ATN Reports Third Quarter 2024 Results; Updates Full-Year 2024 Outlook
"First-to-Fiber" and "Glass & SteelTM" Strategies Yield Year-Over-Year Increases in High-Speed Data Subscriber and Network Reach Metrics
Total high-speed broadband subscribers increased 6% year-over-year
Broadband homes passed by high-speed data services expanded 20% year-over-year
Capital expenditures were $85.7 million (net of $71.8 million reimbursements) for the first nine months of 2024, reduced from $126.6 million (net of $14.3 million reimbursements) for the first nine months of 2023
Q3 2024 Results Highlighted by International Telecom Segment Fixed Revenue Growth, Cost Management Initiatives Supporting Margin Expansion
International Telecom segment revenues were essentially flat supported by growth in consumer and business fixed revenues and business mobility revenues
US Telecom segment revenues were down 13% due primarily to the anticipated conclusion of two government subsidy programs and the anticipated reduction in construction revenues
Third quarter net loss increased to $32.7 million, or $2.26 per diluted share inclusive of a $35.3 million non-cash goodwill impairment charge
Operating loss increased to $38.4 million, including the impairment charge
Adjusted EBITDA1 decreased 5% to $45.7 million
Year-to-date net cash from operations increased 9% year-over-year to $97.4 million
Updates 2024 Outlook for Revenues, Adjusted EBITDA and Net Debt RatioThe Company's expectations for full-year 2024 outlook are as follows:
Revenue is now expected to be in the range of $720 million to $730 million, excluding construction revenue
Adjusted EBITDA2 is now expected to be in the range of $182 million to $188 million
Capital Expenditures are still expected to be in the range of $100 million to $110 million, net of reimbursements
Net Debt Ratio3 is now expected to be in the range of 2.3x to 2.6x exiting 2024
Earnings Conference CallWednesday October 30, 2024, at 10:00 a.m. ET; Webcast Link: https://edge.media-server.com/mmc/p/i66c89ki
BEVERLY, Mass., Oct. 29, 2024 (GLOBE NEWSWIRE) -- ATN International, Inc. ("ATN" or the "Company") (NASDAQ:ATNI), a leading provider of digital infrastructure and communications services, today reported financial results for the quarter ended September 30, 2024.
Remarks by Brad Martin, ATN Chief Executive Officer
"We reported strong free cash flow from operations in the third quarter, driven by effective cost and net working capital management. Our performance continues to reflect a tale of two segments, with revenues impacted primarily by underperformance in our US Telecom segment related to the conclusion of certain government subsidy programs, slower consumer growth, and delays in enterprise sales and delivery. Based on these dynamics, and compression in market multiples, we recorded a non-cash $35 million goodwill impairment charge during the third quarter.
"In the International Telecom segment, solid fixed revenue gains and business mobility revenue growth offset softness in consumer mobility related to competitive pressures, and we delivered Adjusted EBITDA growth. Additionally, we increased our international post-paid mobile subscriber bases both sequentially and year-over-year.
"To reflect our expectations for near-term operating performance, we are lowering our revenue and Adjusted EBITDA guidance ranges for fiscal 2024 and increasing our expected leverage multiple exiting the year. We are taking strategic actions intended to align our cost structure with current revenue levels, while focusing on margin improvement and cash flow generation. These actions include refocusing efforts on growing our business and carrier customer revenues in the US, strengthening sales execution teams, and maximizing value from deployed assets.
"Longer term, we remain committed to leveraging the value and longevity of our upgraded network while diligently operating the business in an effort to further expand cash flows and position ATN to deliver increased value for shareholders."
Third Quarter 2024 Financial Results
Consolidated revenues were $178.5 million, down 7% versus $191.0 million in the year-ago quarter. This primarily reflects the overall revenue decline in the US Telecom segment due in part to the anticipated impact of the end of the Emergency Connectivity Fund (ECF) and Affordable Care Program (ACP), and a reduction in construction revenues for the quarter.
Operating loss was $38.4 million in the third quarter versus operating income of $6.8 million in the year-ago quarter. The decrease in operating income was primarily due to a $35.3 million non-cash goodwill impairment charge on certain US Telecom assets, $3.8 million of transaction-related charges, and $2.3 million of restructuring and reorganization expenses.
Net loss attributable to ATN stockholders in the third quarter of 2024 was $32.7 million, or a loss of $2.26 per share compared with a net loss attributable to ATN stockholders of $3.6 million, or $0.31 loss per share, in the year-ago quarter. The year-over-year change was the result of the above-mentioned factors that increased the operating loss combined with an increase in interest expense. In all periods, the loss per share calculation includes the impact of preferred dividends that are not included in the net loss calculation.
Adjusted EBITDA1 was $45.7 million in the third quarter of 2024, a decrease from $47.8 million in the year-ago quarter primarily due to lower US Telecom revenues.
Segment Operating Results (in Thousands)
The Company recorded financial results in three categories: (i) International Telecom; (ii) US Telecom; and (iii) Corporate and Other*.
For Three Months Ended September 30, 2024 and 2023
2024
2023
2024
2023
2024
2023
2024
2023
International
International
US
US
Corporate and
Corporate and
Total
Total
Telecom
Telecom
Telecom
Telecom
Other*
Other*
ATN
ATN
Total Revenue:
$
94,281
$
93,878
$
84,170
$
97,158
$
-
$
-
$
178,451
$
191,036
Mobility
26,809
27,791
706
946
-
-
27,515
28,737
Fixed
61,759
59,983
51,015
58,342
-
-
112,774
118,325
Carrier Services
3,272
3,441
29,430
32,319
-
-
32,702
35,760
Construction
-
-
203
2,038
-
-
203
2,038
All other
2,441
2,663
2,816
3,513
-
-
5,257
6,176
Operating Income (Loss)
$
12,853
$
12,800
$
(44,333
)
$
3,018
$
(6,878
)
$
(8,981
)
$
(38,358
)
$
6,837
EBITDA**
$
31,518
$
27,394
$
(23,912
)
$
25,299
$
(6,674
)
$
(8,363
)
$
932
$
44,330
Adjusted EBITDA1
$
32,248
$
27,502
$
17,692
$
26,860
$
(4,270
)
$
(6,516
)
$
45,670
$
47,846
Capital Expenditures***
$
10,489
$
18,744
$
13,070
$
18,445
$
282
$
-
$
23,841
$
37,189
For Nine Months Ended September 30, 2024 and 2023
2024
2023
2024
2023
2024
2023
2024
2023
International
International
US
US
Corporate and
Corporate and
Total
Total
Telecom
Telecom
Telecom
Telecom
Other*
Other*
ATN
ATN
Total Revenue:
$
282,697
$
276,267
$
265,830
$
286,983
$
-
$
-
$
548,527
$
563,250
Mobility
79,657
80,754
2,312
3,081
-
-
81,969
83,835
Fixed
185,295
178,546
161,392
175,346
-
-
346,687
353,892
Carrier Services
10,481
11,011
89,539
95,978
-
-
100,020
106,989
Construction
-
-
2,609
3,648
-
-
2,609
3,648
All other
7,264
5,956
9,978
8,930
-
-
17,242
14,886
Operating Income (Loss)
$
56,944
$
41,177
$
(42,852
)
$
(3,719
)
$
(23,559
)
$
(27,547
)
$
(9,467
)
$
9,911
EBITDA**
$
108,512
$
84,807
$
18,361
$
67,126
$
(23,229
)
$
(25,517
)
$
103,644
$
126,416
Adjusted EBITDA1
$
94,808
$
85,089
$
60,313
$
72,443
$
(17,260
)
$
(19,097
)
$
137,861
$
138,435
Capital Expenditures***
$
39,440
$
57,610
$
44,371
$
69,030
$
1,860
$
-
$
85,671
$
126,640
* Corporate and Other refer to corporate overhead expenses and consolidating adjustments.** See Table 5 for reconciliation of Operating Income to EBITDA, a non-GAAP measure***Excludes government capital program amounts disbursed, and amounts received.
ATN's Strategic Plan and Key Performance Indicators
The Company is in the final quarter of its three-year strategic plan initiated in 2021 to accelerate investments in its high-speed data footprint and grow high speed broadband subscribers. During this final year of the plan, the Company is transitioning away from a period of heavy investments to focus more on margin and cash flow improvement. The Company believes these efforts will allow it to improve returns to shareholders.
Operating Metrics
Operating Metrics
2024
2024
2024
2023
2023
Q3 2024
Q3
Q2
Q1
Q4
Q3
vs. Q3 2023
High-Speed Data* Broadband Homes Passed
399,500
396,100
386,300
367,200
333,500
20
%
High-Speed Data* Broadband Customers
141,500
142,000
138,700
135,900
132,900
6
%
Broadband Homes Passed
798,400
803,300
789,700
768,900
746,600
7
%
Broadband Customers
206,400
213,000
214,100
214,400
213,900
-4
%
Fiber Route Miles
11,901
11,728
11,692
11,655
11,575
3
%
International Mobile Subscribers
Pre-Paid
336,400
339,000
346,400
350,700
345,500
-3
%
Post-Paid
58,700
57,900
57,300
57,000
55,600
6
%
Total
395,100
396,900
403,700
407,700
401,100
-1
%
Blended Churn
3.47
%
3.44
%
3.34
%
3.33
%
3.76
%
*High-Speed Data is defined as download speeds 100 Mbps or greater and High-Speed Data Broadband Customers as subscribers connected to our high-speed networks regardless of the speed of plan selected.
Note: Data 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, 2024, was $116.8 million and total debt was $568.9 million, versus $62.2 million of cash, cash equivalents and restricted cash and $516.9 million of total debt on December 31, 2023.
Net cash provided by operating activities was $97.4 million for the nine months ended September 30, 2024, compared with net cash provided by operating activities of $89.5 million in the prior year period.
Capital expenditures were $85.7 million net of $71.8 million of reimbursable capital expenditures for the nine months ended September 30, 2024, versus $126.6 million, net of $14.3 million of reimbursable capital expenditures in the prior year period.
Quarterly Dividends and Stock Repurchases
Quarterly dividends of $0.24 per share were paid on October 4, 2024 on all common shares outstanding to stockholders of record as of September 30, 2024.
Updates Full-Year 2024 Guidance and Outlook
The Company has updated its revenue, adjusted EBITDA and net debt ratio guidance ranges and reiterated its capital expenditure guidance range for the full year ended December 31, 2024, as follows:
Revenue (excluding construction revenue)
$720 million to $730 million (previously $730 million to $750 million)
Full-year 2024
Adjusted EBITDA1
