Attached files
| file | filename |
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| 8-K - FORM 8-K - Enventis Corp | form8-k.htm |
Exhibit 99.1
Fourth Quarter 2011
Earnings Conference Call
March 7, 2012
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
Q4 and Fiscal 2011 Highlights
Fourth Quarter 2011 compared to Fourth Quarter 2010
• Revenue totaled $39.6 M, -5%
– Fiber and data revenue +7%
– Equipment sales down 28%, equipment support services
revenue +15%
revenue +15%
• Operating income totaled $3.6 M
• Net income totaled $1.4 M, EPS was $0.11
Fiscal 2011 compared to Fiscal 2010
• Revenue totaled $163.5 M, +1% (+4%*)
• Net income totaled $9.2 M, -24% (+11%*)
• Operating Income was $19.7 M, -6% (+5%*)
• Fiber and Data revenue of $45.9 M, + 2% (+14%*)
* (Normalized, excludes non-recurring 2010 fiber construction project
revenue and 2010 -11 tax reserve releases.)
revenue and 2010 -11 tax reserve releases.)
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Consolidated Revenue
Q4 ’11 compared to Q4 ’10
• Equipment revenue -22%
• Fiber and data revenue +7%
(+13% when excluding the Q4-2010
fiber construction project revenue)
(+13% when excluding the Q4-2010
fiber construction project revenue)
• Broadband revenue +2%
2011 compared to 2010
• Revenue +1% (+4% excluding
2010 fiber construction project)
2010 fiber construction project)
($ in millions)
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69% of 2011 revenue is from Business & Broadband Services;
less reliance on regulated telecom revenue
less reliance on regulated telecom revenue
Revenue Diversification
• 2011 EPS declined 7% compared t0
2010 when excluding the 2010 tax
reserve release*
2010 when excluding the 2010 tax
reserve release*
• 2011 EBITDA increased 6%
compared to 2010 when excluding
the 2010 fiber project.*
compared to 2010 when excluding
the 2010 fiber project.*
($ in millions)
EBITDA (as defined by our credit agreement)
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*Excludes tax reserve releases
*Excludes the fiber construction project
Business Sector
2011 compared to 2010
• Revenue up 2%
• Excluding the fiber construction project in 2010
revenue was up 14% from organic growth
revenue was up 14% from organic growth
2011 compared to 2010
• Equipment sales stable, up 1%
• Equipment support services up 12%
($ in millions)
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Excludes fiber construction project
Equipment Revenue
Fiber and Data Revenue
Telecom Sector
2011 compared to 2010
•Stable Telecom revenue
•Broadband revenue up 8%
•Network Access revenue down 3% and
Local Service revenue down 6%
Local Service revenue down 6%
2011 compared to 2010
•Business Ethernet and data sales strong
•Broadband residential markets maturing
Broadband Revenue (within Telecom Sector)
($ in millions)
before intersegment
eliminations
eliminations
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Debt Balance
($ in millions)
Net debt was $107.2 million at 12/31/11, a $11.7 million improvement from 12/31/10
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Net Debt Balance
Total Debt Balance
2011 Free Cash Flow
Free Cash Flow = $19.4 M
Dividend Payout is
38%
38%
IdeaOne Acquisition Close
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Close Date
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March 1, 2012 - IdeaOne will be included in the
Fiber & Data Segment for 10 mos. of 2012 |
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Transaction price
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$28 million, cash transaction with routine
adjustments for capital expenditures and working capital adjustments |
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Financing structure
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$22 M of new term debt under existing credit
facility plus $6 M cash |
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Approximate transaction
multiples |
2.3x 2011 IdeaOne Revenue
5.8x 2011 IdeaOne EBITDA |
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Integration status
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In progress, to be completed by Q3-2012
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Fiber network
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225 fiber route miles, 650 lit buildings,
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Employees
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40 based in Fargo, No. Dakota
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Greater Minnesota Broadband
Collaborative Project
•Phase 1 extends fiber network from
St. Paul to Duluth, Minn. / Superior, Wisc.
Majority of project was completed in 2011
St. Paul to Duluth, Minn. / Superior, Wisc.
Majority of project was completed in 2011
•Phase 2 will extend fiber from Brainerd, Minn.
to Fargo, N.D.
Construction to begin in 2012
to Fargo, N.D.
Construction to begin in 2012
•Project will be completed by Aug. 2013
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2012 Fiscal Outlook
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Outlook provided in Q4 earnings release on March 6, 2012.
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
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Key Strategic Initiatives
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Strategic Growth through organic and external growth
HickoryTech Strengths
Diverse revenue streams / markets, emerging
growth through business revenue stream and fiber
network expansion
growth through business revenue stream and fiber
network expansion
More than 60 years of dividend return, yield 5-6%
Increased dividend in 2011 and 2010
Experienced company with 114-year track record
of financial stability
of financial stability
Strong cash flow, strong balance sheet,
high level of recurring revenue
high level of recurring revenue
Focused on doubling the value of HickoryTech by
growing EBITDA, strategic services, managing debt
growing EBITDA, strategic services, managing debt
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Reconciliation of Non-GAAP Measures
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1 EBITDA, a non-GAAP financial measure, is as defined in our credit agreement
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Reconciliation of Non-GAAP Measures
Appendix
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Reconciliation of Non-GAAP Measures
(Dollars in thousands)