EDINBURG, Va., Nov. 03, 2023 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company ("Shentel") (Nasdaq: SHEN) announced third quarter 2023 financial and operating results.
Third Quarter 2023 Highlights
- Glo Fiber constructed its 200,000th home and business passing during the quarter and now has over 202,000 passings.
- Glo Fiber Markets added approximately 4,500 subscribers; 13.9% higher than the third quarter of 2022 and 12.5% higher than the second quarter 2023.
- Consolidated revenue grew 7.3% to $71.8 million compared to the third quarter of 2022. Glo Fiber Markets revenue grew 90.5% to $9.3 million and Broadband revenue grew 8.1% to $67.4 million over the same period.
- Consolidated net income was $1.6 million in the third quarter of 2023, compared with net loss of $2.7 million in the third quarter of 2022.
- Consolidated Adjusted EBITDA grew 20.5% to $22.9 million compared to the third quarter of 2022. Broadband Adjusted EBITDA grew 19.4% to $26.6 million over the same period.
"We are very pleased with the continued growth for our Glo Fiber Markets, reflected in a new milestone in number of passings and the growth in subscribers and revenue. Glo Fiber's accelerating growth and increased scale contributed to solid financial results for the quarter, and reflected ongoing success of execution of our Fiber First strategy," said President and CEO, Christopher E. French. "This progress, along with our previously announced planned acquisition of Horizon Telcom, position us well to deliver long term value to our shareholders."
Shentel's third-quarter earnings conference call will be webcast at 8:30 a.m. ET on Friday, November 3, 2023. The webcast and related materials will be available on Shentel's Investor Relations website at https://investor.shentel.com/.
Consolidated Third Quarter 2023 Results
- Revenue in the third quarter of 2023 grew 7.3% to $71.8 million compared with the third quarter of 2022, due to Broadband segment revenue growth of 8.1%.
- Net income per share was $0.03 in the third quarter of 2023 compared with net loss per share of $0.05 in the third quarter of 2022.
- Adjusted EBITDA grew 20.5% to $22.9 million in the third quarter of 2023 compared with $19.0 million in the third quarter of 2022 due to Broadband segment growth of 19.4%.
Broadband
- Total Cable Markets and Glo Fiber Markets broadband data Revenue Generating Units ("RGUs") as of September 30, 2023 were 146,797, representing 12.7% year-over-year growth. Penetration for Cable Markets and Glo Fiber Markets as of September 30, 2023 were 51% and 18%, respectively, compared to 52% and 16%, respectively, as of September 30, 2022. Total Glo Fiber Markets passings grew year-over-year by 71,742 from 130,912 to 202,654.
- Broadband revenue in the third quarter of 2023 grew $5.1 million, or 8.1%, to $67.4 million compared with $62.4 million in the third quarter of 2022, primarily driven by a $4.4 million, or 90.5%, increase in Residential & Small and Medium Business ("SMB") - Glo Fiber Markets revenue and a $0.9 million, or 9.4%, increase in Commercial Fiber revenue. Residential & SMB - Glo Fiber Markets increased due to a 77.2% increase in broadband data RGUs and a 5.8% increase in broadband data Average Revenue per User ("ARPU"). Commercial Fiber revenue increased $0.9 million, or 9.4%, primarily driven by $0.5 million in recurring revenue driven by 16.3% increase in connections and $0.4 million in T-Mobile non-recurring early termination fees. T-Mobile disconnected 71 backhaul circuits during the three months ended September 30, 2023 as part of their previously announced rationalization of the former Sprint network. The Company expects approximately 80 additional backhaul disconnects as part of the network rationalization.
- Cost of services for the three months ended September 30, 2023 was consistent with cost of services for the three months ended September 30, 2022.
- Selling, general and administrative expense increased $0.7 million, or 4.8%, compared with the three months ended September 30, 2022, primarily driven by 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.
- Shentel recorded impairment charges of $1.5 million during the three months ended September 30, 2023, compared with $0.5 million of impairment charges for the three months ended September 30, 2022. Impairment charges were primarily a result of Beam fixed wireless assets that are no longer expected to be used and have no alternative use.
- Depreciation and amortization expense decreased $1.1 million, or 6.3%, compared with the three months ended September 30, 2022, primarily driven by the acceleration of depreciation associated with assets at Beam sites for the three months ended September 30, 2022, with no corresponding accelerated depreciation during the current period.
- Broadband operating income was $9.3 million in the third quarter of 2023, compared to $4.8 million in the third quarter of 2022.
- Broadband Adjusted EBITDA was $26.6 million in the third quarter of 2023 compared to $22.2 million in the third quarter of 2022.
Tower
- Revenue for the three months ended September 30, 2023 was consistent with revenue for the three months ended September 30, 2022.
- Tower operating income was $2.1 million in the third quarter of 2023, compared to $2.6 million in the third quarter of 2022.
- Tower Adjusted EBITDA in the third quarter of 2023 decreased 12.8% to $2.6 million, compared with $3.0 million for the third quarter of 2022 primarily driven by higher maintenance expenses.
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.
- As of September 30, 2023, our cash and cash equivalents totaled $36.0 million and the availability under our delayed draw term loans and revolving line of credit was $250.0 million, for total available liquidity of $286.0 million. We expect to draw the remaining $150.0 million in delayed draw term loans by December 31, 2023.
- Capital expenditures were $190.4 million for the nine months ended September 30, 2023 compared with $132.4 million in the comparable 2022 period. The $58.0 million increase in capital expenditures was primarily due to higher spending in the Broadband segment to enable our Glo Fiber market expansion.
- 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.
Earnings Call Webcast
Date: Friday, November 3, 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 9,300 route miles of fiber and 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," "plans," "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, among others, the ability to obtain the required regulatory approvals and satisfy the closing conditions required for the Transaction, Shentel's ability to obtain the financing for the Transaction, the closing of the Transaction may not occur on time or at all, the expected savings and synergies from the 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.
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||
| (in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Service revenue and other | $ | 71,842 | $ | 66,924 | $ | 214,869 | $ | 197,359 | |||||
| Operating expenses: | |||||||||||||
| Cost of services exclusive of depreciation and amortization | 27,751 | 27,477 | 80,394 | 80,572 | |||||||||
| Selling, general and administrative | 24,402 | 22,227 | 76,702 | 69,152 | |||||||||
| Restructuring expense | - | 641 | - | 1,031 | |||||||||
| Impairment expense | 1,532 | 477 | 2,552 | 4,884 | |||||||||
| Depreciation and amortization | 16,670 | 17,873 | 48,637 | 47,008 | |||||||||
| Total operating expenses | 70,355 | 68,695 | 208,285 | 202,647 | |||||||||
| Operating income (loss) | 1,487 | (1,771 | ) | 6,584 | (5,288 | ) | |||||||
| Other income (expense): | |||||||||||||
| Other income (expense), net | 826 | (1,208 | ) | 2,120 | (1,967 | ) | |||||||
| Income (loss) before income taxes | 2,313 | (2,979 | ) | 8,704 | (7,255 | ) | |||||||
| Income tax expense (benefit) | 720 | (251 | ) | 3,255 | (699 | ) | |||||||
| Net income (loss) | $ | 1,593 | $ | (2,728 | ) | $ | 5,449 | $ | (6,556 | ) | |||
| Other comprehensive income: | |||||||||||||
| Unrealized income on interest rate hedge, net of tax | 1,115 | - | 3,242 | - | |||||||||
| Comprehensive income (loss) | $ | 2,708 | $ | (2,728 | ) | $ | 8,691 | $ | (6,556 | ) | |||
| Net income (loss) per share, basic and diluted: | |||||||||||||
| Basic net income (loss) per share | $ | 0.03 | $ | (0.05 | ) | $ | 0.11 | $ | (0.13 | ) | |||
| Diluted net income (loss) per share | $ | 0.03 | $ | (0.05 | ) | $ | 0.11 | $ | (0.13 | ) | |||
| Weighted average shares outstanding, basic | 50,379 | 50,183 | 50,346 | 50,153 | |||||||||
| Weighted average shares outstanding, diluted | 50,836 | 50,183 | 50,623 | 50,153 | |||||||||
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (in thousands) | September 30, 2023 | December 31, 2022 | |||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 35,966 | $ | 44,061 | |
| Accounts receivable, net of allowance for doubtful accounts of $767 and $776, respectively | 18,851 | 20,615 | |||
| Income taxes receivable | 4,647 | 29,755 | |||
| Prepaid expenses and other | 14,394 | 11,509 | |||
| Current assets held for sale | 596 | 22,622 | |||
| Total current assets | 74,454 | 128,562 | |||
| Investments | 12,918 | 12,971 | |||
| Property, plant and equipment, net | 822,494 | 687,553 | |||
| Goodwill and intangible assets, net | 81,187 | 81,515 | |||
| Operating lease right-of-use assets | 51,832 | 53,859 | |||
| Deferred charges and other assets | 15,825 | 13,259 | |||
| Total assets | $ | 1,058,710 | $ | 977,719 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Current maturities of long-term debt, net of unamortized loan fees | $ | 2,412 | $ | 648 | |
| Accounts payable | 43,360 | 49,173 | |||
| Advanced billings and customer deposits | 13,120 | 12,425 | |||
| Accrued compensation | 10,640 | 9,616 | |||
| Current operating lease liabilities | 3,126 | 2,829 | |||
| Accrued liabilities and other | 11,763 | 17,906 | |||
| Current liabilities held for sale | - | 3,824 | |||
| Total current liabilities | 84,421 | 96,421 | |||
| Long-term debt, less current maturities, net of unamortized loan fees | 147,494 | 74,306 | |||
| Other long-term liabilities: | |||||
| Deferred income taxes | 88,938 | 84,600 | |||
| Asset retirement obligations | 9,942 | 9,932 | |||
| Benefit plan obligations | 3,972 | 3,758 | |||
| Non-current operating lease liabilities | 49,502 | 50,477 | |||
| Other liabilities | 20,078 | 20,218 | |||
| Total other long-term liabilities | 172,432 | 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 September 30, 2023 and December 31, 2022, respectively | - | - | |||
| Additional paid in capital | 65,118 | 57,453 | |||
| Retained earnings | 586,003 | 580,554 | |||
| Accumulated other comprehensive income, net of taxes | 3,242 | - | |||
| Total shareholders' equity | 654,363 | 638,007 | |||
| Total liabilities and shareholders' equity | $ | 1,058,710 | $ | 977,719 | |
| SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES | |||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | Nine Months Ended September 30, | ||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net income (loss) | $ | 5,449 | $ | (6,556 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 48,637 | 47,008 | |||||
| Stock-based compensation expense, net of amount capitalized | 8,364 | 7,299 | |||||
| Impairment expense | 2,552 | 4,884 | |||||
| Deferred income taxes | 3,211 | (1,374 | ) | ||||
| Bad debt expense | 1,837 | 1,252 | |||||
| Gain on sale of FCC spectrum licenses | (1,328 | ) | - | ||||
| Other, net | 439 | 1,638 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 1,407 | 1,157 | |||||
| Current income taxes | 25,108 | 731 | |||||
| Operating lease assets and liabilities, net | 512 | 618 | |||||
| Other assets | 2,515 | (1,056 | ) | ||||
| Accounts payable | (3,431 | ) | (608 | ) | |||
| Other deferrals and accruals | (3,583 | ) | 1,212 | ||||
| Net cash provided by operating activities | 91,689 | 56,205 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (190,354 | ) | (132,357 | ) | |||
| Proceeds from the sale of FCC spectrum licenses | 17,300 | - | |||||
| Proceeds from sale of investments | - | 793 | |||||
| Proceeds from sale of assets and other | 566 | 922 | |||||
| Net cash used in investing activities | (172,488 | ) | (130,642 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from credit facility borrowings | 75,000 | 25,000 | |||||
| Payments for debt issuance costs | (300 | ) | - | ||||
| Taxes paid for equity award issuances | (1,317 | ) | (986 | ) | |||
| Payments for financing arrangements and other | (679 | ) | (888 | ) | |||
| Net cash provided by financing activities | 72,704 | 23,126 | |||||
| Net decrease in cash and cash equivalents | (8,095 | ) | (51,311 | ) | |||
| Cash and cash equivalents, beginning of period | 44,061 | 84,344 | |||||
| Cash and cash equivalents, end of period | $ | 35,966 | $ | 33,033 | |||
| Supplemental Disclosures of Cash Flow Information | |||||||
| Interest paid | $ | 5,424 | $ | 243 | |||
| 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 September 30, 2023 | ||||||||||||||||
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 10,630 | $ | 2,097 | $ | (11,134 | ) | $ | 1,593 | |||||||
| Depreciation and amortization | 15,729 | 549 | 392 | 16,670 | ||||||||||||
| Impairment expense | 1,532 | - | - | 1,532 | ||||||||||||
| Other expense (income), net | (1,323 | ) | - | 497 | (826 | ) | ||||||||||
| Income tax benefit | - | - | 720 | 720 | ||||||||||||
| Stock-based compensation | - | - | 2,044 | 2,044 | ||||||||||||
| Restructuring charges and other | 3 | - | 1,143 | 1,146 | ||||||||||||
| Adjusted EBITDA | $ | 26,571 | $ | 2,646 | $ | (6,338 | ) | $ | 22,879 | |||||||
| Adjusted EBITDA margin | 39 | % | 57 | % | N/A | 32 | % | |||||||||
| Three Months Ended September 30, 2022 | ||||||||||||||||
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 4,752 | $ | 2,590 | $ | (10,070 | ) | $ | (2,728 | ) | ||||||
| Depreciation and amortization | 16,791 | 445 | 637 | 17,873 | ||||||||||||
| Impairment expense | 477 | - | - | 477 | ||||||||||||
| Other expense (income), net | 58 | - | 1,150 | 1,208 | ||||||||||||
| Income tax benefit | - | - | (251 | ) | (251 | ) | ||||||||||
| Stock-based compensation | - | - | 1,771 | 1,771 | ||||||||||||
| Restructuring charges and other | 169 | - | 472 | 641 | ||||||||||||
| Adjusted EBITDA | $ | 22,247 | $ | 3,035 | $ | (6,291 | ) | $ | 18,991 | |||||||
| Adjusted EBITDA margin | 36 | % | 65 | % | N/A | 28 | % | |||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||||
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 31,517 | $ | 7,005 | $ | (33,073 | ) | $ | 5,449 | |||||||
| Depreciation and amortization | 45,902 | 1,600 | 1,135 | 48,637 | ||||||||||||
| Impairment expense | 2,552 | - | - | 2,552 | ||||||||||||
| Other expense (income), net | (1,199 | ) | - | (921 | ) | (2,120 | ) | |||||||||
| Income tax benefit | - | - | 3,255 | 3,255 | ||||||||||||
| Stock-based compensation | - | - | 8,364 | 8,364 | ||||||||||||
| Restructuring charges and other | 205 | - | 1,373 | 1,578 | ||||||||||||
| Adjusted EBITDA | $ | 78,977 | $ | 8,605 | $ | (19,867 | ) | $ | 67,715 | |||||||
| Adjusted EBITDA margin | 39 | % | 62 | % | N/A | 32 | % | |||||||||
| Nine Months Ended September 30, 2022 | ||||||||||||||||
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||||||
| Net income (loss) | $ | 16,921 | $ | 7,628 | $ | (31,105 | ) | $ | (6,556 | ) | ||||||
| Depreciation and amortization | 42,724 | 1,562 | 2,722 | 47,008 | ||||||||||||
| Impairment expense | 4,884 | - | - | 4,884 | ||||||||||||
| Other expense (income), net | 177 | - | 1,790 | 1,967 | ||||||||||||
| Income tax benefit | - | - | (699 | ) | (699 | ) | ||||||||||
| Stock-based compensation | - | - | 7,299 | 7,299 | ||||||||||||
| Restructuring charges and other | 629 | - | 402 | 1,031 | ||||||||||||
| Adjusted EBITDA | $ | 65,335 | $ | 9,190 | $ | (19,591 | ) | $ | 54,934 | |||||||
| Adjusted EBITDA margin | 36 | % | 65 | % | N/A | 28 | % | |||||||||
Segment Results
Three Months Ended September 30, 2023:
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||
| External revenue | ||||||||||||
| Residential & SMB - Cable Markets1 | $ | 43,679 | $ | - | $ | - | $ | 43,679 | ||||
| Residential & SMB - Glo Fiber Markets1 | 9,325 | - | - | 9,325 | ||||||||
| Commercial Fiber | 10,415 | - | - | 10,415 | ||||||||
| Tower lease | - | 4,608 | - | 4,608 | ||||||||
| RLEC & Other | 3,815 | - | - | 3,815 | ||||||||
| Service revenue and other | 67,234 | 4,608 | - | 71,842 | ||||||||
| Intercompany revenue and other | 215 | 36 | (251 | ) | - | |||||||
| Total revenue | 67,449 | 4,644 | (251 | ) | 71,842 | |||||||
| Operating expenses | ||||||||||||
| Cost of services | 26,266 | 1,694 | (209 | ) | 27,751 | |||||||
| Selling, general and administrative | 14,615 | 304 | 9,483 | 24,402 | ||||||||
| Impairment expense | 1,532 | - | - | 1,532 | ||||||||
| Depreciation and amortization | 15,729 | 549 | 392 | 16,670 | ||||||||
| Total operating expenses | 58,142 | 2,547 | 9,666 | 70,355 | ||||||||
| Operating income (loss) | $ | 9,307 | $ | 2,097 | $ | (9,917 | ) | $ | 1,487 | |||
Three Months Ended September 30, 2022:
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | |||||||||
| External revenue | |||||||||||||
| Residential & SMB - Cable Markets1 | $ | 43,805 | $ | - | $ | - | $ | 43,805 | |||||
| Residential & SMB - Glo Fiber Markets1 | 4,895 | - | - | 4,895 | |||||||||
| Commercial Fiber | 9,522 | - | - | 9,522 | |||||||||
| Tower lease | - | 4,610 | - | 4,610 | |||||||||
| RLEC & Other | 4,139 | - | - | 4,139 | |||||||||
| Service revenue and other | 62,361 | 4,610 | - | 66,971 | |||||||||
| Intercompany revenue and other | 25 | 67 | (139 | ) | (47 | ) | |||||||
| Total revenue | 62,386 | 4,677 | (139 | ) | 66,924 | ||||||||
| Operating expenses | |||||||||||||
| Cost of services | 26,193 | 1,384 | (100 | ) | 27,477 | ||||||||
| Selling, general and administrative | 13,946 | 258 | 8,023 | 22,227 | |||||||||
| Restructuring expense | 169 | - | 472 | 641 | |||||||||
| Impairment expense | 477 | - | - | 477 | |||||||||
| Depreciation and amortization | 16,791 | 445 | 637 | 17,873 | |||||||||
| Total operating expenses | 57,576 | 2,087 | 9,032 | 68,695 | |||||||||
| Operating income (loss) | $ | 4,810 | $ | 2,590 | $ | (9,171 | ) | $ | (1,771 | ) | |||
Nine Months Ended September 30, 2023:
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | ||||||||
| External revenue | ||||||||||||
| Residential & SMB - Cable Markets1 | $ | 132,838 | $ | - | $ | - | $ | 132,838 | ||||
| Residential & SMB - Glo Fiber Markets1 | 24,492 | - | - | 24,492 | ||||||||
| Commercial Fiber | 32,366 | - | - | 32,366 | ||||||||
| Tower lease | - | 13,861 | - | 13,861 | ||||||||
| RLEC & Other | 11,312 | - | - | 11,312 | ||||||||
| Service revenue and other | 201,008 | 13,861 | - | 214,869 | ||||||||
| Intercompany revenue and other | 321 | 112 | (433 | ) | - | |||||||
| Total revenue | 201,329 | 13,973 | (433 | ) | 214,869 | |||||||
| Operating expenses | ||||||||||||
| Cost of services | 76,447 | 4,265 | (318 | ) | 80,394 | |||||||
| Selling, general and administrative | 46,110 | 1,103 | 29,489 | 76,702 | ||||||||
| Impairment expense | 2,552 | - | - | 2,552 | ||||||||
| Depreciation and amortization | 45,902 | 1,600 | 1,135 | 48,637 | ||||||||
| Total operating expenses | 171,011 | 6,968 | 30,306 | 208,285 | ||||||||
| Operating income (loss) | $ | 30,318 | $ | 7,005 | $ | (30,739 | ) | $ | 6,584 | |||
Nine Months Ended September 30, 2022:
| (in thousands) | Broadband | Tower | Corporate & Eliminations | Consolidated | |||||||||
| External revenue | |||||||||||||
| Residential & SMB - Cable Markets1 | $ | 131,141 | $ | - | $ | - | $ | 131,141 | |||||
| Residential & SMB - Glo Fiber Markets1 | 12,371 | - | - | 12,371 | |||||||||
| Commercial Fiber | 27,924 | - | - | 27,924 | |||||||||
| Tower lease | - | 13,971 | - | 13,971 | |||||||||
| RLEC & Other | 11,952 | - | - | 11,952 | |||||||||
| Service revenue and other | 183,388 | 13,971 | - | 197,359 | |||||||||
| Intercompany revenue and other | 124 | 255 | (379 | ) | - | ||||||||
| Total revenue | 183,512 | 14,226 | (379 | ) | 197,359 | ||||||||
| Operating expenses | |||||||||||||
| Cost of services | 76,801 | 4,054 | (283 | ) | 80,572 | ||||||||
| Selling, general and administrative | 41,376 | 982 | 26,794 | 69,152 | |||||||||
| Restructuring expense | 629 | - | 402 | 1,031 | |||||||||
| Impairment expense | 4,884 | - | - | 4,884 | |||||||||
| Depreciation and amortization | 42,724 | 1,562 | 2,722 | 47,008 | |||||||||
| Total operating expenses | 166,414 | 6,598 | 29,635 | 202,647 | |||||||||
| Operating income (loss) | $ | 17,098 | $ | 7,628 | $ | (30,014 | ) | $ | (5,288 | ) | |||
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1 Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the three and nine months ended September 30, 2023. These revenues were previously reported in one line under the description "Residential & SMB". Shentel has amended the presentation for the three and nine months ended September 30, 2022 for comparability.
Supplemental Information
Broadband Operating Statistics
| September 30, 2023 | September 30, 2022 | ||||
| Broadband homes and businesses passed 1 | 415,971 | 342,741 | |||
| Cable Markets | 213,317 | 211,829 | |||
| Glo Fiber Markets | 202,654 | 130,912 | |||
| Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"): | |||||
| Broadband Data | 146,797 | 130,238 | |||
| Cable Markets | 109,404 | 109,132 | |||
| Glo Fiber Markets | 37,393 | 21,106 | |||
| Video | 44,050 | 48,092 | |||
| Voice | 40,699 | 39,801 | |||
| Total Residential & SMB RGUs (excludes RLEC) | 231,546 | 218,131 | |||
| Residential & SMB Penetration 2 | |||||
| Broadband Data | 35.3 | % | 38.0 | % | |
| Cable Markets | 51.3 | % | 51.5 | % | |
| Glo Fiber Markets | 18.5 | % | 16.1 | % | |
| Video | 10.6 | % | 14.0 | % | |
| Voice | 10.2 | % | 12.2 | % | |
| Fiber route miles | 9,387 | 8,072 | |||
| Total fiber miles 3 | 813,273 | 622,095 | |||
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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 September 30, | Nine Months Ended September 30, | ||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| Residential and SMB Revenue: | |||||||||||
| Broadband | $ | 35,096 | $ | 30,670 | $ | 102,422 | $ | 88,887 | |||
| Cable Markets | 26,977 | 26,502 | 81,422 | 78,488 | |||||||
| Glo Fiber Markets | 8,119 | 4,168 | 21,000 | 10,399 | |||||||
| Video | 14,077 | 14,914 | 43,133 | 45,465 | |||||||
| Voice | 3,062 | 3,041 | 9,146 | 8,951 | |||||||
| Discounts, adjustments and other | 769 | 75 | 2,629 | 209 | |||||||
| Total Revenue | $ | 53,004 | $ | 48,700 | $ | 157,330 | $ | 143,512 | |||
| Average RGUs: | |||||||||||
| Broadband Data | 144,510 | 127,579 | 140,420 | 123,271 | |||||||
| Cable Markets | 109,364 | 108,481 | 109,612 | 107,603 | |||||||
| Glo Fiber Markets | 35,146 | 19,098 | 30,808 | 15,668 | |||||||
| Video | 44,385 | 48,456 | 45,294 | 49,016 | |||||||
| Voice | 40,605 | 39,659 | 40,254 | 37,653 | |||||||
| ARPU: 1 | |||||||||||
| Broadband | $ | 80.95 | $ | 80.05 | $ | 81.02 | $ | 80.03 | |||
| Cable Markets | $ | 82.22 | $ | 81.43 | $ | 82.54 | $ | 81.05 | |||
| Glo Fiber Markets | $ | 77.00 | $ | 72.75 | $ | 75.74 | $ | 73.74 | |||
| Video | $ | 105.72 | $ | 102.59 | $ | 105.81 | $ | 103.06 | |||
| Voice | $ | 25.14 | $ | 25.56 | $ | 25.24 | $ | 26.41 | |||
______________________________________________________
1 Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.
Tower Operating Statistics
| September 30, 2023 | September 30, 2022 | ||
| Macro tower sites | 220 | 222 | |
| Tenants | 446 | 457 | |
| Average tenants per tower | 2.0 | 2.0 |
