Shenandoah Telecommunications Company Reports Improved Operating Results for First Quarter 2012

Shenandoah Telecommunications Company Reports Improved Operating Results for
First Quarter 2012

EDINBURG, Va., May 4, 2012 (GLOBE NEWSWIRE) -- Shenandoah Telecommunications
Company (Shentel) (Nasdaq:SHEN) announces financial and operating results for
the three months ended March 31, 2012.

First Quarter 2012 Highlights

Highlights for the quarter include:

  *Revenue of $68.8 million, an increase of 14% from first quarter 2011
  *Net income of $4.5 million and net income from continuing operations of
    $4.4 million, up 48% and 44%, respectively, from first quarter 2011
  *Adjusted operating income before depreciation and amortization (adjusted
    OIBDA) of $25.0 million, compared to $21.4 million for the first quarter
    of 2011, an increase of 17%
  *Net postpaid PCS customer additions of 2,064 and net prepaid customer
    additions of 7,285
  *At March 31, 2012, the Company had 250,684 postpaid PCS customers and
    114,384 prepaid customers
  *PCS Postpaid churn was 1.86% in the first quarter of 2012 compared to
    1.76% in first quarter 2011. Prepaid churn improved to 3.65% from 4.50% in
    first quarter 2011
  *Cable segment revenue generating units increased 2,361 during the first
    quarter of 2012, compared to an increase of 2,438 in the first quarter of
    2011
  *Ninety percent of the cable markets acquired in 2010 have now been
    upgraded to DOCSIS 3.0 and are now capable of providing voice service as
    well as improved high speed data and video services.

President and CEO, Christopher E. French commented, "We are very pleased with
the significant increase in our net income, and the continued good growth in
customers and revenues.Demand for broadband services continued to be strong
across all three of our business segments.We have commenced work on our large
upgrade project for our Wireless network as part of Sprint Nextel's Network
Vision project, and are nearing completion of the planned upgrades to our
acquired cable networks."

Consolidated First Quarter Results

For the quarter ended March 31, 2012, net income from continuing operations
was $4.4 million compared to $3.1 million in the first quarter of
2011.Operating income for the first quarter of 2012 was $8.8 million, up $1.7
million or 24% from the first quarter of 2011.Adjusted OIBDA (as defined
below) increased to $25.0 million in the first quarter of 2012 from $21.4
million in the first quarter of 2011.

Total revenues for the first quarter of 2012 were $68.8 million, an increase
of $8.4 million or nearly 14% compared to $60.4 million for the 2011 first
quarter. Increases in cable and PCS customer counts, combined with increases
in the monthly revenue per customer in all categories, accounted for the
growth in revenues.Operating expenses increased $6.7 million or 12.5%, from
$53.3 million in the first quarter of 2011 to $60.0 million in first quarter
2012. Major components of the expense increase included $1.9 million in PCS
handset costs, $0.9 million in other PCS costs of goods and services, $1.5
million in net incremental PCS depreciation and amortization expenses, $1.5
million in PCS sales and marketing costs, and $0.9 million in Cable segment
operating costs.

Wireless Segment

Wireless segment operating income increased $0.5 million and operating
revenues increased by $6.2 million in the first quarter of 2012 compared to
the first quarter of 2011. The $3.6 million increase in postpaid PCS revenues
was primarily due to a 6% increase in the customer base and the increasing
proportion of smartphones, which are subject to additional fees.The $2.6
million increase in prepaid revenues was principally due to the 50% increase
in average subscribers in the first quarter of 2012, compared to the first
quarter of 2011, with an increase in the proportion of customers with higher
revenue plans accounting for the remainder of the increase.

Operating expenses increased $5.7 million. Postpaid handset costs increased
$1.0 million due principally to the higher subsidies on iPhones, which were
not available until the fourth quarter 2011.Prepaid handset subsidies
increased $0.9 million and wireless network costs increased $0.7 million in
the first quarter of 2012 compared to the 2011 first quarter. Selling,
general and administrative expenses increased $1.4 million, due equally to
prepaid and postpaid marketing costs. Depreciation expense increased $1.5
million, as the Company began to accelerate depreciation on cell site assets
that will be replaced in 2012 and 2013 as part of the Network Vision
upgrade.Accelerated depreciation on these assets totaled $2.0 million in the
first quarter of 2012, and was partially offset by the declining amortization
expense associated with the prepaid subscribers acquired in 2010, which
decreased $0.4 million compared to the 2011 first quarter amortization.First
quarter adjusted OIBDA was $18.4 million, an increase of $2.0 million from the
first quarter of 2011.

The Company continued to experience customer growth in its postpaid wireless
markets, adding 2,064 net retail postpaid customers during the first quarter
of 2012, compared to the 3,016 net added during the first quarter of 2011.The
Company's postpaid wireless customer count at March 31, 2012 was 250,684, a
12,859 or 5.4% increase from March 31, 2011.The Company's first quarter
postpaid churn was 1.86% compared to 1.76% in first quarter 2011.Gross adds
of retail postpaid customers for first quarter 2012 totaled 15,966, up from
15,486 in the first quarter of 2011.

During the first quarter, the Company added 7,285 net prepaid subscribers,
ending the first quarter of 2012 with 114,384 prepaid subscribers, compared to
80,243 as of March 31, 2011.Gross additions of prepaid subscribers totaled
19,364 in the first quarter of 2012, compared to 23,170 added in the first
quarter of 2011.Prepaid churn was 3.65% for the first quarter, down from
4.50% for the first quarter of 2011.

Cable Segment

Cable segment operating loss decreased $1.2 million in the first quarter of
2012 from the 2011 first quarter.System upgrades for the July 2010
JetBroadband acquisition are now approximately 90% complete, and are scheduled
to be finished in 2012.Operating revenue in the first quarter of 2012
increased $2.1 million on 7% growth in revenue generating units and 4% growth
in revenue per subscriber, compared to the first quarter of 2011. Operating
expenses increased by $0.9 million in first quarter 2012 over first quarter
2011.Operating expense increases included $0.3 million in costs to provide
expanded internet and voice services in upgraded markets, sales and marketing
costs of $0.4 million, and depreciation and amortization expense of $0.2
million.Adjusted OIBDA for first quarter 2012 was $1.5 million, compared to
$0.1 million in the first quarter of 2011.

Revenue generating units (the sum of voice, data, video and digital video
subscribers) totaled 139,599 at the end of the first quarter of 2012, an
increase of 7% from the prior year, and a quarterly increase of 2,361 compared
to an increase of 2,438 in the first quarter of 2011.

Wireline Segment

Wireline segment operating income was $3.8 million in 2012 first quarter,
essentially unchanged from the first quarter of 2011.Adjusted OIBDA for the
Wireline segment for first quarter 2012 was $6.1 million, an increase of $0.2
million from the comparable 2011 period.Wireline segment DSL customers grew
by 319 to 12,472 or 2.6% from the prior year period.Access lines at March 31,
2012, were 22,838, compared to 23,083 at December 31, 2011 and 23,638 at March
31, 2011.

Other Information

Capital expenditures were $14.8 million in the first quarter of 2012, down
slightly from $16.1 million in the comparable 2011 period.Capital
expenditures in first quarter 2012 related primarily to upgrading the acquired
cable networks and capacity upgrades at PCS sites, while spending in first
quarter 2011 primarily included upgrades to the cable networks acquired in
2010.The Company expects that capital spending will begin to increase during
the second quarter as the Company begins upgrading cell sites as part of the
Network Vision project.

Cash and cash equivalents as of March 31, 2012 were $19.6 million, up from
$15.9 million at December 31, 2011.Total outstanding debt at March 31, 2012
totaled $175.1 million, down from $180.6 million at December 31, 2011.Over
the next twelve months, the Company expects to make approximately $21.9
million in scheduled principal repayments.At March 31, 2012, the debt/equity
ratio was 0.87 and debt as a percent of total assets was 37%.The amount
available to the Company through its revolver facility was $50 million as of
March 31, 2012.

In February 2012, the Company executed Addendum XII to the Management
Agreement with Sprint Nextel that paves the way for the Company to implement
4G LTE services in its PCS service area in conjunction with Sprint Nextel's
previously announced Network Vision plan.The Company expects to spend
approximately $60 million on capital expenditures related to this plan during
2012, and an additional $55 million in 2013, in addition to on-going capital
spending needs to support capacity on the wireless network. The Company will
accelerate depreciation on existing PCS assets to be replaced which is
expected to add expenses of approximately $7.3 million and $5.3 million to
2012 and 2013, respectively, and expects to incur additional network related
costs to support the transition to 4G LTE during 2012.The Company also
executed an amendment to its credit agreements that removed the fixed charge
coverage ratio covenant for periods ending after December 31, 2011.

The Company has substantially completed the sale of its Converged Services
properties, and expects to close on all remaining transactions in the next
ninety days.The Company expects that the proceeds from the sales will
approximate the book value of the assets sold.

Conference Call and Webcast

The Company will host a conference call and simultaneous webcast on Friday,
May 4, 2012.

Teleconference Information:

Friday, May 4, 2012, 2:00 P. M. (ET)

Dial in number: 1-888-695-7639

Audio webcast:www.shentel.com

SHENANDOAH TELECOMMUNICATIONS COMPANY                           
SUMMARY FINANCIAL INFORMATION (unaudited)                       
(In thousands)                                                  
                                                               
Condensed Consolidated Balance Sheets                           
                                                      March 31, December 31,
                                                      2012      2011
                                                               
Cash and cash equivalents                              $19,643  $15,874
Other current assets                                   37,329    48,590
Investments                                            8,446     8,305
                                                               
Net property, plant and equipment                      311,531   310,754
                                                               
Intangible assets, net                                 79,474    81,346
Other assets, net                                      15,182    15,110
Total assets                                          $471,605 $479,979
                                                               
Current liabilities, exclusive of current maturities   $31,149  $33,666
of long-term debt of $21,916 and $21,913, respectively
Long-term debt, including current maturities           175,140   180,575
Total other liabilities                                62,868    68,079
Total shareholders' equity                             202,448   197,659
Total liabilities and shareholders' equity            $471,605 $479,979
                                                               

SHENANDOAH TELECOMMUNICATIONS COMPANY                    
                                                        
SUMMARY FINANCIAL INFORMATION (unaudited)                
                                                        
(In thousands, except per share amounts)                 
                                                        
                                                        
                                                        
                                                        Three months ended
                                                        
                                                        March 31,
                                                        
                                                        2012      2011
                                                                 
                                                        $68,823   $60,428
Revenues                                                          

                                                                 
                                                                 
Cost of goods and services                               29,029    26,061
                                                                 
Selling, general and administrative                      15,170    13,338
                                                                 
Depreciation & amortization                              15,807    13,938
                                                                 
Operating expenses                                       60,006    53,337
                                                                 
Operating income                                         8,817     7,091
                                                                 
                                                                 
                                                                 
Interest expense                                         (1,795)   (1,819)
                                                                 
Other income (expense), net                              659       93
                                                                 
Income from continuing operations before income taxes    7,681     5,365
                                                                 
Income tax expense                                       3,273     2,305
                                                                 
Net income from continuing operations                    $4,408    $3,060
                                                                 
Income (loss) from discontinued operations, net of taxes 58        (33)
                                                                 
Net income                                               $4,466    $3,027
                                                                 
                                                                 
                                                                 
                                                     
                                                     
Net income from continuing operations                    $0.19     $0.13
                                                                 
Earnings (loss) from discontinued operations             --        --
                                                                 
Net income                                               $0.19     $0.13
                                                                 
                                                              

Non-GAAP Financial Measure

In managing our business and assessing our financial performance, management
supplements the information provided by financial statement measures prepared
in accordance with GAAP with adjusted OIBDA, which is considered a "non-GAAP
financial measure" under SEC rules.

Adjusted OIBDA is defined by us as operating income (loss) before depreciation
and amortization, adjusted to exclude the effects of:certain non-recurring
transactions; impairment of assets; gains and losses on asset sales; and share
based compensation expense.Adjusted OIBDA should not be construed as an
alternative to operating income as determined in accordance with GAAP as a
measure of operating performance.

In a capital-intensive industry such as telecommunications, management
believes that adjusted OIBDA and the associated percentage margin calculations
are meaningful measures of our operating performance.We use adjusted OIBDA as
a supplemental performance measure because management believes it facilitates
comparisons of our operating performance from period to period and comparisons
of our operating performance to that of other companies by excluding potential
differences caused by the age and book depreciation of fixed assets (affecting
relative depreciation expenses) as well as the other items described above for
which additional adjustments were made.In the future, management expects that
the Company may again report adjusted OIBDA excluding these items and may
incur expenses similar to these excluded items.Accordingly, the exclusion of
these and other similar items from our non-GAAP presentation should not be
interpreted as implying these items are non-recurring, infrequent or unusual.

While depreciation and amortization are considered operating costs under
generally accepted accounting principles, these expenses primarily represent
the current period allocation of costs associated with long-lived assets
acquired or constructed in prior periods, and accordingly may obscure
underlying operating trends for some purposes.By isolating the effects of
these expenses and other items that vary from period to period without any
correlation to our underlying performance, or that vary widely among similar
companies, management believes adjusted OIBDA facilitates internal comparisons
of our historical operating performance, which are used by management for
business planning purposes, and also facilitates comparisons of our
performance relative to that of our competitors.In addition, we believe that
adjusted OIBDA and similar measures are widely used by investors and financial
analysts as measures of our financial performance over time, and to compare
our financial performance with that of other companies in our industry.

Adjusted OIBDA has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for analysis of our results as
reported under GAAP.These limitations include the following:

  *it does not reflect capital expenditures;
  *many of the assets being depreciated and amortized will have to be
    replaced in the future and adjusted OIBDA does not reflect cash
    requirements for such replacements;
  *it does not reflect costs associated with share-based awards exchanged for
    employee services;
  *it does not reflect interest expense necessary to service interest or
    principal payments onindebtedness;
  *it does not reflect expenses incurred for the payment of income taxes and
    other taxes; and
  *other companies, including companies in our industry, may calculate
    adjusted OIBDA differently than we do, limiting its usefulness as a
    comparative measure.

In light of these limitations, management considers adjusted OIBDA as a
financial performance measure that supplements but does not replace the
information reflected in our GAAP results.

The following table shows adjusted OIBDA for the three months ended March 31,
2012 and 2011:

(in thousands) Three months ended
                March 31,
               2012      2011
Adjusted OIBDA  $25,014   $21,374

The following table reconciles adjusted OIBDA to operating income, which we
consider to be the most directly comparable GAAP financial measure to adjusted
OIBDA:

                                     Three Months Ended
(in thousands)                       March 31,
                                     2012      2011
Operating income                      $ 8,817  $7,091
Plus depreciation and amortization    15,807    13,938
OIBDA                                 24,624    21,029
Plus loss on asset sales              33        75
Plus share based compensation expense 357       270
Adjusted OIBDA                        $25,014   $21,374

The following tables reconcile adjusted OIBDA to operating income by major
segment for the three months March 31, 2012 and 2011:

Wireless Segment:                     Three Months Ended
(in thousands)                       March 31,
                                     2012      2011
Operating income                      $10,525  $10,075
Plus depreciation and amortization    7,757     6,235
OIBDA                                 18,282    16,310
Plus loss on asset sales              4         16
Plus share based compensation expense 104       80
Adjusted OIBDA                        $ 18,390  $ 16,406

Cable Segment:                        Three Months Ended
(in thousands)                       March 31,
                                     2012      2011
Operating loss                        $(4,542) $(5,720)
Plus depreciation and amortization    5,852     5,698
OIBDA                                 1,310     (22)
Plus loss on asset sales              9         47
Plus share based compensation expense 149       106
Adjusted OIBDA                        $ 1,468   $131

Wireline Segment:                     Three Months Ended
(in thousands)                       March 31,
                                     2012      2011
Operating income                      $3,791   $3,800
Plus depreciation and amortization    2,173     1,949
OIBDA                                 5,964     5,749
Plus loss on asset sales              20        10
Plus share based compensation expense 82        62
Adjusted OIBDA                        $6,066   $5,821

About Shenandoah Telecommunications

Shenandoah Telecommunications Company is a holding company that provides a
broad range of telecommunications services through its operating
subsidiaries.The Company is traded on the NASDAQ Global Select Market under
the symbol "SHEN."The Company's operating subsidiaries provide local and long
distance telephone, Internet and data services, cable television, wireless
voice and data services, alarm monitoring, and telecommunications equipment,
along with many other associated solutions in the Mid-Atlantic United States.

This release contains forward-looking statements that are subject to various
risks and uncertainties.The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
unforeseen factors.A discussion of factors that may cause actual results to
differ from management's projections, forecasts, estimates and expectations is
available in the Company filings with the SEC.Those factors may include
changes in general economic conditions, increases in costs, changes in
regulation and other competitive factors.

CONTACT: Adele M. Skolits
         540-984-5161
 
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