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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
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October 25, 2005
Date of Report
(Date of earliest event reported)
Shenandoah Telecommunications Company
(Exact name of registrant as specified in its charter)
Virginia 0-9881 54-1162807
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
500 Shentel Way
P.O. Box 459
Edinburg, VA 22824
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (540) 984-4141
1
2.02 Results of Operations and Financial Condition.
On October 25, 2005, the Company issued a press release reporting results for
the quarter ending September 30, 2005. A copy of the press release is included
as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press release dated October 25, 2005
SIGNATURES
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)
October 26, 2005 /S/ Christopher E. French
-------------------------------
Christopher E. French
President and Chief Executive Officer
2
Exhibit 99.1
NEWS RELEASE
For further information, please contact Earle A. MacKenzie at 540-984-5192.
SHENANDOAH TELECOMMUNICATIONS COMPANY DECLARES DIVIDEND AND REPORTS
THIRD QUARTER 2005 FINANCIAL RESULTS
EDINBURG, VA, (October 25, 2005) - The Board of Directors of Shenandoah
Telecommunications Company (Shentel; NASDAQ: SHEN) declared a cash dividend of
$0.46 per share. The dividend will be payable December 1, 2005, to shareholders
of record on November 14, 2005. The dividend is an increase of $0.03 per share
or 7.0 % over the 2004 dividend. Total payout to shareholders will be
approximately $3.7 million.
Shenandoah Telecommunications Company also announced unaudited financial
results for the third quarter ended September 30, 2005. Net income for the
quarter was $3.2 million, compared to $3.1 million for the third quarter 2004.
Total third quarter revenues grew by 20.0% from the same quarter last year,
including a 17.1% increase in PCS revenues. Net income for the nine months ended
September 30, 2005 was $8.1 million, $0.2 million less than the same period last
year.
Overall Highlights
For the quarter ended September 30, 2005, net income was $3.2 million or
$0.41 per diluted share, compared to $3.1 million or $0.41 per diluted share in
the third quarter of 2004. The Company's total revenues for the third quarter of
2005 were $37.3 million, compared to $31.1 million in the third quarter of 2004,
which represented an increase of $6.2 million or 20.0%. The Company's revenue
growth was driven by a $3.6 million increase in its PCS operations and $2.3
million from NTC Communications (NTC), acquired on November 30, 2004.
October 25, 2005
News Release
Page 2 of 6
Operating income for the third quarter of 2005 and 2004 was $5.9 million
and $6.5 million, respectively. Operating income for the third quarter of 2005
includes an operating loss of $1.5 million from NTC. Operating income for the
nine months ended September 30, 2005 and 2004 was $15.2 million and $15.8
million respectively, with the 2005 operating income including an operating loss
of $3.2 million for NTC.
President and CEO, Christopher E. French commented, "We are pleased our
financial results have again enabled us to increase our cash dividend to
shareholders. Strong growth in our PCS business, along with solid results from
our traditional telephone services, has enabled us to continue our
diversification efforts while still delivering good overall financial results
for our investors."
PCS Operations
The Company experienced continued growth in third quarter wireless
revenues as a Sprint PCS Affiliate of Sprint Nextel, increasing its PCS
subsidiary revenue to a total of $24.6 million, which represented an increase of
$3.6 million over the 2004 third quarter. The PCS net income was $2.0 million in
the third quarter of 2005 compared to a net income of $1.3 million in the third
quarter of 2004. PCS net income for the nine months ended September 30, 2005 was
$4.0 million, which represented a $1.3 million increase over the 2004 nine-month
period. The third quarter of 2005 included a $750,000 settlement for the
recovery of network costs for the period 2001 to 2004. The Company's Sprint
retail wireless customer count increased by 4,370, compared to an increase of
3,578 in the third quarter of 2004, to 116,460 retail customers. Wholesale users
increased by 1,115, compared to a 1,544 increase in the third quarter of 2004,
to 33,848 wholesale users. The Company's third quarter retail customer turnover,
or churn, was 2.1%, compared to 2.2% in the third quarter of 2004.
October 25, 2005
News Release
Page 3 of 6
Telephone Operations
The local telephone operations' net income for the 2005 third quarter was
$1.9 million, which represented a $0.1 million increase compared to the 2004
third quarter. Net income for the nine months ended September 30, 2005 and 2004
was $5.6 million and $5.1 million, respectively. Telephone operations recorded a
net loss of 66 access lines during the 2005 third quarter, but had cumulative
net add of 120 access lines for the nine months ended September 30, 2005, to end
the quarter with 24,811 access lines. DSL users increased 625 in the third
quarter and 1,416 for the nine months ended September 30, 2005 for a total of
4,062 customers.
Additional Highlight
The Company invested and/or committed $13.7 million in plant in service
and retired $1.1 million of scheduled debt during the third quarter of 2005. The
Company had cash and cash equivalents of $12.2 million as of the end of the
third quarter. At September 30, 2005, the Company's debt/equity ratio was 30.1%
and debt as a percent of total assets was 17.9%.
About Shenandoah Telecommunications
Shenandoah Telecommunications Company is a holding company that provides a
comprehensive portfolio of telecommunications products and services through its
operating subsidiaries. The Company is traded on the NASDAQ National 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 and Southeastern
United States.
_______________________________
Earle A. MacKenzie
Chief Financial Officer
October 25, 2005
News Release
Page 4 of 6
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 and other competitive
factors. For a discussion of these factors, see the Company's Annual Report on
Form 10-K as filed with the Securities and Exchange Commission on March 22,
2005. The Company expressly disclaims any obligation to update or review any
forward-looking statements contained in this release.
October 25, 2005
News Release
Page 5 of 6
SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands, except per share amounts)
Condensed Consolidated Balance Sheets September 30, December 31,
- ------------------------------------- 2005 2004
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Cash and cash equivalents $ 12,165 $ 14,172
Other current assets 14,595 20,345
Total securities and investments 7,163 7,250
Property, plant and equipment 248,009 230,323
Less accumulated depreciation (89,506) (74,071)
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Net property, plant and equipment 158,503 156,252
Other assets, net 14,954 13,228
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Total assets $ 207,380 $ 211,247
========= =========
Current liabilities, exclusive of current
maturities of $ 4,486 and $4,372, respectively $ 20,245 $ 17,474
Long and short-term debt 37,024 52,291
Total other liabilities 27,431 27,685
Total shareholders' equity 122,680 113,797
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Total liabilities and shareholders' equity $ 207,380 $ 211,247
========= =========
October 25, 2005
News Release
Page 6 of 6
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,
2005 2004* 2005 2004*
------- ------- -------- -------
Revenues $37,320 $31,103 $107,184 $88,674
Expenses 31,418 24,633 92,006 72,893
------- ------- -------- -------
Operating Income 5,902 6,470 15,178 15,781
Other Income & Expense 661 1,515 2,139 2,543
Income Tax Provision 2,083 1,844 4,973 4,934
------- ------- -------- -------
Net income $ 3,158 $ 3,111 $ 8,066 $ 8,304
======= ======= ======== =======
Net earnings per share, basic $ 0.41 $ 0.41 $ 1.05 $ 1.09
======= ======= ======== =======
Net earnings per share, diluted $ 0.41 $ 0.41 $ 1.05 $ 1.09
======= ======= ======== =======
*Certain amounts for 2004 have been reclassified to conform with the 2005
presentation.
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