MATTOON, Ill. -- Consolidated Communications Holdings, Inc. (Nasdaq: CNSL - News) today announced results for the second quarter and six months ended June 30, 2006. The company reported revenues of $79.3 million for the quarter and $158.8 million for the six-month period. Adjusted EBITDA and net cash provided by operating activities for the quarter were $34.5 million and $19.0 million, respectively, and were $69.3 million and $33.4 million for the six-month period, respectively.

"We had another strong quarter and we continue to execute against our business plan while generating strong cash flow to support both our dividend and growth initiatives," said Bob Currey, Consolidated's president and chief executive officer. "We also continue to improve our competitive position and secure customer relationships by offering a superior bundle of voice and broadband products, at the right price and supported by our outstanding customer service."

"Our focus remains on being the telecommunications provider of choice in the markets we serve and to continue to grow total connections. We have demonstrated consistent quarter-over-quarter connection growth in the past, and this quarter is no exception. We grew total connections by approximately 1,200 in the quarter and we are up over 6,000 for the year, now surpassing 289,000 total connections. Additionally, monthly telephone operations average revenue per access line (ARPU) increased to $96.74."

"Digital Subscriber Lines (DSL) and Internet protocol television (IPTV), our strategic growth products, accounted for almost 17,000 new connections for the twelve months ended June 30, 2006. DSL is up 39 percent year-over-year and we just completed the strongest first half in our history. We added 2,235 DSL subscribers in the quarter and have added over 12,000 new DSL subscribers in the last twelve months. DSL penetration now exceeds 26.5 percent of primary residential lines and 19.2 percent of total lines."

"Our IPTV product continues to be well received in Illinois and we continue to improve the offering based on customer feedback. We added six new channels to the programming lineup, bringing the total to over 200 channels. In the quarter, we began rolling out our new universal remote and significantly upgraded our video on demand content. IPTV subscribers increased to over 4,500, an increase of 29 percent from the prior quarter, and we passed approximately 27,000 homes, representing a 16 percent penetration rate. We expect to achieve our plan and pass 36,000 homes by the end of August," commented Currey.

Currey added, "Both DSL and IPTV are significant drivers of the approximately 23 percent year-over-year increase in service bundles. To date, 89 percent of our customers that have signed up for IPTV have taken our triple play offering, which includes voice, data and video services. Customers continue to recognize both the overall value of the bundle and proven services of Consolidated, while we benefit from efficiencies from multiple product delivery, higher overall ARPU and stronger customer relationships."

Steve Childers, Consolidated's chief financial officer, said, "I am pleased with our financial results for the quarter and the progress we are making on improving our cost structure. Compared to a year ago, we have reduced our headcount, lowered our benefit costs and consolidated our facilities. Total company Adjusted EBITDA margin, the ratio of Adjusted EBITDA to total revenue, was 43.5 percent for the quarter. Excluding the effect of a one-time $2.8 million life insurance payout in 2005, our Adjusted EBITDA margin increased by 170 basis points over the second quarter of 2005. In addition, with the anticipated completion of Phase II of our billing integration project, we will consolidate our Texas call centers. As a result, we recorded approximately $1.5 million in severance expense in the second quarter and will reduce headcount by an additional net 24 in the third quarter. We anticipate realizing approximately $1.0 million in annual wage cost savings from these headcount reductions going forward."

Childers continued, "As anticipated, during the quarter, we received proceeds of $5.9 million in cash from the redemption of our Rural Telephone Bank (RTB) class C stock. In part, due to the timing of the RTB proceeds, we elected to begin making estimated federal income tax payments for 2006. In the quarter, we made $2.7 million in estimated federal payments and $1.0 million in state payments relating to our 2005 Texas state returns. In total, our dividend payout ratio for the quarter was 61.8 percent and we ended the quarter with approximately $17.0 million of cumulative available cash as defined by our credit agreement."

Currey added, "I am pleased to announce that we will launch our IPTV product in Texas in the next thirty to sixty days. We recently completed the IP backbone in Texas, the video headend is deployed, the statewide franchise application is approved, the network is tested, and the workforce is trained and ready to go. The product offering in Texas will be very similar to our offering in Illinois and we plan to pass approximately 37,000 homes at launch, which will more than double our current total number of homes passed."

Consolidated Communications Inc.