Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN)
announced fourth quarter and full year 2023 financial and operating
results.
2023
Highlights
- Glo Fiber data customers grew 71.7%
year-over-year to approximately 42,000.
- Glo Fiber passings grew by
approximately 86,400, or 58.6%, to approximately 234,000.
- Glo Fiber revenue grew 91.9% to
$35.1 million.
- Consolidated revenue grew 7.5% to
$287.4 million.
- Consolidated net income in 2023 was
$8.0 million, compared with consolidated net loss of $8.4 million
in 2022.
- Consolidated Adjusted EBITDA1 grew
19.3% to $90.6 million in 2023, compared with $76.0 million in
2022.
- Announced in October 2023 agreement
to acquire 100% of the equity interests in Horizon Acquisition
Parent LLC.
“Glo Fiber continues to be the major catalyst
for our strong growth and is now our largest line of business in
terms of passings. Since our first full year of Glo Fiber
operations in 2020, our consolidated revenue and Adjusted EBITDA
compounded annual growth rates (“CAGR”) have been industry-leading
among publicly-traded broadband companies at 9.2% and 17.8%,
respectively,” said President and CEO, Christopher E. French. “We
believe we have the potential to more than double our Glo Fiber
data customer penetration rate over the next five years, creating
an excellent opportunity to continue to drive strong consolidated
CAGR results.”
Shentel’s fourth-quarter earnings conference call
will be webcast at 8:30 a.m. ET on Wednesday, February 21,
2024. The webcast and related materials will be available on
Shentel’s Investor Relations website at
https://investor.shentel.com/. For Analysts, please register to
dial-in at this link.
Full Year 2023 Results
Broadband
- Total Broadband Data Revenue
Generating Units (“RGUs”) grew 17,459, or 13.0%, in 2023 to
151,389. Glo Fiber Markets Data RGUs grew 17,424, or 71.7%,
year-over-year to 41,710, driven by network expansion of 86,393
passings and churn of 1.0%. Cable Markets Data RGUs grew 35 to
109,679. Penetration for Glo Fiber Markets and Cable Markets were
17.8% and 50.8%, respectively, as of December 31, 2023.
- Broadband revenue grew $20.2
million, or 8.1%, to $269.3 million. Residential & SMB revenue
in Glo Fiber Markets increased approximately $16.8 million, or
91.9%, during 2023, primarily driven by 71.7% year-over-year growth
in data RGUs and a 4.0% increase in data Average Revenue per Unit
(“ARPU”). Residential & SMB revenue in Cable Markets, excluding
discontinued Beam operations, increased approximately $2.5 million,
or 1.4%, during 2023, primarily driven by 1.8% year-over-year
growth in data ARPU. Commercial Fiber revenue increased
approximately $3.3 million, or 8.5%, during 2023, primarily driven
by $3.0 million in T-Mobile non-recurring early termination fees
and $0.3 million in recurring revenue driven by year-over-year
growth in connections. T-Mobile disconnected 338 backhaul circuits
during 2023 as part of their previously announced rationalization
of the former Sprint network. The Company expects approximately $1
million of additional annual revenue churn as part of the network
rationalization. Rural Local Exchange Carrier (“RLEC”) & Other
revenue decreased approximately $1.1 million, or 6.7%, compared
with 2022, primarily driven by a decline in residential DSL
subscribers.
- Broadband operating expenses
decreased approximately $0.2 million, or 0.1%, to $228.1 million in
2023, compared with 2022. The primarily drivers were lower
impairment charges and depreciation charges resulting from the
discontinuation of Beam fixed wireless in 2022 as well as lower
payroll costs due to higher capitalized labor. These lower expenses
were partially offset by higher line costs due to the expansion of
the network into new markets, and higher advertising costs
associated with the Company’s expansion of Glo Fiber.
- Broadband operating income in 2023
was $41.1 million, an increase of 98.6% compared with $20.7 million
in 2022.
- Broadband Adjusted EBITDA2 in 2023
was $105.8 million, an increase of 17.6% compared with $90.0
million in 2022.
Tower
- Total macro towers and tenants were
219 and 453, respectively, as of December 31, 2023 compared
with 222 and 446, respectively, as of December 31, 2022.
- Revenue decreased approximately
$0.3 million, or 1.5%, in 2023 to $18.6 million compared with 2022.
This decrease was primarily driven by lower intercompany lease
revenue from ceasing Beam service in 2022.
- Operating expenses decreased
approximately $0.3 million, or 2.8%, in 2023 compared with 2022,
primarily driven by lower depreciation as a result of fewer
depreciable tower assets in 2023 compared to 2022.
- Tower operating income in 2023 was
$9.5 million, approximately flat compared with $9.5 million in
2022.
- Tower Adjusted EBITDA3 in 2023
was $11.6 million, a decrease of 2.8%compared with $11.9 million in
2022.
1 Non-GAAP measure. See the disclosure captioned “Non-GAAP
Financial Measures” below in this press release for more details
and a reconciliation to the most comparable GAAP measure.2 Non-GAAP
measure. See the disclosure captioned “Non-GAAP Financial Measures”
below in this press release for more details and a reconciliation
to the most comparable GAAP measure.3 Non-GAAP measure. See the
disclosure captioned “Non-GAAP Financial Measures” below in this
press release for more details and a reconciliation to the most
comparable GAAP measure.
Consolidated Fourth Quarter 2023
Results
- Consolidated revenue in the fourth
quarter of 2023 grew 3.6% to $72.5 million compared with the fourth
quarter of 2022 primarily due to growth of 3.7% in the Broadband
segment.
- Consolidated net income in the
fourth quarter of 2023 was $2.6 million, compared with net loss of
$1.8 million in the fourth quarter of 2022.
- Consolidated Adjusted EBITDA in the
fourth quarter of 2023 was $22.9 million, an increase of $1.9
million, or 8.8%, compared with the fourth quarter of 2022 due to
growth of 8.9% in the Broadband segment and 9.3% growth in the
Tower segment, partially offset by a 9.2% increase in corporate
expenses.
Broadband
- Broadband revenue in the fourth
quarter of 2023 grew $2.4 million, or 3.7%, to $67.9 million
compared with $65.5 million in the fourth quarter of 2022.
Residential & SMB revenue in Glo Fiber Markets increased
approximately $4.7 million, or 79.2%, during 2023, primarily driven
71.7% year-over-year growth in data RGUs and 7.1% increase in data
ARPU. Residential & SMB revenue in Cable Markets decreased
approximately $0.4 million, or 0.8%, during 2023, primarily driven
by a 11.2% decrease in video subscribers due to accelerated cord
cutting. Commercial Fiber revenue decreased approximately $1.1
million, or 10.4%, primarily driven by timing of T-Mobile early
termination fees. T-Mobile disconnected 338 backhaul circuits
during 2023 as part of their previously announced rationalization
of the former Sprint network. RLEC & Other revenue decreased
approximately $0.6 million, or 15.3%, compared with 2022, primarily
driven by a decline in residential DSL subscribers.
- Broadband operating expenses in the
fourth quarter of 2023 were $57.1 million compared with $61.9
million in the fourth quarter of 2022. The decrease was primarily
due to $4.8 million in lower depreciation due to 2022 accelerated
depreciation of Beam network assets associated with the Company’s
decision to permanently cease Beam operations, for which no
equivalent accelerated depreciation was present in 2023.
- Broadband operating income in the
fourth quarter of 2023 was $10.8 million, an increase of 200%
compared with $3.6 million in the fourth quarter of 2022.
- Broadband Adjusted EBITDA in the
fourth quarter of 2023 was $26.8 million, an increase of 8.9%
compared with $24.6 million for the fourth quarter of 2022.
Tower
- Tower revenue for the fourth
quarter of 2023 was consistent with revenue for fourth quarter of
2022.
- Tower operating income in the
fourth quarter of 2023 was $2.5 million, an increase of 32.2%
compared with $1.9 million for the fourth quarter of 2022,
primarily due to lower depreciation and rent expense.
- Tower Adjusted EBITDA in the
fourth quarter of 2023 was $3.0 million, an increase of 9.3%
compared with $2.7 million for the fourth quarter of 2022.
Other Information
- As previously announced, on October
24, 2023, Shentel entered into a definitive agreement to acquire
100% of the equity interests in Horizon Acquisition Parent LLC for
$385 million. Consideration will consist of $305 million in cash
and $80 million of Shentel common stock. Closing is expected to
occur in the first half of 2024 after regulatory approvals are
received.
- The Company plans to raise
additional growth capital for the FTTH network expansion,
government grant projects and general corporate purposes, which may
include the sale of some or all of its tower portfolio as well as
exploring other strategic alternatives.
- Capital expenditures were $256.6
million for the year ended December 31, 2023 compared with
$189.6 million in 2022. The $66.9 million increase in capital
expenditures was primarily due to higher spending in the Broadband
segment driven by the expansion of Glo Fiber Markets.
- As of December 31, 2023, our
cash and cash equivalents totaled $139.3 million and the
availability under our revolving line of credit was
$100.0 million, for total available liquidity of $239.3
million. During 2023, we borrowed a total of $225.0 million under
our term loans and had total indebtedness of $300 million as of
December 31, 2023.
- On July 6, 2023, the Company closed
on the sale of its 2.5 GHz spectrum for $17.3 million in cash and
$3.8 million in assumed liabilities.
Conference Call and Webcast
Date: Wednesday, February 21, 2024Time: 8:30
a.m. (ET)Listen via Internet: https://investor.shentel.com/ For
Analysts, please register to dial-in at this link.A live webcast of
the call will be available on the “Investor Relations” page of the
Company’s website at http://investor.shentel.com/.
A replay of the call will be available for a
limited time on the Investor Relations page of the Company’s
website.
About Shenandoah
Telecommunications
Shenandoah Telecommunications Company (Shentel)
provides broadband services through its high speed,
state-of-the-art fiber optic and cable and 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 approximately 9,900 route
miles of fiber and 219 macro cellular towers. For more information,
please visit www.shentel.com.
This release contains forward-looking statements
about Shentel regarding, among other things, its business strategy,
its prospects and its financial position. These statements can be
identified by the use of forward-looking terminology such as
“believes,” “estimates,” “expects,” “intends,” “may,” “will,”
“should,” “could,” or “anticipates” or the negative or other
variation of these or similar words, or by discussions of strategy
or risks and uncertainties. The forward-looking statements are
based upon management’s beliefs, assumptions and current
expectations and may include comments as to Shentel’s beliefs and
expectations as to future events and trends affecting its business
that are necessarily subject to uncertainties, many of which are
outside Shentel’s control. Although management believes that the
expectations reflected in the forward-looking statements are
reasonable, forward-looking statements are not, and should not be
relied upon as, a guarantee of future performance or results, nor
will they necessarily prove to be accurate indications of the times
at which such performance or results will be achieved, and actual
results may differ materially from those contained in or implied by
the forward-looking statements as a result of various factors. A
discussion of other factors that may cause actual results to differ
from management’s projections, forecasts, estimates and
expectations is available in Shentel’s filings with the Securities
and Exchange Commission. Those factors may include, among others,
the ability to obtain the required regulatory approvals and satisfy
the closing conditions required for the Horizon Transaction,
Shentel’s ability to obtain the financing for the Horizon
Transaction, the closing of the Transaction may not occur on time
or at all, the expected savings and synergies from the Horizon
Transaction may not be realized or may take longer or cost more
than expected to realize, changes in overall economic conditions
including rising inflation, regulatory requirements, changes in
technologies, changes in competition, demand for our products and
services, availability of labor resources and capital, natural
disasters, pandemics and outbreaks of contagious diseases and other
adverse public health developments, such as COVID-19 and other
conditions. The forward-looking statements included are made only
as of the date of the statement. Shentel undertakes no obligation
to revise or update such statements to reflect current events or
circumstances after the date hereof, or to reflect the occurrence
of unanticipated events, except as required by law.
CONTACTS: Shenandoah Telecommunications CompanyJim
Volk Senior Vice President - Chief Financial
Officer540-984-5168Jim.Volk@emp.shentel.com
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
COMPREHENSIVE (LOSS) INCOME(in thousands, except per share
amounts)(Figures for the quarters ended December 31, 2023 and 2022
are unaudited)
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Service revenue and other |
$ |
72,510 |
|
|
$ |
70,012 |
|
|
$ |
287,379 |
|
$ |
267,371 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of services exclusive of depreciation and amortization |
|
25,707 |
|
|
|
26,974 |
|
|
|
106,101 |
|
|
107,546 |
|
Selling, general and administrative |
|
26,929 |
|
|
|
23,240 |
|
|
|
103,631 |
|
|
92,392 |
|
Restructuring expense |
|
— |
|
|
|
220 |
|
|
|
— |
|
|
1,251 |
|
Impairment expense |
|
— |
|
|
|
357 |
|
|
|
2,552 |
|
|
5,241 |
|
Depreciation and amortization |
|
16,834 |
|
|
|
21,891 |
|
|
|
65,471 |
|
|
68,899 |
|
Total operating expenses |
|
69,470 |
|
|
|
72,682 |
|
|
|
277,755 |
|
|
275,329 |
|
Operating income (loss) |
|
3,040 |
|
|
|
(2,670 |
) |
|
|
9,624 |
|
|
(7,958 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Other income (expense), net |
|
(733 |
) |
|
|
619 |
|
|
|
1,387 |
|
|
(1,348 |
) |
Income (loss) before income taxes |
|
2,307 |
|
|
|
(2,051 |
) |
|
|
11,011 |
|
|
(9,306 |
) |
Income tax expense (benefit) |
|
(282 |
) |
|
|
(228 |
) |
|
|
2,973 |
|
|
(927 |
) |
Net income (loss) |
$ |
2,589 |
|
|
$ |
(1,823 |
) |
|
$ |
8,038 |
|
$ |
(8,379 |
) |
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Unrealized (loss) income on interest rate hedge, net of tax |
|
(1,574 |
) |
|
|
— |
|
|
|
1,668 |
|
|
— |
|
Comprehensive (loss) income |
$ |
1,015 |
|
|
$ |
(1,823 |
) |
|
$ |
9,706 |
|
$ |
(8,379 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share, basic and diluted: |
|
|
|
|
|
|
|
Basic net income (loss) per share |
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
0.16 |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
Diluted net income (loss) per share |
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
0.16 |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
50,422 |
|
|
|
50,194 |
|
|
|
50,396 |
|
|
50,155 |
|
Weighted average shares outstanding, diluted |
|
50,971 |
|
|
|
50,194 |
|
|
|
50,715 |
|
|
50,155 |
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
(in thousands) |
2023 |
|
2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
139,255 |
|
$ |
44,061 |
Accounts receivable, net of allowance for credit losses of $886 and
$776, respectively |
|
19,782 |
|
|
20,615 |
Income taxes receivable |
|
4,691 |
|
|
29,755 |
Prepaid expenses and other |
|
11,782 |
|
|
11,509 |
Current assets held for sale |
|
561 |
|
|
22,622 |
Total current assets |
|
176,071 |
|
|
128,562 |
Investments |
|
13,198 |
|
|
12,971 |
Property, plant and equipment, net |
|
879,499 |
|
|
687,553 |
Goodwill and intangible assets, net |
|
81,123 |
|
|
81,515 |
Operating lease right-of-use assets |
|
50,640 |
|
|
53,859 |
Deferred charges and other assets |
|
13,698 |
|
|
13,259 |
Total assets |
$ |
1,214,229 |
|
$ |
977,719 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current maturities of long-term debt, net of unamortized loan
fees |
$ |
7,095 |
|
$ |
648 |
Accounts payable |
|
53,546 |
|
|
49,173 |
Advanced billings and customer deposits |
|
13,241 |
|
|
12,425 |
Accrued compensation |
|
11,749 |
|
|
9,616 |
Current operating lease liabilities |
|
3,081 |
|
|
2,829 |
Accrued liabilities and other |
|
9,643 |
|
|
17,906 |
Current liabilities held for sale |
|
— |
|
|
3,824 |
Total current liabilities |
|
98,355 |
|
|
96,421 |
Long-term debt, less current maturities, net of unamortized loan
fees |
|
292,804 |
|
|
74,306 |
Other long-term liabilities: |
|
|
|
Deferred income taxes |
|
88,147 |
|
|
84,600 |
Asset retirement obligations |
|
10,069 |
|
|
9,932 |
Benefit plan obligations |
|
3,943 |
|
|
3,758 |
Non-current operating lease liabilities |
|
48,358 |
|
|
50,477 |
Other liabilities |
|
19,883 |
|
|
20,218 |
Total other long-term liabilities |
|
170,400 |
|
|
168,985 |
Commitments and contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Common stock, no par value, authorized 96,000; 50,272 and 50,110
issued and outstanding at December 31, 2023 and 2022,
respectively |
|
— |
|
|
— |
Additional paid in capital |
|
66,933 |
|
|
57,453 |
Retained earnings |
|
584,069 |
|
|
580,554 |
Accumulated other comprehensive income, net of taxes |
|
1,668 |
|
|
— |
Total shareholders’ equity |
|
652,670 |
|
|
638,007 |
Total liabilities and shareholders’ equity |
$ |
1,214,229 |
|
$ |
977,719 |
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands) |
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
Net income (loss) |
$ |
8,038 |
|
|
$ |
(8,379 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
Depreciation and amortization |
|
64,981 |
|
|
|
68,175 |
|
Amortization of intangible assets |
|
490 |
|
|
|
724 |
|
Accretion of asset retirement obligations |
|
621 |
|
|
|
531 |
|
Provision for credit losses |
|
2,898 |
|
|
|
1,972 |
|
Stock-based compensation expense, net of amount capitalized |
|
10,033 |
|
|
|
8,528 |
|
Deferred income taxes |
|
2,973 |
|
|
|
(1,414 |
) |
Impairment expense |
|
2,552 |
|
|
|
5,241 |
|
Gain on sale of FCC spectrum licenses |
|
(1,328 |
) |
|
|
— |
|
Other, net |
|
(504 |
) |
|
|
427 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
(189 |
) |
|
|
(583 |
) |
Current income taxes |
|
25,064 |
|
|
|
434 |
|
Operating lease right-of-use assets |
|
3,614 |
|
|
|
6,322 |
|
Other assets |
|
5,043 |
|
|
|
(451 |
) |
Accounts payable |
|
(2,869 |
) |
|
|
19 |
|
Lease liabilities |
|
(3,098 |
) |
|
|
(5,471 |
) |
Other deferrals and accruals |
|
(4,545 |
) |
|
|
(1,180 |
) |
Net cash provided by operating activities |
|
113,774 |
|
|
|
74,895 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
|
(256,550 |
) |
|
|
(189,609 |
) |
Government grants received |
|
1,904 |
|
|
|
— |
|
Proceeds from the sale of FCC spectrum licenses |
|
17,300 |
|
|
|
— |
|
Refund received for deposit on FCC spectrum leases |
|
— |
|
|
|
3,996 |
|
Proceeds from sale of assets and other |
|
655 |
|
|
|
1,434 |
|
Net cash used in investing activities |
|
(236,691 |
) |
|
|
(184,179 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from credit facility borrowings |
|
225,000 |
|
|
|
75,000 |
|
Payments for debt issuance costs |
|
(300 |
) |
|
|
— |
|
Dividends paid, net of dividends reinvested |
|
(4,523 |
) |
|
|
(3,991 |
) |
Taxes paid for equity award issuances |
|
(1,387 |
) |
|
|
(1,076 |
) |
Payments for financing arrangements and other |
|
(679 |
) |
|
|
(932 |
) |
Net cash provided by financing activities |
|
218,111 |
|
|
|
69,001 |
|
Net increase (decrease) in cash and cash equivalents |
|
95,194 |
|
|
|
(40,283 |
) |
Cash and cash equivalents, beginning of period |
|
44,061 |
|
|
|
84,344 |
|
Cash and cash equivalents, end of period |
$ |
139,255 |
|
|
$ |
44,061 |
|
|
Non-GAAP Financial
MeasuresAdjusted EBITDA
The Company defines Adjusted EBITDA as net
income (loss) from continuing operations calculated in accordance
with GAAP, adjusted for the impact of depreciation and
amortization, impairment, other income (expense), net, interest
income, interest expense, income tax expense (benefit), stock
compensation expense, transaction costs related to acquisition and
disposition events (including professional advisory fees,
integration costs and related compensatory matters), restructuring
expense, tax on equity award vesting and exercise events and other
non-comparable items. A reconciliation of net income (loss), 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.
Year Ended December 31, 2023 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) |
|
$ |
42,308 |
|
|
$ |
9,495 |
|
|
$ |
(43,765 |
) |
|
$ |
8,038 |
|
Depreciation and amortization |
|
|
61,897 |
|
|
|
2,103 |
|
|
|
1,471 |
|
|
|
65,471 |
|
Impairment expense |
|
|
2,552 |
|
|
|
— |
|
|
|
— |
|
|
|
2,552 |
|
Other income, net |
|
|
(1,179 |
) |
|
|
— |
|
|
|
(208 |
) |
|
|
(1,387 |
) |
Income tax expense (benefit) |
|
|
— |
|
|
|
— |
|
|
|
2,973 |
|
|
|
2,973 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
10,033 |
|
|
|
10,033 |
|
Restructuring charges and transaction related fees |
|
|
221 |
|
|
|
— |
|
|
|
2,694 |
|
|
|
2,915 |
|
Adjusted EBITDA |
|
$ |
105,799 |
|
|
$ |
11,598 |
|
|
$ |
(26,802 |
) |
|
$ |
90,595 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
39 |
% |
|
|
62 |
% |
|
N/A |
|
|
32 |
% |
Year Ended December 31, 2022 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) |
|
$ |
20,467 |
|
|
$ |
9,512 |
|
|
$ |
(38,358 |
) |
|
$ |
(8,379 |
) |
Depreciation and amortization |
|
|
63,175 |
|
|
|
2,416 |
|
|
|
3,308 |
|
|
|
68,899 |
|
Impairment expense |
|
|
5,241 |
|
|
|
— |
|
|
|
— |
|
|
|
5,241 |
|
Other expense, net |
|
|
240 |
|
|
|
— |
|
|
|
1,108 |
|
|
|
1,348 |
|
Income tax expense (benefit) |
|
|
— |
|
|
|
— |
|
|
|
(927 |
) |
|
|
(927 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
8,528 |
|
|
|
8,528 |
|
Restructuring charges and transaction related fees |
|
|
849 |
|
|
|
— |
|
|
|
402 |
|
|
|
1,251 |
|
Adjusted EBITDA |
|
$ |
89,972 |
|
|
$ |
11,928 |
|
|
$ |
(25,939 |
) |
|
$ |
75,961 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
36 |
% |
|
|
63 |
% |
|
N/A |
|
|
28 |
% |
Quarter Ended December 31, 2023 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) |
|
$ |
10,791 |
|
|
$ |
2,490 |
|
|
$ |
(10,692 |
) |
|
$ |
2,589 |
|
Depreciation and amortization |
|
|
15,995 |
|
|
|
503 |
|
|
|
336 |
|
|
|
16,834 |
|
Impairment expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other expense, net |
|
|
20 |
|
|
|
— |
|
|
|
713 |
|
|
|
733 |
|
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(282 |
) |
|
|
(282 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,669 |
|
|
|
1,669 |
|
Restructuring charges and transaction related fees |
|
|
16 |
|
|
|
— |
|
|
|
1,321 |
|
|
|
1,337 |
|
Adjusted EBITDA |
|
$ |
26,822 |
|
|
$ |
2,993 |
|
|
$ |
(6,935 |
) |
|
$ |
22,880 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
39 |
% |
|
|
64 |
% |
|
N/A |
|
|
32 |
% |
Quarter Ended December 31, 2022 |
|
|
|
|
|
|
|
|
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
Net income (loss) |
|
$ |
3,546 |
|
|
$ |
1,884 |
|
|
$ |
(7,253 |
) |
|
$ |
(1,823 |
) |
Depreciation and amortization |
|
|
20,451 |
|
|
|
854 |
|
|
|
586 |
|
|
|
21,891 |
|
Impairment expense |
|
|
357 |
|
|
|
— |
|
|
|
— |
|
|
|
357 |
|
Other expense (income), net |
|
|
63 |
|
|
|
— |
|
|
|
(682 |
) |
|
|
(619 |
) |
Income tax benefit |
|
|
— |
|
|
|
— |
|
|
|
(228 |
) |
|
|
(228 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
1,229 |
|
|
|
1,229 |
|
Restructuring charges and transaction related fees |
|
|
220 |
|
|
|
— |
|
|
|
— |
|
|
|
220 |
|
Adjusted EBITDA |
|
$ |
24,637 |
|
|
$ |
2,738 |
|
|
$ |
(6,348 |
) |
|
$ |
21,027 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
|
|
38 |
% |
|
|
58 |
% |
|
N/A |
|
|
30 |
% |
|
Segment Results
Year ended
December 31, 2023
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB - Cable Markets1 |
|
$ |
176,879 |
|
$ |
— |
|
$ |
— |
|
|
$ |
176,879 |
Residential & SMB - Glo Fiber Markets1 |
|
|
35,103 |
|
|
— |
|
|
— |
|
|
|
35,103 |
Commercial Fiber |
|
|
42,132 |
|
|
— |
|
|
— |
|
|
|
42,132 |
RLEC & Other |
|
|
14,791 |
|
|
— |
|
|
— |
|
|
|
14,791 |
Tower lease |
|
|
— |
|
|
18,474 |
|
|
— |
|
|
|
18,474 |
Service revenue and other |
|
|
268,905 |
|
|
18,474 |
|
|
— |
|
|
|
287,379 |
Intercompany revenue and other |
|
|
348 |
|
|
161 |
|
|
(509 |
) |
|
|
— |
Total revenue |
|
|
269,253 |
|
|
18,635 |
|
|
(509 |
) |
|
|
287,379 |
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
|
100,841 |
|
|
5,625 |
|
|
(365 |
) |
|
|
106,101 |
Selling, general and administrative |
|
|
62,834 |
|
|
1,412 |
|
|
39,385 |
|
|
|
103,631 |
Impairment expense |
|
|
2,552 |
|
|
— |
|
|
— |
|
|
|
2,552 |
Depreciation and amortization |
|
|
61,897 |
|
|
2,103 |
|
|
1,471 |
|
|
|
65,471 |
Total operating expenses |
|
|
228,124 |
|
|
9,140 |
|
|
40,491 |
|
|
|
277,755 |
Operating income (loss) |
|
$ |
41,129 |
|
$ |
9,495 |
|
$ |
(41,000 |
) |
|
$ |
9,624 |
|
Year ended
December 31, 2022
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB - Cable Markets1 |
|
$ |
175,681 |
|
$ |
— |
|
$ |
— |
|
|
$ |
175,681 |
|
Residential & SMB - Glo Fiber Markets1 |
|
|
18,293 |
|
|
— |
|
|
— |
|
|
|
18,293 |
|
Commercial Fiber |
|
|
38,821 |
|
|
— |
|
|
— |
|
|
|
38,821 |
|
RLEC & Other |
|
|
16,035 |
|
|
— |
|
|
— |
|
|
|
16,035 |
|
Tower lease |
|
|
— |
|
|
18,541 |
|
|
— |
|
|
|
18,541 |
|
Service revenue and other |
|
|
248,830 |
|
|
18,541 |
|
|
— |
|
|
|
267,371 |
|
Intercompany revenue and other |
|
|
185 |
|
|
378 |
|
|
(563 |
) |
|
|
— |
|
Total revenue |
|
|
249,015 |
|
|
18,919 |
|
|
(563 |
) |
|
|
267,371 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
|
102,267 |
|
|
5,712 |
|
|
(433 |
) |
|
|
107,546 |
|
Selling, general and administrative |
|
|
56,776 |
|
|
1,279 |
|
|
34,337 |
|
|
|
92,392 |
|
Restructuring expense |
|
|
849 |
|
|
— |
|
|
402 |
|
|
|
1,251 |
|
Impairment expense |
|
|
5,241 |
|
|
— |
|
|
— |
|
|
|
5,241 |
|
Depreciation and amortization |
|
|
63,175 |
|
|
2,416 |
|
|
3,308 |
|
|
|
68,899 |
|
Total operating expenses |
|
|
228,308 |
|
|
9,407 |
|
|
37,614 |
|
|
|
275,329 |
|
Operating income (loss) |
|
$ |
20,707 |
|
$ |
9,512 |
|
$ |
(38,177 |
) |
|
$ |
(7,958 |
) |
|
Quarter ended
December 31, 2023
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB - Cable Markets1 |
|
$ |
44,041 |
|
$ |
— |
|
$ |
— |
|
|
$ |
44,041 |
Residential & SMB - Glo Fiber Markets1 |
|
$ |
10,611 |
|
$ |
— |
|
$ |
— |
|
|
$ |
10,611 |
Commercial Fiber |
|
|
9,766 |
|
|
— |
|
|
— |
|
|
|
9,766 |
RLEC & Other |
|
|
3,479 |
|
|
— |
|
|
— |
|
|
|
3,479 |
Tower lease |
|
|
— |
|
|
4,613 |
|
|
— |
|
|
|
4,613 |
Service revenue and other |
|
|
67,897 |
|
|
4,613 |
|
|
— |
|
|
|
72,510 |
Intercompany revenue and other |
|
|
27 |
|
|
49 |
|
|
(76 |
) |
|
|
— |
Total revenue |
|
|
67,924 |
|
|
4,662 |
|
|
(76 |
) |
|
|
72,510 |
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
|
24,394 |
|
|
1,360 |
|
|
(47 |
) |
|
|
25,707 |
Selling, general and administrative |
|
|
16,724 |
|
|
309 |
|
|
9,896 |
|
|
|
26,929 |
Depreciation and amortization |
|
|
15,995 |
|
|
503 |
|
|
336 |
|
|
|
16,834 |
Total operating expenses |
|
|
57,113 |
|
|
2,172 |
|
|
10,185 |
|
|
|
69,470 |
Operating income (loss) |
|
$ |
10,811 |
|
$ |
2,490 |
|
$ |
(10,261 |
) |
|
$ |
3,040 |
|
Quarter ended
December 31, 2022
(in thousands) |
|
Broadband |
|
Tower |
|
Corporate & Eliminations |
|
Consolidated |
External revenue |
|
|
|
|
|
|
|
|
Residential & SMB - Cable Markets1 |
|
$ |
44,540 |
|
$ |
— |
|
$ |
— |
|
|
$ |
44,540 |
|
Residential & SMB - Glo Fiber Markets1 |
|
|
5,922 |
|
|
— |
|
|
— |
|
|
|
5,922 |
|
Commercial Fiber |
|
|
10,897 |
|
|
— |
|
|
— |
|
|
|
10,897 |
|
RLEC & Other |
|
|
4,083 |
|
|
— |
|
|
— |
|
|
|
4,083 |
|
Tower lease |
|
|
— |
|
|
4,570 |
|
|
— |
|
|
|
4,570 |
|
Service revenue and other |
|
|
65,442 |
|
|
4,570 |
|
|
— |
|
|
|
70,012 |
|
Intercompany revenue and other |
|
|
61 |
|
|
123 |
|
|
(184 |
) |
|
|
— |
|
Total revenue |
|
|
65,503 |
|
|
4,693 |
|
|
(184 |
) |
|
|
70,012 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of services |
|
|
25,466 |
|
|
1,658 |
|
|
(150 |
) |
|
|
26,974 |
|
Selling, general and administrative |
|
|
15,400 |
|
|
297 |
|
|
7,543 |
|
|
|
23,240 |
|
Restructuring expense |
|
|
220 |
|
|
— |
|
|
— |
|
|
|
220 |
|
Impairment expense |
|
|
357 |
|
|
— |
|
|
— |
|
|
|
357 |
|
Depreciation and amortization |
|
|
20,451 |
|
|
854 |
|
|
586 |
|
|
|
21,891 |
|
Total operating expenses |
|
|
61,894 |
|
|
2,809 |
|
|
7,979 |
|
|
|
72,682 |
|
Operating income (loss) |
|
$ |
3,609 |
|
$ |
1,884 |
|
$ |
(8,163 |
) |
|
$ |
(2,670 |
) |
_________________________________________(1)
Shentel has presented Residential & SMB - Cable Markets and
Residential & SMB - Glo Fiber Markets separately for 2023.
These revenues were previously reported in one line under the
description “Residential & SMB”. Shentel has amended the
presentation for 2022 for comparability.
Supplemental Information
Broadband Operating
Statistics
|
|
December 31,2023 |
|
December 31,2022 |
Broadband homes and businesses passed (1) |
|
449,635 |
|
|
359,529 |
|
Cable Markets |
|
215,763 |
|
|
212,050 |
|
Glo Fiber Markets |
|
233,872 |
|
|
147,479 |
|
|
|
|
|
|
Residential & Small and Medium Business ("SMB") Revenue
Generating Units ("RGUs"): |
|
|
|
|
Broadband Data |
|
151,389 |
|
|
133,930 |
|
Cable Markets |
|
109,679 |
|
|
109,644 |
|
Glo Fiber Markets |
|
41,710 |
|
|
24,286 |
|
Video |
|
43,152 |
|
|
46,975 |
|
Voice |
|
40,757 |
|
|
39,951 |
|
Total Residential & SMB RGUs (excludes RLEC) |
|
235,298 |
|
|
220,856 |
|
|
|
|
|
|
Residential & SMB Penetration (2) |
|
|
|
|
Broadband Data |
|
33.7 |
% |
|
37.3 |
% |
Cable Markets |
|
50.8 |
% |
|
51.7 |
% |
Glo Fiber Markets |
|
17.8 |
% |
|
16.5 |
% |
Video |
|
9.6 |
% |
|
13.1 |
% |
Voice |
|
9.5 |
% |
|
11.7 |
% |
|
|
|
|
|
Fiber route miles |
|
9,875 |
|
|
8,346 |
|
Total fiber miles (3) |
|
861,980 |
|
|
656,033 |
|
_________________________________________(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 RGUs 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 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Residential and SMB Revenue: |
|
|
|
|
|
|
|
|
Broadband Data |
|
$ |
36,679 |
|
$ |
31,916 |
|
$ |
139,102 |
|
$ |
120,803 |
Cable Markets |
|
|
27,400 |
|
|
26,945 |
|
|
108,822 |
|
|
105,433 |
Glo Fiber Markets |
|
|
9,279 |
|
|
4,971 |
|
|
30,280 |
|
|
15,370 |
Video |
|
|
13,791 |
|
|
14,558 |
|
|
56,924 |
|
|
60,023 |
Voice |
|
|
3,057 |
|
|
3,079 |
|
|
12,203 |
|
|
12,030 |
Discounts and adjustments |
|
|
1,125 |
|
|
909 |
|
|
3,753 |
|
|
1,118 |
Total Revenue |
|
$ |
54,652 |
|
$ |
50,462 |
|
$ |
211,982 |
|
$ |
193,974 |
|
|
|
|
|
|
|
|
|
Average RGUs: |
|
|
|
|
|
|
|
|
Broadband Data |
|
|
149,134 |
|
|
132,123 |
|
|
142,598 |
|
|
125,484 |
Cable Markets |
|
|
109,528 |
|
|
109,403 |
|
|
109,591 |
|
|
108,053 |
Glo Fiber Markets |
|
|
39,606 |
|
|
22,720 |
|
|
33,007 |
|
|
17,431 |
Video |
|
|
43,621 |
|
|
47,571 |
|
|
44,876 |
|
|
48,654 |
Voice |
|
|
40,726 |
|
|
39,910 |
|
|
40,372 |
|
|
38,217 |
|
|
|
|
|
|
|
|
|
ARPU: |
|
|
|
|
|
|
|
|
Broadband Data |
|
$ |
81.98 |
|
$ |
80.46 |
|
$ |
81.27 |
|
$ |
80.14 |
Cable Markets |
|
$ |
83.39 |
|
$ |
82.10 |
|
$ |
82.75 |
|
$ |
81.31 |
Glo Fiber Markets |
|
$ |
78.10 |
|
$ |
72.93 |
|
$ |
76.45 |
|
$ |
73.48 |
Video |
|
$ |
105.38 |
|
$ |
102.01 |
|
$ |
105.71 |
|
$ |
102.80 |
Voice |
|
$ |
25.02 |
|
$ |
25.72 |
|
$ |
25.19 |
|
$ |
26.23 |
_________________________________________
(1) Average Revenue Per Data RGU calculation =
(Residential & SMB Revenue * 1,000) / average data RGUs / 12
months
Tower Operating Statistics
|
|
December 31,2023 |
|
December 31,2022 |
Macro tower sites |
|
219 |
|
222 |
Tenants |
|
453 |
|
446 |
Average tenants per tower |
|
2.0 |
|
1.9 |
Shenandoah Telecommunica... (NASDAQ:SHEN)
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Shenandoah Telecommunica... (NASDAQ:SHEN)
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