Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Shareholder Meeting (May 2008)
49 slides from Shenandoah Telecommunications's shareholder meeting presentation, May 6, 2008
Slide 1: 2008 Annual Shareholders Meeting
2008 ANNUAL SHAREHOLDERS MEETING SHENANDOAH TELECOMMUNICATIONS COMPANY Exhibit 99.1
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements 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
Slide 3: Total Return - 5 Years
Total Return - 5 Years SHENANDOAH TELECOMMUNICATIONS COMPANY NASDAQ U.S. INDEX NASDAQ TELECOMMUNICATIONS INDEX
Slide 4: Comparative Results
) ) ) ) Comparative Results (in millions, except per share amounts) 0.25 11.5 17.9 21.2 169.2 8.0) 0.27 Cash Dividend (per share) 63.7) 18.8 Total Net Income w/o RTB gain 4.9) 18.8 Total Net Income 47.3) 31.2 Operating Income (16.6) 141.2 Revenues Percent Change
Slide 5: Stock Performance-Wireless
Stock Performance-Wireless January 2007 – April 2008 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 SHEN IPCS S NTLS
Slide 6: Stock Performance-Wireline
Stock Performance-Wireline January 2007 – April 2008 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 SHEN DECC SURW CNSL
Slide 7: Long-Term Stock Performance
Long-Term Stock Performance December 2001 – April 2008 0.00 5.00 10.00 15.00 20.00 25.00 30.00 SHEN Closing Price Nasdaq
Slide 8: PCS Net Income Growth
PCS Net Income Growth (thousands) (2,573) (4,359) (5,599) (5,569) 2,764 5,362 8,753 16,957
Slide 9: 2008 Annual Shareholders Meeting
2008 ANNUAL SHAREHOLDERS MEETING SHENANDOAH TELECOMMUNICATIONS COMPANY
Slide 10: Comparative Financial Results 2007 and 2006
Comparative Financial Results 2007 and 2006
Slide 11: Summary Results
Summary Results (in millions) $17.9 $11.5 $18.8 $18.8 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 Net Income Adjusted Net Income* *Excluding $6.4 gain on liquidation of Rural Telephone Bank
Slide 12: Operating Income Results
Operating Income Results (in millions) $21.2 $31.2 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 up 47.3%
Slide 13: Operating Income Growth Rate
Operating Income Growth Rate 0.5% 7.6% 9.3% 47.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
Slide 14: 2007 Reporting Segment Revenues
2007 Reporting Segment Revenues PCS 61.8% Telephone 16.8% Converged Services 7.9% Mobile 2.8% Cable TV 3.6% Other 7.0%
Slide 15: Revenues by Segment
Revenues by Segment (in millions) $10.7 $5.0 $9.8 $3.6 $24.7 $11.2 $23.8 $5.0 $3.9 $9.9 $- $5.0 $10.0 $15.0 $20.0 $25.0 Telephone Converged Services Mobile Cable TV Other
Slide 16: Reporting Segments Operating Income
Reporting Segments Operating Income (in millions) $14.4 $(1.8) $15.7 $2.1 $(2.9) $(0.5) $(7.4) $2.6 $11.3 $28.8 $(1.5) $(8.2) $(12.0) $(7.0) $(2.0) $3.0 $8.0 $13.0 $18.0 $23.0 $28.0 PCS Telephone Converged Services Mobile Cable TV Other
Slide 17: Earnings Per Share
Earnings Per Share $0.44 $0.46 $0.50 $0.80 $0.27 $- $0.20 $0.40 $0.60 $0.80 $1.00 Earnings RTB Portion $0.77
Slide 18: Dividends Per Share
$0.14 $0.15 $0.16 $0.27 $0.09 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 Regular Special $0.25 Dividends Per Share
Slide 19: Cash Flows — 2006 to 2007
) ) ) ) Cash Flows — 2006 to 2007 (in millions) 17.2 13.4 Ending Cash (0.9) 1.6 Other sources (uses) of cash (5.8) (5.3) Dividends (4.1) (9.9) Payments on Long-term Debt (29.1) (21.2) Plant and Equipment Cash used for: 0.0 11.3 Net proceeds of RTB sale 43.7 34.4 Cash generated by Operations $ 13.4 $
Slide 20: Debt as a Percent of Assets
Debt as a Percent of Assets As of 12/31/07 10% 67% 35% 39% 68% 25% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Shentel Ntelos iPCS Sprint D & E Consol. SureWest
Slide 21: Comparative Financial Results Quarter 2008 and 2007
Comparative Financial Results Quarter 1 2008 and 2007
Slide 22: Q1 Results - Net Income
Q1 Results - Net Income (in millions) $4.1 $4.8 12.3% 13.1% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Q1 2007 Q1 2008 12.0% 12.2% 12.4% 12.6% 12.8% 13.0% 13.2% 13.4% 13.6% Net Income Profit Margin
Slide 23: Q1 Results - Operating Income
Q1 Results - Operating Income (in millions) $8.5 $7.1 21.4% 23.3% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 Q1 2007 Q1 2008 19.0% 20.0% 21.0% 22.0% 23.0% 24.0% 25.0% Operating Income Operating Margin
Slide 24: Q1 Results – Revenues by Segment
Q1 Results – Revenues by Segment PCS 60% Telephone 18% Converged Services 8% Mobile 3% Cable TV 4% Other 7% Converged Services 8% Mobile 3% Cable TV 4% Other 7% Telephone 16% PCS 62%
Slide 25: Q1 Results - Revenues
Q1 Results - Revenues (in millions) $19.7 $6.0 $2.7 $1.0 $1.2 $2.4 $22.8 $5.7 $3.0 $1.0 $1.3 $2.6 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 PCS Telephone Converged Services Mobile Cable TV Other Q1 2007 Q1 2008
Slide 26: Q1 Results – Operating Income
Q1 Results – Operating Income (in millions) $(0.6) $3.6 $0.8 $(0.2) $0.1 $7.3 $2.2 $0.5 $(0.6) $(1.7) $5.9 $(1.6) $(3.0) $(2.0) $(1.0) $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 PCS Telephone Converged Services Mobile Cable TV Other Q1 2007 Q1 2008
Slide 27: Cash Flows – Q1 2007 to Q1 2008
) ) ) ) ) ) ) Cash Flows – Q1 2007 to Q1 2008 (in millions) 23.0 20.9 Ending Cash 0.3 0.6 Other sources (uses) of cash (1.0) (1.0) Payments on Long-term Debt (7.8) (3.5) Plant and Equipment Cash used for: 14.3 11.3 Cash generated by Operations $ 17.2 $ 13.4 Beginning Cash Q1 2008 Q1 2007
Slide 28: Operations Review
2008 ANNUAL SHAREHOLDERS MEETING OPERATIONS REVIEW SHENANDOAH TELECOMMUNICATIONS COMPANY
Slide 29: PCS Subscriber Growth
8,483 47,318 187,303 122,975 85,139 PCS Subscriber Growth
Slide 30: Customer Additions
Customer Additions 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Net Adds Gross Adds
Slide 31: PCS Total Revenue
PCS Total Revenue (in millions) * New contract amendment $0 $20 $40 $60 $80 $100 $120 2007*
Slide 32: PCS Service Revenue
PCS Service Revenue (in millions, except ARPU) $0 $20 $40 $60 $80 $100 $120 $140 $35 $38 $41 $44 $47 $50 $53 $56 Service Revenue ARPU
Slide 33: PCS Data Revenue
PCS Data Revenue (in millions, except ARPU) $0 $4 $8 $12 $16 $20 $24 $0 $2 $4 $5 $7 $9 $11 Data Revenue ARPU
Slide 34: PCS Distribution
61% 19% 26% 57% 24% 60% PCS Distribution Regional Other Shentel Controlled Radio Shack 6% 14% 17% 5% 11%
Slide 35: Sprint Subscribers
2005* 2006** 2007*** Sprint Subscribers (in millions) * Includes Nextel merger, US Unwired, Gulf Coast and IWO ** Includes acquisition of Nextel Partners, Alamosa, UbiquiTel and Enterprise Communications *** Includes acquisition of Northern PCS * * * ** ** ***
Slide 36: Sprint Subscriber Net Additions
Sprint Subscriber Net Additions (in millions) -5.0 0.0 5.0 10.0 15.0 20.0 25.0 2005* 2006** 2007*** * ** *** * Includes Nextel merger, US Unwired, Gulf Coast and IWO ** Includes acquisition of Nextel Partners, Alamosa, UbiquiTel and Enterprise Communications *** Includes acquisition of Northern PCS
Slide 37: Sprint Issues
Sprint Issues Merger of equals – clash of cultures Integration issues High churn Poor customer service Lack of strong marketing and sales plan
Slide 38: Recent Changes at Sprint
Recent Changes at Sprint New CEO – December 2007 Reorganize Focus on the basics Simplified “Everything” plans
Slide 39: PCS Construction
PCS Construction (in millions) $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Capacity EVDO Coverage
Slide 40: Why Large Increase in PCS Construction?
Why Large Increase in PCS Construction? Keep ahead of capacity requirements Continue to roll out high speed data (EVDO) Offer Q-Chat before the end of 2009 Coverage issues in Central PA
Slide 41: Cumulative Local Access Line Losses
-22% -20% -18% -16% -14% -12% -10% -8% -6% -4% -2% 0% Cumulative Local Access Line Losses Shentel LEC w/o Bell Total LEC
Slide 42: Internet Customers
Internet Customers 3,000 6,000 9,000 12,000 15,000 18,000 21,000 DSL Dial-Up
Slide 43: Internet Revenue
Internet Revenue (in millions) $0 $1 $2 $3 $4 $5 $6 DSL Dial-Up
Slide 44: Converged Services Subscribers
10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 Converged Services Subscribers Voice Video Data Voice Video Data Voice Video Data
Slide 45: Converged Services Revenues
$0 $2 $4 $6 $8 $10 $12 Converged Services Revenues (in millions) Voice Video Data Voice Video Data Voice Video Data
Slide 46: Converged Services Losses
Converged Services Losses (in millions) ($7) ($6) ($5) ($4) ($3) ($2) ($1) $0
Slide 47: Converged Services Issues
Converged Services Issues Need for scale to be profitable FCC rules to restrict exclusive contracts Aggressive tactics by cable companies Rely on 3 rd party for video content Fast changing marketplace
Slide 48: Why Converged Services
Why Converged Services Demand for an alternative to the cable/telephone companies Shentel’s core competence – Voice, Data and Video Shentel unique position Unrestricted growth
Slide 49: 2008 Annual Shareholders Meeting
2008 ANNUAL SHAREHOLDERS MEETING SHENANDOAH TELECOMMUNICATIONS COMPANY
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