ATNI - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the ATN International First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer-session and instructions will follow at that time. [Operator Instructions].

As a reminder, today’s conference is being recorded. introduce for to conference, like would your today's host Mr. I

please Chief Financial Benincasa, go Officer. Justin Sir, ahead.

Justin Benincasa

review XXXX Michelle. thank Michael us to you you, Prior, for first Thank Good Chief joining on morning, ATN’s President our Executive here With me results. everyone, and and our is quarter Officer. call

an I’ll business and the cover call, information the on relevant financial and update Michael During the will be providing outlook.

investors, our that press over to contain Michael, and like to comments financial this non-GAAP and differ are Before call our in today uncertainties turn results out and our those future concerning and the measures. from cause call statements to operating described. Also, I actual provide objectives risks results our subject underlying release regarding materially to an to include that to forward-looking I’d effort expectations, could point information current useful assumptions

comparable regarding the our I’ll For results, on call reconciliations provided these the and our earnings or site to and our affect SEC. the to Michael. may filing measures turn over that release Web information details at measures future refer to factors to atni.com GAAP for X-K please on And operating the

Michael Prior

wireline side the right, into Virgin impact though Islands The comparable improvement comparisons future U.S. due to fence, wireline more massive quarter non-hurricane in to to customers performance network VI talk was quarterly on contract From telecom All the results resulting a mix wireless factors of Both much our and territory looking feeling of infrastructure of nears invest Indian have and affected ability in fairly and I’ll destruction we as minutes. reduction we a from to from about year, sequential the the our at should news capital in network of our few a the changes effect the of in flow including to we and build year-on-year loss are Telecom improvements capacity completion the it negatively of a XXXX. bit, revenue from main two lot operations opportunities see continue the those the as standpoint the well, hurricanes revenue about forward international free those XXXX, areas, XXXX in in Justin. the International allocation the actively course will to positive solar. during cash markets balance growth. substantially and happy overall Also, factors today throughout expect in that at went period expected, September I are notably looking time wholesale it. good discussed grow down reconnect we Thanks, throughout two segment be were year. in several in for same in and see other the the last were said sheet the of the the

So I’ll with Telecom. segment starting turn International to details of the more with that,

rebuilding And reconnected. along shorter So certainly so further is focus one-third of Viya of the of We the than Islands And residential course from is of Viya’s last less a quite the on bit but environment. a but support I’ll of by ATN end were date. this be partners. team keep of to the attention also had the of quarter, hoped network today; lot much to team and the first Virgin Viya’s post-hurricane it there at customers much try there our the wireline in than of time main

Islands nomenclature. wireline is rebuild essentially the some of network think talking [ph] main management of hard the from the I the we’re entire outside complete elements, to the outside older about in understand switching it’s use but network what a Virgin

the only and island then, took rely in the And has islands the team outside been Puerto the a in substantially of hindered Another way crews that the point operations difficulties spread virtually was three supplies. that typically by shipping get since on and trucks to our fact of of power looking the grid picture in some of awhile fact been plant. facing. ocean us at you the and middle on necessary are February. restored have that main get it’s for critical And It the Rico all it and that the over we the supplies shortages is most delays

pace we up week. every bringing and the day and line picking billing and is However, on every into are more customers

and press at Virgin to done others and the the Islands efficiently XXXX proposals we more ensure out with on restore can we difficult are provide that billion get some were during destroyed networks and the and speedily to work we March, these time. in early details action can awaiting them are know but the we FCC Chairman relief the that resilient direct that In discussing Puerto so and action season. appreciate more rebuild of easy Rico hurricane support our it mentioned good, proposal a are release, worked eagerly some the services $X motives areas. and have and soon almost the isn’t We into to the been we FCC to announced awaiting in expand and we As that damaged for

investments. and customers pressure may But in for that others improving competition and seeing and to build-out this performance progress have and others general the do XXXX competition smarter in some, has in in In margins. new have of segment of we beyond. we seen we undoubtedly we’ve faster There network numbers through customers be revenue of our be expenditure improvements back data revenues. capital good ongoing trend voice seen provisioning see multiple and areas. and we Part and data more with a seen will increased optimism now services and are execution the continued the video seen a the we’ve substantial right for to speedier legacy include healthy high-speed expect on should in fiber lengthy on reduction once whole of requirements So a very in as rebuild, and previous

full more specifically as on is for look as are and we on we places. and of issuing of than over were quarter. X,XXX about last markets, focusing caution don’t Looking the the the numbers little in at kept will that a from subscribers that at reconnect movements what at of and smaller segment lines the sequential reconnect roughly we it the those kept lost I year. lot had they dropped of net to up sale fourth better the subscriber long have XXX,XXX actually the slightly Data voice continue from we we hurricanes video prevailing we’re the below to XXX,XXX in XXX,XXX rates given in they subscribers rise, billing the as XXX,XXX access roughly from system expect credits levels well. People wireless static static. subscribers subscribers note the that a of the and And will some But before would Islands end that loss our end XXX,XXX we Virgin XXX,XXX Conversely, before, we said level because as you storms. at

by segment. spending. are opportunities same for was offset conversations the expected. see capital for a strategic we this So believe the to team business results time percentage focused segment expanding of rightsizing there certain operational loss did been And has U.S. The other changed on reasonable capital but revenue telecom, moving we as considering find having lower this in services at expenditures on efficiencies in and environment. We to more are the about areas and

So environment. success more we be in careful pressure revenue We and new we we could on see with any materializes, have as near-term are improvements solutions. with patience need late fluctuating balance much working our segment February. implementing the national the for deal call has the with to our in continue opportunities to energy, in on and since but before changed margins Renewable not diligently impatience developing

coming restructuring our year-on-year good market plants in pipeline on revenue sold see increase business more and against We stage in the in other the potential did plants a to being are existing our more progress further for time position receiving lenders our come on had produced we India as and was expansion thanks more making final moving and of and in of funding to business. evaluate slowly we some regulatory with approval. as India, examining We but current power on-line dynamics conversations strategy the terms partners. continue We’re and

International Conversely, expected our the of Trends is evaluating was period for number this was but projects sequential with situation wireless positioned in reasons tough growth but provide we closely longer-term anticipated. we are summary, line continue for and progressive a growth. in soft that So somewhat to are in understandable year-on-year of U.S. potential. what comparisons monitor and a performance Telecom

for so me. And it that’s

Justin, back to you.

Justin Benincasa

Thank Michael. you,

specific business our XXXX comparing as comparisons, items comparisons can the progress. the I’m wireless our you namely wireline the contractual that in the by and found know of more to consecutive the U.S. year-on-year impact thinking changes release. informative on hurricanes, future quarters press covered, better for Michael year-on-year just the baseline be earnings All will which the be the Given measure in U.S.

plan. XXX.X anticipated domestic would quarter, telecom. but rebuild have revenues the wireless customers. Telecom Actually into increased Telecom quarter more the hurricane segment spent quarter for of the without did revenues but first driven quarter compared Michael declines and see consolidated as We phase there quarter. revenue now core wireless was predominately offset impact, in XX% adjusted network a U.S. from the we prior is by down was the to were in EBITDA in than think offset more U.S. moved the repairing fourth quarter increase the his in margin the the EBITDA Virgin International the that drop million Much revenue the our in million, quarter total partially sequential million first X% International network the For reduction behind of the revenue. revenue. noted for as Islands in in our The adjusted in U.S. by XX.X the Consolidated operations the of XX.X comments, reconnecting the we’ve was

to adjusted of at related of have new last down down starting and Looking difference each from Telecom, previously. XX.X quarter the XX.X million, majority contractual million, discussed around XX from and million and with we revenues revenues million segments U.S. quarter rates was caps revenue EBITDA our The the were specifics the the quarter. from that for fourth XX.X some

segment all Telecom capital the That’s that��s segment, the up revenue Almost the not few We million. over quarter. capital revenues X% the increases In Even to years. that fourth the XX.X network in expenditures of look was adjusted EBITDA up And where spent with XX% build-out XX.X budget growth in million, to certain losses in the from specifically Virgin operate calls nature level the in in we continue last with from continue market from costs opportunities quarter-over-quarter tied million. as revenues, adjusted we the Islands. to the in million maintained. EBITDA requires of International business the spending XX.X a reduction for and a fixed our current reduce be were on pickup revenue average from came to for of XX.X the

that million. As in to XXXX. the business were million energy we Adjusted EBITDA X.X energy X.X segment, in had India noted the with X.X move In through last we was improve we steady similar the the this in quarter. quarter, in quarter renewable quarter release, XXXX as prior million quarter progressively as comparable do to revenues expect reported as we at fourth market in the production

consolidated net the just expense loss U.S. in was in accounting effective And a out a Virgin of company, a X.X point million for the we exclusions rate of loss result share. pre-tax the the that $X.XX or for quarter incurred Islands. should income as mainly per tax portion the For I of

move be overall compensation non-cash we was income year, mid-XXs. Also operating stock-based in to X.X expect the the included we As million of expense. through this rate quarter still tax

of million. the to balance with XXX cash and investments short-term ended sheet, Moving we the year

of million for repairs XX expenditures XX.X million X.X of network incurred our which renewable million, and ended totaled with in Telecom cash quarter approximately outstanding million was total incurred outside quarter energy. the debt hurricane the was segment, for X.X costs XXX.X operations in million. For of operations the XX.X the in U.S. million quarter, and Capital International we from Telecom

approximately spent the in USVI hurricane efforts. XX.X addition, In restoration for we million

to questions. million paid any press release, was to mentioned costs of received. that estimate between that for of the the and we XX network And we in for million, like total with we up some call governmental rebuild that, As we’d XX open the support now with insurance be and operator, proceeds which

Operator

Thank Instructions]. [Operator you.

Our James. Raymond of first Ric question comes from the Prentiss line with

ahead. Your line is open. Please go

Ric Prentiss

Hi. Good morning, guys.

Michael Prior

Good morning, Ric.

Ric Prentiss

questions. of couple A

you 'XX. that to was the think X.X you British you were that you Virgin mentioned revenue at out came when what million in out late Islands. was the sold quarter-over-quarter many think had that effect and call Did of I Virgin Because that out and ARPU Islands know of just look that I on how was? you First, trying selling that it through didn’t British the subs

Justin Benincasa

Yes, pro forma And think table I we the historical put we from the that in was the out number. all back revenue provided, the that subs to data Ric.

Michael Prior

clear. was not mid-XXXX, it be And just late; to

Ric Prentiss

Okay.

that was of out well? XQ was so BVI – the So as

Justin Benincasa

Yes, think so. I

Let me look.

Ric Prentiss

think XQ said subs the from about XQ Okay. And you nice up of a growth that, when to you Obviously subscriber by consider X,XXX. mobile I going quarter.

the look ARPU as international like came now it I competitive the what included trying in like pretty up far looked out also guess is operations? revenue. think Just into there as nicely, the although equipment mobile of And to dynamics

Michael Prior

a amount through talk the about business, Yes, although nature of But right, want competitive? – are equipment prepaid you Guyana. in subs we do the don’t of have huge the coming the a subsidies to lot of because

Justin Benincasa

Right. there more own to And their is bring point typically and -- why think people the that’s make I

Michael Prior

– So I in own it’s share and a is of I there’s we’ve say it’s remarkable difference say gains good competitive places their otherwise. kind Guyana I some held agree. but environment, would a like different a got in markets little trend, wouldn’t but there a

Justin Benincasa

typically they’re we’d in where be markets would seeing I we in what more too like where now to is Guyana traffic the data U.S., the behind Ric, are ARPU. in that add

Ric Prentiss

right. All

you So grow can thought, trying so it a continued good this from level or as see think – that a through some just ARPU is this to level --?

Michael Prior

biggest economy and is ARPUs to subs activity. the have usage in penetration anticipation already think the from is starting fact potential grow to and then the where data oil of we of the quite Guyana a the bit I number further grow in think from that

Ric Prentiss

All right, you the XX question. I think CapEx, of I be million. million to were that might XX the answered makes sense. restoration on And kind you thinking hurricane think Previously

to million. Now gross Those you’re thinking XX million are numbers. XX

on maybe insurance a Is you when basis. so would government and And that net get that support it correct? reduce

Michael Prior

That’s some at insurance is correct. I in And and XX change there think.

Justin Benincasa

And include of course revenue. doesn’t that loss

Ric Prentiss

telecom thought to Has million the for had you was CapEx of there been that kind change to was what notice going previously I XX And million. to to any that. mentioned right. absent you be Sure, year. didn’t XX Linked that? update an

Michael Prior

range. update still that that didn’t We and probably around we’re

We’re that would initiatives may forward. little move be seeing on growth it gross a up few to still things of out. kind that see we’re But plays waiting that number But bit as of how CapEx. bring we kind some a

Ric Prentiss

mentioned XXX Is through it in that XQ. upcoming in then of the you’ve still sale you it’s Got And got you. like part of close think the to about wholesale And the network. U.S., a think trying I base looking that just stations? might

sale we’re of but impact to just the what the trying think the the like network of of in XQ rest just year? not looks So the through

Michael Prior

kind think you it stations I it on. Yes, the and larger it’s straight-line is base that of but of more XXX about within contracts because context can’t so

I had thing given to back So we encapsulated is previously which to best think the do go that event. the guidance

Ric Prentiss

right. All

U.S. to million in was, XXX guidance think XXX Telco the to so XXX – that And million what, million I or XXX million of 'XX?

Michael Prior

pegged we the question we’re – that some release I And in noted, know we’re softness. Yes. seeing as some because seeing we’ve the

fall low think put we But we’re might that end. point. this outside saying at at us to not guidance We’re the it going

Ric Prentiss

and I what that at you of revenue want the it on what was mentioned margin kind be that’s to Yes, the and was could side. get softness Okay.

Michael Prior

Yes.

Ric Prentiss

good for a That’s me. in great. come other Okay, I start might after ask. people

Operator

you. Thank

Company. comes Our of line next and from Klee Allen question the with Sidoti

is line Your Please go open. ahead.

Allen Klee

morning. Good

Michael Prior

Good Allen. morning,

Allen Klee

given the credits quarter? U.S. today what are with we service profitability Virgin Starting a how first being there Islands, get in are of much sense and losses or can the or

Justin Benincasa

release, we’re about out negative. EBITDA, a the quarters, million look credits. We but quarter if the giving service impact on not right, for at you on year-over-year that in specifics mentioned it’s it’s And in the $XX

Allen Klee

credits And your the did up service show in financials? where

Justin Benincasa

It’s a reduction revenue. In to revenue.

Allen Klee

get prior Okay. post But once make to and those get running back that thought reason little said XX% you And bit to late think I that is to the if you XX% USVI hurricanes economy summer, margins. there operating still a everything bit then running slowed that you XXX annualized you up there. – that to sense? if numbers for that maybe would have by around had down and of the million the revenue it’s and any know has a

Michael Prior

Allen, Michael. it’s

back so add break a go was what said the more. we gave before, that was within ready, doing be we it out you run have the to numbers any we of don’t – as the away pre-storms. pre-deal, back at kind first it rate of If people the would been could it. segment level figure markets to right all, will what individual it’s out how come believe hard But We directionally

whose You’ve – have maybe return. the haven’t got we island people may left and not

long You’ve naturally sorts have of for up. waiting people below economic I [ph] some that’s then cutting, inherent; don’t it but court of court situations activity its for what where is the sort can time. know are catching of reconnection that exacerbated some word got you And a be when can – occur by was; shaving other these

will to will minimum. in hard be, but to take we So get full it what steam a that to think it’s gauge time exactly some

Justin Benincasa

the included the are the And we numbers VI in first kind mind and acquired that margins. which also when gave the of some of same keep property those we

off before begin number to apples-to-apples So bit with to impact. is of little that be going the a anyways

Michael Prior

kind look high There’s Virgin back point last the if territory. that kind high to takes of back the it, in second other and thing come Islands that back of in full improvement pretty – point but right. Islands was to there’s some best do some puts we and get is year and say markets The that’s to to a the Virgin need quarter

Allen Klee

Okay. Thank you.

talked In in terms of Telecom. managing – about costs U.S. you’ve

have feel where current going do rate coming that a one in, good of forward? the terms is you EBITDA In margins run been

Justin Benincasa

I think the say. it’s margin, hard On to –

additional revenues think any on margin. put in softness pressure I will the

Allen Klee

of and update terms may on more party just then not an it getting timeframe that potential what maybe financing or of And may Okay. third in on is a your India thinking little --?

Michael Prior

thinking and flippant. occurring our too is like against guess scale it, conversations. the also question direction those we’re forward out I to debt is other the having good are equity be a we’d serious terms interest but we side equity on partner in and both level play there’s not like I But particularly and acceptability. going considerations It’s think on of of side, conversations a things what that. There

hard only progress it. the going So to something specific it’s in hand. working conversations some actually be and when point making on But I And really have than [indiscernible] are that. we’re at more clear is you

Allen Klee

you. Thank Okay.

paid Could the Just back in to to And it you was high relative said that questions; be – income. impacted year. over you repeat Could contributable of in you it did income range XXX% was quarter? still then did, of net have compared one, a it’s looking you but – pre-tax Guyana? your relatively been maybe for non-controlling two amount interest steady or was? time, from what point the while And accounting-related the cash what to you pre-tax you income also same the your tax in quarter should if

explaining just on So you. Thank what’s maybe those going kind of things. in also two

Justin Benincasa

the you take first. me of of around if driven that’s spread kind second income kind let The of jurisdictional minority the really quarter. will, this one Yes, distributions,

XXX% to The those. going really are there then we’re of So place accounting losses well. the both markets in you’re minority that have owned. impacting takes interest did And are in that Islands Virgin that’s and what

excluded, that because the say. I’ll – piece losses in the So for purposes are interest and to Islands – losses artificially the accounting inflate minority are that’s there going Virgin also is not

no you Virgin the Islands. benefit from of the kind in tax else have on losses So but everything

Allen Klee

taxes? on And

Justin Benincasa

the them effective That’s – would tax the taxes same losses so bring affect Islands would if the you well. The on affect exclude are you and rate tax you which as have brought can’t it them. could in have down thing – ultimately Virgin tax to

Allen Klee

you. Thank Okay.

Operator

Thank you.

question BWS. of from the next with comes line Khorsand Hamed Our

Please open. is line ahead. Your go

Hamed Khorsand

morning. Good Hi.

you that could So the that just it’s clarify because remaining being the sale that’s terms first up, up earlier? you is for guidance just the would assets? gave the commentary the because of U.S. or end given closer the of Is that pending to had lower indicating you end of Telecom, contract were guidance. the You

Michael Prior

sale already low to closer things just things combination and was lower end that we in the of be it’s that. gave. the traffic seeing; could guidance It included and we’re like The

Hamed Khorsand

as then that to And is ARPU? data about increasing are as what’s how Guyana far concerned, as rising market. able or Okay. as rates far strategy talked you the had in You

Michael Prior

little mobile markets, it, It’s it you’ve It’s just data valuing in to or getting it’s still behind has just penetration consumers smartphone not believe seen more, penetration impact. a using data, penetration. it some just mobile in as used most

kind of it’s So it’s seen, more just little developed bit economies. a of time a lag other the markets have versus trends

Hamed Khorsand

smartphones Guyana? in what you the rate for ask penetration just is will I

Michael Prior

We don’t market-by-market provide details.

Hamed Khorsand

for out or you can are looking third yourself? a you And in then Okay. grow party India investor it

Michael Prior

a of out whereas we there’s of than energy it are high markets grow the in the can cost do. we in and therefore of solar [indiscernible] pros – happening said much cons, lot But multiple evaluating returns lower a a coming capital lower is there and return we’re in are lot that’s We the money What’s ourselves. need got enough. renewable

in to of the an us the Indian financial as and in investing particular. that And be partners we of the you outlet operating sort provides as helps in money it if path returns get and partner, also money including that’s contemplated effectively sector, additional for managing solar for for into looking enough this serving always layers segment capital a build attracting attractive And of so we’ve will.

egg too, allow So out and to bigger a to of people money there’s potential get likely we chicken need but little a work. to is there which to bit enough it’s put

Hamed Khorsand

you. Thank Okay.

Operator

[Operator Instructions]. you. Thank

Our comes question the follow-up James. with line Ric Raymond of Prentiss from

line open. Please is Your go ahead.

Ric Prentiss

Michael, allocation bit or and last you’re growth for as there us desire capital on balance the about could for types free locations to and they of sitting you sheet some had you? might little fairly manage Is a and need But fast you really early night a opportunities ton guys. there had cost or then there CapEx. furious also cash. FirstNet opportunities positive elaborate might revenue, on flow obviously Thanks, that their what be Can a of call of be? AT&T on talked with And opportunities also bullish cash on the there go very you any project. you’re

Michael Prior

capacity the massive to keep for bucket think don’t the all I in – as their and certainly infrastructure need think general network and we of do continue data I particular. there’s Yes, with what as we’re capabilities But the opportunities like, operational think capabilities call a would quickly big lot anybody I And add of communications of things for for about I to expansion the mostly yes, their we individual all-in we area well. reputation. And see talking looking the carriers wireless broadly network in side. of our infrastructure like areas a on shared in would kind costs having that opportunities there’s side. I good we people manage to what is for but down in costs, and see our that things bunch it’s us doing there and us. There in on are call kinds a other – fit conversations they of And

So other that’s like but also opportunity continue that We for And United size States think again, figuring of benefitting sector. in puts work of of from a but Australia. a lot takes kind the there renewable moving, other see small financial to that it. in could of with a it, energy, markets investment it’s places. we particularly there then We the the model bit see in our and sources and I player made large those capital be to in out

Ric Prentiss

of call referenced U.S. might Puerto you there the of looking type help to a then And what the timing Obviously but it Virgin couple and Islands. and Chairman Is Rico it’s magnitude to opportunity obviously what scale Okay. for to might us some the times that be? Pai mean? potential way tough potential

Michael Prior

to certainly be that the of hard it to of the it’s sense think things we is accomplish we has the more the Puerto make the look to say, is some to It’s of kind us. think potential And critical island makes robust. course more the it’s most Rico material to business size that because for of going resilient pretty and communications Islands. infrastructure to not No, relative of that Rico at public. money easy bulk given of Puerto to and the But Virgin

– now be say than to right to material. really the can’t I short think hard So could is quantify other answer it

Ric Prentiss

fiber guys the in going II II the register interested And the or have process lines FCC, Okay. with auction? II you you’re CAF on. CAF you along obviously the doing for Did CAF

Michael Prior

registered. else. thing are briefed get – think I forgot say anything but told I’m I don’t We the usual to And is

Ric Prentiss

you’re I as think of timeline? the timeline far what’s your that. you talk could And the out? then registered. to that plays how Yes, thoughts And what’s as

Michael Prior

correctly. Well, remember starts July I believe I in if auction the

I I know it timeline. but get that I an wrong. say have idea beyond in So don’t and don’t to want I mean

Ric Prentiss

That’s fine. Great. Sure.

up, Okay, guys. thanks follow the for

Michael Prior

Sure.

Operator

you. Thank

Sidoti Klee line and from comes with question Company. follow-up of next Allen Our the

is open. go ahead. line Please Your

Allen Klee

hi. Yes,

clarification. a Just

this it to seeing be getting forward the rid that quarter? didn’t some You was won’t any just result wondering and specific show as going of businesses a sales something change I that quarter equipment you of is of that a or really is

Justin Benincasa

this That’s change principle took a accounting that just No. quarter. in effect

– wireless. So the included I all all in it’s think all now it’s –

Allen Klee

you. Thank

Operator

no to Justin any questions the turn like time. back showing Benincasa conference at I’m would over to further I you. Thank this for closing remarks.

Justin Benincasa

all That’s next you us. Take And we’ll for see you Thank care. everybody. joining have quarter. we

Operator

all This participating disconnect. in thank gentlemen, today’s you the have program may you Everyone, great conclude and a conference. Ladies day. does and for

ATN International (ATNI) 26 Apr 182018 Q1 Earnings call transcript