Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q3 2021 Earnings Presentation
28 slides from Shenandoah Telecommunications's earnings presentation, Oct 29, 2021
Slide 1: Q3 2021 Earnings Conference Call
Q3 2021 Earnings Conference Call October 29, 2021
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 our business strategy, our prospects and our financial position. These statements can be
Slide 3: Chris French, President and CEO
Chris French President and CEO 3
Slide 4: Strategy Update
Strategy Update • 2026 broadband target remains at 730,000 serviceable addresses with a fiber first, future-proof network design • Upgrading target for Glo Fiber serviceable addresses to 450,000 home and business passings ◦ Strong municipality demand for offering choice of broadband ◦ Executed 17 ne
Slide 5: Growing Broadband Network
Growing Broadband Network Broadband Data Homes and Businesses Passed 296,196 278,952 24,347 259,891 21,797 246,790 15,240 230,002 60,836 46,368 34,441 28,652 22,347 207,655 208,691 210,210 210,787 211,013 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Incumbent Cable Glo Fiber Beam Wireless 5
Slide 6: Solid Broadband Results
Solid Broadband Results Broadband Data Net Additions 6,069 1,471 4,245 4,048 4,104 3,906 370 350 372 1,356 1,366 1,645 2,103 4,598 2,593 2,509 1,889 1,651 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Incumbent Cable Glo Fiber Beam Wireless Q1'21 excludes 512 acquired data RGUs from net additions 6
Slide 7: Dividend and Earnings Per Share
Dividend and Earnings Per Share Annual Dividend and Third Quarter YTD Earnings Per Share 2021 Annual Cash Dividend • Payable December 1st, 2021 to $0.23 shareholders of record as of close of business November 8th, 2021 2021 YTD • 62nd consecutive year of annual dividends $0.07 2021 Special Cash Divi
Slide 8: Jim Volk, SVP of Finance and CFO
Jim Volk SVP of Finance and CFO 8
Slide 9: Broadband Highlights - Third Quarter Results
Broadband Highlights - Third Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $22.6 Residential & SMB 15.4% Commercial Fiber RLEC & Other $19.6 $57.9 14.2% $4.1 $50.7 $3.9 $9.1 $7.3 38.6% 39.0% margin margin $44.8 $39.5 Q3'20 Q3'21 Q3'20 Q3'21 9
Slide 10: Tower Highlights - Third Quarter Results
Tower Highlights - Third Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $4.5 (1.2)% $4.4 $2.9 (8.7)% $2.6 64.2% 59.3% margin margin Q3'20 Q3'21 Q3'20 Q3'21 10
Slide 11: Consolidated Highlights - Third Quarter Results
Consolidated Highlights - Third Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $62.2 12.8% $4.4 $19.3 $55.2 31.7% $14.6 $2.6 $4.5 $2.9 $22.6 $19.6 $57.9 $50.7 $(6.0) $(7.8) Q3'20 Q3'21 Q3'20 Q3'21 Broadband Tower Broadband Tower Corporate Consolidated revenue includes elimination
Slide 12: Consolidated 2021 Outlook
Consolidated 2021 Outlook Revenue (in millions) Adjusted OIBDA (in millions) $243 - $246 10.6% $17 - $18 25.4% $220.8 $70 - $73 $17.1 $57.2 $11 - $12 $10.7 $88 - $89 $81.5 $226 - $228 $204.3 $(28) - $(29) $(35.0) 2020 2021 Guidance 2020 2021 Guidance Broadband Tower Broadband Tower Corporate Consoli
Slide 13: Liquidity Guidance
Liquidity Guidance • Estimated tax payment of $428M Cash & Cash Equivalents Available Debt relating to sale of Wireless due in $933 December • Fully funded business plan $400 • Expect to turn FCF positive in 2026 • Net leverage is expected to peak at 2.4x in 2024 $505 $400 $533 $105 9/30/21 Pro Form
Slide 14: Ed McKay, EVP and COO
~~. EVP and COO AXSHENTEL
Slide 15: Unique network platform with high growth potential
Unique network platform with high growth potential Government Grant Opportunities Greenfield fiber Greenfield fixed wireless Greenfield hybrid fiber / Shentel position Incumbent cable overbuilder broadband overbuilder fixed wireless provider Higher density tier III / IV Market type Mostly rural Low
Slide 16: Strategy Update - Broadband Funding
Strategy Update - Broadband Funding • American Rescue Plan (ARP) - Primary source of funding for state broadband programs ◦ Virginia - $700 million for broadband infrastructure ◦ Maryland - $400 million for broadband infrastructure and affordability ◦ West Virginia - $236 million for broadband infra
Slide 17: Integrated Fiber, Cable and Fixed Wireless Broadband Network
Integrated Fiber, Cable and Fixed Wireless Broadband Network 17
Slide 18: Broadband - Incumbent Cable Metrics
Broadband - Incumbent Cable Metrics Revenue Generating Units (RGU) Broadband Data Average Revenue per User (ARPU) $77.66 $79.31 Voice Broadband Data Video 181,479 187,012 52,907 48,667 95,962 105,116 32,610 33,229 Q3'20 Q3'21 Q3'20 Q3'21 Broadband Data Penetration Broadband Data Churn 1.89% 1.77% 49
Slide 19: Broadband - Glo Fiber Metrics
Broadband - Glo Fiber Metrics Revenue Generating Units (RGU) Broadband Data Average Revenue per User (ARPU) $80.03 Voice Broadband Data $73.69 Video 12,620 1,985 3,951 9,272 2,802 1,363 Q3'20 Q3'21 Q3'20 Q3'21 Broadband Data Penetration Broadband Data Churn 1.32% 15.2% 0.98% 12.5% Q3'20 Q3'21 Q3'20
Slide 20: Glo Fiber Market Update
Glo Fiber Market Update Passings Released to Penetration as of Sales Target Passings* Launch Date 9/30/2021 Harrisonburg VA 10.9k 18.9k October 2019 23.7% Staunton VA 10.4k 12.5k February 2020 21.9% Front Royal VA 5.1k 5.4k March 2020 18.0% Winchester VA** 8.6k 24.3k March 2020 15.7% Salem VA 6.1k 1
Slide 21: Broadband - Beam Broadband Data Metrics
Broadband - Beam Broadband Data Metrics Revenue Generating Units (RGU) Average Revenue per User (ARPU) 1,191 $72.22 $73.02 841 Q2'21 Q3'21 Q2'21 Q3'21 Penetration Churn 1.02% 4.9% 3.9% 0.42% Q2'21 Q3'21 Q2'21 Q3'21 21
Slide 22: Tower - Metrics
Tower - Metrics Towers Tenants Intercompany Carriers 222 223 470 414 206 436 208 34 Q3'20 Q3'21 Q3'20 Q3'21 Intercompany leases assumed by T-Mobile 7/1/2021 22
Slide 23: Capital Expenditures
Capital Expenditures Capex Spending ($ in millions) $161 - $166 163500000 $2 $119 $105 - $108 $83 $77 $39 $54 - $56 $43 $40 2020 2021 2021 Guidance Broadband* Glo Fiber & Beam Tower & Other *Excludes CapEx for Glo Fiber and Beam Fixed Wireless 2020 and 2021 actuals reflect Q3 YTD results 23
Slide 24: Q&A
AXSHENTEL Q&A 24
Slide 25: Appendix
Appendix AXSHENTEL
Slide 26: 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 U.S. generally accepted accounting principles. These financial performance measures are not indicative of cash provided or used by operating activities
Slide 27: Adjusted OIBDA by Segment - Quarterly Results
Adjusted OIBDA by Segment - Quarterly Results Three Months Ended September 30, 2021 Corporate (in thousands) Broadband Tower & Other Consolidated Operating income (loss) from continuing operations $ 9,721 $ 2,163 $ (10,712) $ 1,172 Depreciation 12,012 468 1,569 14,049 Amortization 199 — — 199 OIBDA
Slide 28: Broadband - Average Revenue per User (ARPU)
Broadband - Average Revenue per User (ARPU) For the third quarter ended, 2020 2021 Residential & SMB Revenue (000's) Broadband $ 22,261 $ 26,813 Incumbent Cable $ 21,770 $ 24,780 Glo Fiber $ 491 $ 1,810 Beam Wireless $ — $ 223 Video $ 14,823 $ 15,391 Voice $ 2,894 $ 2,968 Average Revenue Generating
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