Shenandoah Telecommunications Company Reports First Quarter 2021 Results

Edinburg, Virginia, UNITED STATES

EDINBURG, Va., April 29, 2021 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN) announced first quarter 2021 financial and operating results.

First Quarter 2021 Highlights  

  • Broadband data net additions grew 61.9% to 4,245 including 1,366 and 370 for Glo Fiber and Beam, respectively.
  • Broadband data churn of 1.29%, 0.86% and 0.99% for incumbent cable, Glo Fiber and Beam, respectively.
  • In addition to the launch of Salem, Virginia, in January, Glo Fiber launched in two additional markets in April, Roanoke and Lynchburg Virginia.
  • Total Broadband homes and businesses passed grew over 13,000 to approximately 260,000.
  • Earnings per diluted share was $1.03 consisting of $0.06 for continuing operations and $0.97 for discontinued operations.

“We made excellent progress in executing our 2021 plan with strong growth in broadband data net additions, newly constructed passings, revenues and Adjusted OIBDA,” said President and CEO, Christopher E. French. “In particular, we are very pleased with our broadband data churn result in the quarter. We believe strongly that we have a superior value proposition to our competitors in all of the markets we serve and the continued gains in customer satisfaction we are experiencing are strong validation of our broadband investment thesis.”  

Shentel's first-quarter earnings conference call will be webcast at 8:00 a.m. ET on Friday, April 30, 2021. The webcast and related materials will be available on Shentel’s Investor Relations website at

Consolidated First Quarter 2021 Results

  • Revenue in the first quarter of 2021 grew 12.3% to $59.7 million due to the growth of 25.1% in Towers and 10.8% in Broadband segments.
  • Adjusted OIBDA in the first quarter of 2021 grew 19.1% to $17.1 million due to 8.3% growth in Broadband, and 40.5% growth in Tower.
  • Operating income in the first quarter of 2021 was $2.4 million compared with a loss of $1.4 million in the first quarter of 2020.
  • Earnings from continuing operations per diluted share was $0.06 in the first quarter of 2021 and earnings from discontinued operations grew 259.3% to $0.97 per diluted share from the first quarter of 2020.


  • Broadband revenue in the first quarter of 2021 grew $5.4 million or 10.8% to $55.2 million compared with $49.8 million in the first quarter of 2020, primarily driven by $5.9 million or 16.0% increase in Residential and SMB revenue on 24.1% increase in broadband data RGUs. RLEC revenue declined by $0.6 million, or 15.2%, to $3.7 million due primarily to a decline in residential DSL subscribers, lower governmental support and lower intercompany phone service. We expect RLEC revenue to continue to decline.
  • Broadband operating expenses in the first quarter of 2021 were $44.7 million compared to $39.1 million in the first quarter of 2020, driven by costs incurred to support the growth of Glo Fiber and Beam fixed wireless, including a $2.1 million increase in compensation expense primarily from increased staffing, $1.7 million increase in depreciation, a $0.9 million increase in software and professional fees, and a $0.5 million increase in programming fees.
  • Broadband Adjusted OIBDA in the first quarter of 2021 grew 8.3% to $22.4 million, compared with $20.7 million for the first quarter of 2020.
  • Broadband Operating income in the first quarter of 2021 was $10.4 million, compared to $10.7 million in the first quarter of 2020.


  • Tower revenue grew 25.1% to $4.7 million due to 8.6% increase in tenants and 14.7% increase in average revenue per tenant.
  • Tower Adjusted OIBDA in the first quarter of 2021 grew 40.5% to $3.2 million, compared with $2.3 million for the first quarter of 2020.
  • Tower operating income in the first quarter of 2021 was consistent with 2020.

Other Information

  • The closing of the sale of our Wireless assets is now expected to occur in early third quarter 2021, subject to execution of the definitive asset purchase agreement, securing required regulatory approvals and fulfillment of customary closing conditions. The Company and T-Mobile submitted required regulatory filings to the Department of Justice (DOJ), the Federal Communications Commission (FCC), and the Public Service Commission of West Virginia (PSCWV), in March 2021. The premerger notification waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, expired on April 26, 2021, without the DOJ’s Antitrust Division or the Federal Trade Commission taking any action in connection with the proposed transaction thus allowing the parties to consummate the transaction upon receipt of pending regulatory approvals from the FCC and the PSCWV.
  • In connection with the pending sale of the Wireless assets, we announced a workforce reduction that is expected to result in the termination of approximately 340 employees, or 30% of the Company’s workforce. Approximately 90% of the reductions are employees who support wireless operations and who will not automatically transfer to T-Mobile as part of the pending Wireless asset sale. Most of the employees impacted by the workforce reduction will exit the Company in 2021 following the closing of the pending sale and any required transition services.
  • The Company currently expects to incur approximately $5.8 million of severance expense during 2021, with approximately $1.7 million attributable to continuing operations and $4.1 million related to discontinued operations. Approximately $0.8 million of severance expense was recognized during the first quarter of 2021, with $0.6 million related to continuing operations and $0.2 million related to discontinued operations. The remaining severance expenses are expected to be incurred when the sale of our Wireless operations is completed, which is expected to be during the third quarter of 2021. The workforce reduction is expected to decrease the Company's annualized run-rate operating expenses for continuing operations by approximately $4 million.
  • As previously announced, the Company currently expects the after-tax proceeds from the sale of our discontinued Wireless operations to be approximately $1.5 billion, which will be used repay approximately $689 million of outstanding term loans under our existing credit agreement (which will then be terminated) and to fund a special dividend of $18.75 per share to Shentel’s shareholders. The Company expects to pay the special dividend in the third quarter 2021 after the close of the transaction, subject to the approval of Shentel’s Board of Directors. Additionally, the Company intends to repay approximately $3 million of swap liabilities.
  • Cash and cash equivalents grew $33.8 million to $229.2 million as of March 31, 2021 driven by strong cash flow from discontinued operations. The Company had liquidity of approximately $304.2 million, including $75.0 million of revolving line of credit availability.
  • Capital expenditures were $39.5 million for the three months ended March 31, 2021 compared with $23.4 million in the comparable 2020 period. The $16.1 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by the expansion of Glo Fiber and Beam.

2021 Outlook
The Company is affirming the full-year 2021 guidance as summarized below:

($ in millions) Year Ending December 31, Year Ended December 31, 2019 % Change 2020 to 2021 Midpoint % Change 2019 to 2020
  2021 2020   
  Guidance Actual   
  Low High     
Revenue $241  $248  $221   $207   10.6% 6.8%
Operating Income (loss) $7  $14  $(1)  $(1)  nm %
Adjusted OIBDA $69  $76  $57   $49   27.2% 16.3%
Capital Expenditures $157  $168  $120   $67   35.4% 79.1%

Adjusted OIBDA is a non-GAAP financial measure that is not determined in accordance with US generally accepted accounting principles. Reconciliations of this non-GAAP financial measures are provided in this press release after the consolidated financial statements.

Conference Call and Webcast

Teleconference Information:

Date: April 30, 2021
Time: 8:00 A.M. (ET)
Dial in number: 1-888-695-7639

Password: 5934209

Audio webcast:

An audio replay of the call will be available approximately two hours after the call is complete, through May 30, 2021 by calling (855) 859-2056.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides a broad range of diversified communications services through its high speed, state-of-the-art wireless, cable and fiber optic and fixed wireless networks to customers in the Mid-Atlantic United States. The Company’s services include: broadband internet, video, and digital voice; fiber optic Ethernet, wavelength and leasing; telephone voice and digital subscriber line; tower colocation leasing; and wireless voice and data. Shentel is the exclusive personal communications service (“PCS”) Affiliate of Sprint in a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, and Kentucky. For more information, please visit

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
Jim Volk
Senior Vice President - Chief Financial Officer

(in thousands, except per share amounts)Three Months Ended
March 31,
 2021 2020
Service revenue and other$59,691  $53,134  
Operating expenses:   
Cost of services23,283  20,317  
Selling, general and administrative20,153  22,096  
Restructuring expense618    
Depreciation and amortization13,266  12,085  
Total operating expenses57,320  54,498  
Operating income (loss)2,371  (1,364) 
Other income:   
Other income, net1,600  749  
Income (loss) before income taxes3,971  (615) 
Income tax expense (benefit)922  (765) 
Income from continuing operations3,049  150  
Income from discontinued operations, net of tax48,472  13,130  
Net income51,521  13,280  
Net income per share, basic and diluted:   
Basic - Income from continuing operations$0.06  $  
Basic - Income from discontinued operations, net of tax$0.97  $0.27  
Basic net income per share$1.03  $0.27  
Diluted - Income from continuing operations$0.06  $  
Diluted - Income from discontinued operations, net of tax$0.97  $0.27  
Diluted net income per share$1.03  $0.27  
Weighted average shares outstanding, basic49,947  49,888  
Weighted average shares outstanding, diluted50,081  50,036  

(in thousands)

 March 31,
 December 31,
Cash and cash equivalents$229,182  $195,397 
Other current assets79,561  80,024 
Current assets held for sale1,117,528  1,133,294 
Total current assets1,426,271  1,408,715 
Investments13,376  13,769 
Property, plant and equipment, net468,383  440,427 
Intangible assets, net and Goodwill106,543  106,759 
Operating lease right-of-use assets52,738  50,387 
Deferred charges and other assets, net14,998  11,650 
Non-current assets held for sale   
Total assets$2,082,309  $2,031,707 
Current liabilities held for sale443,089  $452,202 
Total current liabilities759,228  $755,859 
Long-term debt, less current maturities   
Non-current liabilities held for sale   
Other liabilities246,038  241,252 
Total shareholders’ equity633,954  582,394 
Total liabilities and shareholders’ equity$2,082,309  $2,031,707 


 Three Months Ended
March 31,
(in thousands)2021 2020
Cash flows from operating activities:   
Net income$51,521   $13,280  
Income from operations of discontinued operations, net of tax48,472   13,130  
Income from continuing operations3,049   150  
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation13,043   11,931  
Amortization of intangible assets223   154  
Bad debt expense137   205  
Stock based compensation expense, net of amount capitalized642   2,739  
Deferred income taxes5,256   (385) 
Other adjustments(339)  (257) 
Changes in assets and liabilities(12,875)  (1,283) 
Net cash provided by operating activities – continuing operations9,136   13,254  
Net cash provided by operating activities – discontinued operations75,530   47,854  
Net cash provided by operating activities84,666   61,108  
Cash flows from investing activities:   
Capital expenditures(39,482)  (23,362) 
Proceeds from sale of assets and other14   263  
Net cash used in investing activities – continuing operations(39,468)  (23,099) 
Net cash used in investing activities – discontinued operations(882)  (8,926) 
Net cash used in investing activities(40,350)  (32,025) 
Cash flows from financing activities:   
Taxes paid for equity award issuances(1,486)  (1,945) 
Other(496)  (27) 
Net cash used in financing activities – continuing operations(1,982)  (1,972) 
Net cash used in financing activities – discontinued operations(8,549)  (8,530) 
Net cash used in financing activities(10,531)  (10,502) 
Net increase in cash and cash equivalents33,785   18,581  
Cash and cash equivalents, beginning of period195,397   101,651  
Cash and cash equivalents, end of period$229,182   $120,232  

Non-GAAP Financial Measures
Adjusted OIBDA

Adjusted OIBDA represents Operating income before depreciation, amortization of intangible assets, stock-based compensation and certain other items of revenue, expense, gain or loss not reflective of our operating performance, which may or may not be recurring in nature.

Adjusted OIBDA is a non-GAAP financial measure that we use to evaluate our operating performance in comparison to our competitors. Management believes that analysts and investors use Adjusted OIBDA as a supplemental measure of operating performance to facilitate comparisons with other telecommunications companies. This measure isolates and evaluates operating performance by excluding the cost of financing (e.g., interest expense), as well as the non-cash depreciation and amortization of past capital investments, non-cash share-based compensation expense, and certain other items of revenue, expense, gain or loss not reflective of our operating performance.

Adjusted OIBDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for operating income, net income or any other measure of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

The following tables reconcile Adjusted OIBDA to operating income, which we consider to be the most directly comparable GAAP financial measure:

Three Months Ended March 31, 2021        
(in thousands) Broadband Tower Corporate & Eliminations Consolidated
Operating income (loss) from continuing operations $10,427  $2,702  $(10,758)  $2,371 
Depreciation 11,538  481  1,024   13,043 
Amortization 223       223 
OIBDA 22,188  3,183  (9,734)  15,637 
Stock compensation expense     642   642 
Deal advisory fees 115    109   224 
Restructuring expense 105    513   618 
Adjusted OIBDA $22,408  $3,183  $(8,470)  $17,121 

Three Months Ended March 31, 2020        
(in thousands) Broadband Tower Corporate & Eliminations Consolidated
Operating income (loss) from continuing operations $10,662  $1,795  $(13,821)  $(1,364) 
Depreciation 9,880  470  1,581   11,931  
Amortization 154       154  
OIBDA 20,696  2,265  (12,240)  10,721  
Stock compensation expense     2,739   2,739  
Deal advisory fees     910   910  
Adjusted OIBDA $20,696  $2,265  $(8,591)  $14,370  

2021 Outlook – Adjusted OIBDA

($ in millions) Year Ending December 31, Year Ended December 31, 2019
  2021 2020 
  Guidance Actual 
  Low High   
Operating Income (loss) $7  $14  $(1)  $(1) 
Depreciation $53  $53  $48   $46  
Amortization $1  $1  $1   $1  
Stock compensation expense $6  $6  $6   $3  
Deal advisory fees $  $  $3   $  
Restructuring expense and other $2  $2  $   $  
Adjusted OIBDA $69  $76  $57   $49  

Segment Results

Three Months Ended March 31, 2021:

(in thousands) Broadband Tower Corporate & Eliminations Consolidated
External revenue        
Residential & SMB $42,930  $  $   $42,930 
Commercial Fiber 6,385       6,385 
RLEC & Other 3,631       3,631 
Tower lease   2,150     2,150 
Service revenue and other 52,946  2,150     55,096 
Revenue for service provided to the discontinued Wireless operations 2,208  2,515  (128)  4,595 
Total revenue 55,154  4,665  (128)  59,691 
Operating expenses        
Cost of services 22,136  1,248  (101)  23,283 
Selling, general and administrative 10,725  234  9,194   20,153 
Restructuring expense 105    513   618 
Depreciation and amortization 11,761  481  1,024   13,266 
Total operating expenses 44,727  1,963  10,630   57,320 
Operating income (loss) $10,427  $2,702  $(10,758)  $2,371 

Three Months Ended March 31, 2020:

(in thousands) Broadband Tower Corporate & Eliminations Consolidated
External revenue        
Residential & SMB $37,009  $  $   $37,009  
Commercial Fiber 6,200       6,200  
RLEC & Other 4,044       4,044  
Tower lease   1,797     1,797  
Service revenue and other 47,253  1,797     49,050  
Revenue for service provided to the discontinued Wireless operations 2,533  1,933  (382)  4,084  
Total revenue 49,786  3,730  (382)  53,134  
Operating expenses        
Cost of services 19,386  939  (8)  20,317  
Selling, general and administrative 9,704  526  11,866   22,096  
Depreciation and amortization 10,034  470  1,581   12,085  
Total operating expenses 39,124  1,935  13,439   54,498  
Operating income (loss) $10,662  $1,795  $(13,821)  $(1,364) 

Supplemental Information

Broadband Operating Statistics

 March 31,
 March 31,
Broadband homes and businesses passed (1)259,891  212,129 
Incumbent Cable (2)210,210  206,782 
Glo Fiber34,441  5,347 
Broadband customer relationships (3)115,921  103,287 
Residential & SMB RGUs:   
Broadband Data107,569  86,667 
Incumbent Cable (2)101,576  86,214 
Glo Fiber5,524  453 
Video (2)51,989  53,067 
Voice (2)33,322  31,836 
Total Residential & SMB RGUs (excludes RLEC)192,880  171,570 
Residential & SMB Penetration (4)   
Broadband Data41.4% 40.9%
Incumbent Cable48.3% 41.7%
Glo Fiber16.0% 8.5%
Beam3.1% %
Video20.0% 25.0%
Voice14.6% 16.3%
Fiber route miles6,888  6,273 
Total fiber miles (5)407,710  334,802 


(1)Homes and businesses are considered passed (“homes passed”) if we can connect them to our network without further extending the distribution system. Homes passed is an estimate based upon the best available information. Homes passed will vary among video, broadband data and voice services.
(2)The Company acquired Canaan Cable on December 31, 2020 adding 1,100 homes passed, 512 data RGUs, 324 video RGUs and 164 voice RGUs.
(3)Customer relationships represent the number of billed customers who receive at least one of our services.
(4)Penetration is calculated by dividing the number of users by the number of homes passed or available homes, as appropriate.
(5)Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.


Broadband - Residential and SMB ARPU   
 Three Months Ended
March 31,
 2021 2020
Residential and SMB Revenue:   
Broadband$24,585   $19,833  
Incumbent Cable23,465    19,768   
Glo Fiber1,068    65   
Beam52    —   
Video15,652   14,821  
Voice2,899   2,827  
Discounts and adjustments(206)  (472) 
Total Revenue$42,930    $37,009   
Average RGUs:   
Broadband Data105,149   84,890  
Incumbent Cable100,117    84,621   
Glo Fiber4,795    269   
Beam237    —   
Video52,436   52,995  
Voice32,931   31,593  
ARPU: (1)   
Broadband$77.93   $77.88  
Incumbent Cable$78.12    $77.87   
Glo Fiber$74.24    $80.55   
Beam$73.14    $—   
Video$99.50   $93.22  
Voice$29.34   $29.83  


(1)Average Revenue Per RGU calculation = (Residential & SMB Revenue * 1,000) / average RGUs / 3 months

Tower Operating Statistics

 March 31,
 March 31,
Macro tower sites223  220 
Tenants (1)443  408 
Average tenants per tower2.0  1.85 


(1)Includes 236 and 203 intercompany tenants for our Wireless operations, (reported as a discontinued operation), and Broadband operations, as of March 31, 2021 and 2020, respectively.