EDINBURG, Va., Feb. 25, 2021 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications Company (Nasdaq: SHEN) announced fourth quarter and full year 2020 financial and operating results.

2020 Highlights

• Record Broadband data net additions of approximately 18,800 with Glo Fiber and Beam contributing approximately 4,000 and 100, respectively
• Added approximately 27,000 Glo Fiber homes passed and eight new franchise agreements expanding franchise passings to over 116,000
• Launched Beam fixed wireless broadband service in the fourth quarter 2020 to approximately 9,400 homes passed in four counties in Virginia

“2020 was a very successful and pivotal year for our Company, as we built momentum executing our Broadband strategy. Our incumbent cable business had a record year of data net additions, driven by our upgraded DOCSIS 3.1 cable network, the value of our Powerhouse rate card, and the increase in customers working and learning from home,” said President and CEO, Christopher E. French. “Our first full year of Glo Fiber exceeded our expectations for construction pace, penetration rates and churn, validating our investment thesis. We are also pleased to have successfully launched our Beam fixed wireless service in October, providing an additional means to deliver broadband services. We are excited that the foundational investments made in our integrated broadband network will support sustainable high growth rates for the next several years.”

Shentel's fourth-quarter earnings conference call will be webcast at 8:30 a.m. ET on Thursday, February 25, 2021. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/. 

Consolidated Full Year 2020 Results

• Revenue grew 6.7% to $220.8 million driven by 31% growth in Tower and 5.4% growth in Broadband segments.
• Adjusted OIBDA increased 15.8% to $57.2 million in 2020 due to strong growth in Towers and a 13.3% decline in Corporate expenses.
• Operating loss in 2020 was $(1.1) million, compared with $(0.7) million in 2019.
• Earnings from continuing operations per diluted share was $0.05 compared to $0.05 in 2019 and earnings from discontinued operations grew 131.8% to $2.48 per diluted share 2020.

Broadband

• Total Broadband Data Revenue Generating Units ("RGUs") as of December 31, 2020 were 102,812, representing 22.3% year over year growth.
• Incumbent cable Broadband Data RGUs as of December 31, 2020 were 98,555, representing 17.4% year over year growth. Data penetration grew year over year from 40.6% to 47.2% driven by strong demand for high speed Internet, the enhanced value of our Powerhouse rate card and demand from Covid-19 induced work and learn from home mandates. Churn declined 20 basis points year over year to 1.6%. Broadband average revenue per user (“ARPU”) decreased 1.0% to $77.97, in 2020, driven by sales of a discounted pre-paid rate plan offered to credit-challenged customers as a result of the pandemic.
• Glo Fiber Broadband Data RGUs as of December 31, 2020 were 4,158. Penetration grew to 14.5% driven by strong demand for high speed Internet fiber-based services and differentiated local customer service. 2020 churn and ARPU were 0.84% and $78.90, respectively. Total Glo Fiber passings grew approximately 28.2% sequentially, from the third quarter 2020, to 28,652.
• Beam Broadband Data RGUs as of December 31, 2020 were 99. ARPU was $73.17 for the period since the launch in October 2020.
• The Company acquired Canaan Cable on December 31, 2020 for $2.1 million. RGUs acquired in the deal totaled approximately one thousand, which have not been included in our reporting of revenue, RGUs, or ARPU for 2020.
• Total Broadband revenue grew $10.4 million or 5.4% to $204.3 million. Residential & SMB revenue increased approximately $12.7 million, or 8.9%, during 2020 primarily driven by 22.3% growth in broadband penetration. Commercial Fiber revenue increased approximately $2.3 million during 2020 due to an increase in new enterprise and backhaul recurring revenue of $4.0 million partially offset by a $1.6 million decline in amortized upfront fee revenue. Rural Local Exchange Carrier (RLEC) & Other revenue decreased approximately $4.7 million, or 22.0%, compared with 2019 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 as subscribers migrate to faster speed data services provided by our dual-incumbent cable franchise in Shenandoah County, Virginia.
• Broadband operating expenses increased approximately $12.6 million, or 8.4%, to $164.0 million in 2020, compared with 2019, primarily due to $7.9 million of higher compensation expense due to the combination of Glo Fiber and Beam start-up staffing, higher incentive accrual from strong operating results, COVID supplemental pay for customer interfacing employees and enhanced benefit plans. Higher software fees and professional services drove an additional increase of $2.8 million which was driven by higher software fees and licenses and professional services. Other general and administrative expenses increased by $0.6 million. Depreciation and amortization expense also increased by $2.5 million.
• Broadband Adjusted OIBDA in 2020 grew 0.5% to $81.5 million, compared with $81.2 million in 2019.
• Broadband operating income in 2020 was $40.4 million, compared with $42.6 million in 2019.

Tower

• Total macro towers and tenants were 223 and 427, respectively, as of December 31, 2020, as compared to 225 and 404, respectively, as of December 31, 2019.
• Revenue increased approximately $4.1 million, or 31.3%, in 2020 to $17.1 million compared with 2019. This increase was due to an 5.7% increase in tenants and 23.4% increase in average revenue per tenant driven by amendments to intercompany leases.
• Operating expenses increased approximately $1.5 million compared to the prior year period, due primarily to increases in ground lease rent expense and professional services.
• Tower Adjusted OIBDA grew 29.7% to $10.7 million, compared with $8.3 million in 2019.
• Tower operating income in 2020 was $8.8 million, compared with $6.3 million in 2019.

Consolidated Fourth Quarter 2020 Results

• Revenue in the fourth quarter of 2020 grew 8.5% to $58.1 million due to the growth of 20.4% in Towers and 7.8% in Broadband segments.
• Adjusted OIBDA in the fourth quarter of 2020 grew 20.4% to $15.7 million due to 18.2% decline in Corporate expenses, 18.9% growth in Towers and 3.1% growth in Broadband.
• Operating income in the fourth quarter of 2020 was $1.6 million compared with a loss of $(0.6) million in the fourth quarter of 2019.
• Earnings from continuing operations per diluted share was $0.03 compared to $(0.01) in the fourth quarter 2019 and earnings from discontinued operations grew 216.7% to $0.95 per diluted share from the fourth quarter 2020.

Broadband

• Broadband revenue in the fourth quarter of 2020 grew $3.9 million or 7.8% to $53.7 million compared with $50.0 million in the fourth quarter of 2019, primarily driven by $4.3 million or 11.6% increase in Residential and SMB revenue on 22.3% increase in data subscribers. Commercial fiber grew 8.7% to $8.7 million from higher enterprise and backhaul connections. RLEC revenue declined 20.5% to $4.2 million due primarily to lower DSL subscribers and intercompany phone service.
• Broadband operating expenses in the fourth quarter of 2020 were $43.0 million compared to $40.4 million in the fourth quarter of 2019. The increase was primarily due to a $1.8 million increase in compensation expense due to a combination of Glo Fiber and Beam start-up staffing, higher incentive accrual from strong operating results and enhanced benefit plans, and $1.2 million in higher maintenance of the expanding network.
• Broadband Adjusted OIBDA in the fourth quarter of 2020 grew 3.5% to $21.4 million, compared with $20.7 million for the fourth quarter of 2019.
• Broadband Operating income in the fourth quarter of 2020 was $10.7 million, compared to $9.4 million in the fourth quarter of 2019.

Tower

• Tower revenue grew 20.4% to $4.6 million due to 5.5% increase in tenants and 16.2% increase in revenue per tenant due to amendments to intercompany leases.
• Tower Adjusted OIBDA in the fourth quarter of 2020 grew 18.9% to $2.9 million, compared with $2.4 million for the fourth quarter of 2019.
• Tower operating income in the fourth quarter of 2020 was consistent with 2019.

Other Information

• As previously announced, T-Mobile exercised an option to purchase our Wireless assets and operations pursuant to an appraisal process that determined the sale price to be $1.95 billion, inclusive of an estimated closing adjustment for the unrealized waived management fee. We expect to enter into a definitive asset purchase agreement with T-Mobile during the first quarter 2021 and expect that the transaction will close during the second quarter 2021, subject to customary closing conditions and required regulatory approvals.
• As previously announced, the Company currently expects the after-tax proceeds from the sale of our wireless assets and operations to be approximately $1.5 billion and will be used repay approximately $702 million of outstanding term loans and terminate the credit agreement 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 second quarter 2021 after the close of the transaction, subject to the approval of Shentel’s Board of Directors.
• At December 31, 2020 the Company had $697.9 million of outstanding debt principal that is required to be fully repaid upon the disposition of Wireless operations and assets. Additionally, the Company intends to repay $4.0 million of swap liabilities. As of December 31, 2020, the Company had liquidity of approximately $270.4 million, including $75.0 million of revolving line of credit availability.
• Capital expenditures were $120.5 million for the year ended December 31, 2020 compared with $67.0 million in 2019. The $53.4 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by the expansion of Glo Fiber and Beam.
• The Company declared and paid a cash dividend of $0.34 per share, in the fourth quarter 2020, representing a 17.2% increase over the 2019 dividend.

2021 Outlook Shentel is affirming the full-year 2021 guidance issued by the Company on February 3, 2021. As previously conveyed, full year guidance for 2021 is summarized as follows:

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.

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 www.shentel.com.