Shenandoah Telecommunications (SHEN) Q2 2010 Earnings Call August 5, 2010 3:00 pm ET Executives Adele Skolits - CFO, VP, Finance Earle MacKenzie - EVP, COO Christopher French, President Analysts Richard Prentiss – Raymond James Barry Sine - CapStone Investments Greg Burns - Sidoti & Company Presentation Operator
Shentel provides a detailed discussion of various risk factors in our SEC filings, which you are strongly encouraged to review. You’re cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements.Also, in an effort to provide useful information to investors, we note on slide three that our comments today include non-GAAP financial measures. Details on these measures, including why we use them and reconciliations to the most comparable GAAP measures, are included in our FCC filings. I’ll turn the call now, over to Chris. Christopher French Thank you, Adele. We appreciate everyone joining us this afternoon. The second quarter 2010 was a very busy one for our company, and we’ve had many significant accomplishments since our last quarterly call. I’ve listed some of the highlights on Slide 5. Last Friday, we closed on the acquisition of Jet Broadband. At close, the Jet Broadband network past approximately 115,000 homes, and had approximately 66,000 revenue generating units or RGUs. This acquisition was funded with new credit facilities, which Adele will discuss later on this call. In our existing cable business, we’re pleased with the 7% increase and RGUs during the quarter. These results are driven by the substantial progress we’ve made in expanding voice services to 40% of the homes past and high-speed internet to nearly 60% of the homes past. In early July, we signed an amendment to the current contract with Sprint-Nextel to allow Shentel to sell Virgin Mobile and Boost Prepaid Wireless Services. With the signing, these prepaid products and services became available in the Shentel Wireless service area through Sprint stores, operated by Shentel, as well as hundreds of other locations. Shentel also acquired the rights to future revenues related to the approximately 50,000 existing Virgin Mobile customers in our service area.
Late in the second quarter, we also began offering 3G-4G data cards. And more recently, handsets. This happened in conjunction with 4G services becoming available in our York and our Harrisburg, Pennsylvania markets.A third highlight was the final distribution of the assets from our defined benefit pension plan, which happened in early June. We recorded significant incremental non-recurring expenses in the second quarter as a result the final distribution and the curtailment of the supplemental executive retirement plan. As you can see on Slide 6, on a consolidated basis, we’re reporting net income of $4.6 million for the quarter compared to 6.7 million from the second quarter of 2009. Net income from continuing operations was $4.5 million for the quarter as compared to 6.8 million in the second quarter of '09. The 2010 results from continuing operations include 3.8 million before taxes, and 2.2 million after taxes of expense related to the just-mentioned retirement plans. On Slide 7, we’ve listed highlights of our progress in the wireless segment of our business. Post-paid wireless PCS customers are up 5% from a year ago. Continued growth was helped by churn of just 1.7% , relative to the 1.9% for the first quarter of 2010. We’ve still have not reached agreement for the sale of our converged services business, although we continue to work with potential buyers. This process remains challenging as potential buyers actively work to obtain funding. We continue to expect that a sale will ultimately be achieved. I’ll now turn the call back to Adele to review our financial results in more detail. Adele Skolits Thank you, Chris. I’ll begin on Slide 9. For Q2 ‘10, earnings per share from continuing operations were $0.19 in comparison to $0.29 for Q2 ‘09. The impact of closing and curtailment of the retirement plans was over $0.9, which accounted for most of the change. Read the rest of this transcript for free on seekingalpha.com