ATNI - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen and welcome to the ATN International First Quarter 2019 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 be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Chief Financial Officer, Justin Benincasa.

begin. may You

Justin Benincasa

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

cover call, business information the and relevant the outlook. provide During the update will an financial will I on and Michael

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

to would measures further results, affect provided these I on X-K information details website over on filing to And turn to at atni.com the to our it and our factors regarding for or Michael. I'll For GAAP may the refer earnings our that reconciliations SEC. measures release the and operating you future comparable

Michael Prior

Justin be only the this My morning, good are going call. has quarter end year to Alright, everyone. two you, relatively thank it and since since brief remarks been months

at one I not. one look the of Two quickly just Tale finish. as would positive So best is usual, and When this I be very and a story overview segments might and through quarter the look will then go say with Segments; is and entitled start I the at it

levels have adjusted reported segment seen EBITDA Telecom for U.S. well low historically our years. negative, results the many with we below First,

due seasonality and and revenues. the of in wireless to some asset primarily decline these items, the is sale effect results our in wholesale numbers are there core While some other an those

quarter and the Telecom and of quarters positive. the by total we a the progress Today, International part roughly three are the future is portfolio. of of accounting revenue segment far for pleased for is by prospects Second, largest this

was I discussion let's said with that so I to segments International the directly Telecom. going brief, beginning be from So move into

while it The should both for was the margins expectations and of in see reasons growth revenues So, segment. be operating this with line good this familiar. in our to growth

have major we five more We are full of returned a scale, service operating broadband normal data network after to see and to work investments. recovery following environment other our and continuing growth some hurricane quarters

XX% quarter this can recurring subscriber more and than in cost organic be data XXX,XXX, a coupled into So with this year this theme ago. we sortg with And at clearly you higher the growth ending of a next. controls numbers will subscribers growth think than the see year data do

this and flow for Lastly, cover, free we are segment so as spoke Justin will cash our seeing in earnings that last expansion we to expected the far call.

forward. to adversity future of Moving flows transactional and And sequential segment, the our a we bit do this cash to anticipate more will as due quarter were the are In in results main or become is for variety the that to issues the release, was affect not that you improving comparisons. discussed. understanding clearer even those the to the I subsidy I our try we while guaranteed reposition is in of XXXX progresses. a and that much stated press and either of to do or revenues and quarter next from goal a and our a we expected account assure this after that items as even create the effect disproportionately meantime, U.S. the year-on-year you disappointing of Telecom said stream defined, And will of in business. expect the predictable sustainable working idle as team still not I success face moving completely is diligently operations wholesale

call. have number and of since wholesale within segment initiatives offerings offered new in our service wireless. outside we adjusted course revenues U.S. In little we But on to this to there is and to last a different also the that year-on-year of businesses are involving Energy, because add that Renewable note of report down Segment sale. late asset update of Beyond February. there's nothing the EBITDA of

In we the launched business quarter, by Ventures during the cash operating year technologies focused the focusing wireless steady on to significant flow, Now last developing increase new producing XCOM India on investment new are team of a former leadership revenues was ATN that at venture and new made scale. that other opportunities mainly QUALCOMM. in a is developments members

and about group. of new excited business invest in talented open will changes their are to a technologies will We partner which prospect vision up this chance in of we very to communications with broader the believe sector. rapid the share We models

businesses our is are expanding producing time I'll but trends expansion business hand Justin. and are to is flow, and So we And and to U.S. we hard fighting our which And you to of collection not combat. pursuing amount back in Wholesale insignificant capital legacy up, favorable our cash headwinds it working investment sum it investing business opportunities. now still largest of

Justin Benincasa

Michael. you thank Great,

last at were first down For million year's revenues relatively quarter $XXX.X the first from X% total consolidated steady quarter.

further our we go adjusted I'll of in sale investments continue was fiber to XXXX benefits Telecom hurricane segments. from thanks as in U.S. was Consolidated as and to diversified revenues $XX.X year, $XX.X the EBITDA Islands speak in quarter our Telecom Much impact relates XX% quarter to the see $XX.X noted, million. to revenue Solar model. segment the revenues and year million Virgin adjusted for with to $XX.X million the trends the compared business through which to in million fourth increases prior I $XX.X up $XX.X offsetting year-over-year US to segment, a breakdown Telecom the million Starting and increased from with the International subscriber expanding of saw million of lower upgrading post of more XX% the increase EBITDA revenues the which segment last the U.S. the than growths, Michael and similar Excluding up strong International recovery networks. we

capital start rate EBITDA benefit loss And the which reduction approximately and year. Fund of Of segment, XXXX. U.S. million a expect projects operating be made $XX the and the $XX in in between $X.X inclusion America approximate million $X.X in included accounting wholesale XX% or some effective We in $XX note, the I Michael the for we million EBITDA investments site share quarter the and tax million from XX-year Telecom $X.XX the the quarter late of XXXX $X.X pretax Fund of quarter ago impact flow previously the Energy was in quarter. non-cash statement grant in both was in decline year. the lower But of the segment stage we In of for costs second the the million will Including for for $X.X from revenue reflecting the and currently U.S. for half per We first II Consolidated in was $X.X was excess markets first Telecom Renewable income high early acceptance was segment. $XX which for expenditures the in of net operating year the difference, of $XXX EBITDA was and million quarter negatively million for were cash operating the maintenance for million we effective and million items an mid-XXXX. by this XX% stage $XX.X of late see revenue additional income XXX closed million currently sites initiatives $X.X impacted were million segment revenue US discussed. expiration mid down $X to that down item. the second quarter. other segment results. the business a quarter offsets the million compensation accounted to $XX.X portfolio segment smaller results. multiple EBITDA a XX% down the improvement capital The from was free Mobility $X.X in early expense adjusted overall The the quarter items award or first of the quarter estimate from revenue following the related million and the million for $X.X by sale Connect last In decline for rate revenues the the to of expect additional expense was discrete year. full expect stock-based million on Breaking $X.X quarter for growth to the range tax million for to this we that wholesale in sale from expense, the benefit year-on-year million year-over-year adjusted the mentioned. due

in balance up investments by of the other $XX.X approximately the March at expenditures cash million sheet, the And year open Energy Telecom was $X.X $XXX.X total $X.X of for totaled segment. and XX, ended our debt outstanding $XX.X quarter operations, short-term International the for we Telecom million with questions. Renewable U.S. operator, by million segment, Moving will Capital the and million with $XX.X incurred cash call million. the which of we and million and to total that,

Operator

question Raymond [Operator Prentiss from Thank proceed. first And you. Ric with comes Please our Instructions] James.

Ric Prentiss

guys. morning good Thanks,

Michael Prior

morning. Good

Justin Benincasa

morning. Good

Ric Prentiss

XX my loaded also XX title component revenue it especially years, there using Cap to mechanically going that any level two the proud the all on note is is it is funding and for as high kind will it and in When last the spread but I'm as II Tale mentioned you in Your of over late segments, well. work? contra-CapEx look will million side, school is or we incremental of all [indiscernible]? is and XQ Segment is Justin, U.S. that come night versus through come Two the at the university do how because

Justin Benincasa

we again to coming then et in quarters. be might so any the full an flow Ric, needed might there be CapEx then they capital the $XX reserve if not it not covered fairly through revenue. if And the – conservatism it XX. in that's in even all all will but of back… through And requirements expenditures, at is million because will coming is will It the we come area income the we terms in get meet it start if there accepted, don’t be cetera, as if is some

Ric Prentiss

it if a population. is Okay reserved publicly not per

Justin Benincasa

all if to… if are would I think Right, it that's – you asking be incremental

Ric Prentiss

a then it round has revenue Right, Wireline wireline. the the business, been within also and bouncing little bit on U.S. for side

wireline but think to there kind business, to I'm down year now of X last base it up million that, just then in in so Is revenue. XXXX wondering revenue aware the we're million of went that $X what…? latter in was back seasonality I'm $X not of I and part million to XXXX about closer in XQ some the of

Justin Benincasa

that That bit our is, a know revenue around wireline that It quarter little really off. a – kind not particularly this little in wholesale wireline business, is that I bit. seasonal just, it is of is think yes, bounce was does you

Ric Prentiss

what maybe in saw Okay XXXX like and we so is expected of area? somewhat more

Justin Benincasa

to on the EBITDA, yes wholesale we lower. in hard But business was it's long-distance major It's the not or quarter over have say, item Yes, this business. a it's there. impacting

Ric Prentiss

Okay.

Justin Benincasa

So a big the really shouldn’t movements have impact.

Ric Prentiss

you. Got

you segment should capital of control. spent able you've continued the bigger is cost we the and in growth might the the growth that cost that about organic organic that now margins How think with revenue a the the does International, lot go the is business business out Now be done one impact second controls? strong that's of of the the the and in to where business, course EBITDA it also segment, is called margins

Justin Benincasa

but to opportunity think there target, I'm give margin. I we is lot improve not going a a of think to

probably longer on initiatives. You and There know, have will It we ample early but to margins. we I depends individual also viability – to we innings do, businesses, it tell well businesses, good There's matter time we in of we'll do and we a is improve of but the a but opportunity been what won't there's say term some individual overnight. it we so. obviously. both, And think can of areas, the think markets is we're think some how would won't do progress it a number is happen it

Ric Prentiss

segment? it International, how how in mixture is we should business and as seasonality as International revenues far that a seasonality the on and markets, about different think obviously about Right, but margins the of in

Justin Benincasa

is moment. It at not very the pronounced

significant. roaming used be not the there and know revenue. overall You pronounced when smaller more higher just that That's group a was piece in inbound old was days to revenue of higher of it the a assets

think the There you so have the at real increase, an extent some underlying markets throughout not pretty, of if the little of to a different times but product some for about There are year really exceptions. pretty So more that factor. steady year. are a it are different net-net-net those markets, is

Ric Prentiss

it's really the just And broadband to of and adoption then? being tied consumption data

Justin Benincasa

here, core individual throughout right revenues recurring revenue they domestic any around the a customers. both wireless and don't wireline That's stuff and move for the year lot and are

Ric Prentiss

is and Okay the and as How about from one, next there three, the magnitude or from the the Colorado CapEx had much far ramp what's stage region the from the one shift early spending, on in within five as the on me [ph] they final how think quarter. EBITDA [indiscernible] impact should we years? my to other

Justin Benincasa

fairly is we're number I really models the coming we've and the would time what be are be revenue growth. to successful, it's those is it in hard success this but based towards really CapEx, businesses, It's before, business could guess Ric, revenue and spoken so significant very at oriented will commitments predict say that it I if to same

or and it we So it's out. of but predict it's depends – how have chasing scale different the hard we're number really a opportunities they because the to size today pan

Ric Prentiss

indoor looking externally watching path what be we of for buildings to as should milestones along as as look success What is down as factors, announcement should the the do to far as be far we or systems successful? far [ph] as it

Justin Benincasa

that to progress and partnerships progress tentative how be those first really the other indicators, like is, of and see tend answer It's announcements you of your would of things because that's that measure which you'll the businesses. part

Ric Prentiss

very right, All well okay, thanks guys.

Justin Benincasa

Yes.

Operator

Please Maxim next And Group. Thank you. our question from with comes Klee Allen proceed.

Allen Klee

morning. Good

quarter get is the from benefit segment half you U.S. or some that little do improvement there that in Telecom said So think is get could where you the the of some the you terms expand bit of will a quarter for a excluding your you on of in initiatives that margin run to had is of you little fund, the is for what the in new improve? next could bit and second opportunity had what what that Connect on just of America is rate then kind

Michael Prior

nothing the that. of I on a is working say formed under – entirely I of, that quarter out, like all mean not think I or is that's the that probably gist will next some XXXX, missed that's about in bit margins, add quarter factors think a Justin I and There all if the impacting mainly of not – first initiatives it And seasonal that. something depends are of we're the out. further misspeak, a should things terms second best bit for on. but first. little things have but improve really over ultimately but what Those further bigger we're maybe success the

line revenue the predict will wholesale that. core things impact working So to it when bit hard a we're various little that is margins on

Justin Benincasa

quarters higher steady-state. is the Because that in margins, right now cost kind seasonality structure mean the alone of Allen expand seasonal I would right?

as seasonality the expanded margins in kind an the more move of second in the to going and So third. quarters seasonal we you're through get being

Michael Prior

Did that your questions, Allen? answer

Allen Klee

higher Yes, what thank kind of revenue can EBITDA number? thoughts renewables, it's change to a you. a being of on from and India. this In What's pure level steady-state no your

Michael Prior

to It’s see we order pipeline that. local really about we and additional in building including to out lenders said on that our partners do need capital

think So direction, that's what's required. basically still the but we that's

Allen Klee

revenues how from about is touched timeframe you finally, have Okay, and you it, else add investments? the of would investments but potential contribution there think with for these anything guess of I you then the on emerging kind

Justin Benincasa

think think it executing it. significantly be model. on there's that are not know, way are binary. really or covered I largely either think ramp those would somewhat it the XXXX The we You I by So the – about into ramp at to is of basically that visibility Right? coming or they succeeding becomes to starting

Allen Klee

so you much. thank Okay,

Justin Benincasa

Sure.

Operator

proceed. comes [Operator with Khorsand Instructions] Hamed BWS next you. Our question Financial. Thank from Please

Hamed Khorsand

Hi, good morning.

improve So of Wholesale business? you're first profitability on anything doing to off, that is side the U.S. the there

Michael Prior

on it, We’re far can go. so there's working but only you

but we’re revenue a on you issue. that, certainly cost it’s than So, think a I know, working rather mainly issue

Hamed Khorsand

the any then, too the previous highlighted calls, in you’ve monetizing still is And talk of investments made, those? ones on early it early the about you’ve especially to

Justin Benincasa

Yes. to for businesses I build we’re mean, can. if to we we I think feel, we, any like do long-term to the we’re fact know, we not that, rush in in you love build, bigger we

Hamed Khorsand

And then International the well? increase, you is broadband in is that, mix on coming all from the the Islands that were is Guyana Virgin talking side, U.S. or the as about

Michael Prior

multiple it’s it’s our markets, other with markets of really is most those markets. It really, it's markets, not,

Hamed Khorsand

Is U.S. yet? not or Virgin Islands back to being profitable

Michael Prior

It’s EBITDA positive.

Hamed Khorsand

thank great, alright, you. Okay,

Michael Prior

right. All

Operator

you. And proceed. a Thank have from with Allen Maxim Please Group. Klee we followup

Allen Klee

curious how color think just was and Guyana how the doing on competitive – Bermuda? any you I you if specific what’s of had market you in if are

Justin Benincasa

mean, I try but think, we're other individual where an basis markets, or where think and less markets into not think would can we to be I some those we overall there I say, standpoint from markets competitive better. we do I a I more are think get where we’re, think No, are we we from should there

Allen Klee

Thank you.

Justin Benincasa

Yes.

Operator

followup Raymond you. with James. proceed. from Ric And have we Please Thank Prentiss a

Ric Prentiss

subscribers markets, subscriber you broadband quick two changes, accounts the the guys, up any to the way different and updates the different were in you metrics, XXX,XXX, know, the were have the segments Michael there mentioned in or metrics calculated? re-categorize follow-ups, hi Yes, on XX% first, you guys sometimes the updates any subscriber there were year-over-year on

Michael Prior

remove foot-note we’ve the exited numbers if straightforward. most thing those is foot-notes Ric the No, but point that the our out though pretty think, market straightforward. second pretty is one you it you the are We that the to are is done those, if the But look important. at might we for subscribers, to markets, is them, taken know, part we’ve the

than is the kept and on line we they So declined. revenue subscriber really our Islands to network and in them levels were because the we that they service was of the while offer out that's until less pre-hurricane larger just growth Virgin in might that where were foot-note able imply point down, subscriber and

Justin Benincasa

able were so they it but credited we active provide customers, So, we service, weren’t the not, back. still to

Ric Prentiss

come either there, Right, longer the wondering no and are they back you cleaned customers have you is them out the most just you at have, think number are on service and address is now the or where how then of that U.S. offering [indiscernible]?

Michael Prior

it’s particularly relatively the from clean. number not exceptions, service not plan to the are that are as able the back still there But we are under as people and perspective So, of who their waiting there estimates households houses insignificant people to the but that’s them of that some clean the with houses so back, I’ve exceptions, seen who are an in federal XX% are high some are offer of for rebuild. fund were rebuilt,

and precisely. in wouldn't on opportunity us. you you it’s of year some actual service, that a the there's for But revenue for ago. at revenue-generating this, of subs look Islands example were them that you the Virgin subs were of can in but if those generating rely none of capable period, virtually I down there, video number because But maybe video, be occupied a expect still to there's our up can look are definitely video Now win-back so at you still some some right,

Ric Prentiss

islands? And in FCC the you support is get to able that there any might be further

Michael Prior

significant markets the support that high-cost the which of market they while this that's like plan continuing in Yes, absolutely, brand. administer a for under final new lot that’s would pretty a a period of and there on frozen wait plan long-term existing time, old to decide replaces plan this was partly is

not years So, XX for did at and awards they identified make point. $XXX market know, you million over this we, but this the they

Ric Prentiss

into think but it this slipping calendar next happen and it’s might obviously year? something you is wise, year is of, thoughts Any or political it regulatory

Michael Prior

and it’s certainly and network they’ve a hope really terms things some certainty the all to want do FCC some can you difficult hardening has to know things. things and additional those but, the on without we been We, their everything Know we and for they it of want the operate there us expanding plate to in there, of pot so. do, gotten

hear, to waiting really We’re here.

is, year million So was to is that it at all because way we’re a are a of not that today. the, if a getting to not, $XX.X it’s us look $XX roughly that it’s awarded they year number additive million

Ric Prentiss

spectrum what one on you of FCC think and different I their right, lot got that all XX plate, participate do focused the did me, obviously and on brands they auction, guys with the the be busy, the coming XXth you kind then one a how think are being do XG? you talked not think from FCC in Okay, on find to last being about but of for available identified trying might how day more? you about spectrum

Michael Prior

I Yes, all watching we’re think those.

they we’re there's have even it and to it might being have the still In in try so retail that. how there and decide biggest know, in other debts operation augment you but things our understand assets and certain spectrum there, is Virgin are you possible coming. that that the are know, to places, think you different very what maybe some U.S., in probable we but trying but is we’d I identified Islands there, good to that really watching we are technologies participate

expenditure don't for it’s succumbing overall us businesses So probably just are it’s given a huge tell. too our I located. to where think soon

what business then other smaller. wholesale oriented, think be it’s success more some do. tend I much businesses And to will it and we relatively in the

if So or a customer that types know identified of there's other need you enterprise, uses. is

Ric Prentiss

discussion having? same you that of fond were that stuff CBRS the and Okay were

Michael Prior

Exactly.

Ric Prentiss

thanks. Okay,

Michael Prior

Yes.

Operator

this management remarks. for I back our Thank to you call the session would to for today. turn like closing Q&A ends and over

Justin Benincasa

July. everybody and speaking with forward we to in care. you Thank you look Take

Operator

participation gentlemen, in and your program. conference. for thank This you Ladies today’s concludes the

a great have day. now You Everyone may disconnect.

ATN International (ATNI) 26 Apr 192019 Q1 Earnings call transcript