Atlantic Tele-Network, Inc. Reports Fourth Quarter and Full Year 2011 Results
Fourth Quarter 2011 Financial Highlights:
-
Total revenues were
$182.9 million , a 6% decline from the fourth quarter of 2010 -
Adjusted EBITDA increased 30% to
$40.7 million -
Net income attributable to ATN's stockholders was
$4.1 million , or$0.27 per diluted share inclusive of a$0.16 per share non-cash impairment charge
Full Year 2011 Financial Highlights:
-
Total revenues increased 23% to
$759.2 million -
Adjusted EBITDA increased 24% to
$160.2 million -
Net income attributable to ATN's stockholders was
$21.8 million , or$1.41 per diluted share versus$2.48 last year which included an after-tax bargain purchase gain of$1.75 per share -
Net cash provided by operating activities was
$132.6 million , up 29% year-over-year -
Cash dividends paid amounted to
$13.7 million , a 9% increase from 2010
"This was our first full quarter without the burden of overlapping transition expenses associated with the Alltel asset acquisition, and we are pleased to have posted a significant year-over-year increase in Adjusted EBITDA," said
"Fourth quarter results also benefited from an 88% year-over-year increase in our
Total revenues for the fourth quarter were
Adjusted EBITDA1 for the 2011 fourth quarter was
Total operating income was
Net income attributable to ATN's stockholders was
Commenting on full year 2011 results,
Fourth Quarter 2011 Operating Highlights
U.S. Wireless Service Revenues
U.S. wireless service revenues include voice and data service revenues from the Company's prepaid and postpaid retail operations as well as its wholesale roaming operations. Total service revenues from the U.S. wireless businesses amounted to
U.S. retail wireless service revenues were
U.S. wholesale wireless revenues were
International Wireless Revenues
International wireless revenues include retail and wholesale voice and data wireless revenues from international operations in
Wireline Revenues
Wireline revenues are generated by the Company's wireline operations in
Reportable Operating Segments
The Company has four reportable segments: i) U.S. Wireless, ii) International Integrated Telephony, which operates in
U.S. |
International |
Island |
U.S. |
Reconciling |
Total | ||||||||||||||
Total Revenue | $ | 139,538 | $ | 24,039 | $ | 14,511 | $ | 4,855 | $ | - | $ | 182,943 | |||||||
Adjusted EBITDA | 31,806 | 11,526 | 389 | 1,163 | (4,170 | ) | 40,714 | ||||||||||||
Operating Income (Loss) | 12,888 | 7,078 | (4,865 | ) | 355 | (4,517 | ) | 10,939 | |||||||||||
(1) Reconciling items are comprised of corporate general and administrative costs and acquisition-related charges.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents at
Conference Call Information
About
Cautionary Language Concerning Forward Looking Statements
This press release contains forward-looking statements relating to, among other matters, our future financial performance and results of operations; the competitive environment in our key markets, demand for our services and industry trends; the outcome of regulatory matters; our continued access to the credit and capital markets; the pace of our network expansion and improvement, including our level of estimated future capital expenditures and our realization of the benefits of these investments; and management's plans and strategy for the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) the general performance of our operations, including operating margins, and the future retention and turnover of our subscriber base; (2) our ability to maintain favorable roaming arrangements; (3) increased competition; (4) economic, political and other risks facing our foreign operations; (5) the loss of certain
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release also contains non-GAAP financial measures. Specifically, ATN has presented Adjusted EBITDA and ARPU measures. Adjusted EBITDA is defined as net income attributable to
1 See Table 5 for reconciliation of Net Income to Adjusted EBITDA.
Table 1 |
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Unaudited Condensed Consolidated Balance Sheets | |||||
(in Thousands) | |||||
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December 31, | ||||
2011 | 2010 | ||||
Assets: | |||||
Cash and Cash Equivalents | $ | 48,735 | $ | 37,330 | |
Other Current Assets | 135,165 | 116,959 | |||
Total Current Assets | 183,900 | 154,289 | |||
Property, Plant and Equipment, net | 483,203 | 463,891 | |||
Goodwill and Other Intangible Assets, net | 186,871 | 187,762 | |||
Other Assets | 19,757 | 22,254 | |||
Total Assets | $ | 873,731 | $ | 828,196 | |
Liabilities and Stockholders' Equity: | |||||
Current Portion of Long Term Debt | $ | 25,068 | $ | 12,194 | |
Other Current Liabilities | 120,710 | 126,108 | |||
Total Current Liabilities | 145,778 | 138,302 | |||
Long Term Debt, Net of Current Portion | 257,146 | 272,049 | |||
Other Liabilities | 118,277 | 88,809 | |||
Total Liabilities | 521,201 | 499,160 | |||
Total |
294,266 | 283,768 | |||
Non-Controlling Interests | 58,264 | 45,268 | |||
Total Equity | 352,530 | 329,036 | |||
Total Liabilities and Stockholders' Equity | $ | 873,731 | $ | 828,196 |
Table 2 |
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Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
(in Thousands, Except per Share Data) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
|
December 31, | |||||||||||||||
2011 | 2010 (a) | 2011 | 2010 (a) | |||||||||||||
Revenues: | ||||||||||||||||
U.S. Wireless: | ||||||||||||||||
Retail | $ | 85,997 | $ | 102,795 | $ | 370,218 | $ | 293,126 | ||||||||
Wholesale | 48,378 | 47,370 | 201,993 | 159,807 | ||||||||||||
|
19,495 | 13,522 | 73,003 | 50,615 | ||||||||||||
Wireline | 21,653 | 19,913 | 84,957 | 84,488 | ||||||||||||
Equipment and Other | 7,420 | 11,065 | 29,025 | 31,109 | ||||||||||||
Total Revenue | 182,943 | 194,665 | 759,196 | 619,145 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Termination and Access Fees | 49,790 | 51,711 | 205,526 | 160,554 | ||||||||||||
Engineering and Operations | 21,266 | 24,347 | 85,234 | 71,032 | ||||||||||||
Sales, Marketing and Customer Service | 34,089 | 31,839 | 136,013 | 94,661 | ||||||||||||
Equipment Expense | 19,396 | 28,421 | 73,185 | 75,335 | ||||||||||||
General and Administrative | 17,689 | 27,055 | 99,087 | 88,783 | ||||||||||||
Acquisition-Related Charges | 107 | (2,121 | ) | 772 | 13,760 | |||||||||||
Depreciation and Amortization | 27,242 | 24,152 | 104,100 | 76,736 | ||||||||||||
Impairment of Intangible Assets | 2,425 | - | 2,425 | - | ||||||||||||
Gain on Dispostion of Long-Lived Assets | - | - | (2,397 | ) | - | |||||||||||
Total Operating Expenses | 172,004 | 185,404 | 703,945 | 580,861 | ||||||||||||
Operating Income | 10,939 | 9,261 | 55,251 | 38,284 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Interest Income (Expense), net | (4,880 | ) | (2,878 | ) | (16,943 | ) | (9,405 | ) | ||||||||
Other Income | 273 | 109 | 1,129 | 543 | ||||||||||||
Equity in Earnings of Unconsolidated Affiliates | 1,545 | 287 | 3,029 | 743 | ||||||||||||
Bargain Purchase Gain, net of taxes of |
- | - | - | 27,024 | ||||||||||||
Other Income (Expense), net | (3,062 | ) | (2,482 | ) | (12,785 | ) | 18,905 | |||||||||
Income Before Income Taxes | 7,877 | 6,779 | 42,466 | 57,189 | ||||||||||||
Income Taxes | 4,494 | 4,160 | 20,569 | 19,607 | ||||||||||||
Net Income | 3,383 | 2,619 | 21,897 | 37,582 | ||||||||||||
Net Loss (Income) Attributable to Non-Controlling Interests, net of tax | 763 | 660 | (103 | ) | 872 | |||||||||||
Net Income Attributable to |
$ | 4,146 | $ | 3,279 | $ | 21,794 | $ | 38,454 | ||||||||
Net Income Per Weighted Average Share Attributable to |
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Basic | $ | 0.27 | $ | 0.21 | $ | 1.42 | $ | 2.51 | ||||||||
Diluted | $ | 0.27 | $ | 0.21 | $ | 1.41 | $ | 2.48 | ||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Basic | 15,427 | 15,382 | 15,396 | 15,323 | ||||||||||||
Diluted | 15,530 | 15,505 | 15,495 | 15,484 | ||||||||||||
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation |
Table 3 |
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Unaudited Condensed Consolidated Cash Flow Statement | |||||||
(in Thousands) | |||||||
Year Ended December 31, | |||||||
2011 | 2010 | ||||||
Net Income | $ | 21,897 | $ | 37,582 | |||
Gain on Bargain Purchase, Net of Tax | - | (27,024 | ) | ||||
Impairment of Intangible Assets | 2,425 | - | |||||
Depreciation and Amortization | 104,100 | 76,736 | |||||
Change in Working Capital | (37,960 | ) | (4,875 | ) | |||
Other | 42,141 | 20,383 | |||||
Net Cash Provided by Operating Activities | 132,603 | 102,802 | |||||
Capital Expenditures | (101,401 | ) | (135,688 | ) | |||
Acquisitions of Businesses, Net of Cash Acquired | - | (225,498 | ) | ||||
Cash Acquired in Business Combinations | 4,087 | (57 | ) | ||||
Other | 1,667 | 4,782 | |||||
Net Cash Used by Investing Activities | (95,647 | ) | (356,461 | ) | |||
Borrowings Under Credit Facility | 137,069 | 264,000 | |||||
Principal Repayments of Long Term Debt | (146,362 | ) | (49,568 | ) | |||
Payment of Debt Issuance Costs | (1,037 | ) | (4,322 | ) | |||
Dividends Paid on Common Stock | (13,703 | ) | (12,569 | ) | |||
Distributions to Non-Controlling Interests | (2,814 | ) | (1,870 | ) | |||
Other | 1,296 | 5,072 | |||||
Net Cash Used by Financing Activities | (25,551 | ) | 200,743 | ||||
Net Change in Cash and Cash Equivalents | 11,405 | (52,916 | ) | ||||
Cash and Cash Equivalents, Beginning of Period | 37,330 | 90,246 | |||||
Cash and Cash Equivalents, End of Period | $ | 48,735 | $ | 37,330 |
Table 4 |
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Operating Data for U.S. Retail Wireless Operations | ||||||||||
Three Months Ended: |
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766,556 | 717,745 | 674,080 | 638,839 | 592,620 | ||||||
Beginning Subscribers | ||||||||||
Prepay | 216,854 | 194,795 | 169,673 | 145,854 | 123,157 | |||||
Postpay | 549,702 | 522,950 | 504,407 | 492,985 | 469,463 | |||||
Gross Additions | 51,882 | 46,680 | 38,859 | 30,018 | 46,757 | |||||
Prepay | 27,136 | 19,922 | 13,951 | 9,784 | 22,639 | |||||
Postpay | 24,746 | 26,758 | 24,908 | 20,234 | 24,118 | |||||
Net Additions | (48,811) | (43,665) | (35,241) | (46,219) | (10,246) | |||||
Prepay | (22,059) | (25,122) | (23,819) | (22,697) | 1,189 | |||||
Postpay | (26,752) | (18,543) | (11,422) | (23,522) | (11,435) | |||||
Ending Subscribers | 717,745 | 674,080 | 638,839 | 592,620 | 582,374 | |||||
Prepay | 194,795 | 169,673 | 145,854 | 123,157 | 124,346 | |||||
Postpay | 522,950 | 504,407 | 492,985 | 469,463 | 458,028 | |||||
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U.S. Retail Wireless Operations Key Performance Indicators | ||||||||||
Three Months Ended: |
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Average Subscribers (weighted monthly) | 741,228 | 695,399 | 655,292 | 618,862 | 584,652 | |||||
Monthly Average Revenues per Subscriber/Unit (ARPU) | ||||||||||
? Subscriber ARPU |
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? Postpaid Subscriber ARPU |
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Monthly Postpay Subscriber Churn | 3.18% | 2.93% | 2.42% | 2.97% | 2.55% | |||||
Monthly Blended Subscriber Churn | 4.48% | 4.29% | 3.73% | 4.05% | 3.25% |
Table 5 |
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Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended |
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Three Months Ended |
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U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total | |||||||||||||||||
Net Income Attributable to |
$ | 3,279 | ||||||||||||||||||||
Net Income Attributable to Non-Controlling Interests, net of tax | (660 | ) | ||||||||||||||||||||
Income Taxes | 4,160 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (287 | ) | ||||||||||||||||||||
Other Income | (109 | ) | ||||||||||||||||||||
Interest Expense, net | 2,878 | |||||||||||||||||||||
Operating Income (Loss) | $ | 9,280 | $ | 5,600 | $ | (178 | ) | $ | (2,700 | ) | $ | (2,741 | ) | $ | 9,261 | |||||||
Depreciation and Amortization | 17,052 | 4,378 | 764 | 1,808 | 150 | 24,152 | ||||||||||||||||
Acquisition-Related Charges | - | - | - | - | (2,121 | ) | (2,121 | ) | ||||||||||||||
Adjusted EBITDA | $ | 26,332 | $ | 9,978 | $ | 586 | $ | (892 | ) | $ | (4,712 | ) | $ | 31,292 | ||||||||
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Three Months Ended |
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U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total | |||||||||||||||||
Net Income Attributable to |
$ | 4,146 | ||||||||||||||||||||
Net Loss Attributable to Non-Controlling Interests, net of tax | (763 | ) | ||||||||||||||||||||
Income Taxes | 4,494 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (1,545 | ) | ||||||||||||||||||||
Other Income | (273 | ) | ||||||||||||||||||||
Interest Expense, net | 4,880 | |||||||||||||||||||||
Operating Income (Loss) | $ | 12,888 | $ | 7,078 | $ | 355 | $ | (4,865 | ) | $ | (4,517 | ) | $ | 10,939 | ||||||||
Depreciation and Amortization | 18,918 | 4,448 | 808 | 2,829 | 239 | 27,242 | ||||||||||||||||
Impairment of Intangible Assets | - | - | 2,425 | - | 2,425 | |||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 108 | 108 | ||||||||||||||||
Adjusted EBITDA | $ | 31,806 | $ | 11,526 | $ | 1,163 | $ | 389 | $ | (4,170 | ) | $ | 40,714 | |||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Years Ended |
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Year Ended |
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U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total | |||||||||||||||||
Net Income Attributable to |
$ | 38,454 | ||||||||||||||||||||
Net Income Attributable to Non-Controlling Interests, net of tax | (872 | ) | ||||||||||||||||||||
Income Taxes | 19,607 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (743 | ) | ||||||||||||||||||||
Other Income | (543 | ) | ||||||||||||||||||||
Bargain Purchase Gain, net of taxes of |
(27,024 | ) | ||||||||||||||||||||
Interest Expense, net | 9,405 | |||||||||||||||||||||
Operating Income (Loss) | $ | 48,261 | $ | 27,371 | $ | (288 | ) | $ | (6,410 | ) | $ | (30,650 | ) | $ | 38,284 | |||||||
Depreciation and Amortization | 50,662 | 17,480 | 2,936 | 5,271 | 387 | 76,736 | ||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 13,760 | 13,760 | ||||||||||||||||
Adjusted EBITDA | $ | 98,923 | $ | 44,851 | $ | 2,648 | $ | (1,139 | ) | $ | (16,503 | ) | $ | 128,780 | ||||||||
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Year Ended |
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U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
Total | |||||||||||||||||
Net Income Attributable to |
$ | 21,794 | ||||||||||||||||||||
Net Loss Attributable to Non-Controlling Interests, net of tax | 103 | |||||||||||||||||||||
Income Taxes | 20,569 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates | (3,029 | ) | ||||||||||||||||||||
Other Income | (1,129 | ) | ||||||||||||||||||||
Interest Expense, net | 16,943 | |||||||||||||||||||||
Operating Income (Loss) | $ | 56,664 | $ | 26,734 | $ | 255 | $ | (10,153 | ) | $ | (18,249 | ) | $ | 55,251 | ||||||||
Depreciation and Amortization | 72,106 | 18,058 | 3,182 | 9,855 | 899 | 104,100 | ||||||||||||||||
Impairment of Intangible Assets | - | - | 2,425 | - | 2,425 | |||||||||||||||||
Gain on Dispostion of Long-Lived Assets | (2,397 | ) | (2,397 | ) | ||||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 772 | 772 | ||||||||||||||||
Adjusted EBITDA | $ | 126,373 | $ | 44,792 | $ | 3,437 | $ | 2,127 | $ | (16,578 | ) | $ | 160,151 |
Chief Executive Officer
or
Chief Financial Officer
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