-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LCWar6xj4bk3RzWDqV9uTAmGEHwuTzq77EtcAFd72J8CfMxciu2O5SqRIg0fR6KV cbpCxUP95C7jjpyglYqBYQ== 0001140361-09-017138.txt : 20090729 0001140361-09-017138.hdr.sgml : 20090729 20090729080325 ACCESSION NUMBER: 0001140361-09-017138 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090729 DATE AS OF CHANGE: 20090729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHENANDOAH TELECOMMUNICATIONS CO/VA/ CENTRAL INDEX KEY: 0000354963 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 541162807 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09881 FILM NUMBER: 09968688 BUSINESS ADDRESS: STREET 1: PO BOX 459 STREET 2: 124 SOUTH MAIN ST CITY: EDINBURG STATE: VA ZIP: 22824 BUSINESS PHONE: 5409844141 MAIL ADDRESS: STREET 1: P O BOX 459 CITY: EDINBURG STATE: VA ZIP: 22824 8-K 1 form8-k.htm SHENANDOAH TELECOMMUNICATIONS 8-K 7-28-2009 form8-k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 28, 2009
 

Shenandoah Telecommunications Company
(Exact name of registrant as specified in its charter)
 

Virginia
0-9881
54-1162807
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)


500 Shentel Way
P.O. Box 459
Edinburg, VA
 
 
22824
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code:  (540) 984-4141


Not applicable
(Former name or former address, if changed since last report.)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
1
 
 
Item 2.02  Results of Operations and Financial Condition.


On July 28, 2009, the Company issued a press release reporting results for the three months ended June 30, 2009.  A copy of the press release is included as Exhibit 99.1 to this report.


Item 9.01  Financial Statements and Exhibits.

(c)  
Exhibits

 99.1                 Press release dated July 28, 2009



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SHENANDOAH TELECOMMUNICATIONS COMPANY
                        (Registrant)


 
July 29, 2009
/s/ Adele M. Skolits
   
 
Adele M. Skolits
  
 
Vice President - Finance and
  
 
Chief Financial Officer
  
 
(Duly Authorized Officer)
  

 

 
2
 
 EX-99.1 2 ex99.htm SHENANDOAH TELECOMMUNICATIONS PRESS RELEASE ex99.htm
Exhibit 99.1
NEWS RELEASE

For further information, please contact Adele M. Skolits at 540-984-5161.

Teleconference Information:
Wednesday, July 29, 2009  9:00 A. M. (ET)
Domestic Dial in number: 1-888-430-8694
International Dial in number: 1-719-325-2250
Audio webcast:  www.shentel.com

SHENANDOAH TELECOMMUNICATIONS COMPANY
REPORTS SECOND QUARTER 2009 FINANCIAL RESULTS

EDINBURG, VA, (July 28, 2009) – Shenandoah Telecommunications Company (Shentel) (NASDAQ: SHEN) announces financial and operating results for the second quarter and six months ended June 30, 2009.

Second Quarter 2009 Highlights

Highlights for the quarter include:
 
·  
Revenue of $40.1 million, an increase of 11% from second quarter 2008
 
·  
PCS net subscriber additions of 3,013 bringing the total retail wireless customers to 216,067 at June 30, 2009, up 8% from June 30, 2008
 
·  
EVDO high speed data services are now available to 94% of the population covered by our PCS network
 
·  
Net income from continuing operations of $6.8 million, down 15% from second quarter 2008
 
·  
PCS customer churn of 2.07%, in comparison to the 1.74% for the second quarter of 2008
 
President and CEO, Christopher E. French commented, “Our continuing operations delivered solid performance in the second quarter of 2009, despite a difficult economic

 
 
 
July 28, 2009
News Release
Page 2 of 7

 environment and increases in operating expenses due to cable system upgrades and PCS and fiber network expansion.  We believe these improvements in our networks will position us to lead the industry when economic conditions improve.  We completed the upgrade of the cable network we acquired in Alleghany County, Virginia, and we continued to make outstanding progress with the integration of EVDO into our PCS network, improvements in PCS network coverage, and the upgrade of the cable networks we acquired in West Virginia."

Consolidated Second Quarter Results

For the quarter ended June 30, 2009, net income from continuing operations was $6.8 million compared to $8.0 million in second quarter 2008.  The Company’s total revenues for second quarter 2009 were $40.1 million, compared to $36.3 million for the same quarter in 2008, an increase of 11%.  Second quarter operating expenses increased to $28.5 million in 2009 from $22.7 million in 2008.  The increase in revenues is primarily a result of an increase in average PCS subscribers of 9%, increases in the average billing per PCS subscriber and the revenues of the newly acquired cable operations.  Operating revenues for 2008 included $1.0 million for a non-recurring pass-through of certain universal service fund fees received from Sprint Nextel.  The increase in operating expenses results from costs associated with the new cable operations, improvements and expansion of our PCS and fiber optic networks, and associated depreciation.

Consolidated Six Months Results

For the six months ended June 30, 2009, net income from continuing operations was $13.0 million compared to $13.4 million in the comparable 2008 period.  Operating income for the six months was $23.6 million, up from $23.1 million in the first half of 2008. The Company’s total revenues for the 2009 six months were $80.2 million, compared to $69.9 million for the same period in 2008, an increase of 15%.  Operating expenses increased to $56.6 million in the first half of 2009 from $46.8 million in the prior period.  The increase in revenues

 
 
 
July 28, 2009
News Release
Page 3 of 7

is primarily a result of an increase in average PCS subscribers of 10%, increases in the average billing per PCS subscriber and the revenues of the newly acquired cable operations.  Operating revenues for 2008 included $1.0 million for a non-recurring pass-through of certain universal service fund fees received from Sprint Nextel.  The increase in operating expenses results from costs associated with the new cable operations, improvements and expansion of our PCS and fiber optic networks, and associated depreciation.

Wireless Segment Operating Results

The Company continued to experience growth in wireless as a Sprint PCS Affiliate of Sprint Nextel.  Our wireless customer count was 216,067 at June 30, 2009, an 8% increase from June 30, 2008, while first quarter churn was 2.07%, compared to 1.74% in second quarter 2008 and 2.15% in first quarter 2009.

Wireless segment operating income was $11.2 million in the 2009 second quarter, essentially unchanged from the corresponding 2008 period.  Both revenues and operating expenses increased by $1.7 million  The increase in revenue resulted from a 9% increase in average PCS customers and an increase in the average PCS rates billed per customer.  The 2008 revenue included $1.0 million for a non-recurring pass-through of certain universal service fund fees received from Sprint Nextel.  The increase in operating expenses included an additional $1.3 million in costs to operate the PCS network related to additional cell sites and EVDO capabilities.  The Company added 13 cell sites and 41 EVDO sites during the quarter.  The Company now has 278 EVDO sites covering 94% of covered POPs.

Wireline Operating Results

Telephone access line losses continued at a very low rate.  Telephone had 24,046 access lines at June 30, 2009, a decrease of 163 from December 31, 2008.  Operating income of the wireline operations for second quarter 2009 was $2.8 million, a decrease of $0.6 million from the

 
 
 
July 28, 2009
News Release
Page 4 of 7

comparable 2008 period.  Revenues were down by $0.1 million primarily as a result of a short term increase in facilities lease revenues in early 2008.  Expenses increased by $0.5 million primarily as a result of additional depreciation expense and operating costs associated with enhancements to the network.

Cable TV Operating Results

The Company had 25,260 cable customers at June 30, 2009, up approximately 17,000 from June 30, 2008, related to the purchase of assets and subscribers in West Virginia and Alleghany County, Virginia on December 1, 2008.  Operating losses in the cable segment increased by $1.2 million to a loss of $1.4 million for the second quarter of 2009 over the same quarter in 2008.  The acquisition resulted in an increase of revenues in the cable segment of $2.5 million and an increase in expenses of $3.7 million.  The Company completed upgrades to the network acquired in Alleghany County, Virginia, during the second quarter of 2009.

Other Information

The Company’s second quarter 2009 capital expenditures were $16.4 million, up from $10.9 million in second quarter 2008.  The increase in capital expenditures primarily resulted from upgrades to the acquired cable networks and spending to expand our PCS network coverage and footprint.  The Company expects capital spending to remain elevated for the next several quarters with the ongoing upgrades of the acquired cable assets and continued enhancements to the PCS network.  Cash and cash equivalents as of June 30, 2009 were $13.3 million, up from $5.2 million at December 31, 2008.  The Company voluntarily repaid $11.0 million of its delayed draw term loan and made scheduled repayments against other facilities of $1.1 million during the second quarter.  At June 30, 2009, the debt/equity ratio was 0.18; and debt as a percent of total assets was 12%.  The amount available to the Company through its delayed draw

 
 
 
July 28, 2009
News Release
Page 5 of 7

term loan facility was $37.3 million as of June 30, 2009.  The Company can draw against this facility through December 31, 2009.

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 Global Select 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.

 
 
 
July 28, 2009
News Release
Page 6 of 7


SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands)

Condensed Consolidated Balance Sheets
            
   
June 30,
    
December 31,
  
   
2009
    
2008
  
             
Cash and cash equivalents
   $ 13,266     $ 5,240  
Other current assets
     36,841       67,181  
Investments
     8,406       8,388  
                 
Property, plant and equipment
     357,395       328,172  
 Less accumulated depreciation and amortization
     166,284       151,695  
Net property, plant and equipment
     191,111       176,477  
                 
Other assets, net
     8,941       9,551  
   Total assets
   $ 258,565     $ 266,837  
                 
Current liabilities, exclusive of current maturities of long-term debt of $5,703 and $4,399, respectively
   $ 23,493     $ 19,986  
Long-term debt, including current maturities
     30,179       41,359  
Total other liabilities
     35,289       39,180  
Total shareholders' equity
     169,604       166,312  
   Total liabilities and shareholders' equity
   $ 258,565     $ 266,837  
                 

 
 
 
July 28, 2009
News Release
Page 7 of 7

SHENANDOAH TELECOMMUNICATIONS COMPANY
SUMMARY FINANCIAL INFORMATION (unaudited)
(In thousands, except per share amounts)
 
 
Condensed Consolidated Statements of Income
            
   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2009
    
2008
    
2009
    
2008
  
                         
Revenues
   $ 40,140     $ 36,309     $ 80,241     $ 69,896  
                                 
Cost of goods and services
     13,044       10,017       25,749       20,682  
Selling, general and administrative
     7,348       6,255       14,878       13,328  
Depreciation & amortization
     8,111       6,459       15,965       12,820  
Operating expenses
     28,503       22,731       56,592       46,830  
Operating income
     11,637       13,578       23,649       23,066  
                                 
Interest expense
     (405 )     (346 )     (935 )     (680 )
Other income (expense), net
     411       369       (49 )     125  
Income from continuing operations before income taxes
     11,643       13,601       22,665       22,511  
                                 
Income tax expense
     4,828       5,596       9,693       9,106  
  Net income from continuing operations
   $ 6,815     $ 8,005     $ 12,972     $ 13,405  
Loss from discontinued operations, net of taxes
     (75 )     (820 )     (10,445 )     (1,493 )
Net income
   $ 6,740     $ 7,185     $ 2,527     $ 11,912  
                                 
Basic and diluted income (loss) per share:
                                
Net income from continuing operations
   $ 0.29     $ 0.34     $ 0.55     $ 0.57  
Loss from discontinued operations
     -       (0.03 )     (0.44 )     (0.06 )
Net income
   $ 0.29     $ 0.31     $ 0.11     $ 0.51  

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