Attached files
| file | filename |
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| 8-K - HTCO FORM 8-K - Enventis Corp | form8-k.htm |
Exhibit 99.1
Fourth
Quarter 2009
Earnings Conference Call
Earnings Conference Call
March 2, 2010
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.
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.
4Q’
09 Highlights
• Enventis
Sector fiber and data revenue grew 46%
• Telecom
Sector broadband revenue grew 10%
• Equipment
revenue +2%, yet still impacted by economic pressures
• Debt
reduced $4.4 million, year-end debt balance of $120.5 M
• Aggressive
cost controls in both sectors
• Strategic
investments in fiber network upgrades and expansion,
SMB market plan acceleration
SMB market plan acceleration
• Strong
cash position
Solid
balance sheet, strategic investments in growth
opportunities.
Consolidated
Revenue
Quarterly
• Fiber
and data revenue +46%
• Broadband
revenue +10%
Annual
• Overall
economic pressures,
specifically in equipment and
services revenue (-33%)
specifically in equipment and
services revenue (-33%)
• Fiber
and data revenue +30%
• Broadband
revenue +10%
Annual
Revenue
*Equipment
$156.6
$153.2
$139.1
comparative
(Dollars in
Millions)
Consolidated
Revenue
Enventis
Sector
Equipment (-$15.7 M)
Equip. Services ($-2.8 M)
Equipment (-$15.7 M)
Equip. Services ($-2.8 M)
Fiber
and Data (+$7.2 M)
Telecom
Sector
Local
Service, Network
Access
(-$2.7 M)
Broadband
(+$1.1 M)
Long
distance/other (-$1.2M)
(Dollars in
Millions)
Earnings
and Income
Diluted
EPS
• EPS
in 2009 up 41% due to
income tax reversal in Q3’09
income tax reversal in Q3’09
1
Excluding the tax reversal, EPS in ‘09
would have been $0.52, down15%
would have been $0.52, down15%
Income
before Taxes (continuing
operations)
operations)
• Aggressive
cost controls and
success in broadband, fiber and
data services offset some of the
declines
success in broadband, fiber and
data services offset some of the
declines
• Long-term
growth initiatives added
staffing costs and depreciation of
CAPEX in the near-term
staffing costs and depreciation of
CAPEX in the near-term
Income
before Taxes
(Dollars in
Millions)
1
Enventis
Sector
4Q’09
Highlights
• Fiber
and data revenues +46%
• Equipment
and services
revenue impacted by economy
revenue impacted by economy
Fiber
and Data
• Includes
CP Telecom in Q3
‘09, excluding CPT, Fiber and
Data would have increased
14% in ‘09
‘09, excluding CPT, Fiber and
Data would have increased
14% in ‘09
• Strong
mid-band Ethernet and
FTTT growth opportunities
FTTT growth opportunities
• Continued
growth from service
providers (wireless, regional
and national carriers)
providers (wireless, regional
and national carriers)
Quarterly
Revenue
comparative
comparative
(Dollars in
Millions)
Telecom
Sector
4Q’09
Highlights
• Broadband
revenue +10%
• DSL
subscribers +3%
• Digital
TV subscribers +15%
• Network
Access revenue -5%
• Local
Service revenue -6%
Telecom
Operating Income
• Cost
controls and success in
broadband services have moderated
the decline in Telecom profitability
broadband services have moderated
the decline in Telecom profitability
1
2007
included a settlement from
interexchange carrier of $1.9 M,
excluding this, operating income
would have been $15.9 M
interexchange carrier of $1.9 M,
excluding this, operating income
would have been $15.9 M
comparative
1
(Dollars in
Millions)
Debt
Balance
(Dollars in
Millions)
2009
Accomplishments
Enventis
• Fiber
and data
revenue up +30%
revenue up +30%
• Added
network
colocations
colocations
• Expanded
Mid-
band Ethernet
services
band Ethernet
services
Telecom
• Broadband
revenue up 10%
revenue up 10%
• Expanded
Digital
TV service area
TV service area
• Cost
controls
drove 4% increase
in operating
income, despite
declining
voice/network
access revenues
drove 4% increase
in operating
income, despite
declining
voice/network
access revenues
Overall
• Completed
CP
Telecom
acquisition
Telecom
acquisition
• Focused
capital
spending on
strategic growth
opportunities
spending on
strategic growth
opportunities
• Reduced
debt $6.5 M
2010
Strategic Initiatives
• Increased
investment and focus on growing business services
Ø Fiber
network expansion
Ø Target
FTTT and data contracts
Ø
Accelerate SMB market plan
Ø Expand
Mid-band Ethernet and data center services
• Grow
broadband services and focus on customer retention
• Increase
capital spending on key strategic initiatives
• Manage
free cash flow, manage costs and potentially increase debt
in short term
in short term
• Long-term
goal to double the value of HickoryTech over next five
years
years
Fiber
Network Expansion
2009
Network Expansion
• Added
network colocations to reach more
customers, cost advantages
customers, cost advantages
• 10G
upgrade of Twin Cities metro network
• Extended
network to select wireless towers
2010 Network Plans
• Expansion
of network to Des Moines, Iowa
and other key markets
and other key markets
• Add
lit buildings, expand Mid-band Ethernet
services and extend network for FTTT
contracts.
services and extend network for FTTT
contracts.
2010
Fiscal Outlook
Targets
ranges as follows:
• Revenue: $150
million to $158 million
• Net
Income: $8.2
million to $9.1 million
• Capital
spending: $22
million to $26 million
• EBITDA:
$40.5 million to $43 million
• Debt
balance (year-end): $117
million to $119 million.
Outlook
provided in fourth quarter earnings release on March 1,
2010.
HTCO
Strengths
• Strong
cash flows
• High level of
recurring revenue, consistent operating income
• Focused
capital spending on strategic growth initiatives
• Long-standing
dividend return
• Committed
to strategic growth plan
• 110+
year Company with strong financial track record
Reconciliation
of Non-GAAP Measures