Attached files
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| 8-K - FORM 8-K - Enventis Corp | form8k.htm |
Exhibit 99.1
InvestMNt Conference
May 24, 2012
May 24, 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 affect
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.
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 affect
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.
Founded in 1898 as Mankato Citizens Telephone Company
NASDAQ: HTCO, 52-week range: $8.15 - $12.45
Shares outstanding: 13.5 million, Market Cap: $130 million
Quarterly Dividend $0.14, Annualized: $0.56, Yield: 6%
2011 Revenue: $163.5 million
a leading, regional
communications provider
communications provider
Employees: 500
Named by Forbes as one of best 100 small companies
in America
in America
Transforming HickoryTech
Enventis
Acquisition
Acquisition
CP Telecom
Acquisition
Acquisition
Greater MN
Broadband
Collaborative
Project
Initiated
Broadband
Collaborative
Project
Initiated
Close on IdeaOne
Acquisition
Acquisition
Phase 2 of Broadband
Project fiber build
Building a Regional
Communications Company…
Communications Company…
Fiber network
expansion to
So. Dakota,
No. Dakota
expansion to
So. Dakota,
No. Dakota
Regional Service Area
• Telecom Service Area -
residential and business
services in southern
Minnesota, northwest Iowa
and Des Moines area
residential and business
services in southern
Minnesota, northwest Iowa
and Des Moines area
Regional Service Area
• Enventis acquisition
(2006) added statewide
fiber network, presence
(2006) added statewide
fiber network, presence
• CP Telecom acquisition
(2009) added commercial
business focus
(2009) added commercial
business focus
• Organic expansion -
Sioux Falls and Fargo
fiber routes (2010)
Sioux Falls and Fargo
fiber routes (2010)
Regional Service Area
Extensive five-state network
includes 3,250 fiber route
miles
includes 3,250 fiber route
miles
•Greater Minnesota
Broadband Project will add
430 fiber route miles
Broadband Project will add
430 fiber route miles
•IdeaOne (2012) acquisition
added 225 fiber route miles
added 225 fiber route miles
Strategic Initiatives
Goal: Diversify Revenue and Increase Shareholder Value
Recent Highlights
IdeaOne Acquisition
|
Close Date
|
March 1, 2012
|
|
IdeaOne
|
CLEC based in Fargo, North Dakota focused on
business customers |
|
Transaction price
|
$28 million, cash transaction with routine
adjustments for capital expenditures and working capital adjustments |
|
Financing structure
|
$22 M of new term debt under existing credit
facility plus $6 M cash |
|
Fiber network
|
225 fiber route miles, 650 lit buildings,
|
|
Employees
|
40 based in Fargo, North Dakota
|
Idea One Acquisition
• Fiber-based communications
provider in Fargo, North Dakota
provider in Fargo, North Dakota
• Fits strategy; primarily business
revenue
revenue
• Further diversification
• Connects with regional fiber
network
network
• Free cash flow accretive in 2012
Diverse Customer Base and Services
Customers range from national carrier to residential
Revenue Growth & Diversification
69% of 2011 revenue was from Business and
Broadband Services
Broadband Services
2006 Revenue
$132.9 M
$132.9 M
2011 Revenue
$163.5 M
$163.5 M
Legacy Telecom
Business &
Broadband
Broadband
EBITDA Growth
• Grew EBITDA
$9.2 M since 2006
$9.2 M since 2006
• Compound annual
growth rate of 5%
growth rate of 5%
($ in Millions)
Shareholder Dividends
Increased dividend in 2011 and 2010
•More than 60 years of dividend payments
•Dividend yield: 5-6%
2011 Free Cash Flow
Free Cash Flow = $19.4 M
Dividend Payout is
38%
38%
Q1-2012: Solid Start to Year
• Strong Financial Performance
Fiber & Data revenue, +22%
Equipment revenue, +67%
Telecom revenue, -6%
Fiber & Data revenue, +22%
Equipment revenue, +67%
Telecom revenue, -6%
• Progress with Greater Minn.
Broadband Collaborative Project
Phase 1 of project 99% complete,
Phase 2 construction in progress
Broadband Collaborative Project
Phase 1 of project 99% complete,
Phase 2 construction in progress
• Strong Balance Sheet
Solid free cash flow, debt of $142
million, cash $20 million
Solid free cash flow, debt of $142
million, cash $20 million
Grew business
revenues and
earnings
revenues and
earnings
Fiber network
expansion,
last-mile fiber builds
expansion,
last-mile fiber builds
Completed
IdeaOne
Acquisition
IdeaOne
Acquisition
HickoryTech Strengths
Diverse revenue streams / markets, emerging
growth through business services and fiber
network expansion
growth through business services 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 increasing the value of HickoryTech by
growing EBITDA, strategic services, managing debt
growing EBITDA, strategic services, managing debt
Questions
NASDAQ: HTCO
Appendix
• Greater Minnesota Broadband Project
• 2012 Fiscal Outlook
• Debt Balance
• Reconciliation on Non-GAAP
• $24 M project funded with
$16.8 M NTIA Grant Award and
$7.2 M HickoryTech investment
$16.8 M NTIA Grant Award and
$7.2 M HickoryTech investment
• Construction of 430 fiber optic
miles includes two northern routes
miles includes two northern routes
• Partners: education, health care
and state/government entities
and state/government entities
Middle-mile project will add high-
capacity fiber network throughout rural
Minn. and connect anchor institutions
capacity fiber network throughout rural
Minn. and connect anchor institutions
2012 Fiscal Outlook
Outlook provided in Q4 earnings release on March 6, 2012.
Debt Balance
($ in Millions)
Net Debt Balance
Cash on hand
Past acquisitions drove debt increase; history of debt pay down
Enventis
Acquisition
Acquisition
IdeaOne
Acquisition
Acquisition
Reconciliation of Non-GAAP
1 EBITDA, a non-GAAP financial measure, is as defined in our debt agreement.
Reconciliation of Non-GAAP
25