Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q2 2017 Earnings Presentation
34 slides from Shenandoah Telecommunications's earnings presentation, Aug 2, 2017
Slide 1: Q2 2017 Earnings Conference Call
August 2, 2017 2 Q 2017 Earnings Conference Call
Slide 2: Safe Harbor Statement
2 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
3 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 activit
Slide 4: Chris French, President and CEO
4 Chris French President and CEO
Slide 5: Second Quarter 2017 Highlights
5 Second Quarter 2017 Highlights Net Loss in Q2’17 ▪ Net loss of $80 thousand in Q2’17 compared to a net loss of $7.0 million in Q2’16 Adjusted OIBDA Growth ▪ Increased 24.2% to $69.4 million over Q2’16 Revenue Growth ▪ Increased 17.6% to $153.3 million over Q2’16 Customer Change 3/31/17 6/3
Slide 6: Wireless Highlights
6 Wireless Highlights PCS Customers (000s) ▪ Postpaid Growth Postpaid customer s up 2.2% over last 3 months ▪ Prepaid Customers Prepaid customers up 1.3% over last 3 months ▪ Adjusted OIBDA Growth Increas ed to $58.2 million, up 29.4% in Q2’17 vs Q2’16
Slide 7: Cable Highlights
7 Cable Highlights Revenue Growth Operating reven ues $29.6 million, growth of 12.0% over Q2’16 Q2’17 Adjusted OIBDA $9.9 million, up 35.6% from Q2’16 132,287 RGUs at Q2’17, up 1.1% over Q2’16 Cable Adjusted OIBDA (in millions) Cable RGUs
Slide 8: Fiber and Tower Highlights
8 Fiber and Tower Highlights Wireline and Cable fiber l ease revenues of $ 11.7 million, up 12.7% from Q2’16 195 towers generated $1.8 million of OIBDA in Q2’17 *Fiber Lease Revenue (in millions) Mobile Tower OIBDA ($ thousands) *Includes both Affiliate and Non - affiliate revenues 9.6 10.5 0.7
Slide 9: Adele Skolits, VP of Finance and CFO
9 Adele Skolits VP of Finance and CFO
Slide 10: Profitability: Consolidated Results
10 Profitability Consolidated Results ($ in millions, except per share amounts) 6/30/16 6/30/17 Operating Income $ (6.2) $ 8.3 Net Income $ (7.0) $ (0.1) Earnings Per Share: Basic Diluted $ (0.14) $ (0.14) $ (0.0) $ (0.0) For the Quarter Ended:___
Slide 11: Profitability: Adjusted OIBDA
11 Profitability Adjusted OIBDA ($ millions) 6/30/16 6/30/17 Change ($) Change (%) Operating income (6.2) 8.3 14.5 234% Depreciation and amortization 32.4 44.9 12.5 39% Share based compensation 1.0 0.8 (0.2) -20% Straight line adjustment to reduce management fee waiver 3.0 4.4 1.4 47% Amortization o
Slide 12: Adjusted OIBDA by Segment
12 Adjusted OIBDA by Segment ($ millions ) Q2'16 Q2'17 Q2'16 Q2'17 Q2'16 Q2'17 Operating income 7.3$ 6.4$ 1.2$ 3.7$ 5.2$ 5.4$ Depreciation and amortization 23.5 35.6 5.8 6.1 2.9 3.2 Plus (gain) loss on asset sales - - - (0.1) 0.1 - Share based compensation 0.3 0.4 0.3 0.2 0.1 - Straight line adjustm
Slide 13: Wireless Segment – Change in Adjusted OIBDA Q2'17 vs. Q2'16
13 Wireless Segment – Change in Adjusted OIBDA Q2’17 vs. Q2’16 ($ millions ) Postpaid Revenue Prepaid Revenue Waived Mgt Fee Travel Revenue Other & Postpaid Acquisition Costs Prepaid Costs Prepaid Acquisition Costs Network Costs Total (1) Postpaid Revenue and Prepaid Revenue exclude the effect of al
Slide 14: Cable Segment – Change in Adjusted OIBDA Q2'17 vs. Q2'16
14 Cable Segment – Change in Adjusted OIBDA Q2’17 vs. Q2’16 ($ millions )
Slide 15: Earle MacKenzie, EVP and COO
15 Earle MacKenzie EVP and COO
Slide 16: Subscriber Growth
16 Subscriber Growth (1) Includes approximately 19,000 postpaid and 6,000 prepaid customers acquired from Sprint on 4/6/17
Slide 17: Postpaid Customer Additions
17 Postpaid Customer Additions Net Change - Postpaid Gross Additions - Postpaid (1) New Service Area includes the nTelos acquisition and the E xpansion A rea acquired on 4/6/17. Charts exclude the approximately 19,000 postpaid subscribers obtained from Sprint. (2) Q2’16 results include a partial qua
Slide 18: PCS Postpaid Statistics
18 PCS Postpaid Statistics Gross Billed Revenue Less Credits and Discounts per Postpaid User Postpaid Churn
Slide 19: PCS Prepaid Statistics
19 PCS Prepaid Statistics Gross Additions (000s) Cumulative Customers (000s) In Q4’16, approximately 24,000 customers were dropped from the prepaid customer count as a result of reducing the period of t ime a customer can be inactive and be included in the customer count. In Q2’17, approximately 4,3
Slide 20: PCS Prepaid Statistics: Churn and Revenue
20 PCS Prepaid Statistics Churn % Average Gross Billed Revenue (1) – In Q4’16, customers were dropped from the prepaid customer count as a result of reducing the period of time a customer can be inactive and be included in the customer count. The churn calculation excludes the impact from this one -
Slide 21: Status of Network Enhancements – nTelos Footprint
21 Status of Network Enhancements – nTelos Footprint 100 186 220 363 0% 20% 40% 60% 80% 100% Coverage Sites 3G to 4G Add 800 Mhz Decommission Overlapping Sites Completed Expected Completion in 2017 Expected Completion in 2018 Enhancement # of cell sites
Slide 22: nTelos Area Distribution
May 6, 2017 Q2 2017 Estimated YE 2017 Company Owned Stores 41 31 29 Agent Postpaid Stores 55 69 79 Nationals – Postpaid 29 32 32 Total Postpaid Stores 125 132 140 Agent Boost Stores 33 64 83 Nationals - Boost 50 56 56 Total Boost Stores 83 120 139 nTelos Area Distribution (1) Includes nTelos and Spr
Slide 23: Cable - RGU Growth by Quarter
23 Cable - RGU Growth by Quarter Customers 76,471 77,393 77,366 77,925 77,305 RGU's/Customer 1.71 1.71 1.71 1.70 1.71 (1) College students disconnect during summer (1) (1)
Slide 24: Increasing Average Monthly Cable Revenue
24 Increasing Average Monthly Cable Revenue Average Monthly Revenue per RGU Average Monthly Revenue per Customer* *Average monthly revenue per video subscriber was $158.71 and $188.45 for Q2 2016 and Q2 2017, respectively .
Slide 25: Key Operational Results – Cable
25 Key Operational Results – Cable (1) - Excludes cable operations in Shenandoah County, VA which are included in the Wireline segment. (2) - Wireline segment includes approximately 16.5k homes passed, 5.2k video customers, and 1.4k cable modem customers (2) Q2 2016 Q2 2017 Homes Passed (1) 184,627
Slide 26: Key Operational Results - Wireline
26 Key Operational Results - Wireline A ccess line loss of 5.8% in past 12 months as a result of no longer requiring access line to purchase internet service Effective Q4’15, subscribers were offered a cable modem internet option up to 101 Mbps 5,180 video subscribers at 6/30/17 Access lines (
Slide 27: Wireline and Cable Fiber Sales
27 Wireline and Cable Fiber Sales ($ millions) Fiber Lease Revenue New External Fiber Lease Contracts * * Amounts represent the first 10 years of contract value. Contract Terms range from 36 to 120 months.
Slide 28: Investing in the Future
28 Investing in the Future Capex Spending ($ millions) 2017 Capex Budget: 57% Upgrades and Expansion of nTelos network 14% Network Maintenance 10% Network Expansion 10 % Additional Network Capacity 9% Success - Based * Accounts payable at December 31, 2016, 2015 and 2014 included $14.4 mil
Slide 29: Q&A
AXSHENTEL Q&A 29
Slide 30: Appendix
Appendix AXSHENTEL’
Slide 31: Non-GAAP Measures – Billed Revenue per Prepaid & Postpaid Subscriber
31 Non - GAAP Financial Measures – Billed Revenue per Prepaid & Postpaid Subscriber Calculation of Billed revenue per subscriber = Gross billed revenue less discounts / Average subscribers / 3 months Dollars in thousands (except subscribers and revenue per subscriber) Gross billed revenue 2Q 2016 2Q
Slide 32: Network Statistics at 6/30/17
32 Network Statistics at 6/30/17 Cell Sites Legacy New CDMA Base Stations (sites) 568 973 nTelos 3G s ites still requiring upgrade 0 34 Sites with 2 nd LTE carrier 550 869 Sites with three carriers, including a 2 nd carrier @ 1900 MHz 209 195 Sites with 2.5 GHz LTE 141 178 Traffic % LTE traffic 96.7
Slide 33: Non-GAAP Measure – Average Monthly Cable Revenue
33 Non - GAAP Financial Measure – Average Monthly Cable Revenue Dollars in thousands (except subscribers and revenue per subscriber) Q2 2016 Q2 2017 Net Service Revenue $ 22,258 $ 25,145 Set-top box rentals 2,119 2,080 FUSC and pass-through fees 426 435 Video, Internet & Voice Revenue 24,803 27,660
Slide 34: Key Operational Results – Mobile Company
34 Key Operational Results – Mobile Company Mobile Tower Revenue ($ millions) Towers and Leases (in thousands) Q2'16 Q2'17 Operating Income $1,121 $1,320 Deprec. and Amort. 472 471 Loss on Asset Disposals 22 - Share Based Compensation 13 6 Adjusted OIBDA $1,628 $1,797
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