Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q1 2020 Earnings Presentation
29 slides from Shenandoah Telecommunications's earnings presentation, Apr 30, 2020
Slide 1: Q1 2020 Earnings Conference Call
Q1 2020 Earnings Conference Call April 30, 2020
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: COVID-19 Actions
COVID-19 Actions • Protect our employees and the communities that we serve • Instituted work at home policy for most employees • Outfitted customer facing employees with personal protective equipment • Implemented social distancing guidelines in our retail stores and customer homes during installati
Slide 5: Consolidated Normalized Free Cash Flow and Uses
Consolidated Normalized Free Cash Flow and Uses Normalized Free Cash Flow* (in millions) Total Debt & Liquidity (in millions) Cash & Cash Equivalents Available Revolving Line of Credit 112.4% Total Debt $723.5 Effective Interest Rate of 3.15% $36.0 Net Leverage Ratio of 2.35 $17.2 $195.2 $75.0 $120.
Slide 6: Sprint/T-Mobile Merger Options
Sprint/T-Mobile Merger Options 4/1/2020 4 Sprint / T-Mobile merger closed 4 Network Technology, Brand, and Combination Conversion Notice received 4/1/2020 - 4 Negotiation period 6/30/2020 7/1/2020 - 4 New T-Mobile may elect an option to purchase the operating assets of our PCS 8/31/2020 __ business
Slide 7: Jim Volk, SVP of Finance and CFO
Jim Volk SVP of Finance and CFO 7
Slide 8: First Quarter Consolidated Results
First Quarter Consolidated Results Revenue (in millions) Adjusted OIBDA (in millions) $67.7 $158.8 $153.2 $64.2 42.6% 42.2% margin margin Q1'19 Q1'20 Q1'19 Q1'20 Travel revenue 8
Slide 9: First Quarter Consolidated Results
First Quarter Consolidated Results Operating Income (in millions) Net Income Per Diluted Share $24.8 $0.28 $23.1 $0.27 Q1'19 Q1'20 Q1'19 Q1'20 Travel revenue 9
Slide 10: Wireless Highlights - First Quarter Results
Wireless Highlights - First Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $54.6 $112.6 $104.1 $49.2 $15.3 $12.8 $8.0 $3.3 $13.1 $13.1 Postpaid Prepaid Travel & 48.5% 47.2% Other margin margin Equipment $76.2 $74.9 Q1'19 Q1'20 Q1'19 Q1'20 10
Slide 11: Broadband Highlights - First Quarter Results
Broadband Highlights - First Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) 6.2% $49.8 $46.9 $2.1 4.3% $20.9 $2.2 $5.1 $20.0 $5.7 $7.7 $6.6 Cable residential & SMB Fiber enterprise & wholesale 42.7% 42.0% margin margin RLEC $34.9 $32.4 Other & Equipment Q1'19 Q1'20 Q1'19 Q1'20 11
Slide 12: Tower Highlights - First Quarter Results
Tower Highlights - First Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $3.7 $2.3 $3.0 $1.8 59.5% 60.7% margin margin Q1'19 Q1'20 Q1'19 Q1'20 12
Slide 13: Dave Heimbach, EVP and COO
XG Dave Heimbach EVP and COO AXSHENTEL
Slide 14: Wireless - Postpaid Metrics
Wireless - Postpaid Metrics Subscribers Churn 847,771 800,952 78,122 109,361 3.35% 2.97% 1.74% 1.76% 722,830 738,410 Q1'19 Q1'20 Q1'19 Q1'20 Phones Devices Phones Devices Gross Additions Net Additions ARPU* 50,847 51,991 3,577 $42.61 5,776 $40.65 13,061 15,257 5,671 5,888 37,786 36,734 105 (2,311) Q
Slide 15: Wireless - Prepaid Metrics
Wireless - Prepaid Metrics Subscribers Churn 279,096 267,220 4.14% 4.13% Q1'19 Q1'20 Q1'19 Q1'20 Gross Additions Net Additions ARPU * $37.71 $37.50 40,979 8,516 39,074 5,084 Q1'19 Q1'20 Q1'19 Q1'20 Q1'19 Q1'20 * Refer to the Appendix for a reconciliation of Wireless segment revenue to Prepaid ARPU.
Slide 16: Broadband - Incumbent Cable Metrics
Broadband - Incumbent Cable Metrics Revenue Generating Units (RGU) Average Monthly Revenue per Customer * $114.62 168,806 170,888 $112.85 59,202 52,918 Voice 86,214 Broadband 78,867 Video 30,737 31,756 Q1'19 Q1'20 Q1'19 Q1'20 Broadband Penetration Broadband Churn 41.7% 38.3% 1.53% 1.48% Q1'19 Q1'20
Slide 17: Broadband - Glo Fiber Metrics
Broadband - Glo Fiber Metrics Revenue Generating Units (RGU) Product Attach Rates 682 StreamTV Phone 149 Voice 33% 29% 453 Broadband 18% 177 Video 12% 36 126 80 15 Q4'19 Q1'20 Q4'19 Q1'20 Broadband Penetration Homes Passed 5,347 8.5% 7.3% 1,723 Q4'19 Q1'20 Q4'19 Q1'20 17
Slide 18: Cable and Fiber Network
Cable and Fiber Network Target Planned Passings* Launch Harrisonburg 10,377 Active Staunton 10,202 Active Front Royal 5,018 Active Winchester 9,407 Active Salem 7,744 1H21 Lynchburg 9,824 1H21 Roanoke 24,742 1H21 Total 77,314 *Target passings defined as Single Family Households (SFU), residential Mu
Slide 19: Tower - Metrics
Tower - Metrics Towers Tenants 226 Intercompany External 211 408 368 205 193 203 175 Q1'19 Q1'20 Q1'19 Q1'20 19
Slide 20: Capital Expenditures
Capital Expenditures Capex Spending ($ in millions) $125 - $148 $3 - 6 $50 - $55 $40 - $45 $44 $1 $17 $32 $9 $30 - $40 $13 $25 $9 Q1'19 Q2'19 2020 Guidance Wireless Broadband* Glo Fiber & Fixed Wireless Tower Other *Excludes CapEx for Glo Fiber and Fixed Wireless 20
Slide 21: Q&A
AXSHENTEL Q&A 21
Slide 22: Appendix
Appendix AXSHENTEL
Slide 23: 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 24: Adjusted OIBDA by Segment - Quarterly Results
Adjusted OIBDA by Segment - Quarterly Results Three Months Ended March 31, 2020 Corporate & (in thousands) Wireless Broadband Tower Eliminations Consolidated Operating income (loss) $ 23,444 $ 10,030 $ 1,795 $ (12,219) $ 23,050 Depreciation 21,010 10,717 470 271 32,468 Amortization of intangible ass
Slide 25: Net Leverage Ratio
Net Leverage Ratio ($ in thousands) Q1'20 Total Debt $ 723,509 Cash 120,232 Total Debt less Cash 603,277 Adjusted OIBDA 64,201 x4 Adjusted OIBDA (last quarter annualized) $ 256,804 Net leverage ratio 2.35 25
Slide 26: Normalized Free Cash Flow & Free Cash Flow
Normalized Free Cash Flow & Free Cash Flow ($ in thousands) Q1'19 Q1'20 Net Cash Provided by Operations $61,663 $61,108 Less: Capital Expenditures* (44,420) (25,104) Normalized Free Cash Flow 17,243 36,004 Glo Fiber & Fixed Wireless Capital Expenditures — (7,195) Free Cash Flow $17,243 $28,809 *Excl
Slide 27: Wireless Average Revenue per User (ARPU)
Wireless Average Revenue per User (ARPU) ($ in thousands, except subscribers and revenue per subscriber amounts) Q1'19 Q1'20 Postpaid billings $ 101,869 $ 103,096 Average postpaid subscribers* 796,953 845,304 Average monthly billed revenue per postpaid subscriber** $ 42.61 $ 40.65 Prepaid billings $
Slide 28: Broadband - Average Revenue Per Customer
Broadband - Average Revenue Per Customer ($ in thousands, except customer and per customer amounts) Q1'19 Q1'20 Incumbent Cable Residential & SMB Revenue $ 32,426 $ 34,866 Average customer relationships* 95,782 101,616 Average Revenue Per Customer** $ 112.85 $ 114.62 * Represents a quarterly average
Slide 29: Broadband - Cable & Fiber Metrics
Broadband - Cable & Fiber Metrics As of March 31, 2019 2020 Homes passed 206,113 212,129 Total revenue generating units 168,806 171,570 Customer relationships 95,933 103,287 RGUs per customer relationship 1.76 1.66 Video Revenue generating units 59,202 53,067 Penetration 28.7% 25.0% Broadband Revenu
Shenandoah Telecommunications Company — Q1 2020 Earnings Presentation on 6ix