UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
________________________________________________________________________
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 2001
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-19551
________________________________________________________________________
Atlantic Tele-Network, Inc.
(exact name of issuer as specified in its charter)
Delaware 47-072886
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
19 Estate Thomas/Havensight
P.O. Box 12030
St. Thomas, U.S. Virgin Islands 00801
(340) 777-8000
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. Yes X No ____
As of June 30, 2001, the registrant had outstanding 4,986,527 shares
of its common stock ($.01 par value).
________________________________________________________________________
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Columnar Amounts in Thousands)
- ----------------------------------------------------------------------------------------------
----------------------------
December 31, June 30,
2000 2001
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $24,495 $5,148
Marketable securities - 5,743
Accounts receivable, net 21,099 19,287
Materials and supplies 4,944 5,083
Prepayments and other current assets 2,507 5,758
------------ ------------
Total current assets 53,045 41,019
------------ ------------
Fixed assets:
Property, plant and equipment 90,546 99,503
Less accumulated depreciation (18,087) (22,247)
------------ ------------
Total fixed assets, net 72,459 77,256
------------ ------------
Uncollected surcharges, net of current portion 997 771
Investment in and advances to Bermuda Digital
Communications, Ltd. 6,616 7,271
Investment in LighTrade, Inc. - 4,430
Other assets 4,853 3,596
------------ ------------
Total assets $137,970 $134,343
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $12,255 $6,289
Accrued taxes 5,427 6,116
Advance payments and deposits 1,433 1,682
Other current liabilities 4,681 3,604
Current portion of long-term debt 1,687 1,666
------------ ------------
Total current liabilities 25,483 19,357
Deferred income taxes 5,303 6,029
Long-term debt, excluding current portion 2,513 1,598
------------ ------------
Total liabilities 33,299 26,984
------------ ------------
Minority interests 21,202 20,085
------------ ------------
Contingencies and commitments (Note 7)
Stockholders' equity:
Preferred stock, par value $.01 per share;
10,000,000 shares authorized; none issued and outstanding - -
Common stock, par value $.01 per share; 20,000,000 shares
authorized; 5,151,424 shares issued 4,986,527 outstanding 52 52
Treasury stock, at cost (1,621) (1,621)
Paid-in capital 55,867 55,867
Retained earnings 29,372 33,249
Other comprehensive loss (201) (273)
------------ ------------
Total stockholders' equity 83,469 87,274
------------ ------------
Total liabilities and stockholders' equity $137,970 $134,343
============ ============
The accompanying notes are an integral part of these consolidated
condensed financial statements.
2
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 2001
(Columnar Amounts in Thousands, except per share data)
- ---------------------------------------------------------------------------------------------------------------------
Three months ended June 30, Six months ended June 30,
2000 2001 2000 2001
----------- ---------- ----------- -----------
(Unaudited) (Unaudited)
Telephone operations
Revenues:
Local exchange service revenues $2,775 $4,388 $5,316 $7,930
International long-distance revenues 15,713 16,381 31,830 30,468
Other revenues 574 670 1,052 1,413
----------- ---------- ----------- -----------
Total revenues 19,062 21,439 38,198 39,811
----------- ---------- ----------- -----------
Operating expenses:
International long-distance expenses 5,605 4,220 12,281 8,193
Telephone operating expenses 5,245 6,920 10,501 13,014
General and administrative expenses 986 1,579 2,114 2,882
----------- ---------- ----------- -----------
Total operating expenses 11,836 12,719 24,896 24,089
----------- ---------- ----------- -----------
Income from telephone operations 7,226 8,720 13,302 15,722
----------- ---------- ----------- -----------
Other operations:
Revenues of other operations 919 1,129 1,667 2,267
Expenses of other operations 1,171 1,831 2,087 3,684
----------- ---------- ----------- -----------
Loss from other operations (252) (702) (420) (1,417)
----------- ---------- ----------- -----------
Other income (expense):
Interest expense (311) (167) (746) (346)
Interest income 519 368 1,146 925
Other income (expense), net 188 (4) 234 273
----------- ---------- ----------- -----------
Other income, net: 396 197 634 852
----------- ---------- ----------- -----------
Income before income taxes and minority interests 7,370 8,215 13,516 15,157
Income taxes 3,584 4,301 6,608 7,849
----------- ---------- ----------- -----------
Income before minority interests 3,786 3,914 6,908 7,308
Minority interests (599) (809) (1,075) (1,437)
----------- ---------- ----------- -----------
Net income $3,187 $3,105 $5,833 $5,871
=========== ========== =========== ===========
Net income per share:
Basic $0.64 $0.62 $1.21 $1.18
=========== ========== =========== ===========
Diluted $0.64 $0.62 $1.21 $1.17
=========== ========== =========== ===========
Weighted average common stock outstanding:
Basic 4,947 4,987 4,835 4,987
=========== ========== =========== ===========
Diluted 4,947 5,025 4,835 5,010
=========== ========== =========== ===========
The accompanying notes are an integral part of these consolidated
condensed financial statements.
3
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 2001
(Columnar Amounts in Thousands)
- --------------------------------------------------------------------------------------------------------------------
Six months ended June 30,
2000 2001
----------------------------
(Unaudited)
Net cash flows provided by operating activities: $6,750 $5,596
------------ ------------
Cash flows from investing activities:
Purchase of marketable securities - (5,743)
Capital expenditures (4,935) (8,957)
Advances to (rempayments from) Bermuda Digital Communications, Ltd. (337) 113
Investment in Lightrade, Inc. - (5,000)
------------ ------------
Net cash flows used in investing activities (5,272) (19,587)
------------ ------------
Cash flows from financing activities:
Repayment of long-term debt (1,705) (936)
Purchase of common stock (162) -
Cash paid in conjunction with Acquisition of Antilles Wireless (1,500) -
Dividends declared on common stock (1,747) (1,870)
Dividend to minority stockholder in GT&T (1,000) (2,550)
------------ ------------
Net cash flows used in financing activities (6,114) (5,356)
------------ ------------
Net change in cash and cash equivalents (4,636) (19,347)
Cash and cash equivalents, beginning of period 31,463 24,495
------------ ------------
Cash and cash equivalents, end of period $26,827 $5,148
============ ============
Supplemental cash flow information:
Interest paid $538 $200
============ ============
Income taxes paid $8,070 $7,622
============ ============
Supplemental non cash information:
Depreciation and Amortization Expense $3,307 $4,160
============ ============
Issuance of common stock in conjunction with acquisitions $3 -
============ ============
Additional paid in capital realized from issuance of Common Stock $1,413 -
============ ============
The accompanying notes are an integral part of these consolidated
condensed financial statements.
4
Atlantic Tele-Network, Inc. and Subsidiaries
Notes to Consolidated Condensed
Financial Statements
Three and Six Months Ended June 30, 2000 and 2001
1. ORGANIZATION AND BUSINESS OPERATIONS
Atlantic Tele-Network, Inc. (the "Company" or "ATN"), a Delaware
corporation, is engaged principally through its 80%-owned subsidiary, Guyana
Telephone & Telegraph Company, Limited ("GT&T"), in providing
telecommunications services, including local telephone service, long-distance
services, and cellular service in the Cooperative Republic of Guyana
("Guyana") and international telecommunications service to and from Guyana.
The Company also owns the entire equity interest in Wireless World, LLC
("Wireless World"), which holds Multichannel Multipoint Distribution Service
("MMDS") and Local Multipoint Distribution Service ("LMDS") licenses for the
U.S. Virgin Islands and is engaged in the U.S. Virgin Islands in the Internet
service provider, specialized mobile radio and paging businesses and the
wireless cable television business. The Company owns an 80% interest in ATN
(Haiti) S.A. ("ATN (Haiti)"), a Haitian corporation principally engaged in
dispatch radio, mobile telecommunications, and paging in Haiti. Atlantic
Tele-Center, Inc., a wholly owned subsidiary of ATN, is currently developing a
Web-enabled outsourcing call center in Guyana to provide customer support to
companies serving the U.S. and other markets. The Company owns a 46% interest
in Bermuda Digital Communications, Ltd. ("BDC"), a Bermuda corporation which
operates under the name "Cellular One" and is the sole cellular and PCS
competitor in Bermuda to the Bermuda Telephone Company and a significant
minority interest in LighTrade, Inc. which is developing a network of neutral
switching or pooling points to enable telecommunications carriers to
interconnect quickly with each other and create a standard location for
trading bandwidth between cities. ATN provides management, technical,
financial, regulatory, and marketing services to its subsidiaries and
affiliates for a management fee equal to 6% of their revenues.
2. BASIS OF PRESENTATION
The consolidated condensed balance sheet of ATN and subsidiaries at
December 31, 2000 has been taken from the audited financial statements at that
date. All of the other accompanying consolidated condensed financial
statements are unaudited. These consolidated condensed financial statements
have been prepared by the management of ATN in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC"). Accordingly,
certain information and footnote disclosures usually found in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. In the opinion of the management of
the Company, all adjustments (consisting only of normal recurring adjustments)
considered necessary for fair presentation of the consolidated condensed
financial statements have been included, and the accompanying condensed
consolidated financial statements present fairly the financial position and
the results of operations for the interim periods presented. The consolidated
condensed financial statements should be read in conjunction with the
consolidated financial statements and related footnotes included in the
Company's 2000 Annual Report on Form 10-K, as filed with the SEC.
5
3. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
4. MARKETABLE SECURITIES
Marketable securities consist of investments in Government National
Mortgage Association pools of mortgages maturing during 2028. The Company
classifies its existing marketable securities as available-for-sale in
accordance with the provisions of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". These securities are carried at
fair market value, with unrealized gains and losses reported in stockholders'
equity as a component of other comprehensive income (loss). Gains or losses on
securities sold are based on the specific identification method.
5. NET INCOME PER SHARE
In accordance with SFAS No. 128, "Earnings Per Share," basic net income
per share is computed by dividing net income available to common shareholders
by the weighted-average number of common shares outstanding during the period
and does not include any other potentially dilutive securities. Diluted net
income per share gives effect to all potentially dilutive securities.
6. NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued SFAS No. 133, SFAS
No. 137 and SFAS No. 138, "Accounting for Derivative Instruments and Hedging
Activities." These statements establish accounting and reporting standards for
derivative instruments including certain derivative instruments embedded in
other contracts and for hedging activities. SFAS No. 133, SFAS No. 137 and
SFAS No. 138 are not to be applied retroactively to financial statements of
prior periods. The Company has adopted these standards as of January 1, 2001
with no material impact to its financial position.
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 141, "Business Combinations," which establishes new accounting
and reporting standards for business combinations and supersedes Accounting
Principles Board (APB) Opinion No. 16. All business combinations initiated
after June 30, 2001 must now be accounted for using the purchase method of
accounting.
Also in June 2001, the FASB issued Statement No. 142, "Goodwill and Other
Intangible Assets," which establishes new accounting and reporting standards
for acquired goodwill and other intangible assets and supersedes APB Opinion
No. 17. It addresses how intangible assets that are acquired individually or
with a group of other assets (but not those acquired in a business
combination) should be accounted for upon acquisition and on an ongoing basis.
Goodwill and intangible assets that have indefinite useful lives (whether or
not acquired in a business combination) will not be amortized but rather will
be tested at least annually for impairment. Intangible assets that have finite
useful lives will continue to be amortized over their useful lives, which are
no longer limited to 40 years. The provisions of Statement No. 142 must be
adopted on January 1, 2002 by the Company.
6
The Company recorded amortization expense related to goodwill arising
from business combinations of $120,000 for the six months ended June 30, 2001
and is expected to record $240,000 of goodwill amortization expense for the
year ending December 31, 2001. The Company has not yet quantified the impact
of adopting Statement No. 142 on its consolidated financial statements.
7. CONTINGENCIES AND COMMITMENTS
The financial position and results of operations of the Company may be
affected by certain regulatory matters and litigation described in Note 11 to
the Consolidated financial statements included in the Company's 2000 Annual
Report on Form 10-K, as filed with the SEC. On June 8, 2001, GT&T executed a
new operating agreement with a subsidiary of WorldCom. The agreement is for an
initial term of one year from date of execution and continues thereafter
unless terminated by either party with at least six months advance written
notice. The agreement continues the current 85 cents per minute settlement
rate for traffic between the United States and Guyana until December 31, 2001
and provides that the parties will thereafter negotiate a new rate in
compliance with the FCC's "Benchmark Order" or any subsequent FCC orders. The
FCC's Benchmark Order is presently scheduled to reduce the rate to 23 cents
per minute for U.S.-Guyana traffic on January 1, 2002. There have been no
other material developments in any of the matters described in said Note.
7
Atlantic Tele-Network, Inc. and Subsidiaries
Management Discussion and Analysis of Financial
Conditions and Results of Operations
Forward Looking Statements and Analysts' Reports
This report contains forward looking statements within the meaning of the
federal securities laws, including statements concerning future rates,
revenues, costs, capital expenditures, and financing needs and availability
and statements of management's expectations and beliefs. Actual results could
differ materially from these statements as a result of many factors, including
future economic and political conditions in Guyana, the matters discussed in
the Regulatory Considerations section of Management's Discussion and Analysis
of Financial Condition and Results of Operations in this Report and matters
discussed in the Company's Form 10K Annual Report for the fiscal year ended
December 31, 2000.
Investors should also be aware that while the Company does, from time to
time, communicate with securities analysts, it is against the Company's policy
to disclose to them any material non-public information or other confidential
information. Accordingly, shareholders should not assume that the Company
agrees with any statement or report issued by an analyst irrespective of the
content of the statement or report. Furthermore, the Company has a policy
against issuing or confirming financial forecasts or projections issued by
others. Thus, to the extent that reports issued by securities analysts contain
any projections, forecasts or opinions, such reports are not the
responsibility of the Company.
Introduction
Atlantic Tele-Network, Inc. (the "Company" or "ATN"), a Delaware
corporation, is engaged principally through its 80%-owned subsidiary, Guyana
Telephone & Telegraph Company, Limited ("GT&T"), in providing
telecommunications services, including local telephone service, long-distance
services, and cellular service in the Cooperative Republic of Guyana
("Guyana") and international telecommunications service to and from Guyana.
The Company also owns the entire equity interest in Wireless World, LLC
("Wireless World"), which holds Multichannel Multipoint Distribution Service
("MMDS") and Local Multipoint Distribution Service ("LMDS") licenses for the
U.S. Virgin Islands and is engaged in the U.S. Virgin Islands in the Internet
service provider, specialized mobile radio and paging businesses and the
wireless cable television business. The Company owns an 80% interest in ATN
(Haiti) S.A. ("ATN (Haiti)"), a Haitian corporation principally engaged in
dispatch radio, mobile telecommunications, and paging in Haiti. Atlantic
Tele-Center, Inc., a wholly owned subsidiary of ATN, is currently developing a
Web-enabled outsourcing call center in Guyana to provide customer support to
companies serving the U.S. and other markets. The Company owns a 46% interest
in Bermuda Digital Communications, Ltd. ("BDC"), a Bermuda corporation which
operates under the name "Cellular One" and is the sole cellular and PCS
competitor in Bermuda to the Bermuda Telephone Company and a significant
minority interest in LighTrade, Inc. which is developing a network of neutral
switching or pooling points to enable telecommunications carriers to
interconnect quickly with each other and create a standard location for
trading bandwidth between cities. ATN provides management, technical,
financial, regulatory, and marketing services to its subsidiaries and
affiliates for a management fee equal to 6% of their revenues.
8
The principal components of operating expenses for the Company are
international long-distance expenses, telephone operating expenses, and
general and administrative expenses. International long-distance expenses
consist principally of charges from international carriers for outbound
international calls from Guyana and, in 2000, payments to audiotext providers
from whom GT&T derives international audiotext traffic. Telephone operating
expenses consist of plant specific operations, plant non-specific (which
includes depreciation and amortization), customer operations, corporate
operations expenses of GT&T, and taxes other than income taxes. General and
administrative expenses consist principally of expenses of the parent company.
RESULTS OF OPERATIONS
Three and Six months ended June 30, 2000 and 2001
The Company had earnings of $3.1 million, or $0.62 per share, for the
quarter ended June 30, 2001. This compares to earnings of $3.2 million, or
$0.64 per share, for the quarter ended June 30, 2000. For the six months ended
June 30, 2001 the Company had net income of $5.9 million as compared to $5.8
million in the first six months of last year. Per share earnings were $1.18
primary and $1.17 fully diluted for the six months ended June 30, 2001 and
$1.21 primary and fully diluted for the first six months of last year.
Telephone operating revenues for the quarter ending June 30, 2001 were
$21.4 million as compared to $19.1 million for the same period of 2000, an
increase of $2.4 million, or 12%. Telephone operating revenues were $39.8
million for the six months ended June 30, 2001 as compared to $38.2 million
for the six months ended June 30, 2000, an increase of $1.6 million, or 4%.
These increases in telephone operating revenues are partially due to inbound
international traffic which increased by $1.8 million, or 18%, and $3.0
million, or 15%, for the three and six months ended June 30, 2001.
Additionally, telephone operating revenues increased due to increases of $1.6
million, or 58%, and $2.6 million, or 49%, in local exchange revenues due to
additional lines in service and increased cellular telephone operations as
fixed access lines increased from 67,186 to 75,136 from June 30, 2000 to June
30, 2001 and cellular access lines increased from 5,044 to 13,428 for the same
period.
Telephone operating expenses were approximately 59% and 61% of telephone
operating revenues for the three and six months ended June 30, 2001,
respectively, as compared to 62% and 65% for the same periods of the prior
year. This decrease is principally the result of increased inbound
international traffic revenues (which have no direct operating expenses) and
decreased audiotext revenues which have a significantly higher cost. This
decrease occurred despite a $1.7 million increase in customer service expense
in the quarter ending June 30, 2001 due to increased cellular and fixed access
lines in service in Guyana and a $600,000 increase in general and
administrative expense in the same quarter relating to efforts by the Company
to become a Competitive Local Exchange Carrier in the U.S. Virgin Islands.
Income from telephone operations was $8.7 and $15.7 million for the three
and six months ended June 30, 2001 as compared to $7.2 million and $13.3
million for the corresponding periods of 2000. This represents increases of
$1.5 million, or 21%, and $2.4 million, or 18%, for the three and six months
ended June 30, 2001 over the corresponding periods of the prior year. These
changes are principally a result of the factors affecting revenues and
operating expenses discussed above.
9
Other operations revenues and expenses represent the operations of ATN
(Haiti) S.A., Wireless World, LLC and Atlantic Tele-Center, Inc., each of
which had operating losses in the three and six months ended June 30, 2001.
Revenues of these operations were $1.1 million and $2.3 million for the three
and six months ended June 300, 2001 as compared to $919,000 and $1.7 million
for the same periods in 2000. This resulted in increases of $210,000, or 23%,
and $600,000, or 36%, for the three and six months ended June 30, 2001, which
were primarily attributable to additional revenues from Wireless World as the
cable television business was integrated after the purchase of Antilles
Wireless Cable TV on March 31, 2000. Expenses of other operations were $1.8
and $3.7 million for the three and six months ended June 30, 2001 as compared
to $1.2 million and $2.1 million for the same period of 2000. This resulted in
increases of $660,000, or 56% and $1.6 million or 77% for the three and six
months ended June 30, 2001. These increases in expenses were primarily
attributable to start up costs associated with the development of Atlantic
Tele-Center, Inc.
Other income (expense), net consists principally of the Company's equity
in the income of BDC for the three and six months ended June 30, 2001 and the
Company's equity in startup losses of LighTrade since the Company's investment
in LighTrade in April 2001.
The Company's effective tax rate for both the three and six months ended
June 30, 2001 was 52% as compared to 49% for the corresponding periods of the
prior year. The effective tax rate is higher during 2001 as start-up costs
incurred at from Atlantic Tele-Center, Inc. and LighTrade result in no tax
benefits to the Company.
The minority interest in earnings consists primarily of the Guyana
government's 20% interest in GT&T.
Regulatory and Tax Issues
The Company is involved in a number of regulatory and tax proceedings.
See note 11 to the Company's Consolidated Financial Statements included in the
Company's 2000 Annual Report on Form 10-K, as filed with the SEC and note 7 to
the Consolidated Condensed Financial Statements included in this Report. A
material and adverse outcome in one or more of these proceedings could have a
material adverse impact on the Company's financial condition and future
operations. There have been no material developments in any of the matters
described in said Note.
Liquidity and Capital Resources
In July 2001, the Company obtained a $1 million short term credit
facility, and the Company is currently in discussions with respect to an
additional $3-$4 million short term or long term facilities. If these
additional facilities are obtained, the Company believes its existing
liquidity and capital resources will be adequate to meet current operating and
capital needs. The Company's current primary source of funds at the parent
company level is advisory fees and dividends from GT&T. The tax and regulatory
issues discussed in Note 11 to the Company's Consolidated Financial Statements
included in the Company's 2000 Annual Report on Form 10-K could have a
material adverse impact on the Company's liquidity. GT&T is not subject to any
contractual restrictions on the payment of dividends.
10
If and when the Company settles outstanding tax and regulatory issues
with the Guyana government and the PUC, GT&T may require additional external
financing to enable GT&T to further expand its telecommunications facilities.
The Company has not estimated the cost to comply with the October 1997 PUC
order to increase the number of telephone lines in service described in Note
11 to the Company's Consolidated Financial Statements, which GT&T appealed on
the grounds that the PUC did not hear evidence or make findings as to the
financial feasibility of such an increase as required, in GT&T's opinion, by
Guyana law. The Company believes such a project would require significant
capital expenditures that would require external financing. There can be no
assurance that the Company will be able to obtain any such financing.
The continued expansion of GT&T's network is dependent upon the ability
of GT&T to purchase equipment with U.S. dollars. A portion of GT&T's taxes in
Guyana may be payable in U.S. dollars or other hard currencies. The Company
believes that the majority of GT&T's revenues will continue to be denominated
in U.S. dollars or other hard currencies. However, as a result of the rate
increases currently sought by GT&T and the efforts of the U.S. FCC, AT&T and
carriers in other countries to reduce international accounting rates, it is
likely that an increasing portion of the Company's revenues will be earned in
Guyana currency. While there are no legal restrictions on the conversion of
Guyana currency into U.S. dollars or other hard currencies, or on the
expatriation of Guyana currency or foreign currency from Guyana, there is
little liquidity in the foreign currency markets in Guyana. While the Company
believes that it has, and will continue to have, adequate cash flows
denominated in hard currency to meet its current operating, debt service and
capital requirements, there can be no assurance that GT&T will be able to
convert its Guyana currency earnings into hard currency to meet such
obligations. At June 30, 2001, approximately $680,000 of the Company's total
cash balances consisted of balances denominated in Guyana dollars.
From time to time the Company explores opportunities to acquire
communications properties or licenses in the Caribbean and elsewhere. Such
acquisitions may require external financing. There can be no assurance as to
whether, when or on what terms the Company will be able to acquire any of the
businesses or licenses it is currently seeking.
Impact of Devaluation and Inflation
Although the majority of GT&T's revenues and expenditures are transacted
in U.S. dollars or other hard currencies, the results of operations
nevertheless may be affected by changes in the value of the Guyana dollar.
From February 1991 until early 1994, the Guyana dollar remained relatively
stable at the rate of approximately 125 to the U.S. dollar. In 1994, the
Guyana dollar declined in value to approximately 142 to the U.S. dollar, and
it remained relatively stable at approximately that rate through 1997. In
1998, the Guyana dollar declined in value to approximately 180 to the U.S.
dollar. Through June 30, 2001 the rate of exchange has remained at
approximately 180 to the U.S. dollar.
The effect of devaluation and inflation on the Company's financial
results has not been significant in the periods presented.
11
Atlantic Tele-Network, Inc. and Subsidiaries
Other Information
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On May 30, 2001 the Company held its Annual Meeting of Stockholders. At
this meeting Cornelius B. Prior, Jr., Ernst A. Burri, James B. Ellis and Henry
U. Wheatley were reelected as a directors of the Company, and the selection of
Arthur Andersen, LLP as independent auditors for the Company for the fiscal
year ending December 31, 2001 was ratified. The results of the vote for the
election of the directors were 3,994,441 votes (80.1%) for, 6,140 votes (0.1%)
against and 324,300 (6.5%) abstain. No other directors are currently serving
terms on the board. The results of the vote to ratify the selection of Arthur
Andersen, LLP as independent auditors were 4,318,281votes (86.6%) for, 6,340
votes (0.1%) against and 260 (0.01%) abstain. No other matters were submitted
to a vote of the stockholders of the Company at the meeting.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
Not applicable.
12
Atlantic Tele-Network, Inc. and Subsidiaries
Signatures
Pursuant to the Securities Act of 1934, the registrant has caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
Atlantic Tele-Network, Inc.
Date: August 14, 2001 /s/ Cornelius B. Prior, Jr.
- --------------------- --- -----------------------
Cornelius B. Prior, Jr.
Chief Executive Officer and Chairman
of the Board
Date: August 14, 2001 /s/ Steven M. Ross
- --------------------- --- --------------
Steven M. Ross
Chief Accounting Officer
13