2018 Third Quarter Results

EDINBURG, Va., November 6, 2018 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (NASDAQ: SHEN) announces financial and operating results for the three months ended September 30, 2018.

Third Quarter Results

Consolidated

Net income for the three months ended September 30, 2018 was $15.5 million, or $0.31 per share, compared with net income of $3.5 million, or $0.07 per share, in the third quarter of 2017. Effective January 1, 2018, the Company adopted the new revenue recognition standard (Topic 606) that requires the Company to record costs such as commissions for the national sales channel that are settled separately with Sprint as reductions of revenue. Previously these costs were recorded in costs of goods and services and in selling, general and administrative expense. Excluding the impact of adopting Topic 606, third quarter net income was $11.8 million, or $0.24 per basic share, due to the deferral of certain commissions and device costs as required by the new revenue recognition standard.

Operating revenue for the three months ended September 30, 2018 was $158.7 million, representing a year-over-year increase of 4.6%, compared with $151.8 million for the three months ended September 30, 2017. Excluding the impact of adopting Topic 606, total operating revenue increased approximately $11.5 million, or 7.6%, driven by Wireless and Cable operations.

Operating expenses for the third quarter of 2018 were $130.4 million, compared with $142.3 million for the equivalent quarter in the prior year. Excluding the impact of adopting Topic 606, operating expenses decreased approximately $2.2 million, or 1.6% due to the absence of acquisition and integration costs related to the prior year nTelos integration, and a decrease in depreciation and amortization as assets acquired in the nTelos acquisition were retired. These declines were partially offset by increases in network and selling costs associated with the continued expansion of our networks to support the increased demand from the growing subscriber base.

Operating income increased 199.0% in the third quarter of 2018 to $28.3 million from $9.5 million in the equivalent quarter of the prior year. Excluding the impact of adopting Topic 606, operating income increased approximately $13.7 million, or 144.8%.

Adjusted OIBDA for the three months ended September 30, 2018 was $74.1 million, compared with $66.9 million for the three months ended September 30, 2017. Continuing OIBDA for the three months ended September 30, 2018 was $64.5 million, compared with $57.9 million for the three months ended September 30, 2017. The adoption of Topic 606 did not have an impact on Adjusted OIBDA.

Wireless

Wireless operating revenue increased $3.6 million, compared with the three months ended September 30, 2017. Excluding the impact of Topic 606, wireless operating income increased 233%. The increase was driven by growth in postpaid and prepaid PCS subscribers, improvements in PCS average monthly churn for postpaid and prepaid, and was partially offset by a decline in postpaid average revenue per subscriber related to promotions and discounts.

Wireless operating expenses for the three months ended September 30, 2018 were $88.7 million, compared with $105.8 million for the three months ended September 30, 2017, a year over year decrease of 16.1%. Excluding the impact of adopting Topic 606, operating expenses decreased $7.6 million due to repricing Wireless backhaul circuits to market rates, migrating Wireless voice traffic from traditional circuit-switched facilities to more cost effective VoIP facilities, reducing back-office expenses that were required to support former nTelos subscribers that migrated to Sprint's back-office in 2017, and a reduction in acquisition, integration and migration expenses as the integration of the acquired nTelos business was completed during 2017.

Wireless Adjusted OIBDA for the three months ended September 30, 2018 was $62.6 million, compared with $54.2 million for the three months ended September 30, 2017. Wireless Continuing OIBDA for the three months ended September 30, 2018 was $53.0 million, compared with $45.2 million from the three months ended September 30, 2017.

Shentel served 785,537 wireless postpaid retail PCS subscribers as of September 30, 2018, an increase of 57,583 over the third quarter of 2017. Postpaid churn for the three months ended September 30, 2018, was 1.84%, compared with 2.19% for the three months ended September 30, 2017. The Company had net additions of 4,879 postpaid customers in the three months ended September 30, 2018, compared with net losses of 4,710 for the three months ended September 30, 2017. As of the three months ended September 30, 2018, tablets and data devices were 8.5% of the postpaid base.

Cable

Cable operating revenue for the third quarter of 2018 was $32.2 million, representing a year over year increase of 7.0% compared with $30.1 million for the three months ended September 30, 2017. The growth in Cable revenue was primarily due to increases in broadband and voice subscribers and video rate increases. The adoption of Topic 606 did not have a significant impact on Cable operating revenue.

Cable operating expenses for the third quarter of 2018 were $26.3 million, a year over year decrease of 0.4% compared with $26.5 million for the three months ended September 30, 2017. The decrease was driven by a decline in video operating expenses. The Company lost 3,286 video users while adding 3,647 broadband users and 849 voice users, since September 30, 2017.

Cable Adjusted OIBDA for the three months ended September 30, 2018 was $11.8 million, compared with $10.0 million for the three months ended September 30, 2017.

Wireline

Wireline operating revenue for the three months ended September 30, 2018 was $19.6 million, compared with $19.9 million for the prior year third quarter. The decrease in operating revenues was primarily attributable to migrating Wireless backhaul circuits from traditional circuit-switched facilities to more cost effective Voice Over IP ("VoIP") facilities. The adoption of Topic 606 did not have a significant impact on Wireline operating revenue.

Wireline operating expenses for the three months ended September 30, 2018 were $14.5 million, compared with $14.8 million for the quarter ended September 30, 2017. This decrease was primarily attributable to a reduction in network costs.

Wireline Adjusted OIBDA for the three months ended September 30, 2018 was $8.5 million, compared with $8.4 million for the prior year equivalent quarter.

President and CEO Christopher E. French commented, "Throughout 2018, our focus has been on operational execution, particularly in terms of capitalizing on the competitive advantage provided by our state-of-the-art network and expanded wireless geographic area to drive distribution levels and activation rates in the markets we serve. Our third quarter results built upon the momentum established in the first half of the year, as characterized by solid consolidated revenue growth, triple digit increases in operating income, significantly enhanced net profitability and improved adjusted OIBDA.

“In the Wireless segment, we saw growth in both postpaid and prepaid customers and believe our continued success adding customers is directly related to our ability to provide consistent coverage, optimal capacity and excellent service. Our Cable segment showed continued progress as reflected in increased RGUs and 6% revenue growth. As consumer expectations for high speed bandwidth and reliable service intensify, growing marketplace recognition of Shentel’s ability to deliver those capabilities allows us to attract new customers while also meeting the needs of existing customers seeking upgraded service plans. The continued success and growth of our business relies on the satisfaction of our customers and we remain focused on providing reliable and robust network coverage and consistency across all offerings throughout our entire service footprint."

Network and Technology Highlights

Beginning in 2018, we began transitioning Wireless backhaul circuits from traditional circuit-switched facilities to VoIP facilities to reduce our overall network costs. We expect to complete the transition by year-end 2018.

Other Information

Capital expenditures were $92.3 million in the nine months ended September 30, 2018 compared with $109.4 million in the comparable 2017 period. Capital expenditures are expected to be between $145 million and $155 million for the full year 2018 depending on the timing of deliveries of equipment. Delays in equipment deliveries could shift spending into 2019.

Outstanding debt at September 30, 2018 totaled $778.8 million, net of unamortized loan costs, compared to $822.0 million as of December 31, 2017. As of September 30, 2018, no amounts were outstanding under the revolving line of credit. The total leverage ratio as of September 30, 2018 was 2.61.

We declared a cash dividend of $0.27 per share. The dividend is an increase of $0.01 per share or 3.8% over the 2017 dividend. The dividend will be payable November 30, 2018, to shareholders of record as of the close of business on November 12, 2018. The total payout to shareholders, before reinvestment, will be approximately $13.4 million. The Company has paid an annual dividend every year since 1960, when its predecessor Shenandoah Telephone Company declared its first dividend.

Pirtle named to CTIA Board of Directors

Shentel has announced that Willy Pirtle, Senior VP – Wireless, has been named to the board of directors of CTIA – a trade association representing the wireless communications industry in the United States. The association was established in 1984 and is headquartered in Washington, D.C. 

Shentel is the sixth largest public wireless company in the U.S. and provides diversified telecommunications services to consumers. Shentel, as a long-term affiliate of Sprint - provides more than one million consumers with connectivity across Virginia, West Virginia, Maryland, Pennsylvania and Kentucky.

“We are excited to welcome Shentel as a new CTIA member and Willy to the Board of Directors,” said CTIA President and CEO Meredith Attwell Baker. “As the wireless industry continues to rollout the next-generation of wireless networks, we look forward to working with Willy and Shentel on ways to increase consumer access to wireless and the benefits 5G will bring.”

“Shentel was founded to give people greater access to connectivity and there’s been no greater advocate for wireless connectivity than CTIA,” said Pirtle. “I’m honored to serve on the board of directors and look forward to working together to create policies that promote wireless innovation like 5G and further network investment.”

Promoted to Senior Vice President in 2015, Willy joined Shentel in 1992 as Vice President of Network Services responsible for Shentel's technology, maintenance and operational network decisions. He helped launch Shentel's Internet business in 1994 and led its participation in its wireless PCS business and Sprint affiliation beginning in 1995. He is also the co-founder of the Shenandoah Valley Technology Council.

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.

About CTIACTIA® (www.ctia.org) represents the U.S. wireless communications industry and the companies throughout the mobile ecosystem that enable Americans to lead a 21^st century connected life. The association’s members include wireless carriers, device manufacturers, suppliers as well as apps and content companies. CTIA vigorously advocates at all levels of government for policies that foster continued wireless innovation and investment. The association also coordinates the industry’s voluntary best practices, hosts educational events that promote the wireless industry and co-produces the industry’s leading wireless tradeshow. CTIA was founded in 1984 and is based in Washington, D.C.

Shentel VP Appointed to National Cable Board

Shenandoah Telecommunications Company (SHENTEL) has announced Tom Whitaker, Sr. Vice President-Cable, has been appointed to the board of the National Cable Television Cooperative (NCTC). The NCTC represents 750 small and mid-sized independent cable operators across the U.S., of which Shentel is one.

A total of four new members were added to the NCTC board of directors in late July. In addition to Whitaker, Katie Espeseth - Vice President of EPB Chattanooga, Brad Moline - President of Allo Communications, and Matt Weller - President of All West Communications.

In a press release, the NCTC noted that the four were selected for their innovative work to bring exceptional products and services to their customers and added that the incoming board members are respected industry leaders with expertise in broadband, finance, operations, and engineering.

Whitaker leads the cable segment at Shentel. He has 30+ years of experience building and operating wired and wireless communications networks, working with both startup companies and established service operators. “I am excited to serve an organization that has played such a pivotal role in leveling the playing field for small, independent cable companies,” Whitaker said. “I look forward to participating in the future growth of this great cooperative.”

NCTC board members commit to a three-year term and work in partnership with NCTC leaders to support its member companies. Names of the full board of directors are available on the NCTC website.

Shenandoah Telecommunications Company Reports Second Quarter 2018 Results

EDINBURG, Va., August 7, 2018 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (NASDAQ: SHEN) announces financial and operating results for the three months ended June 30, 2018.

President and CEO Christopher E. French commented, “Shentel delivered solid second quarter results which included consolidated revenue growth, significantly enhanced operating income and improved net profitability. In the past year, our Wireless geographic coverage area has grown significantly with the expansion of our affiliate agreement with Sprint, and we are focused on driving distribution and activation levels in our expanded footprint. During the second quarter, our wireless segment achieved growth in both postpaid and prepaid customers, reflective of Shentel’s reputation as a provider of reliable coverage, excellent service and robust capacity which has positioned us as the ‘carrier of choice’ in the markets in which we operate."

“Revenues in our cable segment grew 9% in the second quarter, with increased RGUs, and we are encouraged by the opportunity to capture additional market share as consumers seek the high speed bandwidth and dependable service that our network provides. In the Wireline segment we continued our focus on growth in our regional fiber network and transitioning our legacy telephone area from DSL service to cable modem service. Our focus on providing high quality, reliable service across all of our offerings remains the cornerstone of our service commitment to our customers and the foundation for our continued growth".

Second Quarter Results

Consolidated

• Net income for the three months ended June 30, 2018 was $7.8 million, or $0.16 per share, compared with a net loss of $80 thousand, or less than $0.01 per share, in the second quarter of 2017. Effective January 1, 2018, the Company adopted the new revenue recognition standard, which requires the Company to record costs such as commissions for the national sales channel that are settled separately with Sprint as reductions of revenue. Previously these costs were recorded in costs of goods and services and in selling, general and administrative expense. Excluding the impact of this standard, second quarter net income was $5.9 million, or $0.12 per share, due to the deferral of certain commissions and device costs as required by the new revenue recognition standard.
• Operating revenues for the three months ended June 30, 2018 were $154.0 million, a year over year increase of 0.5%, compared with $153.3 million for the three months ended June 30, 2017. Excluding the impact of the new revenue recognition standard, total operating revenues improved approximately $4.8 million, or 3.1%, driven by Wireless and Cable operations, partially offset by Wireline.
• Operating expenses for the second quarter of 2018 were $135.3 million, compared with $145.0 million for the equivalent quarter in the prior year. Excluding the impacts of the new revenue recognition standard, operating expenses decreased $3.0 million, or 2.1% due to the absence of acquisition and integration costs related to the prior year nTelos integration, and a decrease in depreciation and amortization as assets acquired in the nTelos acquisition were retired. These declines were partially offset by increases in network and selling costs associated with the continued expansion of our networks to support the increase and demand for the subscriber base.
• Operating income increased 126.6% in the second quarter of 2018 to $18.7 million from $8.3 million in the equivalent quarter of the prior year.
• Adjusted OIBDA for the three months ended June 30, 2018 was $69.8 million, compared with $69.4 million for the three months ended June 30, 2017. Continuing OIBDA for the three months ended June 30, 2018 was $60.3 million, compared with $60.3 million for the three months ended June 30, 2017. The adoption of the new revenue recognition standard did not have an impact on adjusted OIBDA.

Wireless

• Wireless operating revenues increased $2.2 million, excluding the impacts of adopting the new revenue recognition standard, compared with the three months ended June 30, 2017. The increase was driven by growth in postpaid and prepaid PCS subscribers, improvements in PCS average monthly churn for postpaid and prepaid, and was partially offset by a decline in average revenue per subscriber primarily related to promotions and discounts.
• Wireless operating expenses for the three months ended June 30, 2018 were $92.5 million, compared with $107.8 million for the three months ended June 30, 2017, a year over year decrease of 14.2%. Excluding the impacts of the new revenue recognition standard, operating expenses decreased $8.6 million due to the absence of acquisition and integration costs related to the prior year nTelos integration and a reduction in depreciation and amortization. These decreases were partially offset by increases in network costs resulting from the completion of our 4G rollout and expanded coverage area, as well as additional selling costs.
• Wireless adjusted OIBDA for the three months ended June 30, 2018 was $60.1 million, compared with $58.2 million for the three months ended June 30, 2017. Wireless continuing OIBDA for the three months ended June 30, 2018 was $50.5 million, compared with $49.0 million from the three months ended June 30, 2017.
• Shentel served 780,658 wireless postpaid retail PCS subscribers as of June 30, 2018, up 6.6% over the second quarter of 2017. Postpaid churn for the three months ended June 30, 2018, was 1.67%, compared with 2.00% for the three months ended June 30, 2017. The Company had net additions of 5,797 postpaid customers in the three months ended June 30, 2018, compared with net additions of 15,514 for the three months ended June 30, 2017. As of the three months ended June 30, 2018, tablets and data devices were 14% of the postpaid base reflecting a net gain of 821 for these devices over the prior year.

Cable

• Cable operating revenues for the second quarter of 2018 were $32.1 million, a year over year increase of 8.6% compared with $29.6 million for the three months ended June 30, 2017. The increase was primarily due to growth in broadband ARPU and rate increases for video services.
• Cable operating expenses were flat at $26.0 million in the second quarter of both 2018 and 2017. The Company added 3,519 High Speed Data users and 790 voice users, and lost 3,448 video users.
• Cable adjusted OIBDA for the three months ended June 30, 2018 was $12.3 million, an increase of 23.7%.

Wireline

• Wireline operating revenues for the three months ended June 30, 2018 were $19.1 million, compared with $19.6 million for the prior year second quarter. The decrease in operating revenues was primarily attributable to migrating Wireless backhaul circuits from traditional circuit-switched facilities to more cost effective Voice Over IP ("VoIP") facilities.
• Wireline operating expenses for the three months ended June 30, 2018 were $14.3 million, compared with $14.2 million for the quarter ended June 30, 2017, due primarily to costs to support new fiber contracts.
• Wireline adjusted OIBDA for the three months ended June 30, 2018 was $8.0 million, compared with $8.6 million for the prior year equivalent quarter, primarily driven by the decline in revenue.

Network & Technology Highlights

• Beginning in 2018, we began transitioning Wireless backhaul circuits from traditional circuit-switched facilities to VoIP facilities, in our Wireline operations. We expect to complete the transition by year-end 2018 and expect to realize a reduction in overall Wireless network costs beginning in 2019.

Other Information

• Capital expenditures were $62.3 million in the six months ended June 30, 2018 compared with $68.8 million in the comparable 2017 period. The Company's estimated 2018 capital budget remains $163 million.
• Cash and cash equivalents as of June 30, 2018 were $65.6 million, compared with $78.6 million at December 31, 2017.
• Outstanding debt at June 30, 2018 totaled $799.9 million, net of unamortized loan costs, compared to $822.0 million as of December 31, 2017. As of June 30, 2018, no amounts were outstanding under the revolving line of credit. The total leverage ratio as of June 30, 2018 was 2.89.

Shentel Summer Backpack Program Collects Four Tons of Food for Kids

Shentel has announced that the philanthropic Shentel Backpack Program collected more than four tons of food for food-challenged youth in its service area.

The Shentel Summer Backpack Program was established in 2015 to help support regional food banks and area food pantries serving families in Virginia, West Virginia, Pennsylvania and Maryland.

The collection specifically targeted food for children who are on the free or reduced-price lunch program during the school year. These young people cannot count on school for meals in the summer, which can impact them in ways both short and long term.

Shentel currently has more than 1,200 employees in different business segments. In addition to achieving a company record in the amount of goods collected this year, more employees than ever took part in this great volunteer program.

“This is one of our most popular volunteer projects, as it gives us the opportunity to help children in our own communities, the places where we live and work,” said Brand Specialist Cindy Rinker, who leads the company’s philanthropic efforts. “Part of our mission statement is being committed to enriching the lives of the people we serve, so I cannot imagine a better way to amplify our goal than to reach out to the most vulnerable. Making a difference is engrained in our employees.”

Shentel Continues to Expand Fiber Networks to Schools and Libraries

Shentel continues to add significant multi-year contracts for wide area networks and dedicated internet access for schools and libraries throughout Virginia.

Shentel is very pleased to have won competitive bids to provide broadband internet and data services to the public school divisions in Alleghany, Rappahannock and Russell counties in Virginia. Shentel has also been awarded new contracts to expand fiber-optic services to public library systems including the Handley Regional Library in Winchester, the Samuels Public Library in Front Royal, the Wythe-Grayson Regional Library in Rural Retreat and the Rappahannock County Public Library.

These new contracts come on the heels of recent broadband fiber network deployments for public school divisions including the cities of Roanoke, Harrisonburg and Lynchburg, as well as the counties of Shenandoah, Nelson, Amherst, Bedford, Franklin and Giles.

“We continue to expand our advanced fiber-based services to support the growing data needs of schools and libraries in our communities,” said Ed McKay, Senior Vice President of Wireline & Engineering. “We have over 5,500 miles of fiber throughout Virginia, Maryland, West Virginia and Pennsylvania, and one of Shentel’s top priorities is to ensure that we provide world-class broadband access to the students in our markets.”

Businesses and municipalities interested in Shentel’s fiber-based services can call 800-SHENTEL for more information about internet, data and voice service options. For more information about all of Shentel’s services and recent activities, please use our contact platform on the homepage

Shentel Ups Internet Speed to Business Customers

Shentel has significantly boosted the internet speed of its existing business customers. The typical Shentel business customer now has triple the speed for the exact same price.

The move to increase speeds took place in June for thousands of business customers in Virginia, West Virginia and Maryland. For example, a business with 25 Mbps speed in May was upgraded to 101 Mbps speed in June for the same price. At the same time, Shentel eliminated slower speeds which no longer met business customer needs. Earlier this year, Shentel also introduced a new top-speed internet tier — 150 Mbps.

“Faster speeds improve efficiencies, enabling our business customers to stay at the top of their game,” said Tom Whitaker, Senior VP-Cable at Shentel. “Shentel invests heavily in our infrastructure and technology. These investments of time, talent and money have enabled us to improve bandwidth and provide our businesses with faster service.”

To find out more about Shentel and its products and services, please send your questions to us using our contact form.

Shenandoah Telecommunications Company reports first quarter 2018 results

Consolidated First Quarter Results

For the quarter ended March 31, 2018, the Company reported net income of $4.8 million, compared to net income of $2.3 million in the first quarter of 2017, representing an improvement of $2.5 million, or 106.3%. The Company completed the acquisition and integration of Sprint subscribers related to the additional Sprint territory under the affiliate agreement on February 1, 2018. The 2018 financial results include the impact of the new revenue recognition standard and Tax Reform.

Earnings per Share was $0.10 in the first quarter 2018 compared to $0.05 in the prior year period. Excluding the impact of the new revenue recognition standard, earnings in the first quarter 2018 were $0.09 per share.

Total revenues were $151.7 million, a decrease of 1.4% compared to first quarter 2017 revenues of $153.9 million.  Excluding the impact of the new revenue recognition standard, which became effective January 1, 2018, total revenues improved approximately $2.0 million. The adoption of the new revenue standard now requires the Company to report costs such as commissions for the national sales channel that are settled separately with Sprint as reductions of revenue. Previously these costs were recorded in cost of goods and services and in selling, general and administrative expense.

Total operating expenses were $137.4 million in the first quarter of 2018 compared to $143.2 million in the prior year period, a decrease of $5.8 million or 4.1%.  Excluding the impacts of the new revenue standard, operating expenses decreased $1.4 million due to a decrease in acquisition and integration costs related to the nTelos integration, and a decrease in depreciation and amortization as assets acquired in the nTelos acquisition were retired. These declines were partially offset by increases in network and selling costs associated with the continued expansion of our networks to support the increase and demand of our subscriber base.

Adjusted OIBDA decreased 6.6% to $68.7 million in the first quarter of 2018 from $73.5 million in the first quarter of 2017. Continuing OIBDA (Adjusted OIBDA less the benefit received from the waived Sprint management fee) decreased 7.7% to $59.6 million from $64.6 million. The adoption of the new revenue recognition standard did not have an impact on Adjusted OIBDA.

President and CEO Christopher E. French commented, “We’re pleased to have continued our momentum from the fourth quarter, delivering enhanced net profitability as well as revenue improvement in two of our segments. The early completion of our transition of nTelos to the Sprint affiliate model resulted in a significant reduction in operating expenses for the quarter and our upgraded network and service packages position us well as a leading telecommunications provider in all of the markets in our extended coverage area.”

Wireless

First quarter wireless revenue decreased $5.1 million or 4.4%, due primarily to the adoption of the new revenue recognition standard. Excluding the impacts of the new revenue recognition standard, revenues decreased $0.9 million driven by a decline in average revenue per subscriber offset by an increase in the number of Sprint's subscribers, including the acquisition of the new territory on February 1, 2018.  The decline in average revenue per subscriber was driven by promotions and discounts.

First quarter operating expenses decreased $10.8 million or 10.1%.  Excluding the impacts of the new revenue recognition standard, operating expenses decreased $6.3 million.  The decrease was due to the elimination of acquisition and integration costs related to the nTelos integration and a reduction in depreciation and amortization.  These decreases were offset by increases in network costs resulting from the completion of our 4G roll-out and expanded coverage, as well as additional selling costs.

Shentel served 774,861 wireless postpaid customers at March 31, 2018, up 8.0% over March 31, 2017.  First quarter postpaid churn was 1.9% and flat to the preceding quarter. The Company had net additions of 38,264 postpaid customers in the quarter, including 38,434 postpaid subscribers in the acquired territory. As of March 31, 2018, tablets and data devices were 8% of the postpaid base reflecting a net gain of 187 for these devices in the quarter.

Shentel served 250,191 prepaid wireless customers at March 31, 2018, an increase of 35 thousand compared to the first quarter of last year.  Total first quarter prepaid churn was 4.4%, down from 5.0% in Q1 2017.  The Company had net additions of 24,369 prepaid customers in the first quarter of 2018, including 15,691 prepaid subscribers in the acquired territory. Excluding the impact of the acquired territory, prepaid subscribers grew 3.7%.

First quarter 2018 Adjusted OIBDA in Wireless was $57.6 million, a decrease of 6.3% from the first quarter of 2017.  Continuing OIBDA in Wireless was $48.5 million, down 7.6% from the first quarter of 2017.

Mr. French continued, “We have significantly grown our coverage area through both the nTelos acquisition and the recent expansion of our Sprint relationship which added 1.1 million POPs in Lancaster County, Pennsylvania, central and southwestern Virginia, southern West Virginia and eastern Kentucky.  With the addition of these new markets, we’ve focused our marketing efforts on increasing customer awareness around our state-of-the-art network, extended coverage area and enhanced service offerings.  We have expanded into complementary markets where we can build networks designed to improve the customer experience by bridging coverage between our existing service areas and Sprint’s metro networks while also providing more continuous, reliable service.  We believe the benefits of our upgraded network and expanded market coverage will drive continued customer additions and market share growth.”

Cable

Service revenues in Cable increased $2.1 million or 7.8% to $28.5 million, primarily due to growth in High Speed Data and Voice RGUs, video rate increases implemented in January 2018 to pass through programming cost increases, and new and existing customers selecting higher speed data packages.  Operating expenses increased 1.2% or $0.3 million in the first quarter of 2018. In the first quarter the Company added 1,223 High Speed Data users and 188 voice users, and lost 1,058 video users. The impact of the new revenue recognition standard, which includes the deferral of incremental commissions and installation costs, was immaterial to operating income for the period ended March 31, 2018.

Adjusted OIBDA in Cable for first quarter 2018 was $11.7 million, up 26.2% from $9.3 million in the first quarter of 2017.

“Consumers increasingly demand high speed, availability, and reliability when they select a new cable provider or look to upgrade their existing service, and our robust network meets and exceeds these requirements. Our ability to provide both high speed bandwidth and dependability is a competitive advantage that allows us to attract new customers and to seamlessly meet the changing needs of our existing customers,” Mr. French stated.

Wireline

Revenue in Wireline increased 2.9% to $19.7 million in the first quarter of 2018, as compared to $19.2 million in the first quarter of 2017.  Carrier access and fiber revenue for the first quarter of 2018 was $12.9 million, an increase of 1.5% from the same quarter last year, primarily as a result of new fiber contracts. Increases in broadband service revenue offset the loss of regulated voice service revenue.  Operating expenses increased 6.1% or $0.9 million to $14.9 million for first quarter 2018, primarily due to costs to support new fiber contracts. The impact of the new revenue recognition standard, which includes the deferral of incremental commissions and installation costs, was immaterial to operating income for the period ended March 31, 2018.

Adjusted OIBDA in Wireline for first quarter 2018 was $8.1 million, as compared to $8.4 million in first quarter 2017.

Other Information

Capital expenditures were $24.4 million in the first quarter of 2018 compared to $38.6 million in the comparable 2017 period. The Company has spent or committed $47.7 million of the estimated 2018 capital budget.

Cash and cash equivalents as of March 31, 2018 were $49.4 million, compared to $78.6 million at December 31, 2017. During the quarter, the Company funded the expansion of the Sprint territory with $52 million of cash on hand. Outstanding debt at March 31, 2018 totaled $810.9 million, net of unamortized loan costs, compared to $822.0 million as of December 31, 2017.  As of March 31, 2018 no amounts were outstanding under the revolving line of credit.

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 digital voice; fiber network and services; and regulated local and long distance telephone. Shentel is the exclusive personal communications service (“PCS”) Affiliate of Sprint in portions of Pennsylvania, Maryland, Virginia, West Virginia, and portions of Kentucky and Ohio.  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’s 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 Reports Fourth Quarter and Full Year 2017 Results

EDINBURG, Va., March 15, 2018 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (NASDAQ: SHEN) announces financial and operating results for the three months and for the year ended December 31, 2017.

Consolidated Fourth Quarter 2017 Results

For the quarter ended December 31, 2017, the Company reported net income of $60.6 million, compared to a net loss of $0.2 million in the fourth quarter of 2016, representing an improvement of $60.8 million. This includes a onetime non-cash tax benefit of approximately $53.4 million in our net deferred tax liabilities as a result of the remeasurement of our deferred tax assets and liabilities to reflect the reduction in the U.S. corporate income tax rate from 35 percent to 21 percent. The integration of nTelos' operations, the transition of its customers, and the upgrade of the network were completed ahead of schedule.

Total revenues were $151.6 million, compared with $155.6 million for the 2016 fourth quarter. Wireless service revenues decreased 3.0% as a result of lower average revenue per subscriber, partially offset by an increase in the number of subscribers. Cable revenues increased 7.7% due primarily to an increase in High Speed Data and voice Revenue Generating Units (RGUs), and new and existing customers selecting higher-speed data packages. Wireline revenues increased 7.3% due to increases in fiber revenue.

Total operating expenses were $133.5 million in the fourth quarter of 2017 compared to $143.4 million in the prior year period, a decrease of $9.9 million or 6.9%. Operating expenses in the fourth quarter of 2017 included $1.2 million of integration and acquisition costs associated with the nTelos acquisition and the exchange transaction with Sprint, compared to $6.4 million in the same quarter last year.

Operating income was $18.1 million representing an increase of $5.9 million compared with the fourth quarter of 2016.

Adjusted OIBDA (Operating Income Before Depreciation and Amortization) decreased 6.5% to $71.0 million in the fourth quarter of 2017 from $76.0 million in the fourth quarter of 2016 primarily due to a decline in Wireless revenues. Continuing OIBDA (Adjusted OIBDA less the benefit received from the waived Sprint management fee) decreased 7.4% to $62.0 million from $67.0 million.

Consolidated Full Year Results

For the year ended December 31, 2017, operating revenues were $612.0 million, an increase of $76.7 million or 14.3%, primarily due to the expansion of our wireless network and coverage area through our acquisition of nTelos and exchange transaction with Sprint that occurred during May 2016. Operating income was $46.5 million, representing an increase of $24.0 million compared with 2016.

Adjusted OIBDA increased 14.1% to $280.9 million in 2017 from $246.1 million in 2016, primarily due to the expansion of our wireless network coverage area through our acquisition of nTelos and exchange transaction with Sprint that occurred during May 2016. Continuing OIBDA increased 10.5% to $244.8 million from 2016.

Net cash provided by operating activities increased 38.0% to $222.9 million.

President and CEO Christopher E. French commented, “Our Company delivered profitable growth in 2017, highlighted by our completed transition of nTelos to the Sprint affiliate model and making great progress in many areas. We accomplished the transition a full quarter ahead of schedule and below our cost expectations. The fourth quarter was our first full quarter of sales after completing the upgrade to 4G LTE in the former nTelos area. At year end 2017 we have completed more than 60% of the planned expansion sites and believe we’re well positioned to continue marketing our enhanced network to drive new customer growth."

Wireless

Fourth quarter wireless revenue decreased $6.3 million or 5.3%, primarily related to a reduction in average revenue per customer as our postpaid subscriber base continued the shift from higher revenue subsidized phone price plans to lower revenue price plans associated with leased and installment sale phones.

Shentel served 736,597 postpaid wireless subscribers at December 31, 2017, up 1.9% over December 31, 2016. Fourth quarter postpaid churn was 2.0% for the total Company and 1.8% in the Legacy area (service area excluding the acquired nTelos area). The Company had net adds of 8,643 postpaid subscribers in the quarter, of which 2,895 were tablets and devices, with the Legacy area adding 3,838 net adds. As of December 31, 2017, tablets and data devices were 7.9% of the postpaid base.

Shentel served 225,822 prepaid wireless subscribers at December 31, 2017, representing an increase of 9.3% compared with 2016. Total fourth quarter prepaid churn was 5.1% with 4.8% in the Legacy area. The Company had net additions of 1,213 prepaid subscribers in the fourth quarter of 2017, with the Legacy area net additions of 1,191.

As previously reported, the prepaid subscriber migration was completed in late December 2016, and the outsourced prepaid billing arrangement was terminated. Shentel completed the migration of the postpaid subscribers in the nTelos service area and the upgrade of the network September 30, 2017.

Fourth quarter 2017 Adjusted OIBDA in Wireless was $56.6 million, a decrease of 11.0% from the fourth quarter of 2016. Continuing OIBDA in Wireless was $47.6 million, down 12.9% from the fourth quarter of 2016.

Mr. French continued, “With the nTelos transition completed, we are focused on attracting new subscribers by effectively marketing the benefits of our improved network, extended coverage area and enhanced service offerings. A few weeks ago, we announced that effective February 1, 2018 we have further expanded our Sprint relationship to add 1.1 million POPs in Lancaster County, Pennsylvania, central Virginia, southwest Virginia, southern West Virginia and eastern Kentucky, with the opportunity to add an additional 200,000 POPs in eastern Kentucky. The expansion allows us to build networks that will improve coverage between our existing service areas and Sprint’s metro networks, provide better and more reliable service for our customers and introduce significant opportunities for our continued growth.”

Cable

Fourth quarter Cable revenue increased $2.2 million or 7.7% to $30.5 million, primarily due to growth in High Speed Data and Voice RGUs. Operating expenses decreased 1.0% or $0.3 million in the fourth quarter of 2017. Operating income was $5.4 million compared with $3.0 million in the prior year, primarily due to the continued transformation of Cable from a video focus to broadband. In the fourth quarter of 2017, the Company added 476 High Speed Data users and 136 voice users, and lost 766 video users.

Adjusted OIBDA in Cable for fourth quarter 2017 was $11.3 million, up 21.3% from $9.3 million in the fourth quarter of 2016.

“Our proven network delivers the high bandwidth and availability that enables us to meet and exceed consumer expectations for high speed service and dependably accessing voice, video or data applications. The reliability of our state-of-the-art network is a competitive advantage as customers choose a new provider or evaluate upgrading their existing service,” Mr. French stated.

Wireline

Revenue in Wireline increased 7.3% to $20.7 million in the fourth quarter of 2017, as compared to $19.3 million in the fourth quarter of 2016. Fiber revenue for the fourth quarter of 2017 was $14.2 million, an increase of 9.7% from the same quarter last year, primarily as a result of new fiber contracts. Increases in broadband service revenue offset the loss of regulated voice service revenue. Operating expenses increased 10.6% or $1.5 million to $15.3 million for fourth quarter 2017, primarily due to costs to support new fiber contracts.

Adjusted OIBDA in Wireline for fourth quarter 2017 was $8.8 million, as compared to $8.4 million in fourth quarter 2016.

Other Information

The Company declared and paid a cash dividend of $0.26 per share during the fourth quarter of 2017. This was the 58th consecutive year of paying a dividend.

Capital expenditures were $37.1 million in the fourth quarter of 2017 compared to $70.4 million in the comparable 2016 period.

Capital Expenditures were $146.5 for the full year 2017, compared with $173.2 for 2016. Capital expenditures in 2017 primarily supported the expansion of our wireless network. Capital expenditures in 2016 primarily supported wireless network upgrades and capacity and coverage enhancements as a result of the nTelos acquisition, as well as retail store remodeling, cable segment extensions and investment in customer premises equipment, and expansion and upgrade of our fiber networks.

Cash and cash equivalents as of December 31, 2017 were $78.6 million, compared to $36.2 million at December 31, 2016. Total outstanding debt at December 31, 2017 totaled $822.0 million, net of unamortized loan costs, compared to $829.3 million as of December 31, 2016. At December 31, 2017, debt as a percent of total assets was 58%. The amount available to the Company through its revolver facility was $75.0 million. The Company expects to utilize $15 million of the revolver facility capacity during the first quarter of 2018.

Effective February 1, 2018, we signed the Expansion Agreement with Sprint to expand our wireless service area to include certain areas in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia, (the “Expansion Area”), effectively adding a population (POPs) of approximately 1.1 million in Lancaster County, PA, central Virginia, southwest Virginia, southern West Virginia, and eastern Kentucky. The agreement includes certain network build out requirements in the Expansion Area, and the ability to utilize Sprint’s spectrum in the Expansion Area along with certain other amendments to the Affiliate Agreements. Pursuant to the Expansion Agreement, Sprint agreed to, among other things, transition the provision of network coverage in the Expansion Area from Sprint to us. The Expansion Agreement required us to make a one-time payment of $60.0 million to Sprint for the right to service the Expansion Area pursuant to the Affiliate Agreements plus an additional payment of up to $5.0 million for certain equipment at the Sprint cell sites in the Expansion Area for maximum potential consideration of $65.0 million. We also amended our affiliate agreements with Sprint to reflect the provisions of the Expansion Agreement. A postclosing reconciliation to validate Sprint subscribers in the Expansion Area identified 59,097 Sprint subscribers in the Expansion Area instead of the 66,822 originally identified, which resulted in an $8 million reduction in purchase price.

On February 16, 2018, the Company, entered into a Second Amendment to Credit Agreement (the “Second Amendment”) with CoBank, ACB, as administrative agent of its Credit Agreement, described more fully in Note 13, Long-Term Debt, and the various financial institutions party thereto (the “Lenders”), which modifies the Credit Agreement by (i) reducing the interest rate paid by the Company by approximately 50 basis points with respect to certain loans made by the Lenders to the Company under the Credit Agreement, and (ii) allowing the Company to make charitable contributions to Shentel Foundation, a Virginia nonstock corporation, of up to $1.5 million in any fiscal year.

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 digital voice; fiber network and services; and regulated local and long distance telephone. Shentel is the exclusive personal communications service (“PCS”) Affiliate of Sprint in portions of Pennsylvania, Maryland, Virginia, West Virginia, and portions of Kentucky and Ohio. 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’s filings with the SEC. Those factors may include changes in general economic conditions, increases in costs, changes in regulation and other competitive factors.

Shentel increases speed to next tier for Internet customers

Shentel upgraded its internet customers with 15Mbps speed or higher to the next speed tier at no additional cost to them.

The move took place in February and, in recent days, the company has received positive feedback about the decision to upgrade. Shentel also took this opportunity to introduce a new top speed, 150Mbps, for customers in Virginia, West Virginia and Maryland. In the tiers, 15Mbps rose to 25Mbps, 25Mbps doubled to 50Mbps and 101Mbps rose to 150Mbps.

For customers who live in a home with multiple devices and many users, the speed increase means they can be online simultaneously without experiencing a slowing of service. Households are able to download HD movies, stream programs and download games, as well as do homework and download work files, much faster. Shentel customers have already noticed the difference and have reported their satisfaction with the new speed.

“While it may seem that the speed upgrade happened with a flip of the switch, a lot of work went into this project,” said Tom Whitaker, Senior VP-Cable at Shentel. “Shentel invests heavily in our infrastructure and technology. These investments of time, talent and money have enabled us to improve bandwidth and provide customers with faster service.”

To find out more about Shentel and its products and services, please send your questions to us via our contact form provided

Shentel improves network, adds services in rural WV towns

A recent significant upgrade in network has enabled Shentel to bring new products and services to the towns of Marlinton and Grantsville, both in Shentel’s West Virginia service area.

Customers in these rural areas, now have access to the highest Internet speed tier Shentel offers - 150Mbps. They will be able to experience truly fast high-speed Internet. Telecommuting and sharing large files is no longer an issue. Busy homes using multiple IP-driven devices won’t have to take turns. Tablets, laptops and desktops can share with speed to spare.

Upgraded phone service is now available as well. Shentel Digital Voice is secure, easy and convenient. Get expanded local calls or unlimited long distance with local. Either package comes with favorite calling features like voicemail and Caller ID. There are no hidden fees and customers can keep their current phone number.

In celebration of the new upgrade, Shentel boosted all current Internet customers to 25 Mbps for free for three months so they can test out the new high speed broadband. “This is a way to sample the higher speeds at no cost to them,” said Tom Whitaker, Senior VP – Cable.  “We are very excited to be able to bring advanced services to these areas.”

To find out more about Shentel and what products and services are available in your area, go to Shentel.com and pop in your zip code. You will be able to see what services are available in your area.

Shentel Partners with Hitron to offer Wall to Wall WiFi

Shentel has announced the launch of a new product to enhance and extend Shentel WiFi service in your home.

Wall to Wall WiFi from Shentel offers a powerful modem with signal extenders when needed to cover every inch of livable space in the home. The network is custom installed by a Shentel technician who will identify and eliminate areas in the home where Wi-Fi signals are weakest.

In addition to enhancing wireless Internet service access throughout your home, Wall to Wall WiFi also gives enhanced control over your home wireless network. By using the MyHitron™ mobile app, customers will be able to see all the devices connected to their wireless network, set parental controls, test internet speed and manage access per connected device.

Shentel teamed with Hitron Technologies, North America’s fastest growing DOCSIS CPE vendor, to launch this every corner, every room, every device WiFi experience. “Hitron is thrilled to partner with Shentel, a service provider who shares our strategic vision. No frustrating dead spots, just fast, reliable and managed WiFi service,” said Todd Babic, Hitron America’s Chief Sales Officer. “Shentel’s Wall to Wall WiFi customers can expect a sanity-saving, Zen-inducing WiFi experience.

“Wall to Wall WiFi gives our customers the power to make the most of their wireless Internet,” said Tom Whitaker, Senior VP – Cable at Shentel. “The mobile app allows Wall to Wall WiFi customers to visualize their home network and manage that network to provide every user in the home with a great experience.”