Shenandoah Telecommunications Company Reports First Quarter 2007 Financial Results
April 25 2007 - 7:30PM
PR Newswire (US)
EDINBURG, Va., April 25 /PRNewswire-FirstCall/ -- Shenandoah
Telecommunications Company (Shentel, Nasdaq: SHEN) announced
financial results for the first quarter of 2007. Operating income
for the quarter ending March 31, 2007 was $7.1 million, an increase
of $2.9 million or 70.7% over the first quarter of 2006. Net income
for the first quarter was $4.1 million, with fully diluted earnings
per share of $0.52. First Quarter Highlights For the quarter ended
March 31, 2007, operating income was $7.1 million and net income
was $4.1 million compared to operating income of $4.2 million and
net income of $8.5 million in first quarter 2006. In the first
quarter 2007, the Company recorded a non-recurring net of tax
expense of $1.2 million related to a reduction in force and Early
Retirement Plan announced late in 2006. Net income for the first
quarter of 2006 included the one time net of tax gain of $6.4
million related to the liquidation of the Rural Telephone Bank. In
March 2007, the Company signed an amendment to its Sprint PCS
Affiliate Management Agreement, which was retroactive to January 1,
2007, simplifying the settlement process between itself and Sprint
Nextel. The Agreement also provides Shentel with more certainty in
projecting its revenues and expenses, and settled any potential
claims that Shentel may have had in connection with the merger of
Sprint and Nextel. In order to conform to the new terms of the
Management Agreement with Sprint Nextel, the Company changed the
presentation of reporting PCS revenue and expenses. This change is
the primary reason for the decrease in consolidated revenues from
$39.8 million in the first quarter of 2006 to $33.0 million in the
first quarter of 2007. Likewise the change was the primary reason
for the decrease in consolidated expenses from $35.7 million in
2006 to $26.0 million in 2007. PCS Operations The Company continued
to experience strong growth in wireless revenues as a Sprint PCS
Affiliate of Sprint Nextel, increasing its PCS subsidiary operating
income by $4.7 million to a total of $7.3 million for first quarter
2007 compared to the same period last year. The Company's Sprint
Nextel retail wireless customer count increased during the first
quarter by 11,645 to a total of 165,148. These results represent an
89.4% increase in net additions from the first quarter of 2006. The
Company's first quarter churn was 1.8%, compared to 1.9% in the
first quarter of 2006. Wireless revenues decreased $6.5 million
primarily as a result of the changes in accounting adopted by the
Company to record PCS revenues, consistent with the terms of the
newly amended Agreement with Sprint Nextel. The Company plans to
provide details related to the change adopted by the Company in its
upcoming 10-Q filing with the Securities and Exchange Commission.
Telephone Operations The operating income of the local telephone
operations for the quarter was $2.2 million, a decrease of $1.3
million from 2006. The Telephone Company recorded approximately
$1.4 million of the total $2.0 million of the reduction in force
and early retirement expenses recorded in the quarter. Telephone
had 24,794 access lines at March 31, 2007, a decrease of 36 from
the previous year-end. Converged Services (NTC) The operating loss
for the first quarter was $1.7 million, an increase of $0.1 million
from 2006. The increase in the operating loss is due primarily to
an increase in depreciation expense resulting from the increase in
fixed assets and management's decision in the third quarter of 2006
to shorten the useful lives of certain assets, which was greater
than the decrease of expenses in other areas of the operations.
Other Information The Company's capital expenditures and
commitments in the first quarter were $4.0 million and it had cash
and cash equivalents of $20.9 million. At March 31, 2007, the
debt/equity ratio was 0.18; and debt as a percent of total assets
was 11.8%. 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. 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,
changes in regulation and other competitive factors. SHENANDOAH
TELECOMMUNICATIONS COMPANY SUMMARY FINANCIAL INFORMATION (In
thousands, except per share amounts) Condensed Consolidated Balance
Sheets March 31, December 31, 2007 2006 Cash and cash equivalents $
20,867 $ 13,440 Other current assets 17,722 17,423 Total securities
and investments 7,027 7,075 Property, plant and equipment 276,662
274,061 Less accumulated depreciation 124,670 118,417 Net property,
plant and equipment 151,992 155,644 Other assets, net 14,055 14,138
Total assets $ 211,663 $ 207,720 Current liabilities, exclusive of
current maturities of $4,142 and $4,109, respectively $ 17,828 $
17,171 Long-term debt, including current maturities 25,001 26,016
Total other liabilities 29,174 29,344 Total shareholders' equity
139,660 135,189 Total liabilities and shareholders' equity $
211,663 $ 207,720 SHENANDOAH TELECOMMUNICATIONS COMPANY SUMMARY
FINANCIAL INFORMATION (unaudited) (In thousands, except per share
amounts) Condensed Consolidated Statements of Income (In thousands,
except per share amounts) Three months ended March 31, 2007 2006
Revenues $ 33,048 $ 39,799 Cost of goods and services 11,402 16,868
Depreciation and amortization 7,088 6,537 Selling, general and
administrative 7,474 12,243 Operating income 7,084 4,151 Interest
expense 507 648 Other income (316) (10,641) Income tax provision
2,822 5,522 Net income before change in accounting 4,071 8,622
Cumulative effect of a change in accounting, net of income taxes -
(77) Net income $ 4,071 $ 8,545 Basic net income per share: Net
income before cumulative effect of a change in accounting, net of
taxes $ 0.52 $ 1.12 Cumulative effect of a change in accounting,
net of income taxes - (0.01) Net income per share, basic $ 0.52 $
1.11 Diluted net income per share: in accounting, net of taxes $
0.52 $ 1.11 Cumulative effect of a change in accounting, net of
income taxes - (0.01) Net income per share, diluted $ 0.52 $ 1.10
DATASOURCE: Shenandoah Telecommunications Company CONTACT: Earle A.
MacKenzie of Shenandoah Telecommunications Company, +1-540-984-5192
Web site: http://www.shentel.com/
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