Consolidated communications reports first quarter 2022 results including a record increase in fiber subscribers
Mattoon, ill.--(business wire)--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, 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. 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 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. 2022 2021 74,171 99,635 85,767 110,801 118,596 133,362 2,733 1,134 61,319 56,831 94,368 26,052 436,954 427,815 1,983,819 2,019,444 109,034 109,578 929,570 1,013,243 66,226 73,939 10,557 10,557 59,288 58,116 3,595,448 3,712,692 39,807 40,953 53,002 53,028 63,951 68,272 35,020 17,819 97,243 97,417 8,379 7,959 5,021 97 302,423 285,545 2,120,930 2,118,853 185,985 194,458 205,350 214,671 51,923 62,789 2,866,611 2,876,316 298,174 288,576 1,154 1,137 733,216 740,746 (257,263 ) (141,599 ) (53,646 ) (59,571 ) 7,202 7,087 430,663 547,800 3,595,448 3,712,692 2022 2021 300,278 324,766 135,895 143,979 73,285 66,850 126,490 — 72,350 75,611 (107,742 ) 38,326 (29,515 ) (48,415 ) — (11,980 ) — (57,588 ) 11,405 12,274 (125,852 ) (67,383 ) (10,303 ) (5,300 ) (115,549 ) (62,083 ) 9,598 — 115 16 (125,262 ) (62,099 ) (1.12 ) (0.80 ) 2022 2021 (115,549 ) (62,083 ) 72,350 75,611 153 11 (9,342 ) (8,770 ) 2,199 1,450 1,802 4,283 — 7,875 — 11,980 — 57,588 126,490 — (189 ) (368 ) 3,646 10,913 81,560 98,490 (156,480 ) (75,960 ) (39,959 ) — 74 24 26,042 — 65,754 1,198 (104,569 ) (74,738 ) — 400,000 — 150,000 (2,341 ) (1,598 ) — (397,000 ) — (5,573 ) (114 ) — (2,455 ) 145,829 (25,464 ) 169,581 99,635 155,561 74,171 325,142 2022 2021 65,911 65,755 37,452 40,420 14,366 16,781 117,729 122,956 57,895 57,071 36,339 39,753 11,560 9,328 105,794 106,152 33,485 33,277 3,852 4,526 391 391 37,728 38,194 6,583 17,339 26,213 31,603 6,231 8,522 300,278 324,766 65,911 66,983 68,604 67,981 65,755 37,452 39,518 40,587 40,173 40,420 14,366 15,371 16,163 16,799 16,781 117,729 121,872 125,354 124,953 122,956 57,895 57,444 57,545 56,871 57,071 36,339 37,303 38,446 39,065 39,753 11,560 11,408 10,205 9,091 9,328 105,794 106,155 106,196 105,027 106,152 33,485 32,659 33,556 33,942 33,277 3,852 4,088 4,173 4,396 4,526 391 431 375 395 391 37,728 37,178 38,104 38,733 38,194 6,583 17,671 17,264 17,465 17,339 26,213 27,846 29,923 31,115 31,603 6,231 7,758 1,743 3,110 8,522 300,278 318,480 318,584 320,403 324,766 2022 2021 (115,549 ) (62,083 ) (10,303 ) (5,300 ) 29,515 48,415 72,350 75,611 (23,987 ) 56,643 5,510 1,688 (8,249 ) (9,556 ) 8,216 9,377 (2,983 ) (2,541 ) — 11,980 126,490 — — 57,588 2,199 1,450 107,196 126,629 (10 ) 8 (4 ) 3 125 120 295 290 406 421 5 5 (11 ) (11 ) 10 10 410 425 2022 989,963 750,000 400,000 25,685 2,165,648 (36,339 ) (159,938 ) 1,969,371 487,429 2022 2021 (115,549 ) (62,083 ) 802 1,156 126,490 — — 8,743 — 57,588 — 10,201 (295 ) (182 ) (10,813 ) — 1,626 1,058 2,261 16,481 111,691 78,029 0.02 0.21 2022 2021 2021 2021 2021 341,010 291,921 217,660 168,165 122,736 348,396 313,789 276,500 228,958 198,070 689,406 605,710 494,160 397,123 320,806 1,395,190 1,444,279 1,518,540 1,568,035 1,613,464 663,835 702,098 737,016 779,781 807,828 2,059,025 2,146,377 2,255,556 2,347,816 2,421,292 2,748,431 2,752,087 2,749,716 2,744,939 2,742,098 25 % 22 % 18 % 14 % 12 % 24,882 20,032 17,288 14,927 13,024 68,930 66,090 64,251 62,594 61,471 93,812 86,122 81,539 77,521 74,495 131,763 136,140 140,893 144,057 147,847 154,575 162,302 168,229 171,902 175,660 286,338 298,442 309,122 315,959 323,507 380,150 384,564 390,661 393,480 398,002 473 (2,009 ) (803 ) (1,887 ) (919 ) (1,327 ) (4,088 ) (2,016 ) (2,635 ) (2,436 ) (854 ) (6,097 ) (2,819 ) (4,522 ) (3,355 ) 7 % 7 % 8 % 9 % 11 % 20 % 21 % 23 % 27 % 31 % 14 % 14 % 17 % 20 % 23 % 9 % 9 % 9 % 9 % 9 % 23 % 23 % 23 % 22 % 22 % 14 % 14 % 14 % 13 % 13 % 14 % 14 % 14 % 14 % 15 % 17,241 16,152 15,423 15,013 14,122 48,670 50,831 53,181 52,968 51,633 65,911 66,983 68,604 67,981 65,755 63.88 64.22 64.64 65.83 64.87 50.78 50.65 51.32 49.92 47.72 316,634 328,849 341,135 352,835 362,384 58,812 63,447 66,971 70,795 73,986 54,239 52,402 50,405 48,727 47,364 15,446 14,981 14,625 14,253 13,910 tag: [consolidated-communications-earnings]
