

 

 

 

799

 

 

 

20,006

 

 

 

52,300

 

Impairment expense

 

1,020

 

 

 

 

 

 

 

 

 

1,020

 

Depreciation and amortization

 

30,173

 

 

 

1,051

 

 

 

743

 

 

 

31,967

 

Total operating expenses

 

112,869

 

 

 

4,421

 

 

 

20,640

 

 

 

137,930

 

Operating income (loss)

$

21,011

 

 

$

4,908

 

 

$

(20,822

)

 

$

5,097

 


Six Months Ended June 30, 2022:

(in thousands)

Broadband

 

Tower

 

Corporate &
Eliminations

 

Consolidated

External revenue

 

 

 

 

 

 

 

Residential & SMB - Cable Markets1

$

87,336

 

 

$

 

 

$

 

 

$

87,336

 

Residential & SMB - Glo Fiber Markets1

 

7,476

 

 

 

 

 

 

 

 

 

7,476

 

Commercial Fiber

 

18,402

 

 

 

 

 

 

 

 

 

18,402

 

Tower lease

 

 

 

 

9,361

 

 

 

 

 

 

9,361

 

RLEC & Other

 

7,813

 

 

 

 

 

 

 

 

 

7,813

 

Service revenue and other

 

121,027

 

 

 

9,361

 

 

 

 

 

 

130,388

 

Intercompany revenue and other

 

99

 

 

 

188

 

 

 

(240

)

 

 

47

 

Total revenue

 

121,126

 

 

 

9,549

 

 

 

(240

)

 

 

130,435

 

Operating expenses

 

 

 

 

 

 

 

Cost of services

 

50,608

 

 

 

2,670

 

 

 

(183

)

 

 

53,095

 

Selling, general and administrative

 

27,430

 

 

 

724

 

 

 

18,771

 

 

 

46,925

 

Restructuring expense

 

460

 

 

 

 

 

 

(70

)

 

 

390

 

Impairment expense

 

4,407

 

 

 

 

 

 

 

 

 

4,407

 

Depreciation and amortization

 

25,933

 

 

 

1,117

 

 

 

2,085

 

 

 

29,135

 

Total operating expenses

 

108,838

 

 

 

4,511

 

 

 

20,603

 

 

 

133,952

 

Operating income (loss)

$

12,288

 

 

$

5,038

 

 

$

(20,843

)

 

$

(3,517

)

_________________________________________
(1)   Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the three and six months ended June 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the three and six months ended June 30, 2022 for comparability.

Supplemental Information

Broadband Operating Statistics

 

June 30,
2023

 

June 30,
2022

Broadband homes and businesses passed (1)

396,035

 

 

324,186

 

Cable Markets

213,188

 

 

211,681

 

Glo Fiber Markets

182,847

 

 

112,505

 

 

 

 

 

Residential & Small and Medium Business ("SMB") RGUs:

 

 

 

Broadband Data

142,247

 

 

125,003

 

Cable Markets

109,404

 

 

107,878

 

Glo Fiber Markets

32,843

 

 

17,125

 

Video

44,800

 

 

49,027

 

Voice

40,313

 

 

39,535

 

Total Residential & SMB RGUs (excludes RLEC)

227,360

 

 

213,565

 

 

 

 

 

Residential & SMB Penetration (2)

 

 

 

Broadband Data

35.9

%

 

38.6

%

Cable Markets

51.3

%

 

51.0

%

Glo Fiber Markets

18.0

%

 

15.2

%

Video

11.3

%

 

15.1

%

Voice

10.7

%

 

12.9

%

 

 

 

 

Fiber route miles

9,082

 

 

7,906

 

Total fiber miles (3)

767,173

 

 

589,923

 

______________________________________________________
(1)   Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2)   Penetration is calculated by dividing the number of users by the number of passings or available homes, as appropriate.
(3)   Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.

Broadband - Residential and SMB ARPU

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Residential and SMB Revenue:

 

 

 

 

 

 

 

Broadband

$

34,152

 

 

$

29,568

 

 

$

67,326

 

 

$

58,217

 

Cable Markets

 

27,172

 

 

 

26,123

 

 

 

54,445

 

 

 

51,986

 

Glo Fiber Markets

 

6,980

 

 

 

3,445

 

 

 

12,881

 

 

 

6,231

 

Video

 

14,411

 

 

 

15,210

 

 

 

29,056

 

 

 

30,551

 

Voice

 

3,054

 

 

 

2,994

 

 

 

6,084

 

 

 

5,910

 

Discounts, adjustments and other

 

950

 

 

 

127

 

 

 

1,860

 

 

 

134

 

Total Revenue

$

52,567

 

 

$

47,899

 

 

$

104,326

 

 

$

94,812

 

 

 

 

 

 

 

 

 

Average RGUs:

 

 

 

 

 

 

 

Broadband Data

 

140,481

 

 

 

123,153

 

 

 

138,376

 

 

 

121,832

 

Cable Markets

 

109,716

 

 

 

107,738

 

 

 

109,737

 

 

 

107,878

 

Glo Fiber Markets

 

30,765

 

 

 

15,415

 

 

 

28,639

 

 

 

13,954

 

Video

 

45,229

 

 

 

49,146

 

 

 

45,749

 

 

 

49,295

 

Voice

 

40,164

 

 

 

38,463

 

 

 

40,078

 

 

 

36,650

 

 

 

 

 

 

 

 

 

ARPU: (1)

 

 

 

 

 

 

 

Broadband

$

81.03

 

 

$

79.94

 

 

$

81.06

 

 

$

80.02

 

Cable Markets

$

82.55

 

 

$

80.82

 

 

$

82.69

 

 

$

80.85

 

Glo Fiber Markets

$

75.63

 

 

$

74.49

 

 

$

74.96

 

 

$

74.42

 

Video

$

106.21

 

 

$

103.16

 

 

$

105.85

 

 

$

103.29

 

Voice

$

25.35

 

 

$

25.95

 

 

$

25.30

 

 

$

26.88

 

______________________________________________________
(1)   Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.

Tower Operating Statistics

 

June 30,
2023

 

June 30,
2022

Macro tower sites

222

 

 

223

 

Tenants

448

 

 

465

 

Average tenants per tower

1.9

 

 

2.0