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) November 5, 2004
ATLANTIC TELE-NETWORK, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 0-19551 | 47-0728886 | ||
| (State or other jurisdiction of incorporation) |
Commission File Number | (IRS Employer Identification No.) |
9719 Estate Thomas Havensight
St. Thomas, U.S. Virgin Islands 00802
(Address of principal executive offices and zip code)
(340) 777-8000
(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 communication 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)) |
| Item 7.01 | Regulation FD Disclosure |
On November 5, 2004, Atlantic Tele-Network, Inc. (the “Company”) presented information regarding the Company’s business at a conference on the telecom industry sponsored by the New York Society of Security Analysts. The slide presentation given at this conference is filed as Exhibit 99.1 to this Current Report on Form 8-K. The foregoing description is qualified by reference to such exhibit.
The information contained in this Current Report on From 8-K, including the exhibit attached hereto, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to liabilities of that Section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
| Item 9.01 | Financial Statements and Exhibits |
| (c) | Exhibits |
| 99.1 | Presentation to the New York Society of Security Analysts dated November 5, 2004 |
SIGNATURE
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.
| ATLANTIC TELE-NETWORK, INC. | ||
| By: | /s/ MICHAEL T. PRIOR | |
| Chief Financial Officer | ||
November 5, 2004
EXHIBIT INDEX
| Exhibit Number |
Description of Exhibit | |
| 99.1 | Presentation to the New York Society of Securities Analysts dated November 5, 2004. |
Atlantic Tele-Network, Inc.
New York Society of Security Analysts
November 2004
Notice
ATN makes no express or implied representation or warranty as to the accuracy or completeness of the information contained herein. ATN expressly disclaims any and all liability that may be based on such information, errors therein or omissions therefrom.
This presentation may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are or may be forward-looking statements. Forward-looking statements can generally be identified by the use of words that include phrases such as “believe,” “expect,” “anticipate,” “plan,” “forsee,” “likely,” “will,” or other similar words and phrases. As such, final results could differ materially from estimates or expectations due to risks and uncertainties including, but not limited to, incomplete or preliminary information, government regulations, actions and policies, competitive factors, technological changes and continued acceptance of the Company’s services in the marketplace and other risks. ATN claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended
November 2004
2
Corporate Organization
Atlantic Tele-Network, Inc.
(Delaware)
AMEX: ANK
GT&T ATN: 80%; Gov’t 20% Main Operating Subsidiary PTT of Guyana Choice Communications Wholly owned Broadband, ISP, TV Virgin Islands Bermuda Digital 44% ATN; 56% local Cellular One Bermuda Largest Mobile Provider ATC Wholly owned Call Center in Guyana Call Home Telecom Wholly owned ILD business from Guyana
November 2004
3
ATN Consolidated Summary Financial Data
(USD Millions) 2001 2002 2003 Nine Months Ended September 30
2003 2004
Revenue from consolidated $ 88.1 $ 74.7 $ 83.3 $ 60.5 $ 66.0
operations1
Income from telephone $ 34.1 $ 27.4 $ 34.5 $ 24.8 $ 30.0
operations
Income before income taxes and $ 26.8 $ 24.8 $ 31.7 $ 22.9 $ 29.1
minority interest
Minority Interest ($ 3.1) ($ 2.4) ($ 3.5) ($ 2.3) ($ 2.9)
Net Income $ 9.2 $ 9.5 $ 12.2 $ 9.1 $ 10.6
Dividends Paid $ 4.0 $ 4.2 $ 4.6 $ 3.4 $ 3.8
1Revenue from consolidated operations consists of revenue from total revenue from telephone operations plus revenue from other operations.
November 2004
4
Guyana Facts and Figures
History
Dutch colony until 1815; English colony until independence in 1966
Republic in English Commonwealth
Geography
North Coast of South America, Caribbean Rim
Size of Idaho; 70% of Pop. on coastal plain
Demographics/Economy
Population of approx. 700,000; tele-density fixed line of approximately 13%
Over 1 million expatriates living in the U.S. and Canada
GDP per capita (purchasing power parity) $4,000; growth rate of 0.5%
Ethnic mix 50% East Indian, 36% Black; balance Amerindian and other
Literacy 99%
Unemployment 9.1% (understated—2000)
Source: CIA World Fact Book 2004
November 2004
5
GT&T Subscribers / Lines
160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0
1991 1993 1995 1997 1999 2001 2003 3Q 04
Access Lines Mobile Subscribers
November 2004
6
GT&T International MOUs
(in millions)
40 35 30 25 20 15 10 5 0
1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q-
01 01
01 01
02 02
02 02
03 03
03 03
04 04
04
Inbound Outbound
November 2004
7
Bermuda Digital Communications, Ltd.
Cellular Telephone Services Provider in Bermuda
Operates under the “Cellular One” brand
Approximately 50% of market share
State of the art: 1XRTT CDMA with BrewTM and EVDO
Competes with Bermuda Telephone Company’s cellular subsidiary and AT&T Wireless (both GSM)
Preferred roamer (and only CDMA roamer) for Verizon and Sprint visitors
ATN holds 44% interest
ATN receives management fee of approximately 6% of revenue, in addition to share of net income (equity in earnings)
ATN equity in earnings of BDC
9 months ended September 30, 2004 = $2.0 million
9 months ended September 30, 2003 = $1.7 million
November 2004
8
Other Operations & Investments
Choice Communications LLC
Largest Internet Service Provider (“ISP”) in the USVI serving nearly 9,000 subscribers, largely dial-up but with growth potential in WDSL segment
Provider of 137 channels of digital television programming via wireless (MMDS frequencies). Currently services approximately 3,800 subscribers with rapidly growing market share
May roll out telephony services opportunistically
Atlantic Tele-Center, LLC
Call Center Services provider, established in 2000, serving clients mostly in the United States;
Call Home Telecom, LLC
Provides United States distribution and termination of international outbound collect calls from Guyana
Investment in Bridge International Communications
November 2004
9
ATN Board of Directors
Cornelius B. Prior, Jr.
Chief Executive Officer and Chairman
Former Fulbright Scholar and attorney with Sullivan & Cromwell
Current trustee of Holy Cross and Harvard Law School, Chairman of CANTO (The Caribbean Association of National Telecommunication Organizations)
Ernst A. Burri
Director of the Company since May 1998
Member of the Audit and Compensation Committee
Former President of CODETEL, the leading telecommunications carrier in the Dominican Republic and a subsidiary of GTE Corporation, through December 31, 1997
Charles J. Roesslein
Director of the Company since April 2002
Chairman of the Audit and Compensation Committee
Former senior executive with SBC Communications, Inc. in various capacities, including vice president-chief financial officer and treasurer of Southwestern Bell Telephone Company
Henry Wheatley
Director of the Company since December 1997
Member of the Audit and Compensation Committee
President of Wheatley Realty Corporation since 1973 and Chairman of the Board of Coral World (Virgin Islands), Inc.
November 2004
10
ATN Management
Cornelius B. Prior, Jr.
Chief Executive Officer and Chairman of the Board (since 1987, including predecessor company).
Michael T. Prior
Chief Financial Officer & Treasurer (June 2003). Formerly partner of Q Advisors LLC, SVP Corp. Dev. LighTrade, Inc., Director ComSpace LLC and Corporate Finance Attorney with Cleary Gottlieb Steen and Hamilton (NY and London) and Perkins Coie (Seattle).
Steven J. Parrish
Vice President, Operations (November 2003). Twenty-six years of telecom experience including VP positions with Ameritech, Executive VP of USN Communications and Senior VP of WorldPort Communications with a focus on new technologies, engineering, and operations.
Douglas J. Minster
Vice President and General Counsel (November 2003). Former FCC attorney, member of founding team and senior legal advisor at Time Warner Telecommunications, VP of Patrick Communications, formed by ex-chairman of the FCC and senior advisor to new telecom and technology ventures.
Christopher N. Burns, CPA
Chief Accounting Officer (October 2003). Sixteen years of experience including Corporate Controller positions with emerging technology companies, Nauticus Networks and MCK Communications. Public accounting experience with Coopers & Lybrand (now PricewaterhouseCoopers).
Sonita Jagan
Chief Executive Officer of GT&T since June 1999, responsible for running one of the highest margin integrated telecommunications companies in the region. Started at GTT in March 1993.
November 2004
11
ATN Comparative Stock and Financial Data
Stock Price Performance
As of September 30, 2004
1-year Performance
ATN (ANK) 41% Russell 2000 17% S&P 500 12%
Amex
31%
Telecom
3-year Performance
149%
42% 7% -13%
Source: Yahoo Finance
November 2004
13
Valuation Ratios
Trailing twelve months
P/E Ratio
ATN
10.87
Telecom
Industry 27.16
S&P 500 22.57
Price to Sales1
1.63
2.32
3.19
Price to Book2
1.47
2.52
4.04
1ATN “sales” is comprised of revenue from telephone operations plus revenue from other operations 2Represents most recently reported quarter (June 30, 2004 for ATN) Source for Telecom and S&P comparative data—Multex Investor
November 2004
14
Dividend Ratios
Trailing twelve months
Dividend Yield
ATN 3.56
Telecom
Industry 3.9
S&P 500 2.08
Payout Ratio *
38.73
37.74
27.38
*Most recent quarter
Source for Telecom and S&P comparative data—Multex Investor
November 2004
15
Profitability Ratios
Trailing twelve months, as % of revenues
Operating Margin1
ATN 37.38
Telecom
13.92
Industry
S&P 500 21.59
Net Profit Margin2
14.99 8.57 13.92
1ATN “sales” is comprised of revenue from telephone operations plus revenue from other operations; ATN operating income is comprised of income from telephone operations plus loss from other operations.
2Calculation affected by inclusion of 100% of revenue from GT&T but only 80% of net income due to minority interest. Source for Telecom and S&P comparative data—Multex Investor
November 2004
16
Mgmt Effectiveness Ratios
Trailing twelve months, in %
Return On Assets
ATN 8.03
Telecom
Industry 3.95
S&P 500 7.1
Return on Investment
12.14
3.74
10.90
Return on Equity
12.65
12.15
19.54
Represents twelve months beginning on July 1, 2003 through June 30, 2004 for ATN Source for Telecom and S&P comparative data—Multex Investor
November 2004
17
Financial Strength Ratios
Most recent quarter
Total Debt to Equity
ATN
0.06
Telecom
Industry 0.79
S&P 500 0.65
Current Ratio
2.59
1.33
1.8
Represents most recently reported quarter (June 30, 2004 for ATN) Source for Telecom and S&P comparative data—Multex Investor
November 2004
18
Investment Considerations
Undervalued by almost any measure
Price/Earnings (11.17x); low price to cash flow ratio
Strong balance sheet:
Cash on hand $40.8 million at June 30, 2004
Debt of $6.0 million at June 30, 2004
High dividend yield with excellent payout record
Long track record of consistent returns
Disciplined strategy for growth
Improvement in other operations will deliver immediate benefits to bottom line
Cash flow and un-leveraged balance sheet, coupled with the potential for increasing the public float and market visibility provide fuel for external growth but focus will remain on bottom line
Earnings concentrated in Guyana
Low volume and float impact shares; controlling shareholder
November 2004
19