Atlantic Tele-Network, Inc. Reports Second Quarter 2012 Results
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Total revenues were
$185.3 million -
Adjusted EBITDA was
$49.7 million , up 55% from 2011 -
Operating income more than tripled year-over-year to
$23.1 million -
Net income attributable to ATN's stockholders was
$10.5 million , or$0.67 per diluted share -
Cash provided by operating activities was
$79.6 million for the first six months of 2012
Second Quarter/First Half 2012 Financial Results
"Profitability significantly increased in the second quarter primarily
as a result of the anticipated expense reductions and the operating
efficiencies we achieved in our U.S. retail wireless business.
Additionally, our results for the period benefitted from higher
international wireless revenues, which partially offset lower U.S.
retail wireless revenues that resulted from the net subscriber attrition
we experienced during the transition period last year," said Michael T.
Prior, Chief Executive Officer. "In fact, this marks the first quarter
since the Alltel acquisition was completed in
"Our international wireless business continued to perform well in the
second quarter with operating results benefitting from higher revenues
and further expense synergies following our
Total revenues for the second quarter were
Adjusted EBITDA1 for the 2012 second quarter was
"First half 2012 results illustrate the solid earnings capability of our diversified portfolio of telecom service assets. We continue to deleverage while also maintaining a high level of investment in our networks. This strategy has provided us with an even stronger balance sheet and offers us the flexibility to rapidly increase internal and external investments as the circumstances and opportunities arise," Mr. Prior said.
Total revenues for the first six months of 2012 were
Second Quarter 2012 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 were
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. Wireless |
International |
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U.S. Wireline | Reconciling Items 1 | Total | |||||||||||||||||||||||
Total Revenue | $ | 142,482 | $ | 23,219 | $ | 14,831 | $ | 4,761 | $ | - | $ | 185,293 | ||||||||||||||||
Adjusted EBITDA | 42,302 | 8,631 | 3,070 | 27 | (4,374 | ) | 49,656 | |||||||||||||||||||||
Operating Income (Loss) | 23,978 | 4,141 | 287 | (666 | ) | (4,666 | ) | 23,074 |
(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, wholesale revenues, 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, | |||||
2012 | 2011 | |||||
Assets: | ||||||
Cash and cash equivalents | $ | 79,837 | $ | 48,735 | ||
Other current assets | 130,922 | 135,165 | ||||
Total current assets | 210,759 | 183,900 | ||||
Property, plant and equipment, net | 456,239 | 483,203 | ||||
Goodwill and other intangible assets, net | 182,114 | 186,871 | ||||
Other assets | 27,700 | 19,757 | ||||
Total assets | $ | 876,812 | $ | 873,731 | ||
Liabilities and Stockholders' Equity: | ||||||
Current portion of long-term debt | $ | 15,680 | $ | 25,068 | ||
Other current liabilities | 118,611 | 120,710 | ||||
Total current liabilities | 134,291 | 145,778 | ||||
Long-term debt, net of current portion | 258,235 | 257,146 | ||||
Other liabilities | 115,556 | 118,277 | ||||
Total liabilities | 508,082 | 521,201 | ||||
Total |
309,817 | 294,266 | ||||
Non-controlling interests | 58,913 | 58,264 | ||||
Total equity | 368,730 | 352,530 | ||||
Total liabilities and stockholders' equity | $ | 876,812 | $ | 873,731 |
Table 2 |
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Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
(in Thousands, Except per Share Data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
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2012 | 2011 (a) | 2012 | 2011 (a) | |||||||||||||
Revenues: | ||||||||||||||||
U.S. wireless: | ||||||||||||||||
Retail | $ | 84,062 | $ | 95,410 | $ | 170,812 | $ | 195,079 | ||||||||
Wholesale | 51,569 | 51,870 | 98,952 | 96,567 | ||||||||||||
International wireless | 20,315 | 18,434 | 39,270 | 32,497 | ||||||||||||
Wireline | 20,889 | 20,886 | 42,437 | 41,557 | ||||||||||||
Equipment and other | 8,458 | 7,153 | 16,712 | 16,208 | ||||||||||||
Total revenue | 185,293 | 193,753 | 368,183 | 381,908 | ||||||||||||
Operating expenses: | ||||||||||||||||
Termination and access fees | 38,951 | 54,539 | 79,434 | 106,313 | ||||||||||||
Engineering and operations | 21,945 | 21,897 | 43,281 | 43,802 | ||||||||||||
Sales, marketing and customer service | 31,203 | 36,079 | 63,377 | 67,908 | ||||||||||||
Equipment expense | 21,989 | 18,486 | 42,340 | 40,069 | ||||||||||||
General and administrative | 21,549 | 30,775 | 44,907 | 56,390 | ||||||||||||
Acquisition-related charges | - | 316 | 5 | 567 | ||||||||||||
Depreciation and amortization | 26,582 | 25,384 | 53,606 | 50,192 | ||||||||||||
Total operating expenses | 162,219 | 187,476 | 326,950 | 365,241 | ||||||||||||
Operating income | 23,074 | 6,277 | 41,233 | 16,667 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income (expense), net | (3,927 | ) | (4,150 | ) | (7,806 | ) | (7,842 | ) | ||||||||
Other income (expense) | (331 | ) | 4 | (295 | ) | 599 | ||||||||||
Equity in earnings of unconsolidated affiliates | 930 | 239 | 2,331 | 755 | ||||||||||||
Other income (expense), net | (3,328 | ) | (3,907 | ) | (5,770 | ) | (6,488 | ) | ||||||||
Income before income taxes | 19,746 | 2,370 | 35,463 | 10,179 | ||||||||||||
Income taxes | 7,979 | 1,052 | 14,759 | 4,882 | ||||||||||||
Net income | 11,767 | 1,318 | 20,704 | 5,297 | ||||||||||||
Net loss (income) attributable to non-controlling interests, net of tax | (1,237 | ) | 497 | (853 | ) | 1,015 | ||||||||||
Net income attributable to |
$ | 10,530 | $ | 1,815 | $ | 19,851 | $ | 6,312 | ||||||||
Net income per weighted average share attributable to |
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Basic | $ | 0.68 | $ | 0.12 | $ | 1.28 | $ | 0.41 | ||||||||
Diluted | $ | 0.67 | $ | 0.12 | $ | 1.27 | $ | 0.41 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 15,535 | 15,394 | 15,495 | 15,389 | ||||||||||||
Diluted | 15,609 | 15,497 | 15,581 | 15,478 | ||||||||||||
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) | ||||||||
Six Months Ended |
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2012 | 2011 | |||||||
Net income | $ | 20,704 | $ | 5,297 | ||||
Depreciation and amortization | 53,606 | 50,192 | ||||||
Change in working capital | (2,459 | ) | (18,410 | ) | ||||
Other | 7,757 | 5,950 | ||||||
Net cash provided by operating activities | 79,608 | 43,029 | ||||||
Capital expenditures | (32,272 | ) | (45,428 | ) | ||||
Other | - | 4,554 | ||||||
Net cash used by investing activities | (32,272 | ) | (40,874 | ) | ||||
Borrowings under credit facility | 321,378 | 23,096 | ||||||
Principal repayments of long-term debt | (327,487 | ) | (6,516 | ) | ||||
Dividends paid on common stock | (7,119 | ) | (6,771 | ) | ||||
Distributions to non-controlling interests | (929 | ) | (1,608 | ) | ||||
Other | (2,077 | ) | (909 | ) | ||||
Net cash used by financing activities | (16,234 | ) | 7,292 | |||||
Net change in cash and cash equivalents | 31,102 | 9,447 | ||||||
Cash and cash equivalents, beginning of period | 48,735 | 37,330 | ||||||
Cash and cash equivalents, end of period | $ | 79,837 | $ | 46,777 |
Table 4 |
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Operating Data for U.S. Retail Wireless Operations | ||||||||||||
Three Months Ended: |
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Beginning Subscribers |
674,080 |
638,839 |
592,620 |
579,716 |
578,585 |
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Prepay | 169,673 | 145,854 | 123,157 | 121,688 | 130,981 | |||||||
Postpay | 504,407 | 492,985 | 469,463 | 458,028 | 447,604 | |||||||
Gross Additions | 38,859 | 30,018 | 46,757 | 54,837 | 55,448 | |||||||
Prepay | 13,951 | 9,784 | 22,639 | 32,372 | 31,868 | |||||||
Postpay | 24,908 | 20,234 | 24,118 | 22,465 | 23,580 | |||||||
Net Additions | (35,241) | (46,219) | (12,904) | (1,131) | 4,962 | |||||||
Prepay | (23,819) | (22,697) | (1,469) | 9,293 | 10,471 | |||||||
Postpay | (11,422) | (23,522) | (11,435) | (10,424) | (5,509) | |||||||
Ending Subscribers | 638,839 | 592,620 | 579,716 | 578,585 | 583,547 | |||||||
Prepay | 145,854 | 123,157 | 121,688 | 130,981 | 141,452 | |||||||
Postpay | 492,985 | 469,463 | 458,028 | 447,604 | 442,095 | |||||||
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U.S. Retail Wireless Operations Key Performance Indicators | ||||||||||
Three Months Ended: |
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Average Subscribers (weighted monthly) | 655,292 | 618,862 | 583,470 | 578,531 | 580,441 | |||||
Monthly Average Revenues per Subscriber/Unit (ARPU) | ||||||||||
● Subscriber ARPU |
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● Postpaid Subscriber ARPU |
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Monthly Postpay Subscriber Churn | 2.42% | 2.97% | 2.55% | 2.41% | 2.18% | |||||
Monthly Blended Subscriber Churn | 3.73% | 4.05% | 3.40% | 3.22% | 2.90% | |||||
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 |
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U.S. Wireline |
Reconciling Items |
Total |
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Net income attributable to |
$ | 1,815 | ||||||||||||||||||||
Net income 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 | $ | (2,440 | ) | $ | 51 | $ | (4,481 | ) | $ | 6,277 | ||||||||
Depreciation and amortization | 17,363 | 4,557 | 2,453 | 791 | 220 | 25,384 | ||||||||||||||||
Acquisition-related charges | - | - | 218 | - | 98 | 316 | ||||||||||||||||
Adjusted EBITDA | $ | 23,870 | $ | 11,197 | $ | 231 | $ | 842 | $ | (4,163 | ) | $ | 31,977 | |||||||||
Three Months Ended |
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U.S Wireless |
International |
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U.S. Wireline |
Reconciling Items |
Total |
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Net income attributable to |
$ | 10,530 | ||||||||||||||||||||
Net loss attributable to non-controlling interests, net of tax | 1,237 | |||||||||||||||||||||
Income taxes | 7,979 | |||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (930 | ) | ||||||||||||||||||||
Other income | 331 | |||||||||||||||||||||
Interest expense, net | 3,927 | |||||||||||||||||||||
Operating income (loss) | $ | 23,978 | $ | 4,141 | $ | 287 | $ | (666 | ) | $ | (4,666 | ) | $ | 23,074 | ||||||||
Depreciation and amortization | 18,324 | 4,490 | 2,783 | 693 | 292 | 26,582 | ||||||||||||||||
Adjusted EBITDA | $ | 42,302 | $ | 8,631 | $ | 3,070 | $ | 27 | $ | (4,374 | ) | $ | 49,656 | |||||||||
Reconciliation of Net Income to Adjusted EBITDA for the Six
Months Ended |
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Six Months Ended |
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U.S Wireless |
International |
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U.S. Wireline |
Reconciling Items |
Total |
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Net income attributable to |
$ | 6,312 | ||||||||||||||||||||
Net income attributable to non-controlling interests, net of tax | (1,015 | ) | ||||||||||||||||||||
Income taxes | 4,882 | |||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (755 | ) | ||||||||||||||||||||
Other income | (599 | ) | ||||||||||||||||||||
Interest expense, net | 7,842 | |||||||||||||||||||||
Operating income (loss) | $ | 16,934 | $ | 12,884 | $ | (4,103 | ) | $ | 11 | $ | (9,059 | ) | $ | 16,667 | ||||||||
Depreciation and amortization | 34,771 | 9,104 | 4,323 | 1,577 | 417 | 50,192 | ||||||||||||||||
Acquisition-related charges | - | - | 218 | - | 349 | 567 | ||||||||||||||||
Adjusted EBITDA | $ | 51,705 | $ | 21,988 | $ | 438 | $ | 1,588 | $ | (8,293 | ) | $ | 67,426 | |||||||||
Six Months Ended |
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U.S Wireless |
International |
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U.S. Wireline |
Reconciling Items |
Total |
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Net income attributable to |
$ | 19,851 | ||||||||||||||||||||
Net loss attributable to non-controlling interests, net of tax | 853 | |||||||||||||||||||||
Income taxes | 14,759 | |||||||||||||||||||||
Equity in earnings of unconsolidated affiliates | (2,331 | ) | ||||||||||||||||||||
Other income | 295 | |||||||||||||||||||||
Interest expense, net | 7,806 | |||||||||||||||||||||
Operating income (loss) | $ | 42,900 | $ | 10,377 | $ | (1,324 | ) | $ | (1,089 | ) | $ | (9,631 | ) | $ | 41,233 | |||||||
Depreciation and amortization | 37,026 | 9,017 | 5,569 | 1,438 | 556 | 53,606 | ||||||||||||||||
Acquisition-related charges | - | - | - | - | 5 | 5 | ||||||||||||||||
Adjusted EBITDA | $ | 79,926 | $ | 19,394 | $ | 4,245 | $ | 349 | $ | (9,070 | ) | $ | 94,844 | |||||||||
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