solidated munications (US:CNSL)2020-04-30 23:27Financial Data and Key Metrics Changes - Operating revenues for Q1 2020 totaled $325.7 million, down 3.8% compared to Q1 2019 [33] - Adjusted EBITDA was $131.6 million, an increase of $1.3 million from the previous year [33] - Adjusted net income per share improved to $0.23 compared to a net loss of $0.03 a year ago [48] - Net debt leverage decreased to 4.23 times from 4.33 times at the end of the previous year [50] Business Line Data and Key Metrics Changes - Total commercial and carrier revenue was $147 million, with data and transport revenue growing 1.6% to $89.6 million [34] - Voice services revenue declined by $2.3 million, or 4.9% [34] - Consumer revenue totaled $126.4 million, down $3.3 million or 2.6% year-over-year, but consumer broadband revenue grew 1.6% [38] - Video revenue decreased by 8%, consistent with the strategy to transition to broadband streaming services [39] Market Data and Key Metrics Changes - The company experienced a 20% increase in call volumes across all customer groups and a 40% increase in bandwidth upgrades due to remote work and learning [12][19] - Approximately 51,000 SMB accounts were monitored, with 255 requesting temporary service holds [55] - The company noted a 20% increase in data traffic utilization and a 10% increase in voice traffic [19] Company Strategy and Development Direction - The company remains focused on producing stable earnings and growing free cash flow, leveraging fiber assets across carrier, commercial, and consumer groups [22] - The capital allocation plan emphasizes disciplined cash management and improving the balance sheet [23] - The company is evaluating its portfolio of assets for potential monetization opportunities [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through the COVID-19 pandemic and highlighted the importance of broadband connectivity [9][20] - The company is closely monitoring early indicators of potential business impacts related to COVID-19, with a focus on maintaining network reliability [17][19] - Management withdrew 2020 guidance due to uncertainties surrounding the economic downturn [32] Other Important Information - The company implemented measures to ensure business continuity during the pandemic, including remote work for 90% of office employees [11] - Capital expenditures for Q1 2020 were $42.4 million, supporting broadband network infrastructure expansion [48] - The company is optimistic about expanding broadband capabilities in rural markets with support from the Rural Development Opportunity Fund [41] Q&A Session Summary Question: What is the percentage of revenue in the SMB channel and areas lacking visibility? - Management indicated that SMB accounts represent about 7% to 8% of total revenue, with 255 accounts requesting temporary holds [55][57] Question: How to balance debt pay down versus building liquidity? - Management emphasized a focus on preserving cash liquidity while remaining committed to the leverage target of four times [59][61] Question: Ongoing portfolio review and potential asset sales? - Management confirmed that ongoing discussions regarding asset sales continue, unaffected by the COVID-19 situation [63] Question: Impact of RDOF and current connectivity providers? - Management stated that the company is well positioned for RDOF opportunities, leveraging existing fiber infrastructure [67] Question: Wireless backhaul and stimulus impact? - Management noted an uptick in wireless backhaul demand and ongoing discussions regarding infrastructure stimulus [71][74]