Consolidated Communications Announces Second Quarter 2024 Financial Results

Rhea-AI Summary

Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) reported its Q2 2024 financial results. Key highlights include:

- Revenue: $268.7 million
- Consumer fiber broadband revenue: $45.4 million
- Consumer broadband net adds: 3,670
- Net loss: ($66.7 million)
- Adjusted EBITDA: $84.2 million
- Capital expenditures: $102.7 million

The company completed the sale of its Washington assets on May 1, 2024. CNSL is also in the process of being acquired by affiliates of Searchlight Capital Partners and British Columbia Investment Management in a $3.1 billion all-cash transaction, expected to close in late Q4 2024 or early Q1 2025.

Positive

• Consumer broadband net adds of 3,670
• Reduction in cost of services and products by $3.2 million due to cost-saving initiatives
• 32,961 new fiber passings added in Q2
• Completion of Washington assets sale on May 1, 2024
• Shareholder approval (75%) for the pending acquisition by Searchlight Capital Partners and British Columbia Investment Management

Negative

• Net loss of $66.7 million in Q2 2024
• Increased net interest expense by $7.2 million due to higher interest rates
• Adjusted diluted net loss per share worsened to ($0.37) from ($0.28) in Q2 2023
• Low liquidity with only $5 million in cash and short-term investments

Insights

Financial Analyst

Consolidated Communications' Q2 2024 results reveal a mixed financial picture. While the company reported $268.7 million in revenue, it faced a significant net loss of $66.7 million. This loss, although substantial, is an improvement from the $119 million loss in Q2 2023. The company's Adjusted EBITDA of $84.2 million indicates some operational efficiency.

Key positives include consumer broadband net adds of 3,670 and cost reductions of $3.2 million in services and administrative expenses. However, these are offset by increased net interest expense of $44.1 million, up $7.2 million year-over-year, primarily due to higher interest rates.

The company's liquidity position appears tight with only $5 million in cash and short-term investments, though it has access to $155 million in credit facilities. The pending acquisition by Searchlight Capital Partners and British Columbia Investment Management could provide financial stability but introduces uncertainty for current shareholders.

Telecom Industry Expert

Consolidated Communications' Q2 2024 results highlight its ongoing transition to a fiber-focused provider. The company added 32,961 new fiber passings, demonstrating commitment to network expansion. Consumer fiber broadband revenue reached $45.4 million, indicating growing traction in this strategic segment.

However, the company faces challenges in its legacy businesses. The overall consumer revenue of $112.7 million suggests pressure on traditional services. The commercial data services revenue of $54.6 million and carrier data-transport revenue of $30.3 million indicate the importance of diversified revenue streams.

The completion of the Washington assets sale on May 1, 2024, aligns with the industry trend of geographic consolidation. The pending privatization, if completed, could allow for more aggressive long-term investments in fiber infrastructure without public market pressures, potentially strengthening Consolidated's competitive position in the evolving telecom landscape.

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 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805205357/en/

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

FAQ

What was Consolidated Communications' (CNSL) revenue in Q2 2024?

Consolidated Communications (CNSL) reported total revenue of $268.7 million for the second quarter of 2024.

How many new fiber passings did CNSL add in Q2 2024?

CNSL added 32,961 new fiber passings in the second quarter of 2024.

What was CNSL's net loss in Q2 2024?

Consolidated Communications (CNSL) reported a net loss of $66.7 million in the second quarter of 2024.

When did CNSL complete the sale of its Washington assets?

Consolidated Communications (CNSL) completed the sale of its Washington assets on May 1, 2024.

What is the status of CNSL's pending acquisition?

CNSL's acquisition by affiliates of Searchlight Capital Partners and British Columbia Investment Management is expected to close in late Q4 2024 or early Q1 2025, subject to regulatory approvals.