Shenandoah Telecommunications Co · NASDAQ:SHEN

Shenandoah Telecommunications — Q1 2016 Earnings Presentation

36 slides from Shenandoah Telecommunications's earnings presentation, Apr 29, 2016

  1. Slide 1: 1Q 2016 Earnings Conference Call

    1Q 2016 Earnings Conference Call April 29, 2016

  2. 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

  3. 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

  4. Slide 4: Chris French, President and CEO

    Chris French President and CEO 4

  5. Slide 5: First Quarter 2016 Highlights

    First Quarter 2016 Highlights (Q1’16 v. Q1’15)  Net Income Growth  Increased 35.0% to $13.9 million  Adjusted OIBDA Growth  Increased 12.8% to $40.4 million  Revenue Growth  Increased 9.8% to $92.6 million  Customer Growth 3/31/15 3/31/16 Change Wireless 438,861 457,770 +18,909 Cable (RGUs) 1

  6. Slide 6: Wireless Highlights

    Wireless Highlights  Postpaid Growth PCS Customers (000s) Postpaid customers up 8.3% over last 12 months  Prepaid Decline Prepaid customers down 3.5% over last 12 months  Operating Income An increase of $0.5 million, or 2.5% 6

  7. Slide 7: Cable Highlights

    Cable Highlights Cable OIBDA (in millions)  Revenue Growth  Operating revenues $26.4 million, growth of 13.4% over Q1’15  Q1’16 Adjusted OIBDA $7.0 million, up 38.6% from Q1’15  131,527 RGUs at Q1’16, up 6.6% over Q1’15 Adjusted OIBDA Margin Shows Long Term Improvement 27% Cable RGUs 25% 18% 15%

  8. Slide 8: Other Highlights

    Other Highlights *Fiber Lease Revenue (in millions) Wireline Cable $10.0 $0.6 $8.0 $9.4  Wireline and Cable - $0.6 $7.4 Fiber lease revenues of $10.0 million, up 25.4% from Q1’15 Q1'15 Q1'16  157 towers generated *Includes both Affiliate and Non-affiliate revenues $1.9 million of OIBDA Mobile Towe

  9. Slide 9: Adele Skolits, VP of Finance and CFO

    Adele Skolits VP of Finance and CFO 9

  10. Slide 10: Profitability

    Profitability Consolidated Results ($ in thousands, except per share amounts) For the Quarter Ended:___ 3/31/15 3/31/16 Change Operating Income $ 18,526 $ 21,312 15% Net Income $ 10,286 $ 13,881 35% Earnings Per Share: Basic $ 0.21 $ 0.29 38% Diluted $ 0.21 $ 0.28 33% 10

  11. Slide 11: Profitability: Adjusted OIBDA

    Profitability Adjusted OIBDA ($ thousands) For the Quarter Ended: 3/31/15 3/31/16 Change Operating Income 18,526 21,312 15% Depreciation and Amortization 16,337 17,739 9% Share Based Compensation 825 1,048 27% (Gain)/Loss on Asset Disposals 11 (15) N.M. nTelos Acquisition Related Expenses 140 332 N.

  12. Slide 12: Adjusted OIBDA by Segment

    Adjusted OIBDA by Segment ($ millions) Wireless Cable Wireline Q1'15 Q1'16 Q1'15 Q1'16 Q1'15 Q1'16 Operating Income $ 19.4 $ 19.9 $ (0.7) $ 0.6 $ 3.8 $ 5.1 Depreciation and amortization 7.8 8.5 5.5 6.1 2.9 3.0 Plus (gain) loss on asset sales 0.1 - - (0.1) 0.1 - Share based compensation 0.2 0.3 0.3 0

  13. Slide 13: Wireless Segment – Change in Adjusted OIBDA

    Wireless Segment – Change in Adjusted OIBDA Q1’16 vs. Q1’15 ($ millions) 13

  14. Slide 14: Cable Segment – Change in Adjusted OIBDA

    Cable Segment – Change in Adjusted OIBDA Q1’16 vs. Q1’15 ($ millions) 14

  15. Slide 15: Wireline Segment – Change in Adjusted OIBDA

    Wireline Segment – Change in Adjusted OIBDA Q1’16 vs. Q1’15 ($ millions) 15

  16. Slide 16: Earle MacKenzie, EVP and COO

    Earle MacKenzie EVP and COO 16

  17. Slide 17: Postpaid Customer Growth

    Postpaid Customer Growth PCS Postpaid Customers (000s) 17

  18. Slide 18: Postpaid Customer Additions

    Postpaid Customer Additions Gross Additions - Postpaid  Net adds of 2,719 in Q1 2016 versus 3,211 in Q1 2015  Shentel-controlled channels produced 33% of gross adds in Q1 2016 and 39% in Q1 2015  Q1 2016 churn of 1.56%, down from 1.60% in Q1 2015 Net Additions - Postpaid Postpaid Churn 18

  19. Slide 19: 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 Voice Data $61.06 $55.15 $35.58 $34.21 $25.48 $20.94 Q1'15 Q1'16 1 – Before Service credits, bad debt, Sprint fees. 19

  20. Slide 20: PCS Revenues

    PCS Revenues Gross Billed Revenues - Postpaid ($ millions) Total Down 2% $53.0 $51.9 Management & Service 10.3 7.6 Fees 2.0 3.5 4.0 Bad Debt 2.6 Discounts and Credits Net Up 4% $38.1 Net Revenue $36.6 Q1'15 Q1'16 20

  21. Slide 21: PCS Prepaid Statistics

    PCS Prepaid Statistics Gross Additions (000s) Cumulative Customers (000s) 21

  22. Slide 22: PCS Prepaid Statistics

    PCS Prepaid Statistics Churn % Average Gross Billed Revenue 22

  23. Slide 23: Network Statistics at 3/31/16

    Network Statistics at 3/31/16  556 Cell Sites  95% have a second LTE carrier at 800 MHz  193 sites have three carriers, including a second carrier at 1900 MHz  61 2.5 GHz sites  Traffic  92% of data traffic is on LTE, with 30% on 800 MHz, 5% on 2.5GHz  Data usage grew 19% in Q1’16  Average s

  24. Slide 24: Cable - RGU Growth by Quarter

    Cable - RGU Growth by Quarter Customers 72,192 71,4691 72,237 72,734 77,090 RGU's/Customer 1.72 1.73 1.73 1.73 1.71 1. College students disconnect during summer 24

  25. Slide 25: 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 $141.46 and $159.60 for Q1 2015 and Q1 2016, respectively. 25

  26. Slide 26: Key Operational Results – Cable

    Key Operational Results – Cable* Q1 2015 Q1 2016 Homes Passed 172,022 181,375 Total Revenue Generating Units 123,328 131,527 Customer Relationships 72,192 77,090 RGUs per Customer Relationship 1.71 1.71 Video Revenue generating units 51,708 52,468 Penetration 30.1% 28.9% Digital video penetration 69

  27. Slide 27: Key Operational Results - Wireline

    Key Operational Results - Wireline Access lines (000s)  Access line loss of 9.2% in past 12 months as a result of no longer requiring access line to purchase internet service  Effective Q4’15, subscribers were offered a cable modem DSL & Cable Modem Customers (000s) internet option up to 101 Mbps

  28. Slide 28: Wireline and Cable Fiber Sales

    Wireline and Cable Fiber Sales ($ millions) Fiber Lease Revenue New External Fiber Lease Contracts* * Amounts shown represent the total contract value. Contract Terms range from 36 to 120 months. 28

  29. Slide 29: Investing in the Future

    Investing in the Future Capex Spending ($ millions)  2016 Capex Spending:  56% Upgrades and Expansion of nTelos network  17% Network Expansion  11% Additional Network Capacity  10% Network Maintenance  6% Success-Based 29

  30. Slide 30: Q&A

    ASHENTEL’ Q&A 30

  31. Slide 31: Appendix

    Appendix ASHENTEL’

  32. Slide 32: 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) 1Q 2015 1Q 2016 Gross billed revenue Wireless segment total operating revenues $ 52,509 $ 56,517 Equipment revenue (1,481) (1,454) Tower lease revenue (

  33. Slide 33: Postpaid PCS Customers Top Picks Q1 2016

    Postpaid PCS Customers Top Picks Q1 2016  Top Service Plans – 57% of  Top Devices – New Activations Gross Adds – All Channels $75 Unlimited Plan 15% iPhone 43% High Speed Data Share 15% Samsung Galaxy S 21% ATT Mobile Choice 50% OFF 11% Samsung Note 5 6% Unlimited Plan 8% Alcatel One Touch Pixi 3

  34. Slide 34: iPhone Statistics – Q1'16

    iPhone Statistics – Q1’16  59% of Q4 Gross Adds  26% of iPhones were sold or upgraded in Shentel- controlled channels  50.1% of 3/31/16 Postpaid customers had the iPhone, up from 39.9% at 12/31/15 and 40.8% at 3/31/15.  iPhone Base – 3/31/16  69% iPhone 6, 6S, 6 Plus, 6S Plus  24% iPhone 5, 5C

  35. Slide 35: 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) Q1 2015 Q1 2016 Net Service Revenue $ 19,672 $ 22,417 Set-top box rentals 1,911 2,099 FUSC and pass-through fees 395 425 Video, Internet & Voice Revenue 21,978 24,941 Other misce

  36. Slide 36: Key Operational Results – Mobile Company

    Key Operational Results – Mobile Company Towers and Leases Mobile Tower Revenue ($ millions) Towers Non-affiliate Leases Non-affiliate Revenue Affiliate Revenue 202 2.7 199 2.6 1.1 1.1 154 157 1.5 1.6 1Q'15 1Q'16 1Q'15 1Q'16 (in thousands) Q1'15 Q1'16 Operating Income $1,234 $1,345 Deprec. and Amort

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