Attached files
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| 8-K - FORM 8-K - Enventis Corp | form8k.htm |
Exhibit 99.1
Second Quarter 2011
Earnings Conference Call
August 4, 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.
2
Second Quarter 2011 Highlights
• Revenue totaled $40.1 million, +5%
– Equipment product revenue up 12%
Excluding the 2010 fiber construction project, organic
fiber & data revenue grew15%
Excluding the 2010 fiber construction project, organic
fiber & data revenue grew15%
– Fiber and data revenue grew 4%
– Broadband revenue grew 12%
• Net debt position improved $15 M year-to-
date
date
• Focus on leveraging fiber network upgrades
and route expansion, pursuing business,
broadband and wholesale services growth
and route expansion, pursuing business,
broadband and wholesale services growth
3
Consolidated Revenue
Q2 ’11 compared to Q2 ’10
• Equipment product revenue
+12%
+12%
• Fiber and data revenue +4%
(+15% when excluding the 2010
fiber construction project)
(+15% when excluding the 2010
fiber construction project)
• Broadband revenue +12%
($ in Millions)
Quarterly Revenue
4
69% of YTD 2011 revenue was from Business Sector & Broadband Services
Revenue Diversification
5
Q2 ’11 compared to Q2 ’10
• Q2 ‘10 earnings positively impacted by
$800k income tax reserve release.
Excluding release, EPS would be $0.20
per share
$800k income tax reserve release.
Excluding release, EPS would be $0.20
per share
Q2 ’11 compared to Q2 ’10
• Higher costs to support strong
equipment sales and fiber & data
growth
equipment sales and fiber & data
growth
($ in Millions)
6
Business Sector
Q2 ’11 compared to Q2 ’10
• 15% fiber & data growth year over year when
excluding the fiber construction project in 2010
excluding the fiber construction project in 2010
• Fiber construction project (Dakotas expansion)
added $1.1 M revenue in Q2 ‘10
added $1.1 M revenue in Q2 ‘10
Q2 ’11 compared to Q2 ’10
• Equipment sales up 12%,
fluctuates on a quarterly basis
fluctuates on a quarterly basis
• Equipment support services up 15%
Formerly referred to as “Enventis Sector”
7
Q2 ‘11 compared to Q2 ‘10
• Stable Telecom revenue
• Broadband revenue up 12%
• Network Access revenue down 1% and
Local Service revenue down 6%
Local Service revenue down 6%
Q2 ‘11 compared to Q2 ‘10
• Strong business Ethernet and data sales
• Digital TV subscribers +7%
8
Debt Balance
• Net debt was $103.8 M,
down $15 M from 12/31/10
down $15 M from 12/31/10
• Lower intra-quarter borrowing
and interest rates in 2011
contributing to 23% reduction in
interest expense
and interest rates in 2011
contributing to 23% reduction in
interest expense
• New senior debt agreement
expected in Q3-11
expected in Q3-11
Continued debt improvement
9
2011 Fiscal Outlook
2011 guidance affirmed in second quarter earnings release issued Aug. 3, 2011.
10
Continued Network Expansion with
Greater Minnesota Broadband
Collaborative Project
•Phase 1 will extend fiber network from
St. Paul to Duluth, Minn. / Superior, Wisc.
(construction started in July 2011)
St. Paul to Duluth, Minn. / Superior, Wisc.
(construction started in July 2011)
•Phase 2 will extend fiber from Brainerd,
Minn. to Fargo, N.D. (construction to begin in
2012)
Minn. to Fargo, N.D. (construction to begin in
2012)
•Project will be completed by Aug. 2013
11
Strategic Initiatives
• Focus on growing business services:
Ø Fiber network expansion
Ø Accelerated SMB market plan
Ø Target last-mile fiber builds
Ø Construction of broadband stimulus project
• Grow broadband services (Digital TV, DSL, data services)
• Increase capital spending on key strategic initiatives
• Manage free cash flow, manage costs and reduce debt in long
term
term
Goal: double the value of HickoryTech over five years by 2014
12
HTCO Investment Highlights
• Stable growth and cash flows; 60+ years of dividend payments,
yield approximately 5%
yield approximately 5%
• 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, 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
13
Appendix
Reconciliation of Non-GAAP Measures
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Appendix
Reconciliation of Non-GAAP Measures
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Appendix
Reconciliation of Non-GAAP Measures
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