Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q2 2015 Earnings Presentation
35 slides from Shenandoah Telecommunications's earnings presentation, Jul 31, 2015
Slide 1: 2Q 2015 Earnings Conference Call
2Q 2015 Earnings Conference Call July 31, 2015
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. Th
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 an
Slide 4: Chris French, President and CEO
Chris French President and CEO 4
Slide 5: Second Quarter 2015 Highlights
Second Quarter 2015 Highlights Net Income Growth – Q2’15 v. Q2’14 Increased 21.6% over Q2’14 to $10.5 million Adjusted OIBDA increased 12.7% to $37.2 million Revenue Growth Revenue grew 5.3% over Q2’14 to $85.7 million Customer Growth 6/30/14 6/30/15 Change Wireless 415,849 441,923 +26,0
Slide 6: Wireless Highlights
Wireless Highlights Postpaid Growth PCS Customers (000s) Postpaid customers up 6.8% over last 12 months Prepaid Growth Prepaid customers up 5.3% over last 12 months Operating Income Increase Improvement of $1.7 million, or 9.7% 6
Slide 7: Cable Highlights
Cable Highlights Revenue Growth Cable OIBDA (in millions) Operating revenues $24.2 million, growth of 15.9% over Q2’14 Q2’15 Adjusted OIBDA $5.7 million, up 46.0% from Q2’14 123,390 RGUs at Q2’15, up 6.2% over Q2’14 Adjusted OIBDA Margin Cable RGUs Shows Long Term Improvement 24% 18% 15% 10%
Slide 8: Other Highlights
Other Highlights *Fiber Lease Revenue (in millions) Wireline Cable $8.0 $8.5 $0.6 $0.5 $7.9 Wireline and Cable - $7.5 Fiber lease revenues of $8.5 million, up 6.0% from Q2’14 Q2'14 Q2'15 *Includes both Affiliate and Non-affiliate revenues 154 towers generated Mobile Tower OIBDA ($ thousands) $1.
Slide 9: Adele Skolits, VP of Finance and CFO
Adele Skolits VP of Finance and CFO 9
Slide 10: Profitability
Profitability Consolidated Results ($ in thousands, except per share amounts) For the Quarter Ended:___ 6/30/14 6/30/15 Change Operating Income $ 15,793 $ 18,750 19% Net Income $ 8,615 $ 10,474 22% Earnings Per Share: Basic $ 0.36 $ 0.43 19% Diluted $ 0.35 $ 0.43 23% 10
Slide 11: Profitability: Adjusted OIBDA
Profitability Adjusted OIBDA ($ thousands) For the Quarter Ended: 6/30/14 6/30/15 Change Operating Income 15,793 18,750 19% Depreciation and Amortization 16,595 17,663 6% Share Based Compensation 532 608 14% Loss on Asset Disposals 123 218 77% Adjusted OIBDA 33,043 37,239 13% 11
Slide 12: Adjusted OIBDA by Segment ($ millions)
Adjusted OIBDA by Segment ($ millions) Wireless Cable Wireline Q2'14 Q2'15 Q2'14 Q2'15 Q2'14 Q2'15 Operating Income $ 17.6 $ 19.3 $ (2.1) $ (0.4) $ 3.8 $ 4.0 Depreciation and amortization 8.1 8.6 5.8 5.8 2.6 3.1 Loss on asset sales - - - 0.1 - 0.1 Share based compensation 0.1 0.1 0.2 0.2 0.1 0.1 Adj
Slide 13: Wireless Segment – Change in Adjusted OIBDA
Wireless Segment – Change in Adjusted OIBDA Q2’15 vs. Q2’14 ($ millions) 13
Slide 14: Cable Segment – Change in Adjusted OIBDA
Cable Segment – Change in Adjusted OIBDA Q2’15 vs. Q2’14 ($ millions) 14
Slide 15: Earle MacKenzie, EVP and COO
Earle MacKenzie EVP and COO 15
Slide 16: Postpaid Customer Growth
Postpaid Customer Growth PCS Postpaid Customers (000s) 16
Slide 17: Postpaid Customer Additions
Postpaid Customer Additions Gross Additions - Postpaid Net adds of 5,414 in Q2 2015 versus 2,648 in Q2 2014 Shentel-controlled channels produced 36% of gross adds in Q2 2015 and 47% in Q2 2014 Q2 2015 churn of 1.40%, down from 1.60% in Q2 2014 Net Additions - Postpaid Postpaid Churn 17
Slide 18: Billed Revenue per Customer Down; Data Usage Increasing
Billed Revenue per Customer Down; Data Usage Increasing Gross Billed Service Revenue per Postpaid User – Data & Voice 1 1 – Before Service credits, bad debt, Sprint Nextel fees. 18
Slide 19: PCS Revenues
PCS Revenues Gross Billed Revenues - Postpaid ($ millions) * 19
Slide 20: PCS Prepaid Statistics
PCS Prepaid Statistics Gross Additions (000s) Cumulative Customers (000s) *The losses of customers in Q2’14 and Q2’15 largely relate to more stringent governmental requirements for customers renewing their eligibility for the government subsidized Assurance program. 20
Slide 21: PCS Prepaid Statistics
PCS Prepaid Statistics Churn % Average Gross Billed Revenue 21
Slide 22: Network Statistics at 6/30/15
Network Statistics at 6/30/15 546 Cell Sites 94% have a second LTE carrier at 800 MHz 166 sites have three carriers, including a second carrier at 1900 MHz Traffic 86% of data traffic is on LTE, with 34% on 800 MHz Average speeds of approximately 5 Mbps Data usage grew 11% in Q2’15 A
Slide 23: Cable - RGU Growth by Quarter
Cable - RGU Growth by Quarter Customers 69,889(1) 71,302 71,298 72,192 71,469(1) RGU's/Customer 1.66 1.69 1.71 1.72 1.73 1. College students disconnect during summer 23
Slide 24: 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 $124.32 and $147.12 for Q2 2014 and Q2 2015, respectively. 24
Slide 25: Key Operational Results – Cable
Key Operational Results – Cable* Q2 2014 Q2 2015 Homes Passed 171,147 172,144 Total Revenue Generating Units 116,221 123,390 Customer Relationships 69,889 71,469 RGUs per Customer Relationship 1.66 1.73 Video Revenue generating units 51,699 50,892 Penetration 30.2% 29.6% Digital video penetration 63
Slide 26: Key Operational Results - Wireline
Key Operational Results - Wireline Access lines (000s) Access line loss of 1.0% in past 12 months Broadband penetration in LEC area at 59.5% Total connections at 6/30/15 of 34.5 thousand DSL Customers (000s) 5,473 video subscribers at 6/30/15 26
Slide 27: Wireline and Cable Fiber Sales ($ millions)
Wireline and Cable Fiber Sales ($ millions) New External Fiber Lease Contracts* *Amounts shown represent the total contract value. Contract Terms range from 36 to 120 months. 27
Slide 28: Investing in the Future
Investing in the Future Capex Spending ($ millions) 2015 Capex Budget: 33% Network Capacity 30% Network Maintenance 20% Network Expansion 17% Success-Based * Accounts payable at December 31, 2013 and 2012 included $6.5 million and $24.7 million associated with PCS Network Vision capital ex
Slide 29: Q&A
ASHENTEL’ Q&A 29
Slide 30: Appendix
Appendix ASHENTEL’
Slide 31: Non-GAAP Financial Measures – Billed Revenue per Prepaid & Postpaid Subscriber
Non-GAAP Financial Measures – Billed Revenue per Prepaid & Postpaid Subscriber Dollars in thousands (except subscribers and revenue per subscriber) 2Q 2014 2Q 2015 Gross billed revenue Wireless segment total operating revenues $ 51,774 $ 52,702 Equipment revenue (1,306) (1,286) Tower lease revenue (
Slide 32: Postpaid PCS Customers Top Picks Q2 2015
Postpaid PCS Customers Top Picks Q2 2015 Top Service Plans – 54% of Top Devices – New Activations Gross Adds – All Channels Family Unlimited, Talk/Text/Data 20% iPhone 36% Unlimited, Talk/Text 11% Samsung Galaxy S 21% $50 Unlimited Plan 10% LG G Pad 9% Unlimited, My Way 7% LG G3 7% Data Share, U
Slide 33: iPhone Statistics – Q2'15
iPhone Statistics – Q2’15 36% of Q2 Gross Adds 31% of iPhones were sold or upgraded in Shentel- controlled channels 37.3% of 6/30/15 Postpaid customers had the iPhone, up from 36.5% at 3/31/15 and 31.6% at 6/30/14. iPhone Base – 6/30/15 43% iPhone 5, 5C & 5S 40% iPhone 6, 6 Plus 17% iP
Slide 34: Non-GAAP Financial Measure – Average Monthly Cable Revenue
Non-GAAP Financial Measure – Average Monthly Cable Revenue Dollars in thousands (except subscribers and revenue per user) Q2 2014 Q2 2015 Net Service Revenue $ 17,417 $ 20,280 Set-top box rentals 1,752 1,963 FUSC and pass-through fees 338 410 Video, Internet & Voice Revenue 19,507 22,653 Other misce
Slide 35: Key Operational Results – Mobile Company
Key Operational Results – Mobile Company Towers and Leases Mobile Tower Revenue ($ millions) Towers Non-affiliate Leases 195 202 154 154 2Q'14 2Q'15 35
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