Shenandoah Telecommunications Company Reports Third Quarter 2009 Financial Results
EDINBURG, Va., Nov 03, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Shenandoah Telecommunications Company (Shentel) (Nasdaq: SHEN) announces financial and operating results for the third quarter and nine months ended September 30, 2009.
Third Quarter 2009 Highlights
Highlights for the quarter include:
-- Revenue of $40.1 million, an increase of 7% from third quarter 2008
-- Net income of $6.3 million, which includes a net loss of $0.8 million
from newly acquired cable operations undergoing upgrades
-- PCS net subscriber additions of 3,286
-- Total PCS subscribers of 219,353, up 7% from September 30, 2008
-- EVDO high speed data services are now available to 94% of the population
covered by our PCS network
-- Added seven cell towers, 16 CDMA base stations, and 28 EVDO-enabled
sites
-- Completed upgrades in the recently acquired cable territories to 27% of
the homes passed, and 100% of the homes passed in Shenandoah County
cable territory
President and CEO, Christopher E. French commented, "Despite a difficult economic environment, our company experienced solid operating results in the quarter, while continuing to invest in upgrading and improving all of our networks, especially PCS and the newly acquired cable operations. Development of and growth in these operations is an important part of our plans for long-term growth in earnings. During the quarter we continued to make improvements in our PCS network, further improving coverage and extending high speed data service to 94 percent of our covered population. We are fortunate that our financial strength has allowed us to continue to invest in growth at a time when many companies are retrenching, and we believe these investments position us well for when economic conditions improve."
Consolidated Third Quarter Results
For the quarter ended September 30, 2009, net income from continuing operations was $6.3 million compared to $7.4 million in third quarter 2008. The third quarter of 2009 included an after-tax loss of $0.8 million from the cable operations acquired in December 2008, which are undergoing upgrades. The Company's total revenues for third quarter 2009 were $40.1 million, compared to $37.4 million for the same quarter in 2008, an increase of 7%. Third quarter operating expenses increased to $29.5 million in 2009 from $24.9 million in 2008. The increase in revenues is primarily a result of higher revenues in our PCS unit and the revenues of the newly acquired cable operations. The increase in PCS revenues is a result of an increase in average PCS subscribers of 7%. The increase in operating expenses results from costs associated with the new cable operations, improvements and expansion of our PCS and fiber optic networks, and associated depreciation.
Consolidated Nine Months Results
For the nine months ended September 30, 2009, net income from continuing operations was $19.3 million compared to $20.8 million in the comparable 2008 period. Year-to-date, results for 2009 include a $1.9 million after-tax loss from the cable operations acquired in December of 2008. The Company's total revenues for the 2009 nine months were $120.4 million, compared to $107.3 million for the same period in 2008, an increase of 12%. Operating expenses increased to $86.1 million in the first nine months of 2009 from $71.8 million in the prior period. The increase in revenues is primarily a result of an increase in average PCS subscribers of 9% and the revenues of the newly acquired cable operations. Operating expenses increased due to costs associated with the new cable operations, improvements and expansion of our PCS and fiber optic networks, and associated depreciation.
Cable TV Update
The Company acquired cable assets and subscribers in West Virginia and Alleghany County, Virginia on December 1, 2008. In the third quarter of 2009, the acquisition added revenues of $2.6 million and expenses of $3.9 million, for an operating loss of $1.3 million. The acquired cable operations accounted for 68% of the decrease in consolidated operating income in third quarter 2009 compared to third quarter 2008. Following the upgrade of the network acquired in Alleghany County, Virginia, during the second quarter, the Company completed upgrades to the networks acquired in Franklin and Petersburg, West Virginia, during the third quarter of 2009. Through September 30, the Company had upgraded networks passing 27% of homes passed in our acquired service areas, and an additional 13% of homes passed have been upgraded since the end of the quarter. The Company expects to have 53% of homes passed upgraded by the end of the year. In addition, the Company has upgraded its cable network in Shenandoah County, Virginia, upgrading 100% of homes passed as of September 30, 2009. In total, the Company expects to have upgraded, as of December 31, 2009, approximately 65% of homes passed in our cable markets.
Other Information
The Company's third quarter 2009 capital expenditures were $12.1 million, down from $20.2 million in third quarter 2008. Capital expenditures primarily resulted from upgrades to the acquired cable networks and spending to expand our PCS network coverage and footprint. The Company expects capital spending to increase in the fourth quarter as the PCS network improvements are finished and cable network upgrade work increases. Spending should then begin to decline over the next several quarters as enhancements to the PCS network focus on success-based spending to address capacity issues, followed by reduced spending as planned cable network upgrades are completed.
Cash and cash equivalents as of September 30, 2009 were $14.9 million, up from $5.2 million at December 31, 2008. The Company made scheduled repayments against debt facilities of $1.1 million during the third quarter. At September 30, 2009, the debt/equity ratio was 0.17; and debt as a percent of total assets was 11%. The amount available to the Company through its delayed draw term loan facility was $37.3 million as of September 30, 2009. Draws against this facility can be made through December 31, 2009. The Company continues to progress towards completing the sale of its Converged Services operations.
The Company's Board of Directors declared a cash dividend of $0.32 per share, payable December 1, 2009 to shareholders of record on November 10, 2009. This represents an increase of $0.02 per share, or 7%, over the 2008 dividend.
About Shenandoah Telecommunications
Shenandoah Telecommunications Company is a holding company that provides a broad range of telecommunications services through its operating subsidiaries. The Company is traded on the NASDAQ Global Select Market under the symbol "SHEN." The Company's operating subsidiaries provide local and long distance telephone, Internet and data services, cable television, wireless voice and data services, alarm monitoring, and telecommunications equipment, along with many other associated solutions in the Mid-Atlantic United States.
Teleconference Information:
Wednesday, November 4, 2009 9:00 A. M. (ET)
Domestic Dial in number: 1-800-441-0022
International Dial in number: 1-719-325-2106
Audio webcast: 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.
SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands)
Condensed Consolidated Balance Sheets
-------------------------------------
September 30, December 31,
2009 2008
---- ----
Cash and cash equivalents $14,918 $5,240
Other current assets 35,886 67,181
Investments 8,666 8,388
Property, plant and equipment 367,325 328,172
Less accumulated depreciation and
amortization 172,447 151,695
------- -------
Net property, plant and equipment 194,878 176,477
Other assets, net 8,649 9,551
----- -----
Total assets $262,997 $266,837
======== ========
Current liabilities, exclusive of
current maturities of long-term debt
of $6,357 and $4,399, respectively $23,206 $19,986
Long-term debt, including current
maturities 29,075 41,359
Total other liabilities 34,575 39,180
Total shareholders' equity 176,141 166,312
------- -------
Total liabilities and shareholders'
equity $262,997 $266,837
======== ========
SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands, except per share amounts)
Condensed Consolidated Statements of Income
-------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues $40,115 $37,408 $120,356 $107,304
Cost of goods and services 13,703 10,712 39,452 31,394
Selling, general and
administrative 7,692 7,724 22,569 21,052
Depreciation & amortization 8,151 6,484 24,116 19,304
----- ----- ------ ------
Operating expenses 29,546 24,920 86,137 71,750
------ ------ ------ ------
Operating income 10,569 12,488 34,219 35,554
Interest expense (193) (103) (1,128) (783)
Other income (expense), net 296 (233) 246 (108)
--- ---- --- ----
Income from continuing
operations before income taxes 10,672 12,152 33,337 34,663
Income tax expense 4,326 4,774 14,019 13,881
----- ----- ------ ------
Net income from continuing
operations $6,346 $7,378 $19,318 $20,782
Loss from discontinued
operations, net of taxes (39) (636) (10,484) (2,128)
--- ---- ------- ------
Net income $6,307 $6,742 $8,834 $18,654
====== ====== ====== =======
Basic and diluted income (loss)
per share:
Net income from continuing
operations $0.27 $0.31 $0.81 $0.88
Loss from discontinued
operations - (0.03) (0.44) (0.09)
--- ----- ----- -----
Net income $0.27 $0.28 $0.37 $0.79
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SOURCE Shenandoah Telecommunications Company
http://www.shentel.com
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