Attached files
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| 8-K - FORM 8-K - Enventis Corp | form8-k.htm |
Exhibit 99.1
Annual Shareholder Meeting
May 11, 2010
May 11, 2010
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.
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.
Welcome
James Bracke
Board Chairman
Agenda
1. Business Meeting
2. Company Overview
3. Financial Highlights
4. Questions
Board of Directors
Starr Kirklin, who served as director from 1989 to 2010, retires from the board as of
May 11, 2010.
May 11, 2010.
Business Meeting
Proposals
1. Election of Directors to three-year term:
• Diane Dewbrey
• Lyle Jacobson
2. Ratify Grant Thornton LLP as independent
auditor for 2010
auditor for 2010
Vote
Adjourn Business Meeting
Business Overview
John Finke
President and CEO
Executive Team
David Christensen
Sr. Vice President & CFO
Damon Dutz
President of Consumer
& Network Solutions
President of Consumer
& Network Solutions
Mary Jacobs
Vice President Human
Resources
Vice President Human
Resources
John Morton
President of Business
Solutions
President of Business
Solutions
Lane Nordquist
President of Information
Solutions
President of Information
Solutions
Walt Prahl
Pres. of Wholesale Solutions
& Bus. Development
Pres. of Wholesale Solutions
& Bus. Development
Jennifer Spaude
Director of Investor &
Public Relations
Director of Investor &
Public Relations
2009 Business Highlights
Fiscal 2009 as compared to fiscal 2008:
• Enventis Sector fiber and data revenue grew 30%
• Acquired and integrated CP Telecom business
• Enventis equipment revenue down 36%,
impacted by economic pressures
impacted by economic pressures
• Telecom Sector broadband revenue grew 10%,
solid EBITDA and cash flow
solid EBITDA and cash flow
• Aggressive cost controls in both sectors
• Debt reduced $6.5 million
• Strategic investments in fiber network upgrades and expansion,
SMB market plan acceleration
SMB market plan acceleration
Revenue Diversification
Consolidated Revenue
(Dollars in Millions)
($1.2)
$18.5 M
2009 Financial Results
• 2009 net income included a
$4.4 M income tax reserve
release (non recurring)
$4.4 M income tax reserve
release (non recurring)
• EPS in 2009 up 41% due to
income tax reversal.
income tax reversal.
• Excluding the tax reversal, EPS
in ‘09 would have been $0.52.
in ‘09 would have been $0.52.
2009 Financial Results
EBITDA
• Stable EBITDA results despite
revenue decline of $14.1 M
revenue decline of $14.1 M
• Fiber and data EBITDA growth
• Telecom EBITDA flat
(Dollars in Millions)
Strategic Business Initiatives
Enventis Sector
• Focus on growth in fiber and data services
• Expand fiber network
• Focus on SMB customer segment
• Grow monthly recurring revenue streams
Telecom Sector
• Grow broadband services, market bundle of services,
focus on customer retention
focus on customer retention
• Manage the network access decline
• Leverage local customer service and community presence
• Maintain strong free cash flow
HickoryTech Fiber Network
2,400 fiber route miles;
350 fiber route miles will be added in 2010
350 fiber route miles will be added in 2010
•Expand network to Sioux Falls and Fargo
•Expand network capacity in Des Moines
•Pursue broadband stimulus funding to further
expand middle mile network
expand middle mile network
Financial Overview
David Christensen,
Sr. Vice President and
Chief Financial Officer
Chief Financial Officer
Total Company Results
EBITDA
(Dollars in Millions)
Enventis Sector Results
Operating Income
(Dollars in Millions)
Equipment & Services
Revenue
Revenue
Operating Cash Flow
(EBITDA minus Capex)
$6.9
$7.0
$5.6
$4.7
$5.0
$2.8
Telecom Sector Results
(Dollars in Millions)
Operating Cash Flow
Q1-2010 Highlights
• Revenue increased 16% to $38.7 million
• Net income totaled $1.4 million, down 12%
(included $279,000 income tax non-recurring charge)
(included $279,000 income tax non-recurring charge)
• Debt reduced $4.3 million, resulting in a
debt to EBITDA ratio of 2.9x
debt to EBITDA ratio of 2.9x
• Solid balance sheet, low debt, 16% higher equity,
signs of business growth and recovery
signs of business growth and recovery
Q1-2010 Company Results
(Dollars in Millions)
Operating Income
Operating Cash Flow
(EBITDA minus Capex)
Q1-2010 Enventis Sector
• Fiber and data revenues +44% year
over year
over year
• Equipment & services revenue +29%
year over year
year over year
• Increased 65% year over year
Revenue
(Dollars in Millions)
Operating Income
Q1-2010 Telecom Sector
• Consistent Telecom revenue
Year over year:
• Broadband revenue +12%
• Network Access revenue -1%
• Local Service revenue -5%
• Cost management and success in
broadband services have moderated
decline in Telecom profitability
broadband services have moderated
decline in Telecom profitability
Debt Balance
Strong record of debt pay down; reduced debt $4.3 M in Q1’10
following pay down of $6.5 M in 2009
following pay down of $6.5 M in 2009
Dividend
• 2009 Annual Dividend totaled $0.52 per share
+6% increase over 2008 dividend of $0.49 per share
• Strong Dividend Yield
$0.52
$7.88*
=
6.6% Yield
*HTCO Stock Price on 5/10/10
Relative Stock Performance
Nasdaq -- S&P 500 -- HTCO --
Daily performance May 2009 to May 2010
Strategic Initiatives
• Increased investment and focus on growing business services
Ø Fiber network expansion
Ø Target data and Fiber-to-the-Tower contracts
Ø Accelerate SMB market plan
Ø Expand 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
debt in short term
Long-term goal to double the value of
HickoryTech over next five years
HickoryTech over next five years
HTCO Strengths
• Diverse, recurring revenue streams
• Strong cash flows, consistent operating income
• Focused capital spending on strategic growth
initiatives
initiatives
• Committed to strategic growth plan to double
value of company in five years
value of company in five years
• Long-standing dividend
• Strong financial position, financially stable,
poised for growth
poised for growth
Strong Balance Sheet, Positioned for Growth
Questions
Positioned for Growth
Thank You
Thank you for joining us today.
Reconciliation of Non-GAAP Measures