Attached files
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| 8-K - 8-K - Enventis Corp | form8k.htm |
Exhibit 99.1
First Quarter 2011
Earnings Conference Call
May 3, 2011
NASDAQ: HTCO
“Safe Harbor” Statement
Information set forth in this presentation contains financial estimates
and other forward-looking statements that are subject to risks and
uncertainties; therefore, actual results might differ materially from such
statements, whether as a result of new information, future events or
otherwise. You are cautioned not to place undue reliance on these
forward-looking statements. A discussion of factors that may effect
future results is contained in HickoryTech’s filings with the Securities
and Exchange Commission. HickoryTech disclaims any obligation to
update and revise statements contained in this presentation based on
new information or otherwise. This presentation also contains certain
non-GAAP financial measures. Reconciliations of these non-GAAP
measures to the most directly comparable GAAP measures are
available in our presentation.
First Quarter 2011 Highlights
• Consolidated revenue totaled $38.6 million
– Fiber and data revenue grew 13%
– Equipment support services revenue up
20%
20%
– Broadband revenue grew 14%
– Surpassed 20,000 DSL subscribers
• Net debt position improved $10 M
• Focus on leveraging fiber network upgrades
and route expansion, pursuing business and
wholesale services growth
and route expansion, pursuing business and
wholesale services growth
Consolidated Revenue
Q1 ’11 compared to Q1 ’10
• Fiber and data revenue +13%
• Equipment sales -17%
• Equip. support services +20%
• Broadband revenue +14%
($ in Millions)
Quarterly Revenue
68% of Q1-11 revenue was from Business Sector & Broadband Services
Revenue Diversification
Q1 ’11 compared to Q1 ’10
• Interest expense is 33% lower
• Q1-10 included $279,000 income tax
expense due to the 2010 Patient Protection
and Affordable Care Act and Health Care
and Education Reconciliation Act
Q1 ’11 compared to Q1 ’10
• Interest expense 33%
• Strong fiber and data sales and
equipment support services positively
impacted income
equipment support services positively
impacted income
Business Sector
• Fiber construction project (Dakotas expansion)
added $0.6 M in Q4 ‘10
added $0.6 M in Q4 ‘10
• Steady wholesale services growth;
SMB and enterprise market expansion
SMB and enterprise market expansion
Q1 ’11 compared to Q1 ’10
• Equipment sales down 17%,
fluctuate on a quarterly basis
fluctuate on a quarterly basis
• Support services up 20%
• Continued profitability within product line
($ in Millions)
Fiber and Data
Formerly referred to as “Enventis Sector”
Telecom Sector
• Broadband revenue up 14%
• Network Access revenue down 5% and
Local Service revenue down 4%
Local Service revenue down 4%
• Total costs and expenses down 1%
• Strong business Ethernet and data sales
• Digital TV subscribers +8%
• DSL subscribers exceeded 20,000
($ in Millions)
before intersegment
eliminations
eliminations
Debt Balance
• Net debt was $108.9 M,
down $10 M from 12/31/10
down $10 M from 12/31/10
• Lower intra-quarter borrowing
and interest rates in 2011
contributing to 33% reduction in
interest expense
and interest rates in 2011
contributing to 33% reduction in
interest expense
• New senior debt agreement
expected by Q3-11
expected by Q3-11
Continued debt improvement
2011 Fiscal Outlook
2011 guidance provided in fourth quarter 2010 earnings release issued Feb. 28, 2011.
Recent Network Expansion
• Extended fiber network to Sioux Falls, So.
Dakota and Fargo, No. Dakota
Dakota and Fargo, No. Dakota
• Increased network capacity between
Minnesota and Des Moines, Iowa, added
local fiber network in Des Moines, Iowa
Minnesota and Des Moines, Iowa, added
local fiber network in Des Moines, Iowa
• Added network collocations to expand
Mid-band Ethernet services.
Mid-band Ethernet services.
• Secured Broadband stimulus grant, network
expansion plans in progress
expansion plans in progress
Five-Year Growth Goal
Our Goal: Double HickoryTech’s value by 2014
By way of example using 2009 EBITDA of $40 M and approximately $120 M of
debt, HickoryTech hypothetical shareholder value in 2009 was approximately $170 M.
By way of example using 2009 EBITDA of $40 M and approximately $120 M of
debt, HickoryTech hypothetical shareholder value in 2009 was approximately $170 M.
Our goal is to double shareholder value by the end of 2014 by growing EBITDA,
driving growth in lines of business with higher value and management of our debt
level.
driving growth in lines of business with higher value and management of our debt
level.
This should not be construed as guidance.
Strategic Initiatives
• Focus on growing business services:
Ø Fiber network expansion
Ø Accelerated SMB market plan
Ø Pursue fiber builds to wireless towers
Ø Target last-mile fiber builds
Ø Construction of broadband stimulus project
• Grow broadband services and focus on customer retention
• Increase capital spending on key strategic initiatives
• Manage free cash flow, manage costs and reduce debt in long term
Goal: double the value of HickoryTech over five years
HTCO Investment Highlights
• Stable growth and cash flows; 60+ years of dividend payments,
yield approximately 5-6%
yield approximately 5-6%
• Business transformation from a pure telephone company to an
integrated communications company serving businesses and
consumers
integrated communications company serving businesses and
consumers
• Emerging growth through B2B strategy and fiber network expansion
• High level of recurring revenue, dominant consumer market share,
expanded broadband service area
expanded broadband service area
• Experienced Company with 112-year track record generating
stable operating results and financial position with strong strategic
plan
stable operating results and financial position with strong strategic
plan
Appendix
Reconciliation of Non-GAAP Measures