EX-99.1 2 ex99-1.htm ex99-1.htm
Exhibit 99.1
Second Quarter 2010
Earnings Conference Call

July 29, 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.

 
 
 

 
Second Quarter 2010 Highlights
 Revenue increased 18% to $38.3 M
 Enventis Fiber and Data revenue increased 63%,
 Equipment and Services revenue increased 28%
 Telecom Broadband revenue grew 10%,
 Digital TV subscribers increased 11%
 Net income increased 66% and totaled $3.5 M
 
Income tax release added $800k to net income, excluding this release, Net Income +28%
 Fiber network expansion project added $1.1 M revenue and $200k
 net income
 
 

 
Consolidated Revenue
Q2’10 compared to Q2’09
 Enventis fiber and data
 revenue +63%
 Enventis equipment & services
 revenue +28%
 Telecom broadband revenue
 +10%
 Telecom network access and
 local service revenue (-4%)
($ in Millions)
Quarterly Revenue
 
 

 
Earnings and Income
Diluted EPS
 Earnings positively impacted by
 $800k income tax reserve release.
 Excluding release, EPS would be
 $0.20 per share
 Fiber expansion project added
 $200k to earnings.
Income before Taxes
 
(continuing operations)
 28% increase in Q2’10 vs. Q2 ‘09
 Success in fiber & data, and
 broadband services
 Lower interest expense
($ in Millions)
 
 

 
Enventis Sector
Q2’10 compared to Q2’09
 Enventis revenue +44%
 Fiber and data revenues +63%
 Equipment & services revenue
 +28%

 
Operating Income
 33% increase in Q2’10 vs. Q2 ‘09
 46% increase six months YTD
Quarterly Revenue
($ in Millions)
Operating Income
 
 

 
Telecom Sector
Q2’10 compared to Q2’09
 Consistent Telecom revenue
 Broadband revenue +10%
 Digital TV subscribers +11%
 DSL subscribers +2%
 Network Access revenue -2%
 Local Service revenue -6%
Telecom Operating Income
 Success in selling broadband
 services have moderated decline in
 Telecom profitability
 Continued focus on cost controls
($ in Millions)
Operating Income
 
 

 
Debt Balance
Debt to EBITDA
ratio of less than
3x at 6/30/10
 
 

 
2010 Fiscal Outlook
Targets ranges as follows:
 Revenue: $150 M to $158 M
 Net Income: $9.7 M to $10.6 M (previously $8.7 to $9.6 M)
 Capital spending: $22 M to $26 M
 EBITDA: $41.5 M to $44 M (previously $40.5 to $43 M)
 Debt balance (year-end): $117 M to $120 M
 
(previously $117 to $119 M)
Outlook targets updated in second quarter 2010 earnings release, issued July 28, 2010.
 
 

 
Fiber Network Expansion

2010 Network Plans
Extend fiber network to Sioux Falls, So. Dakota
and Fargo, No. Dakota
Increase network capacity between Minnesota
and Des Moines, Iowa
Add network collocations, expand Mid-band
Ethernet services and extend network for FTTT
contracts.
 
 

 
Strategic Initiatives
 Increased investment and focus on growing business services
 Ø Fiber network expansion
 Ø Accelerate SMB market plan
 Ø Expand Mid-band Ethernet and data center services
 Ø Target FTTT and last-mile fiber builds
 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
 Long-term goal to double the value of HickoryTech over five years
 
 

 
HTCO Investment Highlights
 Stable growth and cash flows; more than 60 years of paying a
 dividend, yield approximately 7%
 Business transformation generating strong diversification, operating
 results and financial position
 Emerging growth through Enventis Sector b2b strategy and fiber
 network expansion
 High level of recurring revenue, dominant consumer market share,
 expanded triple-play service area
 Experienced Company with 112-year track record and strong
 strategic plan
 A strategic plan to grow the company and double the value over five
 years
 
 

 
Reconciliation of Non-GAAP
Measures