Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q2 2013 Earnings Presentation
40 slides from Shenandoah Telecommunications's earnings presentation, Aug 2, 2013
Slide 1: 2Q 2013 Earnings Conference Call
August 2, 2013 2Q 2013 Earnings Conference Call Exhibit 99.1
Slide 2: Safe Harbor Statement
* Safe Harbor Statement This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our business strategy, our prospects and our financial position.
Slide 3: Use of Non-GAAP Financial Measures
* Use of Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures that are not determined in accordance with US generally accepted accounting principles. These financial performance measures are not indicative of cash provided or used by operating activities
Slide 4: Chris French, President and CEO
* Chris French President and CEO
Slide 5: Q2'13 Highlights
* Q2’13 Highlights Net Income Growth Increased 41% to $7.8 million Revenue Growth Revenue grew 8.5% over Q2’12 to $77.5 million. Customer Growth 6/30/12 6/30/13 Change Wireless 372,095 397,669 +22,574 Cable (RGUs) 112,493 116,115 +3,622
Slide 6: Wireless Highlights
* Wireless Highlights PCS Customers (000s) Steady Postpaid growth Postpaid customers up 4.4% in the last year Decline in Prepaid for Quarter Q2’13 net decline of 3,023; due to recertification of government subsidized Assurance customers Operating Income Increase Improvement of $2.6 million, or over
Slide 7: Cable Highlights
* Cable Highlights Cable Upgrades Final upgrade to markets acquired in mid-2010 is substantially completed. Revenue Growth Operating revenues grew 6.0% over Q2’12 116,115 RGUs at 6/30/2013
Slide 8: Tail End of Significant Capital Expenditures
* Tail End of Significant Capital Expenditures Acquisitions Upgrades Reduced CapEx 2008-2010 2010-2013 2014 Cable Upgraded acquired networks to offer “Triple Play” with robust high speed data offering Streamline network to gain operating efficiency Wireless Investing heavily in upgrading wireless ne
Slide 9: Strategic Initiatives
Strategic Initiatives | + Complete 4G upgrade by end of year + Leverage improved network and our regional advantage to drive growth | + Leverage significant improvements made to network + Drive unified brand initiative launched in 2012 * Continue to delivertotal RGU growth | Cable & Wireline + Grow
Slide 10: Adele Skolits, VP of Finance and CFO
* Adele Skolits VP of Finance and CFO
Slide 11: Profitability: Net Income and Earnings Per Share
* Profitability Net Income and Earnings Per Share ($ in thousands, except per share amounts) 6/30/12 6/30/13 Operating Income $ 11,137 $ 14,500 Net Income $ 5,560 $ 7,842 Basic and Diluted Earnings Per Share $ 0.23 $ 0.33
Slide 12: Profitability: Adjusted OIBDA
* Profitability Adjusted OIBDA ($ thousands)
Slide 13: Adjusted OIBDA by Segment
* Adjusted OIBDA by Segment ($ millions)
Slide 14: Wireless Segment – Change in Adjusted OIBDA
* Wireless Segment – Change in Adjusted OIBDA Q2’13 vs. Q2’12 ($ millions)
Slide 15: Cable Segment – Change in Adjusted OIBDA
* Cable Segment – Change in Adjusted OIBDA Q2’13 vs. Q2’12 ($ millions)
Slide 16: Effective Tax Rate
* Effective Tax Rate Decrease in rate is the result of organizational changes made in 2012 These changes resulted in savings of approximately $450k in Q2’13.
Slide 17: Earle MacKenzie, EVP and COO
Earle MacKenzie EVP and COO AXSHENTEL
Slide 18: Wireless Segment
—< Wireless Segment
Slide 19: Network Vision Scorecard
* Network Vision Scorecard – as of 7/29/13 To Date, out of 525 sites: Leasing & Zoning Complete 501 or 95% Sites on air 458 or 87% Sites with 4G LTE launched 394 or 75% Number of sites on air has increased 67% since Q1 2013 4G LTE currently available to 88% of covered POPs 4G LTE service launched in
Slide 20: Postpaid Customer Growth
* Postpaid Customer Growth PCS Postpaid Customers (000s)
Slide 21: Postpaid Customer Additions
* Postpaid Customer Additions Gross Additions - Postpaid Net Additions - Postpaid Net adds of 2,340 in Q2 2013 versus 4,341 in Q2 2012 Q2 2013 churn of 1.62% up from 1.55% in Q2 2012 Shentel-controlled channels produced 44% of gross adds in Q2 2013 and 48% in Q2 2012
Slide 22: Total Revenue per Customer Up; Data Usage Increasing
* Total Revenue per Customer Up; Data Usage Increasing Gross Billed Revenue per Postpaid User – Data & Voice 1 1 – Before Service credits, bad debt, Sprint Nextel fees.
Slide 23: PCS Revenues
* PCS Revenues Annual Gross Billed Revenues - Postpaid ($ millions)
Slide 24: PCS Prepaid Statistics
* PCS Prepaid Statistics Gross Additions (000s) Cumulative Customers (000s) *The loss of customers in Q2’13 related to more stringent governmental requirements for customers renewing their eligibility for the government subsidized Assurance program.
Slide 25: PCS Prepaid Statistics: Churn and Revenue
* PCS Prepaid Statistics Churn % Average Gross Billed Revenue
Slide 26: Cable Segment
_— Cable Segment
Slide 27: Cable RGU Growth by Quarter
* Cable - RGU Growth by Quarter Customers 74,726 75,386 74,798 75,573 74,557 RGU's/Customer 1.51 1.52 1.54 1.54 1.56
Slide 28: Increasing Average Monthly Cable Revenue
* Increasing Average Monthly Cable Revenue Average Monthly Revenue per RGU Average Monthly Revenue per Customer* *Average monthly revenue per video subscriber was $92.38 and $104.99 for Q2 2012 and Q2 2013, respectively.
Slide 29: Key Operational Results – Cable
* Key Operational Results – Cable Note: Video homes passed includes 16K homes located in Shenandoah County, VA, where internet and voice services are provided by the Wireline segment.
Slide 30: Wireline Segment
_< Wireline Segment
Slide 31: Key Operational Results – Wireline
* Key Operational Results - Wireline Access line loss of 1.3% in past 12 months Broadband penetration in LEC area at 56.1% Total connections at 06/30/13 of 35.0 thousand Access lines (000s) DSL Customers (000s)
Slide 32: Investing in the Future
* Investing in the Future Network Vision spend of $55M in 2012. Budget of $60M in 2013. Success-based spending is 23% of total 2013 budget. Capex should decrease significantly in 2014. Capex Spending ($ millions) * Capex spending for 2012 included $24.7 million of contracted commitments that was inc
Slide 33: Q&A
AXSHENTEL Q&A 33
Slide 34: Appendix
AXSHENTEL Appendix 34
Slide 35: Non-GAAP Financial Measure – Billed Revenue per Postpaid Subscriber
* Non-GAAP Financial Measure – Billed Revenue per Postpaid Subscriber
Slide 36: Postpaid PCS Customers Top Picks
* Postpaid PCS Customers Top Picks Q2 2013 Top Service Plans – 74% of Gross Adds Top Devices – New Activations – All Channels Everything Data 1500 55% Everything Data 450 19% iPhone 25% Samsung Galaxy S III 21% Samsung Galaxy Victory 8% Smartphones made up 70% of the Postpaid base in Q2 2013, up fro
Slide 37: iPhone Statistics – Q2'13
* iPhone Statistics – Q2’13 25% of Q2 Gross Adds 28% of iPhones were sold or upgraded in Shentel-controlled channels 23.7% of 06/30/13 Postpaid customers had the iPhone, up from 21.2% at 03/31/13 49% iPhone 4S 30% iPhone 4 20% iPhone 5
Slide 38: Non-GAAP Financial Measure – Average Monthly Cable Revenue
* Non-GAAP Financial Measure – Average Monthly Cable Revenue
Slide 39: Key Operational Results – Mobile Company
* Key Operational Results – Mobile Company Mobile Company Revenue ($ millions) Towers and Leases * * The decrease in operating income primarily resulted from a $0.5 million adjustment to reduce straight-line rent accruals at a small number of sites related to termination of Sprint’s iDEN leases.
Slide 40: Wireline Statistics – Fiber Sales
* Wireline Statistics – Fiber Sales ($ millions) Fiber Lease Revenue
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