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8-K - 8-K - ATN International, Inc.a17-24891_18k.htm

Exhibit 99.1

 

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE

CONTACT:

978-619-1300

Monday October 30, 2017

 

Michael T. Prior

 

 

Chief Executive Officer

 

 

 

 

 

Justin D. Benincasa

 

 

Chief Financial Officer

 

ATN Reports

Third Quarter 2017 Results

 

Third Quarter Financial Highlights:

 

·                  Revenues: $122.1 million

·                  Adjusted EBITDA(1), which excludes the loss on damaged assets and other hurricane related charges was $37.7 million

·                  Operating loss of $19.5 million

·                  Operating income excluding hurricane related charges(2) is $17.0 million.

·                  Net loss attributable to ATN’s stockholders: $24.8 million, or $1.53 loss per share

·                  Net income attributable to ATN’s stockholders excluding hurricane related charges(2) is $11.9 million, or $0.73 per share

·                  Cash flow from operating activities was $121.4 million for the first nine months of 2017

 

Beverly, MA (October 30, 2017) — ATN (NASDAQ: ATNI) today reported results for the third quarter and nine months ended September 30, 2017. Unless otherwise indicated, the discussion of the Company’s results is focused on its continuing operations, and comparisons are to the same period in the prior year.

 

Business Review and Outlook

 

“ATN’s operating performance in the third quarter was broadly in line with our expectations excluding the impact of the September hurricanes on the U.S. Virgin Islands,” said Michael Prior, Chief Executive Officer. “As previously disclosed, we had anticipated a year-over-year decline in wireless revenues resulting from contractual pricing changes in our domestic wholesale wireless business. That was the case in the third quarter, but we were pleased to see traffic was modestly better than we had expected in this seasonally stronger period.  Approximately half of the decline in wireline revenues from last year related to the sale of our U.S. wireline business this past March.  The other half of the decline reflected the impact from Hurricanes Irma and Maria, which significantly impacted the customers and damaged the network of Viya, our Virgin Islands subsidiary, in September.

 

“We could not be prouder of Viya’s employees and leadership team for the work they have done before, during and after the storm. They have been instrumental in leading, coordinating and partnering with local and federal authorities and charitable organizations on many community relief efforts. Among other things Viya has been coordinating damage assessments with the local power authority, providing free wireless hot

 



 

spots to the community and restoring critical services.  These recovery efforts have been supported by numerous engineers and technical and other employees from within the ATN group.

 

“We have been able to restore wireless coverage to a large part of St. Thomas and expect to bring up wireless service on St. Croix over the next few weeks.  St. John, the smallest of the main islands, is being serviced with hot spots. Our damage assessment has been hampered by the still devastating island conditions and lack of commercial power and therefore is not yet complete. We currently estimate that approximately one third of our wireline plant sustained significant damage, but only a very small percentage of our wireline customers are currently receiving service, due to the lack of commercial power as well as the damage to many residences.  Until commercial electricity is restored to more of the territory, it is difficult to assess the timeline for restoring wireline services, which currently comprise most of our revenue in the USVI. We do have insurance for named storms which compensates us for replacement costs of damaged property, extra expenses and business interruption up to a net coverage of approximately $34 million, but we believe total losses for these items will exceed this level.  Additionally, from a financial reporting standpoint, we do not anticipate the positive offset from insurance proceeds to be recognized until 2018.  We expect that the effect on our Adjusted EBITDA of the loss of wireline service revenues from our U.S. Virgin Island properties will be most pronounced in the fourth quarter of this year, with progressive improvement expected over the following two to three quarters.

 

“In the third quarter, we made progress in our renewable energy venture in India, Vibrant Energy. We received final regulatory approval for an 11 MW (DC) project installation, and we have three additional projects with a combined 29MW (DC) completed and producing power to the grid, but we are awaiting regulatory approval to begin billing our identified customers.

 

“We completed over $10 million of repurchases of the Company’s common stock during the third quarter as part of the previously announced shift in our capital allocation strategy.  Additionally, we made a minority investment in a newly formed Australian telecommunications infrastructure company, and we continue to evaluate other opportunities to put our significant balance sheet capacity to work,” Mr. Prior concluded.

 

Third Quarter 2017 Financial Results

 

The Company intends to provide an updated estimate of the loss on damaged assets and other hurricane related charges in the U.S. Virgin Islands with its Quarterly Report on Form 10-Q for the third quarter 2017 to be filed with the SEC as its assessment of the hurricanes impact on operations is still ongoing.

 

Third quarter 2017 revenues were $122.1 million, a 12% decrease from the $138.8 million reported for the third quarter of 2016. Revenue decreases for the quarter include $7.3 million from the sale of our U.S. Wireline and St. Maarten businesses in the first quarter of the year and the sale of the British Virgin Island business this quarter, $4.4 million in service disruption credits issued to customers as a result of the hurricanes, and declines in U.S. Telecom revenues mainly related to lower contractual rates. Adjusted EBITDA(1) for the third quarter was $37.7 million, 19% below the prior year period, primarily associated with the foregoing revenue decreases.  Operating loss for the third quarter was $19.5 million due to expenses and charges related to the hurricanes as well as other revenue declines.  Operating income excluding hurricane related charges(2) for the third quarter was $17.0 million.

 

Net loss attributable to ATN’s stockholders for the third quarter was $24.8 million or $1.53 loss per share, a decrease over the prior year net income of $7.2 million or $0.44 income per share.  Net Income excluding hurricane related charges(2) for the third quarter was $11.9 million, or $0.73 per share.

 


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

(2) See Table 6 for reconciliation of Operating Income (Loss), Net Income (Loss) and Net Income (Loss) per share to Operating Income excluding hurricane charges, Net Income excluding hurricane charges and Diluted income per share excluding hurricane charges, respectively.

 

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Revenues for the first nine months of 2017 were $373.5 million, a 14% increase from the $328.5 million reported for the same period in 2016.  Revenue increases for this period are mostly due to the impact of the 2016 acquisitions in Bermuda and the U.S. Virgin Islands.  Adjusted EBITDA(1) for the first nine months of 2017 was $118.0 million, an increase of 3% from the prior year.  The operating income of $14.1 million for the first nine months of 2017 includes $36.6 million of charges related to hurricane damages this quarter without the benefit of any offset from related insurance claim proceeds.  Operating income excluding hurricane related charges(2) for the first nine months of 2017 is $50.7 million.  Net loss attributable to ATN stockholders was $12.0 million or $0.74 loss per share, as compared to the net income attributable to ATN stockholders of $10.2 million and $0.63 per share in the prior year period. Net income excluding hurricane related charges(2) for the first nine months of 2017 was $24.6 million or $1.52 per diluted share.

 

Third Quarter 2017 Operating Highlights

 

The Company has three reportable segments: (i) U.S. Telecom; (ii) International Telecom; and (iii) Renewable Energy.

 

U.S. Telecom

 

U.S. Telecom revenues consist mainly of wireless revenues from our voice and data wholesale roaming operations and our smaller retail operations in the Southwestern United States, as well as enterprise and wholesale wireline revenues.  Total U.S. Telecom segment revenues were $40.1 million in the third quarter of 2017, a 16% decrease from the $47.6 million reported in the third quarter of 2016.  U.S. Wireless revenues declined 8% to $36.8 million compared with $40.1 million in the prior year quarter, due mostly to lower contractual wholesale roaming rates and revenue caps.  U.S. Wireline revenues decreased to $2.3 million from $6.9 million in the prior year primarily as a result the sale of our Northeastern U.S. wireline business in early March 2017. The Company ended the third quarter of 2017 with 1,061 domestic base stations in service compared to 926 at the end of last year’s third quarter.

 

U.S. Telecom Adjusted EBITDA(1) of $21.7 million in the third quarter of 2017 decreased 11% compared to the prior year’s $24.3 million.  The decrease was mainly due to the reduction in wireless revenues as previously noted partially offset by reductions in wireless operating expenses.

 

International Telecom

 

International Telecom consists of a broad range of information and communications services including wireline and wireless data, internet, voice and video service revenues from our operations in Bermuda and the Caribbean including the U.S. Virgin Islands. International Telecom revenues were $77.0 million in the third quarter of 2017, a 10% decrease from the $85.3 million reported in the third quarter of 2016. In addition to the impact of the sale of our businesses in St. Maarten and the British Virgin Islands earlier in 2017, $4.4 million of service credits were issued for the month of September to customers impacted by hurricane outages in the U.S. Virgin Islands.

 

International Telecom Adjusted EBITDA(1) of $20.3 million in the third quarter decreased 18% from $24.7 million in the prior year period.  The decrease is the primarily the result of the revenue impacts from service credits  following the hurricanes in the U.S. Virgin Islands, but this figure excludes the loss on damaged assets and other hurricane related charges.

 

Renewable Energy

 

Renewable Energy segment revenues are generated principally by the sale of energy and solar renewable energy credits from our 28 commercial solar projects in the United States.  For the third quarter of 2017, revenues from our renewable energy business were $5.0 million, down 15% from the $5.9 million in the prior year mostly due to the scheduled expiration of certain renewable energy credits.  Adjusted EBITDA(1)

 

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for the Renewable Energy segment was $2.6 million in the third quarter, down $1.4 million from the prior year quarter due to the lower revenue and increased operating expenses from the ramp up of our solar business in India ahead of the offsetting revenue.

 

Balance Sheet and Cash Flow Highlights

 

Cash and cash equivalents at September 30, 2017 were $224.6 million.  In addition, the Company held $7.9 million of short-term investments and $17.0 million of restricted cash.  Net cash provided by operating activities was $121.4 million for the first nine months of 2017, compared with $92.1 million for the first nine months of 2016.  The increase in net cash provided by operating activities is due to the 2017 growth in revenue as a result of the 2016 acquisitions in the U.S. Virgin Islands and Bermuda, in addition to the net impact of 2016 transaction-related charges and impairments of assets, and changes in working capital.  During the first nine months of 2017, the Company used cash of $32.2 million for investments in new assets and businesses after netting proceeds received from the sales and dispositions of other business lines.  Total capital expenditures were $107.7 million for the first nine months of 2017. The Company expects full year 2017 capital expenditures for its domestic and international telecom businesses to be between the $95.0 million to $110.0 million range estimated at the beginning of the year.  Expenditures include planned major network expansions and upgrades in multiple markets, including the recently acquired Bermuda and U.S. Virgin Islands businesses, and therefore are higher than what we would consider to be ordinary course capital expenditures.  These projects include extensive fiber builds and upgrades as well as market-wide mobile data network upgrades but exclude the restoration work being undertaken in the U.S. Virgin Islands post hurricanes Irma and Maria.  In addition, capital expenditures for our renewable energy business are expected to be in the range of $30.0 million to $40.0 million for the full year 2017, primarily related to ongoing construction of solar projects in India.

 

Through September 30, the Company has repurchased 201,932 shares of common stock totaling $10.6 million and paid $16.5 million in dividends in 2017.

 

Conference Call Information

 

ATN will host a conference call on Tuesday, October 31, 2017 at 9:30 a.m. Eastern Time (ET) to discuss its third quarter 2017 results. The call will be hosted by Michael Prior, President and Chief Executive Officer, and Justin Benincasa, Chief Financial Officer. The dial-in numbers are US/Canada: (877) 734-4582 and International: (678) 905-9376, conference ID 1105620. A replay of the call will be available at ir.atni.com beginning at 1:00 p.m. (ET) on October 31, 2017.

 

About ATN

 

ATN International, Inc. (Nasdaq:ATNI), headquartered in Beverly, Massachusetts, provides telecommunications services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean and owns and operates solar power systems in various locations in the United States and India. Through our operating subsidiaries, we (i) provide both wireless and wireline connectivity to residential and business customers, including a range of mobile wireless solutions, high speed internet services, video services and local exchange services, (ii) provide distributed solar electric power to corporate and municipal customers and (iii) are the owner and operator of terrestrial and submarine fiber optic transport systems. For more information, please visit www.atni.com.

 

Cautionary Language Concerning Forward Looking Statements

 

This press release contains forward-looking statements relating to, among other matters, our future financial performance and results of operations; the estimated timeline for restoration of our U.S. Virgin Islands operations; our estimates of total losses due to Hurricanes Irma and Maria; the competitive environment in our key markets, demand for our services and industry trends; the pace of expansion and improvement of our telecommunications network and renewable energy operations including our level of estimated future capital expenditures and our realization of the benefits of these investments; the anticipated timing of our

 

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build schedule and the commencement of energy production of our India renewable energy projects; 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)  our ability to conduct and complete a full assessment of damage in the U.S. Virgin Islands; (2) our ability to restore our networks and services to our customers in the U.S. Virgin Islands in an efficient and timely manner; (3) our ability to operate our newly acquired businesses in Bermuda and the U.S. Virgin Islands and both integrate these operations into our existing operations and execute planned network expansions and upgrades; (4) the general performance of our operations, including operating margins, revenues, capital expenditures, and the future growth and retention of our major customers and subscriber base and consumer demand for solar power; (5) government regulation of our businesses, which may impact our FCC and other telecommunications licenses or our renewables business; (6) economic, political and other risks facing our operations; (7) our ability to maintain favorable roaming arrangements; (8) our ability to efficiently and cost-effectively upgrade our networks and IT platforms to address  rapid and significant technological changes in the telecommunications industry; (9) the loss of or an inability to recruit skilled personnel in our various jurisdictions, including key members of management; (10) our ability to find investment or acquisition or disposition opportunities that fit our strategic goals for the Company; (11) increased competition; (12) our ability to expand our renewable energy business; (13) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure; (14) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (15) the occurrence of weather events and natural catastrophes; (16) our continued access to capital and credit markets; (17) the risk of currency fluctuation for those markets in which we operate and (18) our ability to realize the value that we believe exists in our businesses.  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, 2016, filed with the SEC on March 1, 2017 and the other reports we file 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.

 

Use of Non-GAAP Financial Measures

 

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release also contains non-GAAP financial measures. Specifically, ATN has presented the following measures:  Adjusted EBITDA; Operating Income excluding hurricane related charges; Net Income excluding hurricane related charges and; Diluted income per share excluding hurricane related charges.  Adjusted EBITDA is defined as net income attributable to ATN stockholders before bargain purchase gain, impairment of long-lived assets, restructuring charges, interest, taxes, depreciation and amortization, transaction-related charges, other income or expense, loss on damages of assets and other hurricane related charges and net income attributable to non-controlling interests.  Operating Income excluding hurricane related charges is defined as Operating Income (Loss) adjusted for the loss on damaged assets and other charges from hurricanes.  Net Income excluding hurricane related charges is defined as Net Income (Loss) adjusted for the loss on damaged assets and other hurricane related charges.  Diluted income per share excluding hurricane related charges is defined as net income (loss) per diluted share adjusted for the loss on damaged assets and other hurricane related charges.  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 comparing such performance with prior periods. ATN’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our 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 used in this press release to the most directly comparable GAAP financial measure is set forth in the text of, and the accompanying tables to, this press release.

 

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Table 1

 

ATN International, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in Thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2017

 

2016

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

224,597

 

$

269,721

 

Restricted cash

 

833

 

524

 

Short-term investments

 

7,857

 

9,237

 

Other current assets

 

101,451

 

87,887

 

 

 

 

 

 

 

Total current assets

 

334,738

 

367,369

 

 

 

 

 

 

 

Long-term restricted cash

 

16,206

 

18,113

 

Property, plant and equipment, net

 

624,595

 

647,712

 

Goodwill and other intangible assets, net

 

172,231

 

126,193

 

Other assets

 

36,248

 

38,831

 

 

 

 

 

 

 

Total assets

 

$

1,184,018

 

$

1,198,218

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

Current portion of long-term debt

 

$

13,944

 

$

12,440

 

Taxes payable

 

9,370

 

13,531

 

Other current liabilities

 

150,363

 

124,134

 

 

 

 

 

 

 

Total current liabilities

 

173,677

 

150,105

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

$

145,707

 

$

144,383

 

Deferred income taxes

 

45,655

 

46,622

 

Other long-term liabilities

 

32,245

 

47,939

 

 

 

 

 

 

 

Total long-term liabilities

 

223,607

 

238,944

 

 

 

 

 

 

 

Total liabilities

 

397,284

 

389,049

 

 

 

 

 

 

 

Total ATN International, Inc.’s stockholders’ equity

 

644,628

 

677,055

 

Non-controlling interests

 

142,106

 

132,114

 

 

 

 

 

 

 

Total equity

 

786,734

 

809,169

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

1,184,018

 

$

1,198,218

 

 

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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,

 

 

 

2017

 

2016

 

2017

 

2016

 

Revenues:

 

 

 

 

 

 

 

 

 

Wireless

 

$

57,254

 

$

61,151

 

$

167,945

 

$

177,300

 

Wireline

 

56,309

 

66,129

 

181,568

 

122,190

 

Renewable energy

 

4,974

 

5,784

 

14,765

 

16,935

 

Equipment and other

 

3,595

 

5,731

 

9,214

 

12,046

 

Total revenue

 

122,132

 

138,795

 

373,492

 

328,471

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Termination and access fees

 

27,387

 

34,359

 

85,758

 

77,872

 

Engineering and operations

 

18,852

 

19,372

 

57,881

 

40,621

 

Sales, marketing and customer service

 

8,440

 

8,377

 

26,176

 

21,814

 

Equipment expense

 

3,167

 

3,390

 

8,720

 

10,751

 

General and administrative

 

26,620

 

26,854

 

76,969

 

62,525

 

Transaction-related charges

 

61

 

2,091

 

887

 

16,156

 

Restructuring charges

 

 

 

 

1,785

 

Depreciation and amortization

 

21,157

 

21,866

 

65,904

 

52,913

 

Impairment of long-lived assets

 

 

349

 

 

11,425

 

Bargain purchase gain

 

 

 

 

(7,304

)

(Gain) loss on sale of assets

 

(593

)

56

 

513

 

27

 

Loss on damaged assets and other hurricane related charges

 

36,566

 

 

36,566

 

 

Total operating expenses

 

141,657

 

116,714

 

359,374

 

288,585

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(19,525

)

22,081

 

14,118

 

39,886

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(1,645

)

(1,551

)

(5,480

)

(2,745

)

Loss on deconsolidation of subsidiary

 

 

 

(529

)

 

Other expense

 

(690

)

766

 

(1,751

)

643

 

Other expense, net

 

(2,335

)

(785

)

(7,760

)

(2,102

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(21,860

)

21,296

 

6,358

 

37,784

 

Income tax expense (benefit)

 

(884

)

9,602

 

4,839

 

17,178

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

(20,976

)

11,694

 

1,519

 

20,606

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to non-controlling interests, net

 

(3,784

)

(4,523

)

(13,535

)

(10,400

)

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

$

(24,760

)

$

7,171

 

$

(12,016

)

$

10,206

 

 

 

 

 

 

 

 

 

 

 

Basic net income per weighted average share attributable to ATN International, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(1.53

)

$

0.44

 

$

(0.74

)

$

0.63

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per weighted average share attributable to ATN International, Inc. stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(1.53

)

$

0.44

 

$

(0.74

)

$

0.63

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

16,178

 

16,148

 

16,177

 

16,128

 

Diluted

 

16,178

 

16,241

 

16,177

 

16,228

 

 

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Table 3

 

ATN International, Inc.

Unaudited Condensed Consolidated Cash Flow Statement

(in Thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2017

 

2016

 

 

 

 

 

 

 

Net income

 

$

1,519

 

$

20,606

 

Depreciation and amortization

 

65,904

 

52,913

 

Stock-based compensation

 

5,437

 

5,032

 

Loss on damaged assets and other hurricane related charges

 

35,213

 

 

Loss on deconsolidation of subsidiary

 

529

 

 

(Gain) Loss on sale of assets

 

(536

)

27

 

Equity in earnings

 

2,033

 

 

Bargain purchase gain

 

 

(7,304

)

Impairment of long-lived assets

 

 

11,425

 

Deferred income taxes

 

1,456

 

(8,775

)

Change in prepaid and accrued income taxes

 

(7,971

)

21,886

 

Change in other operating assets and liabilities

 

13,769

 

(5,135

)

Other non-cash activity

 

4,011

 

1,430

 

 

 

 

 

 

 

Net cash provided by operating activities

 

121,364

 

92,105

 

 

 

 

 

 

 

Capital expenditures

 

(107,652

)

(78,455

)

Acquisition of businesses, net of acquired cash of $0 and $8.3 million

 

(20,470

)

(152,499

)

Sale of business, net of transferred cash of $2.1 million

 

22,381

 

 

Purchases of spectrum licenses and other intangible assets, including deposits

 

(36,832

)

(10,860

)

Purchase of securities

 

 

(9,422

)

Proceeds from sale of investments

 

2,761

 

1,424

 

Change in restricted cash

 

1,598

 

(28,287

)

 

 

 

 

 

 

Net cash used in investing activities

 

(138,214

)

(278,099

)

 

 

 

 

 

 

Dividends paid on common stock

 

(16,502

)

(15,468

)

Distributions to non-controlling interests

 

(3,583

)

(7,667

)

Principal repayments of term loan

 

(5,447

)

(7,982

)

Proceeds from new borrowings

 

8,571

 

60,000

 

Purchases of common stock

 

(11,139

)

(3,997

)

Investments made by minority shareholders in consolidated affiliates

 

122

 

22,409

 

Other

 

(496

)

(650

)

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

(28,474

)

46,645

 

 

 

 

 

 

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

200

 

(263

)

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(45,124

)

(139,612

)

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

269,721

 

392,045

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

224,597

 

$

252,433

 

 

8



 

Table 4

 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the three months ended September 30, 2017 is as follows:

 

 

 

U.S. 
Telecom

 

International
Telecom

 

Renewable 
Energy

 

Corporate and 
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

36,830

 

$

20,424

 

$

 

$

 

$

57,254

 

Wireline

 

2,336

 

53,973

 

 

 

56,309

 

Renewable Energy

 

 

 

4,974

 

 

4,974

 

Equipment and Other

 

945

 

2,614

 

36

 

 

3,595

 

Total Revenue

 

$

40,111

 

$

77,011

 

$

5,010

 

$

 

$

122,132

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

15,987

 

$

(28,491

)

$

976

 

$

(7,997

)

$

(19,525

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(1,268

)

$

(2,243

)

$

(273

)

$

 

$

(3,784

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

21,695

 

$

20,340

 

$

2,632

 

$

(7,001

)

$

37,666

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (at September 30, 2017):

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

31,328

 

$

112,169

 

$

19,147

 

$

70,643

 

$

233,287

 

Total current assets

 

61,473

 

163,235

 

25,301

 

84,729

 

334,738

 

Fixed assets, net

 

100,349

 

347,421

 

158,554

 

18,271

 

624,595

 

Total assets

 

221,528

 

586,747

 

201,024

 

174,719

 

1,184,018

 

Total current liabilities

 

53,065

 

86,359

 

18,561

 

15,692

 

173,677

 

Total debt

 

 

95,465

 

64,187

 

 

159,652

 

 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the three months ended September 30, 2016 is as follows:

 

 

 

U.S. 
Telecom

 

International
Telecom

 

Renewable 
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

40,076

 

$

21,075

 

$

 

$

 

$

61,151

 

Wireline

 

6,936

 

59,193

 

 

 

66,129

 

Renewable Energy

 

 

 

5,784

 

 

5,784

 

Equipment and Other

 

548

 

5,045

 

138

 

 

5,731

 

Total Revenue

 

$

47,560

 

$

85,313

 

$

5,922

 

$

 

$

138,795

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

18,120

 

$

11,358

 

$

2,822

 

$

(10,219

)

$

22,081

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(2,034

)

$

(2,036

)

$

(453

)

$

 

$

(4,523

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

24,296

 

$

24,732

 

$

4,073

 

$

(6,658

)

$

46,443

 

 


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

 

9



 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the nine months ended September 30, 2017 is as follows:

 

 

 

U.S. 
Telecom

 

International
 Telecom

 

Renewable 
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

108,499

 

$

59,446

 

$

 

$

 

$

167,945

 

Wireline

 

10,443

 

171,125

 

 

 

181,568

 

Renewable Energy

 

 

 

14,765

 

 

14,765

 

Equipment and Other

 

1,939

 

7,101

 

174

 

 

9,214

 

Total Revenue

 

$

120,881

 

$

237,672

 

$

14,939

 

$

 

$

373,492

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

44,520

 

$

(7,713

)

$

3,263

 

$

(25,952

)

$

14,118

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(5,441

)

$

(7,256

)

$

(838

)

$

 

$

(13,535

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

64,131

 

$

67,367

 

$

8,204

 

$

(21,714

)

$

117,988

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flow Data:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

16,773

 

$

54,775

 

$

31,327

 

$

4,779

 

$

107,654

 

 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

For the nine months ended September 30, 2016 is as follows:

 

 

 

U.S. 
Telecom

 

International
Telecom

 

Renewable 
Energy

 

Corporate and
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

$

117,194

 

$

60,106

 

$

 

$

 

$

177,300

 

Wireline

 

18,793

 

103,397

 

 

 

122,190

 

Renewable Energy

 

 

 

16,935

 

 

16,935

 

Equipment and Other

 

1,716

 

10,071

 

259

 

 

12,046

 

Total Revenue

 

$

137,703

 

$

173,574

 

$

17,194

 

$

 

$

328,471

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

39,698

 

$

28,320

 

$

(734

)

$

(27,398

)

$

39,886

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest ( net income or (loss) )

 

$

(4,888

)

$

(3,911

)

$

(1,601

)

$

 

$

(10,400

)

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP measure:

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

68,179

 

$

54,232

 

$

12,123

 

$

(19,646

)

$

114,888

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Cash Flow Data:

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

26,709

 

$

36,543

 

$

10,326

 

$

4,877

 

$

78,455

 

 


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

 

10



 

ATN International, Inc.

Selected Segment Financial Information

(In Thousands)

 

At December 31, 2016 is as follows:

 

 

 

U.S. 
Telecom

 

International
 Telecom

 

Renewable 
Energy

 

Corporate and 
Other *

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

22,235

 

$

97,681

 

$

27,378

 

$

131,664

 

$

278,958

 

Total current assets

 

50,983

 

143,201

 

37,440

 

135,745

 

367,369

 

Fixed assets, net

 

129,274

 

372,741

 

130,268

 

15,429

 

647,712

 

Total assets

 

240,006

 

597,454

 

190,253

 

170,505

 

1,198,218

 

Total current liabilities

 

23,162

 

95,502

 

12,603

 

18,838

 

150,105

 

Total debt

 

 

91,316

 

65,507

 

 

156,823

 

 


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

 

ATN International, Inc.

Selected Segment Operational Data

 

 

 

Quarter ended

 

 

 

 

 

December 31,

 

March 31,

 

June 30,

 

September 30,

 

 

 

 

 

2016 *

 

2017 *

 

2017 *

 

2017 *, **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Telecom Operational Data:

 

 

 

 

 

 

 

 

 

 

 

Wireless - Total Domestic Base Stations

 

1,006

 

1,019

 

1,041

 

1,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Telecom Operational Data:

 

 

 

 

 

 

 

 

 

 

 

Wireline - Voice / Access lines

 

179,700

 

176,900

 

174,600

 

172,300

 

 

 

Wireline - Data Subscribers

 

97,400

 

99,900

 

101,700

 

102,400

 

 

 

Wireline - Video Subscribers

 

48,600

 

47,900

 

47,200

 

46,700

 

 

 

Wireless - Subscribers

 

304,700

 

302,900

 

302,900

 

302,000

 

 

 

 


* Adjusted subscriber counts for the sales of St Maarten and British Virgin Islands, and the transfer of ownership of Aruba business

 

**  The subscriber counts for the U.S. Virgin Islands were as of August 31, 2017 and before the impact of Hurricane Irma and Maria.

 

11



 

Table 5

 

ATN International, Inc.

Reconciliation of Non-GAAP Measures

(In Thousands)

 

Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended September 30, 2017 and 2016

 

Three Months Ended September 30, 2017

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

Net Income attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

(24,760

)

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

3,784

 

Income tax benefit

 

 

 

 

 

 

 

 

 

(884

)

Other expense, net

 

 

 

 

 

 

 

 

 

690

 

Interest expense, net

 

 

 

 

 

 

 

 

 

1,645

 

Operating income

 

$

15,987

 

$

(28,491

)

$

976

 

$

(7,997

)

$

(19,525

)

Depreciation and amortization

 

6,301

 

12,088

 

1,656

 

1,112

 

21,157

 

(Gain) loss on sale of assets

 

(593

)

 

 

 

(593

)

Loss on damaged assets and other hurricane related charges

 

 

36,566

 

 

 

36,566

 

Transaction-related charges

 

 

177

 

 

(116

)

61

 

Adjusted EBITDA

 

$

21,695

 

$

20,340

 

$

2,632

 

$

(7,001

)

$

37,666

 

 

Three Months Ended September 30, 2016

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

7,171

 

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

4,523

 

Income tax expense

 

 

 

 

 

 

 

 

 

9,602

 

Other income, net

 

 

 

 

 

 

 

 

 

(766

)

Interest expense, net

 

 

 

 

 

 

 

 

 

1,551

 

Operating income

 

$

18,120

 

$

11,358

 

$

2,822

 

$

(10,219

)

$

22,081

 

Depreciation and amortization

 

6,176

 

12,896

 

1,227

 

1,567

 

21,866

 

Impairment of long-lived asset

 

 

349

 

 

 

349

 

(Gain) loss on sale of assets

 

 

56

 

 

 

56

 

Transaction-related charges

 

 

73

 

24

 

1,994

 

2,091

 

Adjusted EBITDA

 

$

24,296

 

$

24,732

 

$

4,073

 

$

(6,658

)

$

46,443

 

 


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

 

12



 

Reconciliation of Net Income to Adjusted EBITDA for the Nine Months Ended September 30, 2017 and 2016

 

Nine Months Ended September 30, 2017

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

Net Income attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

(12,016

)

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

13,535

 

Income tax expense

 

 

 

 

 

 

 

 

 

4,839

 

Loss on deconsolidation of subsidiary

 

 

 

 

 

 

 

 

 

529

 

Other expense, net

 

 

 

 

 

 

 

 

 

1,751

 

Interest expense, net

 

 

 

 

 

 

 

 

 

5,480

 

Operating income

 

$

44,520

 

$

(7,713

)

$

3,263

 

$

(25,952

)

$

14,118

 

Depreciation and amortization

 

19,098

 

38,337

 

4,941

 

3,528

 

65,904

 

(Gain) loss on sale of assets

 

513

 

 

 

 

513

 

Loss on damaged assets and other hurricane related charges

 

 

36,566

 

 

 

36,566

 

Transaction-related charges

 

 

177

 

 

710

 

887

 

Adjusted EBITDA

 

$

64,131

 

$

67,367

 

$

8,204

 

$

(21,714

)

$

117,988

 

 

Nine Months Ended September 30, 2016

 

 

 

U.S.
Telecom

 

International
Telecom

 

Renewable
Energy

 

Corporate
and Other *

 

Total

 

Net Income (Loss) attributable to ATN International, Inc. stockholders

 

 

 

 

 

 

 

 

 

$

10,206

 

Net Income (Loss) attributable to non-controlling interests, net of tax

 

 

 

 

 

 

 

 

 

10,400

 

Income tax expense

 

 

 

 

 

 

 

 

 

17,178

 

Other income, net

 

 

 

 

 

 

 

 

 

(643

)

Interest expense, net

 

 

 

 

 

 

 

 

 

2,745

 

Operating income

 

$

39,698

 

$

28,320

 

$

(734

)

$

(27,398

)

$

39,886

 

Depreciation and amortization

 

17,405

 

27,482

 

3,642

 

4,384

 

52,913

 

Impairment of long-lived asset

 

11,076

 

349

 

 

 

11,425

 

Bargain purchase gain

 

 

(7,304

)

 

 

(7,304

)

(Gain) loss on sale of assets

 

 

27

 

 

 

27

 

Restructuring charges

 

 

1,785

 

 

 

1,785

 

Transaction-related charges

 

 

3,573

 

9,215

 

3,368

 

16,156

 

Adjusted EBITDA

 

$

68,179

 

$

54,232

 

$

12,123

 

$

(19,646

)

$

114,888

 

 


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

 

13



 

Table 6

 

ATN International, Inc.

(In Thousands)

Reconciliation of GAAP measures to Non-GAAP measures

 

Reconciliation of Operating Income (Loss) to Operating Income excluding hurricane charges, Net Income (Loss) to Net Income (Loss) excluding hurricane charges and Net Income (Loss) per share to Net Income per share excluding hurricane charges

 

For the three months ended September 30, 2017 is as follows:

 

 

 

Operating Income (Loss)

 

Net Income (Loss)

 

Net Income (Loss) per
share

 

GAAP - As reported

 

$

(19,525

)

$

(24,760

)

$

(1.53

)

Add back: Loss on damaged assets and other charges from hurricanes

 

36,566

 

36,566

 

2.26

 

Tax effect

 

 

69

 

0.00

 

 

 

 

 

 

 

 

 

Non-GAAP

 

$

17,041

 

$

11,875

 

$

0.73

 

 

For the nine months ended September 30, 2017 is as follows:

 

 

 

Operating Income (Loss)

 

Net Income (Loss)

 

Net Income (Loss) per
share

 

GAAP - As reported

 

$

14,118

 

$

(12,016

)

$

(0.74

)

Add back: Loss on damaged assets and other charges from hurricanes

 

36,566

 

36,566

 

2.26

 

Tax effect

 

 

69

 

0.00

 

 

 

 

 

 

 

 

 

Non-GAAP

 

$

50,684

 

$

24,619

 

$

1.52

 

 

14