EDINBURG, Va., May 4, 2015 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company ("Shentel") (Nasdaq:SHEN) announces financial and operating results for the three months ended March 31, 2015.

Consolidated First Quarter Results

For the quarter ended March 31, 2015 net income was $10.3 million compared to $8.6 million in the first quarter of 2014 due to continued growth in the Wireless and Cable segments. Operating income was $18.5 million, up 18% from the same quarter last year.

Adjusted OIBDA (Operating Income Before Depreciation and Amortization) increased 12.5% to $35.7 million in the first quarter of 2015 from $31.7 million in the first quarter of 2014. Total revenues were $84.3 million, an increase of 4.8% compared to $80.5 million for the 2014 first quarter. Wireless revenues increased primarily as a result of wireless subscriber growth. Additionally, cable segment revenues increased due to an increase in RGU (revenue generating unit) counts, video price increases and customers selecting higher-priced digital TV and higher-speed data packages. Total operating expenses were $65.8 million in the first quarter of 2015 compared to $64.8 million in the prior year period.

President and CEO Christopher E. French commented, "We are pleased to have delivered a strong quarter characterized by steady revenue growth and improved profitability. The enhanced coverage and high quality services available through our upgraded wireless and cable networks are attracting new customers who are subscribing to additional offerings. Our balance sheet remains strong, positioning us well for continued growth."

Wireless Segment

Service revenues in the wireless segment increased 2.4% to $48.4 million as compared to the first quarter of 2014. Postpaid service revenues increased $0.2 million due to 5.4% growth in average customers offset by lower service revenues primarily from customers selecting leasing and installment billing programs for handsets. During the first quarter, net prepaid service revenues grew $0.9 million, or 8.6%, due primarily to a 6.4% growth in average prepaid customers as compared to the same period of 2014.

During the first quarter of 2015, net additions to postpaid subscribers were 3,211, up 146% compared to 1,304 postpaid subscriber additions in the first quarter of 2014. Net additions to prepaid subscribers increased 76% to 2,621 during first quarter 2015, compared to 1,490 in the first quarter of 2014.

First quarter operating expenses in the Wireless segment decreased $1.2 million overall, primarily due to lower postpaid handset costs as more customers finance their handsets through Sprint.

First quarter adjusted OIBDA in the wireless segment was $27.5 million, an increase of $3.6 million or 15.2% from the first quarter of 2014.

"Our wireless segment experienced solid growth with increased customers in our post and prepaid offerings as we continued to leverage Sprint's national marketing along with our regional advertising to communicate the benefits of our upgraded network and high quality local customer service," Mr. French said. "Declining monthly recurring service fees is a function of decoupling of the phones from the service plans and service promotions. To date, reductions in recurring service revenues have been offset by reduced handset subsidies as a result of customers choosing to finance handsets under equipment installment billing or lease plans. Further pricing reductions could result in a modest reduction in our wireless net operating margin."

Cable Segment

Service revenue in the cable segment increased $2.5 million or 13.4% to $21.4 million, due to 6.6% growth in average RGUs (the sum of voice, data, and video users), video rate increases, and customers selecting higher speed data access packages and higher priced digital TV services. Operating expenses increased by $1.6 million in first quarter 2015 over first quarter 2014.

Revenue generating units totaled 124,015 at the end of the first quarter of 2015, an increase of 6.4% over March 31, 2014.

Adjusted OIBDA in the cable segment for first quarter 2015 was $5.1 million, up 33.3% from $3.8 million in the first quarter of 2014.

Mr. French stated, "We saw strong demand for our high speed internet and voice services in the quarter, which outpaced the anticipated decrease in video subscribers. With our updated cable network we are now capable of providing the high speed and reliability our customers expect. Likewise, we are building our reputation for quality service which has attracted new customers and encouraged existing customers to increase or upgrade their subscription plans."

Wireline Segment

Operating income for the wireline segment was $3.8 million as compared to $4.4 million in first quarter 2014. Access lines at March 31, 2015, were 21,669 compared to 21,955 at March 31, 2014. Carrier access and fiber revenue for the quarter was $9.5 million, a decrease from $9.9 million for the same quarter last year, due to favorable NECA pool adjustments that increased access revenues in the first quarter of 2014. Adjusted OIBDA for the wireline segment for first quarter 2015 was $6.9 million, as compared to $7.2 million in first quarter 2014.

Other Information

Capital expenditures were $9.5 million in the first quarter of 2015, compared to $17.2 million in the comparable 2014 period. 

Cash and cash equivalents as of March 31, 2015 were $77.2 million, compared to $68.9 million at December 31, 2014. Total outstanding debt at March 31, 2015 totaled $218.5 million compared to $224.3 million last year. The Company began making quarterly principal payments of $5.75 million on its debt in December 2014. At March 31, 2015, debt as a percent of total assets was 35.5%. The amount available to the Company through its revolver facility was $50 million as of March 31, 2015.

"Our solid balance sheet allows us to focus on expanding our customer base and provides the flexibility for continued enhancements to our capabilities and portfolio of services," Mr. French concluded. 

Conference Call and Webcast

The Company will host a conference call and simultaneous webcast today, Monday, May 4, 2015, at 11 A.M. Eastern Time.

An audio replay of the call will be available approximately one hour after the call is complete, through May 10, 2015 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 filings with the SEC. Those factors may include changes in general economic conditions, increases in costs, changes in regulation and other competitive factors.

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, which is considered a "non-GAAP financial measure" 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; 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.

In a capital-intensive industry such as telecommunications, management believes that adjusted OIBDA and the associated percentage margin calculations are meaningful measures of our operating performance. We use adjusted OIBDA as a supplemental performance measure because management believes it facilitates 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 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 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 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 has 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: 

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

In light of these limitations, management considers adjusted 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 months ended March 31, 2015 and 2014:

The following table reconciles adjusted OIBDA to operating income, which we consider to be the most directly comparable GAAP financial measure, for the three months ended March 31, 2015 and 2014:

The following tables reconcile adjusted OIBDA to operating income by major segment for the three months ended March 31, 2015 and 2014:

Supplemental Information

Subscriber Statistics

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

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

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

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 makers. 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 provides 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. 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 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 Pennsylvania.

CONTACT: 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

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