Exhibit 99.1
NEWS RELEASE
For further information, please contact Earle A. MacKenzie at 540-984-5192.
SHENANDOAH TELECOMMUNICATIONS COMPANY
REPORTS FIRST QUARTER 2005 FINANCIAL RESULTS
EDINBURG, VA, (April 21, 2005) - Shenandoah Telecommunications Company
(Shentel; NASDAQ: SHEN) announced unaudited financial results for the first
quarter ended March 31, 2005. Net income for the quarter was $2.4 million,
compared to $2.3 million for the same period in 2004. Total first quarter
revenues grew by 24.1% from the same quarter last year, including a 19.7%
increase in wireless revenues.
Overall Highlights
For the quarter ended March 31, 2005, net income was $2.4 million or $0.31
per diluted share, compared to $2.3 million or $0.30 per diluted share in the
first quarter of 2004. The Company's total revenues for the first quarter 2005
were $34.4 million, compared to $27.7 million in the first quarter of 2004, an
increase of $6.7 million or 24.1%. The Company's revenue growth was primarily
driven by a $3.7 million increase in its PCS business and $2.2 million from the
addition of NTC Communications, as previously reported on December 1, 2004.
Operating income for the first quarter of 2005 and 2004 was $4.6 million and
$4.3 million, respectively, an increase of 7.8%. First quarter 2005 results
include an operating loss from NTC Communications of $0.7 million.
"Being able to grow both operating and net income, while incurring the
expected startup costs from our acquisition of NTC, reflects continued progress
on our objective of profitable growth," commented Christopher E. French,
President and CEO. "Our past investment in PCS
April 21, 2005
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continues to contribute to our growth and profitability while we are addressing
the opportunities presented by our acquisition of NTC."
PCS Operations
The Company experienced strong growth in first quarter wireless revenues
as a PCS Affiliate of Sprint, increasing its PCS subsidiary revenue by $3.7
million compared to the first quarter of 2004, to a total of $21.8 million. The
PCS net income was $0.9 million in the first quarter of 2005 compared to $0.5
million in the first quarter of 2004. The Company's Sprint retail wireless
subscriber count increased by 4,300, compared to 4,500 in the first quarter of
2004, to approximately 107,000 subscribers. Although not included in the
Company's subscriber count, wholesale-prepaid subscribers increased by 4,100 in
the first quarter, compared to a 3,500 increase in the first quarter of 2004, to
approximately 31,500 wholesale subscribers. The Company's first quarter retail
churn was 2.05%, down from 2.2% in the first quarter of 2004.
Telephone Operations
The local telephone operations net income for the first quarter was $1.9
million, a $0.3 million increase compared to the same quarter last year. The
increase in net income was primarily the result of the Company recording a
reduction in revenue of $0.3 million against access revenue in the first quarter
2004 related to a dispute by interexchange carriers and continued growth of
directory revenue in the first quarter of 2005. Local telephone operations
recorded a net gain of 111 access lines in the quarter to a total of 24,802.
April 21, 2005
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Other Operations
The Company ended the quarter with 2,923 Digital Subscriber Lines (DSL)
subscribers in its local telephone service area. This represents a 79% increase
in DSL customers compared to March 31, 2004. The Company continues to experience
a decline in Dial-up Internet customers, primarily outside of the Company's DSL
footprint, as they migrate to high speed alternatives.
As previously reported on December 1, 2004, the Company acquired the 83.9%
of NTC Communications that it did not previously own. NTC Communications had a
net loss of $0.6 million in the first quarter of 2005, on revenues of $2.2
million.
External Investments
In the quarter ended March 31, 2005, the Company recorded a $0.3 million
loss on investments compared to a loss of $18 thousand in the first quarter of
2004. At the end of the quarter, the Company's external investments totaled $7.1
million.
Consolidated Results
Interest expense increased $0.1 million from the same quarter last year
due to an increase in debt outstanding related to the acquisition of NTC
Communications. The Company invested $4.9 million in Plant in Service and
retired $1.1 million of scheduled debt during the first quarter of 2005. The
Company had cash and cash equivalents of $23.6 million as of the end of the
quarter. The Company's debt/equity ratio was 44% at March 31, 2005; and debt as
a percent of total assets was 24.1%.
April 21, 2005
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About Shenandoah Telecommunications
Shenandoah Telecommunications Company is a holding company that provides a
broad range of telecommunications services through its operating subsidiaries.
The Company is traded on the NASDAQ National Market under the symbol "SHEN." The
Company's operating subsidiaries provide local and long distance telephone,
Internet and data services, cable television, wireless voice and data services,
alarm monitoring, and telecommunications equipment, along with many other
associated solutions in the Mid-Atlantic and Southeastern United States.
/S/Earle A. Mackenzie
----------------------------
Earle A. MacKenzie
Executive Vice President and
Chief Financial Officer
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 filings with the SEC. Those factors may include changes
in general economic conditions, increases in costs and other competitive
factors.
April 21, 2005
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SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands, except per share amounts)
Condensed Consolidated Balance Sheets
March 31, December 31,
2005 2004
---- ----
Cash and cash equivalents $ 23,551 $ 14,172
Other current assets 13,429 20,345
Total securities and investments 7,149 7,250
Property, plant and equipment 234,364 230,323
Less accumulated depreciation (79,290) (74,071)
--------- ---------
Net property, plant and equipment 155,074 156,252
Other assets, net 13,112 13,228
--------- ---------
Total assets $ 212,315 $ 211,247
========= =========
Current liabilities, exclusive of current
maturities of $4,410 and $4,372, respectively $ 16,660 $ 17,474
Long and short-term debt 51,211 52,291
Total other liabilities 28,016 27,685
Total shareholders' equity 116,428 113,797
--------- ---------
Total liabilities and shareholders' equity $ 212,315 $ 211,247
========= =========
April 21, 2005
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SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION
(unaudited)
(In thousands, except per share amounts)
Condensed Consolidated Statements of Income
Three months ended
March 31,
2005 2004*
---- ----
Operating Revenues-Wireless $ 22,578 $ 18,863
-Wireline 9,206 7,149
-Other 2,616 1,707
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Total operating revenue 34,400 27,719
Cost of goods and services 5,478 3,726
Network operating costs 9,807 8,311
Depreciation 5,049 4,337
Selling, general and administrative 9,449 7,061
-------- --------
Total operating expenses 29,783 23,435
-------- --------
Operating income 4,617 4,284
Interest expense (854) (797)
Other income (expense) 25 206
Income tax provision (1,393) (1,380)
-------- --------
Net income $ 2,395 $ 2,313
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Net earnings per share, basic $ 0.31 $ 0.30
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Net earnings per share, diluted $ 0.31 $ 0.30
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* Certain amounts for 2004 have been reclassified to conform with the 2005
presentation.