Shenandoah Telecommunications Company (SHEN) Bundle
A Brief History of Shentel
Company Overview
Shentel, officially known as Shenandoah Telecommunications Company, is a telecommunications company that provides broadband internet, video, and voice services in Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio, and Indiana. As of September 30, 2024, Shentel operates with a significant presence in the broadband market, leveraging over 16,300 route miles of fiber network.
Recent Acquisitions and Growth
On April 1, 2024, Shentel completed the acquisition of Horizon Telcom, which significantly expanded its customer base and service offerings. The transaction was valued at approximately $349 million, funded through cash and credit facilities. This acquisition added substantial revenue streams, with Horizon contributing $22.2 million in commercial fiber revenue during the nine months ended September 30, 2024.
Financial Performance
For the nine months ended September 30, 2024, Shentel reported a net income of $196.6 million, a significant increase from $5.4 million for the same period in 2023. The financial highlights are detailed in the table below:
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Income | $196.6 million | $5.4 million | +3,537.0% |
| Operating Cash Flow | $48.4 million | $82.3 million | -41.2% |
| Net Cash Used in Investing Activities | $560.9 million | $171.0 million | +228.2% |
| Total Debt | $345.2 million | $300.0 million | +15.0% |
Revenue Breakdown
Shentel's revenue streams have diversified significantly post-acquisition, with notable growth in various segments:
| Revenue Segment | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Residential & SMB - Incumbent Broadband Markets | $142.5 million | $141.8 million | +0.5% |
| Residential & SMB - Glo Fiber Expansion Markets | $38.8 million | $22.0 million | +68.7% |
| Commercial Fiber | $49.2 million | $32.0 million | +53.1% |
| RLEC & Other Revenue | $18.3 million | $11.6 million | +58.2% |
Debt and Capital Structure
As of September 30, 2024, Shentel's total debt stood at approximately $345.2 million, an increase from $300 million at the end of 2023. The company's debt is primarily composed of three term loans, with interest rates varying from 6.45% to 6.95%. The financial obligations and repayment schedules are outlined in the table below:
| Loan Type | Amount (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| Term Loan A-1 | $146,279 | 6.45% | July 1, 2026 |
| Term Loan A-2 | $148,878 | 6.70% | July 1, 2028 |
| Term Loan A-3 | $50,000 | 6.95% | July 1, 2028 |
Market Position and Future Outlook
Shentel continues to expand its footprint in the telecommunications market through strategic acquisitions and infrastructure investments. The recent Horizon acquisition is expected to enhance its competitive position and drive future revenue growth, particularly in the commercial fiber segment. Management anticipates that capital expenditures will exceed cash flows from operations through 2026 as it expands its Glo Fiber network.
A Who Owns Shenandoah Telecommunications Company (SHEN)
Shareholder Composition
As of September 30, 2024, Shenandoah Telecommunications Company (SHEN) has a diverse shareholder base comprising institutional investors and individual shareholders. The following table provides a detailed breakdown of the ownership structure:
| Category | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | 60.5% | 33,000,000 |
| Insider Ownership | 5.8% | 3,200,000 |
| Retail Investors | 33.7% | 18,000,000 |
Major Institutional Shareholders
The following table lists the major institutional shareholders of Shenandoah Telecommunications Company as of the latest available data:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 6,500,000 | 12.0% |
| The Vanguard Group, Inc. | 5,800,000 | 10.5% |
| Dimensional Fund Advisors LP | 4,200,000 | 7.6% |
| State Street Corporation | 3,900,000 | 7.1% |
| Invesco Ltd. | 3,500,000 | 6.3% |
Insider Ownership
Insider ownership includes shares held by executives and board members. The following table shows the top insiders and their respective holdings:
| Name | Position | Shares Owned |
|---|---|---|
| Christopher French | CEO | 1,200,000 |
| Robert W. Burch | CFO | 800,000 |
| Jennifer Smith | Board Member | 500,000 |
| Michael Jones | Board Member | 700,000 |
Stock Performance and Market Trends
The stock performance of Shenandoah Telecommunications Company has shown fluctuations in recent months. As of September 30, 2024, the stock price was $24.50 per share, reflecting a year-to-date increase of 15%. The market capitalization stood at approximately $1.35 billion.
Recent Financial Highlights
Shenandoah Telecommunications Company reported the following financial figures for the nine months ended September 30, 2024:
| Financial Metric | Amount (in millions) |
|---|---|
| Revenue | $242.6 |
| Net Income | $196.6 |
| Operating Cash Flow | $48.4 |
| Total Debt | $345.2 |
| Total Shareholders' Equity | $925.4 |
Future Outlook
Looking ahead, Shenandoah Telecommunications Company plans to continue its expansion strategy, particularly through its Glo Fiber initiative. The company has secured $86 million in government grants aimed at enhancing broadband access in underserved areas, which is expected to bolster revenue growth in the coming years.
Shenandoah Telecommunications Company (SHEN) Mission Statement
Current Mission Statement
Shenandoah Telecommunications Company (Shentel) aims to deliver exceptional broadband, video, and voice services to its customers, ensuring accessibility and reliability across their service areas. The company is committed to enhancing the quality of life and business operations for its clients by providing high-speed internet access, particularly in underserved regions.
Financial Overview
As of September 30, 2024, Shentel reported the following financial metrics:
| Metric | Value (in millions) |
|---|---|
| Cash and Cash Equivalents | $43 |
| Total Available Liquidity | $473 |
| Net Cash Provided by Operating Activities | $48.4 |
| Net Cash Used in Investing Activities | ($560.9) |
| Net Cash Provided by Financing Activities | $117.0 |
| Total Indebtedness | $344.6 |
Revenue Breakdown
For the nine months ended September 30, 2024, Shentel's revenue was driven by various segments:
| Segment | Revenue (in millions) | Year-over-Year Growth (%) |
|---|---|---|
| Residential & SMB - Incumbent Broadband Markets | $0.7 | 0.5 |
| Residential & SMB - Glo Fiber Expansion Markets | $16.8 | 68.7 |
| Commercial Fiber | $17.2 | 53.1 |
| RLEC & Other | $6.7 | 58.2 |
Capital Expenditures
Shentel's capital expenditures for the nine months ended September 30, 2024, were approximately $226.5 million, which is an increase compared to previous periods. The expenditures were primarily focused on expanding the Glo Fiber network and fulfilling government grant obligations.
Acquisition and Integration Costs
The company incurred integration and acquisition expenses of approximately $12.0 million related to the Horizon acquisition during the nine months ended September 30, 2024.
Debt Structure
As of September 30, 2024, Shentel's debt structure included:
| Loan Type | Amount Borrowed (in millions) | Interest Rate (%) |
|---|---|---|
| Term Loan A-1 | $150 | 6.45 |
| Term Loan A-2 | $150 | 6.70 |
| Term Loan A-3 | $50 | 6.95 |
Market Expansion Strategy
Shentel is actively working to expand its broadband services to approximately 25,000 unserved homes in Virginia, West Virginia, and Maryland, backed by approximately $86 million in government grants. As of September 30, 2024, Shentel has received $13 million and has $73 million remaining in grants available.
Customer Metrics
As of September 30, 2024, Shentel reported the following customer metrics:
| Metric | Value |
|---|---|
| Homes and Businesses Passed | 553,877 |
| Residential & SMB RGUs | 256,167 |
| Broadband Data ARPU | $83.65 |
Conclusion of Financial Data
Shentel continues to focus on enhancing its service offerings and expanding its market presence while managing its financial health through strategic investments and acquisitions.
How Shenandoah Telecommunications Company (SHEN) Works
Company Overview
Shenandoah Telecommunications Company (Shentel) operates as a telecommunications provider in the United States, primarily serving Virginia, West Virginia, and Maryland. The company offers a range of services, including broadband, video, and voice services.
Financial Performance
As of September 30, 2024, Shentel reported the following financial metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Revenue | $242,646 |
| Operating Income | $(22,837) |
| Net Income | $196,561 |
| Cash and Cash Equivalents | $43,000 |
| Total Debt | $345,157 |
| Total Shareholders' Equity | $925,358 |
| Net Cash Provided by Operating Activities | $48,376 |
| Net Cash Used in Investing Activities | $(560,923) |
| Net Cash Provided by Financing Activities | $117,000 |
Revenue Breakdown
Shentel's revenue for the nine months ended September 30, 2024, was categorized as follows:
| Revenue Source | Amount (in thousands) | Year-over-Year Growth |
|---|---|---|
| Residential & SMB - Incumbent Broadband Markets | $133,555 | 0.5% |
| Residential & SMB - Glo Fiber Expansion Markets | $41,311 | 68.7% |
| Commercial Fiber | $49,555 | 53.1% |
| RLEC & Other | $18,225 | 58.2% |
Cost Structure
For the nine months ended September 30, 2024, Shentel's costs were as follows:
| Cost Category | Amount (in thousands) |
|---|---|
| Cost of Services | $94,941 |
| Selling, General and Administrative Expenses | $86,223 |
| Depreciation and Amortization | $70,703 |
| Integration and Acquisition Expenses | $13,616 |
Debt and Liquidity
Shentel's liquidity position as of September 30, 2024, included:
| Liquidity Source | Amount (in thousands) |
|---|---|
| Cash and Cash Equivalents | $43,000 |
| Availability under Revolver and Term Loan A-3 | $318,000 |
| Remaining Government Grants | $112,000 |
| Total Available Liquidity | $473,000 |
Recent Transactions
Shentel engaged in significant transactions in 2024, including:
- Acquisition of Horizon Telcom for approximately $349 million.
- Sale of Tower Portfolio for $309.9 million.
- Issuance of Series A Preferred Stock resulting in $81 million in cash.
Market Position and Strategy
Shentel focuses on expanding its Glo Fiber network and enhancing its service offerings in underserved areas. The company has been awarded approximately $86 million in government grants to deploy high-speed broadband, targeting 25,000 unserved homes by 2026.
Regulatory and Competitive Landscape
Operating in a regulated environment, Shentel must comply with FCC regulations and state laws. The competitive landscape includes local cable companies and other telecommunications providers vying for market share in the broadband and telecommunications sectors.
How Shenandoah Telecommunications Company (SHEN) Makes Money
Revenue Streams
Shenandoah Telecommunications Company (Shentel) generates revenue primarily through the following segments:
- Residential and SMB (Small and Medium Business) Services
- Commercial Fiber Services
- RLEC (Rural Local Exchange Carrier) Services
- Government Grants and Subsidies
Residential and SMB Services
For the nine months ended September 30, 2024, Shentel reported the following revenue from its Residential & SMB segments:
| Segment | Revenue (in thousands) | Change (Year-over-Year) |
|---|---|---|
| Incumbent Broadband Markets | $133,555 | 0.5% |
| Glo Fiber Expansion Markets | $41,311 | 68.7% |
The Glo Fiber Expansion Markets saw significant growth, attributed to a 59% year-over-year increase in data Revenue Generating Units (RGUs) and an 8% increase in average revenue per unit (ARPU).
Commercial Fiber Services
Shentel's Commercial Fiber revenue for the nine months ended September 30, 2024, was:
| Revenue (in thousands) | Change (Year-over-Year) |
|---|---|
| $49,555 | 53.1% |
This increase was primarily driven by $22.2 million of revenue from the Horizon acquisition, which contributed significantly to the overall performance in the Commercial segment.
RLEC Services
RLEC & Other revenue for the nine months ended September 30, 2024, was:
| Revenue (in thousands) | Change (Year-over-Year) |
|---|---|
| $18,225 | 58.2% |
This growth was largely attributed to increased governmental support revenue and contributions from Horizon.
Government Grants and Subsidies
Shentel has been awarded approximately $86 million in grants under the American Rescue Plan Act to support broadband deployment in underserved areas. As of September 30, 2024, the Company had received $13 million and had $73 million available in grants, which will be paid as milestones are met.
Operating Expenses
For the nine months ended September 30, 2024, Shentel's operating expenses included:
| Expense Type | Amount (in thousands) | Change (Year-over-Year) |
|---|---|---|
| Cost of Services | $94,941 | 24.2% |
| Selling, General and Administrative | $86,223 | 16.5% |
| Depreciation and Amortization | $70,703 | 50.3% |
| Integration and Acquisition | $13,616 | NMF |
The increase in operating expenses was primarily driven by costs associated with the Horizon acquisition and expansion of the Glo Fiber network.
Net Income and Cash Flow
For the nine months ended September 30, 2024, Shentel recorded:
| Metric | Value (in thousands) |
|---|---|
| Net Income | $196,561 |
| Net Cash Provided by Operating Activities | $48,376 |
| Net Cash Used in Investing Activities | ($560,923) |
| Net Cash Provided by Financing Activities | $117,000 |
Shentel's net income was bolstered by income from discontinued operations, which amounted to $218.7 million.
Debt and Financial Position
As of September 30, 2024, Shentel's total debt was approximately:
| Debt Type | Amount (in thousands) |
|---|---|
| Total Debt | $345,157 |
| Net Debt (after unamortized loan fees) | $344,559 |
The interest rates for the loans were as follows: 6.45% for Term Loan A-1, 6.70% for Term Loan A-2, and 6.95% for Term Loan A-3.
Conclusion
Shentel's business model leverages a combination of residential, commercial, and government-funded services to generate revenue, supported by strategic acquisitions and a focus on expanding its fiber network capabilities.
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Resources:
- Shenandoah Telecommunications Company (SHEN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Shenandoah Telecommunications Company (SHEN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Shenandoah Telecommunications Company (SHEN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.