Consolidated Communications Announces Second Quarter 2024 Financial Results

Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) (the “Company” or “Consolidated”), a top 10 fiber provider in the U.S., today reported results for second quarter 2024.

Second Quarter 2024 Results

  • Revenue totaled $268.7 million
  • Overall consumer revenue was $112.7 million
  • Consumer fiber broadband revenue was $45.4 million
  • Total consumer broadband net adds were 3,6701
  • Consumer broadband revenue was $81.4 million
  • Commercial data services revenue was $54.6 million
  • Carrier data-transport revenue was $30.3 million
  • Net loss was ($66.7 million). Adjusted EBITDA was $84.2 million
  • Total committed capital expenditures were $102.7 million

Cost of services and products and selling, general and administrative expenses collectively decreased $3.2 million versus the prior year largely due to lower video programming costs, a reduction in contract labor costs, and lower salaries driven by certain cost savings initiatives. The decrease was partly offset by higher professional fees for various system enhancements, customer service improvements and strategic initiatives.

Net interest expense was $44.1 million, an increase of $7.2 million versus the prior year, primarily as a result of higher interest rates on the term loan, interest from borrowings on the revolving credit facility, and decreased interest income due to lower cash holdings in the current quarter. At June 30, 2024, the Company had 72% of its total outstanding debt at a fixed rate through September 2026. As of June 30, 2024, the weighted average cost of debt was 7.18%.

Net loss in the second quarter of 2024 was ($66.7 million) compared to net loss of ($119.0 million) in the second quarter of 2023. The net loss in 2023 included an impairment loss of ($77.8 million) recorded in relation to the Washington assets. Net loss per share was ($0.58) in the second quarter of 2024 as compared to net loss per share of ($1.05) in the second quarter of 2023. 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 ($0.37) compared to ($0.28) in the second quarter of 2023.

_____________

1 Normalized for the divestiture of the Company’s Washington assets, which closed on May 1, 2024.

Refer to the tables contained in this press release for a reconciliation of all non-GAAP measures.

Capital Expenditures

Total committed capital expenditures were $102.7 million, driven by 32,961 new fiber passings, second quarter fiber adds, and the usage of existing inventory for install and build activity.

Capital Structure

As of June 30, 2024, the Company maintained liquidity with cash and short-term investments of approximately $5 million, as well as $75 million of available borrowing capacity under the Company’s revolving credit facility and $80 million undrawn under its term loan agreement with Searchlight CVL AGG, L.P. as lender, in each case, subject to customary conditions.

Washington Asset Sale

On May 1, 2024, Consolidated completed the sale of its Washington assets.

Pending Transaction

As previously announced on Oct. 16, 2023, Consolidated entered into an agreement to be acquired by affiliates of Searchlight Capital Partners, L.P. and British Columbia Investment Management Corporation 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 shares held by 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 in late fourth quarter 2024 or early first quarter 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 63,000 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,” “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). EBITDA is defined as net income (loss) 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.

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.

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 Capital Partners, L.P. and British Columbia Investment Management Corporation in late fourth quarter 2024 or early first quarter 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)
 
 

June 30,

 

December 31,

2024

 

2023

ASSETS
Current assets:
Cash and cash equivalents $

5,327

 

$

4,765

 

Accounts receivable, net

127,359

 

121,194

 

Income tax receivable

3,470

 

2,880

 

Prepaid expenses and other current assets

57,321

 

56,843

 

Assets held for sale

 

70,473

 

Total current assets

193,477

 

256,155

 

 
Property, plant and equipment, net

2,494,789

 

2,449,009

 

Investments

8,628

 

8,887

 

Goodwill

814,624

 

814,624

 

Customer relationships, net

10,470

 

18,616

 

Other intangible assets

10,557

 

10,557

 

Other assets

77,771

 

70,578

 

Total assets $

3,610,316

 

$

3,628,426

 

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

39,820

 

$

60,073

 

Advance billings and customer deposits

48,539

 

44,478

 

Accrued compensation

56,243

 

58,151

 

Accrued interest

19,931

 

18,694

 

Accrued expense

83,645

 

114,022

 

Current portion of long-term debt and finance lease obligations

20,601

 

18,425

 

Liabilities held for sale

 

3,402

 

Total current liabilities

268,779

 

317,245

 

 
Long-term debt and finance lease obligations

2,268,663

 

2,134,916

 

Deferred income taxes

189,987

 

210,648

 

Pension and other post-retirement obligations

135,488

 

137,616

 

Other long-term liabilities

49,350

 

48,637

 

Total liabilities

2,912,267

 

2,849,062

 

 
Series A Preferred Stock, par value $0.01 per share; 10,000,000 shares authorized, 434,266 shares outstanding as of June 30, 2024 and December 31, 2023; liquidation preference of $544,335 and $520,957 as of June 30, 2024 and December 31, 2023, respectively

395,969

 

372,590

 

 
Shareholders' equity:
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 118,477,091 and 116,172,568 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

1,185

 

1,162

 

Additional paid-in capital

662,422

 

681,757

 

Accumulated deficit

(352,849

)

(262,380

)

Accumulated other comprehensive loss, net

(17,043

)

(21,872

)

Noncontrolling interest

8,365

 

8,107

 

Total shareholders' equity

302,080

 

406,774

 

Total liabilities, mezzanine equity and shareholders' equity $

3,610,316

 

$

3,628,426

 

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

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

2024

 

2023

 

2024

 

2023

 
Net revenues $

268,709

 

$

275,162

 

$

543,384

 

$

551,288

 

Operating expenses:
Cost of services and products

114,006

 

126,967

 

227,465

 

258,905

 

Selling, general and administrative expenses

93,288

 

83,565

 

177,243

 

164,849

 

Transaction costs

3,175

 

 

6,100

 

 

Loss on impairment of assets held for sale

 

77,755

 

 

77,755

 

Loss on disposal of assets

 

2,384

 

 

5,688

 

Depreciation and amortization

79,809

 

79,538

 

160,442

 

157,237

 

Loss from operations

(21,569

)

(95,047

)

(27,866

)

(113,146

)

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

(44,132

)

(36,903

)

(86,583

)

(70,763

)

Other, net

292

 

5,410

 

1,885

 

8,168

 

Loss before income taxes

(65,409

)

(126,540

)

(112,564

)

(175,741

)

Income tax benefit

(10,581

)

(18,448

)

(22,353

)

(30,688

)

Net loss

(54,828

)

(108,092

)

(90,211

)

(145,053

)

Less: dividends on Series A preferred stock

11,692

 

10,704

 

23,379

 

21,291

 

Less: net income attributable to noncontrolling interest

145

 

161

 

258

 

304

 

Net loss attributable to common shareholders $

(66,665

)

$

(118,957

)

$

(113,848

)

$

(166,648

)

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

(0.58

)

$

(1.05

)

$

(1.00

)

$

(1.47

)

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

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

2024

 

2023

 

2024

 

2023

OPERATING ACTIVITIES
Net loss $

(54,828

)

$

(108,092

)

$

(90,211

)

$

(145,053

)

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

79,809

 

79,538

 

160,442

 

157,237

 

Deferred income tax expense (benefit)

(10,580

)

(19,020

)

(22,371

)

(31,259

)

Pension and post-retirement contributions in excess of expense

(1,577

)

(2,676

)

(3,279

)

(5,537

)

Non-cash, stock-based compensation

3,030

 

2,388

 

4,711

 

3,187

 

Amortization of deferred financing costs and discounts

1,985

 

1,874

 

3,942

 

3,721

 

Loss on impairment of assets held for sale

 

77,755

 

 

77,755

 

Loss on disposal of assets

 

2,384

 

 

5,688

 

Other adjustments, net

1,170

 

(2,443

)

(113

)

(2,861

)

Changes in operating assets and liabilities, net

(27,211

)

(19,475

)

(55,653

)

4,441

 

Net cash provided by (used in) operating activities

(8,202

)

12,233

 

(2,532

)

67,319

 

INVESTING ACTIVITIES
Purchase of property, plant and equipment, net

(85,545

)

(150,034

)

(183,577

)

(280,860

)

Proceeds from sale of assets

156

 

6,509

 

232

 

6,801

 

Proceeds from business dispositions, net

67,458

 

 

67,458

 

 

Proceeds from sale and maturity of investments

 

90,000

 

714

 

91,623

 

Net cash used in investing activities

(17,931

)

(53,525

)

(115,173

)

(182,436

)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt

30,000

 

 

130,000

 

 

Payment of finance lease obligations

(5,317

)

(4,007

)

(10,154

)

(7,121

)

Payment of financing costs

(430

)

 

(934

)

 

Share repurchases for minimum tax withholding

(156

)

 

(645

)

(1,036

)

Net cash provided by (used in) financing activities

24,097

 

(4,007

)

118,267

 

(8,157

)

Net change in cash and cash equivalents

(2,036

)

(45,299

)

562

 

(123,274

)

Cash and cash equivalents at beginning of period

7,363

 

247,877

 

4,765

 

325,852

 

Cash and cash equivalents at end of period $

5,327

 

$

202,578

 

$

5,327

 

$

202,578

 

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

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

2024

 

2023

 

2024

 

2023

Consumer:
Broadband (Data and VoIP) $

81,405

$

71,339

$

161,287

$

139,300

Voice services

27,965

31,352

56,301

63,615

Video services

3,312

9,362

9,938

18,956

112,682

112,053

227,526

221,871

Commercial:
Data services (includes VoIP)

54,571

53,230

109,252

106,364

Voice services

30,509

32,236

61,220

64,867

Other

8,295

10,378

17,259

20,134

93,375

95,844

187,731

191,365

Carrier:
Data and transport services

30,263

31,224

61,311

64,147

Voice services

3,610

4,263

7,404

8,630

Other

284

313

519

663

34,157

35,800

69,234

73,440

 
Subsidies

6,373

7,072

13,179

14,108

Network access

21,143

22,747

43,611

47,191

Other products and services

979

1,646

2,103

3,313

Total operating revenue $

268,709

$

275,162

$

543,384

$

551,288

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

Three Months Ended

Q2 2024

 

Q1 2024

 

Q4 2023

 

Q3 2023

 

Q2 2023

Consumer:
Broadband (Data and VoIP) $

81,405

$

79,882

$

76,458

$

75,089

$

71,339

Voice services

27,965

28,336

29,935

31,616

31,352

Video services

3,312

6,626

7,460

8,541

9,362

112,682

114,844

113,853

115,246

112,053

Commercial:
Data services (includes VoIP)

54,571

54,681

54,473

53,870

53,230

Voice services

30,509

30,711

31,217

31,825

32,236

Other

8,295

8,964

10,521

9,228

10,378

93,375

94,356

96,211

94,923

95,844

Carrier:
Data and transport services

30,263

31,048

31,713

31,388

31,224

Voice services

3,610

3,794

2,868

4,090

4,263

Other

284

235

243

262

313

34,157

35,077

34,824

35,740

35,800

 
Subsidies

6,373

6,806

6,902

6,878

7,072

Network access

21,143

22,468

22,217

20,842

22,747

Other products and services

979

1,124

1,171

10,025

1,646

Total operating revenue $

268,709

$

274,675

$

275,178

$

283,654

$

275,162

 
Consolidated Communications Holdings, Inc.
Reconciliation of Historical Revenue by Category to Normalized Revenue by Category
(Dollars in thousands)
(Unaudited)
 
 

Three Months Ended

 

Three Months Ended

June 30, 2024

 

June 30, 2023

Historical

 

Adjustments (1)

 

Normalized

 

Historical

 

Adjustments (1)

 

Normalized

Consumer:
Broadband (Data and VoIP) $

81,405

$

(659

)

$

80,746

$

71,339

$

(2,065

)

$

69,274

Voice services

27,965

(228

)

27,737

31,352

(769

)

30,583

Video services

3,312

 

3,312

9,362

(172

)

9,190

112,682

(887

)

111,795

112,053

(3,006

)

109,047

Commercial:
Data services (includes VoIP)

54,571

(165

)

54,406

53,230

(434

)

52,796

Voice services

30,509

(139

)

30,370

32,236

(445

)

31,791

Other

8,295

(6

)

8,289

10,378

(33

)

10,345

93,375

(310

)

93,065

95,844

(912

)

94,932

Carrier:
Data and transport services

30,263

(6

)

30,257

31,224

(20

)

31,204

Voice services

3,610

 

3,610

4,263

(5

)

4,258

Other

284

(4

)

280

313

(13

)

300

34,157

(10

)

34,147

35,800

(38

)

35,762

 
Subsidies

6,373

(204

)

6,169

7,072

(621

)

6,451

Network access

21,143

(126

)

21,017

22,747

(420

)

22,327

Other products and services

979

(13

)

966

1,646

(59

)

1,587

Total operating revenue $

268,709

$

(1,550

)

$

267,159

$

275,162

$

(5,056

)

$

270,106

 
Notes:
(1) These adjustments reflect the removal of operating revenues for divestitures. We completed the sale of the Company's Washington operations on May 1, 2024.
 
Consolidated Communications Holdings, Inc.
Reconciliation of Historical Revenue by Category to Normalized Revenue by Category
(Dollars in thousands)
(Unaudited)
 
 

Six Months Ended

 

Six Months Ended

June 30, 2024

 

June 30, 2023

Historical

 

Adjustments (1)

 

Normalized

 

Historical

 

Adjustments (1)

 

Normalized

Consumer:
Broadband (Data and VoIP) $

161,287

$

(2,644

)

$

158,643

$

139,300

$

(4,091

)

$

135,209

Voice services

56,301

(930

)

55,371

63,615

(1,547

)

62,068

Video services

9,938

 

9,938

18,956

(344

)

18,612

227,526

(3,574

)

223,952

221,871

(5,982

)

215,889

Commercial:
Data services (includes VoIP)

109,252

(690

)

108,562

106,364

(851

)

105,513

Voice services

61,220

(573

)

60,647

64,867

(923

)

63,944

Other

17,259

(33

)

17,226

20,134

(52

)

20,082

187,731

(1,296

)

186,435

191,365

(1,826

)

189,539

Carrier:
Data and transport services

61,311

(25

)

61,286

64,147

(40

)

64,107

Voice services

7,404

(1

)

7,403

8,630

(5

)

8,625

Other

519

(17

)

502

663

(26

)

637

69,234

(43

)

69,191

73,440

(71

)

73,369

 
Subsidies

13,179

(812

)

12,367

14,108

(1,231

)

12,877

Network access

43,611

(541

)

43,070

47,191

(858

)

46,333

Other products and services

2,103

(56

)

2,047

3,313

(119

)

3,194

Total operating revenue $

543,384

$

(6,322

)

$

537,062

$

551,288

$

(10,087

)

$

541,201

 
Notes:
(1) These adjustments reflect the removal of operating revenues from divestitures. We completed the sale of the Company's Washington operations on May 1, 2024.
 
Consolidated Communications Holdings, Inc.
Reconciliation of Net Loss to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
 
 

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

2024

 

2023

 

2024

 

2023

Net loss $

(54,828

)

$

(108,092

)

$

(90,211

)

$

(145,053

)

Add (subtract):
Income tax benefit

(10,581

)

(18,448

)

(22,353

)

(30,688

)

Interest expense, net

44,132

 

36,903

 

86,583

 

70,763

 

Depreciation and amortization

79,809

 

79,538

 

160,442

 

157,237

 

EBITDA

58,532

 

(10,099

)

134,461

 

52,259

 

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

22,616

 

5,441

 

33,343

 

15,471

 

Pension/OPEB benefit

62

 

(931

)

124

 

(2,072

)

Loss on disposal of assets

 

2,384

 

 

5,688

 

Loss on impairment

 

77,755

 

 

77,755

 

Non-cash compensation (3)

3,030

 

2,388

 

4,711

 

3,187

 

Adjusted EBITDA $

84,240

 

$

76,938

 

$

172,639

 

$

152,288

 

 
 
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, transaction 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 to Adjusted Loss and Calculation of Adjusted Diluted Net Loss Per Common Share
(Dollars in thousands, except per share amounts)
(Unaudited)
 

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

2024

 

2023

 

2024

 

2023

Net loss $

(54,828

)

$

(108,092

)

$

(90,211

)

$

(145,053

)

Less: dividends on Series A preferred stock

11,692

 

10,704

 

23,379

 

21,291

 

Less: net income attributable to noncontrolling interest

145

 

161

 

258

 

304

 

Net loss attributable to common shareholders

(66,665

)

(118,957

)

(113,848

)

(166,648

)

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

11,692

 

10,704

 

23,379

 

21,291

 

Transaction and severance related costs, net of tax

4,902

 

1,314

 

8,093

 

3,962

 

Loss on impairment of assets held for sale

 

77,755

 

 

77,755

 

Loss on disposition of assets, net of tax

 

1,761

 

 

4,202

 

Non-cash interest expense for swaps, net of tax

 

(293

)

 

(631

)

Tax impact of non-deductible goodwill

6,112

 

(5,901

)

6,112

 

(5,901

)

Non-cash stock compensation, net of tax

2,238

 

1,764

 

3,479

 

2,354

 

Adjusted net loss $

(41,721

)

$

(31,853

)

$

(72,785

)

$

(63,616

)

 
Weighted average number of common shares outstanding

114,255

 

113,050

 

114,195

 

112,995

 

 
Adjusted diluted net loss per common share $

(0.37

)

$

(0.28

)

$

(0.64

)

$

(0.56

)

 
Notes:
Calculations above assume a 26.15% effective tax rate for the three and six months ended June 30, 2024 and 26.13% effective tax rate for the three and six months ended June 30, 2023.
 
Consolidated Communications Holdings, Inc.
Key Operating Metrics
(Unaudited)
 

 

 

2023

 

2024

FY 2022

 

Q1

 

Q2

 

Q3

 

Q4

 

FY

 

Q1

 

Q2

Passings
Total Fiber Gig+ Capable Passings (1)(2)(3)(5)

1,008,660

 

1,062,518

 

1,119,956

 

1,187,076

 

1,236,208

 

1,236,208

 

1,246,991

 

1,273,926

 

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

1,617,077

 

1,564,889

 

1,509,875

 

1,447,539

 

1,401,535

 

1,401,535

 

1,392,698

 

1,324,438

 

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

2,625,737

 

2,627,407

 

2,629,831

 

2,634,615

 

2,637,743

 

2,637,743

 

2,639,689

 

2,598,364

 

% Fiber Gig+ Coverage/Total Passings

38

%

40

%

43

%

45

%

47

%

47

%

47

%

49

%

 
Consumer Broadband Connections
Fiber Gig+ Capable (5)

122,872

 

135,209

 

153,860

 

175,748

 

195,195

 

195,195

 

213,997

 

231,187

 

DSL/Copper (5)

244,586

 

234,653

 

222,969

 

210,473

 

198,024

 

198,024

 

185,560

 

163,199

 

Total Consumer Broadband Connections (5)

367,458

 

369,862

 

376,829

 

386,221

 

393,219

 

393,219

 

399,557

 

394,386

 

 
Consumer Broadband Net Adds
Total Fiber Gig+ Capable Net Adds (6)

40,075

 

12,337

 

18,651

 

21,888

 

19,447

 

72,323

 

18,802

 

17,759

 

DSL/Copper Net Adds (6)

(39,351

)

(9,933

)

(11,684

)

(12,496

)

(12,449

)

(46,562

)

(12,464

)

(14,089

)

Total Consumer Broadband Net Adds (6)

724

 

2,404

 

6,967

 

9,392

 

6,998

 

25,761

 

6,338

 

3,670

 

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

12.2

%

12.7

%

13.7

%

14.8

%

15.8

%

15.8

%

17.2

%

18.1

%

DSL/Copper (on DSL/copper passings)

15.1

%

15.0

%

14.8

%

14.5

%

14.1

%

14.1

%

13.3

%

12.3

%

Total Consumer Broadband Penetration %

14.0

%

14.1

%

14.3

%

14.7

%

14.9

%

14.9

%

15.1

%

15.2

%

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

65.42

 

$

67.51

 

$

68.29

 

$

68.78

 

$

68.14

 

$

66.90

 

$

67.96

 

$

67.95

 

DSL/Copper $

53.36

 

$

53.21

 

$

55.88

 

$

57.18

 

$

56.27

 

$

55.83

 

$

59.69

 

$

60.88

 

 
Churn
Fiber Consumer Broadband Churn (6)

1.1

%

1.0

%

1.3

%

1.3

%

1.2

%

1.2

%

1.1

%

1.4

%

DSL/Copper Consumer Broadband Churn (6)

1.6

%

1.5

%

1.7

%

2.0

%

2.0

%

1.8

%

2.0

%

2.4

%

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

82,034

 

$

26,136

 

$

29,613

 

$

34,004

 

$

37,916

 

$

127,668

 

$

41,613

 

$

45,414

 

Copper and Other Broadband Revenue

190,112

 

41,825

 

41,726

 

41,085

 

38,542

 

163,179

 

38,268

 

35,992

 

Total Consumer Broadband Revenue $

272,146

 

$

67,961

 

$

71,339

 

$

75,089

 

$

76,458

 

$

290,847

 

$

79,882

 

$

81,406

 

 
Consumer Voice Connections (5)

276,779

 

267,509

 

258,680

 

249,081

 

239,587

 

239,587

 

229,523

 

213,472

 

 
Video Connections

35,039

 

32,426

 

28,934

 

26,158

 

21,900

 

21,900

 

17,620

 

134

 

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

57,865

 

57,569

 

58,836

 

59,915

 

60,438

 

60,438

 

61,366

 

63,343

 

 
On-net buildings

14,427

 

14,520

 

14,735

 

14,928

 

15,105

 

15,105

 

15,254

 

15,381

 

 
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. During the three and six months ended June 30, 2024, an additional 32,961 and 43,744 passings were upgraded to FttP, respectively, and total fiber passings were 1,273,926 or 49% of the Company's service area at June 30, 2024.
(2) 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.
(3) When a passing is both fiber and DSL/Copper capable it is counted as a fiber passing.
(4) Fiber broadband revenue includes revenue from our Kansas City operations, which was sold in the fourth quarter of 2022, of approximately $1.8 million for the year ended December 31, 2022. Amounts have not been adjusted to reflect the sale.
(5) The sale of our Washington operations in the second quarter of 2024 resulted in a reduction of approximately 37,679 DSL/Copper passings, 6,026 fiber passings, 8,272 DSL/Copper broadband connections, 569 fiber broadband connections, and 4,674 consumer voice connections. Prior period amounts have not been adjusted to reflect the sale.
(6) Consumer Broadband net adds and churn for the year ended December 31, 2022 have been normalized to reflect the divestitures of our Kansas City and Ohio operations, which were sold in 2022. Additionally, for the three months ended June 30, 2024, Consumer Broadband net adds and churn have been normalized to reflect the divestiture of the Washington operations, which was sold in the second quarter of 2024.

 

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