EDINBURG, Va., November 3, 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 thirdquarter of 2022.
• Broadband Adjusted EBITDA was $26.6 million in the third quarter of 2023 compared to $22.2 million in the thirdquarter 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.

CONTACT:

Shenandoah Telecommunications Company

Jim Volk

Senior Vice President, Chief Financial Officer

540-984-5168

Source: Shenandoah Telecommunications Co