Atlantic Tele-Network, Inc. Reports Third Quarter 2012 Results
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Total revenues were
$188.8 million -
Adjusted EBITDA was
$55.7 million , up 7% from 2011 -
Operating income increased 7% year-over-year to
$29.6 million -
Net income attributable to ATN's stockholders was
$16.0 million , or$1.02 per diluted share -
Cash provided by operating activities was
$137.5 million for the first nine months of 2012; Cash dividend increased for 14th consecutive year to$0.25 per share quarterly
Third Quarter/Nine Months 2012 Financial Results
"In addition to benefitting from seasonal factors, this year's strong
third quarter performance reflected our ability to achieve operating
efficiencies and expense reductions in our U.S. retail wireless
business," said
"Our international wireless business had another solid quarter thanks to
subscriber growth in multiple markets and additional operating
efficiencies. Wireline revenues were relatively stable for the quarter
and we continue to make significant progress on our fiber network builds
in the northeast U.S., which should allow for future revenue growth in
this area,"
Total revenues for the third quarter were
Adjusted EBITDA1 for the 2012 third quarter was
Total revenues for the first nine months of 2012 were
"We reported strong operating performance for the first nine months of
2012 which has driven significant growth in our operating cash flow and
added to an already robust balance sheet. We were pleased to pass along
to our stockholders the benefits of ATN's recent and long-term cash flow
and profit growth by increasing our quarterly cash dividend by nearly 9%
-- our 14th consecutive annual increase,"
Third Quarter 2012 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 were
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. Wireless, ii)
International Integrated Telephony, which operates in
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U.S. Wireless |
International |
Island |
U.S. Wireline |
Reconciling |
Total | |||||||||||||||
Total Revenue | $ | 144,971 | $ | 23,344 | $ | 15,643 | $ | 4,840 | $ | - | $ | 188,798 | ||||||||
Adjusted EBITDA | 46,148 | 11,002 | 3,635 | 131 | (5,236 | ) | 55,680 | |||||||||||||
Operating Income (Loss) | 28,394 | 6,596 | 760 | (566 | ) | (5,554 | ) | 29,630 | ||||||||||||
(1) Reconciling items are comprised of corporate general and administrative costs and acquisition-related charges.
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) the general performance of our operations,
including operating margins, wholesale revenues, and the future
retention and turnover of our subscriber base; (2) our ability to
maintain favorable roaming arrangements; (3) increased competition; (4)
economic, political and other risks facing our foreign operations; (5)
the loss of certain
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
1 See Table 5 for reconciliation of Net Income to Adjusted EBITDA.
Table 1 |
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Unaudited Condensed Consolidated Balance Sheets | ||||||
(in Thousands) | ||||||
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December 31, | |||||
2012 |
2011 |
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Assets: | ||||||
Cash and cash equivalents | $ | 111,408 | $ | 48,735 | ||
Other current assets | 138,281 | 135,165 | ||||
Total current assets | 249,689 | 183,900 | ||||
Property, plant and equipment, net | 447,426 | 483,203 | ||||
Goodwill and other intangible assets, net | 181,016 | 186,871 | ||||
Other assets | 28,368 | 19,757 | ||||
Total assets | $ | 906,499 | $ | 873,731 | ||
Liabilities and Stockholders' Equity: | ||||||
Current portion of long-term debt | $ | 15,680 | $ | 25,068 | ||
Other current liabilities | 136,567 | 120,710 | ||||
Total current liabilities | 152,247 | 145,778 | ||||
Long-term debt, net of current portion | 254,568 | 257,146 | ||||
Other liabilities | 117,309 | 118,277 | ||||
Total liabilities | 524,124 | 521,201 | ||||
Total |
322,261 | 294,266 | ||||
Non-controlling interests | 60,114 | 58,264 | ||||
Total equity | 382,375 | 352,530 | ||||
Total liabilities and stockholders' equity | $ | 906,499 | $ | 873,731 | ||
Table 2 |
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Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
(in Thousands, Except per Share Data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
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September 30, | |||||||||||||||
2012 |
2011 (a) |
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2012 |
2011 (a) |
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Revenues: | ||||||||||||||||
U.S. wireless: | ||||||||||||||||
Retail | $ | 83,269 | $ | 89,143 | $ | 254,081 | $ | 284,221 | ||||||||
Wholesale | 54,918 | 57,048 | 153,854 | 153,615 | ||||||||||||
International wireless | 21,048 | 20,377 | 60,318 | 52,874 | ||||||||||||
Wireline | 21,120 | 21,748 | 63,573 | 63,305 | ||||||||||||
Equipment and other | 8,443 | 6,030 | 25,155 | 22,238 | ||||||||||||
Total revenue | 188,798 | 194,346 | 556,981 | 576,253 | ||||||||||||
Operating expenses: | ||||||||||||||||
Termination and access fees | 38,790 | 48,764 | 118,224 | 155,077 | ||||||||||||
Engineering and operations | 20,796 | 20,165 | 64,077 | 63,967 | ||||||||||||
Sales, marketing and customer service | 27,930 | 33,965 | 91,307 | 101,874 | ||||||||||||
Equipment expense | 23,408 | 14,379 | 65,747 | 54,447 | ||||||||||||
General and administrative | 22,194 | 25,014 | 67,101 | 81,405 | ||||||||||||
Acquisition-related charges | 2 | 98 | 7 | 664 | ||||||||||||
Depreciation and amortization | 26,048 | 26,712 | 79,654 | 76,903 | ||||||||||||
Gain on disposition of long-lived assets | - | (2,397 | ) | - | (2,397 | ) | ||||||||||
Total operating expenses | 159,168 | 166,700 | 486,117 | 531,940 | ||||||||||||
Operating income | 29,630 | 27,646 | 70,864 | 44,313 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income (expense), net | (2,983 | ) | (4,221 | ) | (10,753 | ) | (12,063 | ) | ||||||||
Other income (expense) | 199 | 255 | (133 | ) | 854 | |||||||||||
Equity in earnings of unconsolidated affiliates | 679 | 729 | 3,011 | 1,484 | ||||||||||||
Other income (expense), net | (2,105 | ) | (3,237 | ) | (7,875 | ) | (9,725 | ) | ||||||||
Income before income taxes | 27,525 | 24,409 | 62,989 | 34,588 | ||||||||||||
Income taxes | 9,513 | 11,193 | 24,273 | 16,074 | ||||||||||||
Net income | 18,012 | 13,216 | 38,716 | 18,514 | ||||||||||||
Net loss (income) attributable to non-controlling interests, net of tax | (2,047 | ) | (1,880 | ) | (2,900 | ) | (866 | ) | ||||||||
Net income attributable to |
$ | 15,965 | $ | 11,336 | $ | 35,816 | $ | 17,648 | ||||||||
Net income per weighted average share attributable to |
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Basic | $ | 1.03 | $ | 0.74 | $ | 2.31 | $ | 1.15 | ||||||||
Diluted | $ | 1.02 | $ | 0.73 | $ | 2.30 | $ | 1.14 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 15,560 | 15,401 | 15,517 | 15,393 | ||||||||||||
Diluted | 15,651 | 15,489 | 15,605 | 15,490 | ||||||||||||
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation | ||||||||||||||||
Table 3 |
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Unaudited Condensed Consolidated Cash Flow Statement | ||||||||
(in Thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2012 |
2011 |
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Net income | $ | 38,716 | $ | 18,514 | ||||
Depreciation and amortization | 79,654 | 76,903 | ||||||
Change in working capital | 17,167 | (10,965 | ) | |||||
Other | 1,938 | 285 | ||||||
Net cash provided by operating activities | 137,475 | 84,737 | ||||||
Capital expenditures | (50,505 | ) | (65,850 | ) | ||||
Cash acquired in business combinations | - | 4,087 | ||||||
Other | - | 1,667 | ||||||
Net cash used by investing activities | (50,505 | ) | (60,096 | ) | ||||
Borrowings under credit facility | 321,378 | 93,153 | ||||||
Principal repayments of long-term debt | (331,407 | ) | (89,603 | ) | ||||
Payments of debt issuance costs | (3,564 | ) | (1,020 | ) | ||||
Dividends paid on common stock | (10,692 | ) | (10,159 | ) | ||||
Distributions to non-controlling interests | (2,010 | ) | (2,531 | ) | ||||
Other | 1,998 | 302 | ||||||
Net cash used by financing activities | (24,297 | ) | (9,858 | ) | ||||
Net change in cash and cash equivalents | 62,673 | 14,783 | ||||||
Cash and cash equivalents, beginning of period | 48,735 | 37,330 | ||||||
Cash and cash equivalents, end of period | $ | 111,408 | $ | 52,113 | ||||
Table 4 |
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Operating Data for U.S. Retail Wireless Operations | |||||||||||||||||
Three Months Ended: |
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Beginning Subscribers |
638,839 |
592,620 |
579,716 |
578,585 |
583,547 |
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Prepay | 145,854 |
123,157 |
121,688 | 130,981 | 141,452 | ||||||||||||
Postpay | 492,985 | 469,463 | 458,028 | 447,604 | 442,095 | ||||||||||||
Gross Additions | 30,018 | 46,757 | 54,837 | 55,448 | 66,539 | ||||||||||||
Prepay | 9,784 | 22,639 | 32,372 | 31,868 | 40,779 | ||||||||||||
Postpay | 20,234 | 24,118 | 22,465 | 23,580 | 25,760 | ||||||||||||
Net Additions |
(46,219 |
) | (12,904 | ) | (1,131 | ) | 4,962 | 1,871 | |||||||||
Prepay | (22,697 | ) | (1,469 | ) | 9,293 | 10,471 | 11,656 | ||||||||||
Postpay | (23,522 | ) | (11,435 | ) | (10,424 | ) | (5,509 | ) | (9,785 | ) | |||||||
Ending Subscribers | 592,620 | 579,716 | 578,585 | 583,547 | 585,418 | ||||||||||||
Prepay | 123,157 | 121,688 | 130,981 | 141,452 | 153,108 | ||||||||||||
Postpay | 469,463 | 458,028 | 447,604 | 442,095 | 432,310 | ||||||||||||
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U.S. Retail Wireless Operations Key Performance Indicators | ||||||||||
Three Months Ended: |
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Average Subscribers (weighted monthly) | 618,862 | 583,470 | 578,531 | 580,441 | 583,607 | |||||
Monthly Average Revenues per Subscriber/Unit (ARPU) | ||||||||||
-- Subscriber ARPU |
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-- Postpaid Subscriber ARPU |
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Monthly Postpay Subscriber Churn | 2.97% | 2.55% | 2.41% | 2.18% | 2.70% | |||||
Monthly Blended Subscriber Churn | 4.05% | 3.40% | 3.22% | 2.90% | 3.70% | |||||
Table 5 |
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Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Three
Months Ended |
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Three Months Ended |
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U.S. Wireless |
International |
Island |
U.S. Wireline |
Reconciling |
Total |
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Net income attributable to |
$ | 11,336 | |||||||||||||||||||||
Net income attributable to non-controlling interests, net of tax | 1,880 | ||||||||||||||||||||||
Income taxes | 11,193 | ||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (729 | ) | |||||||||||||||||||||
Other income | (255 | ) | |||||||||||||||||||||
Interest expense, net | 4,221 | ||||||||||||||||||||||
Operating income (loss) | $ | 26,840 | $ | 6,771 | $ | (1,186 | ) | $ | (111 | ) | $ | (4,668 | ) | $ | 27,646 | ||||||||
Depreciation and amortization | 18,417 | 4,506 | 2,748 | 797 | 244 | 26,712 | |||||||||||||||||
Acquisition-related charges | - | - | - | - | 98 | 98 | |||||||||||||||||
Gain on disposition of long-lived assets | (2,397 | ) | - | - | - | - | (2,397 | ) | |||||||||||||||
Adjusted EBITDA | $ | 42,860 | $ | 11,277 | $ | 1,562 | $ | 686 | $ | (4,326 | ) | $ | 52,059 | ||||||||||
Three Months Ended |
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U.S. Wireless |
International |
Island |
U.S. Wireline |
Reconciling |
Total |
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Net income attributable to |
$ | 15,965 | |||||||||||||||||||||
Net loss attributable to non-controlling interests, net of tax | 2,047 | ||||||||||||||||||||||
Income taxes | 9,513 | ||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (679 | ) | |||||||||||||||||||||
Other income | (199 | ) | |||||||||||||||||||||
Interest expense, net | 2,983 | ||||||||||||||||||||||
Operating income (loss) | $ | 28,394 | $ | 6,596 | $ | 760 | $ | (566 | ) | $ | (5,554 | ) | $ | 29,630 | |||||||||
Depreciation and amortization | 17,754 | 4,406 | 2,875 | 697 | 316 | 26,048 | |||||||||||||||||
Acquisition-related charges | - | - | - | - | 2 | 2 | |||||||||||||||||
Adjusted EBITDA | $ | 46,148 | $ | 11,002 | $ | 3,635 | $ | 131 | $ | (5,236 | ) | $ | 55,680 | ||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Nine
Months Ended |
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Nine Months Ended |
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U.S. Wireless |
International |
Island |
U.S. Wireline |
Reconciling |
Total |
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Net income attributable to |
$ | 17,648 | |||||||||||||||||||||
Net income attributable to non-controlling interests, net of tax | 866 | ||||||||||||||||||||||
Income taxes | 16,074 | ||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (1,484 | ) | |||||||||||||||||||||
Other income | (854 | ) | |||||||||||||||||||||
Interest expense, net | 12,063 | ||||||||||||||||||||||
Operating income (loss) | $ | 43,775 | $ | 19,655 | $ | (5,289 | ) | $ | (101 | ) | $ | (13,727 | ) | $ | 44,313 | ||||||||
Depreciation and amortization | 53,188 | 13,610 | 7,070 | 2,374 | 661 | 76,903 | |||||||||||||||||
Acquisition-related charges | - | - | 218 | - | 446 | 664 | |||||||||||||||||
Gain on disposition of long-lived assets | (2,397 | ) | - | - | - | - | (2,397 | ) | |||||||||||||||
Adjusted EBITDA | $ | 94,566 | $ | 33,265 | $ | 1,999 | $ | 2,273 | $ | (12,620 | ) | $ | 119,483 | ||||||||||
Nine Months Ended |
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U.S. Wireless |
International |
Island |
U.S. Wireline |
Reconciling |
Total |
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Net income attributable to |
$ | 35,816 | |||||||||||||||||||||
Net loss attributable to non-controlling interests, net of tax | 2,900 | ||||||||||||||||||||||
Income taxes | 24,273 | ||||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (3,011 | ) | |||||||||||||||||||||
Other income | 133 | ||||||||||||||||||||||
Interest expense, net | 10,753 | ||||||||||||||||||||||
Operating income (loss) | $ | 71,294 | $ | 16,973 | $ | (564 | ) | $ | (1,655 | ) | $ | (15,184 | ) | $ | 70,864 | ||||||||
Depreciation and amortization | 54,780 | 13,424 | 8,444 | 2,135 | 871 | 79,654 | |||||||||||||||||
Acquisition-related charges | - | - | - | - | 7 | 7 | |||||||||||||||||
Adjusted EBITDA | $ | 126,074 | $ | 30,397 | $ | 7,880 | $ | 480 | $ | (14,306 | ) | $ | 150,525 |
Chief
Executive Officer
or
Chief
Financial Officer
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