Consolidated Communications Announces Fourth Quarter and Full Year 2023 Financial Results

March 5, 2024

MATTOON, Ill.--(BUSINESS WIRE)-- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S., today reported results for the fourth quarter and full year 2023.

Fourth Quarter 2023 Results

  • Revenue totaled $275.2 million
  • Overall consumer revenue was $113.9 million
  • Consumer fiber revenue was $37.9 million
  • Total consumer broadband net adds were 6,998
  • Consumer broadband revenue was $76.5 million
  • Commercial data services revenue was $54.5 million
  • Carrier data-transport revenue was $31.7 million
  • Net loss was ($58.6 million). Adjusted EBITDA was $86.7 million
  • Total committed capital expenditures were $91.5 million

Cost of services and products and selling, general and administrative expenses collectively decreased $12.6 million versus the prior year largely due to the divestiture of the Kansas City operations on Nov. 30, 2022, lower video programming costs, lower advertising expense, lower access expense and a reduction in salaries driven by the cost savings initiative.

Net interest expense was $41.6 million, an increase of $8.4 million versus the prior year, primarily as a result of higher interest on the term loan. The Company had 77% of its total debt at a fixed rate through September 2026. As of Dec. 31, 2023, the weighted average cost of debt was 7.04%.

Net loss in the fourth quarter of 2023 was ($58.6 million) compared to net loss of ($45.5 million) in the fourth quarter of 2022, which included $5.8 million of income from discontinued operations. Net loss per share was ($0.52) in the fourth quarter of 2023 as compared to net loss per share of ($0.41) in the fourth quarter of 2022. Adjusted diluted net income (loss) per share excludes certain items as outlined in the table provided in this release. Adjusted diluted net loss per share from continuing operations was ($0.26) compared to ($0.17) in the fourth quarter of 2022.

Capital Expenditures

Total committed capital expenditures were $91.5 million, driven by 49,132 new fiber passings, fourth quarter fiber adds, and reflect the usage of existing inventory for install and build activity.

Full-Year 2023 Results

  • Revenue totaled $1.11 billion
  • Overall consumer revenue was $451.0 million
  • Consumer fiber revenue was $127.7 million
  • Total consumer broadband net adds were 25,761
  • Consumer broadband revenue was $290.8 million
  • Commercial data services revenue was $214.7 million
  • Carrier data-transport revenue was $127.2 million
  • Net loss was ($294.4 million). Adjusted EBITDA was $319.2 million
  • Total committed capital expenditures were $511.8 million

Capital Structure

As of Dec. 31, 2023, the Company maintained liquidity with cash and short-term investments of approximately $4.8 million and $214 million of available borrowing capacity on the revolving credit facility, subject to certain covenants. The net debt leverage ratio for the trailing 12 months ended Dec. 31, 2023, was 6.73x.

Pending Transaction

As previously announced, on Oct. 16, 2023, Consolidated entered into an agreement to be acquired by Searchlight and BCI in an all-cash transaction with an enterprise value of approximately $3.1 billion, including the assumption of debt. On Jan. 31, 2024, at a special meeting of shareholders, approximately 75% of disinterested shareholders voted to approve the proposal to adopt the merger agreement and approve the pending transaction. The transaction will result in Consolidated becoming a private company and is expected to close by the first quarter of 2025, subject to customary closing conditions, including receipt of regulatory approvals. The transaction is not subject to a financing condition. Following the closing of the transaction, shares of Consolidated common stock will no longer be traded or listed on any public securities exchange.

In light of the transaction, Consolidated will not host an earnings conference call.

About Consolidated Communications

Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) is dedicated to moving people, businesses and communities forward by delivering the most reliable fiber communications solutions. Consumers, businesses and wireless and wireline carriers depend on Consolidated for a wide range of high-speed internet, data, phone, security, cloud and wholesale carrier solutions. With a network spanning over 60,000 fiber route miles, Consolidated is a top 10 U.S. fiber provider, turning technology into solutions that are backed by exceptional customer support. Learn more at consolidated.com.

Use of Non-GAAP Financial Measures

This press release includes disclosures regarding “EBITDA,” “adjusted EBITDA,” “Net debt leverage ratio,” “adjusted diluted net income (loss) per share,” and “Normalized revenue,” all of which are non-GAAP financial measures. Accordingly, they should not be construed as alternatives to net cash from operating or investing activities, cash and cash equivalents, cash flows from operations, net income or net income per share as defined by GAAP and are not, on their own, necessarily indicative of cash available to fund cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and the non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures presented in accordance with GAAP is included in the tables that follow.

Adjusted EBITDA is comprised of EBITDA, adjusted for certain items as permitted or required by the lenders under our credit agreement in place at the end of each quarter in the periods presented. The tables that follow include an explanation of how adjusted EBITDA is calculated for each of the periods presented with the reconciliation to net income (loss) from continuing operations. EBITDA is defined as income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization on a historical basis.

We present adjusted EBITDA for several reasons. Management believes adjusted EBITDA is useful as a means to evaluate our ability to fund our estimated uses of cash (including interest on our debt). In addition, we have presented adjusted EBITDA to investors in the past because it is frequently used by investors, securities analysts and other interested parties in the evaluation of companies in our industry, and management believes presenting it here provides a measure of consistency in our financial reporting. Adjusted EBITDA, referred to as Available Cash in our credit agreement, is also a component of the restrictive covenants and financial ratios contained in our credit agreement that requires us to maintain compliance with these covenants and limit certain activities, such as our ability to incur debt. The definitions in these covenants and ratios are based on Adjusted EBITDA after giving effect to specified charges. In addition, Adjusted EBITDA provides our board of directors with meaningful information, with other data, assumptions and considerations, to measure our ability to service and repay debt. We present the related “Net debt leverage ratio” principally to help investors understand how we measure leverage and facilitate comparisons by investors, security analysts and others. Total net debt is defined as the current and long-term portions of debt and finance lease obligations less cash, cash equivalents and short-term investments, deferred debt issuance costs and discounts on debt. Our Net debt leverage ratio differs in certain respects from the similar ratio used in our credit agreement or against comparable measures of certain other companies in our industry. These measures differ in certain respects from the ratios used in our senior notes indenture.

These non-GAAP financial measures have certain shortcomings. In particular, Adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. In addition, the Net debt leverage ratio is subject to the risk that we may not be able to use the cash on the balance sheet to reduce our debt on a dollar-for-dollar basis. Management believes this ratio is useful as a means to evaluate our ability to incur additional indebtedness in the future.

We present the non-GAAP measure “adjusted diluted net income (loss) per share” because our net income (loss) and net income (loss) per share are regularly affected by items that occur at irregular intervals or are non-cash items. We believe that disclosing these measures assists investors, securities analysts and other interested parties in evaluating both our company over time and the relative performance of the companies in our industry.

Forward-Looking Statements

Certain statements in this press release, including those relating to the current expectations, plans, strategies, and the timeline for consummating the take private transaction with Searchlight and BCI by the first quarter of 2025, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, our current expectations, plans, strategies and anticipated financial results. There are a number of risks, uncertainties and conditions that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements, including: significant competition in all parts of our business and among our customer channels; our ability to adapt to rapid technological changes; shifts in our product mix that may result in a decline in operating profitability; continued receipt of support from various funds established under federal and state laws; disruptions in our networks and infrastructure and any related service delays or disruptions could cause us to lose customers and incur additional expenses; cyber-attacks may lead to unauthorized access to confidential customer, personnel and business information that could adversely affect our business; our operations require substantial capital expenditures and our business, financial condition, results of operations and liquidity may be impacted if funds for capital expenditures are not available when needed; our ability to obtain and maintain necessary rights-of-way for our networks; our ability to obtain necessary hardware, software and operational support from third-party vendors; substantial video content costs continue to rise; our ability to enter into new collective bargaining agreements or renew existing agreements; our ability to attract and/or retain certain key management and other personnel in the future; risks associated with acquisitions and the realization of anticipated benefits from such acquisitions; increasing attention to, and evolving expectations for, environmental, social and governance initiatives; unfavorable changes in financial markets could affect pension plan investments; weak economic conditions; the risk that the proposed transaction may not be completed in a timely manner or at all; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require the Company to pay a termination fee; the effect of the announcement or pendency of the proposed transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from the Company’s ongoing business operations; the amount of costs, fees and expenses related to the proposed transaction; the risk that the Company’s stock price may decline significantly if the proposed transaction is not consummated; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and the other risk factors described in Part I, Item 1A of Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 and the other risk factors identified from time to time in the Company’s other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Many of these circumstances are beyond our ability to control or predict. Moreover, forward-looking statements necessarily involve assumptions on our part. These forward-looking statements generally are identified by the words “believe,” “expect,” “anticipate,” “estimate,” “project,” “intend,” “plan,” “should,” “may,” “will,” “would,” “will be,” “will continue” or similar expressions. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements that appear throughout this press release. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to us and speak only as of the date they are made. Except as required under federal securities laws or the rules and regulations of the Securities and Exchange Commission, we disclaim any intention or obligation to update or revise publicly any forward-looking statements.

Tag: [Consolidated-Communications-Earnings]

Consolidated Communications Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
(Unaudited)
 

December 31,

 

December 31,

2023

 

2022

ASSETS
Current assets:
Cash and cash equivalents $

4,765

$

325,852

Short-term investments

 

87,951

 

Accounts receivable, net

121,194

 

119,675

 

Income tax receivable

2,880

 

1,670

 

Prepaid expenses and other current assets

56,843

 

62,996

 

Assets held for sale

70,473

 

 

Total current assets

256,155

 

598,144

 

 
Property, plant and equipment, net

2,449,009

 

2,234,122

 

Investments

8,887

 

10,297

 

Goodwill

814,624

 

929,570

 

Customer relationships, net

18,616

 

43,089

 

Other intangible assets

10,557

 

10,557

 

Other assets

70,578

 

61,315

 

Total assets $

3,628,426

 

$

3,887,094

 

 
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $

60,073

 

$

33,096

 

Advance billings and customer deposits

44,478

 

46,664

 

Accrued compensation

58,151

 

60,903

 

Accrued interest

18,694

 

18,201

 

Accrued expense

114,022

 

95,206

 

Current portion of long-term debt and finance lease obligations

18,425

 

12,834

 

Liabilities held for sale

3,402

 

 

Total current liabilities

317,245

 

266,904

 

 
Long-term debt and finance lease obligations

2,134,916

 

2,129,462

 

Deferred income taxes

210,648

 

274,309

 

Pension and other post-retirement obligations

137,616

 

123,644

 

Other long-term liabilities

48,637

 

47,326

 

Total liabilities

2,849,062

 

2,841,645

 

 
Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 434,266 and 456,343 shares outstanding as of December 31, 2023 and December 31, 2022, respectively; liquidation preference of $520,957 and $477,047 as of December 31, 2023 and December 31, 2022, respectively

372,590

 

328,680

 

 
Shareholders' equity:
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 116,172,568 and 115,167,193 shares outstanding as of December 31, 2023 and December 31, 2022, respectively

1,162

 

1,152

 

Additional paid-in capital

681,757

 

720,442

 

Accumulated deficit

(262,380

)

(11,866

)

Accumulated other comprehensive loss, net

(21,872

)

(610

)

Noncontrolling interest

8,107

 

7,651

 

Total shareholders' equity

406,774

 

716,769

 

Total liabilities, mezzanine equity and shareholders' equity $

3,628,426

 

$

3,887,094

 

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

2023

 

2022

 

2023

 

2022

 
Net revenues $

275,178

 

$

295,976

 

$

1,110,120

 

$

1,191,263

 

Operating expenses:
Cost of services and products

120,539

 

133,652

 

511,866

 

546,661

 

Selling, general and administrative expenses

80,575

 

80,035

 

340,252

 

301,667

 

Transaction costs

11,797

 

 

13,783

 

 

Loss on impairment of assets held for sale

 

 

77,755

 

131,698

 

Loss (gain) on disposal of assets

(2,900

)

23,396

 

9,480

 

4,233

 

Depreciation and amortization

78,321

 

79,614

 

315,162

 

300,166

 

Income (loss) from operations

(13,154

)

(20,721

)

(158,178

)

(93,162

)

Other income (expense):
Interest expense, net of interest income

(41,630

)

(33,236

)

(151,964

)

(124,978

)

Other, net

(3,200

)

3,953

 

8,477

 

13,378

 

Loss from continuing operations before income taxes

(57,984

)

(50,004

)

(301,665

)

(204,762

)

Income tax benefit

(10,699

)

(9,244

)

(51,607

)

(27,058

)

Loss from continuing operations

(47,285

)

(40,760

)

(250,058

)

(177,704

)

 
Discontinued operations:
Income from discontinued operations

 

839

 

 

23,467

 

Gain (loss) on sale of discontinued operations

 

(20

)

 

389,885

 

Income tax expense (benefit)

 

(4,974

)

 

94,999

 

Income from discontinued operations

 

5,793

 

 

318,353

 

 
Net income (loss)

(47,285

)

(34,967

)

(250,058

)

140,649

 

Less: dividends on Series A preferred stock

11,314

 

10,352

 

43,910

 

40,104

 

Less: net income attributable to noncontrolling interest

15

 

171

 

456

 

564

 

Net income (loss) attributable to common shareholders $

(58,614

)

$

(45,490

)

$

(294,424

)

$

99,981

 

 
Net income (loss) per common share - basic and diluted:
Loss from continuing operations $

(0.52

)

$

(0.46

)

$

(2.60

)

$

(1.90

)

Income from discontinued operations

 

0.05

 

 

2.77

 

Net income (loss) per basic and diluted common shares attributable to common shareholders $

(0.52

)

$

(0.41

)

$

(2.60

)

$

0.87

 

Consolidated Communications Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

2023

 

2022

 

2023

 

2022

OPERATING ACTIVITIES
Net income (loss) $

(47,285

)

$

(34,967

)

$

(250,058

)

$

140,649

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization

78,321

 

79,614

 

315,162

 

300,166

 

Deferred income tax expense (benefit)

(11,395

)

(11,055

)

(56,092

)

58,894

 

Cash distributions from wireless partnerships in excess of earnings

 

79

 

 

5,697

 

Pension and post-retirement contributions less than (in excess) of expense

3,414

 

(5,214

)

(5,827

)

(29,205

)

Non-cash, stock-based compensation

2,165

 

2,784

 

7,613

 

10,755

 

Amortization of deferred financing costs and discounts

2,429

 

1,856

 

8,051

 

7,331

 

Loss on impairment of assets held for sale

 

 

77,755

 

131,698

 

Loss (gain) on sale of partnership interests

 

20

 

 

(389,885

)

Loss (gain) on disposal of assets

(2,900

)

23,396

 

9,480

 

4,233

 

Other adjustments, net

574

 

191

 

(1,673

)

(367

)

Changes in operating assets and liabilities, net

(13,329

)

(51,125

)

10,176

 

(16,256

)

Net cash provided by operating activities

11,994

 

5,579

 

114,587

 

223,710

 

INVESTING ACTIVITIES
Purchase of property, plant and equipment, net

(90,838

)

(123,022

)

(515,035

)

(619,981

)

Purchase of investments

 

(262,948

)

 

(302,907

)

Proceeds (disbursements) from sale of assets

(135

)

1,661

 

5,954

 

22,918

 

Proceeds from business dispositions, net

 

79,781

 

 

105,823

 

Proceeds from sale and maturity of investments

 

175,859

 

91,623

 

327,419

 

Proceeds from sale of partnership interests, net

 

(6,601

)

 

482,966

 

Net cash provided by (used in) investing activities

(90,973

)

(135,270

)

(417,458

)

16,238

 

FINANCING ACTIVITIES
Payment of finance lease obligations

(4,079

)

(2,725

)

(15,338

)

(9,836

)

Payment of financing costs

(500

)

(2,603

)

(500

)

(2,603

)

Share repurchases for minimum tax withholding

(1,294

)

(1,178

)

(2,378

)

(1,292

)

Net cash used in financing activities

(5,873

)

(6,506

)

(18,216

)

(13,731

)

Net change in cash and cash equivalents

(84,852

)

(136,197

)

(321,087

)

226,217

 

Cash and cash equivalents at beginning of period

89,617

 

462,049

 

325,852

 

99,635

 

Cash and cash equivalents at end of period $

4,765

 

$

325,852

 

$

4,765

 

$

325,852

 

Consolidated Communications Holdings, Inc.
Consolidated Revenue by Category
(Dollars in thousands)
(Unaudited)
 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

2023

 

2022

 

2023

 

2022

Consumer:
Broadband (Data and VoIP) $

76,458

$

69,002

$

290,847

$

272,146

Voice services

29,935

34,314

125,166

144,853

Video services

7,460

11,876

34,957

54,153

113,853

115,192

450,970

471,152

Commercial:
Data services (includes VoIP)

54,473

56,662

214,707

228,466

Voice services

31,217

34,676

127,909

142,274

Other

10,521

10,320

39,883

43,100

96,211

101,658

382,499

413,840

Carrier:
Data and transport services

31,713

33,752

127,248

137,378

Voice services

2,868

3,685

15,588

14,772

Other

243

338

1,168

1,688

34,824

37,775

144,004

153,838

 
Subsidies

6,902

13,078

27,888

33,382

Network access

22,217

26,308

90,250

104,644

Other products and services

1,171

1,965

14,509

14,407

Total operating revenue $

275,178

$

295,976

$

1,110,120

$

1,191,263

Consolidated Communications Holdings, Inc.
Consolidated Revenue Trend by Category
(Dollars in thousands)
(Unaudited)
 
Three Months Ended
Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022
Consumer:
Broadband (Data and VoIP) $

76,458

$

75,089

$

71,339

$

67,961

$

69,002

Voice services

29,935

31,616

31,352

32,263

34,314

Video services

7,460

8,541

9,362

9,594

11,876

113,853

115,246

112,053

109,818

115,192

Commercial:
Data services (includes VoIP)

54,473

53,870

53,230

53,134

56,662

Voice services

31,217

31,825

32,236

32,631

34,676

Other

10,521

9,228

10,378

9,756

10,320

96,211

94,923

95,844

95,521

101,658

Carrier:
Data and transport services

31,713

31,388

31,224

32,923

33,752

Voice services

2,868

4,090

4,263

4,367

3,685

Other

243

262

313

350

338

34,824

35,740

35,800

37,640

37,775

 
Subsidies

6,902

6,878

7,072

7,036

13,078

Network access

22,217

20,842

22,747

24,444

26,308

Other products and services

1,171

10,025

1,646

1,667

1,965

Total operating revenue $

275,178

$

283,654

$

275,162

$

276,126

$

295,976

Consolidated Communications Holdings, Inc.
Reconciliation of Historical Revenue by Category to Normalized Revenue by Category
(Dollars in thousands)
(Unaudited)
 
Three Months Ended Year Ended
December 31, 2022 December 31, 2022
Historical Adjustments (1) Normalized Historical Adjustments (1) Normalized
Consumer:
Broadband (Data and VoIP) $

69,002

$

(1,138

)

$

67,864

$

272,146

$

(6,732

)

$

265,414

Voice services

34,314

 

(328

)

33,986

 

144,853

 

(2,067

)

142,786

 

Video services

11,876

 

(1,679

)

10,197

 

54,153

 

(9,684

)

44,469

 

115,192

 

(3,145

)

112,047

 

471,152

 

(18,483

)

452,669

 

Commercial:
Data services (includes VoIP)

56,662

 

(2,952

)

53,710

 

228,466

 

(15,355

)

213,111

 

Voice services

34,676

 

(818

)

33,858

 

142,274

 

(4,864

)

137,410

 

Other

10,320

 

(179

)

10,141

 

43,100

 

(1,039

)

42,061

 

101,658

 

(3,949

)

97,709

 

413,840

 

(21,258

)

392,582

 

Carrier:
Data and transport services

33,752

 

(171

)

33,581

 

137,378

 

(4,095

)

133,283

 

Voice services

3,685

 

(2

)

3,683

 

14,772

 

(14

)

14,758

 

Other

338

 

(3

)

335

 

1,688

 

(11

)

1,677

 

37,775

 

(176

)

37,599

 

153,838

 

(4,120

)

149,718

 

 
Subsidies

13,078

 

 

13,078

 

33,382

 

(49

)

33,333

 

Network access

26,308

 

(303

)

26,005

 

104,644

 

(1,715

)

102,929

 

Other products and services

1,965

 

(121

)

1,844

 

14,407

 

(490

)

13,917

 

Total operating revenue $

295,976

 

$

(7,694

)

$

288,282

 

$

1,191,263

 

$

(46,115

)

$

1,145,148

 

 
Notes:
(1) These adjustments reflect the removal of operating revenues for divestitures. We completed the sale of the Company's Ohio and Kansas assets on January 31, 2022 and November 30, 2022, respectively.
Consolidated Communications Holdings, Inc.
Reconciliation of Loss from Continuing Operations to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

2023

 

2022

 

2023

 

2022

Loss from continuing operations $

(47,285

)

$

(40,760

)

$

(250,058

)

$

(177,704

)

Add (subtract):
Income tax benefit

(10,699

)

(9,244

)

(51,607

)

(27,058

)

Interest expense, net

41,630

 

33,236

 

151,964

 

124,978

 

Depreciation and amortization

78,321

 

79,614

 

315,162

 

300,166

 

EBITDA

61,967

 

62,846

 

165,461

 

220,382

 

 
Adjustments to EBITDA (1):
Other, net (2)

20,697

 

11,902

 

57,534

 

29,656

 

Pension/OPEB benefit

4,751

 

(3,412

)

1,356

 

(12,309

)

Loss (gain) on disposal of assets

(2,900

)

23,396

 

9,480

 

4,233

 

Loss on impairment

 

 

77,755

 

131,698

 

Non-cash compensation (3)

2,165

 

2,784

 

7,613

 

10,755

 

Adjusted EBITDA from continuing operations

86,680

 

97,516

 

319,199

 

384,415

 

Investment distributions from discontinued operations

 

4,142

 

 

29,165

 

Adjusted EBITDA $

86,680

 

$

101,658

 

$

319,199

 

$

413,580

 

 
Notes:
(1) These adjustments reflect those required or permitted by the lenders under our credit agreement.
(2) Other, net includes income attributable to noncontrolling interests, acquisition and non-recurring related costs, and certain miscellaneous items.
(3) Represents compensation expenses in connection with our Restricted Share Plan, which because of the non-cash nature of the expenses are excluded from adjusted EBITDA.
Consolidated Communications Holdings, Inc.
Reconciliation of Loss Attributable to Common Shareholders from Continuing Operations to Adjusted Loss from Continuing Operations and Calculation of Adjusted Diluted Net Income (Loss) Per Common Share
(Dollars in thousands, except per share amounts)
(Unaudited)
 

Three Months Ended

 

Year Ended

December 31,

 

December 31,

2023

 

2022

 

2023

 

2022

Loss from continuing operations $

(47,285

)

$

(40,760

)

$

(250,058

)

$

(177,704

)

Less: dividends on Series A preferred stock

11,314

 

10,352

 

43,910

 

40,104

 

Less: net income attributable to noncontrolling interest

15

 

171

 

456

 

564

 

Loss attributable to common shareholders from continuing operations

(58,614

)

(51,283

)

(294,424

)

(218,372

)

 
Adjustments to loss attributable to common shareholders:
Dividends on Series A preferred stock

11,314

 

10,352

 

43,910

 

40,104

 

Integration and severance related costs, net of tax

9,551

 

1,498

 

26,604

 

3,081

 

Loss on impairment of assets held for sale

 

 

77,755

 

131,698

 

Loss (gain) on disposition of assets, net of tax

(2,141

)

17,354

 

6,999

 

3,140

 

Non-cash pension settlement charge, net of tax

4,727

 

 

4,727

 

 

Non-cash interest expense for swaps, net of tax

 

(339

)

(732

)

(1,274

)

Tax impact of non-deductible goodwill

2,618

 

2,931

 

 

(8,187

)

Change in deferred tax rate

112

 

(2,417

)

112

 

(3,062

)

Other, tax

1,749

 

622

 

1,749

 

622

 

Non-cash stock compensation, net of tax

1,598

 

2,065

 

5,621

 

7,977

 

Adjusted net loss from continuing operations $

(29,086

)

$

(19,217

)

$

(127,679

)

$

(44,273

)

 
Weighted average number of common shares outstanding

113,338

 

111,929

 

113,096

 

111,754

 

 
Adjusted diluted net income (loss) per common share:
Adjusted net loss from continuing operations $

(0.26

)

$

(0.17

)

$

(1.13

)

$

(0.40

)

Adjusted income from discontinued operations excluding gain on sale of partnership interests, net of tax

 

0.01

 

 

0.16

 

$

(0.26

)

$

(0.16

)

$

(1.13

)

$

(0.24

)

 
Notes:
Calculations above assume a 26.17% effective tax rate for the three months and year ended December 31, 2023 and 25.83% effective tax rate for the three months and year ended December 31, 2022.
Consolidated Communications Holdings, Inc.
Reconciliation of Total Net Debt to LTM Adjusted EBITDA Ratio
(Dollars in thousands)
(Unaudited)
 

December 31,

2023

Long-term debt and finance lease obligations:
Term loans, net of discount $7,017 $

992,858

 

6.50% Senior secured notes due 2028

750,000

 

5.00% Senior secured notes due 2028

400,000

 

Finance leases

39,240

 

Total debt as of December 31, 2023

2,182,098

 

Less: deferred debt issuance costs

(28,757

)

Less: cash, cash equivalents and short-term investments

(4,765

)

Total net debt as of December 31, 2023 $

2,148,576

 

 
Adjusted EBITDA for the 12 months ended December 31, 2023 $

319,199

 

 
Total Net Debt to last 12 months Adjusted EBITDA

6.73x

Consolidated Communications Holdings, Inc.

Key Operating Metrics

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

2023

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

FY

 

Q1

 

Q2

 

Q3

 

Q4

 

FY

Passings
Total Fiber Gig+ Capable Passings (1)(5)(6)

689,406

 

831,779

 

947,974

 

1,008,660

 

1,008,660

 

1,062,518

 

1,119,956

 

1,187,076

 

1,236,208

 

1,236,208

 

Total DSL/Copper Passings (2)(3)(5)(6)

2,059,025

 

1,920,214

 

1,807,381

 

1,617,077

 

1,617,077

 

1,564,889

 

1,509,875

 

1,447,539

 

1,401,535

 

1,401,535

 

Total Passings (1)(2)(3)(5)(6)

2,748,431

 

2,751,993

 

2,755,355

 

2,625,737

 

2,625,737

 

2,627,407

 

2,629,831

 

2,634,615

 

2,637,743

 

2,637,743

 

% Fiber Gig+ Coverage/Total Passings

25

%

30

%

34

%

38

%

38

%

40

%

43

%

45

%

47

%

47

%

 
Consumer Broadband Connections
Fiber Gig+ Capable (3)

93,812

 

103,455

 

115,598

 

122,872

 

122,872

 

135,209

 

153,860

 

175,748

 

195,195

 

195,195

 

DSL/Copper (2)(3)

286,338

 

277,758

 

266,314

 

244,586

 

244,586

 

234,653

 

222,969

 

210,473

 

198,024

 

198,024

 

Total Consumer Broadband Connections (2)(3)

380,150

 

381,213

 

381,912

 

367,458

 

367,458

 

369,862

 

376,829

 

386,221

 

393,219

 

393,219

 

 
Consumer Broadband Net Adds
Total Fiber Gig+ Capable Net Adds (7)

7,690

 

9,643

 

12,143

 

10,599

 

40,075

 

12,337

 

18,651

 

21,888

 

19,447

 

72,323

 

DSL/Copper Net Adds (7)

(8,544

)

(8,580

)

(11,444

)

(10,783

)

(39,351

)

(9,933

)

(11,684

)

(12,496

)

(12,449

)

(46,562

)

Total Consumer Broadband Net Adds (7)

(854

)

1,063

 

699

 

(184

)

724

 

2,404

 

6,967

 

9,392

 

6,998

 

25,761

 

 
Consumer Broadband Penetration %
Fiber Gig+ Capable (on fiber passings)

13.6

%

12.4

%

12.2

%

12.2

%

12.2

%

12.7

%

13.7

%

14.8

%

15.8

%

15.8

%

DSL/Copper (on DSL/copper passings)

13.9

%

14.5

%

14.7

%

15.1

%

15.1

%

15.0

%

14.8

%

14.5

%

14.1

%

14.1

%

Total Consumer Broadband Penetration %

13.8

%

13.9

%

13.9

%

14.0

%

14.0

%

14.1

%

14.3

%

14.7

%

14.9

%

14.9

%

 
Consumer Average Revenue Per Unit (ARPU)
Fiber Gig+ Capable $

63.88

 

$

64.95

 

$

65.61

 

$

67.14

 

$

65.42

 

$

67.51

 

$

68.29

 

$

68.78

 

$

68.14

 

$

66.90

 

DSL/Copper $

50.78

 

$

52.36

 

$

53.87

 

$

53.55

 

$

53.36

 

$

53.21

 

$

55.88

 

$

57.18

 

$

56.27

 

$

55.83

 

 
Churn
Fiber Consumer Broadband Churn (7)

0.9

%

1.1

%

1.2

%

1.1

%

1.1

%

1.0

%

1.3

%

1.3

%

1.2

%

1.2

%

DSL/Copper Consumer Broadband Churn (7)

1.3

%

1.6

%

1.8

%

1.7

%

1.6

%

1.5

%

1.7

%

2.0

%

2.0

%

1.8

%

 
Consumer Broadband Revenue ($ in thousands)
Fiber Broadband Revenue (4) $

17,242

 

$

19,218

 

$

21,558

 

$

24,016

 

$

82,034

 

$

26,136

 

$

29,613

 

$

34,004

 

$

37,916

 

$

127,668

 

Copper and Other Broadband Revenue

48,669

 

48,374

 

48,083

 

44,986

 

190,112

 

41,825

 

41,726

 

41,085

 

38,542

 

163,179

 

Total Consumer Broadband Revenue $

65,911

 

$

67,592

 

$

69,641

 

$

69,002

 

$

272,146

 

$

67,961

 

$

71,339

 

$

75,089

 

$

76,458

 

$

290,847

 

 
Consumer Voice Connections (3)

316,634

 

306,458

 

294,441

 

276,779

 

276,779

 

267,509

 

258,680

 

249,081

 

239,587

 

239,587

 

 
Video Connections (3)

58,812

 

55,225

 

51,339

 

35,039

 

35,039

 

32,426

 

28,934

 

26,158

 

21,900

 

21,900

 

 
Fiber route network miles (long-haul, metro and FttP)

54,239

 

56,093

 

57,498

 

57,865

 

57,865

 

57,569

 

58,836

 

59,915

 

60,438

 

60,438

 

 
On-net buildings (3)

15,446

 

15,618

 

15,715

 

14,427

 

14,427

 

14,520

 

14,735

 

14,928

 

15,105

 

15,105

 

 
Notes:
(1) In Q1 2021, the Company launched a multi-year fiber build plan to upgrade 1.6 million passings or 70% of our service area to fiber Gig+ capable services. As of December 31, 2023, 227,548 passings for 2023 were upgraded to FttP and total fiber passings were 1,236,208 or 47% of the Company's service area.
(2) The sale of the non-core Ohio operations resulted in a reduction of approximately 5,658 DSL/Copper passings and 3,560 DSL/Copper broadband connections in the first quarter of 2022.
(3) The sale of the net assets of our Kansas City operations in the fourth quarter of 2022 resulted in a reduction of approximately 135,144 DSL/Copper passings, 3,325 fiber broadband connections, 10,945 DSL/Copper broadband connections, 6,670 consumer voice connections, 13,425 video connections and 1,415 on-net buildings. Prior period amounts have not been adjusted to reflect the sale.
(4) Fiber broadband revenue includes revenue from our Kansas City operations of approximately $0.3 million for the quarter ended December 31, 2022 and approximately $0.5 million for each of the quarters ended March 31, 2022 through September 30, 2022. Amounts have not been adjusted to reflect the sale.
(5) Passings counts are estimates of single family units, multi-dwelling units, and multi-tenant units within consumer, small business and enterprise. These counts are based upon the information available at this time and are subject to updates as additional information becomes available.
(6) When a passing is both fiber and DSL/Copper capable it is counted as a fiber passing.
(7) Consumer Broadband net adds and churn have been normalized to reflect the divestitures of our Kansas City and Ohio operations.

 

Investor and Media Contacts
Philip Kranz, Investor Relations
+1 217-238-8480
Philip.kranz@consolidated.com

Jennifer Spaude, Media Relations
+1 507-386-3765
Jennifer.spaude@consolidated.com

Source: Consolidated Communications