August 5, 2016

Shenandoah Telecommunications Company Reports Second Quarter 2016 Revenue of $130.3 Million

Company Completes Acquisition of NTELOS During Second Quarter

Adjusted OIBDA of $55.9 Million and Continuing OIBDA of $49.8 Million

EDINBURG, Va., Aug. 05, 2016 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company ("Shentel") (NASDAQ:SHEN) announces financial and operating results for the three and six months ended June 30, 2016.

Consolidated Second Quarter Results

For the quarter ended June 30, 2016, the Company reported total revenues of $130.3 million, an increase of 52.1% compared to $85.7 million for the 2015 second quarter.  The increase was almost entirely due to the nTelos acquisition which was completed effective May 6, 2016.  The integration of nTelos' operations and the transition of its assets and customers is progressing as expected, with Shentel currently ahead of its schedule on the migration of nTelos customers to the Sprint platform.

Wireless service revenues increased 78.2% as a result of the acquisition of approximately 404,000 postpaid and 155,000 prepaid subscribers from nTelos and Sprint, and a reduction in postpaid fees retained by Sprint.  Cable segment revenues increased 9.3% due to an increase in subscribers and Revenue Generating Units (RGUs), video price increases to offset increases in programming costs, as well as improved product mix with customers selecting higher-speed data packages.  Wireline segment revenues increased 12.9% due to higher fiber lease revenues, as well as higher internet service fees as customers upgraded their services.

Total operating expenses were $136.5 million in the second quarter of 2016 compared to $67.0 million in the prior year period.  Operating expenses in the second quarter of 2016 included $20.1 million of overall integration and acquisition costs associated with the nTelos acquisition, including $5.3 million in the Wireless segment and $14.8 million in the Other segment.  An additional $2.3 million of costs to operate and support the nTelos back office and billing functions until customers can migrate to the Sprint platforms was included in cost of goods and services and selling, general and administrative expenses.

For the quarter ended June 30, 2016, the Company reported a net loss of $7.0 million, compared to net income of $10.5 million in the second quarter of 2015, primarily reflecting acquisition and integration costs incurred for its acquisition of nTelos.

Adjusted OIBDA (Operating Income Before Depreciation and Amortization) increased 48.5% to $55.9 million in the second quarter of 2016 from $37.6 million in the second quarter of 2015.  Continuing OIBDA (Adjusted OIBDA less the benefit received from the waived Sprint management fee over the next six years) increased 32.3% to $49.8 million.

President and CEO Christopher E. French commented, "Our second quarter results include the customers and assets we gained through our merger with nTelos and we're pleased to have delivered revenue growth and increased OIBDA throughout all of our segments.  This is a transformational time for our company as we work to ensure that we are effectively serving our newly expanded customer base with the consistent coverage and high speed access our state-of-the-art networks provide.  The transition to one blended company is progressing well, and in addition to doubling our customer base we're excited about the opportunities presented by our increased footprint which has enhanced our presence in the Mid-Atlantic region."

Wireless Segment

Second quarter wireless service revenues increased $38.1 million or 78.2%, primarily related to the addition of both postpaid and prepaid customers as a result of the nTelos acquisition.   Additionally, the segment benefitted from a reduction in the postpaid fees retained by Sprint as part of the amended affiliate agreement.

Excluding the subscribers added on May 6, 2016 in the nTelos acquisition, during the second quarter of 2016, net postpaid subscribers declined by 1,319 as compared to 5,414 net postpaid subscriber additions in the second quarter of 2015, while net prepaid subscribers declined by 6,912 during second quarter 2016, compared to a decline of 2,352 in the second quarter of 2015.

Second quarter adjusted OIBDA in the Wireless segment was $45.0 million, an increase of 60.5% from the second quarter of 2015.  Continuing OIBDA in the Wireless segment was $38.9 million.

"Our wireless customer base has more than doubled, and we've added several highly complementary contiguous markets to our footprint.  During the quarter, we incurred expenses related to the migration of certain nTelos customers to the Sprint billing platform, but we also continued to benefit from a reduction in Sprint's fees.  We are continuing to improve reliability and coverage in our acquired markets as our upgrade progresses," Mr. French stated.

Cable Segment

Service revenues in the Cable segment increased $2.1 million or 9.3% to $24.2 million, due to 6.7% growth in average RGUs (the sum of voice, data, and video users), video rate increases implemented in January 2016 to pass through programming cost increases, and customers selecting higher speed data access packages.  Operating expenses increased slightly to $25.2 million in the second quarter of 2016. Second quarter operating income was $1.2 million compared to an operating loss of $0.4 million in the prior year.

Revenue generating units totaled 130,871 at June 30, 2016, an increase of 6.7% over June 30, 2015.

Adjusted OIBDA in the Cable segment for second quarter 2016 was $7.3 million, up 28.0% from $5.7 million in the second quarter of 2015.

Mr. French stated, "Customers are increasingly demanding more from their broadband provider, and our enhanced products and services position us well to meet those needs.  The strength of our offerings has enabled us to attract new customers and has motivated existing customers to increase their service selection and upgrade their monthly subscription plans." 

Wireline Segment

Revenue in the Wireline segment increased 12.9% to $18.6 million in the second quarter of 2016, as compared to $16.5 million in the second quarter of 2015.  Carrier access and fiber revenue for the quarter was $12.3 million, an increase from $2.1 million for the same quarter last year, as a result of new fiber contracts.  Operating expenses increased 7.3% or $0.9 million to $13.4 million for second quarter 2016, primarily due to costs to support new fiber contracts.

Adjusted OIBDA in the Wireline segment for second quarter 2016 was $8.3 million, as compared to $7.3 million in second quarter 2015.

Other Information

Capital expenditures were $39.6 million in the second quarter of 2016 compared to $15.6 million in the comparable 2015 period. 

Cash and cash equivalents as of June 30, 2016 were $40.6 million, compared to $76.8 million at December 31, 2015. Total outstanding debt at June 30, 2016 totaled $815.6 million, net of unamortized loan costs, compared to $199.7 million as of December 31, 2015.  At June 30, 2016, debt as a percent of total assets was 56.0%. The amount available to the Company through its revolver facility was $75.0 million, and from the delayed draw term loan, $50.0 million.

"Our balance sheet provides a solid platform for the continued growth of our customer base, and positions us well to enhance our service offerings and capabilities.  The nTelos integration and the expansion of our operations to include additional customers and new markets is progressing well.  We look forward to growing our position as one of the top six public wireless providers in the United States," Mr. French concluded.

Conference Call and Webcast

The Company will host a conference call and simultaneous webcast today, Friday, August 5, 2016, at 9 A.M. Eastern Time.

Teleconference Information: 
Friday, August 5, 2016 9:00 A.M. (ET)
Dial in number: 1-888-695-7639

Password: 59001676
Audio webcast: http://investor.shentel.com/

An audio replay of the call will be available approximately two hours after the call is complete, through August 12, 2016 by calling (855) 859-2056.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides a broad range of diversified communications services through its high speed, state-of-the-art network to customers in the Mid-Atlantic United States.  The Company's services include: wireless voice and data; cable video, internet and voice; fiber network and services; and local and long distance telephone. Shentel is the exclusive personal communications service ("PCS") Affiliate of Sprint in portions of Pennsylvania, Maryland, Virginia and West Virginia.  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.

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

 June 30,
2016
December 31,
2015
   
Cash and cash equivalents$  40,571 $  76,812 
Other current assets   117,540    51,135  
Total current assets   158,111    127,947 
       
Investments   12,526    10,679 
   
Building held for sale 4,950  - 
Net property, plant and equipment    653,523    410,018 
   
Intangible assets, net   464,146    66,993 
Goodwill 151,730  10 
Deferred charges and other assets, net   10,855    11,504 
Total assets$  1,455,841 $  627,151 
   
Total current liabilities   138,474    60,729 
Long-term debt, less current maturities   795,426    177,169 
Total other liabilities   217,834    99,315 
Total shareholders' equity   304,107    289,938 
Total liabilities and shareholders' equity $  1,455,841 $  627,151 


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

 Three Months EndedSix Months Ended
 June 30,June 30,
  2016  2015  2016  2015 
     
Operating revenues$  130,309 $  85,701 $  222,880 $  169,989 
     
Cost of goods and services 50,296  30,280  82,057  60,970 
Selling, general, and administrative 33,694  18,606  55,120  36,718 
Integration and acquisition expenses 20,054  402  20,386  1,024 
Depreciation and amortization 32,415  17,663  50,154  34,001 
Total operating expenses   136,459    66,951    207,717    132,713 
Operating income (loss)   (6,150)   18,750     15,163    37,276 
     
Other income (expense):    
Interest expense (5,904) (1,940) (7,524) (3,855)
Gain on investments, net   21    98    109  200 
Non-operating income, net 146  442   614  874 
Income (loss) before taxes   (11,887)   17,350    8,362    34,495 
     
Income tax expense (benefit)   (4,892)   6,876    1,477    13,735 
Net income (loss)$  (6,995 )$  10,474 $  6,885 $  20,760 
     
     
Earnings (loss) per share:    
Basic$  (0.14)$  0.22 $  0.14 $  0.43 
Diluted$  (0.14)$  0.21 $  0.14 $  0.42 
     
Weighted average shares outstanding, basic 48,830  48,380  48,696  48,343 
Weighted average shares outstanding, diluted 48,830  49,004  49,415  48,927 


Non-GAAP Financial Measure

In managing our business and assessing our financial performance, management supplements the information provided by financial statement measures prepared in accordance with GAAP with adjusted OIBDA and continuing OIBDA, which are considered "non-GAAP financial measures" under SEC rules.

Adjusted OIBDA is defined by us as operating income (loss) before depreciation and amortization, adjusted to exclude the effects of:  certain non-recurring transactions; impairment of assets; gains and losses on asset sales; straight-line adjustments for the waived management fee; amortization of the affiliate expansion asset; and share-based compensation expense.  Adjusted OIBDA should not be construed as an alternative to operating income as determined in accordance with GAAP as a measure of operating performance.  Continuing OIBDA is defined by us as adjusted OIBDA, less the benefit received from the waived management fee by Sprint over the next approximate six years.

In a capital-intensive industry such as telecommunications, management believes that adjusted OIBDA and continuing OIBDA and the associated percentage margin calculations are meaningful measures of our operating performance.  We use adjusted OIBDA and continuing OIBDA as supplemental performance measures because management believes they facilitate comparisons of our operating performance from period to period and comparisons of our operating performance to that of other companies by excluding potential differences caused by the age and book depreciation of fixed assets (affecting relative depreciation expenses) as well as the other items described above for which additional adjustments were made.  In the future, management expects that the Company may again report adjusted OIBDA and continuing OIBDA excluding these items and may incur expenses similar to these excluded items.  Accordingly, the exclusion of these and other similar items from our non-GAAP presentation should not be interpreted as implying these items are non-recurring, infrequent or unusual.

While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the current period allocation of costs associated with long-lived assets acquired or constructed in prior periods, and accordingly may obscure underlying operating trends for some purposes.  By isolating the effects of these expenses and other items that vary from period to period without any correlation to our underlying performance, or that vary widely among similar companies, management believes adjusted OIBDA and continuing OIBDA facilitates internal comparisons of our historical operating performance, which are used by management for business planning purposes, and also facilitates comparisons of our performance relative to that of our competitors.  In addition, we believe that adjusted OIBDA and continuing OIBDA and similar measures are widely used by investors and financial analysts as measures of our financial performance over time, and to compare our financial performance with that of other companies in our industry.

Adjusted OIBDA and continuing OIBDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.  These limitations include the following:

  • they do not reflect capital expenditures;
  • many of the assets being depreciated and amortized will have to be replaced in the future and adjusted OIBDA and continuing OIBDA do not reflect cash requirements for such replacements;
  • they do not reflect costs associated with share-based awards exchanged for employee services;
  • they do not reflect interest expense necessary to service interest or principal payments on indebtedness;
  • they do not reflect gains, losses or dividends on investments;
  • they do not reflect expenses incurred for the payment of income taxes; and
  • other companies, including companies in our industry, may calculate adjusted OIBDA and continuing OIBDA differently than we do, limiting its usefulness as a comparative measure.

In light of these limitations, management considers adjusted OIBDA and continuing OIBDA as a financial performance measure that supplements but does not replace the information reflected in our GAAP results.

The following table shows adjusted OIBDA for the three and six months ended June 30, 2016 and 2015:

 Three Months EndedSix Months Ended
(in thousands)June 30,June 30,
  2016  2015  2016  2015 
Adjusted OIBDA$  55,905 $  37,641 $  96,271 $  73,960 
Continuing OIBDA$  49,810 $  37,641 $  90,176 $  73,960 


The following table reconciles adjusted OIBDA and continuing OIBDA to operating income (loss), which we consider to be the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2016 and 2015:

Consolidated:    
(in thousands)Three Months EndedSix Months Ended
 June 30,June 30,
  2016   2015  2016  2015 
Operating income (loss)$  (6,150)$  18,750 $  15,163 $  37,276 
Plus depreciation and amortization   32,415    17,663  50,154  34,001 
Plus (gain) loss on asset sales   (48)   218  (63) 229 
Plus share based compensation expense   959    608  1,956  1,430 
Plus temporary back office costs to support the billing operations through migration (1) 2,339  -  2,339  - 
Plus integration and acquisition related expenses (1) 20,054  402   20,386  1,024 
Plus straight line adjustment to reduce management fee waiver (2) 3,046  -  3,046  - 
Plus amortization of intangible netted in revenue (3) 3,290  -  3,290  - 
Adjusted OIBDA$  55,905 $  37,641 $  96,271 $  73,960 
Less waived management fee (2) (6,095) -  (6,095) - 
Continuing OIBDA$  49,810 $  37,641 $  90,176 $  73,960 


The following tables reconcile adjusted OIBDA and continuing OIBDA to operating income by major segment for the three and six months ended June 30, 2016 and 2015:

Wireless Segment:Three Months EndedSix Months Ended
(in thousands)June 30,June 30,
  2016  2015  2016  2015 
Operating income$  7,277 $  19,270 $  27,209 $  38,708 
Plus depreciation and amortization 23,495    8,612   31,988  16,444 
Plus loss on asset sales (53)   8  (39) 33 
Plus share based compensation expense 311    143  624   334 
Plus temporary back office costs to support the billing operations through migration (1) 2,339  -  2,339  - 
Plus integration and acquisition related expenses(1) 5,276  -  5,276  - 
Plus straight line adjustment to reduce management fee waiver (2) 3,046  -   3,046  - 
Plus amortization of intangible netted in revenue (3) 3,290  -  3,290  - 
Adjusted OIBDA$  44,981  $  28,033 $  73,733 $55,519 
Less waived management fee (2) (6,095) -  (6,095) - 
Continuing OIBDA$  38,886 $28,033 $  67,638 $55,519 
     
Cable Segment:    
(in thousands)Three Months EndedSix Months Ended
 June 30,June 30,
  2016  2015  2016  2015 
     
Operating income (loss)$  1,164 $  (425)$  1,761 $  (1,102)
Plus depreciation and amortization   5,879    5,859  11,974  11,338 
Plus (gain) on asset sales   (20)   65  (34) 52 
Plus share based compensation expense   294    217  602  504 
Adjusted OIBDA and Continuing OIBDA$  7,317 $  5,716 $  14,303 $  10,792 
             
             
Wireline Segment:            
(in thousands)Three Months EndedSix Months Ended
 June 30,June 30,
  2016  2015  2016  2015 
             
Operating income$5,180 $3,967 $10,278 $7,796 
Plus depreciation and amortization 2,933  3,083  5,967  6,007 
Plus loss on asset sales 40   125  40  134 
Plus share based compensation expense     136  106  284  246 
Adjusted OIBDA and Continuing OIBDA$8,289 $7,281 $16,569 $14,183 


(1) Integration and acquisition costs consist of severance accruals for short-term nTelos personnel to be separated as integration activities wind down, transaction related expenses, device costs to support the transition to Sprint billing platforms, and other transition costs to support the migration to Sprint back-office functions  
(2) As part of the Company's amended affiliate agreement, Sprint agreed to waive the management fee, which is historically presented as a contra-revenue by the Company, for a period of approximately six years.  The impact of Sprint's waiver of the management fee over the approximate six-year period is reflected as an increase in revenue, offset by the non-cash adjustment to recognize this impact on a straight-line basis over the contract term of approximately 14 years.  
(3) Pursuant to the intangible asset exchange with Sprint, the Company recognized an intangible asset for the affiliate contract expansion received.  Consistent with the presentation of related service fees charged by Sprint, the Company recognizes the amortization of this intangible as a contra-revenue over the contract term of approximately 14 years.

Supplemental Information

Subscriber Statistics

The following tables show selected operating statistics of the Wireless segment as of the dates shown:

  
June 30,
 
December 31,
  
June 30,
 
December 31,
 20162015 20152014
Retail PCS Subscribers - Postpaid        717,563312,512 296,492287,867
Retail PCS Subscribers - Prepaid                                289,311142,840 145,431145,162
PCS Market POPS (000) (1)5,5362,433 2,4212,415
PCS Covered POPS (000) (1)4,5282,224 2,2132,207
CDMA Base Stations (sites)1,425552 546537
Towers Owned177158 154154
Non-affiliate cell site leases211202 202198


The June 30, 2016 numbers shown above include the following amounts acquired in the nTelos acquisition:

Acquired PCS Subscribers - Postpaid404,444
Acquired PCS Subscribers - Prepaid154,944
Acquired PCS Market POPS (000) (1)3,099
Acquired PCS Covered POPS (000) (1)2,298
Acquired CDMA Base Stations (sites) (2)                    868
Towers20
Non-affiliate Cell Site Leases10


 Three Months EndedSix Months Ended
 June 30,June 30,
  2016  2015  2016  2015 
     
Gross PCS Subscriber Additions - Postpaid 26,185  17,734  43,541  34,839 
Net PCS Subscriber Additions (Losses) - Postpaid       (1,319) 5,414  1,400  8,625 
Gross PCS Subscriber Additions - Prepaid 27,353  19,958  48,584  43,578 
Net PCS Subscriber Additions (Losses) - Prepaid (6,912) (2,352) (7,213) 269 
PCS Average Monthly Retail Churn % - Postpaid (3) 1.56% 1.40% 1.56% 1.50%
PCS Average Monthly Retail Churn % - Prepaid (3) 4.74% 5.07%  4.90% 4.92%


1) POPS refers to the estimated population of a given geographic area and is based on information purchased from third party sources.  Market POPS are those within a market area which we are authorized to serve under our Sprint PCS affiliate agreements, and Covered POPS are those covered by our network.
2) Net of approximately 160 overlap cell sites we intend to shut down in coming months.
3) PCS Average Monthly Retail Churn is the average of the monthly subscriber turnover, or churn, calculations for the period.

In addition, 1,260 former nTelos prepaid subscribers switched to postpaid subscribers as they migrated to the Sprint back-office platforms during the three and six months ended June 30, 2016.

The following table shows selected operating statistics of the Wireline segment as of the dates shown:

  
June 30,
 
Dec. 31,
  
June 30,
 
Dec. 31,
 20162015 20152014
Telephone Access Lines (1)19,18820,252 21,61521,612
Long Distance Subscribers9,2699,476 9,5609,571
Video Customers (2)5,3275,356 5,4735,692
DSL Subscribers (3)14,12213,890 12,85613,094
Fiber Route Miles1,7521,736 1,5901,556
Total Fiber Miles (4)126,639123,891 102,82199,387
      

1) Effective October 1, 2015, we launched cable modem services on our cable plant, and eliminated the requirement that a customer have a telephone access line to purchase DSL service. 
2) The Wireline segment's video service passes approximately 16,000 homes.
3) June 2016 and December 2015 totals include 725 and 420 customers, respectively, served via the coaxial cable network.  During first quarter 2016, we modified the way we count subscribers when a commercial customer upgrades its internet service via a fiber contract. We retroactively applied the new count methodology to prior periods and the net result was increases in internet subscriber counts of 804, 434 and 352 subscribers to December 31, 2015, June 30, 2015 and December 31, 2014 totals, respectively.
4) 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. Fiber counts were revised following a review of fiber records in the first quarter of 2015.

The following table shows selected operating statistics of the Cable segment as of the dates shown:

 June 30,December 31, June 30,December 31,
  2016  2015   2015  2014 
Homes Passed (1) 184,627  172,538   172,144  171,589 
Customer Relationships (2)     
Video customers 49,241  48,184   48,659  49,247 
Non-video customers 27,230  24,550   22,810  22,051 
Total customer relationships 76,471  72,734   71,469  71,298 
Video     
Customers (3) 51,549  50,215   50,892  52,095 
Penetration (4)  27.9% 29.1%  29.6% 30.4%
Digital video penetration (5) 75.3% 77.9%  73.8% 65.9%
High-speed Internet     
Available Homes (6)  183,743  172,538   172,144  171,589 
Customers (3) 58,230  55,131   52,415  50,686 
Penetration (4) 31.7 % 32.0%  30.4% 29.5%
Voice     
Available Homes (6) 181,006  169,801   169,407  168,852 
Customers (3) 21,092  20,166   19,401  18,262 
Penetration (4) 11.7% 11.9%  11.5% 10.8%
Total Revenue Generating Units (7) 130,871  125,512    122,708  121,043 
Fiber Route Miles 2,962  2,844   2,839  2,834 
Total Fiber Miles (8) 81,305  76,949   73,735  72,694 
Average Revenue Generating Units 131,385  124,054    123,159  117,744 


1) Homes and businesses are considered passed ("homes passed") if we can connect them to our distribution system without further extending the transmission lines.  Homes passed is an estimate based upon the best available information. 
2) Customer relationships represent the number of customers who receive at least one of our services.
3) Generally, a dwelling or commercial unit with one or more television sets connected to our distribution system counts as one video customer.  Where services are provided on a bulk basis, such as to hotels and some multi-dwelling units, the revenue charged to the customer is divided by the rate for comparable service in the local market to determine the number of customer equivalents included in the customer counts shown above.  During the first quarter of 2016, we modified the way we count subscribers when a commercial customer upgrades its internet service via a fiber contract. We retroactively applied the new count methodology to prior periods, and applied similar logic to certain bulk customers; the net result was reductions in internet subscriber counts of 559, 682 and 673 subscribers to December 31, 2015, June 30, 2015 and December 31, 2014 totals, respectively.
4) Penetration is calculated by dividing the number of customers by the number of homes passed or available homes, as appropriate.
5) Digital video penetration is calculated by dividing the number of digital video customers by total video customers.  Digital video customers are video customers who receive any level of video service via digital transmission.  A dwelling with one or more digital set-top boxes or digital adapters counts as one digital video customer.
6) Homes and businesses are considered available ("available homes") if we can connect them to our distribution system without further extending the transmission lines and if we offer the service in that area.
7) Revenue generating units are the sum of video, voice and high-speed internet customers.
8) 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.

On January 1, 2016, the Company acquired the assets of Colane Cable Company.  With the acquisition, the Company acquired 3,299 video customers, 1,405 high-speed internet customers, and 302 voice customers.  The customers are included in the June 30, 2016 totals shown above.

Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker.  The Company has three reportable segments, which the Company operates and manages as strategic business units organized by lines of business: (1) Wireless, (2) Cable, and (3) Wireline.   A fourth segment, Other, primarily includes Shenandoah Telecommunications Company, the parent holding company.

The Wireless segment has historically provided digital wireless service to a portion of a four-state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, as a Sprint PCS Affiliate.  With the recent acquisition of nTelos, the Company's wireless service area expanded to include south-central and western Virginia, West Virginia, and small portions of Kentucky and Ohio. This segment also owns cell site towers built on leased land, and leases space on these towers to both affiliates and non-affiliated service providers.

The Cable segment provides video, internet and voice services in Virginia, West Virginia and Maryland, and leases fiber optic facilities throughout southern Virginia and West Virginia. It does not include video, internet and voice services provided to customers in Shenandoah County, Virginia.

The Wireline segment provides regulated and unregulated voice services, DSL internet access, and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia. The segment also provides video and cable modem services in portions of Shenandoah County, and leases fiber optic facilities throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor through West Virginia, Maryland and portions of central and southern Pennsylvania.

Three months ended June 30, 2016      
       
(in thousands)      
       
 WirelessCableWirelineOtherEliminationsConsolidated
Totals
External revenues      
Service revenues$  86,873 $  24,167 $  4,820 $  - $  - $  115,860 
Other 6,280  1,923  6,246  -  -  14,449 
Total external revenues 93,153   26,090  11,066  -  -  130,309 
Internal revenues 1,141  311  7,525  -  (8,977) - 
Total operating revenues  94,294  26,401  18,591  -  (8,977) 130,309 
       
Operating expenses      
Costs of goods and services, exclusive of depreciation and amortization shown separately below 35,236  14,564  8,808  -  (8,312) 50,296 
Selling, general and administrative, exclusive of depreciation and amortization shown separately below 23,010  4,794  1,670  4,885  (665) 33,694 
Integration and acquisition expenses 5,276  -  -  14,778  -  20,054 
Depreciation and amortization 23,495  5,879  2,933  108  -  32,415 
Total operating expenses 87,017  25,237  13,411  19,771  (8,977) 136,459 
Operating income (loss)$  7,277 $  1,164 $  5,180 $(19,771)$  - $  (6,150)


Three months ended June 30, 2015      
       
(in thousands)      
       
 Wireless  Cable  WirelineOtherEliminationsConsolidated
Totals
External revenues      
Service revenues$  48,749 $  22,117 $  4,889 $  - $  - $  75,755 
Other 2,848  1,850    5,248    -    -    9,946 
Total external revenues 51,597  23,967  10,137    -    -  85,701 
Internal revenues 1,105  186  6,326    -    (7,617)   - 
Total operating revenues 52,702  24,153  16,463    -    (7,617) 85,701 
       
Operating expenses      
Costs of goods and services, exclusive of depreciation and amortization shown separately below   15,903  13,635  7,677    (16)   (6,919) 30,280 
Selling, general and administrative, exclusive of depreciation and amortization shown separately below 8,917  5,084  1,736  3,567    (698) 18,606 
Integration and acquisition expenses -  -  -  402  -  402 
Depreciation and amortization 8,612  5,859  3,083  109    -  17,663 
Total operating expenses 33,432  24,578  12,496  4,062    (7,617) 66,951 
Operating income (loss)$  19,270 $  (425)$  3,967 $  (4,062)$  - $  18,750 


Six months ended June 30, 2016

Wireless

Cable

Wireline

Other

Eliminations
Consolidated 
Totals
(in thousands) 
  
External revenues      
Service revenues$  139,052 $  48,507 $  9,779  $  - $  - $  197,338 
Other 9,484  3,768  12,290  -  -  25,542 
Total external revenues 148,536  52,275  22,069  -  -  222,880 
Internal revenues 2,276  572  14,901  -  (17,749) - 
Total operating revenues 150,812  52,847  36,970  -  (17,749) 222,880 
       
Operating expenses      
Costs of goods and services, exclusive of depreciation and amortization shown separately below 51,815  29,210  17,450  -  (16,418) 82,057 
Selling, general and administrative, exclusive of depreciation and amortization shown separately below 34,524  9,902  3,275  8,750  (1,331) 55,120 
Integration and acquisition expenses 5,276  -  -  15,110   20,386 
Depreciation and amortization 31,988  11,974  5,967  225  -  50,154 
Total operating expenses 123,603  51,086  26,692  24,085  (17,749) 207,717 
Operating income (loss)$  27,209 $  1,761 $  10,278 $  (24,085)$  - $  15,163 
        
       
       
 
Six months ended June 30, 2015

Wireless

Cable

Wireline

Other

Eliminations
Consolidated
Totals
       
(in thousands)      
       
External revenues      
Service revenues$  97,124 $  43,518 $  9,639 $  - $   - $  150,281 
Other 5,878  3,613  10,217  -  -  19,708 
Total external revenues 103,002  47,131  19,856  -  -  169,989 
Internal revenues 2,209  334  12,192  -  (14,735) - 
Total operating revenues 105,211  47,465  32,048  -  (14,735) 169,989 
       
Operating expenses       
Costs of goods and services, exclusive of depreciation and amortization shown separately below 32,090   27,253  15,011  -  (13,384) 60,970 
Selling, general and administrative, exclusive of depreciation and amortization shown separately below 17,969  9,976  3,234  6,890  (1,351) 36,718 
Integration and acquisition expenses -  -  -  1,024   1,024 
Depreciation and amortization 16,444  11,338  6,007  212  -  34,001 
Total operating expenses 66,503  48,567  24,252  8,126  (14,735) 132,713 
Operating income (loss) 38,708  (1,102) 7,796   (8,126) -  37,276 
       

Wireless Service Revenues

(in thousands)
Three Months Ended
June 30,
 
Change
Service Revenues 2016  2015 $ %
  Postpaid net billings$  75,219 $  46,704 $  28,515  61.1 
    Sprint fees    
      Management fee (6,344) (3,706) (2,638) 71.2 
      Net Service fee (5,307) (6,485) 1,178  (18.2)
      Waiver of management fee 5,129  -  5,129 NM  
  (6,522) (10,191) 3,669  (36.0)
  Prepaid net billings    
      Gross billings 20,504  12,945  7,559  58.4 
      Sprint management fee (1,218) (783) (435)NM  
      Waiver of management fee 966  -  966 NM  
  20,252  12,162  8,090  66.5 
     
Travel and other revenues 4,260  74  4,186 NM  
Accounting adjustments    
      Amortization of expanded contract (3,290) -  (3,290)NM  
      Straight-line adjustment - management fee  waiver (3,046) -  (3,046)NM  
  (6,336) -  (6,336)NM  
Total Service Revenues  $  86,873  $  48,749 $  38,124  78.2 

 

Shenandoah Telecommunications, Inc.

Adele Skolits

CFO and VP of Finance

540-984-5161

Adele.skolits@emp.shentel.com



Or



John Nesbett/Jennifer Belodeau

Institutional Marketing Services (IMS)

203-972-9200

jnesbett@institutionalms.com

Source: Shenandoah Telecommunications Co

News Provided by Acquire Media


Close window | Back to top

Copyright 2017 Shenandoah Telecommunications Company