Lict Corp. · OTC:LICT
Lict — Shareholder Meeting (May 2016)
23 slides from Lict's shareholder meeting presentation, May 26, 2016
Slide 1: Annual Meeting May 26, 2016
LICT Corporation imier Provider of Broadband Services to Rural America 101001 1010106 Ann al Meeting May 26, 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement The information contained herein is current only as of the date hereof; however, unless otherwise indicated, financial information contained herein is as of December 31, 2015. The business, prospects, financial condition or performance of LICT Corporation
Slide 3: Corporate History
Corporate History • Current management assumed control of Lynch Corporation (predecessor to LICT) in 1985. • Provides broadband connectivity to rural America • Expected to benefit from regulatory shifts to broadband. • Stable operating performance, strong FCF generation and a solid balance sheet. 3
Slide 4: Corporate History
Corporate History Active in corporate development initiatives to create shareholder value: – Made first RLEC acquisition in 1989 – 33 acquisitions, 11 dispositions and 7 spin- offs – Focused spectrum initiative – Continued pro-active M&A and capital deployment strategy 4
Slide 5: Solid Shareholder Returns
Solid Shareholder Returns 12/31/85 3/31/16 CAGR LGL Group, Inc. $3,290 LICT Corporation 103,500 Spin Offs: • Tremont Advisers, Inc. 29,288 • East/West Communications 61,822 • Sunshine PCS/ICTC Group, Inc. 1,630 • Morgan Group 400 • CIBL 28,320 • ICTC Group, Inc. 5,720 Investment $11,500 $234,969 16.
Slide 6: Snapshot
Snapshot (as of 3/31/16, $s in 000s) Customer Connections 68,129 y/y growth +2.7% Revenue (LTM) $87,101 EBITDA From Operations (LTM) $33,329 Net Debt $25,494 Net Debt/LTM EBITDA 0.8x Shares Outstanding 21,592 Market Capitalization (as of 3/31/16) $111,731 Enterprise Value $133,225 Enterprise Value /
Slide 7: Current Markets
Current Markets Michigan Broadband Bretton Woods Cal-Ore CentraCom Cuba City/Belmont Western New Mexico J.B.N. Central Scott Haviland 7
Slide 8: Strategic Advantage
Strategic Advantage • Favorable community ties with customers. • Rural markets less vulnerable to competition. • Generally supportive regulatory environment. • Opportunities in adjacent markets to grow. • Strong balance sheet providing the opportunity to invest both organically and through acquisiti
Slide 9: Growth: Organic & Acquisitions
Growth Organic & Acquisitions Expand Cable Markets Fiber Products- Services RLEC Broadband Wireless Diversify CLEC Sales Data Centers 9
Slide 10: Regulatory Dynamics: USF A-CAM
Regulatory Dynamics USF A-CAM 10
Slide 11: Target Markets
Target Markets Market Population Businesses Market Population Businesses Market Population Businesses Salt Lake City 1,410,815 35,821 Bettendorf 33,217 1,330 Klamath Falls 20,065 1,975 Orem 88,328 3,022 Davenport 99,685 4,302 Medford 74,907 4,123 Provo 112,488 2,645 Muscatine 22,886 996 Mt Shasta 10
Slide 12: CentraCom Fairview, Utah
CentraCom Fairview, Utah Market Population Businesses Salt Lake City 1,410,815 35,821 Orem 88,328 3,022 Provo 112,488 2,645 American Fork 28,542 1,032 Spanish Fork 32,643 752 Ogden 82,825 4,527 12
Slide 13: Improving Revenue Mix
Improving Revenue Mix 2010 2015 Video and Video and Other, Other, 13.7% 10.0% Broadband, 14.9% Broadband, Regulated , 29.5% 56.8% Regulated, 75.1% Regulated Broadband Video and Other Regulated Broadband Video and Other Over the past 5 years, LICT has reduced its regulated revenue composition from 75
Slide 14: Capital Expenditure Focus
Capital Expenditure Focus • Fiber networks: – ILEC territory to support regulated - funded mandates – Non ILEC territory for success based growth • Broadband expansion and enhancement: – Copper loop shortening (G-Fast) – DOCSIS upgrades (3.1) – Fixed wireless • Non-regulated businesses such as video
Slide 15: Broadband Driving LICT's Overall RGU Growth
Broadband Driving LICT’s Overall RGU Growth 67,000 Total Connections as of 2015 36,000 -1.2% 34,000 CAGR 32,000 30,000 +7.3% CAGR 28,000 34,625 33,994 33,186 33,020 33,049 26,000 28,631 24,000 26,039 22,000 24,546 23,132 21,616 20,000 2011 2012 2013 2014 2015 Broadband 21,616 23,132 24,546 26,039 28
Slide 16: LICT's Historical Revenue and EBITDA
LICT’s Historical Revenue and EBITDA (Continuing Operations) 2011 2012 2013 2014 2015 ($ In Thousands) Revenues: Regulated $55,688 $55,098 $52,430 $54,075 $49,726 Non-regulated 21,336 24,830 28,327 31,781 36,859 Total $77,044 $79,928 $80,757 $85,856 $86,585 EBITDA: Regulated $26,684 $25,933 $23,505
Slide 17: Solid FCF
Solid FCF 2011 2012 2013 2014 2015 ($ in Thousands) Capital Expenditures: Regulated $13,072 $8,559 $11,487 $9,711 $10,497 Non-regulated 2,915 4,112 7,075 6,617 7,528 Total $15,987 $12,671 $18,562 $16,328 $18,025 Free Cash Flow*: Regulated $13,612 $17,374 $12,018 $14,401 $8,636 Non-regulated 4,616 3,
Slide 18: First Quarter 2016
First Quarter 2016 ($ in Thousands) 2015 2016 Revenues: Regulated $12,403 $11,638 Non-Regulated 8,704 9,890 Total $21,108 $21,528 EBIDTA Regulated $5,040 $3,947 Non-Regulated 3,518 3,884 Total $8,558 $7,831 Capital Expenditures Regulated $1,801 $1,373 Non-Regulated 1,690 1,513 Total $3,501 $2,886 Fr
Slide 19: Liquidity and Leverage
Liquidity and Leverage ($ in Thousands) 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 3/31/16 Cash and Deposits $11,705 $9,030 $9,272 $22,155 $14,748 $17,073 Debt $100,286 $78,237 $71,756 $58,466 $44,846 $42,567 Net Debt $88,581 $69,207 $62,484 $36,311 $30,097 $25,494 Average Interest Rate 6.0% 6.3%
Slide 20: Valuable Investments
Valuable Investments • Modoc RSA Limited Partnership • Iowa Network Services • AWS and PCS Spectrum • DFT Communications • CoBank Patronage Capital LICT Received $3.13m in Distributions in 2015 20
Slide 21: Comparable Analysis
Comparable Analysis SMID Cap Market Cap Enterprise LTM EBITDA EV/LTM RLECs ($ mil) Value ($ mil) ($ mil) EBITDA ALSK $93.5 $216 $47.7 5.2x CBB 778.3 2,011 302.1 6.6x CNSL 1,248.6 2,616.2 329 7.9x FRP 371.6 1,256.9 254.0 4.9x HCOM 256.0 520.9 117.8 4.4x LICT 118.6 144.1 33 4.1x NULM 37.2 70.3 14.9 4.
Slide 22: Investment Highlights
Investment Highlights Retains a strong incumbency position. Strong growth in non-regulated revenue. Aggressive broadband expansion. Well-positioned for the pending FCC A-CAM ruling. Generates solid FCF supporting a strong balance sheet. Pursuing disciplined M&A to compliment organic grow
Slide 23: Annual Meeting May 26, 2016
LICT Corporation imier Provider of Broadband Services to Rural America 9101001 a *Q401401010110101010101011010101 ~~“Annua Meeting May 26, 2016