Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q1 2017 Earnings Presentation
33 slides from Shenandoah Telecommunications's earnings presentation, May 4, 2017
Slide 1: 1Q 2017 Earnings Conference Call
1Q 2017 Earnings Conference Call May 4, 2017
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: First Quarter 2017 Highlights
First Quarter 2017 Highlights (Q1’17 v. Q1’16) Net Income in Q1’17 Net income of $2.3 million in Q1’17, down from $13.9 million in Q1’16 Adjusted OIBDA Growth Increased 82.0% to $73.5 million Revenue Growth Increased 66.2% to $153.9 million Customer Growth 3/31/16 3/31/17 Change Wirele
Slide 6: Wireless Highlights
Wireless Highlights Postpaid Growth PCS Customers (000s) Postpaid customers up 127.5% over last 12 months Prepaid Growth Prepaid customers up 70.9% over last 12 months Adjusted OIBDA Growth Increased to $61.4 million, up 114% in Q1’17 vs Q1’16 6
Slide 7: Cable Highlights
Cable Highlights Revenue Growth Cable Adjusted OIBDA (in millions) Operating revenues $29.0 million, growth of 9.7% over Q1’16 Q1’17 Adjusted OIBDA $9.3 million, up 31.7% from Q1’16 132,846 RGUs at Q1’17, up 1.0% over Q1’16 Adjusted OIBDA Margin Shows Long Term Improvement 32% 29% Cable RGUs
Slide 8: Fiber and Tower Highlights
Fiber and Tower Highlights *Fiber Lease Revenue (in millions) Wireline Cable $11.2 $10.0 1.1 0.6 Wireline and Cable fiber 9.4 10.1 lease revenues of $11.2 million, up 12.0% from Q1’16 Q1'16 Q1'17 196 towers generated *Includes both Affiliate and Non-affiliate revenues $1.9 million of OIBDA in Mo
Slide 9: Adele Skolits, VP of Finance and CFO
Adele Skolits VP of Finance and CFO 9
Slide 10: Profitability: Consolidated Results
Profitability Consolidated Results ($ in millions, except per share amounts) For the Quarter Ended:___ 3/31/16 3/31/17 Change Operating Income $ 21.3 $ 10.7 (50)% Net Income $ 13.9 $ 2.3 (83)% Earnings Per Share: Basic $ 0.29 $ 0.05 (83)% Diluted $ 0.28 $ 0.05 (79)% 10
Slide 11: Profitability: Adjusted OIBDA
Profitability Adjusted OIBDA ($ millions) For the Quarter Ended: 3/31/16 3/31/17 Change ($) Change (%) Operating income $ 21.3 $ 10.7 $ (10.6) -50% Depreciation and amortization 17.7 44.8 27.1 153% Share based compensation 1.1 1.6 0.5 45% (Gain)/Loss on asset disposals - (0.1) (0.1) 0% Straight line
Slide 12: Adjusted OIBDA by Segment
Adjusted OIBDA by Segment ($ millions) Wireless Cable Wireline Q1'16 Q1'17 Q1'16 Q1'17 Q1'16 Q1'17 Operating income $ 19.9 $ 9.1 $ 0.6 $ 3.1 $ 5.1 $ 5.1 Depreciation and amortization 8.5 35.8 6.1 5.8 3.0 3.1 Plus (gain) loss on asset sales - - (0.1) - - 0.1 Share based compensation 0.3 0.7 0.4 0.4 0
Slide 13: Wireless Segment – Change in Adjusted OIBDA
Wireless Segment – Change in Adjusted OIBDA Q1’17 vs. Q1’16 ($ millions) Postpaid Prepaid Waived Travel Other Postpaid Prepaid Network Total Revenue Revenue Mgt Fee Revenue Prepaid Acquisition Acquisition Costs Costs Costs Costs 13
Slide 14: Cable Segment – Change in Adjusted OIBDA
Cable Segment – Change in Adjusted OIBDA Q1’17 vs. Q1’16 ($ millions) 14
Slide 15: Earle MacKenzie, EVP and COO
Earle MacKenzie EVP and COO 15
Slide 16: Postpaid Subscriber Growth
Postpaid Subscriber Growth 16
Slide 17: Postpaid Customer Additions
Postpaid Customer Additions Gross Additions - Postpaid Q1’17 Legacy area churn of 1.56%, matching the churn in Q1’16 Combined Q1 2017 churn of 2.05% Net Additions - Postpaid Postpaid Churn 17
Slide 18: Billed Revenue per Customer Stabilizing
Billed Revenue per Customer Stabilizing Gross Billed Service Revenue per Postpaid User – Data & Voice (1) Voice Data $55.15 $52.15 $50.95 $51.24 $49.89 $34.21 $32.76 $32.57 $33.27 $32.82 $20.94 $19.39 $18.38 $17.97 $17.07 (2) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 1 – Before Service credits, bad debt, Sprint
Slide 19: PCS Prepaid Statistics
PCS Prepaid Statistics Gross Additions (000s) Cumulative Customers (000s) (1) (1) (1) - In Q4’16, customers were dropped from the prepaid customer count as a result of reducing the period of time a customer can be inactive and be included in the customer count. 19
Slide 20: PCS Prepaid Statistics
PCS Prepaid Statistics Churn % Average Gross Billed Revenue (1) (1) – In Q4’16, customers were dropped from the prepaid customer count as a result of reducing the period of time a customer can be inactive and be included in the customer count. The churn calculation excludes the impact from this one-
Slide 21: Status of Network Enhancements – nTelos Footprint
Status of Network Enhancements – nTelos Footprint Enhancement # of cell sites Decommission Overlapping Sites 100 Add 800 Mhz 186 3G to 4G 363 Coverage Sites 220 0% 20% 40% 60% 80% 100% Completed in 2016 Completed in 2017 Expected Completion in 2017 Expected Completion in 2018 21
Slide 22: Network Statistics at 3/31/17
Network Statistics at 3/31/17 Cell Sites Legacy New CDMA Base Stations (sites) 568 908 nTelos 3G sites still requiring upgrade 0 67 Sites with 2nd LTE carrier 550 777 Sites with three carriers, including a 2nd 221 180 carrier @ 1900 MHz Sites with 2.5 GHz LTE 134 174 Traffic % LTE traffic 97% 90% Da
Slide 23: Cable - RGU Growth by Quarter
Cable - RGU Growth by Quarter (1) (2) Customers 77,090 76,471 77,393 77,366 77,925 RGU's/Customer 1.71 1.71 1.71 1.71 1.70 1. Includes acquisition of Colane Cable (1/1/2016) 2. 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 $159.60 and $181.03 for Q1 2016 and Q1 2017, respectively. 24
Slide 25: Key Operational Results – Cable
Key Operational Results – Cable (2) Q1 2016 Q1 2017 Homes Passed (1) 181,375 184,819 Total Revenue Generating Units 131,527 132,846 Customer Relationships 77,090 77,925 RGUs per Customer Relationship 1.71 1.70 Video Revenue generating units 52,468 49,384 Penetration 28.9% 26.7% Digital video penetra
Slide 26: Key Operational Results - Wireline
Key Operational Results - Wireline Access lines (000s) Access line loss of 7.7% in past 12 months as a result of no longer requiring access line to purchase internet service Effective Q4’15, subscribers were offered a cable modem DSL & Cable Modem Customers (000s) internet option up to 101 Mbps
Slide 27: Wireline and Cable Fiber Sales
Wireline and Cable Fiber Sales ($ millions) Fiber Lease Revenue New External Fiber Lease Contracts* * Amounts represent the first 10 years of contract value. Contract Terms range from 36 to 120 months. 27
Slide 28: Investing in the Future
Investing in the Future Capex Spending ($ millions) 2017 Capex Budget: 57% Upgrades and Expansion of nTelos network 14% Network Maintenance 10% Network Expansion 10% Additional Network Capacity 9% Success-Based * Accounts payable at December 31, 2016, 2015 and 2014 included $14.4 million
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 Gross billed revenue 1Q 2016 1Q 2017 Wireless segment total operating revenues $ 56,517 $ 115,463 Equipment revenue (1,454) (3,145) Tower lease revenue (2,750) (2,882) Gross billed revenue – prepaid (13,083) (25,945) Spri
Slide 32: Non-GAAP Financial Measure – Average Monthly Cable Revenue
Non-GAAP Financial Measure – Average Monthly Cable Revenue Q1 2016 Q1 2017 Net Service Revenue $ 22,417 $ 24,624 Set-top box rentals 2,099 2,053 FUSC and pass-through fees 425 419 Video, Internet & Voice Revenue 24,941 27,096 Other miscellaneous revenue 1,505 1,917 Total Operating Revenue 26,446 29,
Slide 33: 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 2.8 206 2.7 202 196 1.2 1.1 157 1.6 1.7 1Q'16 1Q'17 1Q'16 1Q'17 (in thousands) Q1'16 Q1'17 Operating Income $1,345 $1,426 Deprec. and Amort
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