SHEN - Earnings call transcript Q4 2020 | Shenandoah Telecommunications Company

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Operator

Good morning, everyone. Welcome to the Shenandoah Telecommunications Fourth Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis for Shentel.

Kirk Andrews

you us. thank and morning, for joining Good The results full for today's call year review Shentel's is to the purpose of XXXX. fourth quarter and

this With in an us we'll French, available President call. details and the question-and-answer Our call Executive press Dave and at on our Chris this be release our were announced Senior made Please a later Vice of Officer; the of on page today are release CFO. a results After are session. Chief note this www.shentel.com. prepared President Officer; that Vice announcing and will in Jim the Volk, Investor Operating The Chief the replay set reviewing remarks, and be Finance conduct distributed presentation website, President we is audio forth Heimbach, included today. Executive and press morning, call will

to are our to contains filings, this disclaimer of me risks cause These of As X results materially the Slide and let may call conference in from remind risk Therefore, uncertainties. which presentation, encouraged subject and to forward-looking discussion include refer actual we have to factors always, detailed our statements statements. certain harbor safe you you our the you provided may which review. a various differ SEC that

or ahead, as You to will are update over cautioned forward-looking with by any Chris. law, required these Except turn undertake not reliance we obligation Chris. now statements. undue call that, to publicly revise place statements. forward-looking the no to Go on I And

Christopher French

staying everyone morning, this and healthy joining hope Kirk. Thanks, everyone We and safe. appreciate is us I

X.Xx year more X, results Slide broadband high-speed about than and we As 'XX. than XXXX data with of net reflected a XX,XXX had record additions, higher on

We that of over tied success X accelerated last-mile have over ago driven route joined excellent strategy growth miles we fiber. by X,XXX networks together execution years was by when the now our Dave X company. of Our broadband

contributed developed speeds network, due are most added and data XX,XXX from largest net cable strong learning working rates construction Glo a its increasingly business, our home. our we who full churn. at from exceeding first has additions over value penetration the Our faster incumbent investment to fair for the for pace, and our operations, plan additions X,XXX demand Fiber expectations and customers thesis, pace Glo validated year accelerate net to of expansion. in and of

XXX call. Our will fixed approximately these service was in and Beam provide detail launched outstanding broadband net late Dave the on wireless later October more on additions. contributed results

to to business rates several local years. to the high-speed customer offerings market, combined our expect for the have product service variety areas. of urban now both we industry-leading Slide service. our all to We and Beam increase to lower-density leading incumbent growth in and The and in common with available reach offerings our next in have a Internet superior and in in projected X fixed Turning service XXX,XXX mid-XXs denominator dynamics from to next mid-XX% expect We targeting provide low is with range, of penetration Fiber XX,XXX Beam approximately of to serve now investments Beam over an terminal We rural over penetration cable higher-density and XXXX. X. With market accelerate Glo wireless homes our Glo markets the homes plan service approximately of reach Broadband percent each XXX,XXX sustainable end the the range years. passed, targeting the Glo passed

February. we like a expected announced I'd Slide to transition on update to now earlier proceeds Moving brief X. in of use the and pending to that provide sale

and obtaining in on assets regulatory option the executing will have and to of first off completed, is pay transaction we're second After we, the taxes, of sale sales in the purchase need determination required us, exercise to agreements. the and of existing With the course, credit of closing operation and we'll focused price approvals the agreement quarter. pay behind our the purchase the quarter our now T-Mobile PCS the and asset

and meet Our then Board payable to of consider Directors the will record special the set dividend and dates.

the pandemic. of They to provide protect I'm customers. in responded employees how review is address to steps Jim organization support Beam that, full positioned year successful our for appraisal one PCS to very challenge stronger to how first and of impact work With our and future. but the our most the with The launch of the Fiber's operations not details process company's The pleased Shentel entire very process. Glo a the the call only to XXXX the team leading but service well perhaps history, our our proud significant year the our up became I'm while bright quickly but and turn the of sale, the as now organization financial results. was accomplishments for most for I'll in challenging over of the met continuing to how were was the outcome took of the for

James Volk

of fourth in service. Please SMB intercompany fiber to million, by $X.X discuss revenue fourth subscribers connections. million staffing, a OIBDA other from broadband for increase primarily plans. and expense primarily combination Glo net enterprise increase Thank financial a $X.X the costs X.X% offset due of XX.X% quarter you, XXXX million grew of Slide revenue and strong Beam and and backhaul to incentive for residential XX.X% $X.X adjusted higher the to to Tower XX.X% revenue $X.X $X.X OIBDA rate and or or to maintenance On XX.X% $XXX,XXX driven of or Chris, lower data increase to X.X% Slide X, of to and million, in the higher our revenue million grew to revenue, results by phone X was Broadband growth and million XXXX, from or declined compensation grew a DSL quarter RLEC $X.X -- Fiber expense The start-up and grew Broadband data due increase quarter. Commercial $X.X $XXX,XXX from partially benefit year amendments good million driven period million from $XX.X in X.X% by in refer the million grew million of to and due same $X.X average tenants the morning, growth $XX.X the ago. to to quarter adjusted leases. everyone. intercompany fourth and X.X% an in segment XX.X% to $X.X lease the due million revenue operating fourth RGUs. enhanced results XX.X% for higher

of for million the quarter the adjusted X.X% XX.X% growth OIBDA revenue Moving increase XXXX. Consolidated towers Consolidated to to million corporate XX. Slide quarter primarily grew in in million. expenses. due and grew The $X.X reduction to strong $XX.X a in to $XX.X fourth was

to COVID-XX million the an XX.X% XXXX, service now million $XX.X hiring Turning fiber to due increase $XX.X software data year million in XX.X% of in launched residential XXXX driven offset employees revenue comparison in expenses. to quarter. Compensation to average $X.X revenue $XX.X OIBDA compensation, X.X% On increasing revenue Fiber year-over-year the during and Tower due by increase results Slide grew XXXX, million on fees grew new increase in XX. XXXX full in million and from Commercial from due supplemental to amendments were from SMB RLEC RGUS. the to by Broadband lease or in in to for customer-facing the Beam $XXX.X X.X% growth or broadband segment XXXX grew staff X% launch million to government rate and primarily $X.X phone in XXXX and professional to expenses XX.X% X.X% for and was adjusted largely addition XX% and the markets increases of primarily or subscribers, $XX.X grew the tenants enterprise to as intercompany other million, the we connections. X higher revenue service. $XX.X by to second to for million and leases. XXXX support Slide support intercompany OIBDA the growth new $XXX,XXX Glo higher lower $XX.X primarily of DSL the and XX.X% million, broadband revenue adjusted that grew due declined revenue pay driven to XX, in backhaul

revenue grew reduction XX.X% in The Consolidated was during Consolidated strong XXXX. period. XX. increase growth grew of or year-over-year in to OIBDA time million Slide in to corporate same to the primarily million $XXX.X million to due $XX.X adjusted XX.X% $X Moving towers expenses. X.X% a and

are outlook also our that month. We XXXX reaffirming we earlier disclosed this

be revenues adjusted We between million. expect to million and range million to $XX $XXX million $XX and consolidated to $XXX OIBDA

debt to quarter with equivalents. cash in contribution $XX Beam. by fourth flow operations adjusted XXXX, CapEx $XXX Fiber the million of $XX and Glo of $X an rate of ended free for primarily $XXX had $XXX of million Continuing We cash X.X% effective XX. and million of million and including negative in million million of total interest with liquidity, Slide OIBDA and negative to Moving driven

free generated flow cash of operations XXXX. million over discontinued Our Wireless $XXX the now turn Dave. And I'll to call strong in

David Heimbach

of impressive versus improved slightly our XX average continued an megabits to XXXX, cable whereas in the increased on the that the Powerhouse with X.X churn to megabits our period. to the per the new and robust speed well Jim, which of representing fourth XX in value year now in in our an to XX.X% of period on a leveraging plans data upgrades the incumbent in on broadband XX% year-over-year declining Slide comprises points improvement. less, download pandemic. and broadband data incumbent related card XX% our year to of per added data prior the X.X% from RGUs fourth our quarter I'll is Incumbent and the which year to year-over-year net which card, speeds, exceptional increased penetration cable We're quarter XX,XXX XX.X% new roughly the on good base. are or DOCSIS of broadband to second, rate is quarter Broadband XX new the cable quarter rate quarter per last pleased user to compared everyone. customers the Thanks, the an same competitors. XXX,XXX prior beyond subscribed RGUs plans based XX% increased higher proposition X,XXX approximately with rate consecutive At reach period our $XX.XX the branded second to strength an our year total this grew XX ended the continued churn quarter XX data data fourth XXX,XXX per in of with demand begin prior of of DSL rate data now speed in improve, year increase approximately megabits X.XX%, the XX.X% the as morning, very RGUS, report data average quarter end fourth were or also We improvements business in quarter revenue broadband the second on basis incumbent of prior cable the service year. versus XXth quarter

XX. Turning to Slide

As the XX.X% at relationships. an penetration approximately our quarter broadband year executing Chris full at with Fiber X,XXX of X,XXX had of Edge new rate Out Glo the a outstanding start end strategy, across fourth Home all call, mentioned Glo had over just the RGUs the of Fiber. markets total Glo new customer first the to data we aggregate comprised Fiber

see to a but to Glo down quarter due $XX.XX continue ARPU our high-speed at revenue as activation X.XX%. sequentially in Fiber the churn low to X% not product discounting. We less of data the Broadband in timing, with extraordinarily data new quarter in than result churn was

gigabit of higher higher-priced new Glo In of the new tier, to quarter comprising subscribers with speed this electing XX% XX% plan fact, we percentage adopting Fiber our continue overall the in base. of a subs see

the and of streaming end At double-play perform active in services respectively. fourth our voice subs and continue Fiber with only, data a XX% XX% quarter, customers well approved markets XXXX, as Fiber a quarter. and Our XX% rates depicts to attachment Slide single-play status XX of the Glo end in of the X% were XX% and broadband a the Glo of the in very triple-play. of of were TV were

fourth in neighborhoods target some of X,XXX at business were XXXX overall Fiber rate. sales and the market of our to penetration well expect to in our the the markets Edge Salem, and footprint. as indeed approximately Harrisonburg, start over Fiber terminal Glo of in In XXXX. Fiber most passings the also approximately of additional residential of just all XX.X% networks and reached active January, that and spite mature how of under Out year expectations and depicted On of the and strong helps This passings the added launched Fiber our construct and of our penetration to has operations map Approximately new in Glo our the efforts of approaching exceeded bringing fiber, we a and our targeted really XX,XXX. with release XX,XXX community time, XXXX in market overlap are broadband to have constructed our first will with end total related a and footprint. XXXX, and data franchised approved end by Virginia total XX,XXX leverage in nature passings broadband cable Construction of increase Virginia progressing we Glo with end strategy COVID-XX. quarter adjacency in XX, in to small delays quarter fixed we wireless Our very and the operating broadband our passings at sales given and funnel illustrate released Glo addresses We year. of concerns the new XX,XXX the Slide growing integrated total, approximately XXX,XXX

we've quarter, XXXX in Beam include X,XXX households servicing launched We nearly constructed resulted new to map sites Beam and roughly target updated macro XXX households Beam wireless passed plan construct to markets. at XX Louisa the new This fixed the XXXX, XX in approximately and XX,XXX. and end target in subscribers Augusta, in Rockingham sites to Virginia. Albemarle, XXXX in increase Counties We Beam of

as efforts. Chris Internet As over than will triple strategy We'll to the the Fiber X continue Glo update plans call, development of combined, our status expansion to you growth our our start to continue Beam and on progress construction market multipronged we at passed more XXX,XXX homes both next and the in the of in years. broadband stated

XXX. XXX or of a the open at Turning XX. tenants had Total tenants upgrades our year-over-year to of addition related to tenants for of business. backlog the tenants, orders X.X% intercompany XXX Slide Tower primarily XXXX. increased existing This end to We includes of new Wireless

were in Glo million guidance Capital presentation. XXXX spending of Finally, Beam no wireless result sale providing for and and provides primary pending $XX relates Internet XXXX. to in the longer results to continuing Slide million as year-over-year XX in investments our to an guidance broadband $XXX our Wireless operations We're the capital XXXX. compared the update our for operations of discontinued Fiber initiative. fixed The expenditures increase and XXXX driver a

we $XXX $XX Fiber penetration Glo and the achieve and For continue the fixed in of we to capital markets. Of our Beam-related to million wireless $XXX million related our our incumbent $XX the is to our year approximately the to guidance XXXX, full the XXXX, cable million fiber in million in spend broadband ready and our legacy new $XXX expect is target approximately we're success-based to construction questions. million invest now for business passings of aggressively $XXX and and in operations, million connecting operator, million and you of Of of million wholesale very for new the to $XX broadband fiber spend related million to is in much. wireless expansion increase as cable wireless fiber support and $XX fixed and capital data fixed subscribers. in commercial Thank continued is growth And in $XX fiber in design networks.

Operator

[Operator Instructions].

comes line question of Hamed with first the Khorsand BWS Your Financial. from

Hamed Khorsand

moat, competition just early I first that come early promote you're question the to seeing kind Glo seeing subscribers Fiber. do about on, if had competition a results was How and the was so penetration I see not as create I from of success? -- does increased was you seeing -- this looking you're in? you're

David Heimbach

And providing of the is I'm believe to a Number that, services markets in targeted of as the that fiber-based We is universally of company think two, with to number permitting of provided this far superior the deployed LEC as the competitive company large. share anything franchising, disruptive is and jobs itself, the landscape is symmetrical, is case Yes, moat belongs can developed that DSL-based for we a that fully engender a adding The infrastructure, sure value is in to vast of connection, moat. network, can company. the the aspect as to appreciate, those by you second the of Glo cable the for believe these that incumbent communities construction construction competitive only Dave. these services the is fiber the local goodwill incumbent well markets, we base the in completing pretty thirdly, in is that competitive and of lot in itself, have a and one. else majority getting that a where which, which getting investing and is and subscriber community incumbent get the question. we community is that phone or thanks the the Hamed, and the future-proof, having just Fiber amongst going anybody proposition

of particularly But somebody there's encroachment but monitoring that not slowing. not we've signs us the and night, any we're competitive thus of that cable far, up so of a And response We're incumbents keep things -- lot one else see by success had at closely. of the those. very the is don't competitive

Hamed Khorsand

other early? Okay. are seeing was, that it seasonality question And you COVID loosening? Or in my are business restrictions any the too just is now

David Heimbach

the only construction ice Too in turn. here be and had going think country, degrees more we're storms, and quarter to start as efforts here But recently. of early a XX it's of of door-to-door unpleasant weather is up, the a lot to will selling lot we that. obviously, at that's seasonality today, we've efforts hampered and warms close the that I'd the the first seeing this for snow say part weather of

Operator

like now to [Operator time. showing at over questions CFO. Jim the am to Instructions]. turn Volk, would I no conference this I further

James Volk

progress quarters. future in keeping morning. forward everyone, joining strategy our broadband for growth this to updated on call Have We look you thank good our you, a day. with Well, our

Operator

Thank you for participating.

disconnect may this time. at You

Shenandoah Telecommunications (SHEN) 28 Feb 212020 Q4 Earnings call transcript