ATN International, Inc.
ATN International, Inc. (Form: 8-K, Received: 07/28/2017 06:05:54)

 

 

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):  July 27, 2017

 


 

ATN INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-12593

 

47-0728886

(State or other

 

(Commission File Number)

 

(IRS Employer

jurisdiction of incorporation)

 

 

 

Identification No.)

 

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 July 27, 2017, ATN International, Inc. (the “Company”) issued a press release announcing financial results for the three and six months ended June 30, 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 July 27, 2017.

 

2



 

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.

 

 

ATLANTIC TELE-NETWORK, INC.

 

 

 

 

By:

/s/ Justin D. Benincasa

 

 

Justin D. Benincasa

 

 

Chief Financial Officer

 

 

 

Dated July 27, 2017

 

 

 

3



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description of Exhibit

 

 

 

99.1

 

Press Release of the Company, dated July 27, 2017.

 

4


Exhibit 99.1

 

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE

CONTACT :

978-619-1300

Thursday July 27, 2017

 

Michael T. Prior

 

 

Chief Executive Officer

 

 

 

 

 

Justin D. Benincasa

 

 

Chief Financial Officer

 

ATN Reports

Second Quarter 2017 Results

 

Second Quarter Financial Highlights:

 

·                   Revenues: $123.2 million

·                   Adjusted EBITDA(1): $38.2 million

·                   Operating income: $15.8 million

·                   Net income attributable to ATN’s stockholders: $5.9 million, or $0.36 per diluted share

·                   Cash flow from operating activities was $65.5 million for the first six months of 2017

 

Beverly, MA (July 27, 2017) — ATN (NASDAQ: ATNI) today reported results for the second quarter and six months ended June 30, 2017. Unless otherwise indicated, the discussion of the Company’s results is focused on its continuing operations, and comparisons are to the same period in the prior year.

 

Business Review and Outlook

 

“Our financial results continue to reflect the benefits of our strategy of managing a diversified infrastructure services portfolio, developed through acquisitions and organic growth,” noted Michael Prior, Chief Executive Officer.  “Year-on-year revenue growth was driven by the integration of our 2016 international telecom acquisitions, which more than offset decreases in U.S. Telecom revenues from the sale of our U.S. wireline business last quarter and continued pricing pressures in our wholesale business. Additionally, our legacy international telecom businesses continued to make progress in the second quarter, benefitting from ongoing initiatives to enhance customer offerings and improve operating margins.

 

“Adjusted EBITDA, as expected, was ahead of last year but lagged revenue growth due to the consolidation of the lower margin 2016 acquisitions and lower margins in our domestic wholesale business.

 

“In renewable energy, the performance of our domestic solar business was similar to the first quarter despite weather related production decreases in the Northeast.  In India, we have 40 megawatts operational and are awaiting final regulatory approval before booking the attendant revenues.

 



 

“Revenue caps now included in all of our major domestic wireless contracts preclude our ability to offset reduced pricing with growing data usage.  As a result, we expect third quarter U.S. Telecom revenues to be similar to those of the second quarter and the fourth quarter to be lower given the typical seasonality.   In early 2018 we expect one of our carrier customers to exercise its purchase option to acquire 100 of our sites.  The sale of these sites, which is our only remaining option arrangement, together with the impact of the revenue caps and a current lack of footprint expansion opportunities, is expected to result in 2018 revenue for the segment of $105 to $115 million.  The impact on 2018 results should be offset in part by reduced operating expenses and lower capital expenditures in both the U.S. and International Telecom segments. The resulting cash flows will provide us with additional balance sheet capacity as we explore opportunities to further build and diversify our portfolio of operating companies.”

 

Second Quarter 2017 Financial Results

 

Second quarter 2017 revenues were $123.2 million, a 23% increase from the $100.0 million reported for the second quarter of 2016. Revenue growth for the quarter was primarily from a $31.0 million increase in our International Telecom segment revenues which in turn was mainly due to the impact of the 2016 Bermuda and U.S. Virgin Islands acquisitions. Adjusted EBITDA(1) for the second quarter was $38.2 million, 11% above the prior year period, also from the impact of our 2016 acquisitions and improved operating results in existing International Telecom businesses, partially offset by a decline in U.S. Telecom and Renewable Energy operating results.  Operating income for the second quarter was $15.8 million which included an additional $5.8 million of depreciation and amortization mostly related to the 2016 acquisitions. Operating income is up $13.9 million over the same quarter last year which included the impact of transaction-related expenses, asset impairments and a bargain purchase gain.

 

Net income attributable to ATN’s stockholders for the second quarter was $5.9 million or $0.36 per diluted share, an increase over the prior year loss which included the one-time items noted above.

 

Revenues for the first six months of 2017 were $251.4 million, a 33% increase from the $189.7 million reported for the same period in 2016.  Adjusted EBITDA(1) for the first six months of 2017 was $80.3 million, an increase of 17% from the prior year.  Operating income of $33.6 million for the first six months of 2017 improved from the prior year’s $17.8 million as a result of the impact of the 2016 acquisitions and the transaction-related charges, impairments of assets and restructuring charges that reduced comparable 2016 results.  Net income attributable to ATN stockholders was $12.7 million or $0.78 per diluted share, an improvement from the $3.0 million and $0.19 per diluted share for the prior year period.

 

 

Second 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 $37.0 million in the second quarter of 2017, a 16% decrease from the $43.9 million reported in the second quarter of 2016.  U.S. Wireless revenues declined 8% to $34.5 million compared with $37.7 million in the prior year quarter, due mostly to lower contractual wholesale roaming rates and revenue caps.   U.S. Wireline revenues decreased to $2.1 million from $5.8 million in the prior year as a result the sale of our Northeastern U.S. wireline business in early March 2017. The Company ended the second quarter of 2017 with 1,041 domestic base stations in service compared to 905 at the end of last year’s second quarter.

 


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

 

2



 

U.S. Telecom Adjusted EBITDA(1) of $19.4 million in the second quarter of 2017 decreased 10% compared to the prior year’s $21.5 million.  The decrease was mainly due to the reduction in wireless revenues and to a lesser extent the sale of our wireline business partially offset by 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 $81.4 million in the second quarter of 2017, a 62% increase from the $50.4 million reported in the second quarter of 2016.  Our acquisitions in Bermuda and the U.S. Virgin Islands in 2016 together added $30.6 million of incremental revenues during the current quarter and were responsible for this increase.

 

International Telecom Adjusted EBITDA(1) of $23.9 million in the second quarter increased 55% from $15.4 million in the prior year period.  The increase is the result of the impact of the 2016 acquisitions and improved year over year operating results in some legacy markets.

 

Renewable Energy

 

Renewable Energy segment revenues are generated principally by the sale of energy and solar renewable energy credits from our 28 commercial solar projects in the United States.  For the second quarter of 2017, revenues from our renewable energy business were $4.9 million, down 14% from the $5.7 million in the prior year mostly due to the expiration of certain renewable energy credits.   Adjusted EBITDA(1) for the Renewable Energy segment was $2.7 million in the second quarter, down $1.1 million from the prior year quarter due to the expiration of the renewable energy revenue credits and increased operating expenses from the ramp up of our solar business in India ahead of the offsetting revenue.

 

Balance Sheet and Cash Flow Highlights

 

Cash and cash equivalents at June 30, 2017 were $231.6 million.  In addition, the Company held $7.8 million of short-term investments and $16.9 million of restricted cash.  Net cash provided by operating activities was $65.5 million for the first six months of 2017, compared with $50.7 million for the first six months of 2016.    The increase in net cash provided by operating activities is due to the 2017 growth in revenue as a result of the 2016 acquisitions in the U.S. Virgin Islands and Bermuda, partially offset by the net impact of 2016 transaction-related charges and impairments of assets, and changes in working capital.  During the first six months of 2017, the Company received $22.6 million from the sale of its U.S. wireline business as well as the sales of other smaller international telecom business lines and paid an additional $36.8 million to purchase U.S. spectrum licenses.  Capital expenditures were $78.5 million for the first six months of 2017. The Company expects full year 2017 capital expenditures for its domestic and international telecom businesses to be between the $95 million to $115 million range estimated at the end of last year.  Expenditures include major network expansions and upgrades in multiple markets, including the recently acquired Bermuda and U.S. Virgin Islands businesses, and therefore are higher than what we would consider to be ordinary course capital expenditures.  These projects include extensive fiber builds and upgrades as well as market-wide mobile data network upgrades.  Once complete, we expect aggregate capital expenditures in existing telecom markets to decline significantly in 2018.  In addition, capital expenditures for our renewable energy business are expected to be in the range of $30 million to $45 million for the full year 2017, primarily related to ongoing construction of our solar projects in India.

 

3



 

Conference Call Information

 

ATN will host a conference call on Friday, July 28, 2017 at 8:15 a.m. Eastern Time (ET) to discuss its second 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 55443462. A replay of the call will be available at ir.atni.com beginning at 1:00 p.m. (ET) on Friday, July 28, 2017.

 

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, utility 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 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; 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 our newly acquired businesses in Bermuda and the U.S. Virgin Islands and both integrate these operations into our existing operations and execute planned network expansions and upgrades; (2) 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; (3) government regulation of our businesses, which may impact our FCC and other telecommunications licenses or our renewables business; (4) economic, political and other risks facing our operations; (5) our ability to maintain favorable roaming arrangements; (6) our ability to efficiently and cost-effectively upgrade our networks and IT platforms to address  rapid and significant technological changes in the telecommunications industry; (7) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; (8) our ability to find investment or acquisition or disposition opportunities that fit our strategic goals for the Company; (9) increased competition; (10) our ability to expand our renewable energy business; (11) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (12) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (13) the occurrence of weather events and natural catastrophes; (14) our continued access to capital and credit markets; (15) the risk of currency fluctuation for those markets in which we operate and (16) 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.

 

4



 

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 an Adjusted EBITDA measure.  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, and net income attributable to non-controlling interests.    The Company believes that the inclusion of this non-GAAP financial measure 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 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 measure included in this press release is 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.

 

5



 

Table 1

ATN International, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in Thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2017

 

2016

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

231,640

 

$

269,721

 

Restricted cash

 

714

 

524

 

Short-term investments

 

7,755

 

9,237

 

Other current assets

 

104,226

 

87,887

 

 

 

 

 

 

 

Total current assets

 

344,335

 

367,369

 

 

 

 

 

 

 

Long-term restricted cash

 

16,157

 

18,113

 

Property, plant and equipment, net

 

649,734

 

647,712

 

Goodwill and other intangible assets, net

 

171,945

 

126,193

 

Other assets

 

19,305

 

38,831

 

 

 

 

 

 

 

Total assets

 

$

1,201,476

 

$

1,198,218

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

Current portion of long-term debt

 

$

9,850

 

$

12,440

 

Taxes payable

 

8,326

 

13,531

 

Other current liabilities

 

133,715

 

124,134

 

 

 

 

 

 

 

Total current liabilities

 

151,891

 

150,105

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

$

149,832

 

$

144,383

 

Deferred income taxes

 

48,526

 

46,622

 

Other long-term liabilities

 

30,777

 

47,939

 

 

 

 

 

 

 

Total long-term liabilities

 

229,135

 

238,944

 

 

 

 

 

 

 

Total liabilities

 

381,026

 

389,049

 

 

 

 

 

 

 

Total ATN International, Inc.’s stockholders’ equity

 

681,709

 

677,055

 

Non-controlling interests

 

138,741

 

132,114

 

 

 

 

 

 

 

Total equity

 

820,450

 

809,169

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

1,201,476

 

$

1,198,218

 

 

6



 

Table 2

ATN International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in Thousands, Except per Share Data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

Revenues:

 

 

 

 

 

 

 

 

 

Wireless

 

$

54,460

 

$

57,088

 

$

110,690

 

$

115,965

 

Wireline

 

61,459

 

33,976

 

125,259

 

56,421

 

Renewable energy

 

4,891

 

5,562

 

9,791

 

11,151

 

Equipment and other

 

2,435

 

3,365

 

5,620

 

6,139

 

Total revenue

 

123,245

 

99,991

 

251,360

 

189,676

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Termination and access fees

 

27,915

 

23,797

 

58,372

 

43,514

 

Engineering and operations

 

19,362

 

10,739

 

39,029

 

21,249

 

Sales, marketing and customer service

 

8,715

 

7,681

 

17,737

 

13,437

 

Equipment expense

 

3,008

 

4,133

 

5,553

 

7,362

 

General and administrative

 

26,000

 

19,298

 

50,349

 

35,670

 

Transaction-related charges

 

148

 

10,410

 

826

 

14,065

 

Restructuring charges

 

 

1,785

 

 

1,785

 

Depreciation and amortization

 

22,254

 

16,493

 

44,747

 

31,047

 

Impairment of long-lived asset

 

 

11,076

 

 

11,076

 

Bargain purchase gain

 

 

(7,304

)

 

(7,304

)

(Gain) Loss on disposition of long-lived assets

 

 

(29

)

1,111

 

(29

)

Total operating expenses

 

107,402

 

98,079

 

217,724

 

171,872

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

15,843

 

1,912

 

33,636

 

17,804

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(1,806

)

(716

)

(3,836

)

(1,194

)

Loss on deconsolidation of subsidiary

 

 

 

(529

)

 

Other expense

 

(532

)

(137

)

(1,053

)

(123

)

Other expense, net

 

(2,338

)

(853

)

(5,418

)

(1,317

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

13,505

 

1,059

 

28,218

 

16,487

 

Income tax expense

 

2,596

 

2,945

 

5,724

 

7,576

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

10,909

 

(1,886

)

22,494

 

8,911

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to non-controlling interests, net

 

(5,026

)

(1,200

)

(9,751

)

(5,877

)

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

$

5,883

 

$

(3,086

)

$

12,743

 

$

3,034

 

 

 

 

 

 

 

 

 

 

 

Basic net income per weighted average share attributable to ATN International, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

0.36

 

$

(0.19

)

$

0.79

 

$

0.19

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per weighted average share attributable to ATN International, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

0.36

 

$

(0.19

)

$

0.78

 

$

0.19

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

16,195

 

16,145

 

16,176

 

16,118

 

Diluted

 

16,274

 

16,145

 

16,263

 

16,221

 

 

7



 

Table 3

ATN International, Inc.

Unaudited Condensed Consolidated Cash Flow Statement

(in Thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2017

 

2016

 

 

 

 

 

 

 

Net income

 

$

22,494

 

$

8,911

 

Depreciation and amortization

 

44,747

 

31,047

 

Stock-based compensation

 

3,786

 

3,633

 

Loss (Gain) on disposition of long-lived assets

 

1,111

 

(29

)

Loss on deconsolidation of subsidiary

 

529

 

 

Equity in earnings

 

2,033

 

 

Bargain purchase gain

 

 

(7,304

)

Impairment of long-lived assets

 

 

11,076

 

Deferred income taxes

 

 

(8,775

)

Change in prepaid and accrued income taxes

 

(4,502

)

15,294

 

Change in other operating assets and liabilities

 

(6,370

)

(3,469

)

Other non-cash activity

 

1,639

 

336

 

 

 

 

 

 

 

Net cash provided by operating activities

 

65,467

 

50,720

 

 

 

 

 

 

 

Capital expenditures

 

(78,549

)

(42,727

)

Acquisition of businesses, net of acquired cash of $0 and $8.3 million

 

(1,178

)

(29,719

)

Sale of business, net of transferred cash of $2.1 million

 

22,597

 

 

Purchases of spectrum licenses and other intangible assets, including deposits

 

(36,832

)

(10,860

)

Purchase of securities

 

 

(2,000

)

Acquisition of non-controlling interest in subsidiary

 

 

(7,045

)

Proceeds from sale of investments

 

2,761

 

 

Change in restricted cash

 

1,756

 

1,134

 

 

 

 

 

 

 

Net cash used in investing activities

 

(89,445

)

(91,217

)

 

 

 

 

 

 

Dividends paid on common stock

 

(10,992

)

(10,311

)

Distributions to non-controlling interests

 

(3,373

)

(4,302

)

Principal repayments of term loan

 

(5,447

)

(4,759

)

Proceeds from new borrowings

 

8,571

 

 

Purchases of common stock

 

(2,186

)

(1,986

)

Investments made by minority shareholders in consolidated affiliates

 

122

 

21,904

 

Other

 

(1,005

)

164

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

(14,310

)

710

 

 

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

207

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(38,081

)

(39,787

)

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

269,721

 

392,045

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

231,640

 

$

352,258

 

 

8



 

Table 4

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the three months ended June 30, 2017 is as follows:

 

 

 

U.S. Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

34,505

 

$

19,955

 

$

 

$

 

$

54,460

 

Wireline

 

2,057

 

59,402

 

 

 

61,459

 

Renewable Energy

 

 

 

4,891

 

 

4,891

 

Equipment and Other

 

416

 

2,013

 

6

 

 

2,435

 

Total Revenue

 

$

36,978

 

$

81,370

 

$

4,897

 

$

 

$

123,245

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

13,147

 

$

10,805

 

$

846

 

$

(8,955

)

$

15,843

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(1,756

)

$

(3,024

)

$

(246

)

$

 

$

(5,026

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

19,393

 

$

23,939

 

$

2,676

 

$

(7,763

)

$

38,245

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (at June 30, 2017):

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

14,353

 

$

98,684

 

$

18,679

 

$

107,679

 

$

239,395

 

Total current assets

 

43,730

 

152,351

 

27,209

 

121,045

 

344,335

 

Fixed assets, net

 

102,532

 

374,748

 

156,503

 

15,951

 

649,734

 

Total assets

 

205,968

 

602,990

 

201,785

 

190,733

 

1,201,476

 

Total current liabilities

 

44,733

 

76,896

 

15,134

 

15,128

 

151,891

 

Total debt

 

 

95,446

 

64,236

 

 

159,682

 

 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the three months ended June 30, 2016 is as follows:

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate and
Other *

 

Total

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

37,655

 

$

19,433

 

$

 

$

 

$

57,088

 

Wireline

 

5,811

 

28,165

 

 

 

33,976

 

Renewable Energy

 

 

 

5,562

 

 

5,562

 

Equipment and Other

 

480

 

2,765

 

120

 

 

3,365

 

Total Revenue

 

$

43,946

 

$

50,363

 

$

5,682

 

$

 

$

99,991

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

4,797

 

$

9,259

 

$

(3,618

)

$

(8,526

)

$

1,912

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(1,266

)

$

478

 

$

(412

)

$

 

$

(1,200

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

21,482

 

$

15,420

 

$

3,809

 

$

(6,368

)

$

34,343

 

 


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

 

9



 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the six months ended June 30, 2017 is as follows:

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

71,668

 

$

39,022

 

$

 

$

 

$

110,690

 

Wireline

 

8,108

 

117,151

 

 

 

125,259

 

Renewable Energy

 

 

 

9,791

 

 

9,791

 

Equipment and Other

 

995

 

4,487

 

138

 

 

5,620

 

Total Revenue

 

$

80,771

 

$

160,660

 

$

9,929

 

$

 

$

251,360

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

28,533

 

$

20,771

 

$

2,287

 

$

(17,955

)

$

33,636

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(4,153

)

$

(5,033

)

$

(565

)

$

 

$

(9,751

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

42,561

 

$

46,901

 

$

5,571

 

$

(14,713

)

$

80,320

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flow Data:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

12,602

 

$

37,119

 

$

25,535

 

$

3,293

 

$

78,549

 

 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the six months ended June 30, 2016 is as follows:

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

77,119

 

$

38,846

 

$

 

$

 

$

115,965

 

Wireline

 

11,857

 

44,564

 

 

 

56,421

 

Renewable Energy

 

 

 

11,151

 

 

11,151

 

Equipment and Other

 

1,169

 

4,850

 

120

 

 

6,139

 

Total Revenue

 

$

90,145

 

$

88,260

 

$

11,271

 

$

 

$

189,676

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

21,579

 

$

16,959

 

$

(3,555

)

$

(17,179

)

$

17,804

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(2,853

)

$

(1,875

)

$

(1,149

)

$

 

$

(5,877

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

43,884

 

$

29,497

 

$

8,051

 

$

(12,988

)

$

68,444

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flow Data:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

16,447

 

$

22,283

 

$

242

 

$

3,755

 

$

42,727

 

 


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

 

10



 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

At December 31, 2016 is as follows:

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

22,235

 

$

97,681

 

$

27,378

 

$

131,664

 

$

278,958

 

Total current assets

 

50,983

 

143,201

 

37,440

 

135,745

 

367,369

 

Fixed assets, net

 

129,274

 

372,741

 

130,268

 

15,429

 

647,712

 

Total assets

 

240,006

 

597,454

 

190,253

 

170,505

 

1,198,218

 

Total current liabilities

 

23,162

 

95,502

 

12,603

 

18,838

 

150,105

 

Total debt

 

 

91,316

 

65,507

 

 

156,823

 

 


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

 

ATN International, Inc.

Selected Segment Operational Data

 

 

 

Quarter ended

 

 

 

December 31,

 

March 31,

 

June 30,

 

 

 

2016 *

 

2017

 

2017

 

 

 

 

 

 

 

 

 

U.S. Telecom Operational Data:

 

 

 

 

 

 

 

Wireless - Total Domestic Base Stations

 

1,006

 

1,019

 

1,041

 

 

 

 

 

 

 

 

 

International Telecom Operational Data:

 

 

 

 

 

 

 

Wireline - Voice / Access lines

 

179,700

 

176,900

 

174,600

 

Wireline - Data Subscribers

 

97,400

 

99,900

 

101,700

 

Wireline - Video Subscribers

 

54,600

 

53,800

 

52,900

 

Wireless - Subscribers

 

304,700

 

302,900

 

302,900

 

 


* Adjusted subscriber counts for the sale of St Maarten and transfer of ownership of Aruba business

 

11



 

Table 5

 

ATN International, Inc.

Reconciliation of Non-GAAP Measures

(In Thousands)

 

Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended June 30, 2017 and 2016

 

Three Months Ended June 30, 2017

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

5,883

 

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

5,026

 

Income tax expense

 

 

 

 

 

 

 

 

 

2,596

 

Other expense, net

 

 

 

 

 

 

 

 

 

532

 

Interest expense, net

 

 

 

 

 

 

 

 

 

1,806

 

Operating income

 

$

13,147

 

$

10,805

 

$

846

 

$

(8,955

)

$

15,843

 

Depreciation and amortization

 

6,246

 

13,134

 

1,830

 

1,044

 

22,254

 

Transaction-related charges

 

 

 

 

148

 

148

 

Adjusted EBITDA

 

$

19,393

 

$

23,939

 

$

2,676

 

$

(7,763

)

$

38,245

 

 

Three Months Ended June 30, 2016

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

(3,086

)

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

1,200

 

Income tax expense

 

 

 

 

 

 

 

 

 

2,945

 

Other expense, net

 

 

 

 

 

 

 

 

 

137

 

Interest expense, net

 

 

 

 

 

 

 

 

 

716

 

Operating income

 

$

4,797

 

$

9,259

 

$

(3,618

)

$

(8,526

)

$

1,912

 

Depreciation and amortization

 

5,609

 

8,209

 

1,207

 

1,468

 

16,493

 

Impairment of long-lived asset

 

11,076

 

 

 

 

11,076

 

Bargain purchase gain

 

 

(7,304

)

 

 

(7,304

)

Gain on disposition of long-lived assets

 

 

(29

)

 

 

(29

)

Restructuring charges

 

 

1,785

 

 

 

1,785

 

Transaction-related charges

 

 

3,500

 

6,220

 

690

 

10,410

 

Adjusted EBITDA

 

$

21,482

 

$

15,420

 

$

3,809

 

$

(6,368

)

$

34,343

 

 


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

 

12



 

Reconciliation of Net Income to Adjusted EBITDA for the Six Months Ended June 30, 2017 and 2016

 

Six Months Ended June 30, 2017

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

12,743

 

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

9,751

 

Income tax expense

 

 

 

 

 

 

 

 

 

5,724

 

Loss on deconsolidation of subsidiary

 

 

 

 

 

 

 

 

 

529

 

Other expense, net

 

 

 

 

 

 

 

 

 

1,053

 

Interest expense, net

 

 

 

 

 

 

 

 

 

3,836

 

Operating income

 

$

28,533

 

$

20,771

 

$

2,287

 

$

(17,955

)

$

33,636

 

Depreciation and amortization

 

12,797

 

26,250

 

3,284

 

2,416

 

44,747

 

(Gain) loss on disposition of long-lived asset

 

1,231

 

(120

)

 

 

1,111

 

Transaction-related charges

 

 

 

 

826

 

826

 

Adjusted EBITDA

 

$

42,561

 

$

46,901

 

$

5,571

 

$

(14,713

)

$

80,320

 

 

Six Months Ended June 30, 2016

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

3,034

 

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

5,877

 

Income tax expense

 

 

 

 

 

 

 

 

 

7,576

 

Other income, net

 

 

 

 

 

 

 

 

 

123

 

Interest expense, net

 

 

 

 

 

 

 

 

 

1,194

 

Operating income

 

$

21,579

 

$

16,959

 

$

(3,555

)

$

(17,179

)

$

17,804

 

Depreciation and amortization

 

11,229

 

14,586

 

2,415

 

2,817

 

31,047

 

Impairment of long-lived asset

 

11,076

 

 

 

 

11,076

 

Bargain purchase gain

 

 

(7,304

)

 

 

(7,304

)

Gain on disposition of long-lived assets

 

 

(29

)

 

 

(29

)

Restructuring charges

 

 

1,785

 

 

 

1,785

 

Transaction-related charges

 

 

3,500

 

9,191

 

1,374

 

14,065

 

Adjusted EBITDA

 

$

43,884

 

$

29,497

 

$

8,051

 

$

(12,988

)

$

68,444

 

 


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

 

13