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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  July 26, 2023

 

 

ATN INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-12593   47-0728886
(State or other   (Commission File Number)   (IRS Employer
jurisdiction of incorporation)       Identification No.)

 

500 Cummings Center

Beverly, MA 01915

(Address of principal executive offices and zip code)

 

(978) 619-1300

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Title of Each Class   Trading Symbol(s)   Name of each exchange on which
registered
Common Stock, par value $.01 per share   ATNI   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On July 26, 2023, ATN International, Inc. (the “Company”) issued a press release announcing financial results for the three and six months ended June 30, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

 

Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits
   
99.1 Press Release of the Company, dated July 26, 2023
   
104 Cover Page Data File (formatted as inline XBRL document)

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ATN INTERNATIONAL, INC.
     
  By: /s/ Justin D. Benincasa
    Justin D. Benincasa
    Chief Financial Officer
     
Dated July 26, 2023    

 

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Exhibit 99.1

 

 

ATN Reports Second-Quarter 2023 Results;
Reiterates Outlook

 

“First-to-Fiber” and “Glass & SteelTM” Strategies Drive Year Over Year Growth

 

·Grew revenue 4% to $186.4 million

 

·Increased total high-speed subscribers by 22%

 

·Expanded broadband homes passed by high-speed data services by 66%

 

·Capital expenditures were $38.9 million (net of $4.9 million of reimbursements)

 

Operating Income and Adjusted EBITDA Improvements Follow Subscriber and Revenue Growth

 

·Increased net income to $0.8 million, or a $(0.03) loss per share; operating income increased to $2.4 million

 

·Increased Adjusted EBITDA1 by 10% to $45.8 million

 

Reiterates 2023 Outlook3

 

·Adjusted EBITDA expected to be in the range of $183 million to $193 million

 

·Capital expenditures expected to be in the range of $160 million to $170 million

 

Earnings Conference Call

 

·Thursday, July 27, 2023, at 10:00 a.m. ET; web participant link: https://edge.media-server.com/mmc/p/hweveeqj

 

Beverly, MA (July 26, 2023) – ATN International, Inc. (“ATN” or the “Company”) (Nasdaq: ATNI), a leading provider of digital infrastructure and communications services, today reported financial results for the three and six months ended June 30, 2023.

 

 

1 See Table 5 for reconciliation of Operating Income to Adjusted EBITDA, a non-GAAP measure.

 

2 See Table 5 for reconciliation of Operating Income to EBITDA, a non-GAAP measure.

 

3 For the Company’s Adjusted EBITDA Guidance, the Company is not able to provide without unreasonable effort the most directly comparable GAAP financial measures, or reconciliations to such GAAP financial measures, on a forward-looking basis. Please see “Use of Non-GAAP Financial Measures” below for a full description of items excluded from the Company’s expected Adjusted EBITDA and Net Debt. 

 

1 

 

 

Remarks by Michael Prior, ATN CEO

 

“The growth in revenues and our customer base contributed to margin improvement and Adjusted EBITDA expansion, tracking to our three-year plan. Over the past year, we have increased the number of homes passed by fiber and other high-speed networks by 66%. This has led to 22% growth in our high-speed data subscribers as we have upgraded legacy broadband users and brought on new subscribers. This early success improves the durability of our revenue further validating our Glass & SteelTM and First-to-Fiber strategies. Also, we were pleased with the 14% growth in international mobile subscribers.

 

“As expected, we closed a major, long-term contract with a national mobile carrier during the quarter to provide network, infrastructure, and technical services. This long-term contract leverages our operating capabilities and a mobile network covering more than 50,000 square miles of the western United States.

 

“Our long-term track record of strong operational and financial performance provided the foundation to refinance our main credit facility on attractive terms despite the current market environment. The new facilities have five- and six-year maturities, adding to our financial strength and flexibility. As we enter the latter stages of our three-year fiber-driven expansion, our focus is shifting toward increasing free cash flow and reducing our leverage ratio, as we anticipate network spending to moderate while growing our subscriber base and recurring revenue on this expanded and upgraded network footprint.”

 

Second Quarter 2023 Financial Results

 

Consolidated revenues were $186.4 million, up 4% versus $179.5 million in the year-ago quarter. This increase primarily reflects higher mobility and fixed revenues, including those from a recent acquisition, partially offset by lower legacy roaming and construction revenues.

 

Operating income rose to $2.4 million, from $1.7 million in the year-ago quarter. The year-over-year increase was primarily due to higher revenues, partially offset by an increase in operating and depreciation expenses from a recent acquisition.

 

Net income attributable to ATN stockholders increased to $0.8 million, and a net loss of $(0.03) per share, compared with a net loss attributable to ATN stockholders of $(0.5) million, or $(0.11) loss per share, in the year-ago quarter. The improvement in net income was due primarily to an increase in operating income, an income tax benefit and income from non-controlling investments, partially offset by a $6.1 million increase in interest expense. In both periods, the loss per share calculation includes the impact of preferred dividends that are not included in the net income (loss) calculation.

 

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Adjusted EBITDA1 increased to $45.8 million, from $41.7 million in the year-ago quarter.

 

Segment Operating Results (in Thousands)

 

The Company recorded financial results in three categories: (i) International Telecom; (ii) US Telecom; and (iii) Corporate and Other.

 

For Three Months Ended June 30, 2023 and 2022 
    2023    2022    2023    2022    2023    2022    2023    2022 
    International    International    US    US    Corporate and     Corporate and     Total    Total 
    Telecom    Telecom    Telecom    Telecom    Other*    Other*    ATN    ATN 
Total Revenue:  $91,981   $88,406   $94,460   $91,091   $-   $-   $186,441   $179,497 
         Mobility   26,856    24,954    977    1,850    -    -    27,833    26,804 
         Fixed   59,673    58,349    58,103    51,032    -    -    117,776    109,381 
         Carrier Services   3,879    3,421    31,576    31,753    -    -    35,455    35,174 
         Construction   -    -    1,020    3,297    -    -    1,020    3,297 
         All other   1,573    1,682    2,784    3,159    -    -    4,357    4,841 
                                         
Operating Income (Loss)  $14,552   $11,645   $(2,394)  $(281)  $(9,720)  $(9,642)  $2,438   $1,722 
EBITDA2  $29,022   $27,113   $21,816   $20,338   $(9,039)  $(8,662)  $41,799   $38,789 
Adjusted EBITDA1  $29,128   $27,169   $22,776   $20,729   $(6,113)  $(6,157)  $45,791   $41,741 
Capital Expenditures**  $17,408   $18,699   $21,450   $18,063   $(5)  $222   $38,853   $36,984 

 

For Six Months Ended June 30, 2023 and 2022 
    2023    2022    2023    2022    2023    2022    2023    2022 
    International    International    US    US    Corporate and    Corporate and    Total    Total 
    Telecom    Telecom    Telecom    Telecom    Other*    Other*    ATN    ATN 
Total Revenue:  $182,389   $175,191   $189,825   $176,326   $-   $-   $372,214   $351,517 
         Mobility   52,963    48,540    2,136    3,680    -    -    55,099    52,220 
         Fixed   118,563    116,696    117,004    97,147    -    -    235,567    213,843 
         Carrier Services   7,570    6,823    63,660    64,742    -    -    71,230    71,565 
         Construction   -    -    1,610    5,283    -    -    1,610    5,283 
         All other   3,293    3,132    5,415    5,474    -    -    8,708    8,606 
                                         
Operating Income (Loss)  $28,377   $23,450   $(6,737)  $(4,914)  $(18,566)  $(16,703)  $3,074   $1,833 
EBITDA2  $57,413   $53,233   $41,826   $36,987   $(17,154)  $(14,770)  $82,085   $75,450 
Adjusted EBITDA1  $57,586   $54,380   $45,583   $40,398   $(12,581)  $(10,942)  $90,588   $83,836 
Capital Expenditures**  $38,906   $33,870   $50,584   $36,910   $(40)  $424   $89,450   $71,204 

 

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

**Excludes government capital programs amounts disbursed and amounts received.

 

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ATN’s Strategic Plan and Key Performance Indicators

 

Investments to drive long-term growth and durable cash flow To address the growing need for more bandwidth and reliable connectivity across all markets in which we operate, the Company continues to deploy capital in fiber and fiber-fed high-speed data solutions to increase the Company’s fiber footprint and grow broadband subscribers.

 

Operating Metrics

 

Operating Metrics 
    2023    2023    2022    2022    2022    Q2 2023 
    Q2    Q1    Q4    Q3    Q2     vs. Q2 2022 
Broadband Homes Passed   746,800    736,300    728,900    613,600    614,200    22%
Broadband Homes Passed by HSD*   331,000    301,600    275,100    219,300    199,800    66%
                               
Broadband Customers   217,100    216,900    210,300    205,200    204,500    6%
HSD* Broadband Customers   129,000    122,600    113,000    110,700    105,600    22%
                               
Fiber Route Miles   11,561    11,099    10,545    9,756    9,399    23%
                               
International Mobile Subscribers                              
   Pre-Paid   340,200    328,800    322,000    301,800    297,000    15%
   Post-Paid   58,900    56,900    55,700    54,200    51,900    13%
   Total   399,100    385,700    377,700    356,000    348,900    14%
                               
   Blended Churn   2.69%   2.81%   2.25%   3.02%   2.80%     

 

*HSD is defined as download speeds 100 Mbps or greater and HSD Broadband Customers as subscribers connected to our high-speed networks regardless of the speed of plan selected.

 

Note: Data presented may differ from prior periods to reflect more accurate data and/or changes in calculation methodology and process.

 

Balance Sheet and Cash Flow Highlights

 

Total cash, cash equivalents and restricted cash as of June 30, 2023, was $67.2 million and total debt was $482.1 million, versus $72.2 million of cash, cash equivalents and restricted cash and $356.1 million of total debt at the end of the year-ago quarter.

 

Net cash provided by operating activities was $60.3 million for the six months ended June 30, 2023, compared with net cash provided by operating activities of $50.7 million in the prior year period.

 

Capital expenditures were $89.5 million net of $7.0 million of reimbursable capital expenditures for the six months ended June 30, 2023, versus $71.2 million, net of $3.9 million of reimbursable capital expenditures a year ago.

 

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Quarterly Dividends and Stock Repurchases

 

Quarterly dividends ATN paid a quarterly dividend of $0.21 per share on July 7, 2023, on all common shares outstanding to stockholders of record as of June 30, 2023.

 

Stock repurchases of the Company’s common stock totaled $6.8 million in the first six months of 2023.

 

Guidance and Outlook

 

The Company is continuing investments in its “Glass & Steel™” and “First-to-Fiber” market strategies. At the start of 2022, the Company set business targets to be achieved exiting 2024 following a three-year period of above-normal network investments. In 2023, the Company believes it remains well-positioned to achieve the growth rate targets, capital expenditure levels projected, and projected leverage ratios.

 

Reiterates outlook for full year ending December 31, 2023:

 

Adjusted EBITDA1 $183 million to $193 million Full year 2023
Capital Expenditures $160 million to $170 million Full year 2023

 

Reiterates outlook for the three-year period ending December 31, 2024:

 

Revenue CAGR 4-6% 2021-2024
Adjusted EBITDA1 CAGR 8-10% 2021-2024
Capital Expenditures Return to 10-15% of Revenue After 2024
Net Debt Ratio Approx. 2.0x Exiting 2024

 

Note: Revenue and Adjusted EBITDA CAGRS assume full year 2021 Alaska results and exclude construction revenue.

 

For the Company’s three-year outlook for Adjusted EBITDA, CAGR, Net Debt and Net Debt Ratio, the Company is not able to provide without unreasonable effort the most directly comparable GAAP financial measures, or reconciliations to such GAAP financial measures, on a forward-looking basis. Please see “Use of Non-GAAP Financial Measures” below for a full description of items excluded from the Company’s expected Adjusted EBITDA and Net Debt.

 

Conference Call Information

 

Call Date: Thursday, July 27, 2023 

Call Time: 10:00 a.m. ET 

Webcast Link: https://edge.media-server.com/mmc/p/hweveeqj 

Live Call Participant Link: https://register.vevent.com/register/BI91d57dad09fe477f9509fd230131cc7b

 

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Webcast Link InstructionsA live audio webcast of the conference call is available by visiting the “Webcast Link” above or the “Events & Presentations” section of the Company’s Investor Relations website at https://ir.atni.com/events-and-presentations. A replay of the conference call will be available at the same location approximately one hour after the live call concludes. The Company also will provide an investor presentation as a supplement to the call on the “Events & Presentations” section of its Investor Relations website.

 

About ATN

 

ATN International, Inc. (Nasdaq: ATNI), headquartered in Beverly, Massachusetts, is a leading provider of digital infrastructure and communications services for all. The Company operates in the United States and internationally, including the Caribbean region, with a focus on rural and remote markets with a growing demand for infrastructure investments. The Company’s operating subsidiaries today primarily provide: (i) advanced wireless and wireline connectivity to residential, business, and government customers, including a range of high-speed Internet and data services, fixed and mobile wireless solutions, and video and voice services; and (ii) carrier and enterprise communications services, such as terrestrial and submarine fiber optic transport, and communications tower facilities. For more information, please visit www.atni.com.

 

Use of Non-GAAP Financial Measures and Definition of Terms

 

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release also contains non-GAAP financial measures. Specifically, the Company has included EBITDA, Adjusted EBITDA, Net Debt, and Net Debt Ratio in this release and the tables included herein.

 

EBITDA is defined as Operating income (loss) before depreciation and amortization expense.

 

Adjusted EBITDA is defined as Operating income (loss) before depreciation and amortization expense, transaction-related charges, restructuring expenses, one-time impairment or special charges, and the gain (loss) on disposition of assets. To more closely align with similar calculations presented by companies in its industry, beginning in this first quarter of 2023, the Company excluded non-cash stock-based compensation in its adjustment to derive Adjusted EBITDA. Prior periods have been restated to conform to this definition change.

 

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Net Debt is defined as total debt less cash and cash equivalents and restricted cash.

 

Net Debt Ratio is defined as Net Debt divided by the trailing four quarters’ ended total Adjusted EBITDA at the measurement date.

 

The Company believes that the inclusion of these non-GAAP financial measures helps investors gain a meaningful understanding of the Company's core operating results and enhances the usefulness of comparing such performance with prior periods. Management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company’s core operating performance and comparing such performance to that of prior periods. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the text of, and the accompanying tables to, this press release. While non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating the Company’s own operating results over different periods of time, the Company urges investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

 

Cautionary Language Concerning Forward-Looking Statements

 

This press release contains forward-looking statements relating to, among other matters, the Company’s future financial performance, business goals and objectives, and results of operations, expectations regarding the transition of its US Telecom business, its future revenues, operating income, cash flows, EBITDA, Adjusted EBITDA, Net Debt, Net Debt Ratio, and capital investments; demand for the Company’s services and industry trends; the Company’s liquidity; our expansion into growing markets; the expansion of the Company’s customer base; 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 the Company’s operations, including operating margins, revenues, capital expenditures, and the retention of and future growth of the Company’s subscriber base and ARPU; (2) the Company’s reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to the Company’s network infrastructure; (3) the Company’s ability to satisfy the needs and demands of the Company’s major carrier customers; (4) the Company’s ability to realize expansion plans for its fiber markets; (5) the adequacy and expansion capabilities of the Company’s network capacity and customer service system to support the Company’s customer growth; (6) the Company’s ability to efficiently and cost-effectively upgrade the Company’s networks and information technology platforms to address rapid and significant technological changes in the telecommunications industry; (7) the Company’s continued access to capital and credit markets on terms it deems favorable; (8) government subsidy program availability and regulation of the Company’s businesses, which may impact the Company’s telecommunications licenses, the Company’s revenue and the Company’s operating costs; (9) the Company’s ability to successfully transition its US Telecom business away from wholesale wireless to other carrier and consumer-based services; (10) ongoing risk of an economic downturn, political, geopolitical and other risks and opportunities facing the Company’s operations, including those resulting from the continued inflation and other macroeconomic headwinds including increased costs and supply chain disruptions; (11) the loss of, or an inability to recruit skilled personnel in the Company’s various jurisdictions, including key members of management; (12) the Company’s ability to find investment or acquisition or disposition opportunities that fit the strategic goals of the Company; (13) the occurrence of weather events and natural catastrophes and the Company’s ability to secure the appropriate level of insurance coverage for these assets; and (14) increased competition. 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, 2022, filed with the SEC on March 15, 2023, and the other reports the Company files 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, except as required by law.

 

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Contact

 

Justin D. Benincasa Ian Rhoades 
Chief Financial Officer Investor Relations 
ATN International, Inc. Sharon Merrill Advisors, Inc. 
978-619-1300 ATNI@investorrelations.com

 

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Table 1
ATN International, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in Thousands)

 

   June 30,   December 31, 
   2023   2022 
Assets:        
   Cash and cash equivalents  $64,005   $54,660 
   Restricted cash   3,217    5,068 
   Customer receivable   6,625    5,803 
   Other current assets   174,249    164,157 
   Total current assets   248,096    229,688 
           
   Property, plant and equipment, net   1,063,464    1,055,954 
   Operating lease right-of-use assets   105,090    108,702 
   Customer receivable - long term   44,698    46,706 
   Goodwill and other intangible assets, net   179,489    185,794 
   Other assets   89,132    81,025 
           
Total assets  $1,729,969   $1,707,869 
           
Liabilities, redeemable non-controlling interests and stockholders’ equity:          
   Current portion of long-term debt  $18,070   $6,172 
   Current portion of customer receivable credit facility   6,710    6,073 
   Taxes payable   11,107    7,335 
   Current portion of lease liabilities   16,472    15,457 
   Other current liabilities   188,483    198,143 
   Total current liabilities   240,842    233,180 
           
   Long-term debt, net of current portion  $464,069   $415,727 
   Customer receivable credit facility, net of current portion   39,749    39,275 
   Deferred income taxes   22,034    28,650 
   Lease liabilities   80,893    83,319 
   Other long-term liabilities   132,922    138,420 
Total liabilities   980,509    938,571 
           
Redeemable non-controlling interests   94,484    92,468 
           
Stockholders' equity          
   Total ATN International, Inc.’s stockholders’ equity   557,253    580,814 
   Non-controlling interests   97,723    96,016 
Total stockholders' equity   654,976    676,830 
           
Total liabilities, redeemable non-controlling interests and stockholders’ equity  $1,729,969   $1,707,869 

 

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Table 2

ATN International, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in Thousands, Except per Share Data)

 

   Three Months Ended,   Six Months Ended, 
   June 30,   June 30, 
   2023   2022   2023   2022 
Revenues:                    
   Communications services  $181,576   $171,795   $362,883   $338,338 
   Construction   1,020    3,297    1,610    5,283 
   Other   3,845    4,405    7,721    7,896 
   Total revenue   186,441    179,497    372,214    351,517 
                     
Operating expenses (excluding depreciation and amortization unless otherwise indicated):                    
   Cost of services and other   77,718    77,860    156,759    150,871 
   Cost of construction revenue   1,016    3,286    1,604    5,319 
   Selling, general and administrative   61,914    56,610    123,262    111,491 
   Stock-based compensation   2,739    2,568    4,517    4,028 
   Transaction-related charges   438    412    451    966 
   Restructuring expenses   370    -    3,257    - 
   Depreciation   36,217    33,817    72,621    67,109 
   Amortization of intangibles from acquisitions   3,144    3,250    6,391    6,508 
   (Gain) Loss on disposition of assets   445    (28)   278    3,392 
Total operating expenses   184,001    177,775    369,140    349,684 
                     
Operating income   2,440    1,722    3,074    1,833 
                     
Other income (expense):                    
   Interest expense, net   (10,404)   (4,278)   (19,029)   (7,590)
   Other income (expense)   2,216    (2,724)   2,411    1,474 
   Other income (expenses), net   (8,188)   (7,002)   (16,618)   (6,116)
                     
Loss before income taxes   (5,748)   (5,280)   (13,544)   (4,283)
   Income tax benefit   (5,087)   (3,971)   (5,827)   (1,018)
                     
Net loss   (661)   (1,309)   (7,717)   (3,265)
                     
Net loss attributable to non-controlling interests, net   1,428    784    2,599    1,794 
                     
Net income (loss) attributable to ATN International, Inc. stockholders  $767   $(525)  $(5,118)  $(1,471)
                     
Net loss per weighted average share attributable to ATN International, Inc. stockholders:                    
                     
  Basic Net Loss  $(0.03)  $(0.11)  $(0.48)  $(0.24)
                     
  Diluted Net Loss  $(0.03)  $(0.11)  $(0.48)  $(0.24)
                     
Weighted average common shares outstanding:                    
   Basic   15,719    15,749    15,726    15,736 
   Diluted   15,719    15,749    15,726    15,736 

 

10 

 

 

Table 3

 

ATN International, Inc.

Unaudited Condensed Consolidated Cash Flow Statements

(in Thousands)

 

   Six Months Ended June 30, 
   2023   2022 
   Net Loss  $(7,717)  $(3,265)
   Depreciation   72,621    67,109 
   Amortization of intangibles from acquisitions   6,391    6,508 
   Provision for doubtful accounts   2,463    3,153 
   Amortization of debt discount and debt issuance costs   1,162    1,004 
   Loss on disposition of long-lived assets   278    3,392 
   Stock-based compensation   4,517    4,028 
   Deferred income taxes   (6,616)   (3,871)
   Loss on pension settlement   369    1,725 
   Gain on equity investments   (2,501)   (3,401)
   Increase in customer receivable   1,186    (2,298)
   Change in prepaid and accrued income taxes   3,302    9,433 
   Change in other operating assets and liabilities   (15,126)   (32,797)
           
       Net cash provided by operating activities   60,329    50,720 
           
   Capital expenditures   (89,451)   (71,204)
   Government capital programs:          
        Amounts disbursed   (6,986)   (3,894)
        Amounts received   593    - 
   Purchases of strategic investments   (1,055)   (1,400)
   Purchases and sales of businesses   1,314    1,835 
           
       Net cash used in investing activities   (95,585)   (74,663)
           
   Dividends paid on common stock   (6,633)   (5,348)
   Distributions to non-controlling interests   (1,447)   (1,375)
   Finance leases   (481)   (574)
   Term loan - repayments   (2,335)   (938)
   Payment of debt issuance costs   (159)   - 
   Revolving credit facilities – borrowings   88,273    49,000 
   Revolving credit facilities – repayments   (26,500)   (24,500)
   Proceeds from customer receivable credit facility   4,300    8,000 
   Repayment of customer receivable credit facility   (3,247)   (2,258)
   Purchases of common stock - stock-based compensation   (1,433)   (1,169)
   Purchases of common stock - share repurchase plan   (6,828)   (941)
   Repurchases of non-controlling interests, net   (760)   (4,491)
           
       Net cash provided by financing activities   42,750    15,406 
           
Net change in total cash, cash equivalents and restricted cash   7,494    (8,537)
           
Total cash, cash equivalents and restricted cash, beginning of period   59,728    80,697 
           
Total cash, cash equivalents and restricted cash, end of period  $67,222   $72,160 

 

11 

 

 

Table 4

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the three months ended June 30, 2023 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Statement of Operations Data:                    
Revenue                    
   Mobility                    
        Business  $3,507   $114   $-   $3,621 
        Consumer   23,349    863    -    24,212 
        Total  $26,856   $977   $-   $27,833 
                     
   Fixed                    
        Business  $17,214   $35,495   $-   $52,709 
        Consumer   42,459    22,608    -    65,067 
        Total  $59,673   $58,103   $-   $117,776 
                     
  Carrier Services  $3,879   $31,576   $-   $35,455 
  Other   448    64    -    512 
                     
Total Communications Services  $90,856   $90,720   $-   $181,576 
                     
Construction  $-   $1,020   $-   $1,020 
                     
  Managed services  $1,125   $2,720   $-   $3,845 
Total Other  $1,125   $2,720   $-   $3,845 
                     
Total Revenue  $91,981   $94,460   $-   $186,441 
                     
Depreciation  $14,106   $21,430   $681   $36,217 
Amortization of intangibles from acquisitions  $364   $2,780   $-   $3,144 
Total operating expenses  $77,429   $96,854   $9,720   $184,003 
Operating income (loss)  $14,552   $(2,394)  $(9,720)  $2,438 
Non-controlling interest ( net income or (loss) )  $(2,050)  $3,478   $-   $1,428 
                     
Non GAAP measures:                    
EBITDA (2)  $29,022   $21,816   $(9,039)  $41,799 
Adjusted EBITDA (1)  $29,128   $22,776   $(6,113)  $45,791 
                     
Balance Sheet Data (at June 30, 2023):                    
Cash, cash equivalents and restricted cash  $33,331   $25,433   $8,458   $67,222 
Total current assets   116,153    121,908    10,035    248,096 
Fixed assets, net   472,547    584,834    6,083    1,063,464 
Total assets   668,185    975,996    85,788    1,729,969 
Total current liabilities   88,950    123,616    28,276    240,842 
Total debt, including current portion   63,478    280,661    138,000    482,139 

 

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

 

12 

 

 

Table 4 (continued)

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

For the three months ended June 30, 2022 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Statement of Operations Data:                    
Revenue                    
   Mobility                    
        Business  $3,675   $301   $-   $3,976 
        Consumer   21,279    1,549    -    22,828 
        Total  $24,954   $1,850   $-   $26,804 
                     
   Fixed                    
        Business  $16,996   $31,866   $-   $48,862 
        Consumer   41,353    19,166    -    60,519 
        Total  $58,349   $51,032   $-   $109,381 
                     
  Carrier Services  $3,421   $31,753   $-   $35,174 
  Other   436    -    -    436 
                     
Total Communications Services  $87,160   $84,635   $-   $171,795 
                     
Construction  $-   $3,297   $-   $3,297 
                     
  Managed services  $1,246   $3,159   $-   $4,405 
                     
Total Other  $1,246   $3,159   $-   $4,405 
                     
Total Revenue  $88,406   $91,091   $-   $179,497 
                     
Depreciation  $15,074   $17,763   $980   $33,817 
Amortization of intangibles from acquisitions  $394   $2,856   $-   $3,250 
Total operating expenses  $76,761   $91,372   $9,642   $177,775 
Operating income (loss)  $11,645   $(281)  $(9,642)  $1,722 
Non-controlling interest ( net income or (loss) )  $(921)  $1,705   $-   $784 
                     
Non GAAP measures:                    
EBITDA (2)  $27,113   $20,338   $(8,662)  $38,789 
Adjusted EBITDA (1)  $27,169   $20,729   $(6,157)  $41,741 

 

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

(2) See Table 5 for reconciliation of Operating Income to EBITDA

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

 

13 

 

 

          Table 4 (continued)

  ATN International, Inc.

  Selected Segment Financial Information

  (In Thousands)

  For the six months ended June 30, 2023 is as follows:

 

   International Telecom   US Telecom   Corporate and Other  *   Total 
Statement of Operations Data:                    
Revenue                    
   Mobility                    
        Business  $7,083   $286   $-   $7,369 
        Consumer   45,880    1,850    -    47,730 
        Total  $52,963   $2,136   $-   $55,099 
                     
   Fixed                    
        Business  $34,327   $71,814   $-   $106,141 
        Consumer   84,236    45,190    -    129,426 
        Total  $118,563   $117,004   $-   $235,567 
                     
  Carrier Services  $7,570   $63,660   $-   $71,230 
  Other   848    139    -    987 
                     
Total Communications Services  $179,944   $182,939   $-   $362,883 
                     
Construction  $-   $1,610   $-   $1,610 
                     
  Managed services  $2,445   $5,276   $-   $7,721 
Total Other  $2,445   $5,276   $-   $7,721 
                     
Total Revenue  $182,389   $189,825   $-   $372,214 
                     
Depreciation  $28,292   $42,917   $1,412   $72,621 
Amortization of intangibles from acquisitions  $744   $5,646   $-   $6,390 
Total operating expenses  $154,012   $196,562   $18,566   $369,140 
Operating income (loss)  $28,377   $(6,737)  $(18,566)  $3,074 
Non-controlling interest ( net income or (loss) )  $(3,856)  $6,455   $-   $2,599 
                     
Non GAAP measures:                    
EBITDA (2)  $57,413   $41,826   $(17,154)  $82,085 
Adjusted EBITDA (1)  $57,586   $45,583   $(12,581)  $90,588 

 

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

 

14 

 

 

        Table 4 (continued)

ATN International, Inc.

Selected Segment Financial Information

(In Thousands) 

For the six months ended June 30, 2022 is as follows:

 

   International Telecom   US Telecom   Corporate and Other  *   Total 
Statement of Operations Data:                    
Revenue                    
   Mobility                    
        Business  $7,291   $674   $-   $7,965 
        Consumer   41,249    3,006    -    44,255 
        Total  $48,540   $3,680   $-   $52,220 
                     
   Fixed                    
        Business  $34,250   $59,011   $-   $93,261 
        Consumer   82,446    38,136    -    120,582 
        Total  $116,696   $97,147   $-   $213,843 
                     
  Carrier Services  $6,823   $64,742   $-   $71,565 
  Other   710    -    -    710 
                     
Total Communications Services  $172,769   $165,569   $-   $338,338 
                     
Construction  $-   $5,283   $-   $5,283 
                     
  Managed services  $2,422   $5,474   $-   $7,896 
Total Other  $2,422   $5,474   $-   $7,896 
                     
Total Revenue  $175,191   $176,326   $-   $351,517 
                     
Depreciation  $28,971   $36,205   $1,933   $67,109 
Amortization of intangibles from acquisitions  $812   $5,696   $-   $6,508 
Total operating expenses  $151,741   $181,240   $16,703   $349,684 
Operating income (loss)  $23,450   $(4,914)  $(16,703)  $1,833 
Non-controlling interest ( net income or (loss) )  $(2,440)  $4,234   $-   $1,794 
                     
Non GAAP measures:                    
EBITDA (2)  $53,233   $36,987   $(14,770)  $75,450 
Adjusted EBITDA (1)  $54,380   $40,398   $(10,942)  $83,836 
                     
Balance Sheet Data (at December 31, 2022):                    
Cash, cash equivalents and restricted cash  $26,418   $26,375   $6,935   $59,728 
Total current assets   105,324    116,038    8,326    229,688 
Fixed assets, net   462,447    585,969    7,538    1,055,954 
Total assets   643,664    980,543    83,662    1,707,869 
Total current liabilities   86,738    119,756    26,686    233,180 
Total debt, including current portion   59,659    263,240    99,000    421,899 

 

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

(2) See Table 5 for reconciliation of Operating Income to EBITDA      

 

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

 

15 

 

 

        Table 5

 

ATN International, Inc.

Reconciliation of Non-GAAP Measures

(In Thousands) 

For the three months ended June 30, 2023 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Operating income (loss)  $14,552   $(2,394)  $(9,720)  $2,438 
Depreciation expense   14,106    21,430    681    36,217 
Amortization of intangibles from acquisitions   364    2,780    -    3,144 
EBITDA  $29,022   $21,816   $(9,039)  $41,799 
                     
Stock-based compensation   109    9    2,621    2,739 
Restructuring expenses   -    370    -    370 
Transaction-related charges   -    133    305    438 
(Gain) Loss on disposition of assets   (3)   448    -    445 
ADJUSTED EBITDA  $29,128   $22,776   $(6,113)  $45,791 

 

For the three months ended June 30, 2022 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Operating income (loss)  $11,645   $(281)  $(9,642)  $1,722 
Depreciation expense   15,074    17,763    980    33,817 
Amortization of intangibles from acquisitions   394    2,856    -    3,250 
EBITDA  $27,113   $20,338   $(8,662)  $38,789 
                     
Stock-based compensation   56    79    2,433    2,568 
Transaction-related charges   -    340    72    412 
(Gain) Loss on disposition of assets   -    (28)   -    (28)
ADJUSTED EBITDA  $27,169   $20,729   $(6,157)  $41,741 

 

16 

 

 

        Table 5 (continued)

 

For the six months ended June 30, 2023 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Operating income (loss)  $28,377   $(6,737)  $(18,566)  $3,074 
Depreciation expense   28,292    42,917    1,412    72,621 
Amortization of intangibles from acquisitions   744    5,646    -    6,390 
EBITDA  $57,413   $41,826   $(17,154)  $82,085 
                     
Stock-based compensation   176    86    4,255    4,517 
Restructuring expenses   -    3,257    -    3,257 
Transaction-related charges   -    133    318    451 
(Gain) Loss on disposition of assets   (3)   281    -    278 
ADJUSTED EBITDA  $57,586   $45,583   $(12,581)  $90,588 

 

For the six months ended June 30, 2022 is as follows:

 

   International
Telecom
   US Telecom   Corporate and
Other  *
   Total 
Operating income (loss)  $23,450   $(4,914)  $(16,703)   1,833 
Depreciation expense   28,971    36,205    1,933    67,109 
Amortization of intangibles from acquisitions   812    5,696    -    6,508 
EBITDA  $53,233   $36,987   $(14,770)  $75,450 
                     
Stock-based compensation   116    169    3,743    4,028 
Transaction-related charges   -    881    85    966 
(Gain) Loss on disposition of assets   1,031    2,361    -    3,392 
ADJUSTED EBITDA  $54,380   $40,398   $(10,942)  $83,836 

 

17 

 

 

        Table 6

 

ATN International, Inc.

Non GAAP Measure - Net Debt Ratio

(in Thousands)

 

   June 30,   December 31, 
   2023   2022 
Current portion of long-term debt  *  $18,070   $6,172 
Long-term debt, net of current portion  *   464,069    415,727 
           
Total debt  $482,139   $421,899 
           
Less: Cash, cash equivalents and restricted cash   67,222    59,728 
           
Net Debt  $414,917   $362,171 
           
Adjusted EBITDA - for the four quarters ended  $179,444   $172,688 
           
Net Debt Ratio   2.31    2.10 

 

*  Excludes Customer receivable credit facility

 

18