Exhibit 99.1
Third Quarter 2010
Earnings Conference Call
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.
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%
Equipment and Services revenue increased 38%
• Telecom Broadband revenue grew 16%,
Digital TV subscribers increased 10%
Digital TV subscribers increased 10%
• Pre-tax Net income increased 77% and totaled
$5.3 M
$5.3 M
• Fiber network expansion project added $3.3 M
revenue and $1.1 M net income
revenue and $1.1 M net income
Consolidated Revenue
Q3’10 compared to Q3’09
• Enventis fiber and data
revenue +53%
revenue +53%
• Enventis equipment & services
revenue +38%
revenue +38%
• Telecom broadband revenue
+16%
+16%
• Telecom network access and
local service revenue (-3%)
local service revenue (-3%)
($ 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
$1.9M income tax reserve release.
Excluding tax release, EPS would
be $0.24 per share
• Fiber expansion project added
$1.1M to earnings.
$1.1M to earnings.
Income before Taxes
(continuing operations)
(continuing operations)
• 77% increase in Q3’10 vs. Q3‘09
• Success in fiber & data, and
broadband services
broadband services
• Lower interest expense
($ in Millions)
Enventis Sector
Q3’10 compared to Q3’09
• Enventis revenue +45%
• Fiber and data revenues +53%
• Equipment & services revenue
+38%
+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
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
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
Dakota and Fargo, No. Dakota
•Increase network capacity between
Minnesota and Des Moines, Iowa
Minnesota and Des Moines, Iowa
•Add network collocations, expand
Mid-band Ethernet services.
Mid-band Ethernet services.
•Broadband stimulus grant secured, network
expansion plans in progress
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
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%
dividend, yield approximately 6-7%
• Business transformation generating strong diversification, operating
results and financial position
results and financial position
• Emerging growth through Enventis Sector b2b strategy and fiber
network expansion
network expansion
• High level of recurring revenue, dominant consumer market share,
expanded triple-play service area
expanded triple-play service area
• Experienced Company with 112-year track record and strong
strategic plan
strategic plan
Appendix
Adjusted Pre-tax Income and Net Income
Appendix
Reconciliation of Non-GAAP Measures