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

October 26, 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.

 
 
 

 
Third Quarter 2010 Highlights
 Revenue increased 25% to $43.5 M
 Enventis Fiber and Data revenue increased 53%,
 Equipment and Services revenue increased 38%
 Telecom Broadband revenue grew 16%,
 Digital TV subscribers increased 10%
 Pre-tax Net income increased 77% and totaled
 $5.3 M
 Fiber network expansion project added $3.3 M
 revenue and $1.1 M net income
 
 

 
Consolidated Revenue
Q3’10 compared to Q3’09
 Enventis fiber and data
 revenue +53%
 Enventis equipment & services
 revenue +38%
 Telecom broadband revenue
 +16%
 Telecom network access and
 local service revenue (-3%)
($ in Millions)
Quarterly Revenue
 
 

 
Earnings and Income
Diluted EPS
 Earnings positively impacted by
 $1.9M income tax reserve release.
 Excluding tax release, EPS would
 be $0.24 per share
 Fiber expansion project added
 $1.1M to earnings.
Income before Taxes
 
(continuing operations)
 77% increase in Q3’10 vs. Q3‘09
 Success in fiber & data, and
 broadband services
 Lower interest expense
($ in Millions)
 
 

 
Enventis Sector
Q3’10 compared to Q3’09
 Enventis revenue +45%
 Fiber and data revenues +53%
 Equipment & services revenue
 +38%

 
Operating Income
 123% increase in Q3’10 vs. Q3‘09
 73% increase nine months YTD
Quarterly Revenue
($ in Millions)
Operating Income
 
 

 
Telecom Sector
Q3’10 compared to Q3’09
 Consistent Telecom revenue
 Broadband revenue +16%
 Digital TV subscribers +10% 
 Network Access revenue -3%
 Local Service revenue -4%

 Telecom Operating Income
 Success in selling broadband
 services have moderated decline in
 Telecom profitability
 Continued focus on cost controls
Quarterly Revenue
($ in Millions)
Operating Income
 
 

 
Debt Balance
Debt to EBITDA
ratio of less than
3x at 9/30/10
 
 

 
2010 Fiscal Outlook
2010 targets ranges as follows:
 Revenue: $150 M to $158 M (no change)
 Net Income: $11.6 M to $12.5 M (previously $9.7 to $10.6 M)
 Capital spending: $22 M to $26 M (no change)
 EBITDA: $41.5 M to $44 M (no change)
 Debt balance (year-end): $117 M to $120 M (no change)
 
 

 
Fiber Network Expansion

2010 Network Expansion
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.
Broadband stimulus grant secured, network
expansion plans in progress
 
 

 
Strategic Initiatives
 Increased investment and focus on growing business services
 Ø Fiber network expansion
 Ø Accelerate SMB market plan
 Ø Expand Mid-band Ethernet 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 6-7%
 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
 
 

 
Appendix
Adjusted Pre-tax Income and Net Income
 
 

 
Appendix
Reconciliation of Non-GAAP Measures