Consolidated Communications Reports Second Quarter 2019 Results

Published

New capital allocation policy repurposes $110 million in annual free cash flow, focused on deleveraging

MATTOON, Ill., Aug. 01, 2019 (GLOBE NEWSWIRE) -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company”) reported results for the second quarter 2019 and will hold a conference call and simultaneous webcast to discuss its results and developments today at 10 a.m. ET.

Second Quarter 2019 Financial Summary:

  • Revenue totaled $333.5 million
  • Net cash from operating activities was $88.3 million
  • Adjusted EBITDA was $131.4 million

Second Quarter 2019 Operational Summary:

  • Fiber connections for wireless carriers under contract increased 5 percent
  • Ethernet revenues increased 4 percent year over year
  • Consumer broadband revenue grew more than 2 percent year over year

“Following our final dividend payment on May 1, we are now focused on our revised capital allocation plan, which is designed to achieve our deleveraging goal of less than 4.0x net debt to adjusted EBITDA in advance of refinancing our unsecured debt no later than mid-2021,” said Bob Udell, president and chief executive officer of Consolidated Communications.

“With the change in our capital allocation policy, we are now providing full-year 2019 adjusted EBITDA guidance," continued Udell. "The adjusted EBITDA for 2019 is estimated to be in the range of $520 million to $525 million. We believe the enhanced guidance demonstrates our confidence in our business plan and our commitment to executing on our deleveraging targets.”

“We are pleased with the performance of our carrier and consumer channels this quarter,” added Udell. "In the carrier channel, we increased our fiber connections 5 percent year over year. Consumer broadband revenue grew more than 2 percent year over year and was flat from the prior quarter with strong broadband revenue growth offsetting declines in voice and lower margin video revenue.”

Financial Results for the Second Quarter   

  • Revenues totaled $333.5 million, compared to $350.2 million for the second quarter of 2018, a decline of $16.7 million.  After normalizing for the sale of the Virginia properties in July 2018, revenue declined $15.3 million or 4.4 percent for the quarter.
    • Commercial and carrier data and transport service revenue increased 1.1 percent or $900,000 on a comparable basis from a year ago.
    • Consumer broadband revenue increased 2.4 percent or $1.5 million compared to a year ago, despite the sale of our Virginia properties and impacts related to last year’s Hurricane Michael impacting our Florida service area.
    • Total Consumer revenue was largely flat from the first quarter of 2019 as broadband data increases offset voice and video revenue declines.
    • Voice services revenue declined $10.6 million compared to a year ago across all customer channels.
    • Subsidies decreased $2.8 million during the quarter, due to the final CAF step down in transitional revenues. Network access revenues declined $3.1 million
  • Income from operations was up and totaled $14.3 million compared to $5.4 million in the second quarter of 2018. The change was primarily due to declines in revenues, offset by reductions in operating expense of $11.1 million. Depreciation and amortization expense declined by $14.4 million due to acquired assets with a short remaining useful life becoming fully depreciated.
  • Interest expense, net was $34.7 million, compared to $32.8 million for the same period last year. The change was due primarily to LIBOR increases, offset by a net benefit associated with interest rate hedge agreements put in place to maintain our fixed-debt target of 75 percent. As of June 2019, our weighted average cost of debt was approximately 5.6 percent.
  • Cash distributions from the Company’s wireless partnerships totaled $10.6 million for the second quarter compared to $11.2 million for the prior year period.   
  • Other income, net was $9.1 million, compared to $12.8 million in the second quarter of 2018, due to lower income from the Company’s minority interest in wireless partnerships.
  • On a GAAP basis, the net loss was ($7.3 million) and GAAP net loss per share was ($0.10). Adjusted diluted net loss per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share was ($0.03) in the second quarter of 2019, compared to ($0.10) in the second quarter of 2018. 
  • Adjusted EBITDA was $131.4 million compared to $135.8 million in the year ago quarter.
  • The total net debt to last 12-month adjusted EBITDA ratio was 4.41x.
  • Capital expenditures were $66.4 million, due to seasonal construction and non-recurring expenditures associated with Hurricane Michael restoration and integration.

Financial Guidance

The Company updated its 2019 guidance as follows:

    2019 Updated Guidance   2019 Previous Guidance
Cash interest expense    $130 million to $135 million     $130 million to $135 million 
     (no change)     
Cash income taxes/refund1    $1 million to $3 million     $1 million to $3 million 
     (no change)     
Capital expenditures    $210 million to $220 million    $210 million to $220 million
     (no change)     
Adjusted EBITDA    $520 million to $525 million     N/A 
 
(1)  Cash income taxes primarily include local and state income taxes as federal income taxes will be shielded by existing net operating losses and the benefit of The Tax Cuts and Jobs Act of 2017 tax reform legislation that was enacted in December 2017.
 

Conference Call Information

Consolidated Communications will host a conference call and webcast today at 10 a.m. ET / 9 a.m. CT to discuss second quarter earnings and developments. The live webcast and replay can be accessed from the Investor Relations section of the Company’s website at http://ir.consolidated.com. The live conference call dial-in number is 1-877-374-3981, conference ID 6069567. A telephonic replay of the conference call will be available through Aug. 8 and can be accessed by calling 1-855-859-2056, conference ID 6069567.     About Consolidated Communications 

Consolidated Communications Holdings, Inc. (NASDAQ: CNSL) is a leading broadband and business communications provider serving consumers, businesses, and wireless and wireline carriers across rural and metro communities and a 23-state service area. Leveraging an advanced fiber network spanning 37,000 fiber route miles, Consolidated Communications offers a wide range of communications solutions, including: high-speed Internet, data, phone, security, managed services, cloud services and wholesale, carrier solutions. From our first connection 125 years ago, Consolidated is dedicated to turning technology into solutions, connecting people and enriching how they work and live. Visit www.consolidated.com for more information.

Use of Non-GAAP Financial Measures                         

This press release, as well as the conference call, includes disclosures regarding “EBITDA,” “adjusted EBITDA” and “total net debt to last twelve month adjusted EBITDA coverage ratio,” “adjusted diluted net loss per share” and “adjusted net loss attributable to common stockholders,” 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 they are frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting them 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 twelve month adjusted EBITDA coverage ratio” principally to put other non-GAAP measures in context and facilitate comparisons by investors, security analysts and others; this ratio differs in certain respects from the similar ratio used in our credit agreement.  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.  Because adjusted EBITDA is a component of the ratio of total net debt to last twelve month adjusted EBITDA, these measures are also subject to the material limitations discussed above.  In addition, the ratio of total net debt to last twelve 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 measures adjusted diluted net income per share and adjusted diluted net income attributable to common stockholders because our net income and net income 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

The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions.  Certain statements in this communication 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 our ability to successfully integrate FairPoint Communications, Inc.’s operations and realize the synergies from the integration, as well as a number of factors related to our business, including 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 acquisitions; 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; and liability and compliance costs regarding environmental regulations; and risks associated with discontinuing paying dividends on our common stock. 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 Consolidated Communications Holdings, Inc. 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 communication.  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.

Company Contact                                                                      

Lisa Hood, Consolidated CommunicationsPhone:  (844)-909-CNSL (2675) Lisa.hood@consolidated.com

– Tables to follow –

   
Consolidated Communications Holdings, Inc.  
Condensed Consolidated Balance Sheets  
(Dollars in thousands, except share and per share amounts)  
(Unaudited)  
   June 30,     December 31,   
     2019         2018     
                 
         
ASSETS         
Current assets:        
Cash and cash equivalents $ 10,450     $ 9,599    
Accounts receivable, net   133,535       133,136    
Income tax receivable   11,380       11,072    
Prepaid expenses and other current assets     45,231         44,336    
Total current assets   200,596       198,143    
         
Property, plant and equipment, net   1,872,312       1,927,126    
Investments   112,154       110,853    
Goodwill   1,035,274       1,035,274    
Customer relationships, net   196,754       228,959    
Other intangible assets   10,927       11,483    
Other assets     57,693         23,423    
Total assets $   3,485,710     $   3,535,261    
                 
         
 LIABILITIES AND SHAREHOLDERS' EQUITY         
Current liabilities:        
Accounts payable $ 44,746     $ 32,502    
Advance billings and customer deposits   46,892       47,724    
Dividends payable   -       27,579    
Accrued compensation   55,926       64,459    
Accrued interest   9,955       9,232    
Accrued expense   77,589       71,650    
Current portion of long-term debt and finance lease obligations     29,003         30,468    
Total current liabilities   264,111       283,614    
         
Long-term debt and finance lease obligations   2,309,117       2,303,585    
Deferred income taxes   174,631       188,129    
Pension and other post-retirement obligations   298,571       314,134    
Other long-term liabilities     80,107         30,145    
Total liabilities     3,126,537         3,119,607    
                 
         
Shareholders' equity:        
Common stock, par value $0.01 per share; 100,000,000 shares        
authorized, 72,076,069 and 71,187,301, shares outstanding        
as of June 30, 2019 and December 31, 2018, respectively   721       712    
Additional paid-in capital   489,084       513,070    
Accumulated deficit   (65,486 )     (50,834 )  
Accumulated other comprehensive loss, net   (71,218 )     (53,212 )  
Noncontrolling interest     6,072         5,918    
Total shareholders' equity     359,173         415,654    
Total liabilities and shareholders' equity $   3,485,710     $   3,535,261    
                 
         

 

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
               
   Three Months Ended     Six Months Ended 
   June 30,     June 30, 
     2019         2018         2019         2018   
               
               
Net revenues $ 333,532     $ 350,221     $ 672,181     $ 706,260  
Operating expenses:              
Cost of services and products   143,780       151,358       292,099       304,274  
Selling, general and administrative expenses   78,148       81,695       152,515       167,680  
Depreciation and amortization   97,304       111,741       196,547       219,640  
Income from operations   14,300       5,427       31,020       14,666  
Other income (expense):              
Interest expense, net of interest income   (34,737 )     (32,839 )     (69,020 )     (65,555 )
Gain on extinguishment of debt   249       -       249       -  
Other income, net   9,098       12,843       16,330       20,874  
Loss before income taxes   (11,090 )     (14,569 )     (21,421 )     (30,015 )
Income tax benefit   (3,778 )     (4,009 )     (6,923 )     (8,257 )
Net loss   (7,312 )     (10,560 )     (14,498 )     (21,758 )
Less: net income attributable to noncontrolling interest   75       83       154       183  
               
Net loss attributable to common shareholders $ (7,387 )   $ (10,643 )   $ (14,652 )   $ (21,941 )
               
Net loss per basic and diluted common shares              
  attributable to common shareholders $ (0.10 )   $ (0.15 )   $ (0.21 )   $ (0.32 )
               

 

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
  (Dollars in thousands)
(Unaudited)
                   
       Three Months Ended     Six Months Ended 
       June 30,     June 30, 
        2019       2018       2019       2018  
OPERATING ACTIVITIES                
  Net loss   $ (7,312 )   $ (10,560 )   $ (14,498 )   $ (21,758 )
  Adjustments to reconcile net loss to net cash provided by operating activities:                
  Depreciation and amortization     97,304       111,741       196,547       219,640  
  Deferred income taxes     -       -       -       2  
  Cash distributions from wireless partnerships in excess of (less than) earnings     (94 )     (1,343 )     (1,212 )     519  
  Non-cash, stock-based compensation     1,814       1,538       3,312       2,216  
  Amortization of deferred financing     1,226       1,174       2,439       2,335  
  Other adjustments, net     149       1,075       546       3,415  
  Changes in operating assets and liabilities, net     (4,822 )     (96 )     (23,872 )     (11,998 )
  Net cash provided by operating activities     88,265       103,529       163,262       194,371  
INVESTING ACTIVITIES                
  Purchase of property, plant and equipment, net     (66,374 )     (64,032 )     (119,768 )     (124,840 )
  Proceeds from sale of assets     13,338       1,299       14,203       1,443  
  Distributions from investments     -       -       329       233  
  Other     (450 )     -       (450 )     -  
  Net cash used in investing activities     (53,486 )     (62,733 )     (105,686 )     (123,164 )
FINANCING ACTIVITIES                
  Proceeds from issuance of long-term debt     56,000       49,000       107,000       76,000  
  Payment of finance lease obligations     (3,304 )     (3,104 )     (6,811 )     (6,027 )
  Payment on long-term debt     (51,587 )     (59,588 )     (97,175 )     (91,176 )
  Repurchase of senior notes     (4,294 )     -       (4,294 )     -  
  Dividends on common stock     (27,868 )     (27,602 )     (55,445 )     (55,019 )
  Net cash used in financing activities     (31,053 )     (41,294 )     (56,725 )     (76,222 )
Net change in cash and cash equivalents     3,726       (498 )     851       (5,015 )
Cash and cash equivalents at beginning of period     6,724       11,140       9,599       15,657  
Cash and cash equivalents at end of period   $ 10,450     $ 10,642     $ 10,450     $ 10,642  
                   

 

Consolidated Communications Holdings, Inc.  
Consolidated Revenue by Category  
(Dollars in thousands)  
 (Unaudited)   
                     
       Three Months Ended     Six Months Ended   
       June 30,     June 30,   
       2019     2018     2019     2018   
Commercial and carrier:                    
Data and transport services (includes VoIP)     $ 88,538   $ 87,603     $ 176,664   $ 173,628    
Voice services       47,136     51,322       95,206     103,483    
Other       13,390     14,237       28,566     26,100    
        149,064     153,162       300,436     303,211    
Consumer:                    
Broadband (VoIP and Data)       64,068     62,545       127,153     125,656    
Video services       20,341     22,065       41,077     44,899    
Voice services       45,235     51,616       91,114     103,678    
        129,644     136,226       259,344     274,233    
                     
Subsidies       18,134     20,979       36,293     46,234    
Network access       34,198     37,338       70,789     77,053    
Other products and services       2,492     2,516       5,319     5,529    
Total operating revenue       333,532     350,221       672,181     706,260    
Less operating revenues from divestitures       -     (1,417 )     -     (2,871 )  
      $ 333,532   $ 348,804     $ 672,181   $ 703,389    
                     

 

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
 (Unaudited) 
                     
                     
     Three Months Ended 
     Q2 2019     Q1 2019     Q4 2018     Q3 2018     Q2 2018 
Commercial and carrier:                    
Data and transport services (includes VoIP)   $ 88,538   $ 88,126   $ 88,152   $ 87,633     $ 87,603  
Voice services     47,136     48,070     49,301     50,091       51,322  
Other     13,390     15,176     16,389     13,906       14,237  
      149,064     151,372     153,842     151,630       153,162  
Consumer:                    
Broadband (VoIP and Data)     64,068     63,085     63,598     63,865       62,545  
Video services     20,341     20,736     21,649     21,790       22,065  
Voice services     45,235     45,879     47,597     50,757       51,616  
      129,644     129,700     132,844     136,412       136,226  
                     
Subsidies     18,134     18,159     17,948     19,189       20,979  
Network access     34,198     36,591     37,382     38,147       37,338  
Other products and services     2,492     2,827     2,734     2,686       2,516  
Total operating revenue     333,532     338,649     344,750     348,064       350,221  
Less operating revenues from divestitures     -     -     -     (466 )     (1,417 )
    $ 333,532   $ 338,649   $ 344,750   $ 347,598     $ 348,804  
                     

 

Consolidated Communications Holdings, Inc.
Schedule of Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
               
               
   Three Months Ended     Six Months Ended 
   June 30,     June 30, 
     2019         2018         2019         2018   
Net loss $ (7,312 )   $ (10,560 )   $ (14,498 )   $ (21,758 )
Add (subtract):              
Income tax benefit   (3,778 )     (4,009 )     (6,923 )     (8,257 )
Interest expense, net   34,737       32,839       69,020       65,555  
Depreciation and amortization   97,304       111,741       196,547       219,640  
EBITDA   120,951       130,011       244,146       255,180  
               
Adjustments to EBITDA (1):              
Other, net (2)   7,374       4,118       12,699       10,634  
Investment income (accrual basis)   (10,750 )     (12,535 )     (19,351 )     (20,324 )
Investment distributions (cash basis)   10,628       11,224       17,918       20,694  
Pension/OPEB expense   1,603       1,455       3,207       2,827  
Gain on extinguishment of debt   (249 )     -       (249 )     -  
Non-cash compensation (3)   1,814       1,538       3,312       2,216  
Adjusted EBITDA $ 131,371     $ 135,811     $ 261,682     $ 271,227  
               
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 Net Loss to Adjusted EBITDA Guidance
(Dollars in millions)
(Unaudited)
         
         
  Twelve Months Ended  
  December 31, 2019  
   Range   
   Low     High   
Net loss $ (22 )   $ (12 )  
Add (subtract):        
Income tax benefit   (11 )     (6 )  
Interest expense, net   138       133    
Depreciation and amortization   390       385    
EBITDA   495       500    
         
Adjustments to EBITDA (1):        
Other, net (2)   12       12    
Pension/OPEB expense   6       6    
Non-cash compensation (3)   7       7    
Adjusted EBITDA $ 520     $ 525    
         
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, cash distributions less equity earnings from our investments, dividend income, acquisition and non-recurring related costs, gain on the extinguishment of debt 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.
         
To enhance the information in our outlook with respect to non-GAAP metrics, we are providing a range for certain GAAP measures that are components of the reconciliation of the non-GAAP metrics.  The provision of these ranges is in no way meant to indicate that we are explicitly or implicitly providing an outlook on those GAAP components of the reconciliation.  In order to reconcile the non-GAAP financial metric to GAAP, we have used ranges for the GAAP components that arithmetically add up to the non-GAAP financial metric.  While we feel reasonably comfortable about the outlook for the non-GAAP financial metrics, we fully expect that the ranges used for the GAAP components will vary from actual results.  We will consider our outlook of non-GAAP financial metrics to be accurate if the specific non-GAAP metric is met or exceeded, even if the GAAP components of the reconciliation are different from those provided in an earlier reconciliation.
         

 

Consolidated Communications Holdings, Inc.
Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
     
   June 30,   
Summary of Outstanding Debt:    2019     
Term loans, net of discount $6,304 $ 1,787,584    
Revolving loan   41,000    
Senior unsecured notes due 2022, net of discount $2,611   492,784    
Finance leases   26,708    
Total debt as of June 30, 2019 $ 2,348,076    
Less deferred debt issuance costs   (9,956 )  
Less cash on hand   (10,450 )  
Total net debt as of June 30, 2019 $ 2,327,670    
     
Adjusted EBITDA for the twelve    
months ended June 30, 2019 $ 527,749    
     
Total Net Debt to last twelve months    
Adjusted EBITDA   4.41x    
     

 

Consolidated Communications Holdings, Inc.  
Adjusted Net Loss and Net Loss Per Share   
(Dollars in thousands, except per share amounts)  
(Unaudited)  
                 
                 
   Three Months Ended     Six Months Ended   
   June 30,     June 30,   
     2019         2018         2019         2018     
Net loss $ (7,312 )   $ (10,560 )   $ (14,498 )   $ (21,758 )  
Integration and severance related costs, net of tax   4,595       2,735       8,006       7,458    
Storm costs (recoveries), net of tax   (506 )     (459 )     (256 )     1,716    
Gain on extinguishment of debt, net of tax   (164 )     -       (169 )     -    
Local switching support settlement, net of tax   -       -       -       (2,891 )  
Non-cash interest expense for swaps, net of tax   (10 )     213       238       1,923    
Non-cash stock compensation, net of tax   1,195       1,115       2,242       1,607    
Adjusted net loss $ (2,202 )   $ (6,956 )   $ (4,437 )   $ (11,945 )  
                 
Weighted average number of shares outstanding   70,813       70,598       70,813       70,598    
Adjusted diluted net loss per share $ (0.03 )   $ (0.10 )   $ (0.06 )   $ (0.17 )  
                 
Notes:                
Calculations above assume a 34.1% and 27.5% effective tax rate for the three months ended and 32.3% and 27.5% for the six months ended June 30, 2019 and 2018, respectively.  
                 

 

Consolidated Communications Holdings, Inc.  
Key Operating Statistics  
(Unaudited)  
                         
       June 30,     March 31,    % Change     June 30,    % Change   
         2019         2019      in Qtr      2018      YOY  
                         
Voice Connections     873,269       887,357     (1.6%)     936,576     (6.8%)  
                         
Data and Internet Connections     783,008       780,720     0.3%     783,886     (0.1%)  
                         
Video Connections      89,531       91,269     (1.9%)     97,853     (8.5%)  
                         
Business and Broadband as % of total revenue (1)     76.2%       76.3%     (0.1%)     74.5%     2.3%  
                         
Fiber route network miles (long-haul and metro)     37,167       36,987     0.5%     36,568     1.6%  
                         
On-net buildings     11,164       10,702     4.3%     9,674     15.4%  
                         
Consumer Customers     609,876       616,091     (1.0%)     649,561     (6.1%)  
                         
Consumer ARPU     $70.86       $70.17     1.0%     $69.47     2.0%  
                         
Notes:                      
(1) Business and Broadband revenue % includes: commercial/carrier, equipment sales and service, directory, consumer broadband and special access.  
(2) The sale of our local exchange carrier in Virginia resulted in a reduction of approximately 4,110 voice connections, 2,900 data and Internet connections and 4,340 consumer customers in the third quarter of 2018.  Prior period amounts have been adjusted to reflect the sale.  

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Consolidated Communications Holdings, Inc.

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