UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 1,
2009
___________________
Shenandoah
Telecommunications Company
-------------------------------------------------------------------------
(Exact
name of registrant as specified in its charter)
__________________
|
Virginia
|
0-9881
|
54-1162807
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
500
Shentel Way
P.O.
Box 459
Edinburg,
VA
|
22824
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (540) 984-4141
Not
applicable
-------------------------------------------------
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2-(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
8.01 Other Events.
On
December 1, 2009, Shenandoah Telecommunications Company presented at the FBR
Capital Markets 2009 Fall Investor Conference hosted by Freidman, Billings,
Ramsey & Co., Inc., in New York, New York. The presentation
included materials related to the Company’s results of operations through
September 30, 2009. The materials attached hereto as Exhibit 99.1
were utilized during the presentation. These materials are also
available on the Company’s website.
These
materials may contain forward-looking statements about Shenandoah
Telecommunications regarding, among other things, our business strategy, our
prospects and our financial position. These statements can be
identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or
“anticipates” or the negative or other variation of these or similar words, or
by discussions of strategy or risks and uncertainties. Shenandoah
Telecommunications undertakes no obligation to revise or update such statements
to reflect current events or circumstances after the date hereof, or to reflect
the occurrence of unanticipated events.
Item
9.01 Financial Statements and Exhibits.
|
|
(c)
|
Exhibits
|
The
following exhibits are filed with this Current Report on Form 8-K.
|
|
FBR
Capital Markets 2009 Fall Investor Conference Presentation
Slides
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
SHENANDOAH
TELECOMMUNICATIONS COMPANY
|
|
| (Registrant) | |
|
December
1, 2009
|
Adele M. Skolits | ||
| Adele M. Skolits | |||
| Vice President - Finance and | |||
| Chief Financial Officer | |||
| (Duly Authorized Officer) |
2
December
1, 2009
FBR
Capital Markets
2009
Fall Investor Conference
Exhibit
99.1
1
Safe
Harbor Statement
This
presentation includes “forward-looking statements” within the meaning of Section
27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, regarding,
among other things, our business strategy, our prospects and our financial position. These
statements can be identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or
other variation of these similar words, or by discussions of strategy or risks and uncertainties. These
statements are based on current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the
Company’s expectations and projections. Important factors that could cause actual results to differ
materially from such forward-looking statements include, without limitation, risks related to the
following:
Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, regarding,
among other things, our business strategy, our prospects and our financial position. These
statements can be identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or
other variation of these similar words, or by discussions of strategy or risks and uncertainties. These
statements are based on current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the
Company’s expectations and projections. Important factors that could cause actual results to differ
materially from such forward-looking statements include, without limitation, risks related to the
following:
nIncreasing
competition in the communications industry; and
nA
complex and uncertain regulatory environment.
A
further list and description of these risks, uncertainties and other factors can
be found in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Copies of this
Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.shentel.com or
on request from the Company. The Company does not undertake to update any forward-looking
statements as a result of new information or future events or developments.
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Copies of this
Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.shentel.com or
on request from the Company. The Company does not undertake to update any forward-looking
statements as a result of new information or future events or developments.
2
Use
of Non-GAAP Financial Measures
Included
in this presentation are certain non-GAAP financial measures that are not
determined in
accordance with US generally accepted accounting principles. These financial performance
measures are not indicative of cash provided or used by operating activities and exclude the effectors
of certain operating, capital and financing costs and may differ from comparable information provided
by other companies, and they should not be considered in isolation, as an alternative to, or more
meaningful than measures of financial performance determined in accordance with US generally
accepted accounting principles. These financial performance measures are commonly used in the
industry and are presented because Shentel believes they provide relevant and useful information to
investors. Shentel utilizes these financial performance measures to assess its ability to meet future
capital expenditure and working capital requirements, to incur indebtedness if necessary, return
investment to shareholders and to fund continued growth. Shentel also uses these financial
performance measures to evaluate the performance of its business and for budget planning
purposes.
accordance with US generally accepted accounting principles. These financial performance
measures are not indicative of cash provided or used by operating activities and exclude the effectors
of certain operating, capital and financing costs and may differ from comparable information provided
by other companies, and they should not be considered in isolation, as an alternative to, or more
meaningful than measures of financial performance determined in accordance with US generally
accepted accounting principles. These financial performance measures are commonly used in the
industry and are presented because Shentel believes they provide relevant and useful information to
investors. Shentel utilizes these financial performance measures to assess its ability to meet future
capital expenditure and working capital requirements, to incur indebtedness if necessary, return
investment to shareholders and to fund continued growth. Shentel also uses these financial
performance measures to evaluate the performance of its business and for budget planning
purposes.
3
Agenda
Introduction
and Shentel Overview - Earle MacKenzie - EVP/COO
Overview
of Wireless
Overview
of Wireline
Overview
of Cable
Financials
- - Adele Skolits - CFO
4
Shenandoah
Telecommunications Company
n Reporting
Segments: Wireless, Wireline and Cable
n Shentel
Management Company: Allocation subsidiary for all
employees and shared expenses
employees and shared expenses
Allocation
Subsidiary
Wireline
Entities
Wireless
Entities
Shenandoah
Telecommunications
Company
Telecommunications
Company
Shentel
Cable
Company
Company
Shentel
Service
Company
Company
Shenandoah
Mobile
Company
Company
Shenandoah
Cable
Television Company
Television Company
Shentel
Management
Company
Company
Shentel
Communications
Company
Communications
Company
Shenandoah
Telephone Company
Telephone Company
Shenandoah
Personal
Communications
Company
Personal
Communications
Company
Shenandoah
Network Company
Network Company
Shenandoah
Long
Distance Company
Distance Company
Cable
Entities
5
Business
Overview
n Public
company with
4,400+ shareholders
u ≈ 70%
individual / 30% institutional
n Sprint
PCS Affiliate of Sprint Nextel
n Profitable
n Strong
growth
n Healthy
balance sheet
n Continuity
of ownership & management
n Focused
business plan
6
Growth
Strategy - Capitalize on Core Competencies
n Wireless
u Increase
penetration in existing PCS footprint
u Look
for new wireless opportunities in surrounding
geographic areas
geographic areas
n Cable
u Focus
on smaller less competitive markets
u Build
clusters to gain operating efficiencies
u Upgrade
networks to offer “Triple Play”
n Wireline
u Attractive
markets at reasonable prices
7
Segment
Overview
12
Months Ending September 30, 2009
Total
External Revenues = $157.5 million
Operating Income Before Depreciation &
Amortization (OIBDA) by Segment
Amortization (OIBDA) by Segment
Revenue
by Segment
8
Agenda
Introduction
and Shentel Overview
Overview
of Wireless
Overview
of Wireline
Overview
of Cable
Financials
9
PCS
Overview
n One
of 2 remaining Sprint Nextel
affiliates
affiliates
n 2.3
million licensed POPs
n 2.0
million covered POPs
n 219k
total subscribers
u 11.0%
penetration of covered
POPs
POPs
n 448
CDMA base stations
n 306
EVDO enabled cell sites
u 94%
EVDO covered POPs
n $41,000
Estimated Average
household income
household income
10
Key
Operational Metrics - PCS
Period Ending
Period Ending
Retail
Subscribers (000s)
Number
of Cell Sites
Churn
(%)
EVDO
Sites
Non-EVDO
Sites
11
Attractive
Service Revenue Growth - PCS
12 Months Ending
12 Months Ending
Gross
Billed PCS Revenue ($ millions)1
1 Before credits and
fees
15.6%
CAGR
12
PCS
Revenues
12 Months Ending
12 Months Ending
Billed
Revenue ($ millions)
Up
10.7%
Bad
Debt
Management
Fee
Service
Credits
Service
Fee
Net
Revenue
13
PCS
Revenue per Subscriber
Period Ending
Period Ending
Gross
Billed Revenue per Subscriber1
1 Before credits and
fees
Voice
Data
14
Wireless
Segment
12
Months Ending
Reported
Revenue ($ millions)
OIBDA
($ millions)
16.8%
CAGR
15
Capital
Expenditures - Wireless
12 Months Ending
12 Months Ending
Capital
Expenditures by Category ($ millions)
#
Cell Sites 332 346 411 475
%
Covered POPs 77% 79% 85% 88%
#
EVDO Sites 0 52 211 336
%
POPs Covered N/A 27% 86% 94%
Other
Capacity
Coverage
EVDO
Mobile
(Towers)
16
Agenda
Introduction
and Shentel Overview
Overview
of Wireless
Overview
of Wireline
Overview
of Cable
Financials
17
Wireline
Customers
12 Months Ending September 30, 2009
12 Months Ending September 30, 2009
n 23.5k
LEC access lines
n Acquisition
of North River
Telephone closed November
2nd
Telephone closed November
2nd
u 1.0k
access lines
n 10.5k
DSL subscribers
n 3.8k
dial-up Internet
subscribers
subscribers
n 10.8k
long distance
subscribers
subscribers
n One
FTTH community in
service outside of LEC area
service outside of LEC area
n Fiber
Network
u Route
miles: 784
18
Access
lines (000s)
-2.5%
CAGR
Internet
Customers (000s)
1 DSL only available
within LEC area
2 Dial-up offered inside
and outside the LEC area
Wireline
Customers
12 Months Ending
12 Months Ending
1
2
19
Wireline
Overview
12 Months Ending
12 Months Ending
Revenue
($ millions)
OIBDA
($ millions)
20
Agenda
Introduction
and Shentel Overview
Overview
of PCS
Overview
of Wireline
Overview
of Cable
Financials
21
Cable
TV Overview
n Complimentary
(with LEC business)
u 15k
Homes Passed
u 7.9k
Video Subscribers
n Offensive
positioning (Outside ILEC)
u 44k
Homes Passed
u 16.2k
Video and 1.6k Internet Subscribers
n All
two-way by mid 2010
22
Cable
TV
12 Months Ending
12 Months Ending
RGUs
(000s)
Revenue
($ millions)
OIBDA
($ millions)
1 Includes Rapid
Communications acquisition - December 2008
2 Only includes internet
for areas outside ILEC service area
1
1
1
Digital
Internet
2
Basic
23
Agenda
Introduction
and Shentel Overview
Overview
of PCS
Overview
of Wireline
Overview
of Cable
Financials
- - Adele Skolits - CFO
24
Key
Financial Results - Continuing Operations1
12 Months Ending
12 Months Ending
Net
Income from Continuing Operations
($
millions)
10.7%
CAGR
Revenue
($ millions)
1 Shentel Converged
Services has been reclassed as discontinued operations. All results have been
restated.
Wireless
Wireline
Cable
25
Operating
Income ($ millions)
Operating Income Before Depreciation &
Amortization ($ millions)
Amortization ($ millions)
Key
Financial Results - Continuing Operations1
12 Months Ending
12 Months Ending
1 Shentel Converged
Services has been reclassed as discontinued operations. All results have been
restated.
26
Key
Financial Results - Consolidated
12 Months Ending
12 Months Ending
Earnings
Per Share
-
Continuing Operations1
Earnings
Per Share
- Net
Income
2
1 Shentel Converged
Services has been reclassed as discontinued operations. All results have been
restated.
2 Includes $10.7 million
write down of Converged Service Business Unit ($0.45 per share) in Q1
2009
27
Total
Capex
12 Months Ending
12 Months Ending
Wireless
Wireline
Cable
Capital
Expenditures by Segment ($ millions)
28
Q&A
29
Appendix
30
Non-GAAP
Financial Measure - Billed Revenue per Subscriber
Period Ending
Period Ending
31
|
Dollars
in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
Wireline
|
Cable
|
Other
|
Consolidated
|
|
Operating
Income
|
$39,724
|
$12,758
|
($4,296)
|
($4,130)
|
$43,876
|
|
Depreciation
and amortization
|
19,669
|
8,502
|
2,979
|
332
|
31,482
|
|
|
|
|
|
|
|
|
OIBDA
|
$59,393
|
$21,080
|
($1,317)
|
($3,798)
|
$75,358
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measure - OIBDA
12 Months Ended 9/30/2009
12 Months Ended 9/30/2009
32
|
Dollars
in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
Wireline
|
Cable
|
Other
|
Consolidated
|
|
Operating
Income
|
$34,834
|
$14,121
|
($1,045)
|
($5,130)
|
$42,780
|
|
Depreciation
and amortization
|
17,184
|
6,988
|
1,042
|
299
|
25,513
|
|
|
|
|
|
|
|
|
OIBDA
|
$52,018
|
$21,109
|
($3)
|
($4,831)
|
$68,293
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measure - OIBDA
12 Months Ended 9/30/2008
12 Months Ended 9/30/2008
33
|
Dollars
in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
|
Wireline
|
Cable
|
Other
|
Consolidated
|
|
Operating
Income
|
$27,384
|
$14,291
|
($1,497)
|
($5,247)
|
$34,931
|
|
Depreciation
and amortization
|
16,188
|
6,030
|
1,060
|
240
|
23,518
|
|
|
|
|
|
|
|
|
OIBDA
|
$43,572
|
$20,321
|
($437)
|
($5,007)
|
$58,449
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measure - OIBDA
12 Months Ended 9/30/2007
12 Months Ended 9/30/2007
December
1, 2009
FBR
Capital Markets
2009
Fall Investor Conference