Shentel(US:SHEN)2025-10-29 20:08Revenue Performance - Total revenue for the three months ended September 30, 2025, was $89.8 million, a 2.5% increase from $87.6 million in the same period of 2024[91]. - Revenue from Residential & SMB - Incumbent Broadband Markets decreased by $1.6 million, or 3.6%, primarily due to a 14.9% decline in video revenue generating units[93]. - Revenue from Residential & SMB - Glo Fiber Expansion Markets increased by $6.2 million, or 41.1%, driven by a 41.3% year-over-year growth in data RGUs[95]. - Commercial Fiber revenue decreased by $1.1 million, or 5.3%, but grew 2.3% excluding non-cash deferred revenue adjustments[97]. - RLEC & Other revenue decreased by $1.3 million, or 16.8%, primarily due to lower governmental support revenue and a 21.1% decline in DSL RGUs[99]. - Total revenue for the nine months ended September 30, 2025, was $266.3 million, an increase of $23.6 million or 9.7% compared to $242.6 million in 2024[108]. - Residential & SMB - Glo Fiber Expansion Markets revenue increased by $18.2 million, or 44.1%, driven by a 45.2% year-over-year growth in data RGUs[111][112]. - Commercial Fiber revenue increased by $7.3 million, or 14.1%, with $9.9 million recognized from acquired Horizon markets[113]. Operating Performance - Operating loss for the three months ended September 30, 2025, was $7.2 million, compared to a loss of $4.2 million in the same period of 2024, representing a 71.6% increase in loss[91]. - Operating expenses totaled $288.6 million, an increase of $23.1 million or 8.7% compared to the prior year[108]. - Restructuring, integration, and acquisition expenses decreased by $1.4 million, or 82.5%, compared to the same period in 2024[103]. Financial Expenses - Interest expense increased by $3.1 million, or 85.1%, due to an increase in the Company's outstanding debt[105]. - Interest expense rose by $5.9 million, or 50.6%, due to an increase in outstanding debt[119]. - An increase in market interest rates of 1.00% would add approximately $5.3 million to annual interest expense, given the company's gross variable rate debt of $535.4 million[141]. - Shentel has pay-fixed, receive-variable interest rate swaps totaling $150.0 million, effectively paying a fixed weighted-average interest rate of 2.90%[142]. Tax and Benefits - Income tax benefit increased by $1.4 million, or 92.9%, due to a higher pre-tax loss in the current period[107]. Cash Flow and Liquidity - Net cash provided by operating activities from continuing operations was approximately $74.5 million, an increase of $26.1 million compared to the prior year[129]. - As of September 30, 2025, total available liquidity was $212.6 million, consisting of cash, credit facility availability, and government grant reimbursements[128]. - The company was awarded approximately $151.2 million in grants to serve unserved homes and upgrade network capacity, with $79.1 million received as of September 30, 2025[127]. - Net cash used in investing activities was approximately $209.9 million for the nine months ended September 30, 2025, a decrease of $351.0 million compared to the prior year, primarily due to a $342.4 million decrease in cash disbursed for acquisitions[130]. - Net cash provided by financing activities was approximately $114.1 million during the same period, a decrease of $2.9 million, driven by a $79.4 million decrease in cash inflows from preferred stock issuances[131]. - As of September 30, 2025, the company's net indebtedness was approximately $534.1 million, with a weighted-average interest rate of 7.47% for the Term Loans[132]. - Capital expenditures for the nine months ended September 30, 2025, totaled $251.5 million, exceeding net cash provided by operating activities by $177.1 million, with expectations for continued excess through 2026[136]. - The company expects cash on hand, cash flows from continuing operations, and availability of funds from the Credit Agreement to meet liquidity needs for the next twelve months[135]. Future Outlook and Risks - The company executed an Asset Purchase Agreement in April 2025 to acquire FTTH assets for $5 million, completing the acquisition on July 9, 2025[89]. - Future capital requirements may differ materially from estimates due to demand for products and services and new market developments[137]. - Cash flows from operations could be adversely affected by various external factors, including economic conditions and competition[138]. - The company amended its Credit Agreement to increase the maximum Total Net Leverage Ratio to 4.75:1.00, remaining in compliance with financial covenants as of September 30, 2025[134].