Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Q3 2020 Earnings Presentation
27 slides from Shenandoah Telecommunications's earnings presentation, Nov 6, 2020
Slide 1: Q3 2020 Earnings Conference Call
Q3 2020 Earnings Conference Call November 6, 2020
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: Chris French, President and CEO
Chris French President and CEO 3
Slide 4: Record Broadband Results
Record Broadband Results Broadband Data Net Additions 6,028 6,069 878 1,471 2,906 2,622 5,150 327 4,598 1,632 126 2,295 1,506 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Incumbent Cable Glo Fiber 4
Slide 5: Dividend and Earnings Per Share
Dividend and Earnings Per Share Dividend Per Share YTD Earnings per Share Continuing Operations Discontinued Operations $1.55 86.7% 2020 $0.34 $0.83 17.2% $1.53 $0.76 2019 $0.29 $0.07 $0.02 2019 YTD 2020 YTD 5
Slide 6: Broadband Strategy Update
Broadband Strategy Update • Glo Fiber ◦ Strong construction and sales momentum, both ahead of projections ◦ Harrisonburg, VA one year penetration of 16.4%, ahead of plan ◦ Increased the market opportunity by 33% to 116,684 target passings* with new franchise agreements ▪ Blacksburg, VA ▪ Charles Tow
Slide 7: Sprint/T-Mobile Merger Update
Sprint/T-Mobile Merger Update 4/1/2020 4 Sprint / T-Mobile merger closed 4 Network Technology, Brand, and Combination Conversion Notice received 8/26/2020 4 T-Mobile exercised their option to purchase the assets and operations of our PCS ----business for 90% of Entire Business Value 11/3/2020 4 Agre
Slide 8: Jim Volk, SVP of Finance and CFO
Jim Volk SVP of Finance and CFO 8
Slide 9: Wireless Segment Accounting Changes
Wireless Segment Accounting Changes • Wireless net income presented as discontinued operations in Consolidated Statements of Comprehensive Income • Wireless operating, investing and financing cash flows reflected as discontinued operations in Consolidated Statement of Cash Flows • Prior periods have
Slide 10: Third Quarter Consolidated Results
Third Quarter Consolidated Results Revenue (in millions) Adjusted OIBDA (in millions) 6.6% $55.2 $14.6 $51.8 20.7% $12.1 23.4% 26.5% margin margin Q3'19 Q3'20 Q3'19 Q3'20 10
Slide 11: Broadband Highlights - Third Quarter Results
Broadband Highlights - Third Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) 4.2% $50.7 $48.7 $2.0 $2.3 $19.9 $19.6 $4.6 1.5% $5.6 $6.6 $7.1 Cable residential & SMB Fiber enterprise & wholesale 40.8% 38.6% RLEC Other & Equipment margin margin $37.5 $33.7 Q3'19 Q3'20 Q3'19 Q3'20 11
Slide 12: Tower Highlights - Third Quarter Results
Tower Highlights - Third Quarter Results Revenue (in millions) Adjusted OIBDA (in millions) $2.9 $4.5 42.8% 43.3% $2.0 $3.1 64.4% 64.2% margin margin Q3'19 Q3'20 Q3'19 Q3'20 12
Slide 13: Capitalization
Capitalization Total Debt & Liquidity (in millions) 2020 YTD Free Cash Flow by Segment $706.4 Wireless Broadband Tower Corporate $164.7 2.61x Effective Interest Leverage Ratio Rate of 2.33% $259.1 $75.0 $184.1 $7.4 $(24.9) Total Debt Total Liquidity $(20.4) Cash & Cash Equivalents $(37.9) Available
Slide 14: Dave Heimbach, EVP and COO
Dave Heimbach EVP and COO AXSHENTEL
Slide 15: Broadband - Incumbent Cable Metrics
Broadband - Incumbent Cable Metrics Revenue Generating Units (RGU) Broadband Average Revenue Per User (ARPU) 181,479 $77.47 $77.66 168,384 7.8% 52,907 55,015 Voice 95,962 Broadband 82,413 Video 30,956 32,610 Q3'19 Q3'20 Q3'19 Q3'20 Broadband Penetration Broadband Churn 1.97% 46.2% 1.88% 40.0% Q3'19
Slide 16: Broadband - Glo Fiber Metrics
Broadband - Glo Fiber Metrics Revenue Generating Units (RGU) Broadband Average Revenue Per User (ARPU) 3,951 $82.72 $80.03 740 1,954 Voice 415 2,802 Broadband Video 1,331 208 409 Q2'20 Q3'20 Q2'20 Q3'20 Broadband Penetration Broadband Churn 0.98% 12.5% 10.1% 0.67% 13,173 22,347 Homes Homes Passed Pa
Slide 17: Glo Fiber Market Update
Glo Fiber Market Update Passings Penetration Released to Target as of Sales Passings* Launch Date 9/30/2020 Harrisonburg VA 9,202 10,908 October 2019 16.4% Staunton VA 6,794 9,895 February 2020 10.9% Front Royal VA 3,546 4,933 March 2020 9.5% Winchester VA 2,805 9,801 March 2020 7.0% Salem VA 8,044
Slide 18: Integrated Fiber, Cable and Fixed Wireless Broadband Network
Integrated Fiber, Cable and Fixed Wireless Broadband Network 18
Slide 19: Unique network platform with high growth potential
Unique network platform with high growth potential Shentel position Incumbent Greenfield fiber overbuilder Greenfield fixed wireless broadband overbuilder Target market Market type Various, but mostly rural Higher density tier III / IV Low density rural dynamic markets Incumbent cable operator and 1
Slide 20: Tower - Metrics
Tower - Metrics Towers and Small Cells Tenants Towers Small Cells Intercompany External 414 230 221 8.9% 8 380 206 203 222 208 177 Q3'19 Q3'20 Q3'19 Q3'20 20
Slide 21: Capital Expenditures
Capital Expenditures Capex Spending ($ in millions) $104 - $116 $2 - 3 $83 $2 $53 - $58 $39 $49 $4 $2 $10 $47 - $52 $43 $33 YTD 2019 YTD 2020 2020 Guidance Broadband* Glo Fiber & Fixed Wireless Tower Other *Excludes CapEx for Glo Fiber and Fixed Wireless 21
Slide 22: Q&A
AXSHENTEL Q&A 22
Slide 23: Appendix
Appendix AXSHENTEL
Slide 24: 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 25: Adjusted OIBDA by Segment - Quarterly Results
Adjusted OIBDA by Segment - Quarterly Results Three Months Ended September 30, 2020 Corporate & (in thousands) Broadband Tower Eliminations Consolidated Operating income (loss) $ 9,486 $ 2,421 $ (11,437) $ 470 Depreciation 9,939 467 1,422 11,828 Amortization 167 — — 167 OIBDA 19,592 2,888 (10,015) 1
Slide 26: Normalized Free Cash Flow and Free Cash Flow
Normalized Free Cash Flow and Free Cash Flow Nine Months Ended September 30, 2020 Total Discontinued Continuing (in thousands) Operations Broadband Tower Corporate Operations Net Cash Provided by Operations $ 182,499 $ 56,611 $ 8,985 $ (20,796) $ 44,800 Less: Capital Expenditures* (17,818) (42,609)
Slide 27: Broadband - Average Revenue per User (ARPU)
Broadband - Average Revenue per User (ARPU) For the third quarter ended, 2019 2020 Residential & SMB Revenue (000's) Broadband $ 18,809 $ 22,261 Incumbent Cable $ 18,809 $ 21,770 Glo Fiber $ — $ 491 Video $ 15,030 $ 14,823 Voice $ 2,839 $ 2,894 Average Revenue Generating Units Broadband 80,931 95,48
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