UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ◻ | ||
Non-accelerated filer ◻ |
| Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
As of November 12, 2024, the registrant had outstanding
ATN INTERNATIONAL, INC.
FORM 10-Q
Quarter Ended September 30, 2024
2
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (or the “Report”) 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 its strategic investment plan, its future revenues, operating income, operating margin, cash flows, network and operating costs, EBITDA, Adjusted EBITDA, Net Debt, Net Debt Ratio, cost management initiatives, and capital investments; demand for the Company’s services and industry trends; the timing of revenue, the Company’s liquidity; the expansion of the Company’s customer base and networks; receipt of certain government grants and management’s plans, expectations 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, the impact of cost savings initiatives, 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) management transitions, and 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 the impact of such events on the timing of project implementation and corresponding revenue, 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, 2023, filed with the SEC on March 15, 2024, 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.
In this Report, the words “the Company,” “we,” “our,” “ours,” “us” and “ATN” refer to ATN International, Inc. and its subsidiaries. This Report contains trademarks, service marks and trade names that are the property of, or licensed by, ATN and its subsidiaries.
References to dollars ($) refer to US dollars unless otherwise specifically indicated.
3
PART I—FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
ATN INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share Data)
September 30, | December 31, | |||||
| 2024 |
| 2023 | |||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash |
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Short-term investments |
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Accounts receivable, net of allowances for credit losses of $ |
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Replace and remove program receivable | | | ||||
Customer receivable | | | ||||
Inventory, materials and supplies |
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Prepayments and other current assets |
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Total current assets |
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Fixed Assets, net |
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Telecommunication licenses, net |
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Goodwill |
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Intangible assets, net |
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Operating lease right-of-use assets |
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Customer receivable - long term | | | ||||
Other assets |
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Total assets | $ | | $ | | ||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | ||||||
Current Liabilities: | ||||||
Current portion of long-term debt | $ | | $ | | ||
Current portion of customer receivable credit facility | | | ||||
Accounts payable and accrued liabilities |
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Dividends payable |
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Accrued taxes |
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Current portion of lease liabilities | | | ||||
Advance payments and deposits |
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Total current liabilities |
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Deferred income taxes |
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Lease liabilities, excluding current portion | | | ||||
Deferred revenue, long-term | | | ||||
Other liabilities |
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Customer receivable credit facility, net of current portion | | | ||||
Long-term debt, excluding current portion |
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Total liabilities |
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Redeemable noncontrolling interests: | ||||||
Preferred redeemable noncontrolling interests | | | ||||
Common redeemable noncontrolling interests | | | ||||
Total redeemable noncontrolling interests | | | ||||
ATN International, Inc. Stockholders’ Equity: | ||||||
Preferred stock, $ |
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Common stock, $ |
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Treasury stock, at cost; |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income |
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Total ATN International, Inc. stockholders’ equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities, redeemable noncontrolling interests and equity | $ | | $ | | ||
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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ATN INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited)
(In Thousands, Except Per Share Data)
Three months ended September 30, | Nine months ended September 30, |
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| 2024 |
| 2023 |
| 2024 |
| 2023 |
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REVENUE: | |||||||||||||
Communication services | $ | | $ | | $ | | $ | | |||||
Construction | | | | | |||||||||
Other |
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Total revenue |
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OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated): | |||||||||||||
Cost of communication services and other |
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Cost of construction revenue | | | | | |||||||||
Selling, general and administrative |
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Stock-based compensation | | | | | |||||||||
Transaction-related charges |
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Restructuring and reorganization expenses | | | | | |||||||||
Depreciation and amortization |
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Amortization of intangibles from acquisitions | | | | | |||||||||
(Gain) loss on disposition of assets and transfers | | | ( | | |||||||||
Goodwill impairment | | — | | — | |||||||||
Total operating expenses |
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Income from operations |
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OTHER INCOME (EXPENSE) | |||||||||||||
Interest income | | | | ||||||||||
Interest expense |
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Other income (expense) |
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Other (expense) |
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LOSS BEFORE INCOME TAXES |
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Income tax benefit |
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NET LOSS |
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Net loss attributable to noncontrolling interests, net of tax (benefit) expense of $( |
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NET LOSS ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS | $ | ( | $ | ( | $ | ( | $ | ( | |||||
NET LOSS PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS: | |||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||
Basic |
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Diluted |
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DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK | $ | | $ | | $ | | $ | | |||||
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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ATN INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited)
(In Thousands)
Three months ended | Nine months ended | ||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment |
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Reclassification of foreign currency losses on investment | — | | — | | |||||||
Reclassification of loss on pension settlement, net of $( | — | — | — | | |||||||
Unrealized gain (loss) on derivatives, net of tax expense of $ | ( | — | | — | |||||||
Other comprehensive income (loss), net of tax |
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Comprehensive loss |
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Less: Comprehensive loss attributable to noncontrolling interests |
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Comprehensive loss attributable to ATN International, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
6
ATN INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Unaudited)
(In Thousands, Except Per Share Data)
Total Equity | ||||||||||||||||
Treasury | Additional | Other | ATNI | Non- | ||||||||||||
Common | Stock, | Paid In | Retained | Comprehensive | Stockholders’ | Controlling | Total | |||||||||
Stock | at cost | Capital | Earnings | Income/(Loss) | Equity | Interests | Equity | |||||||||
Balance, June 30, 2024 | $ | | $ | ( | $ | | $ | | $ | | $ | | $ | | $ | |
Excise tax paid on shares repurchased |
| — | — | ( | — | — | ( | — | ( | |||||||
Stock-based compensation |
| — | — | | — | — | | | | |||||||
Dividends declared on common stock ($ | — | — | — | ( | — | ( | ( | ( | ||||||||
Accrued dividend - redeemable preferred units | — | — | — | ( | — | ( | — | ( | ||||||||
Deemed dividend - redeemable common units | — | — | — | | — | | | | ||||||||
Comprehensive income: | ||||||||||||||||
Net income |
| — | — | — | ( | — | ( | ( | ( | |||||||
Other comprehensive income |
| — | — | — | — | ( | ( | — | ( | |||||||
Total comprehensive income | — | — | — | ( | ( |
| ( |
| ( |
| ( | |||||
Balance, September 30, 2024 | $ | | $ | ( | $ | | $ | | $ | | $ | | $ | | $ | |
Balance, June 30, 2023 | $ | | $ | ( | $ | | $ | | $ | | $ | | $ | | $ | |
Purchase of |
| — | ( | — | — | — | ( | — | ( | |||||||
Stock-based compensation | — | — | | — | — | | | | ||||||||
Dividends declared on common stock ($ | — | — | — | ( | — | ( | — | ( | ||||||||
Repurchase of noncontrolling interests | — | — | — | — | — | — | | | ||||||||
Accrued dividend - redeemable preferred units | — | — | — | ( | — | ( | — | ( | ||||||||
Deemed dividend - redeemable common units | — | — | — | ( | — | ( | | — | ||||||||
Comprehensive income: | ||||||||||||||||
Net income (loss) |
| — | — | — | ( | — | ( | ( | ( | |||||||
Other comprehensive loss |
| — | — | — | — | | | — | | |||||||
Total comprehensive income (loss) | — | — | — | ( | |
| ( |
| ( |
| ( | |||||
Balance, September 30, 2023 | $ | | $ | ( | $ | | $ | | $ | | $ | | $ | | $ | |
7