Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q1 2019 Earnings Presentation
29 slides from Shenandoah Telecommunications's earnings presentation, May 9, 2019
Slide 1: Q1 2019 Earnings Conference Call
Q1 2019 Earnings Conference Call May 9, 2019
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: 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 4: Chris French, President and CEO
Chris French President and CEO 4
Slide 5: First Quarter 2019 Highlights
First Quarter 2019 Highlights ▪ Revenue ▪ $158.8 million in Q1'19 compared with $154.1 million in Q1'18. ▪ Operating Income ▪ $24.8 million in Q1'19 compared with $16.8 million in Q1'18. ▪ Net Income ▪ $13.9 million in Q1'19 compared with $6.6 million in Q1'18. ▪ Adjusted OIBDA ▪ $73.0 million, repr
Slide 6: Wireless Highlights
Wireless Highlights ▪ Continued Growth Wireless PCS Customers ▪ Operating revenue $115.7 million, up 2.5% over Q1'18 774,861 800,952 ▪ Postpaid customers 800,952, an increase of 3.4% over Q1'18 250,191 267,220 ▪ Prepaid customers 267,220, an increase 6.8% over Q1'18 Q1'18 Q1'19 ▪ Adjusted OIBDA $61.
Slide 7: Cable Highlights
Cable Highlights ▪ Continued Growth Cable RGUs ▪ Operating revenue $33.7 million, up 6.3% over Q1'18 139,504 133,439 ▪ RGUs 139,504, up 4.5% over Q1'18 ▪ Adjusted OIBDA $12.1 million, up 3.1% over Q1'18 Adjusted OIBDA Margin 37% Q1'18 Q1'19* 36% 34% 29% QTD Cable Adjusted OIBDA (in millions) 25% $11
Slide 8: Wireline Highlights
Wireline Highlights ▪ Revenue and Adjusted OIBDA declines driven primarily by Wireline Statistics affiliate backhaul circuit repricing. 14,695 14,588 ▪ Continued stability in Wireline subscriber base. 15,000 12,000 8,980 9,623 9,000 6,000 4,912 4,656 3,000 0 Adjusted OIBDA Margin Q1'18 Q1'19 Long Di
Slide 9: Jim Woodward, SVP of Finance and CFO
Jim Woodward SVP of Finance and CFO 9
Slide 10: Consolidated Quarterly Results
Consolidated Quarterly Results Consolidated Results ($ in thousands, except per share amounts) Three Months Ended: 3/31/19 3/31/18 Change ($) Change (%) Operating revenue $158,843 $154,138 $ 4,705 3.1 % Operating expenses $134,056 $137,384 $ (3,328) (2.4)% Operating income $ 24,787 $ 16,754 $ 8,033
Slide 11: Adjusted OIBDA by Segment - Quarterly Results
Adjusted OIBDA by Segment - Quarterly Results Adjusted OIBDA by Segment Three Months Ended March 31, 2019 (in thousands) Wireless Cable Wireline Other Consolidated Operating income $ 25,337 $ 5,703 $ 4,346 $ (10,599) $ 24,787 Non-cash amortization of deferred contract costs (4,211) (237) (64) (2) (4
Slide 12: Wireless Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18
Wireless Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18 (millions) $1.6 $1.3 $0.2 $3.8 $61.8 $(0.5) $(2.1) $57.6 51.0% 53.5% Adj Adj OIBDA OIBDA Margin Margin Revenue Impact Expense Impact $3.3 $1.0 Q1'18 Postpaid Prepaid Equipment Cost of Goods Cost of Advertising and Q1'19 Revenue Revenue Sale
Slide 13: Cable Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18
Cable Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18 (millions) $1.9 $(0.8) $12.1 $11.7 $(0.7) 36.9% 35.8% Adj Adj OIBDA OIBDA Margin Margin Q1'18 Broadband SG&A Cost of Services Q1'19 Service Expenses and Other Revenue ▪ Adjusted OIBDA growth of 3.1% to $12.1 million for the quarter ended March
Slide 14: Wireline Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18
Wireline Segment – Change in Adjusted OIBDA Q1'19 vs. Q1'18 (millions) $0.5 $8.1 $0.3 $7.8 $(1.1) 41.3% 41.3% Adj Adj OIBDA OIBDA Margin Margin Q1'18 Non-affiliate Affiliate Affiliate Q1'19 Access Revenue Costs Revenue 14
Slide 15: Capitalization - Q1'19 vs. Q1'18
Capitalization - Q1'19 vs. Q1'18 (millions) $900 $810.9 $800 $751.3 $700 $600 4.02% 3.78% Eff. Int. Rate Eff. Int Rate $500 $400 2.93x 2.95x 2.61x 2.42x Leverage Ratio Leverage Ratio $300 $200 $100 $49.4 $69.9 $0 Q1'18 Q1'19 Cash & Cash Equivalents Total debt, net of unamortized loan fees ▪ Leverage
Slide 16: Dave Heimbach, EVP and COO
XG Dave Heimbach EVP and COO AXSHENTEL
Slide 17: Wireless Subscriber Changes - Q1'19 Year Over Year
Wireless Subscriber Changes - Q1'19 Year Over Year (in thousands) 17.0 1,068.2 1,025.1 267.2 250.2 26.1 774.9 801.0 Q1'1815.7 Q1'19 15.7 15.2 38.3 19.2 Postpaid Organic Growth Prepaid Organic Growth Postpaid Prepaid 17
Slide 18: Wireless - Postpaid Metrics
Wireless - Postpaid Metrics ▪ Postpaid gross and net additions at an all-time high for a first quarter. Churn ▪ Organic postpaid net additions increased 5,855 subscribers year over year.* 1.89% 1.89% ▪ The new Sprint rate card combined with changes in promotional discounting moderated the pace of AR
Slide 19: Wireless - Prepaid Metrics
Wireless - Prepaid Metrics ▪ Prepaid gross additions up 2.2% over Q1'18. Churn ▪ Churn improved 28 basis points over Q1'18 on the reliability of our network and the strength of the Boost brand. 4.42% 4.14% ▪ Prepaid ARPU increased, up 2.7% from Q1'18 as a result of a greater mix of Boost branded sub
Slide 20: Cable - RGUs and Average Revenue
Cable - RGUs and Average Revenue ▪ 1.7% growth in average monthly revenue per Average Monthly Revenue per RGU * RGU primarily due to broadband. ▪ Broadband penetration increased from 35.2% to $74.96 $73.72 37.7%. ▪ Added approximately 4,800 RGUs with the addition of Big Sandy. Revenue Generating Uni
Slide 21: Capital Expenditures - Investing in the Future
Capital Expenditures - Investing in the Future Capex Spending ($ millions) ▪ 2019 Capex Budget Estimates ▪ 17% Upgrades and Expansion of Acquired $173 Territories $20 ▪ 22% Network Expansion $146 $150 $5 $137 $10 ▪ 27% Network Capacity $32 $23 $8 $21 $16 ▪ 21% Network Maintenance $35 $27 ▪ 13% Succe
Slide 22: Q&A
AXSHENTEL Q&A 22
Slide 23: Appendix
Appendix AXSHENTEL
Slide 24: Wireless Average Monthly Billed Revenue per Subscriber - Postpaid and Prepaid
Wireless Average Monthly Billed Revenue per Subscriber - Postpaid and Prepaid ($ in thousands, except subscribers and revenue per subscriber amounts) Q1'18 Q1'19 Postpaid billings $ 93,290 $ 97,476 Adjustment for write-offs 5,336 4,873 Postpaid billings excluding write-offs $ 98,626 $ 102,349 Averag
Slide 25: Wireless - Average Revenue per User (ARPU) Trend
Wireless - Average Revenue per User (ARPU) Trend Postpaid ARPU Prepaid ARPU $43.22 $43.52 $43.42 $43.45 $42.81 $37.11 $37.51 $37.37 $37.71 $36.73 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 25
Slide 26: Cable - Non-GAAP Financial Measure Average Revenue
Cable - Non-GAAP Financial Measure Average Revenue ($ in thousands, except subscriber and per subscriber amounts) Q1'18 Q1'19 Service revenue $ 28,471 $ 29,705 Fiber, FUSC, pass-through and other 1,944 2,552 Internal revenue (1,031) (1,469) Video, broadband and voice revenue 29,384 30,788 Other misc
Slide 27: Cable - Metrics
Cable - Metrics As of March 31, 2018 2019 Homes passed 184,975 189,613 Total revenue generating units 133,439 139,504 Customer relationships 78,397 83,859 RGUs per customer relationship 1.70 1.66 Video Revenue generating units 45,555 44,119 Penetration 24.6% 23.3% Digital video penetration 75.8% 85.
Slide 28: Fiber and Tower Highlights
Fiber and Tower Highlights Fiber ▪ Cable and Wireline total fiber lease revenue of QTD Fiber Lease Revenue (in millions) $12.0 million is stable year-over-year. ▪ Annual FTTT revenue of $3.1 million, an increase of 10.7% year over year. $12.2 $12.0 6.7 6.5 Tower ▪ 211 towers generated $3.0 million o
Slide 29: Fiber Network - DOCSIS 3.1 Deployment
Fiber Network - DOCSIS 3.1 Deployment ▪ 61% of homes passed are now capable of supporting 1Gbps ▪ 96% of homes passed are now capable of supporting at least 100Mbps 29
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