Shenandoah Telecommunications Co

Good morning, everyone. Welcome to the Shenandoah Telecommunications First Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis for Shentel.

Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for First Quarter 2022. Our results were announced in a press release distributed last night and the presentation we'll be reviewing is included on the investor page at our website, www.chentel.com. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Chris French, President and Chief Executive Officer, Ed McKay, Executive Vice President and Chief Operating Officer, and Jim Volk, Senior Vice President of Finance and CFO. After our prepared remarks, we will conduct a question and answer session. As always, let me refer you to slide two of the presentation, which contains our safe harbor disclaimer, and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statements. Therefore, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. They're cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. And with that, I'll now turn the call over to Chris. Go ahead, Chris.

Thanks, Kirk. We appreciate everyone joining us this morning, and I hope everyone is staying healthy and safe. I'll start with an update on our broadband network expansion on slide four. We had another record quarter for newly constructed glow fiber passings of 18,000 and ended the first quarter with almost 94,000 glow fiber passings, bringing our total passings across all of our broadband networks to over 332,000. Our engineering and construction teams are executing very well, and we're well on our way to reaching our goal of 150,000 glow passings by year end. Turning to slide five, we added about 3,600 net data additions during the first quarter with Glow Fiber contributing 2,400. The Glow Fiber net additions were 14% higher than the fourth quarter 2021 and 76% higher than the first quarter of last year. We finished the quarter on a high note with almost 1,000 Glow data net ads in March. and have seen this momentum continue into April. Our incumbent cable business added over 900 data net additions during the first quarter. With our incumbent cable data penetration now near 51% and approaching our expected terminal penetration in the mid 50% range, we expect slower but steady growth in the coming periods from this business. Similar to recent quarters, we had another strong quarter of delighting and retaining our customers with churn of 1.3% across all of our data products, driven by high-quality broadband services, outstanding local customer service, and fair pricing. Before turning the call over to Jim, I'd like to comment on the priorities that we have set for ourselves to achieve our long-term financial goals. To accomplish our aggressive fiber-first growth strategy, we've increased our focus in a couple important areas. One priority is further investing in our people. In today's highly competitive labor market, we've increased our salary scale to attract and retain key team members. Although these adjustments have put short-term pressure on our compensation expenses and operating margin, continuing to have the best team and maintaining continuity are key drivers towards long-term financial success. On a similar note, we've made long-term decisions to upgrade our operations support, customer relationship management, and ERP systems. In the first four months of this year, we've converted to a new ERP and lease accounting system, launched a new website for Shentel.com that allows online customer ordering for our incumbent cable business, and deployed a new workforce platform for scheduling customer installations and dispatching technicians. These technology investments, along with another half dozen system conversions that are in progress, have added expense in our first quarter results as we incurred conversion and overlapping maintenance fees for the legacy and replacement software. As we complete our system upgrades and retire the legacy systems in the next 20 months, We expect the conversion and overlapping expenses to phase out, leading to a run rate reduction of approximately $2 million. The upgraded automation will create operating efficiencies, and we expect to realize additional savings in the years following, which will help scale our business and improve our margins in the long term. With that, I'll now turn the call over to Jim to review the details of our financial results.