Atlantic Tele-Network, Inc. Reports Fourth Quarter and Full Year 2010 Results
Fourth Quarter 2010 Financial Highlights:
-
Total revenues were
$194.7 million , up 226% from last year -
Wireless service revenues were
$164.2 million , or 84% of total revenues -
Adjusted EBITDA was
$31.3 million -
Operating income was
$9.3 million
Fourth Quarter 2010 Financial Results
"Fourth quarter operating results were similar to those of the third
quarter. Revenue growth was driven primarily by our recent acquisition
of certain former Alltel wireless assets, net of the anticipated
customer attrition. As a result, adjusted EBITDA showed a healthy
increase from 2009 levels. This increase did not extend to operating
income, which was negatively impacted by the lingering effects of
previously discussed transition initiatives and overlapping expenses, as
well as the write-up of acquired assets," said
Total revenues for the fourth quarter were
Adjusted EBITDA1 for the 2010 fourth quarter was
Total operating income for the fourth quarter of 2010 was
"U.S. wireless revenues and subscriber numbers were in line with our expectations and reflected the ongoing initiatives we have implemented to build the stability and value of our domestic retail customer base," Mr. Prior noted. "We will be in a much better position to customize our offerings and leverage our point of sale opportunities, which should result in more normalized margins when we complete our transition. We will continue to address problem areas like involuntary churn, which has remained higher than expected throughout this transition period, but until we complete the transition, we expect margins to continue to be thin and net subscriber losses, particularly in prepaid, to continue. We currently expect to complete the transition late in the second quarter of 2011."
Fourth Quarter 2010 Operating Highlights
U.S. Wireless Service Revenues
U.S. wireless service revenues include voice and data service revenues
from the Company's prepaid and postpaid retail operations as well as its
wholesale roaming operations. Total service revenues from the U.S.
wireless businesses amounted to
U.S. Retail wireless service revenues
were
U.S. Wholesale wireless revenues
were
International Wireless Revenues
International wireless revenues include retail and wholesale voice and
data wireless revenues from international operations in
Wireline Revenues
Wireline revenues are generated by the Company's wireline operations in
Reportable Operating Segments
The Company has four reportable segments: i)
U.S. |
U.S. |
Reconciling |
Total | ||||||||||||||||||||||||
International |
Island |
||||||||||||||||||||||||||
Total Revenue | $ | 160,270 | $ | 21,688 | $ | 4,991 | $ | 7,716 | $ | - | $ | 194,665 | |||||||||||||||
Adjusted EBITDA |
26,332 |
9,978 |
586 |
(892 |
) |
(4,712 |
) | 31,292 | |||||||||||||||||||
Operating Income (Loss) |
9,280 |
5,600 |
(178 |
) |
(2,700 |
) |
(2,741 |
) | 9,261 |
* — Reconciling items are comprised of corporate general and administrative costs and acquisition-related charges.
Full Year 2010 Results
-
Total revenue increased to
$619.1 million from$242.3 million in 2009 -
Total wireless revenue increased to
$504.6 million from$150.0 million in 2009 -
Adjusted EBITDA was
$128.8 million , up 11% from$115.7 million in 2009. -
Net income was
$38.5 million , or$2.48 per diluted share, as compared to$35.5 million , or$2.32 per diluted share in 2009.
Commenting on full year 2010 results, Mr. Prior said, "This was another year of solid performance for ATN. We succeeded in maintaining positive momentum in our international businesses, while completing a transformational acquisition that has significantly increased our domestic wireless footprint and our earnings and cash flow potential."
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents at
Conference Call Information
About
Cautionary Language Concerning Forward Looking Statements
This press release contains forward-looking statements relating to,
among other matters, our future financial performance and results of
operations; the competitive environment in our key markets, demand for
our services and industry trends; the outcome of regulatory matters; our
continued access to the credit and capital markets; the pace of our
network expansion and improvement, including our level of estimated
future capital expenditures and our realization of the benefits of these
investments; and management's plans and strategy for the future. These
forward-looking statements are based on estimates, projections, beliefs,
and assumptions and are not guarantees of future events or results.
Actual future events and results could differ materially from the events
and results indicated in these statements as a result of many factors,
including, among others, (1) our ability to operate a large scale retail
wireless business in
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this news release also contains
non-GAAP financial measures. Specifically, ATN has presented Adjusted
EBITDA and ARPU measures. Adjusted EBITDA is defined as net income
attributable to
Table 1 |
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ATLANTIC TELE-NETWORK, INC. | ||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||
(in Thousands) | ||||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets: | ||||||||
Cash and Cash Equivalents | $ | 37,331 | $ | 90,247 | ||||
Other Current Assets | 116,958 | 46,268 | ||||||
Total Current Assets | 154,289 | 136,515 | ||||||
Fixed Assets, net | 463,891 | 217,015 | ||||||
Goodwill and Other Intangible Assets, net | 187,762 | 77,039 | ||||||
Other Assets | 22,254 | 15,985 | ||||||
Total Assets | $ | 828,196 | $ | 446,554 | ||||
Liabilities and Stockholders' Equity: | ||||||||
Current Liabilities | $ | 137,602 | $ | 56,887 | ||||
Long Term Debt, Net of Current Portion | 272,049 | 69,551 | ||||||
Other Liabilities | 89,509 | 37,683 | ||||||
Total Liabilities | 499,160 | 164,121 | ||||||
Stockholders' Equity | 329,036 | 282,433 | ||||||
Total Liabilities and Stockholders' Equity | $ | 828,196 | $ | 446,554 |
Table 2 |
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ATLANTIC TELE-NETWORK, INC. | ||||||||||||||||||||||
Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||||||||
(in Thousands, Except per Share Data) | ||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
2010 |
2009 (a) |
2010 |
2009 (a) |
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Revenues: | ||||||||||||||||||||||
U.S. Wireless Services: | ||||||||||||||||||||||
Retail | $ | 102,795 | $ | - | $ | 293,126 | $ | - | ||||||||||||||
Wholesale | 47,370 | 25,412 | 159,807 | 104,689 | ||||||||||||||||||
International Wireless | 13,986 | 11,554 | 51,698 | 45,278 | ||||||||||||||||||
Wireline | 19,915 | 21,819 | 84,495 | 88,453 | ||||||||||||||||||
Equipment and Other | 10,599 | 879 | 30,019 | 3,861 | ||||||||||||||||||
Total Revenue | 194,665 | 59,664 | 619,145 | 242,281 | ||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||
Termination and Access Fees | 52,069 | 11,230 | 161,255 | 45,932 | ||||||||||||||||||
Engineering and Operations | 24,517 | 7,130 | 70,805 | 28,140 | ||||||||||||||||||
Sales, Marketing and Customer Services | 31,779 | 4,089 | 94,214 | 13,858 | ||||||||||||||||||
Equipment Expense | 27,804 | 612 | 74,009 | 2,309 | ||||||||||||||||||
General and Administrative | 27,204 | 10,133 | 90,082 | 36,299 | ||||||||||||||||||
Acquisition-Related Charges | (2,121 | ) | 4,684 | 13,760 | 7,163 | |||||||||||||||||
Depreciation and Amortization | 24,152 | 10,132 | 76,736 | 38,889 | ||||||||||||||||||
Total Operating Expenses | 185,404 | 48,010 | 580,861 | 172,590 | ||||||||||||||||||
Operating Income | 9,261 | 11,654 | 38,284 | 69,691 | ||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||
Interest Expense, net | (2,878 | ) | (33 | ) | (9,405 | ) | (2,553 | ) | ||||||||||||||
Other Income | 109 | 556 | 542 | 605 | ||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | 287 | - | 743 | - | ||||||||||||||||||
Bargain Purchase Gain, net of taxes of $18,016 | - | - | 27,024 | - | ||||||||||||||||||
Other Income (Expense), net | (2,482 | ) | 523 | 18,904 | (1,948 | ) | ||||||||||||||||
Income Before Income Taxes | 6,779 | 12,177 | 57,188 | 67,743 | ||||||||||||||||||
Income Taxes | 4,160 | 6,944 | 19,606 | 31,160 | ||||||||||||||||||
Net Income | 2,619 | 5,233 | 37,582 | 36,583 | ||||||||||||||||||
Net Loss (Income) Attributable to Non-Controlling Interests, net of tax | 660 | (68 | ) | 872 | (1,044 | ) | ||||||||||||||||
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 3,279 | $ | 5,165 | $ | 38,454 | $ | 35,539 | ||||||||||||||
Net Income Per Weighted Average Share Attributable to Atlantic Tele-Network, Inc. Stockholders: | ||||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.34 | $ | 2.51 | $ | 2.33 | ||||||||||||||
Diluted | $ | 0.21 | $ | 0.33 | $ | 2.48 | $ | 2.32 | ||||||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||||||||
Basic | 15,382 | 15,236 | 15,323 | 15,234 | ||||||||||||||||||
Diluted | 15,505 | 15,439 | 15,484 | 15,337 | ||||||||||||||||||
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation |
Table 3 |
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ATLANTIC TELE-NETWORK, INC. | ||||||||||||
Unaudited Condensed Consolidated Cash Flow Statement | ||||||||||||
(in Thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
2010 |
2009 |
|||||||||||
Net Income | $ | 37,582 | $ | 36,583 | ||||||||
Gain on Bargain Purchase, Net of Tax | (27,024 | ) | - | |||||||||
Depreciation and Amortization | 76,736 | 38,889 | ||||||||||
Change in Working Capital | (4,751 | ) | 12,266 | |||||||||
Other | 20,259 | 4,888 | ||||||||||
Net Cash Provided by Operating Activities | 102,802 | 92,626 | ||||||||||
Capital Expenditures | (135,688 | ) | (59,719 | ) | ||||||||
Acquisitions of Businesses, Net of Cash Acquired | (225,498 | ) | (24 | ) | ||||||||
Other | 4,725 | (2,317 | ) | |||||||||
Net Cash Used by Investing Activities | (356,461 | ) | (62,060 | ) | ||||||||
Borrowings Under Credit Facility | 264,000 | - | ||||||||||
Principal Repayments of Long Term Debt | (49,568 | ) | (750 | ) | ||||||||
Payment of Debt Issuance Costs | (4,322 | ) | (150 | ) | ||||||||
Dividends Paid on Common Stock | (12,569 | ) | (11,301 | ) | ||||||||
Distributions to Non-Controlling Interests | (1,870 | ) | (8,098 | ) | ||||||||
Other | 5,072 | 315 | ||||||||||
Net Cash Used by Financing Activities | 200,743 | (19,984 | ) | |||||||||
Net Change in Cash and Cash Equivalents | (52,916 | ) | 10,582 | |||||||||
Cash and Cash Equivalents, Beginning of Period | 90,247 | 79,665 | ||||||||||
Cash and Cash Equivalents, End of Period | $ | 37,331 | $ | 90,247 |
Table 4 |
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ATLANTIC TELE-NETWORK, INC. | ||||||||||
Operating Data for U.S. Retail Wireless Operations | ||||||||||
Three Months Ended: | JUN 2010 | SEP 2010 | DEC 2010 | |||||||
827,370 | 807,327 | 766,556 | ||||||||
Beginning Subscribers | ||||||||||
Prepay | 242,385 | 230,334 | 216,854 | |||||||
Postpay | 584,985 | 576,993 | 549,702 | |||||||
Gross Additions | 44,208 | 64,118 | 51,882 | |||||||
Prepay | 25,892 | 37,527 | 27,136 | |||||||
Postpay | 18,316 | 26,591 | 24,746 | |||||||
Net Additions | (20,043 | ) | (40,771 | ) | (48,811 | ) | ||||
Prepay | (12,051 | ) | (13,480 | ) | (22,059 | ) | ||||
Postpay | (7,992 | ) | (27,291 | ) | (26,752 | ) | ||||
Ending Subscribers | 807,327 | 766,556 | 717,745 | |||||||
Prepay | 230,334 | 216,854 | 194,795 | |||||||
Postpay | 576,993 | 549,702 | 522,950 | |||||||
Note: Beginning subscribers for quarter ended June 30, 2010 are as of April 30, 2010 following the close of the Alltel transaction on April 26, 2010. |
ATLANTIC TELE-NETWORK, INC. | |||||||||||||
U.S. Retail Wireless Operations Key Performance Indicators | |||||||||||||
Three Months Ended: | JUN 2010 | SEP 2010 | DEC 2010 | ||||||||||
Average Subscribers (weighted monthly) | 821,637 | 786,295 | 741,228 | ||||||||||
Monthly Average Revenues per Subscriber/Unit (ARPU) | |||||||||||||
● Subscriber ARPU | $ | 45.13 | $ | 45.67 | $ | 45.88 | |||||||
● Postpaid Subscriber ARPU | $ | 53.85 | $ | 53.81 | $ | 53.71 | |||||||
Monthly Postpay Subscriber Churn | 2.24 | % | 3.16 | % | 3.18 | % | |||||||
Monthly Blended Subscriber Churn | 3.85 | % | 4.41 | % | 4.48 | % |
Table 5 |
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ATLANTIC TELE-NETWORK, INC. | |||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended December 31, 2009 and 2010 | |||||||||||||||||||||||
Three Months Ended December 31, 2009 | |||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total |
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Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 5,165 | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interests, net of tax | 68 | ||||||||||||||||||||||
Income Taxes | 6,944 | ||||||||||||||||||||||
Other Income | (556 | ) | |||||||||||||||||||||
Interest Expense, net | 33 | ||||||||||||||||||||||
Operating Income (Loss) | $ | 12,445 | $ |
8,639 |
$ | 3 | $ | (1,189 | ) | $ | (8,244 | ) | $ | 11,654 | |||||||||
Depreciation and Amortization | 3,965 | 4,181 | 682 | 1,285 | 19 | 10,132 | |||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 4,684 | 4,684 | |||||||||||||||||
Adjusted EBITDA | $ | 16,410 | $ | 12,820 | $ | 685 | $ | 96 | $ | (3,541 | ) | $ | 26,470 | ||||||||||
Three Months Ended December 31, 2010 | |||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total |
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Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 3,279 | |||||||||||||||||||||
Net Loss Attributable to Non-Controlling Interests, net of tax | (660 | ) | |||||||||||||||||||||
Income Taxes | 4,160 | ||||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (287 | ) | |||||||||||||||||||||
Other Income | (109 | ) | |||||||||||||||||||||
Interest Expense, net | 2,878 | ||||||||||||||||||||||
Operating Income (Loss) | $ | 9,280 | $ | 5,600 | $ | (178 | ) | $ | (2,700 | ) | $ | (2,741 | ) | $ | 9,261 | ||||||||
Depreciation and Amortization | 17,052 | 4,378 | 764 | 1,808 | 150 | 24,152 | |||||||||||||||||
Acquisition-Related Charges | - | - | - | - | (2,121 | ) | (2,121 | ) | |||||||||||||||
Adjusted EBITDA | $ | 26,332 | $ | 9,978 | $ | 586 | $ | (892 | ) | $ | (4,712 | ) | $ | 31,292 |
ATLANTIC TELE-NETWORK, INC. | |||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Years Ended December 31, 2009 and 2010 | |||||||||||||||||||||||
Year Ended December 31, 2009 | |||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total |
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Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 35,539 | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interests, net of tax | 1,044 | ||||||||||||||||||||||
Income Taxes | 31,160 | ||||||||||||||||||||||
Other Income | (605 | ) | |||||||||||||||||||||
Interest Expense, net | 2,553 | ||||||||||||||||||||||
Operating Income (Loss) | $ | 54,997 | $ | 35,309 | $ | (641 | ) | $ | (2,580 | ) | $ | (17,394 | ) | $ | 69,691 | ||||||||
Depreciation and Amortization | 14,626 | 16,740 | 2,648 | 4,633 | 242 | 38,889 | |||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 7,163 | 7,163 | |||||||||||||||||
Adjusted EBITDA | $ | 69,623 | $ | 52,049 | $ | 2,007 | $ | 2,053 | $ | (9,989 | ) | $ | 115,743 | ||||||||||
Year Ended December 31, 2010 | |||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total |
||||||||||||||||||
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 38,454 | |||||||||||||||||||||
Net Loss Attributable to Non-Controlling Interests, net of tax | (872 | ) | |||||||||||||||||||||
Income Taxes | 19,606 | ||||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (743 | ) | |||||||||||||||||||||
Other Income | (542 | ) | |||||||||||||||||||||
Bargain Purchase Gain, net of taxes of $18,016 | (27,024 | ) | |||||||||||||||||||||
Interest Expense, net | 9,405 | ||||||||||||||||||||||
Operating Income (Loss) | $ | 48,261 | $ | 27,371 | $ | (288 | ) | $ | (6,410 | ) | $ | (30,650 | ) | $ | 38,284 | ||||||||
Depreciation and Amortization | 50,662 | 17,480 | 2,936 | 5,271 | 387 | 76,736 | |||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 13,760 | 13,760 | |||||||||||||||||
Adjusted EBITDA | $ | 98,923 | $ | 44,851 | $ | 2,648 | $ | (1,139 | ) | $ | (16,503 | ) | $ | 128,780 | |||||||||
1 See Table 5 for reconciliation of Net Income to Adjusted EBITDA.
Chief
Executive Officer
or
Chief
Financial Officer
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