ATN International, Inc.
ATLANTIC TELE NETWORK INC /DE (Form: 10-Q, Received: 11/09/2015 16:13:43)

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

Form  10-Q

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION  13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2015

 

OR

 

 

 

TRANSITION REPORT PURSUANT TO SECTION  13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to             

 

Commission File Number 001-12593

 


 

Atlantic Tele-Network, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

 

47-0728886

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification Number)

 

600 Cummings Center

Beverly, MA 01915

(Address of principal executive offices, including zip code)

 

(978) 619-1300

(Registrant’s telephone number, including area code)

 


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No  

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes     No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule  12b-2 of the Exchange Act. (Check one):

 

 

 

 

Large accelerated filer

 

Accelerated filer 

 

 

 

Non-accelerated filer

 

Smaller reporting company 

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule  12b-2 of the Exchange Act): Yes     No  

 

As of November 9 , 2015, the registrant had outstanding 16,062,167 shares of its common stock ($.01 par value).

 

 

 


 

Table of Contents

ATLANTIC TELE-NETWORK, INC.

 

FORM 10-Q

 

Quarter Ended September 30 , 2015

 

 

 

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS  

 

 

 

PART I—FINANCIAL INFORMATION  

 

 

 

Item 1  

Unaudited Condensed Consolidated Financial Statements

 

 

 

 

Condensed Consolidated Balance Shee ts at December 31, 2014 and September  30, 2015

 

 

 

 

Condensed Consolidated Income Statements for th e Three and Nine Months Ended September  30, 2014 and 2015

 

 

 

 

Condensed Consolidated Statements of Comprehensive I ncome for the Nine Months Ended September  30, 2014 and 2015

 

 

 

 

Condensed Consolidated Statements of Cash Flo ws for the Nine Months Ended September  30, 2014 and 2015

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

Item 2  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21 - 37

 

 

 

Item 3  

Quantitative and Qualitative Disclosures About Market Risk

37 

 

 

 

Item 4  

Controls and Procedures

38 

 

 

 

PART II—OTHER INFORMATION  

39 

 

 

 

Item 1  

Legal Proceedings

39 

 

 

 

Item1A  

Risk Factors

39 

 

 

 

Item 2  

Unregistered Sales of Equity Securities and Use of Proceeds

39 

 

 

 

Item 5  

Other Information

40 

 

 

 

Item 6  

Exhibits

41 

 

 

 

SIGNATURES  

42 

 

 

 

CERTIFICATIONS

 

 

 

2


 

Table of Contents

Cautionary Statement Regarding Forward-Looking Statement s

 

This Quarterly Report on Form 10-Q (or the “Report”) 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, revenues, and the future growth and retention of our subscriber base and consumer demand for solar power; (2) government regulation of our businesses, which may impact our FCC and other telecommunications licenses or our renewables business; (3) economic, political and other risks facing our operations; (4) our ability to maintain favorable roaming arrangements; (5) our ability to efficiently and cost-effectively upgrade our networks and IT platforms to address  rapid and significant technological changes in the telecommunications industry; (6) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; (7) our ability to find investment or acquisition or disposition opportunities that fit our strategic goals for the Company; (8) increased competition; (9) our ability to operate in the renewable energy industry; (10) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (11) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (12) the occurrence of weather events and natural catastrophes; (13) our continued access to capital and credit markets; (14) our ability to realize the value that we believe exists in our businesses ;   and (15) our ability to receive requisite regulatory consents and approvals and satisfy other conditions needed to complete our proposed acquisitions   . 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, 2014, filed with the SEC on March 16, 2015 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.

 

In this Report, the words “the Company”, “we,” “our,” “ours,” “us” and “ATN” refer to Atlantic Tele-Network, Inc. and its subsidiaries. This Report contains trademarks, service marks and trade names that are the property of, or licensed by, ATN, and its subsidiaries.

 

Reference to dollars ($) refer to U.S. dollars unless otherwise specifically indicated.

 

 

3


 

Table of Contents

PART I—FINANCIAL INFORMATIO N

Item 1. Unaudited Condensed Consolidated Financial Statement s

ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET S

(Unaudited)

(I n thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

December 31, 

 

September 30, 

 

 

    

2014

    

2015

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

326,216

 

$

397,797

 

Restricted cash

 

 

39,703

 

 

797

 

Accounts receivable, net of allowances of $11.3  million and $10.9 million, respectively

 

 

52,873

 

 

47,419

 

Materials and supplies

 

 

10,546

 

 

9,270

 

Deferred income taxes

 

 

2,588

 

 

2,673

 

Prepayments and other current assets

 

 

19,273

 

 

20,596

 

Assets of discontinued operations

 

 

175

 

 

44

 

Total current assets

 

 

451,374

 

 

478,596

 

Fixed Assets:

 

 

 

 

 

 

 

Property, plant and equipment

 

 

763,417

 

 

787,778

 

Less accumulated depreciation

 

 

(393,835)

 

 

(421,763)

 

Net fixed assets

 

 

369,582

 

 

366,015

 

Telecommunication licenses, net

 

 

44,090

 

 

43,622

 

Goodwill

 

 

45,077

 

 

45,077

 

Trade name license, net

 

 

417

 

 

417

 

Customer relationships, net

 

 

1,496

 

 

1,161

 

Restricted cash

 

 

5,475

 

 

5,013

 

Other assets

 

 

7,519

 

 

6,557

 

Total assets

 

$

925,030

 

$

946,458

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

6,083

 

$

6,254

 

Accounts payable and accrued liabilities

 

 

61,737

 

 

46,127

 

Dividends payable

 

 

4,631

 

 

5,150

 

Accrued taxes

 

 

5,667

 

 

10,935

 

Advance payments and deposits

 

 

7,898

 

 

8,194

 

Deferred income taxes

 

 

213

 

 

201

 

Other current liabilities

 

 

16,593

 

 

10,433

 

Liabilities of discontinued operations

 

 

1,247

 

 

1,293

 

Total current liabilities

 

 

104,069

 

 

88,587

 

Deferred income taxes

 

 

30,366

 

 

37,694

 

Other liabilities

 

 

19,619

 

 

28,738

 

Long-term debt, excluding current portion

 

 

32,794

 

 

28,141

 

Total liabilities

 

 

186,848

 

 

183,160

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

Atlantic Tele-Network, Inc. Stockholders’ Equity:

 

 

 

 

 

 

 

Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding

 

 

 —

 

 

 —

 

Common stock, $0.01 par value per share; 50,000,000 shares authorized; 16,647,334 and 16,802,073 shares issued, respectively, and 15,925,748 and 16,051,111 shares outstanding, respectively

 

 

166

 

 

166

 

Treasury stock, at cost; 721,586 and 750,962 shares, respectively

 

 

(15,549)

 

 

(17,504)

 

Additional paid-in capital

 

 

145,563

 

 

151,466

 

Retained earnings

 

 

549,963

 

 

548,280

 

Accumulated other comprehensive loss

 

 

(2,921)

 

 

(2,892)

 

Total Atlantic Tele-Network, Inc. stockholders’ equity

 

 

677,222

 

 

679,516

 

Non-controlling interests

 

 

60,960

 

 

83,782

 

Total equity

 

 

738,182

 

 

763,298

 

Total liabilities and equity

 

$

925,030

 

$

946,458

 

 

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

4


 

Table of Contents

ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENT S

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 and 201 5

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30, 

 

Nine months ended September 30, 

 

 

    

2014

    

2015

    

2014

    

2015

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. wireless

 

$

44,306

 

$

47,047

 

$

110,153

 

$

122,993

 

International wireless

 

 

21,557

 

 

20,392

 

 

67,127

 

 

61,787

 

Wireline

 

 

21,531

 

 

21,815

 

 

64,344

 

 

64,497

 

Renewable energy

 

 

 —

 

 

5,052

 

 

 —

 

 

15,631

 

Equipment and other

 

 

1,999

 

 

2,476

 

 

6,212

 

 

7,545

 

Total revenue

 

 

89,393

 

 

96,782

 

 

247,836

 

 

272,453

 

OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated) :

 

 

 

 

 

 

 

 

 

 

 

 

 

Termination and access fees

 

 

19,321

 

 

21,343

 

 

58,188

 

 

60,827

 

Engineering and operations

 

 

7,525

 

 

10,631

 

 

21,508

 

 

26,218

 

Sales and marketing

 

 

5,827

 

 

5,797

 

 

16,499

 

 

16,315

 

Equipment expense

 

 

2,924

 

 

3,431

 

 

8,938

 

 

10,093

 

General and administrative

 

 

12,823

 

 

15,930

 

 

38,596

 

 

44,743

 

Transaction-related charges

 

 

(27)

 

 

2,536

 

 

341

 

 

2,852

 

Depreciation and amortization

 

 

12,842

 

 

14,590

 

 

37,752

 

 

43,813

 

Gain on disposition of long-lived assets

 

 

 —

 

 

 —

 

 

 —

 

 

(2,823)

 

Total operating expenses

 

 

61,235

 

 

74,258

 

 

181,822

 

 

202,038

 

Income from operations

 

 

28,158

 

 

22,524

 

 

66,014

 

 

70,415

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(13)

 

 

(795)

 

 

(220)

 

 

(2,153)

 

Loss on deconsolidation of subsidiary (note 5)

 

 

 —

 

 

 —

 

 

 —

 

 

(19,937)

 

Other income , net

 

 

338

 

 

53

 

 

302

 

 

114

 

Other income (expense), net

 

 

325

 

 

(742)

 

 

82

 

 

(21,976)

 

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

 

28,483

 

 

21,782

 

 

66,096

 

 

48,439

 

Income taxes

 

 

9,569

 

 

10,134

 

 

22,460

 

 

22,655

 

INCOME FROM CONTINUING OPERATIONS

 

 

18,914

 

 

11,648

 

 

43,636

 

 

25,784

 

INCOME FROM DISCONTINUED OPERATIONS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of tax

 

 

 —

 

 

 —

 

 

 —

 

 

390

 

NET INCOME

 

 

18,914

 

 

11,648

 

 

43,636

 

 

26,174

 

Net income attributable to non-controlling interests, net of tax:

 

 

(2,747)

 

 

(5,072)

 

 

(8,116)

 

 

(13,417)

 

NET INCOME ATTRIBUTABLE TO ATLANTIC TELE-NETWORK, INC. STOCKHOLDERS

 

$

16,167

 

$

6,576

 

$

35,520

 

$

12,757

 

NET INCOME PER WEIGHTED AVERAGE BASIC SHARE ATTRIBUTABLE TO ATLANTIC TELE-NETWORK, INC. STOCKHOLDERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.02

 

$

0.41

 

$

2.24

 

$

0.77

 

Discontinued operations:

 

$

 —

 

$

 —

 

$

 —

 

$

0.02

 

Total

 

$

1.02

 

$

0.41

 

$

2.24

 

$

0.79

 

NET INCOME PER WEIGHTED AVERAGE DILUTED SHARE ATTRIBUTABLE TO ATLANTIC TELE-NETWORK, INC. STOCKHOLDERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.01

 

$

0.41

 

$

2.22

 

$

0.77

 

Discontinued operations

 

$

 —

 

$

 —

 

$

 —

 

$

0.02

 

Total

 

$

1.01

 

$

0.41

 

$

2.22

 

$

0.79

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

15,923

 

 

16,049

 

 

15,890

 

 

16,009

 

Diluted

 

 

16,030

 

 

16,165

 

 

16,001

 

 

16,128

 

DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK

 

$

0.29

 

$

0.32

 

$

0.83

 

$

0.90

 

 

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

 

 

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Table of Contents

ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOM E

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 201 5

(Unaudited)

(I n thousands)

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 

 

 

    

2014

    

2015

 

Net income

 

$

43,636

 

$

26,174

 

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of tax

 

 

 —

 

 

29

 

Other comprehensive income, net of tax

 

 

 —

 

 

29

 

Comprehensive income

 

 

43,636

 

 

26,203

 

Less: Comprehensive income attributable to non-controlling interests

 

 

(8,116)

 

 

(13,417)

 

Comprehensive income attributable to Atlantic Tele-Network, Inc.

 

$

35,520

 

$

12,786

 

 

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

 

ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 201 5

(Unaudited)

(I n thousands)

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 

 

 

    

2014

    

2015

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$

43,636

 

$

26,174

 

Adjustments to reconcile net income to net cash flows provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

37,752

 

 

43,813

 

Provision for doubtful accounts

 

 

1,313

 

 

711

 

Amortization and write off of debt discount and debt issuance costs

 

 

72

 

 

424

 

Stock-based compensation

 

 

3,381

 

 

3,832

 

Income from discontinued operations, net of tax

 

 

 —

 

 

(390)

 

Gain on disposition of long-lived assets

 

 

 —

 

 

(2,823)

 

Loss on deconsolidation of subsidiary

 

 

 —

 

 

19,937

 

Changes in operating assets and liabilities, excluding the effects of acquisitions:

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(7,830)

 

 

3,832

 

Materials and supplies, prepayments, and other current assets

 

 

(1,921)

 

 

(5,563)

 

Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities

 

 

1,444

 

 

399

 

Accrued taxes

 

 

(18,401)

 

 

27,684

 

Other

 

 

(3,785)

 

 

(5,485)

 

Net cash provided by operating activities of continuing operations

 

 

55,661

 

 

112,545

 

Net cash provided by (used in) operating activities of discontinued operations

 

 

(4,612)

 

 

566

 

Net cash provided by operating activities

 

 

51,049

 

 

113,111

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Capital expenditures

 

 

(41,699)

 

 

(46,031)

 

Acquisition of business (Note 4)

 

 

 —

 

 

(11,968)

 

Change in restricted cash

 

 

38,707

 

 

39,368

 

Proceeds from disposition of long-lived assets (Note 5)

 

 

1,371

 

 

5,873

 

Net cash used in investing activities of continuing operations

 

 

(1,621)

 

 

(12,758)

 

Net cash used in investing activities of discontinued operations

 

 

 —

 

 

 —

 

Net cash used in investing activities

 

 

(1,621)

 

 

(12,758)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Dividends paid on common stock

 

 

(12,873)

 

 

(13,920)

 

Distribution to minority stockholders

 

 

(7,932)

 

 

(11,363)

 

Payment of debt issuance costs

 

 

 —

 

 

(30)

 

Proceeds from stock option exercises

 

 

610

 

 

1,686

 

Principal repayments of term loan

 

 

 —

 

 

(4,482)

 

Purchase of common stock

 

 

(1,355)

 

 

(1,568)

 

Repurchases of non-controlling interests

 

 

(59)

 

 

 —

 

Investments made by minority shareholders in consolidated affiliates

 

 

 —

 

 

905

 

Net cash used in financing activities of continuing operations

 

 

(21,609)

 

 

(28,772)

 

Net cash used in financing activities of discontinued operations

 

 

 —

 

 

 

Net cash used in financing activities

 

 

(21,609)

 

 

(28,772)

 

Net change in cash and cash equivalents

 

 

27,819

 

 

71,581

 

Cash and cash equivalents, beginning of period

 

 

356,607

 

 

326,216

 

Cash and cash equivalents, end of period

 

$

384,426

 

$

397,797

 

 

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

 

 

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Table of Contents

ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT S

 

1. ORGANIZATION AND BUSINESS OPERATIONS

 

The Company is a holding company that, through its operating subsidiaries, (i) provides wireless and wireline telecommunications services in North America, Bermuda and the Caribbean, (ii) owns and operates commercial distributed generation solar power systems in the United States, and (iii) owns and operates terrestrial and submarine fiber optic transport systems in the United States and the Caribbean, respectively.

 

The Company offers the following principal services:

 

·

Wireless.  In the United States, the Company offers wholesale wireless voice and data roaming services to national, regional, local and selected international wireless carriers in rural markets located principally in the Southwest and Midwest United States. The Company also offers wireless voice and data services to retail customers in Guyana, Bermuda, and in other smaller markets in the Caribbean and the United States.

 

·

Wireline.  The Company’s local telephone and data services include its operations in Guyana and the mainland United States. The Company is the exclusive licensed provider of domestic wireline local and long-distance telephone services in Guyana and international voice and data communications into and out of Guyana. The Company also offers facilities-based integrated voice and data communications services and wholesale transport services to enterprise and residential customers in New England, primarily in Vermont, and in New York State. In addition, the Company offers wholesale long-distance voice services to telecommunications carriers.

 

·

Renewable Energy.   In the United States, the Company provides distributed generation solar power to corporate, utility and municipal customers in Massachusetts, California and New Jersey.

 

The following chart summarizes the operating activities of the Company’s principal subsidiaries, the segments in which the Company reports its revenue and the markets it served as of September 30, 2015 :

 

 

 

 

 

 

 

 

 

Services

   

Segment

   

Markets

   

Tradenames

 

Wireless

 

U.S.   Wireless

 

United States (rural markets)

 

Commnet, Choice

 

 

 

Island Wireless

 

Aruba, Bermuda, Turks and Caicos (through March 23, 2015), U.S. Virgin Islands

 

Mio, CellOne, Islandcom (through March 23, 2015), Choice

 

 

 

International   Integrated Telephony

 

Guyana

 

Cellink

 

Wireline

 

International Integrated Telephony

 

Guyana

 

GT&T

 

 

 

U.S. Wireline

 

United States (New England and New York State)

 

Sovernet, ION, Essextel

 

Renewable   Energy

 

Renewable Energy

 

United States (Massachusetts, California, and New Jersey)

 

Ahana Renewables

 

 

The Company is actively evaluating potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, that meet its return ‑on ‑investment and other criteria. The Company provides management, technical, financial, regulatory, and marketing services to its subsidiaries and typically receives a management fee equal to a percentage of their respective revenue and which the Company believes approximates the level of effort provided for such services . Management fees from subsidiaries are eliminated in consolidation. For information about the Company’s business segments and geographical information about its revenue, operating income and long ‑lived assets, see Note 11 to the Unaudited Condensed Consolidated Financial Statements.

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Beginning with the first quarter of 2016, the Company anticipates re-presenting its operating segments as follows: i) Domestic Telecom, consisting of the Company’s current  U.S. Wireless and U.S. Wireline segments, ii) International Telecom, consisting of the Company’s current Island Wireless and International Integrated Telephony segments, and iii) Renewable Energy, consisting of the Company’s current Renewable Energy segment. 

 

The pending acquisitions, as described in Note 4, will be included within the International Telecom segment upon the completion of those acquisitions.

 

2.   BASIS OF PRESENTATION

 

The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted i n the United States of America . Results of interim periods may not be indicative of results for the full year.  These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s 2014 Annual Report on Form  10-K .

 

The consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities since it is determined that the Company is the primary beneficiary of these entities.

 

Certain reclassifications have been made in the prior period financial statements to co nform the Company’s consolidate d income statements to how management analyzes its operations in the current period.   The se changes d id not impact operating income.  For the three months ended September 30, 2014 the aggregate impact of the changes included an increase to termination and access fees of $ 3.3 million, a decrease to eng ineering and operations expense s of $ 2. 3 million, an increase to sales and marketin g expense s of $ 0.3 million and a decrease to gen eral and administrative expense s of $ 1.4 million. For the nine months ended September 30, 2014 the aggregate impact of the changes included an increase to termination and access fees of $ 10. 1 million, a decrease to eng ineering and operations expense s of $ 7.4 million, an increase to sales and marketing expense s of $ 1.1 million and a decrease to gen eral and administrative expense s of $ 3.7 million.

 

The Company’s effective tax rates for the three months ended September 30, 2014 and 2015 were 33.6 % and 46.5 % , respectively.  The Company’s effective tax rates for the nine months ended Sept ember 30, 2014 and 2015 were   34.0 % and   46.8 % , respectively.  The Company’s effective tax rate incr eased in 2015 primarily due to the $ 19.9 million loss on deconsolidation of its Island Wireless business that has no 2015 tax benefit .

 

Recent Accounting Pronouncements

 

In May 2014, the FASB issued a standard on revenue recognition providing a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application.   On July 9, 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard now would be effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of December 15, 2016 .  The Company is currently evaluating the adoption method options and the impact of the new guidance on our consolidated financial statements.

 

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In April 2014, the FASB issued Accounting Sta ndards Update (“ASU”) 2014- 08, “Reporting Discontinued Operations and Disclosures of Disposals of Com ponents of an Entity.” ASU 2014- 08 provides guidance on determining when disposals can be presented as di scontinued operations. ASU 2014- 08 requires that only disposals representing a strategic shift in operations should be presented as discontinued operations. A strategic shift may include a disposal of a major line of business, major equity method investment or a major part of an entity. Additionally, ASU 2014- 08 requires expanded disclosures regarding discontinued operations. This standard was effective prospectively for reporting periods beginning after December 15, 2014. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements.

 

In April 2015, FASB issued ASU 2015-03, which amends the presentation of debt issuance costs on the consolidated balance sheet. Under the new guidance, debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability rather than as an asset. The new guidance is effective retrospectively for fiscal periods starting after December 15, 2015 and early adoption is permitted. We expect to adopt ASU 2015-03 on January 1, 2016 and have determined that its adoption will not have a material impact on our consolidated financial statements and related disclosures at that time.

In April 2015, the FASB issued guidance to customers about whether a cloud computing arrangement includes software and how to account for that software license.  The new guidance does not change the accounting for a customer’s accounting for service contracts.  The standard is effective beginning January 1, 2017, with early adoption permitted, and may be applied prospectively or retrospectively. We do not expect it to have a material impact on our consolidated financial position, results of operations or cash flows.

 

In September 2015, the FASB issued updated guidance related to simplifying the accounting for measurement period adjustments related to business combinations.  The amended guidance eliminates the requirement to retrospectively account for adjustments made during the measurement period. The standard is effective beginning January 1, 2016, with early adoption permitted. We do not expect it to have a material impact on our consolidated financial position, results of operations or cash flows.

 

3.   USE OF ESTIMATES

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates relate to the allowance for doubtful accounts, useful lives of the Company’s fixed   and finite-lived intangible assets, allocation of purchase price to assets acquired and liabilities assumed in purchase business combinations, fair value of indefinite-lived intangible assets, goodwill and income taxes . Actual results could differ significantly from those estimates.

 

4. ACQUISITIONS

 

Pending Acquisitions

 

KeyTech Limited

 

On October 6, 2015, the Company entered into an agreement with KeyTech Limited (“KeyTech”), a publicly held Bermuda company listed on the Bermuda Stock Exchange (“BSX”) that provides voice, broadband, and cable television services under the “Logic” name in Bermuda and the Cayman Islands, in which the Company will acquire a controlling interest in KeyTech as part of a proposed business combination of KeyTech with the Company’s subsidiary providing wireless services under the “CellOne” name in Bermuda. As part of the proposed transaction, the Company will contribute its current ownership interest of approximately 43% in CellOne and approximately $42 million in cash in exchange for a 51% ownership interest in KeyTech. On a combined basis, t he Company and KeyTech currently own approximately 85% of CellOne.  As part of the proposed transaction, CellOne will be merged with and into a company within the KeyTech group and the approximate 15% interest in CellOne held, in the aggregate, by CellOne’s minority shareholders will be converted into the right to receive common shares in KeyTech. Following the transaction, CellOne

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will be indirectly wholly owned by KeyTech and KeyTech will continue to be listed on the BSX.     A portion of the cash proceeds that KeyTech will receive upon closing will be used to fund a one-time special dividend to KeyTech's existing shareholders and to retire KeyTech's subordin ated debt.  The Company currently consolidates the operations of CellOne and, upon closing of the proposed transaction, will consolidate the results of KeyTech, in its financial statements.

 

The proposed transaction is subject to customary closing terms and conditions, including, among others, the receipt of approval from the Bermuda Regulatory Authority, the Federal Communications Commission, and the Information and Communications Technology Authority of the Cayman Islands and the consent of the Bermuda Stock Exchange to certain transaction matters. KeyTech shareholders approved the proposed transaction by affirmative vote on October 20, 2015. The Company currently expects to complete the proposed transaction in the first quarter of 2016.

 

Caribbean Asset Holdings LLC

 

On October 1, 2015, the Company announced that it had entered into an agreement to acquire all of the membership interests of   Caribbean Asset Holdings LLC, the holding company for the Innovative group of companies operating cable TV, Internet and landline services primarily in the   U.S. Virgin Islands   ("Innovative") from the   National Rural Utilities Cooperative Finance Corporation   ("CFC"). The Company will purchase the Innovative operations for a purchase price of approximately   $145 million, subject to certain purchase price adjustments, with   $85 million   payable in cash and the option to finance the remaining   $60 million   of the purchase price with a loan from an affiliate of CFC, the   Rural Telephone Finance C ooperative. With the purchase, the Company ’s current operations in the   U.S. Virgin Islands   under the "Choice" name will be combined with Innovative to deliver residential and business subscribers a full range of telecommunications and media services.

 

The agreement is subject to customary closing terms and conditions, the expiration of the Hart-Scott Rodino waiting period and the receipt of approvals from the Federal Communications Commission and regulatory authorities in the U.S. and   British Virgin Islands   and   St. Maarten.  T he Company currently expects to complete the proposed tra nsaction in mid- 2016.

 

Completed Acquisition

 

On December 24, 2014, the Company acquired substantially all of the assets of Green Lake Capital, LLC and certain of its affiliates (collectively, "Green Lake"), an owner and operator of commercial distributed generation solar power systems in Massachusetts, California and New Jersey (the "Ahana Acquisition"). The Company acquired these assets as part of a total transaction valued at approximately $117.7 million which is comprised of approximately $66.3 million of cash consideration , a $12.5 million reimbursement of cash and restricted cash held by Green Lake on the date of the acquisition, and the assumption of $38.9 million of debt. Of the $78.8 million purchase price, $11.9 million was paid in 2015. The acquisition was performed through the Company's newly formed subsidiary, Ahana Renewables, LLC ("Ahana Renewables"). Certain subsidiaries of Ahana Renewables have been partially capitalized by a third-party tax equity investor who maintains a non-controlling interest in these subsidiaries.  The tax equity investor’s interest in these subsidiaries changes at a certain date (the "Flip Date"), which is the later of a) the five -year anniversary of the placed in service date for the solar assets owned by the subsidiary or, b) the date that the tax equity investor receives a certain return on their original investment in that subsidiary. These dates typically occur at approximately 2 - 4 years from the acquisition date. The profits and losses of these subsidiaries will be allocated to the tax equity investors and to the Company using the Hypothetical Liquidation Book Value method. The Hypothetical Liquidation Book Value Method is used to calculate the non-controlling   interests' share of income for each period by measuring the difference in funds that would flow   to the non-controlling interests in a hypothetical liquidation event at the beginning of the period   compared to the end of a period (adjusted for capital distributions). The method assumes that   the proceeds on liquidation approximate book value and then the proceeds are allocated to the   Company and non-controlling interests based on the liquidation provisions of the solar facility   operating agreement. A positive difference during the period represents non-controlling   interests' share of income and a decrease represents a loss .   Ahana Renewables has the option to buy-out the non-controlling interests.

 

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Ahana Renewables generates revenue from the sale of electricity through long-term ( 10   -   25 years) power purchase agreements as well as the sale of Solar Renewable Energy Credits (“SRECs”) which are government emissions allowances obtained through power generation and compliance with various regulations.

 

 

5. LOSS ON DECONSOLIDATION OF SUBSIDIARY

 

During March 2015, the Company sold certain assets and liabilities of its Turks and Caicos business in its Island Wireless segment.  As a result, the Company recorded a loss of approximately $19.9 million arising from the deconsolidation of non-controlling interests of $20.0 million and a gain of $0.1 million arising from an excess of sales proceeds over the carrying value of net assets disposed of.  The disposition is included within other income (expense) and does not relate to a strategic shift in the Company’s operations .  As a result, the subsidiary’s historical results and financial position are presented with continuing operations .

 

6 .   FAIR VALUE MEASUREMENTS

 

In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

 

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

 

 

 

 

Level 1

 

Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market.

 

 

 

Level 2

 

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non-exchange traded derivative contracts.

 

 

 

Level 3

 

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

 

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Assets and liabilities of the Company measured at fair value on a recurring basis as of December  31, 2014 and September 30, 2015 are summarized as follows  ( in thousands ) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

    

 

 

    

Significant Other

    

 

 

 

 

 

Quoted Prices in

 

Observable

 

 

 

 

 

 

Active Markets

 

Inputs

 

 

 

 

Description

 

(Level 1)

 

(Level 2)

 

Total

 

Certificates of deposit

 

$

 —

 

$

363

 

$

363

 

Money market funds

 

$

1,493

 

$

 —

 

$

1,493

 

Total assets measured at fair value

 

$

1,493

 

$

363

 

$

1,856

 

Debt (Note 7)

 

$

 —

 

$

38,877

 

$

38,877

 

Total liabilities measured at fair value

 

$

 —

 

$

38,877

 

$

38,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

 

    

 

 

    

Significant Other

    

 

 

 

 

 

Quoted Prices in

 

Observable

 

 

 

 

 

 

Active Markets

 

Inputs

 

 

 

 

Description

 

(Level 1)

 

(Level 2)

 

Total

 

Certificates of deposit

 

$

 —

 

$

363

 

$

363

 

Money market funds

 

$

71,105

 

$

 —

 

$

71,105

 

Total assets measured at fair value

 

$

71,105

 

$

363

 

$

71,468

 

 

Certificate of Deposit

 

As of December  31, 2014 and September 30, 2015 , this asset class consisted of a time deposit at a financial institution denominated in U.S. dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data.

 

Money Market Funds

 

As of December  31, 2014 and September 30, 2015 , this asset class consisted of a money market portfolio that comprises Federal government and U.S. Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets.

 

7 .   LONG-TERM DEBT

 

Long-term debt comprises the following (in thousands):

 

 

 

 

 

 

 

 

 

 

    

December 31,

    

September 30, 

 

 

 

2014

 

2015

 

 

 

 

 

 

 

 

 

Term loans assumed in Ahana acquisition

 

$

38,877

 

$

34,395

 

Less: current portion

 

 

(6,083)

 

 

(6,254)

 

Total long-term debt

 

$

32,794

 

$

28,141

 

 

On December 19, 2014, the Company amended and restated its credit facility to provide for a $225  million revolving credit facility (the "Amended Credit Facility") that includes (i) up to $10  million under the Amended Credit Facility for standby or trade letters of credit, (ii) up to $ 2 5  million under the Amended Credit Facility for letters of credit that are necessary or desirable to qualify for disbursements from the FCC's mobility fund and (iii) up to $10  million under a swingline sub-facility.

 

Amounts the Company may borrow under the Amended Credit Facility bear interest at a rate equal to, at its option, either (i) the London Interbank Offered Rate ( LIBOR ) plus an applicable margin ranging between 1.50%   to

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1.75% or (ii) a base rate plus an applicable margin ranging from 0.50% to 0.75% . Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans. The base rate is equal to the higher of (i)  1.00% plus the higher of (x) the one-week LIBOR and (y) the one-month LIBOR ; (ii) the federal funds effective rate (as defined in the Credit Agreement) plus 0.50% per annum; and (iii) the prime rate (as defined in the Credit Agreement). The applicable margin is determined based on the ratio (as further defined in the Amended Credit Agreement) of the Company's indebtedness to EBITDA. Under the terms of the Amended Credit Agreement, the Company must also pay a fee ranging from 0.175% to 0.250% of the average daily unused portion of the Amended Credit Facility over each calendar quarter.

 

The Amended Credit Facility contains customary representations, warranties and covenants, as well as covenants by the Company limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. In addition, the Amended Credit Facility contains a financial covenant that imposes a maximum ratio of indebtedness to EBITDA on the Company . As of September 30, 2015 , the Company was in compliance with all of the financial covenants of the Amended Credit Facility .

 

Throughout 2014 and as of September 30, 2015 , the Company had no borrowings under the Amended Credit Facility and approximately $10.6  million o f outstanding letters of credit.

 

The carrying value of debt approximates its fair value.

 

Acquisition of Green Lake Capital, LLC

 

In connection with the Ahana Acquisition on December 24, 2014, the Company assumed $38.9  million in long-term debt (the "Ahana Debt"). The Ahana Debt includes multiple loan agreements with banks that bear interest at rates between 4.5% and 6.0% , mature at various times between 2018 and 2023 and are secured by certain solar facilities. Repayment of the Ahana Debt with the banks is made on a monthly basis until maturity.  As of September 30, 2015, $ 34.4 million of the Ahana Debt remained outstanding.

 

The Ahana Debt includes a loan from Public Service Electric & Gas (PSE&G) of $2.8 million. The note payable to PSE&G bears interest at   11.3% ,   matures in 2027, and is secured by certain solar facilities. Repayment of the Ahana Debt with PSE&G can be made in either cash or solar renewable energy credits (“SRECs”), at the Company's discretion, with the value of the SRECs being the current market value as of the date of repayment .

 

8. GOVERNMENT GRANTS

 

The Company has received funding from the U.S. Government and its agencies under Stimulus and Universal Services Fund programs.  These are generally designed to fund telecommunications infrastructure expansion into rural or underserved areas of the United States.  The fund programs are evaluated to determine if they represent funding related to capital expenditures (capital grants) or operating activities (income grants).

 

Mobility Fund Grants

 

As part of the Federal Communications Commission’s (“FCC”) reform of its Universal Service Fund (“USF”) program, which previously provided support to carriers seeking to offer telecommunications services in high-cost areas and to low-income households, the FCC created two new funds,   including the Mobility Fund, a one-time award meant to support wireless coverage in underserved geographic areas in the United States. In August 2013, the Company received FCC final approval for $21.7  million of Mobility Fund support to its wholesale wireless business (the "Mobility Funds" ) , to expand voice and broadband networks in certain geographic areas in order to offer either 3G or 4G coverage. As part of the receipt of the Mobility Funds, the Company committed to comply with certain additional FCC construction and other requirements. A portion of these funds will be used to offset network capital costs and a portion is used to offset the costs of supporting the networks for a period of five years. In connection with the Company’s application for the Mobility Funds, the Company has issued approximately $10.6  million in letters of credit to the Universal Service Administrative Company (“USAC”) to secure these obligations. If the Company fails to comply with any of the terms and conditions upon which the Mobility Funds were granted, or if it loses eligibility for the Mobility Funds, USAC will

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be entitled to draw the entire amount of the letter of credit applicable to the affected project plus penalties and may disqualify the Company from the receipt of additional Mobility Fund support.

 

The Company began the construction of its Mobility Funds projects during the third quarter of 2013 and its results are included in the Company’s “U.S. Wireless” segment. As of September 30, 2015 , the Company has received approximately $ 8.1  million in Mobility Funds. Of these funds, $ 3.1 million was recorded as an offset to the cost of the property, plant, and equipment associated with these projects and, consequentially, a reduction of future depreciation expense and $ 1.2 million is recorded within other current liabilities while the remaining $ 3.8 million is recorded within other long-term liabilities in the Company's consolidated balance sheet as of September 30, 2015 . The balance sheet presentation is based on the timing of the expected usage of the funds which will reduce future operations expenses.

 

9. EQUITY

 

Shareholders’ equity was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 

 

 

 

2014

 

2015

 

 

 

Atlantic Tele-

 

Non-Controlling

 

 

 

 

Atlantic Tele-

 

Non-Controlling

 

Total

 

 

    

Network, Inc.

    

Interests

    

Total Equity

    

Network, Inc.

    

Interests

    

Equity

 

Equity, beginning of period

 

$

643,330

 

$

56,525

 

$

699,855

 

$

677,222

 

$

60,960

 

$

738,182

 

Stock-based compensation

 

 

3,381

 

 

 

 

3,381

 

 

3,832

 

 

 —

 

 

3,832

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

35,520

 

 

8,116

 

 

43,636

 

 

12,757

 

 

13,417

 

 

26,174

 

Translation adjustment

 

 

 —

 

 

 

 

 —

 

 

29

 

 

 

 

29

 

Total comprehensive income

 

 

35,520

 

 

8,116

 

 

43,636

 

 

12,786

 

 

13,417

 

 

26,203

 

Issuance of common stock upon exercise of stock options

 

 

1,106

 

 

 

 

1,106

 

 

2,073

 

 

 —

 

 

2,073

 

Dividends declared on common stock

 

 

(13,218)

 

 

 

 

(13,218)

 

 

(14,442)

 

 

 —

 

 

(14,442)

 

Distributions to non-controlling interests

 

 

 

 

(7,932)

 

 

(7,932)

 

 

 —

 

 

(11,513)

 

 

(11,513)

 

Investments made by non-controlling interests

 

 

 

 

 —

 

 

 —

 

 

 

 

905

 

 

905

 

Sale of non-controlling interests

 

 

 

 

(59)

 

 

(59)

 

 

 

 

20,013

 

 

20,013

 

Purchase of treasury stock

 

 

(1,850)

 

 

 

 

(1,850)

 

 

(1,955)

 

 

 —

 

 

(1,955)

 

Equity, end of period

 

$

668,269

 

$

56,650

 

$

724,919

 

$

679,516

 

$

83,782

 

$

763,298

 

 

 

 

 

10.   NET INCOME PER SHARE

 

For the three   and nine   months   ended September 30, 2014 and 2015 , outstanding stock options were the only potentially dilutive securities. The reconciliation from basic to diluted weighted average common shares outstanding is as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30, 

 

Nine months ended September 30, 

 

 

    

2014

    

2015

    

2014

    

2015

 

Basic weighted-average common shares outstanding

 

15,923

 

16,049

 

15,890

 

16,009

 

Stock options

 

107

 

116

 

111

 

119

 

Diluted weighted-average common shares outstanding

 

16,030

 

16,165

 

16,001

 

16,128

 

 

The above cal culation for the three and nine months ended September 30, 2015, does not include approximately 2,000 and 1,000 shares related to certain stock options because the effect of such options were anti-dilutive.  There were no anti-dilutive share s for the three and nine months ended September 30, 2014.

 

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11. SEGMENT REPORTING

 

For the nine months ended September 30, 2014, the Company had four reportable segments for separate disclosure in accordance with the FASB’s authoritative guidance on disclosures about segments of an enterprise. Those four segments were: i) U.S. Wireless, which generates all of its revenues in and has all of its assets located in the United States, ii) International Integrated Telephony, which generates all of its revenues in and has all of its assets located in Guyana, iii) Island Wireless, which generates a majority of its revenues in, and has a majority of its assets located in, Bermuda and which also generates revenues in and has assets located in the U.S. Virgin Islands, Aruba and Turks and Caicos (through March 23, 2015) and iv) U.S. Wireline, which generates all of its revenues in and has all of its assets located in the United States. With the Ahana Acquisition on December 24, 2014, the Company added a fifth reportable segment, Renewable Energy, which generates all of its revenues in and has all of its assets located in the United States. S egment presentations for the nine months ended September 30, 2014 were not impacted by the Ahana Acquisition. The operating segments are managed separately because each offers different services and serves different markets.  

 

The following tables provide information for each operating segment (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2014

 

    

 

 

    

International

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

 

 

U.S.

 

Integrated

 

Island

 

U.S.

 

Renewable

 

Reconciling

 

 

 

 

 

Wireless

 

Telephony

 

Wireless

 

Wireline

 

Energy

 

Items

 

Consolidated

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Wireless

 

$

44,306

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

44,306

International Wireless

 

 

 —

 

 

6,399

 

 

15,158

 

 

 —

 

 

 —

 

 

 —

 

 

21,557

Wireline

 

 

152

 

 

15,249

 

 

 —

 

 

6,130

 

 

 —

 

 

 —

 

 

21,531

Renewable energy

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Equipment and Other

 

 

278

 

 

183

 

 

1,469

 

 

69

 

 

 —

 

 

 —

 

 

1,999

Total Revenue

 

 

44,736

 

 

21,831

 

 

16,627

 

 

6,199

 

 

 —

 

 

 —

 

 

89,393

Depreciation and amortization

 

 

3,657

 

 

4,397

 

 

2,596

 

 

1,193

 

 

 —

 

 

999

 

 

12,842

Non-cash stock-based compensation

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,002

 

 

1,002

Operating income (loss)

 

 

27,585

 

 

5,065

 

 

2,231

 

 

(471)

 

 

 —

 

 

(6,252)

 

 

28,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2015

 

    

 

 

    

International

    

 

 

    

 

 

 

 

 

    

 

 

    

 

 

 

 

U.S.

 

Integrated

 

Island

 

U.S.

 

Renewable

 

Reconciling

 

 

 

 

 

Wireless

 

Telephony

 

Wireless

 

Wireline

 

Energy

 

Items

 

Consolidated

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Wireless

 

$

47,047

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

 —

 

$

47,047

International Wireless

 

 

 —

 

 

6,503

 

 

13,889

 

 

 —

 

 

 —

 

 

 —

 

 

20,392

Wireline

 

 

152

 

 

15,572

 

 

 —

 

 

6,091

 

 

 —

 

 

 —

 

 

21,815

Renewable energy

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

5,052

 

 

 —

 

 

5,052

Equipment and Other

 

 

480

 

 

462

 

 

1,479

 

 

55

 

 

 —

 

 

 —

 

 

2,476

Total Revenue

 

 

47,679

 

 

22,537