Consolidated Communications Holdings Inc (CNSL) Reports Mixed Financial Results Amid Pending ...
Net Revenues: Q4 net revenues decreased to $275.2 million from $295.9 million in the prior year.
Net Loss: Q4 net loss widened to $58.6 million ($0.52 per share) from $45.5 million ($0.41 per share) year-over-year.
Cost Reductions: Cost of services and products, along with SG&A expenses, decreased by $12.6 million due to operational efficiencies.
Capital Expenditures: Committed $91.5 million in Q4, adding 49,132 new fiber passings.
Liquidity: Maintained with approximately $4.8 million in cash and $214 million in available borrowing capacity.
Debt Leverage: Net debt leverage ratio stood at 6.73x for the trailing 12 months as of December 31, 2023.
Pending Acquisition: Consolidated is set to be acquired by Searchlight and BCI, with the transaction expected to close by Q1 2025.
On March 5, 2024, Consolidated Communications Holdings Inc (NASDAQ:CNSL) released its 8-K filing, detailing its financial results for the fourth quarter and full year of 2023. The company, a leading fiber provider in the U.S., reported a decrease in net revenues for the fourth quarter to $275.2 million, down from $295.9 million in the same period last year. The net loss for the quarter widened to $58.6 million, or $0.52 per share, compared to a net loss of $45.5 million, or $0.41 per share, in the fourth quarter of 2022.
Despite the increased net loss, CNSL achieved cost reductions in both cost of services and products and selling, general, and administrative expenses, which collectively decreased by $12.6 million. This reduction was attributed to the divestiture of the Kansas City operations, lower video programming costs, reduced advertising expenses, and a decrease in salaries due to cost-saving initiatives.
Capital expenditures for the quarter totaled $91.5 million, driven by significant investments in fiber infrastructure, including 49,132 new fiber passings. This investment is critical for CNSL as it continues to expand its high-speed internet and data services, which are essential components of the company's business model in the competitive telecommunications industry.
As of December 31, 2023, CNSL maintained liquidity with cash and short-term investments of approximately $4.8 million and had $214 million of available borrowing capacity on its revolving credit facility. The company's net debt leverage ratio was 6.73x for the trailing 12 months ended December 31, 2023.
In a significant corporate development, CNSL is in the process of being acquired by Searchlight and BCI in an all-cash transaction valued at approximately $3.1 billion, including the assumption of debt. Approximately 75% of disinterested shareholders voted to approve the merger agreement, and the transaction is expected to close by the first quarter of 2025. Upon completion, CNSL will become a private company, and its shares will no longer be traded or listed on any public securities exchange.
Consolidated Communications Holdings Inc provides communication services for business and residential customers across various states in the U.S. Its business product suite includes data and Internet solutions, voice, data center services, security services, managed and IT services, and an expanded suite of cloud services. It also offers wholesale solutions to wireless and wireline carriers and other service providers, as well as residential high-speed Internet, video, phone, and home security services.
The company's financial performance and the pending acquisition are pivotal as they navigate a highly competitive and rapidly evolving telecommunications landscape. The strategic focus on fiber expansion and cost management, coupled with the transition to a private company structure, will likely influence CNSL's operational and financial strategies in the coming years.
Explore the complete 8-K earnings release (here) from Consolidated Communications Holdings Inc for further details.
This article first appeared on GuruFocus.
