UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): March 3, 2010
Shenandoah
Telecommunications Company
(Exact
name of registrant as specified in its charter)
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Virginia
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0-9881
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54-1162807
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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500
Shentel Way
P.O.
Box 459
Edinburg,
VA
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22824
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (540) 984-4141
Not
applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2-(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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1
Item
2.02 Results of Operations and Financial Condition.
On March
3, 2010, the Company issued a press release reporting results for the three
months ended December 31, 2009. A copy of the press release is
included as Exhibit 99.1 to this report.
Item
9.01 Financial Statements and Exhibits.
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(c)
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Exhibits
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Press
release dated March 3, 2010
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
SHENANDOAH
TELECOMMUNICATIONS COMPANY
(Registrant)
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March 4, 2010
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/s/ Adele M. Skolits
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Adele
M. Skolits
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Vice
President - Finance and
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Chief
Financial Officer
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(Duly
Authorized Officer)
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2
Exhibit
99.1
NEWS
RELEASE
For
further information, please contact Adele M. Skolits at
540-984-5161.
SHENANDOAH
TELECOMMUNICATIONS COMPANY
REPORTS
FOURTH QUARTER AND FULL YEAR 2009 FINANCIAL RESULTS
EDINBURG,
VA, (March 3, 2010) – Shenandoah Telecommunications Company (Shentel) (NASDAQ:
SHEN) announces financial and operating results for the fourth quarter and year
ended December 31, 2009.
Fourth
Quarter 2009 Highlights
Highlights
for the quarter include:
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·
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Revenue
of $40.3 million, an increase of 8% from fourth quarter
2008
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·
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Net
income of $6.3 million, which includes a net loss of $0.5 million from
newly acquired cable operations undergoing
upgrades
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·
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PCS
net subscriber additions of 3,465
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·
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Total
PCS subscribers of 222,818, up 5% from December 31,
2008
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·
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EVDO
high speed data services are now available to 95% of the population
covered by our PCS network
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·
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Added
eight cell towers, 28 CDMA base stations, and 28 EVDO-enabled
sites
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·
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Completed
upgrades in the recently acquired cable territories, with 64% of the homes
passed now served by upgraded
systems
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President
and CEO, Christopher E. French commented, “Our operating results again reflect
improvement and growth despite the continuation of poor economic conditions.
During the year our employees and management team were able to remain focused on
improving service for our customers and building long term value for our
shareholders.”
March 3,
2010
News
Release
Page 2 of
7
Consolidated
Fourth Quarter Results
For the
quarter ended December 31, 2009, net income from continuing operations was $5.8
million compared to $5.3 million in fourth quarter 2008. The fourth quarter of
2009 included an after-tax loss of $0.5 million from the cable operations
acquired in December 2008, compared to a loss of $0.2 million in the fourth
quarter of 2008. The Company expected these operations to incur losses during
the time required to complete the network upgrades and increase market
penetration.
The
Company’s total revenues for fourth quarter 2009 were $40.3 million, compared to
$37.1 million for the same quarter in 2008, an increase of 8%. Fourth quarter
operating expenses increased to $31.7 million in 2009 from $27.5 million in
2008. The increase in revenues is primarily a result of higher revenues in our
PCS unit and the revenues of the acquired cable operations. The increase in PCS
revenues is a result of an increase in average PCS subscribers of 6%. 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.
March 3,
2010
News
Release
Page 3 of
7
Consolidated
Full Year Results
For the
year ended December 31, 2009, net income from continuing operations was $25.1
million compared to $26.1 million in 2008. Results for 2009 include a
$2.4 million after-tax loss from the cable operations acquired in December of
2008. The Company’s total revenues for 2009 were $160.6 million,
compared to $144.4 million for 2008, an increase of 11%. Operating
expenses increased to $117.8 million in 2009 from $99.2 million in the prior
year. The increase in revenues is primarily a result of an increase
in average PCS subscribers of 8% and the $9.5 million of additional revenues of
the newly acquired cable operations. Operating expenses increased due
to $11.8 million in incremental costs associated with the new cable operations,
operating costs associated with improvements and expansion of our PCS and fiber
optic networks totaling $4.8 million, and associated depreciation which was up
$6 million. These increases were partially offset by lower costs for
PCS handsets due to fewer units sold and other marketing and general and
administrative cost savings.
Cable
TV Update
The
Company acquired cable assets and subscribers in West Virginia and Alleghany
County, Virginia on December 1, 2008. In the fourth quarter of 2009,
the acquisition contributed revenues of $2.7 million and expenses of $4.6
million, for an operating loss of $1.9 million. In the fourth quarter
of 2008, with one month of operations, the acquired cable operations contributed
$0.8 million in revenues, $1.0 million in operating expenses, resulting in an
operating loss of $0.2 million. Through 2009, the Company had
upgraded networks passing 64% of homes passed in our acquired service
areas. The Company expects to have all homes passed upgraded by the
third quarter of 2010. In addition, the Company upgraded its cable
network in Shenandoah County, Virginia, upgrading 100% of homes passed during
2009. The Company spent approximately $14 million upgrading acquired
and existing cable networks during 2009.
March 3,
2010
News
Release
Page 4 of
7
Other
Information
The
Company’s fourth quarter 2009 capital expenditures were $15.6 million, down from
$26.7 million in fourth quarter 2008. Capital expenditures related primarily to
upgrading the acquired cable networks and spending to expand our PCS network
coverage and footprint. The Company expects capital spending to decline over the
next several quarters when enhancements to the PCS network will be limited to
success-based spending to address capacity issues, and as the planned cable
network upgrades are completed.
Cash and
cash equivalents as of December 31, 2009 were $12.1 million, up from $5.2
million at December 31, 2008. The Company made scheduled repayments against debt
facilities of $1.1 million during the fourth quarter. The Company borrowed $5
million during the fourth quarter of 2009 under the Delayed Draw Term Loan
entered into in 2008. This facility was amended to allow the Company to make
draws during 2010 and delay scheduled repayments by one year to begin in March
of 2011. At December 31, 2009, the debt/equity ratio was 0.19 and debt as a
percent of total assets was 12%. The amount available to the Company through its
delayed draw term loan facility was $32.3 million as of December 31, 2009. The
Company continues to progress towards completing the sale of its Converged
Services operations.
March 3,
2010
News
Release
Page 5 of
7
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:
Thursday,
March 4, 2010, 9:00 A. M. (ET)
Domestic
Dial in number: 1-877-741-4241
International
Dial in number: 1-719-325-4844
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.
March 3,
2010
News
Release
Page 6 of
7
SHENANDOAH
TELECOMMUNICATIONS COMPANY
SUMMARY
FINANCIAL INFORMATION (unaudited)
(In
thousands)
Condensed Consolidated
Balance Sheets
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December
31,
2009
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December
31,
2008
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|||||||
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Cash
and cash equivalents
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$ | 12,054 | $ | 5,240 | ||||
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Other
current assets
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40,581 | 67,181 | ||||||
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Investments
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8,705 | 8,388 | ||||||
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Property,
plant and equipment
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382,227 | 328,172 | ||||||
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Less
accumulated depreciation and amortization
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179,925 | 151,695 | ||||||
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Net
property, plant and equipment
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202,302 | 176,477 | ||||||
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Other
assets, net
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8,083 | 9,551 | ||||||
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Total
assets
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$ | 271,725 | $ | 266,837 | ||||
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Current
liabilities, exclusive of current maturities of long-term debt of $4,561
and $4,399, respectively
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$ | 20,067 | $ | 19,986 | ||||
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Long-term
debt, including current maturities
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32,960 | 41,359 | ||||||
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Total
other liabilities
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43,026 | 39,180 | ||||||
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Total
shareholders' equity
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175,672 | 166,312 | ||||||
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Total
liabilities and shareholders' equity
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$ | 271,725 | $ | 266,837 | ||||
March 3,
2010
News
Release
Page 7 of
7
SHENANDOAH
TELECOMMUNICATIONS COMPANY
SUMMARY
FINANCIAL INFORMATION (unaudited)
(In
thousands, except per share amounts)
Condensed Consolidated
Statements of Income
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Three
months ended
December
31,
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Years
ended
December
31,
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|||||||||||||||
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2009
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2008
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2009
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2008
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Revenues
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$ | 40,259 | $ | 37,120 | $ | 160,616 | $ | 144,424 | ||||||||
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Cost
of goods and services
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14,580 | 12,579 | 54,032 | 43,973 | ||||||||||||
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Selling,
general and administrative
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8,557 | 7,517 | 31,127 | 28,570 | ||||||||||||
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Depreciation
& amortization
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8,514 | 7,366 | 32,630 | 26,670 | ||||||||||||
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Operating
expenses
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31,651 | 27,462 | 117,789 | 99,213 | ||||||||||||
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Operating
income
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8,608 | 9,658 | 42,827 | 45,211 | ||||||||||||
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Interest
expense
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(232 | ) | (227 | ) | (1,361 | ) | (1,009 | ) | ||||||||
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Other
income (expense), net
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836 | (531 | ) | 1,083 | (639 | ) | ||||||||||
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Income
from continuing operations before income taxes
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9,212 | 8,900 | 42,549 | 43,563 | ||||||||||||
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Income
tax expense
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3,446 | 3,613 | 17,465 | 17,494 | ||||||||||||
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Net
income from continuing operations
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$ | 5,766 | $ | 5,287 | $ | 25,084 | $ | 26,069 | ||||||||
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Gain
(loss) from discontinued operations, net of taxes
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492 | 204 | (9,992 | ) | (1,924 | ) | ||||||||||
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Net
income
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$ | 6,258 | $ | 5,491 | $ | 15,092 | $ | 24,145 | ||||||||
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Basic
and diluted income (loss) per share:
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||||||||||||||||
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Net
income from continuing operations
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$ | 0.24 | $ | 0.22 | $ | 1.06 | $ | 1.11 | ||||||||
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Gain
(loss) from discontinued operations
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0.02 | 0.01 | (0.42 | ) | (0.08 | ) | ||||||||||
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Net
income
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$ | 0.26 | $ | 0.23 | $ | 0.64 | $ | 1.03 | ||||||||
#####