MATTOON, Ill., April 25, 2019 (GLOBE NEWSWIRE) — Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company”) reported results for the first quarter 2019 and will hold a conference call and simultaneous webcast to discuss its results and developments today at 10 a.m. ET.
First quarter 2019 Consolidated Communications financial summary:
- Revenue totaled $338.6 million
- Net cash from operating activities was $75 million
- Adjusted EBITDA was $130.3 million
“While we are pleased with the performance of the business, after careful consideration, our Board of Directors has elected to eliminate our dividend,” said Bob Udell, president and chief executive officer of Consolidated Communications. “With this action, we are implementing a new capital allocation plan in order to focus on deleveraging. As we achieve our leverage targets, we will accelerate our fiber investment strategy.”
“We are confident this capital allocation plan will allow us to achieve our deleveraging goal of less than 4.0x net debt to adjusted EBITDA in advance of refinancing our unsecured debt no later than mid-2021,” added Udell. “This positions us to continue investing in growth to create long-term shareholder value.”
Financial Results for the First Quarter
- Revenues were $338.6 million, compared to $356.0 million for the first quarter of 2018, a decline of $17.4 million. After normalizing for the sale of the Virginia properties and the one-time Local Switching Support (LSS) received in the first quarter of 2018, revenue declined $11.9 million or 3.4 percent for the quarter.
- Commercial and carrier data and transport service revenue increased 2.4 percent or $2.1 million on a comparable basis. Equipment sales and special construction projects contributed an additional $3.3 million to the first quarter revenues.
- Consumer broadband revenue was flat from a year ago despite the sale of our Virginia properties and decreases related to Hurricane Michael in Florida.
- Voice services revenue declined $10.3 million across all customer channels.
- Subsidies decreased $7.1 million during the quarter, of which $4 million was attributed to the LSS settlement, with the remainder due to the final CAF step down in transitional revenues. Network access revenues declined $3.1 million.
- Income from operations was up and totaled $16.7 million compared to $9.2 million in the first quarter of 2018. The change was primarily due to the declines in revenues described above, offset by reductions in operating expense of $16.2 million. Depreciation and amortization expense declined by $8.7 million.
- Interest expense, net was $34.3 million, compared to $32.7 million for the same period last year. The change was due primarily to LIBOR increases, offset by a decline in non-cash expense associated with interest rate hedge agreements put in place to maintain our fixed-debt target of 75 percent. As of March 31, 2019, our weighted average cost of debt was approximately 5.6 percent.
- Cash distributions from the Company’s wireless partnerships totaled $7.3 million for the first quarter compared to $9.5 million for the prior year period. The prior year distribution included a true-up of $2.4 million associated with the partnership’s accounting for prepaid data roaming.
- Other income, net was $7.2 million, compared to $8.0 million in the first quarter of 2018.
- On a GAAP basis, the net loss was ($7.2 million) and GAAP net loss per share was ($0.11). Adjusted diluted net loss per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share was ($0.03) in the first quarter of 2019, compared to ($0.07) in the first quarter of 2018.
- Adjusted EBITDA was $130.3 million compared to $135.4 million in the year ago quarter, due to the decline of $4.0 million from the LSS settlement received in the first quarter of 2018 and the $2.2 million decline in distributions from wireless partnerships.
- The total net debt to last 12-month adjusted EBITDA ratio was 4.38x.
- The dividend payout ratio was 62.3 percent.
- Capital expenditures were $53.4 million, a capital intensity rate of approximately 16 percent.
Financial Guidance
The Company updated its 2019 guidance as follows:
Consolidated Communications will host a conference call and webcast today at 10 a.m. ET / 9 a.m. CT to discuss first quarter earnings and developments with respect to the Company. The live webcast and replay can be accessed from the Investor Relations section of the Company’s website at http://ir.consolidated.com. The live conference call dial-in number is 1-877-374-3981, conference ID 8286297. A telephonic replay of the conference call will be available through May 2 and can be accessed by calling 1-855-859-2056, conference ID 8286297.
