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):  February 21, 2018

ATN INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

500 Cummings Center

Beverly, MA 01915
(Address of principal executive offices and zip code)

(978) 619-1300
(Registrant’s telephone number, including area code)

N/A
(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):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02                                           Results of Operations and Financial Condition.

On February 21, 2018, ATN International, Inc. (the “Company”) issued a press release announcing financial results for the three and twelve months ended December 31, 2017.  A copy of the press release is furnished herewith as Exhibit 99.1.

Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01                                           Financial Statements and Exhibits.

(d)                                         Exhibits

99.1                                           Press Release of the Company, dated February 21, 2018.

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SIGNATURES

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 hereunto duly authorized.

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Exhibit 99.1

NEWS RELEASE

ATN Reports

Fourth Quarter and Full Year 2017 Results

Fourth Quarter Financial Highlights:

·                  Revenues: $107.7 million

·                  Adjusted EBITDA(1): $30.8 million

·                  Operating income of $41.5 million includes $32.6 million in net hurricane insurance recoveries

·                  Net income attributable to ATN stockholders: $43.5 million, or $2.71  per diluted share

·                  Cash flow from operating activities for full year 2017 was $145.7 million

Beverly, MA (February 21, 2018) — ATN (NASDAQ: ATNI) today reported results for the fourth quarter and year ended December 31, 2017. Unless otherwise indicated, the discussion of the Company’s results is in comparison to the same period in the prior year.

Business Review and Outlook

“Fourth quarter revenue performance was consistent with our expectations across all of our business units and represents a base to build upon in 2018,” said Michael Prior, Chief Executive Officer.” Those expectations included lower International Telecom segment revenue due to the tremendous damage caused by the two Category 5 hurricanes that hit the Virgin Islands in September.  The Viya team, with support from ATN and contractors, has been working around the clock to get our hurricane-damaged U.S. Virgin Islands operations back to normal, following progress on power restoration. As previously noted, while we are making major progress in the first quarter, full restoration of the wireline networks will take until mid-2018 based on recent estimates. On a consolidated basis, our profits for the quarter rebounded from the third quarter, as well as year-on-year, as we recognized the full benefit on our storm-related insurance claims and were able to reduce our group tax liabilities due to the recent U.S. tax law changes.  Those changes will benefit us moving forward and help level the competitive playing field in a number of international markets as well as freeing us up to more efficiently allocate capital to the most promising investments and operations.

“Full year 2017 results included both the positive and negative impacts of several special items, which have skewed year-on-year comparisons, but we have entered 2018 with much of our business positioned for sequential improvement into 2019.  We expect to see progressively better performance from our

International Telecom operations as we re-connect customers in the U.S. Virgin Islands and continue to grow our broadband subscriber base following fiber network expansions in other markets.

“As previously-noted, we expect our U.S. Telecom segment’s 2018 revenues to be below 2017 levels, in the range of $110 million to $120 million. Almost two-thirds of the projected decrease is related to significant asset sales, notably our Northeast wireline operation, which closed in March of 2017, and the previously-announced sale of 100 wholesale wireless sites to a carrier customer that is expected to close in early 2018. The balance is attributable to lower contractual roaming rates in our domestic wholesale business, the impact of which we expect to partially offset through lower ongoing capital expenditures and reduced operating expenses.  Looking further ahead, we see our existing domestic telecommunications properties as a relatively consistent source of cash flows to fund investments and other opportunities for growth.

“In renewable energy many of our recently completed sites have received regulatory approval and are now generating revenue.  As we head into 2018, we expect our first phase of completed solar power plants in India to generate revenue of approximately $6 to $7 million per annum.  We are in discussions with funding partners and evaluating the pace and extent of our expansion opportunities in India beyond this initial phase.

“We generated strong operating cash flow in 2017, and increased free cash flow continues to be a focus as we carefully analyze capital spending in our telecom businesses. Outside of hurricane restoration costs, we expect 2018 capital spending to be significantly lower than in the last few years, reflecting the pending completion of several major network upgrades in our international telecom segment and the alignment of domestic wholesale capital investment with current market conditions.  Tax reform will lower our effective tax rate from our historical average and will provide additional resources for investment in organic and strategic growth,” Mr. Prior noted.

Fourth Quarter and Full Year 2017 Financial Results

Fourth quarter 2017 revenues were $107.7 million, a 16% decrease from the $128.5 million reported for the fourth quarter of 2016. Revenue decreases for the quarter included approximately $17 million in reductions due to service disruptions as a result of the September 2017 hurricanes in the U.S. Virgin Islands in addition to the absence of revenue from our recently exited U.S. wireline business.  These reductions were partially offset by revenue increases in our U.S. wireless business, growth in international broadband and wireless revenues and the ramping up of revenue generation from our solar business in India.    Adjusted EBITDA(1) for the fourth quarter was $30.8 million, 7% below the prior year period, primarily associated with the foregoing revenue decreases.  Operating income for the fourth quarter was $41.5 million due in large part to the $32.6 million from the recognition of insurance benefits from the hurricanes partially offset by hurricane charges.  Operating income excluding hurricane charges and insurance recoveries(2) for the fourth quarter was $8.9 million.

Net income attributable to ATN’s stockholders for the fourth quarter was $43.5 million or $2.71 per diluted share, an increase over the prior year net income of $1.9 million or $0.12 per diluted share.  The Income Tax benefit for the quarter reflects the recent passage of the Tax Cuts and Jobs Act of 2017 and includes a $7.4 million transition tax on foreign earnings offset by an $18.4 million benefit from reduced federal rates on our deferred tax liabilities.  Net Income attributable to ATN stockholders excluding hurricane charges and insurance recoveries (2) for the fourth quarter was $11.0 million, or $0.69 per diluted share.

(1) See Table 5 for reconciliation of Net Income to Adjusted EBITDA.

(2) See Table 6 for reconciliation of Operating Income (Loss), Net Income (Loss) Attributable to ATN Stockholders and Net Income (Loss) Attributable to ATN Stockholders per share to Operating Income excluding hurricane charges and insurance recoveries, Net Income Attributable to ATN Stockholders excluding hurricane charges and insurance recoveries and Diluted Income per share Attributable to ATN Stockholders excluding hurricane charges and insurance recoveries, respectively.

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Revenues for the full year 2017 were $481.2 million, a 5% increase from the $457.0 million reported for the full year 2016.  Revenue increases for this period are mostly due to the full year 2017 impact of the 2016 acquisitions in Bermuda and the U.S. Virgin Islands, partially offset by decreases in the U.S. wireless business and the 2017 sale of the U.S. wireline business.  Adjusted EBITDA(1) for the full year 2017 was $148.6 million, an increase of 1% from the prior year.  Operating income for the full year 2017 was $55.5 million compared with $49.8 million of operating income in the prior year.  Net income for the full year attributable to ATN stockholders was $31.5 million or $1.94 per diluted share, as compared to the prior year $12.1 million and $0.75 per diluted share.

Fourth Quarter 2017 Operating Highlights

The Company has three reportable segments: (i) U.S. Telecom; (ii) International Telecom; and (iii) Renewable Energy.

U.S. Telecom

U.S. Telecom revenues consist mainly of wireless revenues from our voice and data wholesale roaming operations and our smaller retail operations in the Southwestern United States, as well as enterprise and wholesale wireline revenues.  Total U.S. Telecom segment revenues were $34.8 million in the fourth quarter of 2017, an 11% decrease from the $39.0 million reported in the fourth quarter of 2016.  U.S. wireless revenues increased 4% to $32.1 million compared with $30.9 million in the prior year quarter due mostly to increased wholesale traffic.   U.S. wireline revenues decreased to $2.2 million from $7.7 million in the prior year quarter primarily as a result of the sale of our Northeastern U.S. wireline business in early March 2017. The Company ended the fourth quarter of 2017 with 1,100 domestic base stations in service compared to 1,006 at the end of 2016.

U.S. Telecom Adjusted EBITDA(1) of $16.8 million in the fourth quarter of 2017 increased 2% compared to the prior year’s $16.4 million.  The increase was mainly due to the growth in wireless revenues and reductions in wireless operating expenses.

International Telecom

International Telecom consists of a broad range of information and communications services including wireline and wireless data, internet, voice and video service revenues from our operations in Bermuda and the Caribbean including the U.S. Virgin Islands. International Telecom revenues were $66.9 million in the fourth quarter of 2017, a 21% decrease from the $84.7 million reported in the fourth quarter of 2016.  While some of the reduction in revenues is due to the sale of businesses in St. Maarten and the British Virgin Islands earlier in 2017 and despite some offsetting increases in certain markets, the bulk of the decline was due to the extensive network storm-driven service outages in the U.S. Virgin Islands.  The first quarter of 2018 will also see significantly lower revenue for this segment given the continued impacts of the hurricanes.  We expect revenue in the second quarter to recover throughout the period, though the level of damage to the Virgin Islands economy may mean it is some time before we see a return to pre-storm levels in that market.  We are carefully evaluating the scope and other aspects of our investments in network restoration in light of the situation.

International Telecom Adjusted EBITDA(1) of $16.8 million in the fourth quarter decreased 17% from $20.1 million in the prior year period.  The decrease is primarily the result of the revenue impact from service outages resulting from the hurricanes in the U.S. Virgin Islands.

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Renewable Energy

Renewable Energy segment revenues are generated principally by the generation and sale of energy and solar renewable energy credits from our commercial solar projects in the United States and India.  For the fourth quarter of 2017, revenues from our renewable energy business were $5.9 million, and increased 23% from the $4.8 million in the prior year due mainly to commencement of revenue generation from newly completed solar power plants in India.  The growth in India power production revenue drove an increase in Adjusted EBITDA(1) for the Renewable Energy segment to $3.6 million in the fourth quarter, up $0.9 million from the prior year’s quarter.

Balance Sheet and Cash Flow Highlights

Cash and short-term investments at December 31, 2017 were $215.0 million.  Net cash provided by operating activities was $145.7 million for the full year of 2017, compared with $111.7 million for the full year of 2016.  The increase in net cash provided by operating activities is largely due to lower acquisition related charges and a $22.5 million funding of a pension obligation in lieu of purchase consideration paid to the seller of 2016 U.S. Virgin Islands acquisition, offset partially by changes in working capital.  During 2017, the Company used cash of $20.5 million for investments in new assets and businesses and received $22.4 million from the sales and dispositions of other business lines.  Capital expenditures for the year totaled $142.4 million.  Included in the total was $103.1 million of capital expenditures in the domestic and international telecom segments, including $13.3 million incurred for hurricane restorations, and $30.9 million for the construction of solar facilities in India. The Company expects full year 2018 capital expenditures for its domestic and international telecom businesses to be $65 million to $80 million excluding hurricane restoration costs in the U.S. Virgin Islands.  Hurricane restoration capital expenditures are expected to be between $35 million and $45 million in 2018.  We estimate capital expenditures of approximately $5 million to $7 million will be spent to finish the initial phase of India renewables construction, however continued expansion in the market is largely dependent on our ability to secure local financing and the timing and terms and conditions which are difficult to estimate at this time.

In the year ended December 31, 2017, the Company repurchased 201,932 shares of common stock totaling $10.6 million under its share repurchase program and paid $19.2 million in dividends.

Conference Call Information

ATN will host a conference call on Thursday, February 22, 2018 at 9:30 a.m. Eastern Time (ET) to discuss its fourth quarter 2017 results. The call will be hosted by Michael Prior, President and Chief Executive Officer, and Justin Benincasa, Chief Financial Officer. The dial-in numbers are US/Canada: (877) 734-4582 and International: (678) 905-9376, conference ID 1685639. A replay of the call will be available at ir.atni.com beginning at 1:00 p.m. (ET) on February 22, 2018.

About ATN

ATN International, Inc. (Nasdaq:ATNI), headquartered in Beverly, Massachusetts, provides telecommunications services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean and owns and operates solar power systems in various locations in the United States and India. Through our operating subsidiaries, we (i) provide both wireless and wireline connectivity to residential and business customers, including a range of mobile wireless solutions, high speed internet services, video services and local exchange services, (ii) provide distributed solar electric power to corporate and municipal customers and (iii) are the owner and operator of terrestrial and submarine fiber optic transport systems. For more information, please visit www.atni.com.

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 estimated timeline for restoration of our U.S. Virgin Islands

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operations; our estimates of total losses due to Hurricanes Irma and Maria; the competitive environment in our key markets, demand for our services and industry trends; the pace of expansion and improvement of our telecommunications network and renewable energy operations including our level of estimated future capital expenditures and our realization of the benefits of these investments; the anticipated timing of our build schedule and the commencement of energy production of our India renewable energy projects; anticipated effects of recent U.S. tax changes; 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 restore our networks and services to our customers in the U.S. Virgin Islands in an efficient and timely manner; (2) our ability to execute planned network expansions and upgrades in our various markets; (3) the general performance of our operations, including operating margins, revenues, capital expenditures, and the future growth and retention of our major customers and subscriber base and consumer demand for solar power; (4) government regulation of our businesses, which may impact our FCC and other telecommunications licenses or our renewables business; (5) economic, political and other risks facing our operations; (6) our ability to maintain favorable roaming arrangements and satisfy the needs and demands of our major wireless customers; (7) our ability to efficiently and cost-effectively upgrade our networks and IT platforms to address  rapid and significant technological changes in the telecommunications industry; (8) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; (9) our ability to find investment or acquisition or disposition opportunities that fit the strategic goals of the Company; (10) increased competition; (11) our ability to expand our renewable energy business; (12) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (13) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (14) the occurrence of weather events and natural catastrophes; (15) our continued access to capital and credit markets; (16) the risk of currency fluctuation for those markets in which we operate and (17) our ability to realize the value that we believe exists in our businesses.  These and other additional factors that may cause actual future events and results to differ materially from the events and results indicated in the forward-looking statements above are set forth more fully under Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 1, 2017 and the other reports we file from time to time with the SEC.  The Company undertakes no obligation and has no intention to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release also contains non-GAAP financial measures. Specifically, ATN has presented the following measures:  Adjusted EBITDA; Operating Income excluding hurricane charges and insurance recoveries; Net income (loss) attributable to ATN’s stockholders excluding hurricane charges and insurance recoveries and; Net income (loss) per share attributable to ATN stockholders excluding hurricane charges and insurance recoveries.  Adjusted EBITDA is defined as net income attributable to ATN stockholders before bargain purchase gain, impairment of long-lived assets, restructuring charges, interest, taxes, depreciation and amortization, transaction-related charges, other income or expense, loss on damaged assets and other hurricane charges, net of insurance recovery and net income attributable to non-controlling interests.  Operating Income excluding hurricane charges and insurance recoveries is defined as Operating Income (Loss) adjusted for loss on damaged assets and other hurricane related charges, net of insurance recovery.  Net income (loss) attributable to ATN stockholders excluding hurricane charges and insurance recoveries is defined as Net income (loss) attributable to ATN stockholders adjusted for loss on damaged assets and other hurricane related charges net of insurance recovery.  Net income (loss) per share attributable to ATN stockholders excluding hurricane charges and insurance recoveries is defined as net income (loss) per share attributable to ATN stockholders adjusted for loss on damaged assets and other hurricane related charges, net of insurance recovery.  The Company believes that the inclusion of these non-GAAP financial measures helps investors gain a meaningful understanding of the Company’s core operating results and enhances comparing such performance with prior periods. ATN’s management uses

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these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of these non-GAAP financial measures used in this press release to the most directly comparable GAAP financial measure is set forth in the text of, and the accompanying tables to, this press release.

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Table 1

ATN International, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in Thousands)

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Table 2

ATN International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in Thousands, Except per Share Data)

8

Table 3

ATN International, Inc.

Unaudited Condensed Consolidated Cash Flow Statement

(in Thousands)

9

Table 4

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the three months ended December 31, 2017 is as follows:

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the three months ended December 31, 2016 is as follows:

*  Corporate and Other refer to corporate overhead expenses and consolidating adjustments

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ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the year ended December 31, 2017 is as follows:

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the year ended December 31, 2016 is as follows:

*  Corporate and Other refer to corporate overhead expenses and consolidating adjustments

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ATN International, Inc.

Selected Segment Operational Data