As it exits bankruptcy and re-emerges as a private company, Little Rock-based Windstream Holdings reported a second quarter net loss of $162.4 million on Thursday (July 30).
Windstream reported quarterly revenues of $1.185 billion, down from $1.286 billion a year ago. Its second quarter net loss of $162.4 million was in improvement from a year-ago loss of $544.1 million. Net loss per diluted share was $3.80 versus $12.76 one year ago.
Embroiled in bankruptcy negotiations for more than a year, Windstream has shed more than $4 billion in corporate debt, renegotiated terms with its largest vendors, and is moving to reposition itself as high-speed broadband and enterprise service provider. Windstream has secured approximately $2 billion in new capital to expand 1 gig Internet service in rural America.
“Windstream delivered solid second-quarter results bolstered by strong consumer broadband growth and increasing demand for enterprise strategic products and services. With our plan of reorganization confirmed by the court, we are poised to emerge later this summer from restructuring stronger than ever to expand broadband to rural America and help businesses succeed in the digital transformation,” said Tony Thomas, president and CEO of Windstream.
Additional quarterly highlights include:
For the three months ended June 30, 2020, Windstream added more than 22,000 Kinetic broadband customers, representing the company’s highest quarterly net add growth in over a decade.
For the first six months of the year, its kinetic division added more than 40,000 net new broadband customers, surpassing the company’s full-year guidance of 40,000 new broadband customers. As a result, the company is increasing its 2020 full-year guidance to 60,000 net broadband customers.
Enterprise strategic revenues grew 24% for the first six months of the year compared to the same period a year ago.
BANKRUPTCY EXIT
In late June, a federal bankruptcy court in New York signed off on Windstream’s exit plan, a move expected to result in a late August resolution.
Windstream initially filed for Chapter 11 bankruptcy a year ago after a legal ruling by U.S. District Judge Jesse Furman in New York determined that it had violated bond agreements after splitting off the former Communications Sales & Leasing (CS&L) in April 2015. CS&L was the previous name of Uniti, a real estate investment trust that was spun out of Windstream and manages its fiber optic network.
Furman’s decisive ruling arose from challenges by Aurelius Capital Management and U.S. Bank National Association that the 2015 deal was invalid under the terms of a debt exchange offer and consent solicitations in respect to senior notes issued by its Windstream Services LLC to finance the spinoff. The court further ruled that Aurelius was entitled to a $310.5 million judgment, plus interest from and after July 23, 2018.
At the time of the ruling, Windstream said it would bankrupt the company, which led to the Chapter 11 filing. It also led Windstream, a former Fortune 500 company, to be delisted on the NASDAQ stock exchange.
The biggest obstacle to resolving the bankruptcy status was between Windstream and Uniti.
In a settlement announced in March and approved in May, Uniti agreed to invest up to $1.75 billion in growth capital improvements, consisting of long-term fiber and related assets in certain Windstream properties over the initial term of new leases.
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