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MATTOON, Ill.--(BUSINESS WIRE)--May 2, 2023--
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 of 2023.
“We added a record 12,337 consumer fiber broadband subscribers in the first quarter and achieved 60% growth year over year,” said Bob Udell, chief executive officer. “Our plan to drive improved penetration through a refined go-to market strategy is off to a great start with particularly strong fiber net adds of 5,200 in March, and approaching 6,000 in April. On the heels of this positive momentum, we expect to see another milestone of record net fiber adds in the second quarter.”
“With fiber expected to reach nearly 50% of our base at the end of 2023, we are continuing to build the foundation across our 3 C’s, including consumer, commercial and carrier, to position ourselves for revenue and EBITDA growth in 2024,” added Udell.
____________________
1Q1 2022 normalized for the divestitures of the Company’s Ohio and Kansas assets, where applicable, which closed on Jan. 31, 2022 and Nov. 30, 2022, respectively. Refer to the tables contained in this press release for a reconciliation of all non-GAAP measures.
First Quarter 2023 Results (compared to first quarter 2022 where applicable)
Operating expenses increased $4.0 million versus the prior year primarily due to additional costs in 2023 for severance, professional fees for customer service and process improvement initiatives, and marketing and advertising expenses. These higher expenses were partly offset by lower video programming and access costs, and the impact of the divestiture of the Kansas City operations on Nov. 30, 2022.
Net interest expense was $33.9 million, an increase of $4.3 million versus the prior year, primarily as a result of higher interest on the term loan. Notwithstanding the heightened interest rate environment, the Company is well positioned with 77% of its total debt at a fixed rate through July 2023, and 53% fixed thereafter. As of Mar. 31, 2023, the weighted average cost of debt was 6.61%.
Net loss was ($47.7 million) in the first quarter of 2023 compared to ($125.3 million) in the first quarter of 2022, which included $3.5 million of income from discontinued operations. Net loss per share was ($0.42) in the first quarter of 2023 as compared to ($1.12) in the first quarter of 2022. Adjusted diluted net income (loss) per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share from continuing operations was ($0.28) compared to ($0.01) in the first quarter of 2022.
Capital Expenditures
Total committed capital expenditures were $144.6 million driven by 53,858 fiber passings added in the quarter, record first quarter fiber adds, and the timing of construction and CPE inventory purchases in support of future build and install activity.
Capital Structure
As of Mar. 31, 2023, the Company maintained liquidity with cash and short-term investments of approximately $336 million and $213 million of available borrowing capacity on the revolving credit facility, subject to certain covenants. The net leverage ratio for the trailing 12 months ended Mar. 31, 2023, was 4.76x. With no maturities until 2027, healthy liquidity and fiber penetration growth, the Company remains well positioned to continue executing on its fiber expansion and growth plan.
2023 Outlook
Consolidated Communications reaffirmed its guidance for the full-year 2023.
Conference Call Information
Consolidated’s first quarter earnings conference call will be webcast today at 8:30 am ET. The webcast and materials will be available on Consolidated’s Investor Relations 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 replay of the webcast, together with a transcript thereof, will be available on the website following the earnings conference call.
About Consolidated Communications
Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber 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 more than 57,500 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.
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,” “adjusted diluted net income (loss) per share,” and “Normalized revenue,” all of which are non-GAAP financial measures. 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 these non-GAAP financial measures to 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 (loss) from continuing operations. EBITDA is defined as income (loss) from continuing operations 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. Total net debt is defined as the current and long-term portions of debt and finance lease obligations less cash, cash equivalents and short-term investments, deferred debt issuance costs and discounts on debt. Our Net debt leverage ratio differs in certain respects from the similar ratio used in our credit agreement or 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.
Forward-Looking Statements
Certain statements in this press release, including those relating to the current expectations, plans, strategies, and anticipated financial results, including year over year revenue and EBITDA growth in 2024, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private 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, including: significant competition in all parts of our business and among our customer channels; our ability to adapt to rapid technological changes; shifts in our product mix that may result in a decline in operating profitability; public health threats, including the COVID-19 pandemic; continued receipt of support from various funds established under federal and state laws; disruptions in our networks and infrastructure and any related service delays or disruptions could cause us to lose customers and incur additional expenses; cyber-attacks may lead to unauthorized access to confidential customer, personnel and business information that could adversely affect our business; our operations require substantial capital expenditures and our business, financial condition, results of operations and liquidity may be impacted if funds for capital expenditures are not available when needed; our ability to obtain and maintain necessary rights-of-way for our networks; our ability to obtain necessary hardware, software and operational support from third-party vendors; substantial video content costs continue to rise; our ability to enter into new collective bargaining agreements or renew existing agreements; our ability to attract and/or retain certain key management and other personnel in the future; risks associated with acquisitions and the realization of anticipated benefits from such acquisitions; increasing attention to, and evolving expectations for, environmental, social and governance initiatives; unfavorable changes in financial markets could affect pension plan investments; weak economic conditions, and the other risk factors described in Part I, Item 1A of Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. 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, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to us and speak only as of the date they are made. Except as required under federal securities laws or the rules and regulations of the Securities and Exchange Commission, we disclaim any intention or obligation to update or revise publicly any forward-looking statements.
Tag: [Consolidated-Communications-Earnings]
| Consolidated Communications Holdings, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Dollars in thousands, except share and per share amounts) | ||||||||
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 247,877 | $ | 325,852 |
| |||
| Short-term investments |
| 87,951 |
| 87,951 |
| |||
| Accounts receivable, net |
| 108,471 |
| 119,675 |
| |||
| Income tax receivable |
| 1,662 |
| 1,670 |
| |||
| Prepaid expenses and other current assets |
| 65,622 |
| 62,996 |
| |||
| Total current assets |
| 511,583 |
| 598,144 |
| |||
|
| |||||||
| Property, plant and equipment, net |
| 2,330,545 |
| 2,234,122 |
| |||
| Investments |
| 9,104 |
| 10,297 |
| |||
| Goodwill |
| 929,570 |
| 929,570 |
| |||
| Customer relationships, net |
| 37,018 |
| 43,089 |
| |||
| Other intangible assets |
| 10,557 |
| 10,557 |
| |||
| Other assets |
| 63,542 |
| 61,315 |
| |||
| Total assets | $ | 3,891,919 | $ | 3,887,094 |
| |||
|
| |||||||
| LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY |
|
| ||||||
| Current liabilities: |
|
| ||||||
| Accounts payable | $ | 53,921 | $ | 33,096 |
| |||
| Advance billings and customer deposits |
| 49,009 |
| 46,664 |
| |||
| Accrued compensation |
| 51,602 |
| 60,903 |
| |||
| Accrued interest |
| 35,956 |
| 18,201 |
| |||
| Accrued expense |
| 111,808 |
| 95,206 |
| |||
| Current portion of long-term debt and finance lease obligations |
| 16,377 |
| 12,834 |
| |||
| Total current liabilities |
| 318,673 |
| 266,904 |
| |||
|
| |||||||
| Long-term debt and finance lease obligations |
| 2,136,837 |
| 2,129,462 |
| |||
| Deferred income taxes |
| 261,001 |
| 274,309 |
| |||
| Pension and other post-retirement obligations |
| 122,090 |
| 123,644 |
| |||
| Other long-term liabilities |
| 48,079 |
| 47,326 |
| |||
| Total liabilities |
| 2,886,680 |
| 2,841,645 |
| |||
|
| |||||||
| Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 477,047 and 456,343 shares outstanding as of March 31, 2023 and December 31, 2022, respectively; liquidation preference of $487,634 and $477,047 as of March 31, 2023 and December 31, 2022, respectively |
| 339,267 |
| 328,680 |
| |||
|
| |||||||
| Shareholders' equity: |
|
| ||||||
| Common stock, par value $0.01 per share; 150,000,000 shares authorized, 116,649,382 and 115,167,193 shares outstanding as of March 31, 2023 and December 31, 2022, respectively |
| 1,167 |
| 1,152 |
| |||
| Additional paid-in capital |
| 709,603 |
| 720,442 |
| |||
| Accumulated deficit |
| (48,970 | ) |
| (11,866 | ) | ||
| Accumulated other comprehensive loss, net |
| (3,622 | ) |
| (610 | ) | ||
| Noncontrolling interest |
| 7,794 |
| 7,651 |
| |||
| Total shareholders' equity |
| 665,972 |
| 716,769 |
| |||
| Total liabilities, mezzanine equity and shareholders' equity | $ | 3,891,919 | $ | 3,887,094 |
| Consolidated Communications Holdings, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (Dollars in thousands, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2023 | 2022 | |||||||
| Net revenues | $ | 276,126 |
| $ | 300,278 |
| ||
| Operating expenses: | ||||||||
| Cost of services and products | 131,938 |
| 135,895 |
| ||||
| Selling, general and administrative expenses | 81,284 |
| 73,285 |
| ||||
| Loss on impairment of assets held for sale | — |
| 126,490 |
| ||||
| Loss on disposal of assets | 3,304 |
| — |
| ||||
| Depreciation and amortization | 77,699 |
| 72,350 |
| ||||
| Loss from operations | (18,099 | ) | (107,742 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense, net of interest income | (33,860 | ) | (29,515 | ) | ||||
| Other income, net | 2,758 |
| 3,342 |
| ||||
| Loss from continuing operations before income taxes | (49,201 | ) | (133,915 | ) | ||||
| Income tax benefit | (12,240 | ) | (14,819 | ) | ||||
| Loss from continuing operations | (36,961 | ) | (119,096 | ) | ||||
| Discontinued operations: | ||||||||
| Income from discontinued operations | — |
| 8,063 |
| ||||
| Income tax expense | — |
| 4,516 |
| ||||
| Income from discontinued operations | — |
| 3,547 |
| ||||
| Net loss | (36,961 | ) | (115,549 | ) | ||||
| Less: dividends on Series A preferred stock | 10,587 |
| 9,598 |
| ||||
| Less: net income attributable to noncontrolling interest | 143 |
| 115 |
| ||||
| Net loss attributable to common shareholders | $ | (47,691 | ) | $ | (125,262 | ) | ||
| Net income (loss) per common share - basic and diluted: | ||||||||
| Loss from continuing operations | $ | (0.42 | ) | $ | (1.15 | ) | ||
| Income from discontinued operations | — |
| 0.03 |
| ||||
| Net loss per basic and diluted common shares attributable to common shareholders | $ | (0.42 | ) | $ | (1.12 | ) |
| Consolidated Communications Holdings, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (Dollars in thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2023 | 2022 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (36,961 | ) | $ | (115,549 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 77,699 |
| 72,350 |
| ||||
| Deferred income taxes | 5,604 |
| (10,560 | ) | ||||
| Cash distributions from wireless partnerships in excess of earnings | — |
| 153 |
| ||||
| Pension and post-retirement contributions in excess of expense | (2,861 | ) | (9,342 | ) | ||||
| Non-cash, stock-based compensation | 799 |
| 2,199 |
| ||||
| Amortization of deferred financing costs and discounts | 1,847 |
| 1,802 |
| ||||
| Loss on impairment of assets held for sale | — |
| 126,490 |
| ||||
| Loss on disposal of assets | 3,304 |
| — |
| ||||
| Other adjustments, net | (418 | ) | (189 | ) | ||||
| Changes in operating assets and liabilities, net | 6,073 |
| 14,206 |
| ||||
| Net cash provided by operating activities | 55,086 |
| 81,560 |
| ||||
| INVESTING ACTIVITIES | ||||||||
| Purchase of property, plant and equipment, net | (130,826 | ) | (156,480 | ) | ||||
| Purchase of investments | — |
| (39,959 | ) | ||||
| Proceeds from sale of assets | 292 |
| 74 |
| ||||
| Proceeds from business dispositions, net | — |
| 26,042 |
| ||||
| Proceeds from sale and maturity of investments | 1,623 |
| 65,754 |
| ||||
| Net cash used in investing activities | (128,911 | ) | (104,569 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Payment of finance lease obligations | (3,114 | ) | (2,341 | ) | ||||
| Share repurchases for minimum tax withholding | (1,036 | ) | (114 | ) | ||||
| Net cash used in financing activities | (4,150 | ) | (2,455 | ) | ||||
| Net change in cash and cash equivalents | (77,975 | ) | (25,464 | ) | ||||
| Cash and cash equivalents at beginning of period | 325,852 |
| 99,635 |
| ||||
| Cash and cash equivalents at end of period | $ | 247,877 |
| $ | 74,171 |
|
| Consolidated Communications Holdings, Inc. | ||||||
| Consolidated Revenue by Category | ||||||
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
2023 | 2022 | |||||
| Consumer: | ||||||
| Broadband (Data and VoIP) | $ | 67,961 | $ | 65,911 | ||
| Voice services | 32,263 | 37,452 | ||||
| Video services | 9,594 | 14,366 | ||||
109,818 | 117,729 | |||||
| Commercial: | ||||||
| Data services (includes VoIP) | 53,134 | 57,895 | ||||
| Voice services | 32,631 | 36,339 | ||||
| Other | 9,756 | 11,560 | ||||
95,521 | 105,794 | |||||
| Carrier: | ||||||
| Data and transport services | 32,923 | 33,485 | ||||
| Voice services | 4,367 | 3,852 | ||||
| Other | 350 | 391 | ||||
37,640 | 37,728 | |||||
| Subsidies | 7,036 | 6,583 | ||||
| Network access | 24,444 | 26,213 | ||||
| Other products and services | 1,667 | 6,231 | ||||
| Total operating revenue | $ | 276,126 | $ | 300,278 |
| Consolidated Communications Holdings, Inc. | |||||||||||||||
| Consolidated Revenue Trend by Category | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | |||||||||||
| Consumer: | |||||||||||||||
| Broadband (Data and VoIP) | $ | 67,961 | $ | 69,002 | $ | 69,641 | $ | 67,592 | $ | 65,911 | |||||
| Voice services | 32,263 | 34,314 | 36,444 | 36,643 | 37,452 | ||||||||||
| Video services | 9,594 | 11,876 | 13,552 | 14,359 | 14,366 | ||||||||||
109,818 | 115,192 | 119,637 | 118,594 | 117,729 | |||||||||||
| Commercial: | |||||||||||||||
| Data services (includes VoIP) | 53,134 | 56,662 | 56,796 | 57,113 | 57,895 | ||||||||||
| Voice services | 32,631 | 34,676 | 35,484 | 35,775 | 36,339 | ||||||||||
| Other | 9,756 | 10,320 | 9,933 | 11,287 | 11,560 | ||||||||||
95,521 | 101,658 | 102,213 | 104,175 | 105,794 | |||||||||||
| Carrier: | |||||||||||||||
| Data and transport services | 32,923 | 33,752 | 33,878 | 36,263 | 33,485 | ||||||||||
| Voice services | 4,367 | 3,685 | 3,517 | 3,718 | 3,852 | ||||||||||
| Other | 350 | 338 | 605 | 354 | 391 | ||||||||||
37,640 | 37,775 | 38,000 | 40,335 | 37,728 | |||||||||||
| Subsidies | 7,036 | 13,078 | 7,187 | 6,534 | 6,583 | ||||||||||
| Network access | 24,444 | 26,308 | 27,277 | 24,846 | 26,213 | ||||||||||
| Other products and services | 1,667 | 1,965 | 2,305 | 3,906 | 6,231 | ||||||||||
| Total operating revenue | $ | 276,126 | $ | 295,976 | $ | 296,619 | $ | 298,390 | $ | 300,278 |
| Consolidated Communications Holdings, Inc. | ||||||||||
| Reconciliation of Historical Revenue by Category to Normalized Revenue by Category | ||||||||||
| (Dollars in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, 2022 | ||||||||||
| Historical | Adjustments (1) | Normalized | ||||||||
| Consumer: | ||||||||||
| Broadband (Data and VoIP) | $ | 65,911 | $ | (2,048 | ) | $ | 63,863 | |||
| Voice services | 37,452 | (696 | ) | 36,756 | ||||||
| Video services | 14,366 | (2,710 | ) | 11,656 | ||||||
117,729 | (5,454 | ) | 112,275 | |||||||
| Commercial: | ||||||||||
| Data services (includes VoIP) | 57,895 | (4,229 | ) | 53,666 | ||||||
| Voice services | 36,339 | (1,455 | ) | 34,884 | ||||||
| Other | 11,560 | (301 | ) | 11,259 | ||||||
105,794 | (5,985 | ) | 99,809 | |||||||
| Carrier: | ||||||||||
| Data and transport services | 33,485 | (288 | ) | 33,197 | ||||||
| Voice services | 3,852 | (5 | ) | 3,847 | ||||||
| Other | 391 | (1 | ) | 390 | ||||||
37,728 | (294 | ) | 37,434 | |||||||
| Subsidies | 6,583 | (49 | ) | 6,534 | ||||||
| Network access | 26,213 | (508 | ) | 25,705 | ||||||
| Other products and services | 6,231 | (81 | ) | 6,150 | ||||||
| Total operating revenue | $ | 300,278 | $ | (12,371 | ) | $ | 287,907 | |||
| Notes: | ||||||||||
| (1) These adjustments reflect the removal of operating revenues for divestitures. We completed the sale of the Company's Ohio and Kansas assets on January 31, 2022 and November 30, 2022, respectively. |
| Consolidated Communications Holdings, Inc. | ||||||||
| Reconciliation of Loss from Continuing Operations to Adjusted EBITDA | ||||||||
| (Dollars in thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2023 | 2022 | |||||||
| Loss from continuing operations | $ | (36,961 | ) | $ | (119,096 | ) | ||
| Add (subtract): | ||||||||
| Income tax benefit | (12,240 | ) | (14,819 | ) | ||||
| Interest expense, net | 33,860 |
| 29,515 |
| ||||
| Depreciation and amortization | 77,699 |
| 72,350 |
| ||||
| EBITDA | 62,358 |
| (32,050 | ) | ||||
| Adjustments to EBITDA (1): | ||||||||
| Other, net (2) | 10,030 |
| 5,324 |
| ||||
| Pension/OPEB benefit | (1,141 | ) | (2,983 | ) | ||||
| Loss on disposal of assets | 3,304 |
| — |
| ||||
| Loss on impairment | — |
| 126,490 |
| ||||
| Non-cash compensation (3) | 799 |
| 2,199 |
| ||||
| Adjusted EBITDA from continuing operations | 75,350 |
| 98,980 |
| ||||
| Investment distributions from discontinued operations | — |
| 8,216 |
| ||||
| Adjusted EBITDA | $ | 75,350 |
| $ | 107,196 |
| ||
| 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. |
| Consolidated Communications Holdings, Inc. | |||||||
| Reconciliation of Loss from Continuing Operations to Adjusted EBITDA Guidance | |||||||
| (Dollars in millions) | |||||||
| (Unaudited) | |||||||
| Year Ended | |||||||
| December 31, 2023 | |||||||
| Range | |||||||
| Low | High | ||||||
| Loss from continuing operations | $ | (123 | ) | $ | (105 | ) | |
| Add: | |||||||
| Income tax benefit | (43 | ) | (37 | ) | |||
| Interest expense, net | 152 |
| 148 |
| |||
| Depreciation and amortization | 314 |
| 312 |
| |||
| EBITDA | 300 |
| 318 |
| |||
| Adjustments to EBITDA (1): | |||||||
| Other, net (2) | 12 |
| 14 |
| |||
| Pension/OPEB benefit | (12 | ) | (12 | ) | |||
| Non-cash compensation (3) | 10 |
| 10 |
| |||
| Adjusted EBITDA | $ | 310 |
| $ | 330 |
| |
| 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, dividend income, integration 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. |
| Consolidated Communications Holdings, Inc. | ||||
| Reconciliation of Total Net Debt to LTM Adjusted EBITDA Ratio | ||||
| (Dollars in thousands) | ||||
| (Unaudited) | ||||
| March 31, | ||||
2023 | ||||
| Long-term debt and finance lease obligations: | ||||
| Term loans, net of discount $8,286 | $ | 991,589 |
| |
| 6.50% Senior secured notes due 2028 | 750,000 |
| ||
| 5.00% Senior secured notes due 2028 | 400,000 |
| ||
| Finance leases | 44,817 |
| ||
| Total debt as of March 31, 2023 | 2,186,406 |
| ||
| Less: deferred debt issuance costs | (33,192 | ) | ||
| Less: cash, cash equivalents and short-term investments | (335,828 | ) | ||
| Total net debt as of March 31, 2023 | $ | 1,817,386 |
| |
| Adjusted EBITDA for the 12 months ended March 31, 2023 | $ | 381,734 |
| |
| Total Net Debt to last 12 months Adjusted EBITDA | 4.76x |
|
| Consolidated Communications Holdings, Inc. | ||||||||
| Reconciliation of Loss Attributable to Common Shareholders from Continuing Operations to Adjusted Loss from Continuing Operations and Calculation of Adjusted Diluted Net Income (Loss) Per Common Share | ||||||||
| (Dollars in thousands, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2023 | 2022 | |||||||
| Loss from continuing operations | $ | (36,961 | ) | $ | (119,096 | ) | ||
| Less: dividends on Series A preferred stock | 10,587 |
| 9,598 |
| ||||
| Less: net income attributable to noncontrolling interest | 143 |
| 115 |
| ||||
| Loss attributable to common shareholders from continuing operations | (47,691 | ) | (128,809 | ) | ||||
| Adjustments to loss attributable to common shareholders: | ||||||||
| Dividends on Series A preferred stock | 10,587 |
| 9,598 |
| ||||
| Integration and severance related costs, net of tax | 2,648 |
| 802 |
| ||||
| Loss on impairment of assets held for sale | — |
| 126,490 |
| ||||
| Loss on disposition of assets, net of tax | 2,441 |
| — |
| ||||
| Non-cash interest expense for swaps, net of tax | (338 | ) | (295 | ) | ||||
| Tax impact of non-deductible goodwill | — |
| (10,813 | ) | ||||
| Non-cash stock compensation, net of tax | 590 |
| 1,626 |
| ||||
| Adjusted net loss from continuing operations | $ | (31,763 | ) | $ | (1,401 | ) | ||
| Weighted average number of common shares outstanding | 112,939 |
| 111,691 |
| ||||
| Adjusted diluted net income (loss) per common share: | ||||||||
| Adjusted net loss from continuing operations | $ | (0.28 | ) | $ | (0.01 | ) | ||
| Adjusted income from discontinued operations, net of tax | — |
| 0.03 |
| ||||
| $ | (0.28 | ) | $ | 0.02 |
| |||
| Notes: | ||||||||
| Calculations above assume a 26.1% effective tax rate for the three months ended March 31, 2023 and 2022. |
| Consolidated Communications Holdings, Inc. | ||||||||||||||||||||||||||||||||||||||||||||
| Key Operating Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 2023 | ||||||||||||||||||||||||||||||||||
| Passings | ||||||||||||||||||||||||||||||||||||||||||||
| Total Fiber Gig+ Capable Passings (1)(5)(6) | 320,806 |
| 397,123 |
| 494,160 |
| 605,710 |
| 605,710 |
| 689,406 |
| 831,779 |
| 947,974 |
| 1,008,660 |
| 1,008,660 |
| 1,062,518 |
| ||||||||||||||||||||||
| Total DSL/Copper Passings (2)(3)(5)(6) | 2,421,292 |
| 2,347,816 |
| 2,255,556 |
| 2,146,377 |
| 2,146,377 |
| 2,059,025 |
| 1,920,214 |
| 1,807,381 |
| 1,617,077 |
| 1,617,077 |
| 1,564,889 |
| ||||||||||||||||||||||
| Total Passings (1)(2)(3)(5)(6) | 2,742,098 |
| 2,744,939 |
| 2,749,716 |
| 2,752,087 |
| 2,752,087 |
| 2,748,431 |
| 2,751,993 |
| 2,755,355 |
| 2,625,737 |
| 2,625,737 |
| 2,627,407 |
| ||||||||||||||||||||||
| % Fiber Gig+ Coverage/Total Passings | 12 | % | 14 | % | 18 | % | 22 | % | 22 | % | 25 | % | 30 | % | 34 | % | 38 | % | 38 | % | 40 | % | ||||||||||||||||||||||
| Consumer Broadband Connections | ||||||||||||||||||||||||||||||||||||||||||||
| Fiber Gig+ Capable (3) | 74,495 |
| 77,521 |
| 81,539 |
| 86,122 |
| 86,122 |
| 93,812 |
| 103,455 |
| 115,598 |
| 122,872 |
| 122,872 |
| 135,209 |
| ||||||||||||||||||||||
| DSL/Copper (2)(3) | 323,507 |
| 315,959 |
| 309,122 |
| 298,442 |
| 298,442 |
| 286,338 |
| 277,758 |
| 266,314 |
| 244,586 |
| 244,586 |
| 234,653 |
| ||||||||||||||||||||||
| Total Consumer Broadband Connections (2)(3) | 398,002 |
| 393,480 |
| 390,661 |
| 384,564 |
| 384,564 |
| 380,150 |
| 381,213 |
| 381,912 |
| 367,458 |
| 367,458 |
| 369,862 |
| ||||||||||||||||||||||
| Consumer Broadband Net Adds | ||||||||||||||||||||||||||||||||||||||||||||
| Total Fiber Gig+ Capable Net Adds (7) | 3,885 |
| 3,026 |
| 4,018 |
| 4,583 |
| 15,512 |
| 7,690 |
| 9,643 |
| 12,143 |
| 10,599 |
| 40,075 |
| 12,337 |
| ||||||||||||||||||||||
| DSL/Copper Net Adds (7) | (7,240 | ) | (7,548 | ) | (6,837 | ) | (10,680 | ) | (32,305 | ) | (8,544 | ) | (8,580 | ) | (11,444 | ) | (10,783 | ) | (39,351 | ) | (9,933 | ) | ||||||||||||||||||||||
| Total Consumer Broadband Net Adds (7) | (3,355 | ) | (4,522 | ) | (2,819 | ) | (6,097 | ) | (16,793 | ) | (854 | ) | 1,063 |
| 699 |
| (184 | ) | 724 |
| 2,404 |
| ||||||||||||||||||||||
| Consumer Broadband Penetration % | ||||||||||||||||||||||||||||||||||||||||||||
| Fiber Gig+ Capable (on fiber passings) | 23.2 | % | 19.5 | % | 16.5 | % | 14.2 | % | 14.2 | % | 13.6 | % | 12.4 | % | 12.2 | % | 12.2 | % | 12.2 | % | 12.7 | % | ||||||||||||||||||||||
| DSL/Copper (on DSL/copper passings) | 13.4 | % | 13.5 | % | 13.7 | % | 13.9 | % | 13.9 | % | 13.9 | % | 14.5 | % | 14.7 | % | 15.1 | % | 15.1 | % | 15.0 | % | ||||||||||||||||||||||
| Total Consumer Broadband Penetration % | 14.5 | % | 14.3 | % | 14.2 | % | 14.0 | % | 14.0 | % | 13.8 | % | 13.9 | % | 13.9 | % | 14.0 | % | 14.0 | % | 14.1 | % | ||||||||||||||||||||||
| Consumer Average Revenue Per Unit (ARPU) | ||||||||||||||||||||||||||||||||||||||||||||
| Fiber Gig+ Capable | $ | 64.87 |
| $ | 65.83 |
| $ | 64.64 |
| $ | 64.22 |
| $ | 64.55 |
| $ | 63.88 |
| $ | 64.95 |
| $ | 65.61 |
| $ | 67.14 |
| $ | 65.42 |
| $ | 67.51 |
| |||||||||||
| DSL/Copper | $ | 47.72 |
| $ | 49.92 |
| $ | 51.32 |
| $ | 50.65 |
| $ | 50.06 |
| $ | 50.78 |
| $ | 52.36 |
| $ | 53.87 |
| $ | 53.55 |
| $ | 53.36 |
| $ | 53.21 |
| |||||||||||
| Churn | ||||||||||||||||||||||||||||||||||||||||||||
| Fiber Consumer Broadband Churn (7) | 1.3 | % | 1.7 | % | 1.4 | % | 1.0 | % | 1.3 | % | 0.9 | % | 1.1 | % | 1.2 | % | 1.1 | % | 1.1 | % | 1.0 | % | ||||||||||||||||||||||
| DSL/Copper Consumer Broadband Churn (7) | 1.4 | % | 1.6 | % | 1.9 | % | 2.0 | % | 1.7 | % | 1.3 | % | 1.6 | % | 1.8 | % | 1.7 | % | 1.6 | % | 1.5 | % | ||||||||||||||||||||||
| Consumer Broadband Revenue by Service Type($ in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Fiber Broadband Revenue (4) | $ | 14,120 |
| $ | 15,010 |
| $ | 15,422 |
| $ | 16,150 |
| $ | 60,702 |
| $ | 17,242 |
| $ | 19,218 |
| $ | 21,558 |
| $ | 24,016 |
| $ | 82,034 |
| $ | 26,136 |
| |||||||||||
| Copper and Other Broadband Revenue | 51,633 |
| 52,967 |
| 53,182 |
| 50,833 |
| 208,615 |
| 48,669 |
| 48,374 |
| 48,083 |
| 44,986 |
| 190,112 |
| 41,825 |
| ||||||||||||||||||||||
| Total Consumer Broadband Revenue by Service Type | $ | 65,753 |
| $ | 67,977 |
| $ | 68,604 |
| $ | 66,983 |
| $ | 269,317 |
| $ | 65,911 |
| $ | 67,592 |
| $ | 69,641 |
| $ | 69,002 |
| $ | 272,146 |
| $ | 67,961 |
| |||||||||||
| Consumer Voice Connections (3) | 362,384 |
| 352,835 |
| 341,135 |
| 328,849 |
| 328,849 |
| 316,634 |
| 306,458 |
| 294,441 |
| 276,779 |
| 276,779 |
| 267,509 |
| ||||||||||||||||||||||
| Video Connections (3) | 73,986 |
| 70,795 |
| 66,971 |
| 63,447 |
| 63,447 |
| 58,812 |
| 55,225 |
| 51,339 |
| 35,039 |
| 35,039 |
| 32,426 |
| ||||||||||||||||||||||
| Fiber route network miles (long-haul, metro and FttP) | 47,364 |
| 48,727 |
| 50,405 |
| 52,402 |
| 52,402 |
| 54,239 |
| 56,093 |
| 57,498 |
| 57,865 |
| 57,865 |
| 57,569 |
| ||||||||||||||||||||||
| On-net buildings (3) | 13,910 |
| 14,253 |
| 14,625 |
| 14,981 |
| 14,981 |
| 15,446 |
| 15,618 |
| 15,715 |
| 14,427 |
| 14,427 |
| 14,520 |
| ||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) In Q1 2021, the Company launched a multi-year fiber build plan to upgrade 1.6 million passings or 70% of our service area to fiber Gig+ capable services. As of March 31, 2023, 53,858 of the minimum targeted 225,000 passings for 2023 were upgraded to FttP and total fiber passings were ~1,062,518 or 40% 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) The sale of the net assets of our Kansas City operations in the fourth quarter of 2022 resulted in a reduction of approximately 135,144 DSL/Copper passings, 3,325 fiber broadband connections, 10,945 DSL/Copper broadband connections, 6,670 consumer voice connections, 13,425 video connections and 1,415 on-net buildings. Prior period amounts have not been adjusted to reflect the sale. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) Fiber broadband revenue includes revenue from our Kansas City operations of approximately $0.3 million for the quarter ended December 31, 2022 and approximately $0.5 million for each of the quarters ended March 31, 2021 through September 30, 2022. Amounts have not been adjusted to reflect the sale. | ||||||||||||||||||||||||||||||||||||||||||||
| (5) Passings counts are estimates of single family units, multi-dwelling units, and multi-tenant units within consumer, small business and enterprise. These counts are based upon the information available at this time and are subject to updates as additional information becomes available. | ||||||||||||||||||||||||||||||||||||||||||||
| (6) When a passing is both fiber and DSL/Copper capable it is counted as a fiber passing. | ||||||||||||||||||||||||||||||||||||||||||||
| (7) Consumer Broadband net adds and churn have been normalized to reflect the divestitures of our Kansas City and Ohio operations. |
View source version on businesswire.com:https://www.businesswire.com/news/home/20230501005689/en/
CONTACT: Investor and Media ContactsPhilip Kranz, Investor Relations
+1 217-238-8480
Philip.kranz@consolidated.comJennifer Spaude, Media Relations
+1 507-386-3765
Jennifer.spaude@consolidated.com
KEYWORD: ILLINOIS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: TECHNOLOGY VOIP TELECOMMUNICATIONS NETWORKS INTERNET CARRIERS AND SERVICES
SOURCE: Consolidated Communications
Copyright Business Wire 2023.
PUB: 05/02/2023 08:00 AM/DISC: 05/02/2023 08:01 AM
http://www.businesswire.com/news/home/20230501005689/en