Shentel(US:SHEN)2021-07-31 20:32Financial Data and Key Metrics Changes - The company completed the $1.94 billion sale of its Wireless assets to T-Mobile, allowing for significant debt repayment and a special dividend of $18.75 per share, totaling approximately $937 million [7][12] - Consolidated revenues grew 11.7% to $60.7 million, with adjusted OIBDA increasing 29.6% to $16.3 million, driven by strong growth in Broadband and Tower segments [14][15] - Cash and equivalents at the end of Q2 2021 were $248.8 million, an increase of $19.6 million from Q1 2021 [15] Business Line Data and Key Metrics Changes - Broadband revenues increased by 12.2% to $56.2 million, with residential and SMB revenue rising by 16.7% [12] - The Tower segment saw revenues grow by 8.3% to $4.6 million, with adjusted OIBDA growing by 9.3% to $3 million [13] - The company added 19,000 new broadband passings, bringing the total to just under 279,000, with Glo Fiber contributing significantly to net additions [8][9] Market Data and Key Metrics Changes - The company anticipates reaching approximately 329,000 broadband passings by the end of 2021 [8] - Glo Fiber service added 12,000 new passings, doubling the pace of the previous two quarters [8] - Beam fixed wireless network expanded to over 21,000 homes in 7 counties [8] Company Strategy and Development Direction - The company is focusing on expanding its broadband business and has closed a $400 million financing facility to support this growth [7][17] - There is a strategic shift towards organic growth with a disciplined approach to M&A, monitoring opportunities closely [36][52] - The company aims to build out its Glo Fiber and Beam services, targeting a total of 300,000 Glo Fiber passings in the coming years [28] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain issues have not yet impacted construction schedules, but lead times for materials have increased [34] - The company expects to see a shift in net additions towards Glo and Beam services as COVID-related tailwinds decrease [50] - Management remains optimistic about the growth potential in the broadband sector, particularly with the ongoing expansion of Glo Fiber [20] Other Important Information - The company has seen a significant increase in customer satisfaction, with Net Promoter Scores rising from 10% in Q2 2019 to 39.7% in Q2 2021 [23] - Capital expenditures for 2021 are confirmed to be between $157 million and $168 million, with a focus on expanding fiber and broadband networks [32] Q&A Session Summary Question: Supply chain and labor force impact on construction targets - Management acknowledged increased lead times for raw materials but stated that construction schedules have not yet been affected [34] Question: M&A opportunities in the broadband sector - Management indicated that there are currently limited opportunities near their footprint due to high valuations but remains disciplined in their approach [36] Question: Potential churn in the tower business and revenue impact - Management expects some rationalization of the network with T-Mobile but does not anticipate significant impacts until 2022 [38] Question: Commentary on Glo and Beam homes passed targets - Management expressed confidence in their construction plan and the potential for additional opportunities from universal broadband funding [41] Question: Pricing strategy for Beam service - Management believes their pricing is competitive and emphasizes reliability as a key factor for rural customers [43] Question: Changes in consumer habits post-COVID - Management noted a slight increase in churn but emphasized that it remains lower than pre-COVID levels [48]