Shentel(US:SHEN)2022-03-01 17:04Financial Data and Key Metrics Changes - In 2021, consolidated revenue grew 11.1% to $245.2 million, driven by broadband and tower revenue growth of 11.6% and 3.8% respectively [26] - Adjusted EBITDA increased 17.8% to $65.7 million, primarily due to broadband and tower growth [26] - Cash on hand declined by $448 million sequentially due to $434 million paid in income taxes related to the sale of wireless assets, ending the fourth quarter with $484 million in liquidity [27] Business Line Data and Key Metrics Changes - Broadband revenue grew 11.6% to $228.1 million, with residential and SMB revenue increasing by 14.5% [22] - Glo Fiber network saw a record year with 7,200 net additions, ending with approximately 15,300 total RGUs and a 15.1% aggregate broadband data penetration rate [40] - Tower segment revenue grew by $600,000 to $17.7 million, primarily due to a 13.6% increase in tenants [25] Market Data and Key Metrics Changes - The company ended 2021 with over 75,000 Glo Fiber passings, a 73% improvement over 2020 [11] - The integrated broadband network reached approximately 314,000 passings, with a target of 730,000 by 2026 [12] - The incumbent cable business added approximately 7,800 net broadband data RGUs, increasing penetration from 47.2% to 50.4% year-over-year [38] Company Strategy and Development Direction - The company divested its wireless business for $1.94 billion, using proceeds for a special dividend and debt repayment, while focusing on a Fiber First growth plan [8] - The company plans to double Glo Fiber passings to over 150,000 by the end of 2022 and has secured franchise agreements for 175,000 new passings [9][33] - The company has ceased further expansion of beam fixed wireless but will continue to operate existing sites and add subscribers [64] Management's Comments on Operating Environment and Future Outlook - Management expects Glo Fiber to reach breakeven in 2022, while beam will continue to be a drag on adjusted EBITDA [50] - Despite challenges from T-Mobile's network rationalization, the Glo Fiber expansion strategy is anticipated to provide sustainable revenue growth [31] - Management highlighted the importance of government broadband grants, securing over $36 million in Virginia for unserved areas [35] Other Important Information - The company identified $4 million in annual run rate expense savings and an additional $5 million in operating cost savings expected by early 2023 [10] - A cumulative error related to the capitalization of labor and overhead costs increased broadband cost of service by approximately $900,000 in 2021 [18] Q&A Session Summary Question: What should be expected for segment level broadband EBITDA margin in 2022? - Management indicated that adjusted EBITDA margins for broadband should be around 40%, with expected continued losses from the beam segment [51] Question: Are there any issues with labor and construction costs for Glo Fiber? - Management reported no significant issues with labor or construction costs, noting slight increases but also efficiencies in network architecture [52] Question: Is there any significant traction with the EBV program? - Management stated there has been no significant change in uptake, with around 1,000 customers on the EBV and replacement programs [53] Question: Will the beam business continue to operate? - Management confirmed that the beam business will continue to operate, with plans to add subscribers to existing sites [64] Question: When will the new Glo Fiber passings start generating subscribers? - Management indicated that subscriber additions will occur throughout the year as construction for the 75,000 new passings is completed [67]