UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
(Exact name of registrant as specified in its charter)
|
| |||
(State of Incorporation) | (Commission File Number) | (IRS employer identification no.) |
| ||
(Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 5, 2022, Consolidated Communications Holdings, Inc. issued a press release to report its results of operations and financial condition as of and for the quarter ended March 31, 2022. A copy of this press release is included as Exhibit 99.1 to this Form 8-K and incorporated into this Item 2.02 by reference.
The information in this Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
Item 7.01. Regulation FD Disclosure.
On May 5, 2022, the Company posted an investor presentation to the “Investor Relations” section of the Company's website at http://ir.consolidated.com. A copy of the investor presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K.
The information in this Form 8-K, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Ex No. |
| Description |
99.1 | ||
99.2 | ||
104 | Cover Page Interactive Data File (formatted as inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 5, 2022 | ||
Consolidated Communications Holdings, Inc. | ||
By: | /s/ Steven L. Childers | |
Name: Steven L. Childers | ||
Title: Chief Financial Officer |
Exhibit 99.1
Consolidated Communications Reports First Quarter 2022 Results Including a Record Increase in Fiber Subscribers
Added record 8,000 total fiber subscribers and achieved 2x growth from a year ago;
Achieved net positive broadband connections in Northern New England
Built fiber to 83,700 additional locations, bringing total fiber passings to 690,000 or 25% of Company’s service area
Fidium launching in Texas, California, Minnesota, Illinois, and Pennsylvania communities
Mattoon, Ill. – May 5, 2022 – Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S., today reported results for the first quarter 2022.
“Our first quarter results demonstrate the continued success of our fiber construction engine with 83,700 locations upgraded to fiber services with multi-gig capable speeds,” said Bob Udell, president and chief executive officer at Consolidated Communications. “We added a record 8,000 total fiber subscribers in the first quarter and achieved net positive adds in Northern New England. We are on track to build 400,000 fiber passings this year as part of our plan to bring FttP to 70% of our addressable market by 2025. We are building strong momentum to achieve sustained long-term growth and return to revenue growth in 2023.”
First Quarter 2022 Highlights and Results (compared to first quarter 2021)
● | Revenue totaled $300.3 million, generating Adjusted EBITDA of $107.2 million. |
● | Consumer broadband revenue, normalized for the sale of our Ohio assets, grew 1%. |
● | Consumer fiber revenue grew 22%, driven by 2x consumer fiber net adds with positive net adds in Northern New England. |
● | Commercial Data-Transport revenue was $57.9 million, up 1.4%. |
● | Subsidy revenue was $6.6 million, a decline of $10.8 million, primarily reflecting the expected transition to the Rural Digital Opportunity Fund (RDOF). |
● | Other Products and Services included revenue associated with public-private partnership network builds, was $4.5 million compared to $6.5 million a year ago. |
● | Upgraded 83,700 locations to fiber services with Gig+ capable speeds. |
● | Net cash from operating activities was $81.6 million. Cash and short-term investments totaled $159.9 million. |
● | Total committed capital expenditures were $157.7 million, primarily driven by the Company’s fiber build expansion plan. |
● | Operating expenses, excluding the loss on impairment of assets held for sale, were $209.2 million, down $1.6 million from a year ago. The primary drivers were lower expenses associated with public-private partnership builds and other product-related costs partially offset by increased marketing expenses. |
The Company recognized a non-cash impairment charge of $126.5 million in the recent quarter related to the Kansas City assets held for sale. This charge resulted in a loss from operations totaling ($107.7 million), compared to income from operations of $38.3 million a year ago. Excluding the non-cash impairment charge, income from operations for the quarter was $18.7 million, a year-over-year decrease of $19.6 million,
Page 1 of 14
primarily due to the decline in revenue of $24.5 million offset by a decline in depreciation and amortization expense of $3.3 million and slightly lower operating expenses.
Net interest expense was $29.5 million, a decrease of $18.9 million compared to a year ago primarily as a result of non-cash interest of $10.2 million on the Searchlight note, which was converted to perpetual preferred stock in conjunction with the second stage closing of the Searchlight investment in December 2021. The remaining reduction in interest expense was primarily the result of favorable repricing of the Company’s term loan in April 2021.
Cash distributions from the Company’s wireless partnerships totaled $8.2 million, compared to $9.4 million a year ago.
GAAP net loss was ($125.3 million) compared to a net loss of ($62.1 million) for the same period a year ago. GAAP net loss per share was ($1.12) compared to a net loss of ($0.80) in the prior year. Adjusted diluted net income per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net income per share was $0.02 compared to $0.21 in the year ago quarter.
Adjusted EBITDA was $107.2 million, compared to $126.6 million in the prior year.
Asset Divestitures
As part of the Company’s ongoing market portfolio review and focus on its fiber expansion plans, the Company is providing an update on recent divestiture activities.
On Jan. 31, 2022, Consolidated closed on the sale of substantially all of its Ohio assets, for total cash proceeds of $26 million.
On Mar. 3, 2022, Consolidated announced an agreement to sell substantially all of its Kansas City assets. The Company currently expects net cash proceeds of approximately $90 million for the sale, subject to certain purchase price adjustments, closing conditions and customary regulatory approvals. The transaction is expected to close in the second half of 2022.
The Company intends to use proceeds from these asset sales to further support its fiber expansion plans.
2022 Outlook
Consolidated Communications reaffirmed its previous guidance for the full-year 2022.
● | Adjusted EBITDA is expected to be in a range of $410 million to $425 million. |
● | Capital expenditures are expected to be in a range of $475 million to $495 million. |
● | Cash interest expense is expected to be in a range of $123 million to $127 million. |
● | Cash income taxes are expected to be in a range of $2 million to $4 million. |
Conference Call
Consolidated’s first quarter 2022 earnings conference call will be webcast live today at 8:30 a.m. ET. The webcast and materials will be available on the Investor Relations section of the Company’s website at http://ir.consolidated.com. The live conference call dial-in number for analysts and investors is 888-440-5977, conference ID 8956400. A phone replay of the conference call will be available through May 16 by calling 800-770-2030, enter ID 8956400.
About Consolidated Communications
Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is dedicated to moving people, businesses and communities forward by delivering the latest reliable communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning 50,000 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are backed by exceptional customer support. Learn more at consolidated.com.
Page 2 of 14
Use of Non-GAAP Financial Measures
This press release, as well as the conference call, includes disclosures regarding “EBITDA,” “adjusted EBITDA,” “total net debt to last 12 month adjusted EBITDA ratio” or “Net debt leverage ratio,” and “adjusted diluted net income (loss) per share,” all of which are non-GAAP financial measures and described in this section as not being in compliance with Regulation S-X. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.
Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under our credit agreement in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented with the reconciliation to net income. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization on a historical basis.
We present adjusted EBITDA for several reasons. Management believes adjusted EBITDA is useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt). In addition, we have presented adjusted EBITDA to investors in the past because it is frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting it here provides a measure of consistency in our financial reporting. Adjusted EBITDA, referred to as Available Cash in our credit agreement, is also a component of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt. The definitions in these covenants and ratios are based on adjusted EBITDA after giving effect to specified charges. In addition, adjusted EBITDA provides our board of directors with meaningful information, with other data, assumptions and considerations, to measure our ability to service and repay debt. We present the related “total net debt to last 12 month adjusted EBITDA ratio” or “Net debt leverage ratio” principally to help investors understand how we measure leverage and facilitate comparisons by investors, security analysts and others. This ratio differs in certain respects from the similar ratio used in our credit agreement against comparable measures of certain other companies in our industry. These measures differ in certain respects from the ratios used in our senior notes indenture.
These non-GAAP financial measures have certain shortcomings. In particular, adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. In addition, the ratio of total net debt to last 12-month adjusted EBITDA is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes this ratio is useful as a means to evaluate our ability to incur additional indebtedness in the future.
We present the non-GAAP measure “adjusted diluted net income (loss) per share” because our net income (loss) and net income (loss) per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.
Safe Harbor
Certain statements in this press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There are a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include a number of factors related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID-19) pandemic on the Company’s business, results of operations, cash flows, stock price and
Page 3 of 14
employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight or our refinancing of outstanding debt, including our senior secured credit facilities, will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the anticipated use of proceeds of the strategic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valuation of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and repay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of or failure to consummate acquisitions or dispositions; system failures; cyber-attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the competitive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock; and the potential for the rights of our series A preferred stock to negatively impact our cash flow. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10-K and Form 10-Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward-looking statements. You should not place undue reliance on forward-looking statements.
Investor and Media Contact
Jennifer Spaude, Consolidated Communications
Phone: 507-386-3765
jennifer.spaude@consolidated.com
Tag: [Consolidated-Communications-Earnings]
# # #
Page 4 of 14
Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
(Unaudited)
| | March 31, | | December 31, | ||
|
| 2022 |
| 2021 | ||
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 74,171 | | $ | 99,635 |
Short-term investments | | | 85,767 | | | 110,801 |
Accounts receivable, net | | | 118,596 | | | 133,362 |
Income tax receivable | | | 2,733 | | | 1,134 |
Prepaid expenses and other current assets | | | 61,319 | | | 56,831 |
Assets held for sale | | | 94,368 | | | 26,052 |
Total current assets | | | 436,954 | | | 427,815 |
| | | | | | |
Property, plant and equipment, net | | | 1,983,819 | | | 2,019,444 |
Investments | | | 109,034 | | | 109,578 |
Goodwill | | | 929,570 | | | 1,013,243 |
Customer relationships, net | | | 66,226 | | | 73,939 |
Other intangible assets | | | 10,557 | | | 10,557 |
Other assets | | | 59,288 | | | 58,116 |
Total assets | | $ | 3,595,448 | | $ | 3,712,692 |
| | | | | | |
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | | $ | 39,807 | | $ | 40,953 |
Advance billings and customer deposits | | | 53,002 | | | 53,028 |
Accrued compensation | | | 63,951 | | | 68,272 |
Accrued interest | | | 35,020 | | | 17,819 |
Accrued expense | | | 97,243 | | | 97,417 |
Current portion of long-term debt and finance lease obligations | | | 8,379 | | | 7,959 |
Liabilities held for sale | | | 5,021 | | | 97 |
Total current liabilities | | | 302,423 | | | 285,545 |
| | | | | | |
Long-term debt and finance lease obligations | | | 2,120,930 | | | 2,118,853 |
Deferred income taxes | | | 185,985 | | | 194,458 |
Pension and other post-retirement obligations | | | 205,350 | | | 214,671 |
Other long-term liabilities | | | 51,923 | | | 62,789 |
Total liabilities | | | 2,866,611 | | | 2,876,316 |
| | | | | | |
Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 436,943 and 434,266 shares outstanding as of March 31, 2022 and December 31, 2021, respectively; liquidation preference of $446,541 and $436,943 as of March 31, 2022 and December 31, 2021, respectively | | | 298,174 | | | 288,576 |
| | | | | | |
Shareholders' equity: | | | | | | |
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 115,423,869 and 113,647,364 shares outstanding as of March 31, 2022 and December 31, 2021, respectively | | | 1,154 | | | 1,137 |
Additional paid-in capital | | | 733,216 | | | 740,746 |
Accumulated deficit | | | (257,263) | | | (141,599) |
Accumulated other comprehensive loss, net | | | (53,646) | | | (59,571) |
Noncontrolling interest | | | 7,202 | | | 7,087 |
Total shareholders' equity | | | 430,663 | | | 547,800 |
Total liabilities, mezzanine equity and shareholders' equity | | $ | 3,595,448 | | $ | 3,712,692 |
Page 5 of 14
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2022 |
| 2021 | ||
| | | | | | |
Net revenues | | $ | 300,278 | | $ | 324,766 |
Operating expenses: | | | | | | |
Cost of services and products | | | 135,895 | | | 143,979 |
Selling, general and administrative expenses | | | 73,285 | | | 66,850 |
Loss on impairment of assets held for sale | | | 126,490 | | | — |
Depreciation and amortization | | | 72,350 | | | 75,611 |
Income (loss) from operations | | | (107,742) | | | 38,326 |
Other income (expense): | | | | | | |
Interest expense, net of interest income | | | (29,515) | | | (48,415) |
Loss on extinguishment of debt | | | — | | | (11,980) |
Change in fair value of contingent payment rights | | | — | | | (57,588) |
Other income, net | | | 11,405 | | | 12,274 |
Loss before income taxes | | | (125,852) | | | (67,383) |
Income tax benefit | | | (10,303) | | | (5,300) |
Net loss | | | (115,549) | | | (62,083) |
Less: dividends on Series A preferred stock | | | 9,598 | | | — |
Less: net income attributable to noncontrolling interest | | | 115 | | | 16 |
| | | | | | |
Net loss attributable to common shareholders | | $ | (125,262) | | $ | (62,099) |
| | | | | | |
Net loss per basic and diluted common shares attributable to common shareholders | | $ | (1.12) | | $ | (0.80) |
Page 6 of 14
Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2022 |
| 2021 | ||
OPERATING ACTIVITIES | | | | | | |
Net loss | | $ | (115,549) | | $ | (62,083) |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | | | 72,350 | | | 75,611 |
Cash distributions from wireless partnerships in excess of earnings | | | 153 | | | 11 |
Pension and post-retirement contributions in excess of expense | | | (9,342) | | | (8,770) |
Non-cash, stock-based compensation | | | 2,199 | | | 1,450 |
Amortization of deferred financing costs and discounts | | | 1,802 | | | 4,283 |
Non-cash interest expense on convertible security interest | | | — | | | 7,875 |
Loss on extinguishment of debt | | | — | | | 11,980 |
Loss on change in fair value of contingent payment rights | | | — | | | 57,588 |
Loss on impairment of assets held for sale | | | 126,490 | | | — |
Other adjustments, net | | | (189) | | | (368) |
Changes in operating assets and liabilities, net | | | 3,646 | | | 10,913 |
Net cash provided by operating activities | | | 81,560 | | | 98,490 |
INVESTING ACTIVITIES | | | | | | |
Purchase of property, plant and equipment, net | | | (156,480) | | | (75,960) |
Purchase of investments | | | (39,959) | | | — |
Proceeds from sale of assets | | | 74 | | | 24 |
Proceeds from business dispositions | | | 26,042 | | | — |
Proceeds from sale and maturity of investments | | | 65,754 | | | 1,198 |
Net cash used in investing activities | | | (104,569) | | | (74,738) |
FINANCING ACTIVITIES | | | | | | |
Proceeds from bond offering | | | — | | | 400,000 |
Proceeds from issuance of long-term debt | | | — | | | 150,000 |
Payment of finance lease obligations | | | (2,341) | | | (1,598) |
Payment on long-term debt | | | — | | | (397,000) |
Payment of financing costs | | | — | | | (5,573) |
Share repurchases for minimum tax withholding | | | (114) | | | — |
Net cash provided by (used in) financing activities | | | (2,455) | | | 145,829 |
Net change in cash and cash equivalents | | | (25,464) | | | 169,581 |
Cash and cash equivalents at beginning of period | | | 99,635 | | | 155,561 |
Cash and cash equivalents at end of period | | $ | 74,171 | | $ | 325,142 |
Page 7 of 14
Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2022 |
| 2021 | ||
Consumer: | | | | | | |
Broadband (Data and VoIP) | | $ | 65,911 | | $ | 65,755 |
Voice services | | | 37,452 | | | 40,420 |
Video services | | | 14,366 | | | 16,781 |
| | | 117,729 | | | 122,956 |
Commercial: | | | | | | |
Data services (includes VoIP) | | | 57,895 | | | 57,071 |
Voice services | | | 36,339 | | | 39,753 |
Other | | | 11,560 | | | 9,328 |
| | | 105,794 | | | 106,152 |
Carrier: | | | | | | |
Data and transport services | | | 33,485 | | | 33,277 |
Voice services | | | 3,852 | | | 4,526 |
Other | | | 391 | | | 391 |
| | | 37,728 | | | 38,194 |
| | | | | | |
Subsidies | | | 6,583 | | | 17,339 |
Network access | | | 26,213 | | | 31,603 |
Other products and services | | | 6,231 | | | 8,522 |
Total operating revenue | | $ | 300,278 | | $ | 324,766 |
Page 8 of 14
Consolidated Communications Holdings, Inc.
Consolidated Revenue Trend by Category
(Dollars in thousands)
(Unaudited)
| | Three Months Ended | |||||||||||||
|
| Q1 2022 |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 | |||||
Consumer: | | | | | | | | | | | | | | | |
Broadband (Data and VoIP) | | $ | 65,911 | | $ | 66,983 | | $ | 68,604 | | $ | 67,981 | | $ | 65,755 |
Voice services | | | 37,452 | | | 39,518 | | | 40,587 | | | 40,173 | | | 40,420 |
Video services | | | 14,366 | | | 15,371 | | | 16,163 | | | 16,799 | | | 16,781 |
| | | 117,729 | | | 121,872 | | | 125,354 | | | 124,953 | | | 122,956 |
Commercial: | | | | | | | | | | | | | | | |
Data services (includes VoIP) | | | 57,895 | | | 57,444 | | | 57,545 | | | 56,871 | | | 57,071 |
Voice services | | | 36,339 | | | 37,303 | | | 38,446 | | | 39,065 | | | 39,753 |
Other | | | 11,560 | | | 11,408 | | | 10,205 | | | 9,091 | | | 9,328 |
| | | 105,794 | | | 106,155 | | | 106,196 | | | 105,027 | | | 106,152 |
Carrier: | | | | | | | | | | | | | | | |
Data and transport services | | | 33,485 | | | 32,659 | | | 33,556 | | | 33,942 | | | 33,277 |
Voice services | | | 3,852 | | | 4,088 | | | 4,173 | | | 4,396 | | | 4,526 |
Other | | | 391 | | | 431 | | | 375 | | | 395 | | | 391 |
| | | 37,728 | | | 37,178 | | | 38,104 | | | 38,733 | | | 38,194 |
| | | | | | | | | | | | | | | |
Subsidies | | | 6,583 | | | 17,671 | | | 17,264 | | | 17,465 | | | 17,339 |
Network access | | | 26,213 | | | 27,846 | | | 29,923 | | | 31,115 | | | 31,603 |
Other products and services | | | 6,231 | | | 7,758 | | | 1,743 | | | 3,110 | | | 8,522 |
Total operating revenue | | $ | 300,278 | | $ | 318,480 | | $ | 318,584 | | $ | 320,403 | | $ | 324,766 |
Page 9 of 14
Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2022 |
| 2021 | ||
Net loss | | $ | (115,549) | | $ | (62,083) |
Add (subtract): | | | | | | |
Income tax benefit | | | (10,303) | | | (5,300) |
Interest expense, net | | | 29,515 | | | 48,415 |
Depreciation and amortization | | | 72,350 | | | 75,611 |
EBITDA | | | (23,987) | | | 56,643 |
| | | | | | |
Adjustments to EBITDA (1): | | | | | | |
Other, net (2) | | | 5,510 | | | 1,688 |
Investment income (accrual basis) | | | (8,249) | | | (9,556) |
Investment distributions (cash basis) | | | 8,216 | | | 9,377 |
Pension/OPEB benefit | | | (2,983) | | | (2,541) |
Loss on extinguishment of debt | | | — | | | 11,980 |
Loss on impairment | | | 126,490 | | | — |
Change in fair value of contingent payment right | | | — | | | 57,588 |
Non-cash compensation (3) | | | 2,199 | | | 1,450 |
Adjusted EBITDA | | $ | 107,196 | | $ | 126,629 |
Notes:
(1) | These adjustments reflect those required or permitted by the lenders under our credit agreement. |
(2) | Other, net includes income attributable to noncontrolling interests, acquisition and non-recurring related costs, and certain miscellaneous items. |
(3) | Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA. |
Page 10 of 14
Consolidated Communications Holdings, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA Guidance
(Dollars in millions)
(Unaudited)
| Year Ended | ||||
| December 31, 2022 | ||||
| Range | ||||
| Low | | High | ||
Net income (loss) | $ | (10) | | $ | 8 |
Add: | | | | | |
Income tax expense (benefit) | | (4) | | | 3 |
Interest expense, net | | 125 | | | 120 |
Depreciation and amortization | | 295 | | | 290 |
EBITDA | | 406 | | | 421 |
| | | | | |
Adjustments to EBITDA (1): | | | | | |
Other, net (2) | | 5 | | | 5 |
Pension/OPEB benefit | | (11) | | | (11) |
Non-cash compensation (3) | | 10 | | | 10 |
Adjusted EBITDA | $ | 410 | | $ | 425 |
Notes:
(1) | These adjustments reflect those required or permitted by the lenders under our credit agreement. |
(2) | Other, net includes income attributable to noncontrolling interests, cash distributions less equity earnings from our investments, dividend income, and certain miscellaneous items. |
(3) | Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA. |
Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
| | March 31, | |
|
| 2022 | |
Summary of Outstanding Debt: | | | |
Term loans, net of discount $9,912 | | $ | 989,963 |
6.50% Senior secured notes due 2028 | | | 750,000 |
5.00% Senior secured notes due 2028 | | | 400,000 |
Finance leases | | | 25,685 |
Total debt as of March 31, 2022 | | | 2,165,648 |
Less deferred debt issuance costs | | | (36,339) |
Less cash on hand | | | (159,938) |
Total net debt as of March 31, 2022 | | $ | 1,969,371 |
| | | |
Adjusted EBITDA for the 12 months ended March 31, 2022 | | $ | 487,429 |
| | | |
Total Net Debt to last 12 months Adjusted EBITDA | | | 4.04x |
| | | |
Page 11 of 14
Consolidated Communications Holdings, Inc.
Adjusted Net Income and Net Income Per Share
(Dollars in thousands, except per share amounts)
(Unaudited)
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2022 |
| 2021 | ||
Net loss | | $ | (115,549) | | $ | (62,083) |
Integration and severance related costs, net of tax | | | 802 | | | 1,156 |
Loss on impairment of assets held for sale | | | 126,490 | | | — |
Loss on extinguishment of debt, net of tax | | | — | | | 8,743 |
Change in fair value of contingent payment rights | | | — | | | 57,588 |
Non-cash interest expense for Searchlight note including amortization of discount and fees | | | — | | | 10,201 |
Non-cash interest expense for swaps, net of tax | | | (295) | | | (182) |
Tax impact of non-deductible goodwill | | | (10,813) | | | — |
Non-cash stock compensation, net of tax | | | 1,626 | | | 1,058 |
Adjusted net income | | $ | 2,261 | | $ | 16,481 |
| | | | | | |
Weighted average number of shares outstanding | | | 111,691 | | | 78,029 |
Adjusted diluted net income per share | | $ | 0.02 | | $ | 0.21 |
Notes:
Calculations above assume a 26.1% and 27.0% effective tax rate for the three months ended March 31, 2022 and 2021, respectively.
Page 12 of 14
Consolidated Communications Holdings, Inc.
Key Operating Metrics
(Unaudited)
| | March 31, | | December 31, | | September 30, | | June 30, | | March 31, | | |||||
|
| 2022 |
| 2021 |
| 2021 |
| 2021 |
| 2021 |
| |||||
Passings | | | | | | | | | | | | | | | | |
Fiber Gig+ capable passings | | | | | | | | | | | | | | | | |
Northern New England | | | 341,010 | | | 291,921 | | | 217,660 | | | 168,165 | | | 122,736 | |
All other markets | | | 348,396 | | | 313,789 | | | 276,500 | | | 228,958 | | | 198,070 | |
Total Fiber Gig+ capable (1) | | | 689,406 | | | 605,710 | | | 494,160 | | | 397,123 | | | 320,806 | |
| | | | | | | | | | | | | | | | |
DSL/Copper passings (2) | | | | | | | | | | | | | | | | |
Northern New England | | | 1,395,190 | | | 1,444,279 | | | 1,518,540 | | | 1,568,035 | | | 1,613,464 | |
All other markets | | | 663,835 | | | 702,098 | | | 737,016 | | | 779,781 | | | 807,828 | |
Total DSL/Copper (2) | | | 2,059,025 | | | 2,146,377 | | | 2,255,556 | | | 2,347,816 | | | 2,421,292 | |
Total Passings | | | 2,748,431 | | | 2,752,087 | | | 2,749,716 | | | 2,744,939 | | | 2,742,098 | |
% Fiber Gig+ Coverage/Total Passings | | | 25% | | | 22% | | | 18% | | | 14% | | | 12% | |
| | | | | | | | | | | | | | | | |
Consumer Broadband Connections | | | | | | | | | | | | | | | | |
Fiber Gig+ capable | | | | | | | | | | | | | | | | |
Northern New England | | | 24,882 | | | 20,032 | | | 17,288 | | | 14,927 | | | 13,024 | |
All other markets | | | 68,930 | | | 66,090 | | | 64,251 | | | 62,594 | | | 61,471 | |
Total Fiber Gig+ capable connections | | | 93,812 | | | 86,122 | | | 81,539 | | | 77,521 | | | 74,495 | |
| | | | | | | | | | | | | | | | |
DSL/Copper (2) | | | | | | | | | | | | | | | | |
Northern New England | | | 131,763 | | | 136,140 | | | 140,893 | | | 144,057 | | | 147,847 | |
All other markets | | | 154,575 | | | 162,302 | | | 168,229 | | | 171,902 | | | 175,660 | |
Total DSL/Copper connections (2) | | | 286,338 | | | 298,442 | | | 309,122 | | | 315,959 | | | 323,507 | |
Total Consumer Broadband Connections | | | 380,150 | | | 384,564 | | | 390,661 | | | 393,480 | | | 398,002 | |
| | | | | | | | | | | | | | | | |
Consumer Broadband Net Adds | | | | | | | | | | | | | | | | |
Northern New England | | | 473 | | | (2,009) | | | (803) | | | (1,887) | | | (919) | |
All other markets (2) | | | (1,327) | | | (4,088) | | | (2,016) | | | (2,635) | | | (2,436) | |
Total Consumer Broadband Net Adds | | | (854) | | | (6,097) | | | (2,819) | | | (4,522) | | | (3,355) | |
| | | | | | | | | | | | | | | | |
Consumer Broadband Penetration % | | | | | | | | | | | | | | | | |
Fiber Gig+ capable | | | | | | | | | | | | | | | | |
Northern New England | | | 7% | | | 7% | | | 8% | | | 9% | | | 11% | |
All other markets | | | 20% | | | 21% | | | 23% | | | 27% | | | 31% | |
Fiber Gig+ capable | | | 14% | | | 14% | | | 17% | | | 20% | | | 23% | |
| | | | | | | | | | | | | | | | |
DSL/Copper (2) | | | | | | | | | | | | | | | | |
Northern New England | | | 9% | | | 9% | | | 9% | | | 9% | | | 9% | |
All other markets | | | 23% | | | 23% | | | 23% | | | 22% | | | 22% | |
Total DSL/Copper (2) | | | 14% | | | 14% | | | 14% | | | 13% | | | 13% | |
Total Consumer Broadband Penetration % | | | 14% | | | 14% | | | 14% | | | 14% | | | 15% | |
| | | | | | | | | | | | | | | | |
Consumer Broadband Revenue by Service Type ($ in thousands) | | | | | | | | | | | | | | | | |
Fiber Broadband Revenue | | $ | 17,241 | | $ | 16,152 | | $ | 15,423 | | $ | 15,013 | | $ | 14,122 | |
Copper and Other Broadband Revenue | | | 48,670 | | | 50,831 | | | 53,181 | | | 52,968 | | | 51,633 | |
Total Consumer Broadband Revenue by Service Type | | $ | 65,911 | | $ | 66,983 | | $ | 68,604 | | $ | 67,981 | | $ | 65,755 | |
| | | | | | | | | | | | | | | | |
Consumer Average Revenue Per Unit (ARPU) | | | | | | | | | | | | | | | | |
Fiber Broadband ARPU | | $ | 63.88 | | $ | 64.22 | | $ | 64.64 | | $ | 65.83 | | $ | 64.87 | |
Copper Broadband ARPU | | $ | 50.78 | | $ | 50.65 | | $ | 51.32 | | $ | 49.92 | | $ | 47.72 | |
| | | | | | | | | | | | | | | | |
Consumer Voice Connections | | | 316,634 | | | 328,849 | | | 341,135 | | | 352,835 | | | 362,384 | |
| | | | | | | | | | | | | | | | |
Video Connections | | | 58,812 | | | 63,447 | | | 66,971 | | | 70,795 | | | 73,986 | |
| | | | | | | | | | | | | | | | |
Fiber route network miles (long-haul, metro and FttP) | | | 54,239 | | | 52,402 | | | 50,405 | | | 48,727 | | | 47,364 | |
| | | | | | | | | | | | | | | | |
On-net buildings | | | 15,446 | | | 14,981 | | | 14,625 | | | 14,253 | | | 13,910 | |
Page 13 of 14
Notes:
(1) | In Q1 2021, the Company launched a multi-year fiber build plan to upgrade 1.6 million passings by 2025 or 70% of our service area to fiber Gig+ capable services by 2025. As of March 31, 2022, 83,700 of the target 400,000 passings for 2022 were upgraded to FttP and total fiber passings were ~690,000 or 25% of the Company's service area. |
(2) | The sale of the non-core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022. Prior period amounts have not been adjusted to reflect the sale. |
(3) | As of March 31, 2022, the net assets of our Kansas City operations are classified as held for sale. The Kansas City operations include total passings of approximately 137,000 and approximately 10% consumer broadband penetration. Amounts above have not been adjusted to reflect the pending sale. |
Page 14 of 14
Presentation title Month, XX, 2021 Q1 2022 May 5, 2022 EARNINGS |
Safe Harbor Statement Certain statements in this press release are forward - looking statements and are made pursuant to the safe harbor provisions of t he Securities Litigation Reform Act of 1995. These forward - looking statements reflect, among other things, our current expectations, plans, strategies, and anticipated financial results. There ar e a number of risks, uncertainties, and conditions that may cause our actual results to differ materially from those expressed or implied by these forward - looking statements. These risks and uncerta inties include a number of factors related to our business, including the uncertainties relating to the impact of the novel coronavirus (COVID - 19) pandemic on the Company’s business, results of oper ations, cash flows, stock price and employees; the possibility that any of the anticipated benefits of the strategic investment from Searchlight or our refinancing of outstanding debt, includin g o ur senior secured credit facilities, will not be realized; the outcome of any legal proceedings that may be instituted against the Company or its directors; the anticipated use of proceeds of the strateg ic investment; economic and financial market conditions generally and economic conditions in our service areas; various risks to the price and volatility of our common stock; changes in the valua tio n of pension plan assets; the substantial amount of debt and our ability to repay or refinance it or incur additional debt in the future; our need for a significant amount of cash to service and rep ay the debt restrictions contained in our debt agreements that limit the discretion of management in operating the business; regulatory changes, including changes to subsidies, rapid development and in troduction of new technologies and intense competition in the telecommunications industry; risks associated with our possible pursuit of or failure to consummate acquisitions or dispositi ons ; system failures; cyber - attacks, information or security breaches or technology failure of ours or of a third party; losses of large customers or government contracts; risks associated with the rig hts - of - way for the network; disruptions in the relationship with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications services; new or changing tax laws or regulations; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of our network; high costs of regulatory compliance; the com pet itive impact of legislation and regulatory changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; and risks associated with di sco ntinuing paying dividends on our common stock; and the potential for the rights of our series A preferred stock to negatively impact our cash flow. A detailed discussion of these and other risks an d uncertainties that could cause actual results and events to differ materially from such forward - looking statements are discussed in more detail in our filings with the SEC, including our reports on Form 10 - K and Form 10 - Q. Many of these circumstances are beyond our ability to control or predict. Moreover, forward - looking statements necessarily involve assumptions on our part. Thes e forward - looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “wil l c ontinue” or similar expressions. Such forward - looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company and its subsidiaries to be different from those expressed or implied in the forward - looking statements. All forward - looking statements attributable to us or persons acting on our behalf are express ly qualified in their entirety by the cautionary statements that appear throughout this press release. Furthermore, forward - looking statements speak only as of the date they are made. Except as requi red under the federal securities laws or the rules and regulations of the SEC, we disclaim any intention or obligation to update or revise publicly any forward - looking statements. You should not pla ce undue reliance on forward - looking statements. Non - GAAP Measures This presentation includes certain non - GAAP historical and forward - looking financial measures, including but not limited to “EBI TDA,” “adjusted EBITDA,” and “total net debt to last twelve month adjusted EBITDA ratio.” In addition to providing key metrics for management to evaluate the Company’s performance, we believ es these measurements assist investors in their understanding of operating performance and in identifying historical and prospective trends. A reconciliation of the differences between these non - GAAP financial measures and the most directly comparable financial measure s presented in accordance with GAAP are available on the Company’s website at https://ir.consolidated.com .. Non - GAAP measures are not presented to be replacements or alternatives to the GAAP measures, and investors are urged to consi der these non - GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Consolidated may pres ent or calculate its non - GAAP measures differently from other companies. The Company’s 8 - K, Form 10 - K, Form 10 - Q and other filings should be read in conjunction with this presentation as the y contain additional important details on the quarterly results. |
275 606 1,006 1,406 1,706 1,956 331 400 400 300 250 10% 22% 37% 51% 62% 71% -35% -15% 5% 25% 45% 65% -250 250 750 1,250 1,750 2,250 2,750 2020 2021 2022E 2023E 2024E 2025E Fiber Gig+ Passings Annual Fiber Gig+ upgrades % Gig+ Capable Passings Consolidated’s Fiber Build Plan 70%+ service area Gig+ capable speeds In Q1 2021, the Company launched a multi - year, fiber build plan to upgrade 1.6 million passings or 70% of its service area to Gig+ fiber capable services by 2025. Consolidated has ~2.7M total passings across 22 operating states. Fiber Build Plan chart updated quarterly to reflect progress and forecast of planned upgrades. Passings in thousands 1.6 million passings to be fiber upgraded by 2025, ~1M in Northern New England Fiber Expansion Progress Operating States Fiber Build Markets Five - Year Fiber Build Plan: 400,000 upgrades in 2022 Consolidated Footprint |
Fiber Expansion Plan 14% 1 - year Cohort Fiber Penetration Targets • Incumbent position accelerates plan • Owned or leased local and long - haul fiber network, conduit capacity • Aerial fiber access to 80% of Northern New England • Less competitive markets: majority with one wireline competitor • Experienced teams, contractor resources and strong build partners Average cost per fiber passing: $ 550 - 600 1 Northern New England: $400 - $450 1 (1) Includes edge access equipment, labor and fiber components .. Average cost to connect: $700 2 (2) Includes CPE, labor and drop 2022 Capex Guidance* $475M to $495M 45% fiber build 35% success based 20% maintenance & digital transformation 24% 2 - year 33% 3 - year CCI Fiber Deployment Advantages See appendix for Fiber Gig+ capable penetration. |
Digital Customer Experience Digital ordering and provisioning, account management, customer text notifications and self - service support tools Superior Fiber Product Symmetrical Gig speeds, 24/7 network controls and proactive performance monitoring, dedicated home connection and mesh whole - home WiFi .. Fidium Fiber Expansion Fidium markets Operating states Fidium will be available to 150 communities in second quarter. |
6 Response to Experience |
Q1 2022 Y/Y % change Revenue $300.3 (7.5%) Strategic Revenue Consumer Fiber Broadband $17.2 22.1% Consumer Copper/Other Broadband $48.7 (5.7%) Commercial Data $57.9 1.4% Carrier Data & Transport $33.5 0.6% Adj. EBITDA $107.2 (15.3%) EBITDA margin 35.7% (3.3%) Capex $157.7 107.7% Q1 2022 Highlights Q1 2022 Highlights Added record 8,000 total fiber subscribers and achieved 2x growth from a year ago Achieved positive net broadband units in Northern New England Built fiber to 83,700 additional locations, bringing total fiber passings to ~690,000 or 25% of Company’s service area Fidium launching in Texas, California, Minnesota, Illinois, and Pennsylvania communities in May $ in millions Metrics Q1 2022 Y/Y % change Fiber Gig+ capable passings 689,406 115% Fiber Gig+ capable connections (1) 93,812 26% |
Broadband Revenue Highlights $ in millions ARPU +2.6% Y/Y +3.7% Y/Y ( 1) Normalized for OH divestiture Consumer Fiber Connections 26% increase in fiber connections Y/Y Q1 - 21 Q2 - 21 Q3 - 21 Q4 - 21 Q1 - 22 NNE (919) (1,887) (803) (2,009) 473 Other markets (2,436) (2,635) (2,016) (4,088) (1,327) (1) Consumer Broadband Net Adds Positive broadband net adds in Northern New England (NNE) $63.88 Fiber ARPU $50.78 Copper ARPU Broadband Revenue 22% increase in fiber revenue Y/Y 1 % (1) increase in total broadband revenue Y/Y 61,471 62,594 64,251 66,090 68,930 13,024 14,927 17,288 20,032 24,882 74,495 77,521 81,539 86,122 93,812 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Fiber All Other markets Fiber Northern New England $51.6M $53.0M $53.2M $50.8M $48.7M $14.1M $15.0M $15.4M $16.2M $17.2M $65.8M $68.0M $68.6M $67.0M $65.9M Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Copper / Other Data Fiber |
Data - Transport Revenue Highlights $ in millions +2.6% Y/Y +3.7% Y/Y Commercial Data & Transport Revenue Carrier Data &Transport Revenue • Focus sales on - network • Utilizing solutions - based sales approach; lead with fiber solutions • Leveraging industry - leading partnerships to enable complete network solutions 1.4% growth Y/Y 0.6% growth Y/Y 15,446 Lit Buildings +11% Y/Y 54,239 Fiber route miles +15% Y/Y • Create and capture emerging 5G network opportunities • Expand carrier relationships and network planning partnerships • Transition TDM Services to Wave/IP/10G services Commercial Go - to - Market Strategy Carrier Go - to - Market Strategy $57.1 $56.9 $57.5 $57.4 $57.9 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 $33.3 $33.9 $33.6 $32.7 $33.5 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 |
Strategic Priorities Enabling Future Growth and Shareholder Value Consumer Fiber Expansion • Plan to build fiber to 1.6 million locations by 2025; enable Gig + speeds to over 70% of footprint • Launch Fidium Fiber in all fiber markets; accelerate broadband growth and simplified go - to - market strategy Broadband revenue growth with positive net adds Long - Term Value Creation Commercial - Carrier Data Transport Growth • Leverage fiber assets to increase lit buildings; grow customer relationships • Expand business opportunities; deliver improved customer experience and product simplification Enhanced Customer Experience • Deliver simplified, improved customer experience across all channels • Invest in digital transformation initiatives to automate and simplify customer experience Disciplined Capital Allocation • Accelerated investments in fiber growth opportunities • Strategic review of assets and market portfolio Data - Transport revenue growth L eading NPS scores, low churn, retention Return to revenue growth |
Consolidated’s Fiber Transformation 2021 2022 2024 Capital Allocation Plan announced Elimination of dividend May Sept/Oct Strategic Searchlight Capital Partners (SCP) invest ment; closed on $ 350M investment Debt Refinancing Nov brand launch Dec Closed on $75M SCP investment Jan Net Promoter Score implemented e xpansion Completed 330,000 fiber upgrades Plan to upgrade 400,000 fiber passings & achieve broadband net positive adds Dec mid - year 2025 Plan to upgrade 250,000 passings ; Achieve 70%+ fiber passings 2019 2020 2023 Closed on OH divestiture Jan Plan to upgrade 400,000 passings Plan to upgrade 300,000 passings Dec Dec Dec Return to Growth Build Engine Capital Allocation Plan Announced KS asset sale Mar Value Creation Customer Acquisition Ramp |
Appendix |
2022 Outlook 2022 outlook provided on March 3, 2022 with Q4 earnings. For definitions of non - GAAP measures, see Consolidated’s Investor Relations website. 2022 Annual Guidance Range Adjusted EBITDA $410 million to $425 million Capex $475 million to $495 million Cash interest expense $123 million to $127 million Cash taxes $2 million to $4 million |
Capital Structure No scheduled debt maturities until 2027 • $ 160 million of cash on hand and $250 million undrawn revolver. • Net debt leverage is 4.04x at 3/31/22 with long - term target <3.0x. Notes: • March 2021, issued 5.0% Senior Notes of $400 million, proceeds used to prepay principal amortization of the Term Loan to maturity, increasing cash flow by $14 million per year. • Closed on second Searchlight Capital Partners investment of $75 million in Dec. 2021. Capital Structure & Strong Liquidity Debt Maturity Profile as of 3/31/22 ($ in millions) |
Revenue Trends ($ in thousands, unaudited) Three Months Ended Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Consumer: Broadband (VoIP and Data) $ 65,911 $ 66,983 $ 68,604 $ 67,981 $ 65,755 Voice services 37,452 39,518 40,587 40,173 40,420 Video services 14,366 15,371 16,163 16,799 16,781 117,729 121,872 125,354 124,953 122,956 Commercial: Data services (includes VoIP) 57,895 57,444 57,545 56,871 57,071 Voice services 36,339 37,303 38,446 39,065 39,753 Other 11,560 11,408 10,205 9,091 9,328 105,794 106,155 106,196 105,027 106,152 Carrier: Data and transport services 33,485 32,659 33,556 33,942 33,277 Voice services 3,852 4,088 4,173 4,396 4,526 Other 391 431 375 395 391 37,728 37,178 38,104 38,733 38,194 Subsidies 6,583 17,671 17,264 17,465 17,339 Network access 26,213 27,846 29,923 31,115 31,603 Other products and services 6,231 7,758 1,743 3,110 8,522 Total operating revenue $ 300,278 $ 318,480 $ 318,584 $ 320,403 $ 324,766 |
Key Operating Metrics (unaudited) March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Passings Fiber Gig+ capable passings Northern New England 341,010 291,921 217,660 168,165 122,736 All other markets 348,396 313,789 276,500 228,958 198,070 Total Fiber Gig+ capable (1) 689,406 605,710 494,160 397,123 320,806 DSL/Copper passings (2) Northern New England 1,395,190 1,444,279 1,518,540 1,568,035 1,613,464 All other markets 663,835 702,098 737,016 779,781 807,828 Total DSL/Copper (2) 2,059,025 2,146,377 2,255,556 2,347,816 2,421,292 Total Passings 2,748,431 2,752,087 2,749,716 2,744,939 2,742,098 % Fiber Gig+ Coverage/Total Passings 25% 22% 18% 14% 12% Consumer Broadband Connections Fiber Gig+ capable Northern New England 24,882 20,032 17,288 14,927 13,024 All other markets 68,930 66,090 64,251 62,594 61,471 Total Fiber Gig+ capable connections 93,812 86,122 81,539 77,521 74,495 DSL/Copper (2) Northern New England 131,763 136,140 140,893 144,057 147,847 All other markets 154,575 162,302 168,229 171,902 175,660 Total DSL/Copper connections (2) 286,338 298,442 309,122 315,959 323,507 Total Consumer Broadband Connections 380,150 384,564 390,661 393,480 398,002 (1) In Q1 2021, the Company launched a multi - year fiber build plan to upgrade 1.6 million passings by 2025 or 70% of our service area to fiber Gig+ capable services by 2025. As of March 31, 2022, 83,700 of the target 400,000 passings for 2022 were upgraded to FttP and total fiber passings were 690,000 or 25% of the Company's service area. (2) The sale of the non - core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022. Prior period amounts have not been adjusted to refle ct the sale. (3) As of March 31, 2022, the net assets of our Kansas City operations are classified as held for sale. The Kansas City opera tio ns include total passings of approximately 137,000 and approximately 10 % consumer broadband penetration. Amounts above have not been adjusted to reflect the pending sale. |
March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Consumer Broadband Net Adds Northern New England 473 (2,009) (803) (1,887) (919) All other markets (2) (1,327) (4,088) (2,016) (2,635) (2,436) Total Consumer Broadband Net Adds (854) (6,097) (2,819) (4,522) (3,355) Consumer Broadband Penetration % Fiber Gig+ capable Northern New England 7% 7% 8% 9% 11% All other markets 20% 21% 23% 27% 31% Fiber Gig+ capable 14% 14% 17% 20% 23% DSL/Copper (2) Northern New England 9% 9% 9% 9% 9% All other markets 23% 23% 23% 22% 22% Total DSL/Copper (2) 14% 14% 14% 13% 13% Total Consumer Broadband Penetration % 14% 14% 14% 14% 15% Consumer Broadband Revenue by Service Type ($ in thousands) Fiber Broadband Revenue $ 17,241 $ 16,152 $ 15,423 $ 15,013 $ 14,122 Copper and Other Broadband Revenue 48,670 50,831 53,181 52,968 51,633 Total Consumer Broadband Revenue by Service Type $ 65,911 $ 66,983 $ 68,604 $ 67,981 $ 65,755 Consumer Average Revenue Per Unit (ARPU) Fiber Broadband ARPU $ 63.88 $ 64.22 $ 64.64 $ 65.83 $ 64.87 Copper Broadband ARPU $ 50.78 $ 50.65 $ 51.32 $ 49.92 $ 47.72 Consumer Voice Connections 316,634 328,849 341,135 352,835 362,384 Video Connections 58,812 63,447 66,971 70,795 73,986 Fiber route network miles (long - haul, metro and FttP ) 54,239 52,402 50,405 48,727 47,364 On - net buildings 15,446 14,981 14,625 14,253 13,910 Key Operating Metrics (unaudited) (1) In Q1 2021, the Company launched a multi - year fiber build plan to upgrade 1.6 million passings by 2025 or 70% of our service area to fiber Gig+ capable services by 2025. As of March 31, 2022, 83,700 of the target 400,000 passings for 2022 were upgraded to FttP and total fiber passings were 690,000 or 25% of the Company's service area. (2) The sale of the non - core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022. Prior period amounts have not been adjusted to refle ct the sale. (3) As of March 31, 2022, the net assets of our Kansas City operations are classified as held for sale. The Kansas City opera tio ns include total passings of approximately 137,000 and approximately 10% of consumer broadband penetration. Amounts above have not been adjusted to reflect the pending sale. |
"G? ;./XN]9TLLPU/#4\1C:SA[2_*E'FT3M=NZ^X
MJ>,K2K3I8>FI IAJ$<7E=:@JBC)U;J[M?3;_+I?0XJM25#&4ZCBVN2SLK
MVU/L7]M6^M;#]E[Q^UVRA)+$0H&[R-(@0#WSBODOP?I.HK_P2X\2%5?$M\]R
MH_Z8BZB#'Z95JT/&.A_M"_MN:KINA:_X3E^&?@6VG6:Y%[!)"21_$RR8>5@"
M=JA0H)YQUK[>TCX1^'-'^%$7P[CM/,\-IIQTUH7/S/&5(9B?[Q)+9]3FG[:G
MDV%I8> HI*OZP5EN4N$.Z*= ZD]>F#GWR*
MH5ZL9 ]>?WQ7Y1,/K$5M3C^/^9]"_'R[\,_LM_!Z[T_PE>7>IZY\0K=
MEM]1>98WM+ %6SM #?,LA7/&3D\;<5\"U]C_ !S\%7GQV^ GA#QEX?@;4-=\
M&VK:/K-E!\THM5YBF"]2 ,DX_O-_=-?&^*X,OC:$^>5ZEWS7WTT7X6L89BVZ
MD;*T;*W;S_&]SH=%\'3:UIJ7B7$<:L]RFQ@<_N81*?S!Q7/UUOACQ?::-IL%
MGX;PQJGGW-N T]E<1F*>,'H
MQ4]1[@D5XC^SGXW\0Z]^TA\7]+U/7]2OM+L&F^RVES=22Q6V+C \M"<+@<<8
MKE]7M+30?^"A6BP^%8X[?[1;@ZK#9@! 6AI-.TWX Z'J=I
M<7/QL:\:&9)/+@T"Y ;# XR P'3K6]?'8>M2G37-JFM(2ZKT,:=&=.<9MQT?
M\T?\S[=D5[>X8-\LB-S[$4[6X5G2/4(Q@3,5D3T?OCV/6GZA,ES=R3QNLL,V
M)8Y$.5=&&5(/<$$4E]^[T*$,<&2=F4>P7!_6ORFNDX*3W/K<.W&HXK8Q\T9H
M_&C\:X#T@S6^;5M/T;R9G0R22K(J*V2HV]QVZBJN@:4U]=AY(B]K'DR$G '!
MQ2W5RUW*X +=AT ["NBA#FE?L