EDINBURG, Va., Feb. 28, 2022 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN) announced fourth quarter and full year 2021 financial and operating results.

2021 Highlights  

• Revenue and earnings per share for continuing operations grew 11.1% and 433.3%, respectively.
• Adjusted EBITDA for continuing operations grew 17.8%
• Added approximately 15,900 broadband data net additions driven by a record year for Glo Fiber net additions of 7,200 and record churn of 1.5% across all of our data products.
• Glo Fiber homes and businesses passed grew by 46,500 or 162.4% to 75,000.
• Expanded Glo Fiber franchise-approved passings to over 318,000 with the addition of 21 new franchise agreements and 175,000 target passings.
• Verbally awarded grants through the Virginia Telecommunications Initiative (“VATI”) to expand our broadband network to 16,000 unserved homes.
• Completed the sale of Wireless assets and operations to T-Mobile for $1.94 billion in cash on July 1, 2021.
• Distributed dividends totaling $940.3 million.

“2021 was a transformative year in the history of Shentel as we successfully divested our Wireless business and scaled our fiber-to-the-home platform that we expect will provide sustainable growth for the next several years,” said President and CEO, Christopher E. French. “We are off to a great start with our Fiber First growth strategy. Our fiber construction backlog has grown to over 255,000 passings, including our recent VATI grant award for 16,000 unserved homes. We are targeting a doubling of our Glo Fiber passings to 150,000 in 2022, passing more homes and businesses with fiber than our incumbent cable network by the end of 2023.”

Shentel's fourth-quarter earnings conference call will be webcast at 8:00 a.m. ET on Tuesday, March 1, 2022. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/.

Consolidated Full Year 2021 Results

• Revenue grew $24.5 million or 11.1% to $245.2 million driven by 11.6% growth in Broadband and 3.8% growth in Tower segments.

• Net income from continuing operations in 2021 was $7.9 million, compared with $1.6 million in 2020. Earnings from continuing operations per diluted share was $0.16 for 2021 compared with $0.03 in 2020. Our earnings from discontinued operations per diluted share grew 696.8% to $19.76 due to the sale of our Wireless segment during 2021.

• Adjusted EBITDA increased 17.8% to $65.7 million in 2021, primarily driven by a sharp 17.1% decline in corporate expenses due to cost reduction initiatives following the disposition of our wireless assets and operations, and growth of 4.5% and 3.2%, for the Broadband and Tower segments, respectively.

Broadband

• Total Broadband Data Revenue Generating Units ("RGUs") grew 15,873 or 15.9% in 2021 to 119,197. Glo Fiber Data RGUs grew 7,219 or 173.6% year-over-year to 11,377 driven by network expansion of 46,537 homes passed and churn of 1.1%. Incumbent Cable Data RGUs grew 7,278 to 106,345 driven by continued strong churn of 1.5%. Beam Data RGUs grew 1,376 to 1,475 driven by network expansion of 18,000 homes passed and 0.8% churn. Penetration for Incumbent Cable, Glo Fiber and Beam were 50%, 15% and 5%, respectively, as of December 31, 2021.

• Broadband revenue grew $23.7 million or 11.6% to $228.1 million. Residential & SMB revenue increased approximately $22.5 million, or 14.5%, during 2021 primarily driven by 15.9% growth in data RGUs. Commercial Fiber revenue increased approximately $2.2 million during 2021 due to growth in circuits, $0.7 million amortized revenue reduction in 2020 and $0.5 million in non-recurring dark fiber sales-type leases in 2021. Rural Local Exchange Carrier (RLEC) & Other revenue decreased approximately $1.0 million, or 5.7%, compared with 2020 due primarily to a decline in residential DSL subscribers, lower switched access revenue and lower intercompany phone service. We expect RLEC revenue to continue to decline as subscribers migrate to faster speed data services provided by our dual-incumbent cable franchise in Shenandoah County, Virginia.

• Broadband operating expenses increased approximately $33.8 million, or 20.4%, to $199.2 million in 2021, compared with 2020, primarily due to $7.4 million in higher compensation and advertising costs to support the expansion of Glo Fiber and Beam, $6.9 million in depreciation from growth in our broadband networks, $6.0 million in Beam impairment charges following the decision to cease network expansion, $5.8 million increase in maintenance due primarily to higher cable replacements costs, obsolete inventory charges and expensing of software development costs related to our current ERP system that we are replacing in 2022, $2.4 million increase in software development and service fees as we upgrade our operating support, customer relationship and enterprise resource systems, $1.7 million in higher programming fees and $0.9 million in restructuring charges related to the Wireless disposition.

• Broadband net income in 2021 was $28.6 million, compared with $38.7 million in 2020.

• Broadband Adjusted EBITDA in 2021 grew 4.5% to $83.7 million, compared with $80.1 million in 2020.

Tower

• Total macro towers and tenants were 223 and 485, respectively, as of December 31, 2021 as compared with 223 and 427, respectively, as of December 31, 2020.

• Revenue increased approximately $0.6 million, or 3.8%, in 2021 to $17.7 million compared with 2020. This increase was due to a 13.6% increase in tenants, a 3.2% decline in average revenue per tenant and $0.9 million decline in lease application revenue.

• Operating expenses increased approximately $0.5 million compared to the prior year period, due primarily to increases in ground lease rent expense, and expansion of our tower network team resulting in higher payroll costs, partially offset by a decrease in professional services.

• Tower net income in 2021 was $9.0 million, compared with $8.8 million in 2020.

• Tower Adjusted EBITDA grew 3.2% to $11.1 million, compared with $10.7 million in 2020.

Consolidated Fourth Quarter 2021 Results

• Revenue in the fourth quarter of 2021 grew 7.7% to $62.6 million primarily due to growth of 9.4% in the Broadband segment, partially offset by a decline of 12.9% in the Tower segment.

• Loss from continuing operations in the fourth quarter of 2021 was $3.1 million, compared with income from continuing operations of $1.5 million in the fourth quarter of 2020, primarily due to $5.9 million in Beam impairment charges, $3.6 million increase in Broadband maintenance from higher cable replacement and obsolete inventory charges and $0.9 million decline in Tower lease application revenues.

• Adjusted EBITDA in the fourth quarter of 2021 decreased $1.8 million or 11.3% to $13.8 million due to the above noted increase in Broadband maintenance charges and decline in Tower lease application revenues.  

Broadband

• Broadband revenue in the fourth quarter of 2021 grew $5.1 million or 9.4% to $58.8 million compared with $53.7 million in the fourth quarter of 2020, primarily driven by $5.0 million or 12.2% increase in Residential and SMB revenue as a result of a 15.9% increase in broadband data RGUs and a $1.37 improvement for data ARPU. Commercial fiber grew 1.8% to $8.9 million from higher enterprise and backhaul connections. RLEC revenue declined 1.6% to $4.1 million due primarily to lower DSL subscribers and switched access revenue.

• Broadband operating expenses in the fourth quarter of 2021 were $57.8 million compared with $43.1 million in the fourth quarter of 2020. The increase was primarily due to $5.9 million in Beam impairment charges following the decision to cease network expansion, $3.6 million increase in maintenance due primarily to higher cable replacements costs and obsolete inventory charges, $2.4 million in higher compensation and advertising costs to support the expansion of Glo Fiber and Beam, $1.7 million in depreciation from growth in our broadband networks.

• Broadband net income in the fourth quarter of 2021 was $0.9 million, compared with $10.6 million in the fourth quarter of 2020.

• Broadband Adjusted EBITDA in the fourth quarter of 2021 decreased 10.4% to $19.1 million, compared with $21.4 million for the fourth quarter of 2020.

Tower

• Tower revenue declined $0.6 million or 12.9% to $4.0 million due to a $0.9 million non-recurring reduction in lease application fees partially offset by a 13.6% increase in tenants compared with the prior year period.

• Tower net income in the fourth quarter of 2021 was $1.6 million, compared with $2.4 million for the fourth quarter of 2020.

• Tower Adjusted EBITDA in the fourth quarter of 2021 decreased 20.0% to $2.3 million, compared with $2.9 million for the fourth quarter of 2020.

Other Information

• Capital expenditures were $160.1 million for the year ended December 31, 2021 compared with $120.5 million in 2020. The $39.7 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by the expansion of Glo Fiber.

• The Company declared and paid a cash dividend of $0.07 per share, in the fourth quarter 2021.

• As of December 31, 2021, the Company had liquidity of approximately $484.3 million, including $84.3 million of cash, $300 million of delayed draw term loans and a revolving line of credit of $100 million.

Conference Call and Webcast

Teleconference Information:

Date: Tuesday, March 1, 2022
Time: 8:00 A.M. (ET)
Dial in number: 1-888-695-7639

Password: 1640119

Audio webcast: http://investor.shentel.com/

An audio replay of the call will be available approximately two hours after the call is complete, through March 26, 2022 by calling (855) 859-2056.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art cable, fiber-optic and fixed wireless 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 7,400 route miles of fiber and over 220 macro cellular towers. For more information, please visit www.shentel.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of unforeseen factors. A discussion of factors that may cause actual results to differ from management's projections, forecasts, estimates and expectations, is available in the Company’s filings with the SEC. Those factors may include changes in general economic conditions, increases in costs, changes in regulation and other competitive factors.

CONTACTS:

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

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

Non-GAAP Financial Measures
Adjusted EBITDA

The Company defines Adjusted EBITDA as net income calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, other expense, net, interest income, interest expense, provision for income taxes, 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, 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. 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.      

Segment Results

Supplemental Information

Broadband Operating Statistics

Tower Operating Statistics

Source: Shenandoah Telecommunications Co