SHENANDOAH TELECOMMUNICATIONS COVA
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
SHEN$9.65-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001628280-24-045986
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001628280-25-020817
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 68 current paragraphs.
25 unchanged; 20 reworded; 22 added; 45 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Asset Purchase Agreement
Current report
The Company executed an Asset Purchase Agreement in April 2025 to acquire fiber-to-the-home assets for $5 million, passing over 1,500 homes and businesses with approximately 700 customers in Virginia. The Company expects to close on the acquisition during the summer 2025.
Current report
Amendment No. 4 to Credit Agreement
Current report
Revenue from residential and small and medium business (“SMB”) customers in Incumbent Broadband Markets are primarily earned through the Company’s provision of data, video and voice services over primarily hybrid fiber coaxial (“HFC”) cable and to a lesser extent fiber to the home (“FTTH”) networks in incumbent markets.
Current report
Revenue from residential and SMB customers in Glo Fiber Expansion Markets are primarily earned through the Company’s provision of data, video and voice services over FTTH networks in new greenfield expansion markets.
Current report
Revenue from Commercial Fiber customers is primarily earned through the Company’s provision of high-speed Ethernet, wavelength, dark fiber leasing and managed services over fiber optic networks.
Current report
Commercial Fiber revenue increased by $9.7 million, or 97.3%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to $9.9 million of revenues earned in the acquired Horizon markets and a $0.2 million decrease in the legacy Shentel markets.
Current report
Shentel’s RLEC & Other revenue is primarily earned through the Company’s provision of voice and DSL telephone services over copper networks primarily in Shenandoah County, Virginia and Ross County, Ohio. Shentel also earns governmental support revenue through the federal Universal Service Fund.
Current report
Cost of services primarily consist of costs to acquire and deliver video programming, internal labor to maintain our network and service our customers, maintenance and third party network line expenses.
Current report
Cost of services increased by $7.0 million, or 27.1%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to $7.6 million of cost of services incurred in the acquired Horizon markets, partially offset by a $0.6 million decrease in cost of services incurred in the legacy Shentel markets, driven by an decrease in programming costs due to a reduction in video RGUs.
Current report
Selling, general and administrative expenses consist of employee compensation, advertising, software maintenance, stock-based compensation, and operating taxes.
Current report
Selling, general and administrative expense increased by $3.0 million, or 10.8%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to $3.2 million of selling, general and administrative costs incurred in the acquired Horizon markets and a $0.2 million decrease in the legacy Shentel markets driven by lower professional fees.
Current report
Restructuring, integration and acquisition
Current report
Restructuring, integration and acquisition expense in the three months ended March 31, 2025 was comparable with the three months ended March 31, 2024. Restructuring, integration and acquisition expense related primarily to costs incurred to effect the acquisition of Horizon (the “Horizon Transaction”) and integration of costs during the post-acquisition period.
Current report
Interest expense
Current report
Interest expense increased by $0.8 million, or 20.0%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to an increase in the Company’s outstanding debt.
Current report
Other income, net
Current report
Other income, net decreased by $1.0 million, or 57.8%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to a decrease in interest income.
Current report
Income tax benefit
Current report
Income tax benefit in the three months ended March 31, 2025 was comparable with the three months ended March 31, 2024.
Current report
Net cash provided by financing activities from continuing operations was approximately $97.0 million during the three months ended March 31, 2025, representing an increase of $100.2 million compared with the prior year period, primarily driven by an increase of $100.0 million in borrowings under the Term Loans.
Current report
Shentel’s Term Loans, which consist of Term Loan A-1, Term Loan A-2 and Term Loan A-3, have outstanding balances of $142.6 million, $148.1 million and $225.0 million, respectively. The Term Loans require quarterly payments based on a percentage of the outstanding balance. As of March 31, 2025, Term Loan A-1 was due to mature on July 1, 2026. On April 16, 2025, Shentel amended the Credit Agreement to extend the maturity date of the Revolver and Term Loan A-1 to July 1, 2027. Both Term Loan A-2 and Term Loan A-3 mature on July 1, 2028.
Removed paragraphs (45)
Previous report
Horizon Transaction
Previous report
On April 1, 2024 (the “Closing Date”), Shentel completed its previously announced acquisition of Horizon Acquisition Parent LLC, a Delaware limited liability company (“Horizon”), pursuant to the terms of an Agreement and Plan of Merger, dated October 24, 2023, by and among Shentel, Horizon, the sellers set forth on the signature pages thereto (each, a “Seller” and collectively, the “Sellers”) and the other parties thereto (as amended by the First Amendment to Agreement and Plan of Merger, dated April 1, 2024, the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, on the Closing Date, Shentel acquired 100% of the outstanding equity interests of Horizon in exchange for (i) issuing 4,100,375 shares of Shentel’s common stock, no par value (“Common Stock”), to an investment fund managed by affiliates of GCM Grosvenor, which is one of the Sellers (the “Selling Shareholder”); and (ii) paying $305 million in cash consideration to the other Sellers and certain third parties, including Horizon’s existing lenders to discharge debt (collectively, the “Horizon Transaction”). Cash consideration paid also included purchase price adjustments for capital expenditure reimbursements and working capital subject to subsequent adjustments as defined in the merger agreement. The Selling Shareholder agreed to an investor rights agreement with the Company that includes among other provision, a one year lockup period for the shares of Common Stock received.
Previous report
Refer to Note 2, Acquisition of Horizon, for more information regarding the Horizon Transaction and its impact on the Company’s financial statements.
Previous report
Series A Preferred Stock
Previous report
Contemporaneously with the execution of the Merger Agreement, on October 24, 2023,, Shentel and Shentel Broadband Holding Inc., a wholly-owned subsidiary of Shentel (“Shentel Broadband”), entered into an investment agreement (the “Investment Agreement”) with ECP Fiber Holdings, LP, a Delaware limited partnership (“ECP Investor”), and, solely for the limited purposes set forth therein, Hill City Holdings, LP, a Delaware limited partnership affiliated with ECP Investor. Subject to the terms and conditions set forth in the Investment Agreement, on the Closing Date, Shentel Broadband issued to ECP Investor 81,000 shares of Shentel Broadband’s 7% Series A Participating Exchangeable Perpetual Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), at a purchase price of $1,000 per share in exchange for $81 million in cash. The Series A Preferred Stock is exchangeable at the option of the Investor or Shentel in certain circumstances for shares of Common Stock at an exchange price of $24.50 per share (as it may be adjusted pursuant to the terms of the Investment Agreement, the “Exchange Price”).
Previous report
As a condition to closing the transactions contemplated by the Investment Agreement and Amendment No. 3 to the Credit Agreement, Shentel completed a corporate reorganization of Shentel’s subsidiaries (the “Reorganization”). As a result of the Reorganization effected on the Closing Date, Shentel Broadband Operations LLC, a wholly-owned subsidiary of Shentel Broadband, holds or has equity interest in substantially all of the operating assets of Shentel and was assigned and assumed the Credit Agreement.
Previous report
On the Closing Date, Shentel Broadband filed a certificate of designations with the Secretary of State of the State of Delaware authorizing 100,000 shares of Series A Preferred Stock and setting forth the powers, designations, preferences, rights, qualifications, limitations and restrictions of the Series A Preferred Stock (the “Certificate of Designations”). The Series A Preferred Stock ranks senior to Shentel’s Common Stock with respect to the payment of dividends and with respect to the distribution of assets upon Shentel Broadband’s liquidation, dissolution or winding up. Dividends on the Series A Preferred Stock accrue at 7% per annum compounded and payable quarterly in arrears, and, at Shentel’s option, may be paid in cash or in kind (such dividends paid in kind, “PIK Dividends”). The PIK Dividend rate is subject to increase to 8.5% and 10% after the fifth and seventh anniversaries of the Closing Date, respectively, to the extent any dividends accrued during the period from and including such anniversary dates are paid in the form of PIK Dividends.
Previous report
Beginning two years after the Closing Date, Shentel may require the Investor to exchange the Series A Preferred Stock for shares of Common Stock if the price per share of the Common Stock exceeds 125% of the Exchange Price, subject to certain conditions. After five years, Shentel may redeem all of the Series A Preferred Stock for the greater of (i) $1,000 per share, plus (a) any accrued PIK Dividend amount and (b) accrued and unpaid dividends to, but excluding the redemption date (to the extent such accrued and unpaid dividends are not included in such PIK Dividend amount), and (ii) the value of the shares of Common Stock for which such Series A Preferred Stock are exchangeable.
Previous report
Under the terms of the Investment Agreement, the Investor has the right to nominate a director to the Board so long as the Investor beneficially owns at least 7.5% of Shentel’s outstanding Common Stock (including on an as exchanged basis with respect to the Series A Preferred Stock).
Previous report
So long as the Investor beneficially owns at least 7.5% of Shentel’s outstanding Common Stock (including on an as exchanged basis with respect to the Series A Preferred Stock), the Investor is subject to certain standstill provisions and voting covenants and has certain other rights with respect to the shares of Series A Preferred Stock, including, among others, pre-emptive, information and participation rights. The shares of Series A Preferred Stock are subject to a lock-up until the first anniversary of the Closing Date and are subject to certain other transfer restrictions.
Previous report
Refer to Note 12, Redeemable Noncontrolling Interest, for more information regarding the Series A Preferred Stock and its impact on the Company’s financial statements.
Previous report
The Third Amendment provides for, among other things, incremental delay draw term loan commitments under the Credit Agreement in an aggregate amount equal to $225 million and an increase in the revolving commitment under the Credit Agreement in an amount equal to $50 million. Refer to Note 9, Debt, for more information regarding the Credit Agreement.
Previous report
Shentel updated the description for revenues previously reported as “Residential & SMB - Cable Markets” to “Residential & SMB - Incumbent Broadband Markets” and updated the description for revenues previously reported as “Residential & SMB - Glo Fiber Markets” to “Residential & SMB - Glo Fiber Expansion Markets.”
Previous report
Residential & SMB - Glo Fiber Expansion Markets revenue for the three months ended September 30, 2024 increased approximately $5.8 million, or 61.9%, compared with the three months ended September 30, 2023, primarily driven by $0.5 million of revenue from Horizon, a 54% year-over-year growth in data revenue generated units (“RGUs”) and a 7% increase in data average revenue per unit (“ARPU").
Previous report
Commercial Fiber revenue for the three months ended September 30, 2024 increased approximately $9.8 million, or 94.5%, compared with the three months ended September 30, 2023, primarily driven by $11.3 million of revenue from Horizon, partially offset by a $1.4 million decline in T-Mobile revenue in the legacy Shentel markets from the previously disclosed backhaul circuit disconnects as part of the decommissioning of the former Sprint network.
Previous report
Cost of services for the three months ended September 30, 2024, increased approximately $8.1 million, or 31.0%, compared with the three months ended September 30, 2023, primarily driven by $8.6 million of cost of services from Horizon and $0.4 million decline in the legacy Shentel markets due primarily to lower programming costs as customers continue to migrate to other video service alternatives.
Previous report
Selling, general and administrative expense for the three months ended September 30, 2024, increased $5.1 million, or 22.0%, compared with the three months ended September 30, 2023, primarily driven by $3.7 million of selling, general and administrative costs from Horizon and higher advertising and sales headcount to support the Glo Fiber expansion.
Previous report
Integration and acquisition
Previous report
Integration and amortization expense for the three months ended September 30, 2024, increased $0.5 million compared with the three months ended September 30, 2023, primarily driven by non-recurring acquisition-related costs related to the Horizon Transaction and integration of Horizon and Shentel’s operating activities.
Previous report
Other income (expense), net
Previous report
Other expense, net was $2.7 million for the three months ended September 30, 2024 compared with other income, net of $0.8 million for the three months ended September 30, 2023, primarily driven by an increase in interest expense due to a higher outstanding debt balance during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous report
Income tax (benefit) expense
Previous report
The Company recognized $1.5 million of income tax benefit for the three months ended September 30, 2024, compared with $0.4 million of income tax expense for the three months ended September 30, 2023. The $1.9 million increase in income tax benefit was driven by higher pre-tax loss from continuing operations during the three months ended September 30, 2024.
Previous report
Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September 30, 2023
Previous report
Residential & SMB - Incumbent Broadband Markets revenue for the nine months ended September 30, 2024 increased approximately $0.7 million, or 0.5%, compared with the nine months ended September 30, 2023, primarily driven by $3.6 million of revenue from Horizon, partially offset by a $3.0 million decline in the legacy Shentel markets due primarily due to lower video revenue and a 1% decline in data RGUs.
Previous report
Commercial Fiber revenue
Previous report
Commercial Fiber revenue for the nine months ended September 30, 2024 increased approximately $17.2 million, or 53.1%, compared with the nine months ended September 30, 2023, primarily driven by $22.2 million of revenue from Horizon, partially offset by a $5.0 million decline in T-Mobile revenue in the legacy Shentel markets from the previously disclosed backhaul circuit disconnects as part of the decommissioning of the former Sprint network.
Previous report
RLEC & Other revenue
Previous report
RLEC & Other revenue for the nine months ended September 30, 2024 increased approximately $6.7 million, or 58.2%, compared with the nine months ended September 30, 2023, primarily driven by $6.9 million of revenue from Horizon and an increase in governmental support revenue.
Previous report
Cost of services
Previous report
Cost of services for the nine months ended September 30, 2024, increased approximately $18.5 million, or 24.2%, compared with the nine months ended September 30, 2023, primarily driven by $17.5 million of cost of services from Horizon and $1.0 million in higher maintenance costs in the legacy Shentel markets.
Previous report
Selling, general and administrative
Previous report
Selling, general and administrative expense for the nine months ended September 30, 2024, increased $12.2 million, or 16.5%, compared with the nine months ended September 30, 2023, primarily driven by $7.8 million of recurring selling, general and administrative costs acquired from Horizon and $4.4 million in higher expenses in the legacy Shentel markets due to higher advertising costs and sales headcount associated with the Company’s expansion of Glo Fiber and higher software maintenance expenses associated with system upgrades.
Previous report
Integration and acquisition
Previous report
Integration and amortization expense for the nine months ended September 30, 2024, increased $12.0 million compared with the nine months ended September 30, 2023, primarily driven by non-recurring Horizon acquisition-related costs related to banking, legal, accounting, severance and other similar expenses.
Previous report
Depreciation and amortization
Previous report
Depreciation and amortization increased $23.7 million, or 50.3%, compared with the nine months ended September 30, 2023, primarily driven by $16.7 million of depreciation and amortization related to acquired tangible and intangible assets from Horizon and the Company’s expansion of its Glo Fiber network.
Previous report
Other income (expense), net
Previous report
Other expense, net was $7.1 million for the nine months ended September 30, 2024 compared with other income, net of $2.1 million for the nine months ended September 30, 2023, primarily driven by an increase in interest expense due to a higher outstanding debt balance during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, partially offset by patronage income recorded as a result of patronage distributions received during the nine months ended September 30, 2024.
Previous report
Income tax (benefit) expense
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (20)
Previous wording
Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services in seven contiguous states in the eastern United States.
Current wording
Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services in eight contiguous states in the eastern United States.
Previous wording
On April 1, 2024, Shentel entered into Amendment No. 3 to Credit Agreement, Incremental Term Loan Funding Agreement, Joinder and Assignment and Assumption (the “Third Amendment”) to its existing Credit Agreement, dated as of July 1, 2021, with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (as previously amended by Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, and Consent and Amendment No. 2 to Credit Agreement, dated October 24, 2023, the “Credit Agreement”).
Current wording
On April 16, 2025, Shentel entered into Amendment No. 4 to Credit Agreement (the “Fourth Amendment”) to the Company’s existing Credit Agreement, dated as of July 1, 2021, with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (as previously amended by Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, the Consent and Amendment No. 2 to Credit Agreement, dated October 24, 2023, and the Amendment No. 3 to Credit Agreement, Incremental Term Loan Funding Agreement, Joinder and Assignment and Assumption, dated as of April 1, 2024, the “Credit Agreement”).
Previous wording
Sources and Uses of Cash: The Company’s principal sources of liquidity are our cash and cash equivalents, cash generated from operations, government grants and borrowings under our Credit Agreement, dated July 1, 2021 (as amended by (i) Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, (ii) Consent and Amendment No. 2 to Credit Agreement, dated as of October 24, 2023, and Amendment No. 3, dated as of April 1, 2024, the “Credit Agreement”). The Credit Agreement contains (i) a $150 million, available revolving credit facility due June 2026 (the “Revolver”), (ii) a $150 million delayed draw amortizing term loan due June 2026 (“Term Loan A-1”), (iii) a $150 million delayed draw amortizing term loan due June 2028 (“Term Loan A-2”), and (iv) a $225 million delayed draw amortizing term loan due June 2028 (“Term Loan A-3” and collectively with Term Loan A-1 and Term Loan A-2, the “Term Loans”).
Current wording
The Credit Agreement consists of: (i) a $150 million available revolving credit facility due July 1, 2026 (the “Revolver”), (ii) a $150 million delayed draw amortizing term loan due July 1, 2026 (“Term Loan A-1”), (iii) a $150 million delayed draw amortizing term loan due July 1, 2028, and (iv) a $225 million delayed draw amortizing term loan due July 1, 2028. Pursuant to the Fourth Amendment, the maturity date of the Revolver and Term Loan A-1 were extended to July 1, 2027. Additionally, the Fourth Amendment increased the maximum Total Net Leverage Ratio (as defined in the Credit Agreement) permitted as of the last day of any fiscal quarter to 4.75:1.00.
Previous wording
Residential & SMB - Incumbent Broadband Markets revenue
Current wording
Shentel updated the presentation of certain Residential & SMB - Incumbent Broadband Markets and Commercial Fiber revenues in the prior year to conform with changes in how management views these lines of business.
Previous wording
Residential & SMB - Incumbent Broadband Markets revenue for the three months ended September 30, 2024 increased approximately $0.5 million, or 1.3%, compared with the three months ended September 30, 2023, primarily driven by $1.8 million of revenue from Horizon, partially offset by a $1.3 million decline in the legacy Shentel markets due to lower video and other revenue.
Current wording
Residential & SMB - Incumbent Broadband Markets revenue decreased by $0.5 million, or 1.0%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to a $2.2 million decrease in the legacy Shentel markets primarily due to lower video revenue driven by a 14.1% decline in video RGUs and lower data revenue driven by a decrease in non-recurring other revenue, partially offset by $1.7 million of revenues earned in the acquired Horizon markets.
Previous wording
Residential & SMB - Glo Fiber Expansion Markets revenue for the nine months ended September 30, 2024 increased approximately $16.8 million, or 68.7%, compared with the nine months ended September 30, 2023, primarily driven by $1.0 million of revenue from Horizon, a 59% year-over-year growth in data RGUs driven by the Company’s expansion of Glo Fiber and a 8% increase in data ARPU.
Current wording
Residential & SMB - Glo Fiber Expansion Markets revenue increased by $6.3 million, or 52.2%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to a $5.6 million increase in the legacy Shentel markets and $0.7 million of revenues earned in the acquired Horizon markets. The increase in legacy Shentel markets was primarily due to a 46.3% year-over-year growth in data RGUs driven by the Company’s increase in passings.
Previous wording
RLEC & Other revenue for the three months ended September 30, 2024 increased approximately $4.0 million, or 100.9%, compared with the three months ended September 30, 2023, primarily driven by $3.3 million of revenue from Horizon and an increase in governmental support revenue.
Current wording
RLEC & Other revenue increased by $3.1 million, or 91.6%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to $2.9 million of revenues earned in the acquired Horizon markets and an increase in governmental support revenue.
Previous wording
Depreciation and amortization increased $11.6 million, or 71.7%, compared with the three months ended September 30, 2023, primarily driven by $8.3 million of depreciation and amortization related to acquired tangible and intangible assets from Horizon and the Company’s expansion of its Glo Fiber network.
Current wording
Depreciation and amortization increased by $12.0 million, or 68.9%, in the three months ended March 31, 2025 compared with the three months ended March 31, 2024 due to $9.2 million of depreciation and amortization related to the tangible and intangible assets acquired in the Horizon Transaction and the Company’s expansion of its Glo Fiber network.
Previous wording
Shentel provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and DSL telephone services as a Rural Local Exchange Carrier (“RLEC”) to customers in Shenandoah County and portions of adjacent counties in Virginia, and in Ross County and portions of adjacent counties in Ohio. These integrated networks are connected by over 16,300 route miles of fiber.
Current wording
Shentel provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania, Kentucky, Delaware, Ohio and Indiana, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and DSL telephone services as a Rural Local Exchange Carrier (“RLEC”) to customers in Shenandoah County and portions of adjacent counties in Virginia, and in Ross County and portions of adjacent counties in Ohio. These integrated networks are connected by over 17,200 route miles of fiber.
Previous wording
The following table indicates selected operating statistics:
Current wording
The following table indicates selected operating statistics. Shentel updated the presentation of certain revenues and voice RGUs in the prior year to conform with changes in how management views these lines of business. This reclassification resulted in updated ARPU and voice RGUs for the prior period.:
Previous wording
(4)Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.
Current wording
(4)Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with FTTH passings.
Previous wording
(5)Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.
Current wording
(5)Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and Horizon markets.
Previous wording
In 2021, Congress passed the American Rescue Plan Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $86 million in grants to serve approximately 25,000 unserved homes in the states of Virginia, West Virginia and Maryland. The grants will be paid to the Company as certain milestones are completed. As of September 30, 2024, the Company received $13 million and had $73 million in grants available. The Company expects to fulfill the majority of its obligations under these programs by 2026.
Current wording
In 2021, Congress passed the American Rescue Plan Act and the Infrastructure Investment and Jobs Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately $150.2 million in grants to serve approximately 27,100 unserved homes in the states of Virginia, Maryland, West Virginia and Ohio and to upgrade the capacity of the Ohio middle mile network. The grants will be paid to the Company as certain milestones are completed. As of March 31, 2025, the Company had $104.1 million in grants available. The Company expects to fulfill the majority of its obligations under these programs by 2026.
Previous wording
As of September 30, 2024, our cash and cash equivalents totaled $43 million, the availability under our Revolver and Term Loan A-3 was $318 million, and the remaining reimbursements available under government grants was $112 million, which are subject to fulfilling the terms of the agreements, for total available liquidity of approximately $473 million. As discussed in Note 1, Basis of Presentation and Other Informationin Part I, Item 1 of this quarterly report on Form 10-Q, Shentel entered into various agreements on April 1, 2024, which affected the Company’s liquidity. The Company utilized approximately$349 million to fund the Horizon Transaction, including payment of certain capital expenditures and payments for various transaction costs. Furthermore, the Company received$81 million in exchange for the issuance of Series A Preferred Stock. Finally, the Company amended its Credit Agreement, resulting in incremental delay draw term loan commitments under the Credit Agreement in an aggregate amount equal to $225 million and an increase in the revolving commitment under the Credit Agreement of $50 million.
Current wording
As of March 31, 2025, our cash and cash equivalents totaled $87.5 million, the availability under our Revolver was $143.0 million, and the remaining reimbursements available under government grants was $104.1 million, which are subject to fulfilling the terms of the agreements, for total available liquidity of approximately $334.6 million.
Previous wording
Net cash provided by operating activities from continuing operations was approximately $48.4 million during the nine months ended September 30, 2024, representing a decrease of $33.9 million compared with the prior year period, primarily driven by lower current tax refunds received during the nine months ended September 30, 2024 and changes in working capital.
Current wording
Net cash provided by operating activities from continuing operations was approximately $20.5 million during the three months ended March 31, 2025, representing an increase of $7.6 million compared with the prior year period, primarily driven by increases in revenue and timing of changes in working capital.
Previous wording
Net cash used in investing activities from continuing operations was approximately $560.9 million during the nine months ended September 30, 2024, representing an increase of $389.9 million compared with the prior year period, primarily driven by the payment of $349.4 million to acquire Horizon and to cover transaction costs related to the acquisition, a $37.1 million increase in capital expenditures driven by expansion of Glo Fiber and government-subsidized markets and a $17.3 million decrease in sales of assets, partially offset by $11.1 million of grants received related to government funded infrastructure expansion programs.
Current wording
Net cash used in investing activities from continuing operations was approximately $76.3 million during the three months ended March 31, 2025, representing an increase of $8.9 million compared with the prior year period, primarily driven by a $13.2 million increase in capital expenditures driven by expansion of Glo Fiber and government-subsidized markets, partially offset by a $4.2 million increase in cash receipts from government grant programs.
Previous wording
Indebtedness: To date, Shentel has borrowed $150 million under each of Term Loans A-1 and A-2; and $50 million under Term Loan A-3 available under the Credit Agreement for a total of $350 million. As of September 30, 2024, the Company’s indebtedness totaled approximately $344.6 million, net of unamortized loan fees of $0.6 million. The borrowed amounts bear interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The interest rate was 6.45% for Term Loan A-1, 6.70% for Term Loan A-2, and 6.95% for Term Loan A-3 at September 30, 2024.
Current wording
Indebtedness: As of March 31, 2025, the Company’s net indebtedness was approximately $514.5 million, including $515.8 million in outstanding term loans, net of unamortized loan fees of $1.2 million. The borrowed amounts bear interest at a variable rate determined by one-month term SOFR, plus a margin based on net leverage. The weighted-average interest rate was 6.71% for the Term Loans at March 31, 2025.
Previous wording
As of September 30, 2024, the Company was in compliance with the financial covenants in our Credit Agreement.
Current wording
The April 16, 2025 amendment of Shentel’s Credit Agreement also amended certain covenant provisions, including increasing the maximum Total Net Leverage Ratio (as defined in the Credit Agreement) permitted as of the last day of any fiscal quarter to 4.75:1.00. As of March 31, 2025, the Company was in compliance with the financial covenants in our Credit Agreement.
Previous wording
During the nine months ended September 30, 2024, our capital expenditures of $226.5 million exceeded our net cash provided by operating activities of continuing operations by $178.1 million, and we expect our capital expenditures to exceed the cash flows provided from continuing operations through 2026, as we expand our Glo Fiber broadband network.
Current wording
During the three months ended March 31, 2025, our capital expenditures of $83.2 million exceeded our net cash provided by operating activities of continuing operations by $62.7 million, and we expect our capital expenditures to exceed the cash flows provided from continuing operations through 2026, as we expand our Glo Fiber broadband network.
Previous wording
Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base is critical to our ability to maintain positive cash flows from operations. The foregoing events individually or collectively could affect our results.
Current wording
Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions including rising inflation, changes in tariffs, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base is critical to our ability to maintain positive cash flows from operations. The foregoing events individually or collectively could affect our results.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Sources and Uses of Cash: The Company’s principal sources of liquidity are our cash and cash equivalents, cash generated from operations, government grants and borrowings under our credit agreement, which contains a $150 million revolving credit facility (the “Revolver”) and $525 million in delayed draw amortizing term loans (the “Term Loans” and collectively with the Revolver, the “Credit Agreement”).
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Amendment No. 3 to Credit Agreement
Previous report — wording carried elsewhere
The Company’s consolidated results from operations are summarized as follows:
Previous report — wording carried elsewhere
Residential & SMB - Glo Fiber Expansion Markets revenue