UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
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| Item 2.02 | Results of Operations and Financial Condition. |
On October 25, 2023, ATN International, Inc. (the “Company”) issued a press release announcing financial results for the three and nine months ended September 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 October 25, 2023 |
| 104 | Cover Page Data File (formatted as inline XBRL document) |
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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 October 25, 2023 | ||
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Exhibit 99.1
ATN Reports Third-Quarter 2023 Results;
Reiterates 2023 Outlook;
Provides Preliminary Outlook for 2024
“First-to-Fiber” and “Glass & SteelTM” Strategies Drive Year Over Year Growth
| · | Grew revenue 5% to $191.0 million | |
| · | Increased total high-speed subscribers by 20% | |
| · | Expanded broadband homes passed by high-speed data services by 52% | |
| · | Capital expenditures were $37.2 million (net of $7.3 million of reimbursements) |
Operating Income and Adjusted EBITDA Improvements Follow Subscriber and Revenue Growth
| · | Net loss of $(3.6) million, or a $(0.31) loss per share; operating income increased to $6.8 million | |
| · | Increased Adjusted EBITDA1 by 10% to $47.8 million |
Reiterates 2023 Outlook2
| · | Adjusted EBITDA for the full year 2023 expected to be in the range of $183 to $193 million | |
| · | Capital expenditures for the full year 2023 expected to be in the range of $160 to $170 million (net of reimbursements) |
Provides Preliminary 2024 Outlook2
| · | Adjusted EBITDA for the full year 2024 expected to be in the range of $200 to $208 million | |
| · | Capital expenditures for the full year 2024 expected to be in the range of $120 to $130 million (net of reimbursements) |
1 See Table 5 for reconciliation of Operating Income to Adjusted EBITDA, a non-GAAP measure.
2 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
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Earnings Conference Call
| · | Thursday, October 26, 2023, at 10:00 a.m. ET; web participant link: |
https://edge.media-server.com/mmc/p/3yif2rqx/
Beverly, MA (October 25, 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 nine months ended September 30, 2023.
Remarks by Michael Prior, ATN CEO
“We continued to execute on our First-to-Fiber and Glass & SteelTM strategies in the third quarter, contributing to solid revenue growth of 5% across the enterprise,” said Michael Prior, Chief Executive Officer of ATN. “Operating income and Adjusted EBITDA also grew in the third quarter, reflecting the positive momentum of the capital investments in our markets, and we remain on track to achieve our 2023 guidance.
“In the third quarter, we achieved strong high-speed broadband subscriber growth of 20%. Additionally, our international markets saw a 13% annual increase in mobile subscribers,” Prior said. “Based on strong market tailwinds and our approach to maximizing the long-term value of our capital investments, we are excited about the prospects for growth and free cash flow expansion across ATN’s Caribbean operations.
"Domestically, we continue to expand our network reach to high-speed data subscribers and enterprise and government customers. At the same time, we are making progress on rationalizing legacy network and operating costs, with further reductions expected over the coming year. Our team won another $45 million in USDA grants to connect people in remote and rural areas to high-speed Internet, including a partnered project where a tribal entity is the direct award recipient. Grants such as these will fund further fiber network expansion in rural Alaska and the US southwest.
“As we move closer to the final year of our three-year schedule of investments, we are planning to come down the other side of the investment bell curve, positioning us to start to reap the benefits of our network investments more fully. These expected benefits include growth in our subscriber base, revenue, and operating margins alongside reduced capital expenditures, as reflected in our full-year 2024 preliminary outlook," Prior concluded.
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Third Quarter 2023 Financial Results
Consolidated revenues were $191.0 million, up 5% versus $182.2 million in the year-ago quarter. This increase primarily reflects higher fixed and carrier services revenues, including those from the Sacred Wind acquisition, partially offset by lower legacy roaming and construction revenues.
Operating income rose to $6.8 million, from $1.4 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 the Sacred Wind acquisition.
Net loss attributable to ATN stockholders was $(3.6) million, or a loss of $(0.31) per share, compared with a net loss attributable to ATN stockholders of $(2.8) million, or $(0.25) loss per share, in the year-ago quarter. The decrease in net income was due primarily to a $5.8 million increase in interest expense partially offset by a $5.4 million increase in operating income. In both periods, the loss per share calculation includes the impact of preferred dividends that are not included in the net loss calculation.
Adjusted EBITDA1 increased to $47.8 million, from $43.6 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.
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| For Three Months Ended September 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: | $ | 93,878 | $ | 90,007 | $ | 97,158 | $ | 92,206 | $ | - | $ | - | $ | 191,036 | $ | 182,213 | ||||||||||||||||
| Mobility | 27,791 | 26,482 | 946 | 2,356 | - | - | 28,737 | 28,838 | ||||||||||||||||||||||||
| Fixed | 59,983 | 58,567 | 58,342 | 51,652 | - | - | 118,325 | 110,219 | ||||||||||||||||||||||||
| Carrier Services | 3,441 | 3,220 | 32,319 | 31,360 | - | - | 35,760 | 34,580 | ||||||||||||||||||||||||
| Construction | - | - | 2,038 | 3,332 | - | - | 2,038 | 3,332 | ||||||||||||||||||||||||
| All other | 2,663 | 1,738 | 3,513 | 3,506 | - | - | 6,176 | 5,244 | ||||||||||||||||||||||||
| Operating Income (Loss) | $ | 12,800 | $ | 13,360 | $ | 3,018 | $ | 716 | $ | (8,981 | ) | $ | (12,637 | ) | $ | 6,837 | $ | 1,439 | ||||||||||||||
| EBITDA2 | $ | 27,394 | $ | 27,866 | $ | 25,300 | $ | 21,913 | $ | (8,363 | ) | $ | (11,791 | ) | $ | 44,331 | $ | 37,988 | ||||||||||||||
| Adjusted EBITDA1 | $ | 27,502 | $ | 27,917 | $ | 26,861 | $ | 22,044 | $ | (6,516 | ) | $ | (6,405 | ) | $ | 47,847 | $ | 43,556 | ||||||||||||||
| Capital Expenditures** | $ | 18,744 | $ | 19,400 | $ | 18,445 | $ | 19,131 | $ | - | $ | 209 | $ | 37,189 | $ | 38,740 | ||||||||||||||||
| For Nine Months Ended September 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: | $ | 276,267 | $ | 265,197 | $ | 286,983 | $ | 268,533 | $ | - | $ | - | $ | 563,250 | $ | 533,730 | ||||||||||||||||
| Mobility | 80,754 | 75,022 | 3,081 | 6,036 | - | - | 83,835 | 81,058 | ||||||||||||||||||||||||
| Fixed | 178,546 | 175,262 | 175,346 | 148,800 | - | - | 353,892 | 324,062 | ||||||||||||||||||||||||
| Carrier Services | 11,011 | 10,042 | 95,978 | 96,102 | - | - | 106,989 | 106,144 | ||||||||||||||||||||||||
| Construction | - | - | 3,648 | 8,615 | - | - | 3,648 | 8,615 | ||||||||||||||||||||||||
| All other | 5,956 | 4,871 | 8,930 | 8,980 | - | - | 14,886 | 13,851 | ||||||||||||||||||||||||
| Operating Income (Loss) | $ | 41,177 | $ | 36,889 | $ | (3,719 | ) | $ | (4,199 | ) | $ | (27,547 | ) | $ | (29,418 | ) | $ | 9,911 | $ | 3,272 | ||||||||||||
| EBITDA2 | $ | 84,807 | $ | 81,190 | $ | 67,126 | $ | 58,899 | $ | (25,517 | ) | $ | (26,652 | ) | $ | 126,416 | $ | 113,437 | ||||||||||||||
| Adjusted EBITDA1 | $ | 85,089 | $ | 82,389 | $ | 72,443 | $ | 62,441 | $ | (19,097 | ) | $ | (17,440 | ) | $ | 138,435 | $ | 127,390 | ||||||||||||||
| Capital Expenditures** | $ | 57,610 | $ | 53,270 | $ | 69,030 | $ | 56,041 | $ | - | $ | 633 | $ | 126,640 | $ | 109,944 | ||||||||||||||||
* Corporate and Other refer to corporate overhead expenses and consolidating adjustments.
**Excludes government capital program amounts disbursed and amounts received.
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.
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Operating Metrics
| Operating Metrics | ||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | Q3 2023 | |||||||||||||||||||
| Q3 | Q2 | Q1 | Q4 | Q3 | vs. Q3 2022 | |||||||||||||||||||
| Broadband Homes Passed | 746,600 | 746,800 | 736,300 | 728,900 | 613,600 | 22 | % | |||||||||||||||||
| Broadband Homes Passed by HSD* | 333,500 | 331,000 | 301,600 | 275,100 | 219,300 | 52 | % | |||||||||||||||||
| Broadband Customers | 214,800 | 217,100 | 216,900 | 210,300 | 205,200 | 5 | % | |||||||||||||||||
| HSD* Broadband Customers | 132,900 | 129,000 | 122,600 | 113,000 | 110,700 | 20 | % | |||||||||||||||||
| Fiber Route Miles | 11,575 | 11,561 | 11,099 | 10,545 | 9,756 | 19 | % | |||||||||||||||||
| International Mobile Subscribers | ||||||||||||||||||||||||
| Pre-Paid | 346,100 | 340,200 | 328,800 | 322,000 | 301,800 | 15 | % | |||||||||||||||||
| Post-Paid | 56,100 | 58,900 | 56,900 | 55,700 | 54,200 | 4 | % | |||||||||||||||||
| Total | 402,200 | 399,100 | 385,700 | 377,700 | 356,000 | 13 | % | |||||||||||||||||
| Blended Churn | 3.76 | % | 2.69 | % | 2.81 | % | 2.25 | % | 3.02 | % | ||||||||||||||
*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 September 30, 2023, was $73.1 million and total debt was $498.4 million, versus $77.8 million of cash, cash equivalents and restricted cash and $355.7 million of total debt at the end of the year-ago quarter.
Net cash provided by operating activities was $89.5 million for the nine months ended September 30, 2023, compared with net cash provided by operating activities of $79.0 million in the prior year period.
Capital expenditures were $126.6 million net of $14.3 million of reimbursable capital expenditures for the nine months ended September 30, 2023, versus $109.9 million, net of $4.0 million of reimbursable capital expenditures in the prior year period.
Quarterly Dividends and Stock Repurchases
Quarterly dividends ATN paid a quarterly dividend of $0.21 per share on October 6, 2023, on all common shares outstanding to stockholders of record as of September 30, 2023.
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Stock repurchases of the Company’s common stock totaled $11.7 million in the first nine 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. The Company is reiterating its 2023 outlook and providing preliminary guidance for the full year 2024 as network investments begin to return to more normalized levels and management continues its focus on increasing free cash flow and driving positive returns on its network investments.
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 |
Provides preliminary outlook for full year ending December 31, 2024:
| Adjusted EBITDA1 | $200 million to $208 million | Full year 2024 |
| Capital Expenditures | $120 million to $130 million | Full year 2024 |
For the Company’s full year 2023 and 2024 outlooks for Adjusted EBITDA, 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.
Conference Call Information
Call Date: Thursday,
October 26, 2023
Call Time: 10:00 a.m. ET
Webcast Link: https://edge.media-server.com/mmc/p/3yif2rqx
Live Call Participant Link: https://register.vevent.com/register/BIdac10076c12d42508a2c85e814f53a36
Webcast
Link Instructions
You can listen to a live audio webcast of the conference call 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 locations beginning at approximately 1:00 pm ET on the same day. The Company
also will provide an investor presentation as a supplement to the call on the “Events & Presentations” section of
its Investor Relations website.
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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 the 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.
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.
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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, network and operating costs, 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; receipt of certain government grants 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 mobility 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.
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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COMPANY CONFIDENTIAL
Table 1
ATN International, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in Thousands)
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 66,063 | $ | 54,660 | ||||
| Restricted cash | 7,024 | 5,068 | ||||||
| Customer receivable | 6,702 | 5,803 | ||||||
| Other current assets | 187,576 | 164,157 | ||||||
| Total current assets | 267,365 | 229,688 | ||||||
| Property, plant and equipment, net | 1,069,433 | 1,055,954 | ||||||
| Operating lease right-of-use assets | 103,002 | 108,702 | ||||||
| Customer receivable - long term | 44,623 | 46,706 | ||||||
| Goodwill and other intangible assets, net | 176,443 | 185,794 | ||||||
| Other assets | 90,360 | 81,025 | ||||||
| Total assets | $ | 1,751,226 | $ | 1,707,869 | ||||
| Liabilities, redeemable non-controlling interests and stockholders’ equity: | ||||||||
| Current portion of long-term debt | $ | 21,278 | $ | 6,172 | ||||
| Current portion of customer receivable credit facility | 6,727 | 6,073 | ||||||
| Taxes payable | 9,463 | 7,335 | ||||||
| Current portion of lease liabilities | 16,331 | 15,457 | ||||||
| Other current liabilities | 208,858 | 198,143 | ||||||
| Total current liabilities | 262,657 | 233,180 | ||||||
| Long-term debt, net of current portion | $ | 477,099 | $ | 415,727 | ||||
| Customer receivable credit facility, net of current portion | 38,010 | 39,275 | ||||||
| Deferred income taxes | 19,198 | 28,650 | ||||||
| Lease liabilities | 80,260 | 83,319 | ||||||
| Other long-term liabilities | 133,102 | 138,420 | ||||||
| Total liabilities | 1,010,326 | 938,571 | ||||||
| Redeemable non-controlling interests | 95,787 | 92,468 | ||||||
| Stockholders' equity: | ||||||||
| Total ATN International, Inc.’s stockholders’ equity | 545,754 | 580,814 | ||||||
| Non-controlling interests | 99,359 | 96,016 | ||||||
| Total stockholders' equity | 645,113 | 676,830 | ||||||
| Total liabilities, redeemable non-controlling interests and stockholders’ equity | $ | 1,751,226 | $ | 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, | Nine Months Ended, | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues: | ||||||||||||||||
| Communications services | $ | 184,601 | $ | 173,977 | $ | 547,484 | $ | 512,315 | ||||||||
| Construction | 2,038 | 3,332 | 3,648 | 8,615 | ||||||||||||
| Other | 4,397 | 4,904 | 12,118 | 12,800 | ||||||||||||
| Total revenue | 191,036 | 182,213 | 563,250 | 533,730 | ||||||||||||
| Operating expenses (excluding depreciation and amortization unless otherwise indicated): | ||||||||||||||||
| Cost of services and other | 80,367 | 78,949 | 237,125 | 229,821 | ||||||||||||
| Cost of construction revenue | 2,031 | 3,321 | 3,635 | 8,640 | ||||||||||||
| Selling, general and administrative | 60,792 | 56,387 | 184,055 | 167,879 | ||||||||||||
| Stock-based compensation | 1,956 | 1,669 | 6,473 | 5,696 | ||||||||||||
| Transaction-related charges | 45 | 3,416 | 496 | 4,381 | ||||||||||||
| Restructuring expenses | 1,383 | - | 4,640 | - | ||||||||||||
| Depreciation | 34,370 | 33,312 | 106,991 | 100,421 | ||||||||||||
| Amortization of intangibles from acquisitions | 3,124 | 3,236 | 9,514 | 9,744 | ||||||||||||
| Loss on disposition of assets | 132 | 484 | 410 | 3,876 | ||||||||||||
| Total operating expenses | 184,200 | 180,774 | 553,339 | 530,458 | ||||||||||||
| Operating income | 6,836 | 1,439 | 9,911 | 3,272 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense, net | (11,309 | ) | (5,475 | ) | (30,338 | ) | (13,066 | ) | ||||||||
| Other income | 213 | 1,904 | 2,623 | 3,379 | ||||||||||||
| Other income (expense), net | (11,096 | ) | (3,571 | ) | (27,715 | ) | (9,687 | ) | ||||||||
| Loss before income taxes | (4,260 | ) | (2,132 | ) | (17,804 | ) | (6,415 | ) | ||||||||
| Income tax benefit | (542 | ) | (360 | ) | (6,369 | ) | (1,378 | ) | ||||||||
| Net loss | (3,718 | ) | (1,772 | ) | (11,435 | ) | (5,037 | ) | ||||||||
| Net (income) loss attributable to non-controlling interests, net | 134 | (1,011 | ) | 2,733 | 782 | |||||||||||
| Net loss attributable to ATN International, Inc. stockholders | $ | (3,584 | ) | $ | (2,783 | ) | $ | (8,702 | ) | $ | (4,255 | ) | ||||
| Net loss per weighted average share attributable to ATN International, Inc. stockholders: | ||||||||||||||||
| Basic and Diluted Net Loss | $ | (0.31 | ) | $ | (0.25 | ) | $ | (0.80 | ) | $ | (0.49 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 15,601 | 15,763 | 15,666 | 15,746 | ||||||||||||
| Diluted | 15,601 | 15,763 | 15,666 | 15,746 | ||||||||||||
10
COMPANY CONFIDENTIAL
Table 3
ATN International, Inc.
Unaudited Condensed Consolidated Cash Flow Statements
(in Thousands)
| Nine Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Net Loss | $ | (11,435 | ) | $ | (5,037 | ) | ||
| Depreciation | 106,991 | 100,421 | ||||||
| Amortization of intangibles from acquisitions | 9,514 | 9,744 | ||||||
| Provision for doubtful accounts | 4,014 | 4,969 | ||||||
| Amortization of debt discount and debt issuance costs | 1,806 | 1,512 | ||||||
| Loss on disposition of long-lived assets | 410 | 3,876 | ||||||
| Stock-based compensation | 6,472 | 5,696 | ||||||
| Deferred income taxes | (9,452 | ) | (6,619 | ) | ||||
| Loss on pension settlement | 369 | 1,725 | ||||||
| Gain on equity investments | (2,752 | ) | (5,617 | ) | ||||
| Increase (decrease) in customer receivable | 1,185 | (4,399 | ) | |||||
| Change in prepaid and accrued income taxes | 3,602 | 8,369 | ||||||
| Change in other operating assets and liabilities | (21,240 | ) | (35,665 | ) | ||||
| Net cash provided by operating activities | 89,484 | 78,975 | ||||||
| Capital expenditures | (126,640 | ) | (109,944 | ) | ||||
| Government capital programs: | ||||||||
| Amounts disbursed | (14,261 | ) | (4,015 | ) | ||||
| Amounts received | 16,065 | 2,668 | ||||||
| Proceeds from sale of investments | - | 15,745 | ||||||
| Spectrum deposit refund | - | 1,136 | ||||||
| Proceeds from disposiitions of long-lived assets | - | 683 | ||||||
| Purchases of strategic investments | (1,055 | ) | (2,750 | ) | ||||
| Purchases and sales of businesses | 1,314 | 1,835 | ||||||
| Net cash used in investing activities | (124,577 | ) | (94,642 | ) | ||||
| Dividends paid on common stock | (9,918 | ) | (8,028 | ) | ||||
| Distributions to non-controlling interests | (1,447 | ) | (1,375 | ) | ||||
| Business combination contingent consideration | - | (1,718 | ) | |||||
| Finance leases | (932 | ) | (820 | ) | ||||
| Term loan - borrowings | 130,000 | 711 | ||||||
| Term loan - repayments | (3,532 | ) | (953 | ) | ||||
| Payment of debt issuance costs | (3,708 | ) | - | |||||
| Revolving credit facilities – borrowings | 126,893 | 68,000 | ||||||
| Revolving credit facilities – repayments | (174,292 | ) | (45,000 | ) | ||||
| Proceeds from customer receivable credit facility | 4,300 | 12,225 | ||||||
| Repayment of customer receivable credit facility | (4,998 | ) | (3,543 | ) | ||||
| Purchases of common stock - stock-based compensation | (1,473 | ) | (1,169 | ) | ||||
| Purchases of common stock - share repurchase plan | (11,679 | ) | (942 | ) | ||||
| Repurchases of non-controlling interests, net | (762 | ) | (4,609 | ) | ||||
| Net cash provided by financing activities | 48,452 | 12,779 | ||||||
| Net change in total cash, cash equivalents and restricted cash | 13,359 | (2,888 | ) | |||||
| Total cash, cash equivalents and restricted cash, beginning of period | 59,728 | 80,697 | ||||||
| Total cash, cash equivalents and restricted cash, end of period | $ | 73,087 | $ | 77,809 | ||||
11
| Table 4 | ||||
| ATN International, Inc. | ||||
| Selected Segment Financial Information | ||||
| (In Thousands) | ||||
| For the three months ended September 30, 2023 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Statement of Operations Data: | ||||||||||||||||
| Revenue | ||||||||||||||||
| Mobility | ||||||||||||||||
| Business | $ | 3,818 | $ | 129 | $ | - | $ | 3,947 | ||||||||
| Consumer | 23,973 | 817 | - | 24,790 | ||||||||||||
| Total | $ | 27,791 | $ | 946 | $ | - | $ | 28,737 | ||||||||
| Fixed | ||||||||||||||||
| Business | $ | 18,016 | $ | 35,680 | $ | - | $ | 53,696 | ||||||||
| Consumer | 41,967 | 22,662 | - | 64,629 | ||||||||||||
| Total | $ | 59,983 | $ | 58,342 | $ | - | $ | 118,325 | ||||||||
| Carrier Services | $ | 3,441 | $ | 32,319 | $ | - | $ | 35,760 | ||||||||
| Other | 1,236 | 544 | - | 1,780 | ||||||||||||
| Total Communications Services | $ | 92,451 | $ | 92,151 | $ | - | $ | 184,602 | ||||||||
| Construction | $ | - | $ | 2,038 | $ | - | $ | 2,038 | ||||||||
| Managed services | $ | 1,427 | $ | 2,969 | $ | - | $ | 4,396 | ||||||||
| Total Other | $ | 1,427 | $ | 2,969 | $ | - | $ | 4,396 | ||||||||
| Total Revenue | $ | 93,878 | $ | 97,158 | $ | - | $ | 191,036 | ||||||||
| Depreciation | $ | 14,354 | $ | 19,398 | $ | 618 | $ | 34,370 | ||||||||
| Amortization of intangibles from acquisitions | $ | 240 | $ | 2,884 | $ | - | $ | 3,124 | ||||||||
| Total operating expenses | $ | 81,078 | $ | 94,140 | $ | 8,981 | $ | 184,199 | ||||||||
| Operating income (loss) | $ | 12,800 | $ | 3,018 | $ | (8,981 | ) | $ | 6,837 | |||||||
| Net (income) loss attributable to non-controlling interests | $ | (1,794 | ) | $ | 1,928 | $ | - | $ | 134 | |||||||
| Non GAAP measures: | ||||||||||||||||
| EBITDA (2) | $ | 27,394 | $ | 25,300 | $ | (8,363 | ) | $ | 44,331 | |||||||
| Adjusted EBITDA (1) | $ | 27,502 | $ | 26,861 | $ | (6,516 | ) | $ | 47,847 | |||||||
| Balance Sheet Data (at September 30, 2023): | ||||||||||||||||
| Cash, cash equivalents and restricted cash | $ | 35,588 | $ | 31,677 | $ | 5,821 | $ | 73,086 | ||||||||
| Total current assets | 115,888 | 143,280 | 8,197 | 267,365 | ||||||||||||
| Fixed assets, net | 476,355 | 587,623 | 5,455 | 1,069,433 | ||||||||||||
| Total assets | 671,285 | 996,413 | 83,528 | 1,751,226 | ||||||||||||
| Total current liabilities | 82,178 | 148,351 | 32,127 | 262,656 | ||||||||||||
| Total debt, including current portion | 63,210 | 285,843 | 149,326 | 498,379 | ||||||||||||
* 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 September 30, 2022 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Statement of Operations Data: | ||||||||||||||||
| Revenue | ||||||||||||||||
| Mobility | ||||||||||||||||
| Business | $ | 3,706 | $ | 298 | $ | - | $ | 4,004 | ||||||||
| Consumer | 22,776 | 2,058 | - | 24,834 | ||||||||||||
| Total | $ | 26,482 | $ | 2,356 | $ | - | $ | 28,838 | ||||||||
| Fixed | ||||||||||||||||
| Business | $ | 18,578 | $ | 32,509 | $ | - | $ | 51,087 | ||||||||
| Consumer | 39,989 | 19,143 | - | 59,132 | ||||||||||||
| Total | $ | 58,567 | $ | 51,652 | $ | - | $ | 110,219 | ||||||||
| Carrier Services | $ | 3,220 | $ | 31,360 | $ | - | $ | 34,580 | ||||||||
| Other | 340 | - | - | 340 | ||||||||||||
| Total Communications Services | $ | 88,609 | $ | 85,368 | $ | - | $ | 173,977 | ||||||||
| Construction | $ | - | $ | 3,332 | $ | - | $ | 3,332 | ||||||||
| Managed services | $ | 1,398 | $ | 3,506 | $ | - | $ | 4,904 | ||||||||
| Total Other | $ | 1,398 | $ | 3,506 | $ | - | $ | 4,904 | ||||||||
| Total Revenue | $ | 90,007 | $ | 92,206 | $ | - | $ | 182,213 | ||||||||
| Depreciation | $ | 14,126 | $ | 18,341 | $ | 846 | $ | 33,313 | ||||||||
| Amortization of intangibles from acquisitions | $ | 380 | $ | 2,856 | $ | - | $ | 3,236 | ||||||||
| Total operating expenses | $ | 76,647 | $ | 91,490 | $ | 12,637 | $ | 180,774 | ||||||||
| Operating income (loss) | $ | 13,360 | $ | 716 | $ | (12,637 | ) | $ | 1,439 | |||||||
| Net (income) loss attributable to non-controlling interests | $ | (2,391 | ) | $ | 1,380 | $ | - | $ | (1,011 | ) | ||||||
| Non GAAP measures: | ||||||||||||||||
| EBITDA (2) | $ | 27,866 | $ | 21,913 | $ | (11,791 | ) | $ | 37,988 | |||||||
| Adjusted EBITDA (1) | $ | 27,917 | $ | 22,044 | $ | (6,405 | ) | $ | 43,556 | |||||||
(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
COMPANY CONFIDENTIAL
| Table 4 (continued) | ||||
| ATN International, Inc. | ||||
| Selected Segment Financial Information | ||||
| (In Thousands) | ||||
| For the nine months ended September 30, 2023 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Statement of Operations Data: | ||||||||||||||||
| Revenue | ||||||||||||||||
| Mobility | ||||||||||||||||
| Business | $ | 11,484 | $ | 415 | $ | - | $ | 11,899 | ||||||||
| Consumer | 69,270 | 2,666 | - | 71,936 | ||||||||||||
| Total | $ | 80,754 | $ | 3,081 | $ | - | $ | 83,835 | ||||||||
| Fixed | ||||||||||||||||
| Business | $ | 52,602 | $ | 107,494 | $ | - | $ | 160,096 | ||||||||
| Consumer | 125,944 | 67,852 | - | 193,796 | ||||||||||||
| Total | $ | 178,546 | $ | 175,346 | $ | - | $ | 353,892 | ||||||||
| Carrier Services | $ | 11,011 | $ | 95,978 | $ | - | $ | 106,989 | ||||||||
| Other | 2,084 | 684 | - | 2,768 | ||||||||||||
| Total Communications Services | $ | 272,395 | $ | 275,089 | $ | - | $ | 547,484 | ||||||||
| Construction | $ | - | $ | 3,648 | $ | - | $ | 3,648 | ||||||||
| Managed services | $ | 3,872 | $ | 8,246 | $ | - | $ | 12,118 | ||||||||
| Total Other | $ | 3,872 | $ | 8,246 | $ | - | $ | 12,118 | ||||||||
| Total Revenue | $ | 276,267 | $ | 286,983 | $ | - | $ | 563,250 | ||||||||
| Depreciation | $ | 42,646 | $ | 62,315 | $ | 2,030 | $ | 106,991 | ||||||||
| Amortization of intangibles from acquisitions | $ | 984 | $ | 8,530 | $ | - | $ | 9,514 | ||||||||
| Total operating expenses | $ | 235,090 | $ | 290,702 | $ | 27,547 | $ | 553,339 | ||||||||
| Operating income (loss) | $ | 41,177 | $ | (3,719 | ) | $ | (27,547 | ) | $ | 9,911 | ||||||
| Net (income) loss attributable to non-controlling interests | $ | (5,650 | ) | $ | 8,383 | $ | - | $ | 2,733 | |||||||
| Non GAAP measures: | ||||||||||||||||
| EBITDA (2) | $ | 84,807 | $ | 67,126 | $ | (25,517 | ) | $ | 126,416 | |||||||
| Adjusted EBITDA (1) | $ | 85,089 | $ | 72,443 | $ | (19,097 | ) | $ | 138,435 | |||||||
* 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 nine months ended September 30, 2022 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Statement of Operations Data: | ||||||||||||||||
| Revenue | ||||||||||||||||
| Mobility | ||||||||||||||||
| Business | $ | 10,997 | $ | 973 | $ | - | $ | 11,970 | ||||||||
| Consumer | 64,025 | 5,063 | - | 69,088 | ||||||||||||
| Total | $ | 75,022 | $ | 6,036 | $ | - | $ | 81,058 | ||||||||
| Fixed | ||||||||||||||||
| Business | $ | 52,827 | $ | 91,521 | $ | - | $ | 144,348 | ||||||||
| Consumer | 122,435 | 57,279 | - | 179,714 | ||||||||||||
| Total | $ | 175,262 | $ | 148,800 | $ | - | $ | 324,062 | ||||||||
| Carrier Services | $ | 10,042 | $ | 96,102 | $ | - | $ | 106,144 | ||||||||
| Other | 1,051 | - | - | 1,051 | ||||||||||||
| Total Communications Services | $ | 261,377 | $ | 250,938 | $ | - | $ | 512,315 | ||||||||
| Construction | $ | - | $ | 8,615 | $ | - | $ | 8,615 | ||||||||
| Managed services | $ | 3,820 | $ | 8,980 | $ | - | $ | 12,800 | ||||||||
| Total Other | $ | 3,820 | $ | 8,980 | $ | - | $ | 12,800 | ||||||||
| Total Revenue | $ | 265,197 | $ | 268,533 | $ | - | $ | 533,730 | ||||||||
| Depreciation | $ | 43,109 | $ | 54,546 | $ | 2,766 | $ | 100,421 | ||||||||
| Amortization of intangibles from acquisitions | $ | 1,192 | $ | 8,552 | $ | - | $ | 9,744 | ||||||||
| Total operating expenses | $ | 228,308 | $ | 272,732 | $ | 29,418 | $ | 530,458 | ||||||||
| Operating income (loss) | $ | 36,889 | $ | (4,199 | ) | $ | (29,418 | ) | $ | 3,272 | ||||||
| Net (income) loss attributable to non-controlling interests | $ | (4,830 | ) | $ | 5,612 | $ | - | $ | 782 | |||||||
| Non GAAP measures: | ||||||||||||||||
| EBITDA (2) | $ | 81,190 | $ | 58,899 | $ | (26,652 | ) | $ | 113,437 | |||||||
| Adjusted EBITDA (1) | $ | 82,389 | $ | 62,441 | $ | (17,440 | ) | $ | 127,390 | |||||||
| 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 September 30, 2023 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Operating income (loss) | $ | 12,800 | $ | 3,018 | $ | (8,981 | ) | $ | 6,837 | |||||||
| Depreciation expense | 14,354 | 19,398 | 618 | 34,370 | ||||||||||||
| Amortization of intangibles from acquisitions | 240 | 2,884 | - | 3,124 | ||||||||||||
| EBITDA | $ | 27,394 | $ | 25,300 | $ | (8,363 | ) | $ | 44,331 | |||||||
| Stock-based compensation | 130 | 23 | 1,802 | 1,955 | ||||||||||||
| Restructuring expenses | - | 1,383 | - | 1,383 | ||||||||||||
| Transaction-related charges | - | - | 45 | 45 | ||||||||||||
| (Gain) Loss on disposition of assets | (22 | ) | 155 | - | 133 | |||||||||||
| ADJUSTED EBITDA | $ | 27,502 | $ | 26,861 | $ | (6,516 | ) | $ | 47,847 | |||||||
| For the three months ended September 30, 2022 is as follows: | ||||
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Operating income (loss) | $ | 13,360 | $ | 716 | $ | (12,637 | ) | $ | 1,439 | |||||||
| Depreciation expense | 14,126 | 18,341 | 846 | 33,313 | ||||||||||||
| Amortization of intangibles from acquisitions | 380 | 2,856 | - | 3,236 | ||||||||||||
| EBITDA | $ | 27,866 | $ | 21,913 | $ | (11,791 | ) | $ | 37,988 | |||||||
| Stock-based compensation | 54 | 132 | 1,483 | 1,669 | ||||||||||||
| Transaction-related charges | - | 212 | 3,203 | 3,415 | ||||||||||||
| (Gain) Loss on disposition of assets | (3 | ) | (213 | ) | 700 | 484 | ||||||||||
| ADJUSTED EBITDA | $ | 27,917 | $ | 22,044 | $ | (6,405 | ) | $ | 43,556 | |||||||
16
Table 5 (continued)
ATN International, Inc.
Reconciliation of Non-GAAP Measures
(In Thousands)
| For the nine months ended September 30, 2023 is as follows: |
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Operating income (loss) | $ | 41,177 | $ | (3,719 | ) | $ | (27,547 | ) | $ | 9,911 | ||||||
| Depreciation expense | 42,646 | 62,315 | 2,030 | 106,991 | ||||||||||||
| Amortization of intangibles from acquisitions | 984 | 8,530 | - | 9,514 | ||||||||||||
| EBITDA | $ | 84,807 | $ | 67,126 | $ | (25,517 | ) | $ | 126,416 | |||||||
| Stock-based compensation | 307 | 109 | 6,057 | 6,473 | ||||||||||||
| Restructuring expenses | - | 4,640 | - | 4,640 | ||||||||||||
| Transaction-related charges | - | 133 | 363 | 496 | ||||||||||||
| (Gain) Loss on disposition of assets | (25 | ) | 435 | - | 410 | |||||||||||
| ADJUSTED EBITDA | $ | 85,089 | $ | 72,443 | $ | (19,097 | ) | $ | 138,435 | |||||||
| For the nine months ended September 30, 2022 is as follows: |
| International Telecom | US Telecom | Corporate and Other * | Total | |||||||||||||
| Operating income (loss) | $ | 36,889 | $ | (4,199 | ) | $ | (29,418 | ) | 3,272 | |||||||
| Depreciation expense | 43,109 | 54,546 | 2,766 | 100,421 | ||||||||||||
| Amortization of intangibles from acquisitions | 1,192 | 8,552 | - | 9,744 | ||||||||||||
| EBITDA | $ | 81,190 | $ | 58,899 | $ | (26,652 | ) | $ | 113,437 | |||||||
| Stock-based compensation | 170 | 301 | 5,225 | 5,696 | ||||||||||||
| Transaction-related charges | - | 1,094 | 3,287 | 4,381 | ||||||||||||
| (Gain) Loss on disposition of assets | 1,029 | 2,147 | 700 | 3,876 | ||||||||||||
| ADJUSTED EBITDA | $ | 82,389 | $ | 62,441 | $ | (17,440 | ) | $ | 127,390 | |||||||
17
Table 6
ATN International, Inc.
Non GAAP Measure - Net Debt Ratio
(in Thousands)
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Current portion of long-term debt * | $ | 21,278 | $ | 6,172 | ||||
| Long-term debt, net of current portion * | 477,099 | 415,727 | ||||||
| Total debt | $ | 498,377 | $ | 421,899 | ||||
| Less: Cash, cash equivalents and restricted cash | 73,087 | 59,728 | ||||||
| Net Debt | $ | 425,290 | $ | 362,171 | ||||
| Adjusted EBITDA - for the four quarters ended | $ | 183,734 | $ | 172,688 | ||||
| Net Debt Ratio | 2.31 | 2.10 | ||||||
* Excludes Customer receivable credit facility
18