Annual Report 2014 2014Report Annual Hawaiian Telcom
hawaiiantel.com
41115 Cover.indd 1-3 3/18/15 3:40 PM and better positioning us to capitalize on the year with 411 total cell sites built, and we opportunities that exist in our marketplace. have another 73 sites under contract to build. Future-proofed with fi ber, bandwidth to During the past year, our strategic these cell sites is easily increased to provide investments drove growth across many wireless carriers more capacity, which BOARD OF DIRECTORS CORPORATE OFFICERS key areas as we continued to build out our drives a meaningful increase in next-generation fi ber network, and invest in revenue over time. system enhancements and other success- Richard A. Jalkut Steven C. Oldham Eric K. Yeaman Jason K. Fujita based initiatives. We deployed approximately In 2014, we announced a $25 million Chairman President and President and Vice President – Consumer Sales $97 million of capital in 2014 with more investment in a landmark project to build and Hawaiian Telcom Holdco, Inc. Chief Executive Offi cer, Retired Chief Executive Offi cer and Product Marketing than 80 percent directed toward growth and operate the fi rst trans-Pacifi c submarine cable President and SureWest Communications expansion initiatives. system directly connecting Indonesia, the Chief Executive Offi cer Scott K. Barber Paul G. Krueger Philippines, Guam, Hawai‘i and the mainland U.S. TelePacifi c Corp. Bernard R. Phillips III Chief Operating Offi cer Vice President – Business Sales Our growing momentum in the consumer U.S. Our participation in this system will (dba TelePacifi c Communications) President and and Product Marketing To Our Shareholders, channel is powered by the continued strength enable us to more cost-effectively meet our Chief Executive Offi cer, Retired Robert F. Reich Customers and Employees of Hawaiian Telcom TV, supporting growth in own rapidly growing bandwidth requirements, Kurt M. Cellar National Rural Senior Vice President, Ben L. Morgan high-speed Internet and driving an industry- as well as provide a unique opportunity to President Telecommunications Cooperative Chief Financial Offi cer and Vice President – Customer Care For Hawaiian Telcom, 2014 was another leading 4 percent growth in consumer monetize a meaningful amount of our capacity. Corner Pocket Investors, LLC Treasurer and Network Reliability successful year. With your support, we revenues in 2014. Hawai‘i’s superior Eric K. Yeaman continued work to achieve our vision of entertainment experience can now reach Our success in 2014 would not have been Walter A. Dods, Jr. President and John T. Komeiji John K. Duncan being the number one service provider of 160,000 households on O‘ahu, 57.5 percent possible without the dedication of our Chairman Chief Executive Offi cer Senior Vice President and Vice President and Controller innovative, Always On communications, of which are fi ber-to-the-home households employees. We’re proud to call Hawai‘i our Matson, Inc. Hawaiian Telcom Holdco, Inc. General Counsel and capable of receiving our market-leading home, and in addition to our commitment to technology and entertainment solutions to Sean K. Clark 500 Mbps broadband service. The mid-year providing customers with superior service, the people and businesses of Hawai‘i. From Warren H. Haruki Kevin T. Paul Executive Director, our employees work tirelessly to improve the our founding in 1886, Hawaiian Telcom has President and Senior Vice President – Assistant General Counsel quality of life in the communities we serve. always led the way in delivering the products Chief Executive Offi cer Technology and Corporate Secretary and services to meet the changing demands “We are confi dent in our Through employee and company giving, we Grove Farm Company, Inc. of our customers. Communications was the once again ranked as a top contributor to Chairman and Amy S. Aapala backbone of our society then and is even strategies and our platform for the Aloha United Way, and our employees volunteered thousands of hours of Chief Executive Offi cer Vice President – more important in today’s Information Age, growth and are ready to lead where a knowledge-based society requires community service. Maui Land & Pineapple Customer Service a high-tech network supporting it. Hawaiian Hawai‘i into the next generation of Company, Inc. Telcom is leading the advance into this next Outlook for 2015 generation with a strategy of investment in communications, technology growth and innovation. and entertainment.” We begin 2015 with strong momentum. Demand for higher bandwidth services and With a focus on broadband, TV and data integrated communications solutions is dynamic center and cloud services, Hawaiian Telcom’s and growing, as consumers and businesses investment continues in our next-generation launch of a new mass marketing campaign increasingly view them as tools to improve SHAREHOLDER INFORMATION TRANSFER AGENT fi ber network and innovative new products helped fuel strong growth in Hawaiian Telcom their quality of life and strategic enablers of Corporate Headquarters For inquiries regarding registered shareholder accounts, continue to transform our company and TV subscribers, increasing 53 percent in 2014, growth. To address this demand, we will Hawaiian Telcom Holdco, Inc. please contact our transfer agent: Hawai‘i’s communities and businesses. and building our video business into a $30 continue to leverage our next-generation 1177 Bishop Street We also looked beyond our shores to the million dollar annualized revenue stream and fi ber network and data center capabilities to Honolulu, HI 96813 American Stock Transfer & Trust Company, LLC growing global economy. Our participation in growing. launch new Unifi ed Communications services hawaiiantel.com 6201 15th Avenue a consortium to build and operate a new $250 and Software-as-a-Service cloud services like Brooklyn, NY 11219 million trans-Pacifi c submarine cable system In the business channel, customers of all virtual desktop and Microsoft Offi ce 365. We continues our long tradition of connecting sizes—including 225 of Hawai‘i’s top 250 MAILING ADDRESS (800) 937-5449 look forward to expanding the availability of Hawai‘i to the rest of the world. companies—turn to Hawaiian Telcom for a P.O. Box 2200 amstock.com full array of communications services. On Hawaiian Telcom TV to more households on Honolulu, HI 96841 O‘ahu in 2015, driving deeper penetration and We have invested and executed the enterprise side, business data revenue INVESTOR RELATIONS CONTACT increasing our share of the consumer video aggressively, creating new growth channels was up 3 percent driven by demand for COMMON STOCK Other inquiries about Hawaiian Telcom may be directed to: and broadband market. We are confi dent in and demonstrating the strength of our next-generation IP-based services and in the Symbol: HCOM Brian Tanner our strategies and our platform for growth statewide broadband network. This network small- and medium-sized market increased Traded on The NASDAQ Stock Market Director of Investor Relations and are ready to lead Hawai‘i into the next is a powerful distribution platform for the bandwidth demand led to 4 percent growth Phone: (201) 706-8965 generation of communications, technology and innovative products and services that in business high-speed Internet revenue. Email: [email protected] entertainment. are fueling our growth. As we move into Hawaiian Telcom has the full range of assets 2015, we remain focused on enabling our and capabilities to meet our customers’ need Finally, I want to thank our employees and INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM customers to take advantage of an for integrated communications solutions, Board for their hard work and dedication to our Deloitte & Touche LLP expanded array of products and services to which is having a pull-through effect for Company and our customers. I also extend my Honolulu, Hawaii strengthen their businesses and improve their SystemMetrics’ data center and cloud deep appreciation to all of our shareholders quality of life. services. This line of business allows us to truly become a strategic partner in our for your continued support and confi dence in customers’ business, enabling them to Hawaiian Telcom. 2014 Highlights focus on what matters most—growing their business. For the full year, we reported revenue of $391 million, adjusted EBITDA of $118 million, In our wholesale channel, we continued to and net income of $8 million, or $0.76 per invest capital in fi ber-to-the-tower projects, diluted share. Our 2014 results refl ect solid enabling our participation in the growing Eric K. Yeaman performance in the key strategic areas of our demand for wireless broadband. We built President and CEO business, giving us strong momentum fi ber to 122 cell sites in 2014, ending the Hawaiian Telcom
41115 Cover.indd 4-6 3/18/15 3:40 PM UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one)