Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q3 2013 Earnings Presentation
38 slides from Shenandoah Telecommunications's earnings presentation, Nov 1, 2013
Slide 1: 3Q 2013 Earnings Conference Call
November 1, 2013 3Q 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: Q3'13 Highlights
* Q3’13 Highlights Net Income Growth Increased 394% to $6.7 million Adjusted OIBDA increased 12% to $28.7 million Revenue Growth Revenue grew 6.4% over Q3’12 to $77.5 million Customer Growth 9/30/12 9/30/13 Change Wireless 381,321 400,336 +19,015 Cable (RGUs) 114,762 118,805 +4,043
Slide 6: Wireless Highlights
* Wireless Highlights PCS Customers (000s) Postpaid Growth Postpaid customers up 3.4% over last 12 months Prepaid Growth Prepaid customers up 8.3% over last 12 months Operating Income Increase Improvement of $7.2 million, or 87.9%
Slide 7: Cable Highlights
* Cable Highlights Upgrades of 2010 Acquisitions Finished Revenue Growth Operating revenues grew 8.0% over Q3’12 118,805 RGUs at 9/30/2013, up 3.5% over Q3’12 Adjusted OIBDA $1.2 million, up 13% from Q3’12
Slide 8: Tail End of Significant Capital Expenditures
* Tail End of Significant Capital Expenditures Acquisitions Upgrades Reduced CapEx 2008-2010 2010-2013 2014 Cable Upgraded acquired networks to offer “Triple Play” with robust high speed data offering Streamline network to gain operating efficiency Wireless Investing heavily in upgrading wireless ne
Slide 9: Strategic Initiatives
Strategic Initiatives | * Optimize 4G LTE Network by end of year + Leverage improved network and our regional focus to drive growth | + Leverage significant improvements made to network * Drive unified brand initiative launched in 2012 * Continue to deliver total RGU growth | Cable & Wireline + Grow
Slide 10: Adele Skolits, VP of Finance and CFO
* Adele Skolits VP of Finance and CFO
Slide 11: Profitability: Consolidated Results
* Profitability Consolidated Results ($ in thousands, except per share amounts) 9/30/12 9/30/13 Operating Income $ 5,407 $ 13,262 Net Income $ 1,361 $ 6,717 Basic and Diluted Earnings Per Share $ 0.06 $ 0.28 For the Quarter Ended:__
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 Q3'13 vs. Q3'12
* Wireless Segment – Change in Adjusted OIBDA Q3’13 vs. Q3’12 ($ millions)
Slide 15: Cable Segment – Change in Adjusted OIBDA Q3'13 vs. Q3'12
* Cable Segment – Change in Adjusted OIBDA Q3’13 vs. Q3’12 ($ millions)
Slide 16: Earle MacKenzie, EVP and COO
-— Earle MacKenzie EVP and COO AXSHENTEL’
Slide 17: Wireless Segment
<a Wireless Segment
Slide 18: Postpaid Customer Growth
* Postpaid Customer Growth PCS Postpaid Customers (000s)
Slide 19: Postpaid Customer Additions
* Postpaid Customer Additions Gross Additions - Postpaid Net Additions - Postpaid Net adds of 1,370 in Q3 2013 versus 3,842 in Q3 2012 Q3 2013 churn of 1.80% down from 1.89% in Q3 2012 Shentel-controlled channels produced 55% of gross adds in Q3 2013 and 47% in Q3 2012
Slide 20: 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 21: PCS Revenues
* PCS Revenues Annual Gross Billed Revenues - Postpaid ($ millions) * *Net service fee increased from 12% to 14% effective 8/1/2013
Slide 22: 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 23: PCS Prepaid Statistics
* PCS Prepaid Statistics Churn % Average Gross Billed Revenue
Slide 24: Cable Segment
-— Cable Segment
Slide 25: Cable - RGU Growth by Quarter
* Cable - RGU Growth by Quarter Customers *74,726 75,386 74,798 75,573 *74,557 75,324 RGU's/Customer 1.51 1.52 1.54 1.54 1.56 1.58 * College students disconnect during summer
Slide 26: 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 $94.96 and $107.05 for Q3 2012 and Q3 2013, respectively.
Slide 27: 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 28: Wireline Segment
* Wireline Segment
Slide 29: Key Operational Results - Wireline
* Key Operational Results - Wireline Access line loss of 1.3% in past 12 months Broadband penetration in LEC area at 56.3% Total connections at 9/30/13 of 34.7 thousand Access lines (000s) DSL Customers (000s)
Slide 30: Investing in the Future
* Investing in the Future Revised 2013 estimate to $102.4 million. Approximately $17 million of planned FY’13 spend is being shifted into 2014. Capex should decrease significantly in 2014. Capex Spending ($ millions) * Capex spending for 2012 included $24.7 million of contracted commitments that was
Slide 31: Q&A
AXSHENTEL’ Q&A mM
Slide 32: Appendix
AXSHENTEL’ Appendix 32
Slide 33: Non-GAAP Financial Measure – Billed Revenue per Postpaid Subscriber
* Non-GAAP Financial Measure – Billed Revenue per Postpaid Subscriber
Slide 34: Postpaid PCS Customers Top Picks Q3 2013
* Postpaid PCS Customers Top Picks Q3 2013 Top Service Plans – 81% of Gross Adds Top Devices – New Activations – All Channels Everything Data 1500 46% Unlimited, My Way 27% Everything Data 450 9% Samsung Galaxy S III 32% iPhone 23% Samsung Galaxy S4 12% Smartphones made up 72% of the Postpaid base i
Slide 35: iPhone Statistics – Q3'13
* iPhone Statistics – Q3’13 23% of Q3 Gross Adds 29% of iPhones were sold or upgraded in Shentel-controlled channels 25.6% of 09/30/13 Postpaid customers had the iPhone, up from 23.7% at 06/30/13 iPhone Base - 9/30/2013 47% iPhone 4S 28% iPhone 4 25% iPhone 5
Slide 36: Non-GAAP Financial Measure – Average Monthly Cable Revenue
* Non-GAAP Financial Measure – Average Monthly Cable Revenue
Slide 37: Key Operational Results – Mobile Company
* Key Operational Results – Mobile Company Mobile Tower Revenue ($ millions) Towers and Leases * * The decrease in operating income primarily resulted from a $0.3 million adjustment to reduce straight-line rent accruals at a small number of sites related to termination of Sprint’s iDEN leases.
Slide 38: Wireline Statistics – Fiber Sales
* Wireline Statistics – Fiber Sales ($ millions) Fiber Lease Revenue
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