Consolidated Communications Holdings, Inc. (CNSL) Bundle
A Brief History of Consolidated Communications Holdings, Inc.
Company Overview
Consolidated Communications Holdings, Inc. (CNSL) is a telecommunications provider that offers broadband, voice, and video services primarily in the United States. As of September 30, 2024, the company operates a fiber-rich network and serves both residential and commercial customers.
Financial Performance
For the third quarter of 2024, CNSL reported net revenues of $271.1 million, compared to $283.7 million in the same quarter of 2023, reflecting a decrease of 4%. The operating loss for the quarter was $(18.1) million, an improvement from $(31.9) million in Q3 2023. The net loss for the quarter was $(48.9) million, down from $(57.7) million year-over-year .
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenues | $271.1 million | $283.7 million |
| Operating Loss | $(18.1) million | $(31.9) million |
| Net Loss | $(48.9) million | $(57.7) million |
| Basic and Diluted EPS | $(0.54) | $(0.61) |
Debt and Liquidity
As of September 30, 2024, CNSL had total long-term debt of $2.4 billion, which includes borrowings of $200 million under its revolving credit facility. The weighted-average interest rate on outstanding borrowings was 8.89%. The company had cash and cash equivalents totaling $44.4 million, with a current ratio of 0.76 .
Capital Expenditures
In the nine months ended September 30, 2024, CNSL reported capital expenditures of $290.3 million, a decrease from $424.2 million in the same period of 2023. This reduction was primarily due to the completion of certain infrastructure projects .
Market Position and Services
Consolidated Communications focuses on providing broadband services, which accounted for $82.4 million in consumer revenue during Q3 2024, an increase of 10% year-over-year. However, voice services revenue decreased by 12% to $27.9 million, reflecting ongoing challenges in the telecommunications sector .
Regulatory Developments
In May 2024, CNSL completed the sale of its Washington operations, which impacted its revenue streams and operational focus. This strategic divestiture aimed to strengthen the company's balance sheet and enhance its core service offerings .
Outlook
As of 2024, CNSL continues to invest in its fiber network expansion, focusing on enhancing service quality and customer experience. The company anticipates future revenue growth from its broadband and data services, despite competitive pressures within the sector .
A Who Owns Consolidated Communications Holdings, Inc. (CNSL)
Ownership Structure
As of 2024, the primary ownership of Consolidated Communications Holdings, Inc. (CNSL) is held by Searchlight Capital Partners. Searchlight is the sole holder of the Series A Preferred Stock, which has a liquidation preference of approximately $556.7 million as of September 30, 2024.
Common Stock Distribution
As of September 30, 2024, Consolidated Communications had 118,476,944 shares of common stock outstanding. Searchlight holds approximately 33% of the company's outstanding common stock, which translates to about 39.1 million shares.
| Shareholder | Type of Ownership | Number of Shares | Percentage Ownership |
|---|---|---|---|
| Searchlight Capital Partners | Series A Preferred Stock | 434,266 | 100% |
| Searchlight Capital Partners | Common Stock | 39,100,000 (approx.) | 33% |
| Other Shareholders | Common Stock | 79,376,944 (approx.) | 67% |
Financial Overview
Consolidated Communications reported a net loss of $139.2 million for the nine months ended September 30, 2024. The total liabilities stood at approximately $3.07 billion as of the same date.
Recent Transactions
On May 1, 2024, the company completed the sale of its Washington operations for approximately $67.8 million, aligning with its strategic focus on fiber expansion.
Dividends and Liquidation Preference
The Series A Preferred Stock held by Searchlight has a liquidation preference of $556.7 million, which includes accrued and unpaid dividends. The dividends on this preferred stock accrue at a rate of 9.0% per annum, payable semi-annually.
| Dividend Payment Date | Amount Paid (in millions) |
|---|---|
| January 2, 2024 | $22.5 |
| July 1, 2024 | $23.3 |
Voting Rights
Holders of the Series A Preferred Stock are entitled to one vote per share on matters specifically related to the Series A Preferred Stock. They do not have voting rights on other matters except under certain conditions.
Key Financial Metrics
| Metric | Value |
|---|---|
| Net Loss (9 months ended September 30, 2024) | $139.2 million |
| Total Liabilities | $3.07 billion |
| Common Shares Outstanding | 118,476,944 |
| Liquidation Preference of Series A Preferred Stock | $556.7 million |
Consolidated Communications Holdings, Inc. (CNSL) Mission Statement
Company Overview
Consolidated Communications Holdings, Inc. (CNSL) is a telecommunications company that provides broadband, voice, and video services to residential and business customers. As of 2024, the company has focused on enhancing its fiber infrastructure to support high-speed internet access and improve customer service.
Mission Statement
The mission of Consolidated Communications is to deliver high-quality, reliable communication services that empower customers and communities. The company aims to lead in fiber broadband services, ensuring that its customers have access to advanced technology and superior support.
Key Financial Metrics (2024)
| Metric | Value (Q3 2024) |
|---|---|
| Net Revenues | $271.1 million |
| Net Loss | $(48.97) million |
| Adjusted EBITDA | $86.5 million |
| Total Assets | $3.72 billion |
| Total Liabilities | $3.12 billion |
| Consumer Customers | 494,660 |
| Fiber Gig+ Capable Customers | 249,656 |
| Consumer Data Connections | 399,520 |
Strategic Goals
Consolidated Communications is committed to:
- Expanding its fiber network to enhance broadband capabilities.
- Improving customer experience through streamlined operations and advanced service offerings.
- Investing in technology and infrastructure to support multi-Gigabit services.
Recent Operational Changes
As part of its mission, CNSL has initiated the decommissioning of video services across all markets to focus on a fiber-first strategy. This decision aligns with the company’s goal to simplify its product offerings and concentrate resources on high-demand broadband services.
Financial Performance Overview
For the nine months ending September 30, 2024, CNSL reported:
| Metric | Value |
|---|---|
| Operating Revenues | $814.5 million |
| Operating Expenses | $340.7 million |
| Net Loss Attributable to Common Shareholders | $(175.3) million |
| Dividends on Series A Preferred Stock | $35.7 million |
Community Engagement
Consolidated Communications emphasizes its role in supporting local communities by providing reliable internet access, especially in rural areas. The company aims to bridge the digital divide through its fiber expansion initiatives.
Future Outlook
The company plans to continue its investment in fiber infrastructure, with an expectation to upgrade approximately 150,000 homes and small businesses in 2024. This is part of a broader strategy to enhance service delivery and increase market share in the telecommunications sector.
How Consolidated Communications Holdings, Inc. (CNSL) Works
Company Overview
Consolidated Communications Holdings, Inc. (CNSL) operates as a telecommunications provider, offering broadband services, data, and voice services primarily in rural areas. As of September 30, 2024, CNSL serves approximately 494,660 consumer customers, with a significant emphasis on expanding fiber connectivity.
Financial Performance
For the three months ended September 30, 2024, CNSL reported net revenues of $271.1 million, a decrease from $283.7 million in the same period of 2023. The net loss for the third quarter of 2024 was $48.97 million compared to a loss of $57.72 million in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Revenues | $271.1 million | $283.7 million | -4.5% |
| Net Loss | $(48.97) million | $(57.72) million | +15.1% |
| Net Loss per Share | $(0.54) | $(0.61) | +11.5% |
Operating Segments
CNSL operates through three primary segments: Consumer, Commercial, and Carrier services. The Consumer segment includes broadband, voice, and video services. The Commercial segment focuses on data and voice services for business customers, while the Carrier segment provides data and transport services to other communications providers.
Consumer Segment Performance
In the Consumer segment, broadband services generated $82.4 million in revenue for Q3 2024, marking a 10% increase from $75.1 million in Q3 2023. However, voice services revenue decreased by 12% to $27.9 million due to customer churn.
| Consumer Segment Revenue | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Broadband Services | $82.4 million | $75.1 million | +10% |
| Voice Services | $27.9 million | $31.6 million | -12% |
| Video Services | $0.0 million | $8.5 million | -100% |
Commercial Segment Performance
The Commercial segment reported revenue of $95.5 million in Q3 2024, a slight increase of 1% compared to $94.9 million in Q3 2023. The focus on data services, including VoIP, contributed to this growth.
Operating Expenses
Consolidated Communications experienced a reduction in operating expenses, with costs of services decreasing by $19.2 million in Q3 2024 compared to Q3 2023. Selling, general, and administrative expenses increased by $2.9 million during the same period.
| Operating Expenses | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Cost of Services | $113.2 million | $132.4 million | -15% |
| SG&A Expenses | $98.6 million | $95.7 million | +3% |
| Depreciation and Amortization | $76.7 million | $79.6 million | -4% |
Debt and Financing
As of September 30, 2024, CNSL had total long-term debt of $2.38 billion, which includes senior secured credit facilities and senior notes due in 2028. The company reported an interest expense of $44.9 million for Q3 2024, an increase from $39.6 million in Q3 2023.
Cash Flow Analysis
For the nine months ended September 30, 2024, CNSL generated $36.1 million in cash from operations, a decline from $102.6 million in the same period of 2023. The cash used in investing activities amounted to $221.8 million, while financing activities provided $225.3 million.
| Cash Flow Summary | 9M 2024 | 9M 2023 |
|---|---|---|
| Cash from Operating Activities | $36.1 million | $102.6 million |
| Cash Used in Investing Activities | $(221.8) million | $(326.5) million |
| Cash from Financing Activities | $225.3 million | $(12.3) million |
Customer Base and Market Trends
As of September 30, 2024, CNSL had 399,520 consumer data connections, reflecting a 3% increase year-over-year. The shift towards fiber connectivity continues, with 249,656 customers capable of accessing gigabit speeds, representing a 42% increase from the previous year.
Regulatory Environment
CNSL's operations are influenced by federal and state regulations, particularly concerning subsidies aimed at improving broadband access in rural areas. The company reported a decline in subsidy revenue due to changes in state support and the sale of its Washington operations.
How Consolidated Communications Holdings, Inc. (CNSL) Makes Money
Revenue Streams
Consolidated Communications Holdings, Inc. generates revenue primarily through three main segments: Consumer, Commercial, and Carrier services. As of September 30, 2024, the breakdown of operating revenues is as follows:
| Segment | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Consumer | $110,304 | $115,246 | $(4,942) | (4%) |
| Commercial | $95,551 | $94,923 | $628 | 1% |
| Carrier | $34,065 | $35,740 | $(1,675) | (5%) |
| Subsidies | $5,934 | $6,878 | $(944) | (14%) |
| Total Operating Revenues | $271,088 | $283,654 | $(12,566) | (4%) |
Consumer Segment
The Consumer segment includes broadband (data and VoIP), voice services, and previously video services. For the three months ended September 30, 2024, revenues for this segment were:
| Service Type | Revenue (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|
| Broadband (Data and VoIP) | $82,377 | $7,288 | 10% |
| Voice Services | $27,927 | $(3,689) | (12%) |
| Video Services | $— | $(8,541) | (100%) |
| Total Consumer Revenues | $110,304 | $(4,942) | (4%) |
Broadband services have seen an increase in revenue due to price hikes and a growing customer base opting for higher-speed fiber services. However, voice services have declined due to a reduction in access lines and a shift towards alternative technologies.
Commercial Segment
The Commercial segment provides data and voice services to business customers. For the three months ended September 30, 2024, revenues for this segment were:
| Service Type | Revenue (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|
| Data Services (includes VoIP) | $54,631 | $758 | 1% |
| Voice Services | $31,518 | $(307) | (1%) |
| Other | $9,402 | $174 | 1% |
| Total Commercial Revenues | $95,551 | $628 | 1% |
Data services have seen a slight increase, attributed to growth in dedicated Internet access, while voice services have experienced a decline due to customer churn.
Carrier Segment
The Carrier segment focuses on providing data and transport services to other carriers. For the three months ended September 30, 2024, revenues for this segment were:
| Service Type | Revenue (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|
| Data and Transport Services | $30,370 | $(1,018) | (3%) |
| Voice Services | $3,428 | $(662) | (17%) |
| Other | $267 | $5 | 2% |
| Total Carrier Revenues | $34,065 | $(1,675) | (5%) |
Carrier revenues have decreased primarily due to lower demand for voice services and competitive pricing pressures.
Operating Expenses
For the three months ended September 30, 2024, Consolidated Communications reported operating expenses as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Cost of Services and Products | $113,186 |
| Selling, General and Administrative Expenses | $98,651 |
| Transaction Costs | $612 |
| Depreciation and Amortization | $76,693 |
| Total Operating Expenses | $289,142 |
The total operating expenses decreased compared to the previous year, reflecting cost-saving initiatives and a reduction in video programming costs due to the discontinuation of video services.
Net Loss
For the three months ended September 30, 2024, the net loss attributable to common shareholders was:
| Metric | Amount (in thousands) |
|---|---|
| Net Loss | $(61,419) |
| Net Loss per Share | $(0.54) |
The net loss reflects ongoing challenges in the voice services market and increased interest expenses, despite improvements in broadband revenue.
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Resources:
- Consolidated Communications Holdings, Inc. (CNSL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Consolidated Communications Holdings, Inc. (CNSL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Consolidated Communications Holdings, Inc. (CNSL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.