*DJ Shenandoah Telecom 1Q EPS 28c >SHEN

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

May 09, 2019 07:00 ET (11:00 GMT)

*DJ Shenandoah Telecom 1Q Rev $158.8M >SHEN

(MORE TO FOLLOW) Dow Jones Newswires (212-416-2800)

May 09, 2019 07:00 ET (11:00 GMT)

Press Release: Shenandoah Telecommunications Company Reports First Quarter 2019 Results

Shenandoah Telecommunications Company Reports First Quarter 2019 Results

Quarterly Operating Income Increased 47.9% to $24.8 million

Highest first quarter organic net growth in Wireless subscribers in Company history

EDINBURG, Va., May 09, 2019 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company ("Shentel") (Nasdaq: SHEN) announced strong first quarter results, reflecting continued revenue growth and significantly improved profitability. Wireless service revenue demonstrated solid growth driven by the net addition of 5,776 postpaid wireless customers and 8,516 prepaid wireless subscribers, including record gross activations for the Boost brand. Postpaid gross and net activations reached an all-time high as compared to any historical first quarter. Growth in the Cable Segment was bolstered primarily by continued increases in broadband subscribers.

First Quarter 2019 Highlights

-- Operating revenue of $158.8 million grew 3.1%

-- Operating income grew 47.9% to $24.8 million

-- Net income of $13.9 million, or $0.28 per share

-- Adjusted OIBDA of $73.0 million grew 6.3%

-- Acquired Big Sandy Broadband, Inc. ("Big Sandy"), adding approximately
4,800 revenue generating units

Please refer to our First Quarter 2019 Earnings Presentation Supplement available at https://investor.shentel.com/ for additional information, including matters that will be referenced during the Company's conference call. Included in this release are certain non-GAAP financial measures that are not determined in accordance with U.S. generally accepted accounting principles. Please refer to page 7 for additional information for non-GAAP measures.

Results

Consolidated First Quarter 2019 Results

-- Net income for the three months ended March 31, 2019 was $13.9 million,
resulting in net income per share of $0.28, compared with $0.13 per share
in the first quarter of 2018, reflecting an increase of approximately
115%.

-- Operating revenue for the first quarter of 2019 was $158.8 million,
representing a year-over-year increase of 3.1%, driven by strong
subscriber growth in the Wireless and Cable segments.

-- Operating expenses for the three months ended March 31, 2019 were $134.1
million, compared with $137.4 million for the equivalent quarter in the
prior year primarily due to a decline in network costs for the Wireless
segment attributable to repricing backhaul circuits and migrating voice
traffic from traditional circuit-switched facilities to more cost
effective VoIP facilities. The decrease was offset by higher costs for
the Cable segment primarily due to our deployment of higher-speed data
access packages and infrastructure investments necessary to support its
growing cable and fiber networks.

-- Operating income for the three months ended March 31, 2019 increased
47.9% to $24.8 million from $16.8 million in the prior year quarter.

-- Adjusted OIBDA increased 6.3% to $73.0 million for the three months ended
March 31, 2019, driven by subscriber growth in the Wireless and Cable
segments.

Wireless

-- Shentel served 800,952 wireless postpaid customers at March 31, 2019, an
increase of 3.4% over 774,861 subscribers as of March 31, 2018. As of
March 31, 2019, tablets and data devices were 9.8% of the postpaid base.

-- Shentel served 267,220 wireless prepaid customers at March 31, 2019, an
increase of 6.8% over 250,191 subscribers as of March 31, 2018. First
quarter prepaid churn was 4.14%, representing an improvement of 28 basis
points compared with the prior year.

-- Wireless operating revenue increased 2.5%, to $115.7 million for the
three months ended March 31, 2019, compared with $112.8 million in the
first quarter of 2018, primarily driven by a 3.4% increase in postpaid
subscribers and a 6.8% increase in prepaid PCS subscribers.

-- Wireless operating expenses decreased 5.5% in the first quarter of 2019
to $90.3 million, compared with $95.5 million for the three months ended
March 31, 2018. This decrease was primarily due to a $2.9 million
decrease in depreciation and amortization as a result of the retirement
of assets acquired in the nTelos acquisition; a $1.3 million decrease in
cost of goods sold as a result of decreased equipment costs; a $0.3
million decrease in cost of services due to the repricing of Wireless
backhaul circuits to market rates and migrating Wireless voice traffic
from traditional circuit-switched facilities to more cost effective VoIP
facilities; and a $0.8 million decrease in selling, general and
administrative due to a prior year reassessment of property taxes in West
Virginia.

-- Wireless Adjusted OIBDA for the three months ended March 31, 2019
increased 7.4% to $61.8 million, compared with $57.6 million for the
three months ended March 31, 2018. Wireless Continuing OIBDA for the
three months ended March 31, 2019 was $52.2 million, compared with $48.5
million for the three months ended March 31, 2018.

Cable

-- Total Revenue Generating Units increased 4.5% in the first quarter of
2019 to 139,504 which includes the addition of approximately 4,800 Big
Sandy subscribers, compared with 133,439 for the three months ended
March 31, 2018.

-- Cable operating revenue for the first quarter of 2019 was $33.7 million,
representing a quarter over quarter increase of 6.3% compared with $31.7
million for the prior year first quarter. The increase was primarily
attributable to increases in broadband and voice subscribers, higher
video rates implemented to pass through programming cost increases, and
customers selecting or upgrading to higher-speed data access packages.

-- Cable operating expenses for the first quarter of 2019 were $28.0 million,
a quarter over quarter increase of 7.0% compared with $26.2 million for
the three months ended March 31, 2018. The increase was primarily due to
our deployment of higher-speed data access packages and investments in
infrastructure necessary to support the growth of the cable and fiber
network.

-- Cable Adjusted OIBDA for the three months ended March 31, 2019 was $12.1
million, compared with $11.7 million for the three months ended March 31,
2018.

Wireline

-- Wireline operating revenue for the three months ended March 31, 2019 was
$18.9 million, compared with $19.7 million for the prior year first
quarter. The decrease in operating revenue was primarily attributable to
repricing Wireless backhaul circuits to market rates and migrating
Wireless voice traffic from traditional circuit-switched facilities to
more cost effective VoIP facilities.

-- Wireline operating expenses for the three months ended March 31, 2019
were $14.6 million, a quarter-over-quarter decrease of 2.5% compared with
$14.9 million for the three months ended March 31, 2018. The decline in
operating expenses was primarily attributable to a reduction in network
costs.

-- Wireline Adjusted OIBDA for the three months ended March 31, 2019 was
$7.8 million, compared with $8.1 million for the prior year equivalent
quarter.

"Shentel delivered solid first quarter results, building on the success we achieved in 2018. We achieved consolidated revenue growth, dramatically increased operating income, significantly improved profitability, and continued OIBDA growth in the first quarter," said President and CEO Chris E. French, "We saw customer growth in all of our operating segments, highlighted by record customer additions in both our Wireless and Cable businesses.

"The investments we've made to improve the reliability and coverage of our network and to expand our base of stores have elevated brand recognition in the markets we serve, enabling us to attract new customers and drive growth in both our postpaid and prepaid customer base. Our Cable segment continued to see increased RGUs and revenue as customers upgraded their service plans to accommodate a growing need for higher bandwidth. We were pleased to add the assets of Big Sandy Broadband, which expands our service area in Kentucky. Shentel is well-positioned to continue to provide our customers with the best service in our expanding footprint and we look forward to driving continued growth as we move through 2019."

Other Information

-- Capital expenditures budgeted for 2019 have been updated to reflect the
acquisition of Big Sandy and are expected to be approximately $149.5
million, including $64.1 million in the Wireless segment primarily for
wireless network capacity improvements. In addition, $55.0 million is
budgeted primarily to support growth in our Cable segment including new
fiber routes and continuing investments in DOCSIS 3.1 upgrades, $20.5
million in Wireline projects including expansion of the fiber network,
and $9.9 million primarily for IT and other miscellaneous projects.

-- Capital expenditures were $44.4 million for the three months ended
March 31, 2019 compared with $24.4 million in the comparable 2018 period.

-- The Company expanded its Cable segment into the adjacent market of
eastern Kentucky through the acquisition of Big Sandy on February 28,
2019.

-- Outstanding debt at March 31, 2019 totaled $751.3 million, net of
unamortized loan costs, compared to $770.2 million as of December 31,
2018. During the quarter, the Company reduced debt $19.9 million,
including a voluntary $15.0 million prepayment in addition to the
scheduled quarterly payment. As of March 31, 2019, no amounts were
outstanding under the revolving line of credit. The total leverage ratio
as of March 31, 2019 was 2.42.

(MORE TO FOLLOW) Dow Jones Newswires

May 09, 2019 07:00 ET (11:00 GMT)