Atlantic Tele-Network, Inc. Reports Second Quarter 2011 Results
--Announces Completion of Alltel Transition--
Second Quarter 2011 Financial Highlights:
-
Total revenues were
$193.8 million -
Wireless service revenues were
$166.0 million , or 86% of total revenues -
Adjusted EBITDA was
$32.0 million -
Operating income was
$6.3 million
"This was a period of significant accomplishment for ATN, as we
completed the transition of our Alltel customers to our own operating
platform, billing system and customer care centers in late July," said
"While the residual impact of TSA payments and overlapping transition expenses incurred in July will affect our third quarter of 2011 costs, with the transition now complete we expect U.S. Wireless segment margins to progressively improve in the second half of this year."
Second Quarter 2011 Financial Results
Total revenues for the second quarter were
Adjusted EBITDA1 for the 2011 second quarter was
Total operating income was
"Our ability to build a sustainable domestic retail customer base has
been significantly enhanced by the migration of our customers to our new
customer care and information technology platform,"
"The merger of our
Second 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
Information about our operating segments for the three months ended June 30, 2011 is as follows: | ||||||||||||||||||||
U.S. Wireless |
International |
Island Wireless |
U.S. Wireline |
Reconciling |
Total |
|||||||||||||||
Total Revenue | $ | 153,248 | $ | 22,751 | $ | 12,681 | $ | 5,073 | $ | - | $ | 193,753 | ||||||||
Adjusted EBITDA | 23,870 | 11,197 | 216 | 842 | (4,162 | ) | 31,963 | |||||||||||||
Operating Income (Loss) | 6,507 | 6,640 | (2,440 | ) | 51 | (4,481 | ) | 6,277 |
(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 |
||||||
ATLANTIC TELE-NETWORK, INC. | ||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||
(in Thousands) | ||||||
June 30, | December 31, | |||||
2011 |
2010 |
|||||
Assets: | ||||||
Cash and Cash Equivalents | $ | 46,777 | $ | 37,330 | ||
Other Current Assets | 123,832 | 116,959 | ||||
Total Current Assets | 170,609 | 154,289 | ||||
Fixed Assets, net | 474,959 | 463,891 | ||||
Goodwill and Other Intangible Assets, net | 194,281 | 187,762 | ||||
Other Assets | 23,994 | 22,254 | ||||
Total Assets | $ | 863,843 | $ | 828,196 | ||
Liabilities and Stockholders' Equity: | ||||||
Current Portion of Long Term Debt | $ | 17,791 | $ | 12,194 | ||
Other Current Liabilities | 122,871 | 126,108 | ||||
Total Current Liabilities | 140,662 | 138,302 | ||||
Long Term Debt, Net of Current Portion | 289,691 | 272,049 | ||||
Other Liabilities | 87,353 | 88,809 | ||||
Total Liabilities | 517,706 | 499,160 | ||||
Total Atlantic Tele-Network, Inc.'s Stockholders' Equity | 288,061 | 283,768 | ||||
Non-Controlling Interests | 58,076 | 45,268 | ||||
Total Equity | 346,137 | 329,036 | ||||
Total Liabilities and Stockholders' Equity | $ | 863,843 | $ | 828,196 |
Table 2 |
||||||||||||||||
ATLANTIC TELE-NETWORK, INC. | ||||||||||||||||
Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
(in Thousands, Except per Share Data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 |
2010 (a) |
2011 (a) |
2010 (a) |
|||||||||||||
Revenues: | ||||||||||||||||
U.S. Wireless Services: | ||||||||||||||||
Retail | $ | 95,410 | $ | 81,503 | $ | 195,079 | $ | 81,503 | ||||||||
Wholesale | 51,870 | 39,550 | 96,567 | 62,486 | ||||||||||||
International Wireless | 18,714 | 12,575 | 33,657 | 23,492 | ||||||||||||
Wireline | 20,886 | 23,230 | 41,557 | 43,751 | ||||||||||||
Equipment and Other | 6,873 | 7,831 | 15,048 | 8,288 | ||||||||||||
Total Revenue | 193,753 | 164,689 | 381,908 | 219,520 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Termination and Access Fees | 54,757 | 44,590 | 106,662 | 55,812 | ||||||||||||
Engineering and Operations | 21,897 | 17,893 | 43,802 | 24,337 | ||||||||||||
Sales, Marketing and Customer Service | 36,400 | 23,804 | 68,508 | 27,198 | ||||||||||||
Equipment Expense | 17,964 | 17,585 | 39,156 | 18,298 | ||||||||||||
General and Administrative | 30,773 | 23,460 | 56,386 | 34,234 | ||||||||||||
Acquisition-Related Charges | 316 | 11,041 | 567 | 15,834 | ||||||||||||
Depreciation and Amortization | 25,369 | 18,542 | 50,160 | 28,611 | ||||||||||||
Total Operating Expenses | 187,476 | 156,915 | 365,241 | 204,324 | ||||||||||||
Operating Income | 6,277 | 7,774 | 16,667 | 15,196 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Interest Income (Expense), net | (4,150 | ) | (2,303 | ) | (7,842 | ) | (3,416 | ) | ||||||||
Other Income | 4 | 226 | 599 | 230 | ||||||||||||
Equity in Earnings of Unconsolidated Affiliates | 239 | 290 | 755 | 290 | ||||||||||||
Bargain Purchase Gain, net of taxes of $18,016 | - | 27,024 | - | 27,024 | ||||||||||||
Other Income (Expense), net | (3,907 | ) | 25,237 | (6,488 | ) | 24,128 | ||||||||||
Income Before Income Taxes | 2,370 | 33,011 | 10,179 | 39,324 | ||||||||||||
Income Taxes | 1,052 | 7,969 | 4,882 | 10,425 | ||||||||||||
Net Income | 1,318 | 25,042 | 5,297 | 28,899 | ||||||||||||
Net Loss (Income) Attributable to Non-Controlling Interests, net of tax | 497 | (238 | ) | 1,015 | (90 | ) | ||||||||||
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders | $ | 1,815 | $ | 24,804 | $ | 6,312 | $ | 28,809 | ||||||||
Net Income Per Weighted Average Share Attributable to Atlantic Tele-Network, Inc. Stockholders: | ||||||||||||||||
Basic | $ | 0.12 | $ | 1.62 | $ | 0.41 | $ | 1.89 | ||||||||
Diluted | $ | 0.12 | $ | 1.60 | $ | 0.41 | $ | 1.86 | ||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Basic | 15,394 | 15,300 | 15,389 | 15,280 | ||||||||||||
Diluted | 15,497 | 15,478 | 15,491 | 15,463 | ||||||||||||
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation |
Table 3 |
||||||||
ATLANTIC TELE-NETWORK, INC. | ||||||||
Unaudited Condensed Consolidated Cash Flow Statement | ||||||||
(in Thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2011 |
2010 |
|||||||
Net Income | $ | 5,297 | $ | 28,899 | ||||
Gain on Bargain Purchase, Net of Tax | - | (27,024 | ) | |||||
Depreciation and Amortization | 50,160 | 28,611 | ||||||
Change in Working Capital | (18,412 | ) | 19,549 | |||||
Other | 5,984 | 10,703 | ||||||
Net Cash Provided by Operating Activities | 43,029 | 60,738 | ||||||
Capital Expenditures | (45,428 | ) | (51,995 | ) | ||||
Acquisitions of Businesses, Net of Cash Acquired | - | (221,306 | ) | |||||
Cash Acquired in Business Combinations | 4,087 | - | ||||||
Other | 467 | 2,805 | ||||||
Net Cash Used by Investing Activities | (40,874 | ) | (270,496 | ) | ||||
Borrowings Under Credit Facility | 23,095 | 190,000 | ||||||
Principal Repayments of Long Term Debt | (6,516 | ) | (3,721 | ) | ||||
Payment of Debt Issuance Costs | (931 | ) | (3,053 | ) | ||||
Dividends Paid on Common Stock | (6,771 | ) | (6,111 | ) | ||||
Distributions to Non-Controlling Interests | (1,607 | ) | (861 | ) | ||||
Other | 22 | 902 | ||||||
Net Cash Used by Financing Activities | 7,292 | 177,156 | ||||||
Net Change in Cash and Cash Equivalents | 9,447 | (32,602 | ) | |||||
Cash and Cash Equivalents, Beginning of Period | 37,330 | 90,247 | ||||||
Cash and Cash Equivalents, End of Period | $ | 46,777 | $ | 57,645 |
Table 4 |
|||||||||||
ATLANTIC TELE-NETWORK, INC. | |||||||||||
Operating Data for U.S. Retail Wireless Operations | |||||||||||
Three Months Ended: | JUN 2010 | SEP 2010 | DEC 2010 | MAR 2011 | JUN 2011 | ||||||
827,370 | 807,327 | 766,556 | 717,745 | 674,080 | |||||||
Beginning Subscribers | |||||||||||
Prepay | 242,385 | 230,334 | 216,854 | 194,795 | 169,673 | ||||||
Postpay | 584,985 | 576,993 | 549,702 | 522,950 | 504,407 | ||||||
Gross Additions | 44,208 | 64,118 | 51,882 | 46,680 | 38,859 | ||||||
Prepay | 25,892 | 37,527 | 27,136 | 19,922 | 13,951 | ||||||
Postpay | 18,316 | 26,591 | 24,746 | 26,758 | 24,908 | ||||||
Net Additions | (20,043) | (40,771) | (48,811) | (43,665) | (35,241) | ||||||
Prepay | (12,051) | (13,480) | (22,059) | (25,122) | (23,819) | ||||||
Postpay | (7,992) | (27,291) | (26,752) | (18,543) | (11,422) | ||||||
Ending Subscribers | 807,327 | 766,556 | 717,745 | 674,080 | 638,839 | ||||||
Prepay | 230,334 | 216,854 | 194,795 | 169,673 | 145,854 | ||||||
Postpay | 576,993 | 549,702 | 522,950 | 504,407 | 492,985 | ||||||
|
Note: Beginning subscribers for quarter ended
ATLANTIC TELE-NETWORK, INC. | ||||||||||
U.S. Retail Wireless Operations Key Performance Indicators | ||||||||||
Three Months Ended: | JUN 2010 | SEP 2010 | DEC 2010 | MAR 2011 | JUN 2011 | |||||
Average Subscribers (weighted monthly) | 821,637 | 786,295 | 741,228 | 695,399 | 655,292 | |||||
Monthly Average Revenues per Subscriber/Unit (ARPU) | ||||||||||
● Subscriber ARPU | $45.13 | $45.67 | $45.88 | $47.23 | $47.90 | |||||
● Postpaid Subscriber ARPU | $53.85 | $53.81 | $53.71 | $53.78 | $54.47 | |||||
Monthly Postpay Subscriber Churn | 2.24% | 3.16% | 3.18% | 2.93% | 2.42% | |||||
Monthly Blended Subscriber Churn | 3.85% | 4.41% | 4.48% | 4.29% | 3.73% |
Table 5 |
||||||||||||||||||||||
ATLANTIC TELE-NETWORK, INC. | ||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended June 30, 2010 and 2011 | ||||||||||||||||||||||
Three Months Ended June 30, 2010 | ||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island |
Reconciling |
|
Total |
||||||||||||||||
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders |
$ | 24,804 | ||||||||||||||||||||
Net Income Attributable to Non-Controlling Interests, net of tax |
|
238 | ||||||||||||||||||||
Income Taxes | 7,969 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates |
(290 | ) | ||||||||||||||||||||
Other Income | (226 | ) | ||||||||||||||||||||
Bargain Purchase Gain, |
(27,024 | ) | ||||||||||||||||||||
Interest Expense, net | 2,303 | |||||||||||||||||||||
Operating Income (Loss) | $ | 16,834 | $ | 7,899 | $ | 3 | $ | (586 | ) | $ | (16,376 | ) | $ | 7,774 | ||||||||
Depreciation and Amortization | 12,527 | 4,245 | 727 | 965 | 78 | 18,542 | ||||||||||||||||
Acquisition-Related Charges | - | - | - | - | 11,041 | 11,041 | ||||||||||||||||
Adjusted EBITDA | $ | 29,361 | $ | 12,144 | $ | 730 | $ | 379 | $ | (5,257 | ) | $ | 37,357 | |||||||||
Three Months Ended June 30, 2011 | ||||||||||||||||||||||
U.S Wireless |
International |
U.S. Wireline |
Island Wireless |
Reconciling |
Total |
|||||||||||||||||
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders |
$ | 1,815 | ||||||||||||||||||||
Net Loss Attributable to Non-Controlling Interests, net of tax |
(497 | ) | ||||||||||||||||||||
Income Taxes | 1,052 | |||||||||||||||||||||
Equity in Earnings of Unconsolidated Affiliates |
|
(239 | ) | |||||||||||||||||||
Other Income | (4 | ) | ||||||||||||||||||||
Interest Expense, net | 4,150 | |||||||||||||||||||||
Operating Income (Loss) | $ | 6,507 | $ | 6,640 | $ | 51 | $ | (2,440 | ) | $ | (4,481 | ) | $ | 6,277 | ||||||||
Depreciation and Amortization | 17,363 | 4,557 | 791 | 2,438 | 220 | 25,369 | ||||||||||||||||
Acquisition-Related Charges | - | - | - | 218 | 99 | 317 | ||||||||||||||||
Adjusted EBITDA | $ | 23,870 | $ | 11,197 | $ | 842 | $ | 216 | $ | (4,162 | ) | $ | 31,963 |
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