Uniti(UNIT) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Uniti reported consolidated revenues of $293 million for Q4 2021, with adjusted EBITDA of $231 million and AFFO attributed to common shares of $114 million, resulting in an AFFO per diluted common share of $0.44 [17] - Net income attributable to common shares for Q4 was approximately $36 million or $0.15 per diluted share [17] - The net leverage ratio at year-end was 5.55x, the lowest since mid-2017 [33] Business Line Data and Key Metrics Changes - Uniti Leasing segment revenues were $211 million, with adjusted EBITDA of $206 million, reflecting a 9% and 8% year-over-year increase, respectively [18] - Uniti Fiber reported revenues of $82 million in Q4, with adjusted EBITDA of $32 million, representing a 39% margin [24] - Sales bookings in Uniti Fiber for Q4 were $0.8 million of MRR, a 50% increase from Q4 2020, with wireless bookings increasing over threefold in 2021 [10][4] Market Data and Key Metrics Changes - The company operates a national fiber network of 128,000 route miles, having added nearly 6,000 route miles in 2021 [3] - Approximately 90% of business generated is wholesale in nature, driven by demand for 5G networks and fiber-to-the-home [5] - The company has access to metro fiber in nearly 300 markets, indicating significant growth potential [11] Company Strategy and Development Direction - Uniti focuses on a balanced mix of wholesale, non-wholesale, and anchor lease-up bookings to drive profitable economics [9] - The company is prioritizing metro market expansions for organic growth and potential acquisitions [12] - Uniti aims to leverage its existing fiber network to capitalize on high-margin recurring revenue opportunities while pursuing new greenfield builds [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trends in the communications infrastructure space, indicating that the company is well-positioned to benefit from these trends [43] - The company anticipates continued growth in 2022, with guidance for consolidated revenues of $1.1 billion and adjusted EBITDA of $890 million [30] - Management highlighted the importance of maintaining a strong balance sheet and liquidity to support strategic initiatives [32] Other Important Information - The company declared a dividend of $0.15 per share, representing an estimated 90% of taxable income for the year [34] - Uniti has invested over $300 million in capital under the GCI program with Windstream, adding significant route miles to its network [21] Q&A Session Summary Question: Follow-up on transformative value-accretive transactions - Management is prioritizing larger transformative transactions and remains confident in the value-accretive nature of these opportunities [46][47] Question: Timing for smaller deals if larger transactions do not materialize - Management acknowledges the importance of M&A for shareholders and is prepared to pursue smaller deals if necessary [48] Question: Consolidated new sales bookings and revenue acceleration - Management expects an acceleration in revenue, despite some churn from Sprint and DISH not yet ramping up [49][50] Question: Confidence in Windstream's supply chain for GCI program - Management is hopeful that Windstream will deploy the full amount of the GCI program, despite previous shortfalls [57] Question: Relationship with Windstream amidst ongoing discussions - Management describes the day-to-day working relationship with Windstream as constructive, despite the complexities involved [66] Question: Opportunities from the Infrastructure Act - Management sees potential in wholesale opportunities from existing and new customers due to increased federal funding for broadband [87] Question: Impact of supply chain issues on fiber pricing - Management acknowledges rising costs for inputs but remains confident in maintaining competitive pricing and supply [90] Question: Labor inflation and availability - Management reports no significant impact on labor rates or availability for construction, attributing this to strong relationships with contractors [95] Question: Capital allocation priorities regarding dividends and M&A - Management emphasizes that capital allocation, including dividends, is evaluated quarterly, with a focus on creating options for the Board [97]