EDINBURG, Va., Aug. 06, 2019 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (NASDAQ: SHEN) announced solid second quarter results.

Second Quarter 2019 Highlights
• Consolidated operating revenue grew 1.5% to $158.9 million.
• Consolidated Adjusted OIBDA⁽¹⁾ grew 5.2% to $67.0 million with growth in all segments.
• Consolidated operating income grew 13.5% to $24.0 million.
• Diluted earnings per share grew 36.4% to $0.26 per share compared with $0.19 per share in second quarter 2018.
• Wireless postpaid net additions of 10,767.

"Our second quarter results demonstrate continued strength of our high quality networks and operations highlighted by growth in Adjusted OIBDA across all of our business segments," said President and CEO Christopher E. French. "Shentel continued to achieve growth in both our postpaid and prepaid wireless customer base, as we capitalized on the investments we've made in our network to solidify our leadership role providing the highest reliability and broadest coverage in the markets we serve. Our Cable segment benefited from the successful integration of Big Sandy Broadband ("Big Sandy"), the DOCSIS 3.1 upgrade and new pricing introduced earlier in the year that led to bandwidth speed upgrades and growing customer ARPU. We continue to leverage our strong balance sheet and cash flow generation to make targeted investments to position the Company for strong growth for the next several years."

Please refer to our Second 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 additional information for non-GAAP measures provided herein.

Consolidated Second Quarter 2019 Results

• Operating revenue in the second quarter of 2019 was $158.9 million, representing an increase of 1.5% from $156.5 million in the second quarter of 2018 driven by growth in the Cable and Wireline segments.
• Operating expenses for the second quarter of 2019 were $134.9 million, representing a decrease of 0.3% from $135.3 million in the second quarter of 2018. The decrease was primarily due to a decline in selling, general and administrative expenses in our Wireless and Other segments.
• Operating income for the second quarter 2019 was $24.0 million, representing an increase of 13.5% from $21.2 million in the second quarter of 2018.
• Adjusted OIBDA⁽¹⁾ in the second quarter of 2019 was $67.0 million, representing an increase of 5.2% from $63.7 million in the second quarter of 2018. The increase was driven by revenue growth in Cable and Wireline and lower transactional tax and professional fee expenses in the Wireless and Other segments.
• Net income in the second quarter of 2019 was $13.2 million, representing an increase of 36.6% from $9.6 million in the second quarter of 2018.

Wireless

• Shentel's network served 811,719 wireless postpaid subscribers at June 30, 2019, an increase of 4.0% compared with 780,658 subscribers as of June 30, 2018. Second quarter 2019 postpaid churn was 1.74%. At June 30, 2019, tablets and data devices represented 10.4% of the postpaid base.
• Shentel's network served 269,039 wireless prepaid subscribers at June 30, 2019, an increase of 6.7% compared with 252,054 subscribers as of June 30, 2018. Second quarter 2019 prepaid churn was 3.97%, representing an improvement of 28 basis points compared with the prior year.
• Wireless operating revenue decreased 0.5% to $114.1 million for the second quarter of 2019 from $114.8 million in the second quarter of 2018. Travel revenue declined $3.0 million during the second quarter of 2019 due to the suspension by Sprint of travel revenue payments. The travel revenue decline was substantially offset by increases in subscriber service revenue of $0.9 million, in equipment revenue of $0.7 million, and in roaming revenue of $0.5 million.
• Under our Sprint affiliate agreement, Shentel and Sprint compensate one another when subscribers use the other company's network. This has been reflected in a net monthly payment of $1.5 million from Sprint to Shentel for the period beginning at the closing of the Ntelos transaction in 2016 through April of 2019. Sprint suspended the monthly payments beginning in May 2019 pending agreement on new travel fees. Under our affiliate agreement with Sprint, the travel fees are to be reset for a three year period. Although we have been working with Sprint to establish the new fees, we have not reached an agreement and have begun the escalation process as outlined in our affiliate agreement. We expect to resolve the new travel fees in the third quarter 2019.
• Wireless operating expenses in the second quarter of 2019 were $92.1 million, representing a decrease of 0.4% from $92.5 million in the second quarter of 2018. This decrease was primarily due to a $1.8 million decline in selling, general and administrative expenses due to reductions in transactional tax expenses, partially offset by increases of $0.7 million in cost of goods sold and $0.7 million in depreciation expense.
• Wireless operating income in the second quarter of 2019 was $22.0 million, compared to $22.3 million for the second quarter of 2018.
• Wireless Adjusted OIBDA⁽¹⁾ in the second quarter of 2019 was $54.2 million, compared to $53.8 million for the second quarter of 2018.

Cable

• Total Revenue Generating Units ("RGUs") as of June 30, 2019 were 138,572, representing an increase of 4.1% and includes the addition of approximately 4,800 RGUs obtained through the Big Sandy acquisition that occurred in the first quarter of 2019.
• Cable operating revenue for the second quarter of 2019 was $34.7 million, representing an increase of 8.0% from $32.1 million in the second quarter of 2018. The increase was primarily attributable to a full quarter of Big Sandy results and growth in average revenue per customer ("ARPU") as broadband customers upgraded to higher-speed data access packages and an increase in video rates.
• Cable operating expenses in the second quarter of 2019 were $27.9 million, representing an increase of 7.2% from $26.0 million for the second quarter of 2018. The increase was primarily due to higher repair and maintenance expense associated with maintaining our growing network and an increase in business development expenses aimed at expanding our product portfolio.
• Cable operating income for the second quarter of 2019 was $6.8 million, representing an increase of 11.6% from $6.1 million for the second quarter of 2018.
• Cable Adjusted OIBDA for the second quarter of 2019 was $13.3 million, representing an increase of 8.8% from $12.3 million for the second quarter of 2018.

Wireline

• Wireline operating revenue for the second quarter of 2019 was $19.5 million, representing an increase of 2.2% from $19.1 million in the second quarter of 2018. The increase in operating revenue was primarily attributable to the timing of receiving regulatory support funds.
• Wireline operating expenses in the second quarter of 2019 were $14.4 million, consistent with operating expenses in the second quarter of 2018.
• Wireline operating income for the second quarter of 2019 was $5.1 million, representing an increase of 6.3% from $4.8 million in the second quarter of 2018.
• Wireline Adjusted OIBDA for the second quarter of 2019 was $8.5 million, representing an increase of 6.3% from $8.0 million in the second quarter of 2018.

Other Information

• Capital expenditures were $79.1 million for the six months ended June 30, 2019 compared with $62.3 million in the comparable 2018 period. We are increasing our capital expenditures guidance for 2019 from $150 million to $170 million to reflect the acquisition of 2.5 GHz spectrum that we plan to use to increase the reach of our residential broadband service via fixed wireless in the underserved areas of our markets.
• Outstanding debt at June 30, 2019 totaled $760.5 million compared with $785.2 million as of December 31, 2018. As of June 30, 2019, the Company had liquidity of approximately $173.1 million, including $75.0 million of revolving line of credit availability.

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 a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, North Carolina, Kentucky, and Ohio. For more information, please visit www.shentel.com.