Third Quarter Results
Revenue was $115.6 million compared to prior year of $121.1 millionExcluding one-time items and a sale transaction, revenue increased year-on-yearInternational Telecom operations continue strong cash flow trendsUS Telecom operations benefitted from new long-term contractsBEVERLY, Mass., Oct. 23, 2019 (GLOBE NEWSWIRE) — ATN International, Inc. (Nasdaq: ATNI) today reported results for the third quarter ended September 30, 2019.Business Review and Outlook“Our third quarter performance reflects both continued organic growth in our International Telecom businesses and the improved performance of our US Telecom segment,” said Michael Prior, Chairman, and Chief Executive Officer. “While reported revenues and operating income declined year-on-year, adjusting for non-recurring items included in the year-ago quarter, consolidated recurring revenue¹ increased at a mid-single digit rate, driving even higher year-on-year growth in Adjusted EBITDA. “We continued to achieve positive operating results in our International Telecom segment, where we are benefitting from leadership positions in key markets and the network investments made in the past several years to expand fiber coverage and data capacity. Additionally, the steady recovery of our U.S. Virgin Islands business is evident as more hotels and residential housing units come back online in the market, and we take back market share. Adjusting for non-recurring items that were included in the year-ago quarter, our International Telecom segment revenue increased 6%, and we anticipate continued year-on-year revenue growth for the segment in the fourth quarter. More important, quarterly results for this segment again showed a significant improvement in free cash flow compared to 2018 levels.“US Telecom segment revenues also increased at a mid-single digit rate in the third quarter, and we were pleased to see a positive year-over-year comparison for the quarter. The positive revenue performance this quarter benefitted from a full quarter of Connect America Fund Phase ll (CAF II) federal support revenue and the new contract signed in August as part of a comprehensive agreement to support AT&T’s partnership with the First Responder Network Authority, known as FirstNet. The infrastructure services and support deliverables of this agreement will provide ATN with stable, long-term recurring revenue and consistent cash flows. We expect year-on-year US Telecom segment comparisons to continue to be favorable in this year’s fourth quarter. “With respect to our Renewable Energy segment, we are building part of our shovel ready pipeline and adding additional capacity, while at the same time holding preliminary discussions with potential strategic partners interested in investing through the Vibrant Energy platform.”Third Quarter 2019 Financial ResultsThird quarter 2019 revenues of $115.6 million were down 5% compared to last year’s reported revenues of $121.1 million. Compared with third quarter 2018 recurring revenues1 of $109.7 million, third quarter 2019 recurring revenues1 increased by 5%. Last year’s reported revenues included $4.2 million from the Company’s U.S. solar portfolio sold in late 2018 and non-recurring revenue of $7.2 million for additional hurricane related USF high cost support funding from the FCC for our U.S. Virgin Islands business. Operating income for the third quarter of 2019 was $10.2 million compared with the prior year’s $30.8 million, and Adjusted EBITDA2 was $33.0 million, compared to $38.9 million in the prior year period. In addition to the $11.4 million of 2018 non-recurring revenue items noted above, the operating income comparison was also negatively affected by the prior year’s gain of $13.5 million from the sale of certain US Telecom assets. Other income (expense) also includes a $2.1 million mark-to-market write-down of a non-controlling equity investment. Net income attributable to ATN’s stockholders for the third quarter was $1.4 million, or $0.09 per diluted share, compared with the prior year period’s net income of $17.0 million, or $1.06 per diluted share. ______________________________________________________________________
1 See Table 6 for reconciliation of Revenue to Recurring Revenue, which is a non-GAAP measure
2 See Table 5 for reconciliation of Net Income to Adjusted EBITDA.
Third Quarter 2019 Operating HighlightsThe Company has three reportable segments: (i) US Telecom; (ii) International Telecom; and (iii) Renewable Energy. The following is the reconciliation of Revenue to Recurring Revenue for the three months ended September 30, 2019 and September 30, 2018:
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