ATNI - Earnings call transcript Q3 2020

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Operator

Thank you all for standing by and welcome to the ATN International Q3 2020 Earnings Conference Call and Webcast. I’ll now hand the call over to your host, Chief Financial Officer, Mr.

Justin Benincasa. Sir, you may begin.

Justin Benincasa

Great. Jesse. Thanks, and review joining results. our everyone call on you to today third thank morning, us for our Good quarter XXXX

with Prior, Michael me Executive Here Officer. ATN’s Chief is

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

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

measures to for provided that, a X-K reconciliation measures on earnings that are with and GAAP the for our a I the and proceedings. over operating factors respect these including SEC auctions, Fund, related Opportunity our comments. at these questions further the Digital SEC. regarding affect his refer atni.com comparable with and filing our may future release to turn we website would the to results, Rural will to period detail in answer related Also, For to to information not And be we quiet position I to in will certain now Michael these you call on or RDOF

Michael Prior

good morning and Justin you, Thank Alright. everyone.

our are continued productivity cost to improve second and of with services of That resilience improvements, results back flow status businesses. telecom quo. satisfied for quarter strength the trends, largest said the controls. subscriber to Our quarter our demonstrating very segment third we and the substantively from the not the on good are core similar Cash

and we of both development to customers. new ambition I we positive for company. to and both hard the information, across platforms see pursuing an our create pursue of that people. folks grateful operations, be and International the within Relevant businesses quite noted, are of I continue was say multiple to with And generation growth for X that markets services our starting businesses pursuit I the to and this do growth for For need which goals. our the and year, strong pace our to of good. am year-on-year do strategic current as for moving and experiences segment of we Further, of and and fortunate and this months improve segment Telecom, outside territories. experience more in, is deliver even wanted can customers am itself double-digit ambitious we EBITDA part more of the in driving flow great the doing of that to have we retail I much that example, to saw we our and to last historical ahead cash dedication strength

consistent our fixed expansion with with quarter represents good subscribers. the demand particularly As Also, all second spending services line job controls for and nearly the strong continued quarter, the generally this of data of markets. in a past was

in quarter improved segment program totaled the and ago. the Broadband there a improve we run, XXX,XXX is to into to especially a XXX,XXX marketing. the the turn development We a off expand our need XXX,XXX from but of a in second and paying end roughly to this against is mobile year XXXX, the heavy with particularly speeds. to to continue think rate. network XXX,XXX reach positive trend fiber that for to are the area and pickup Our approximately ago, sales year subscribers compared in of XXXX quarter continue growth we is subscribers, quarter, and of of capacity at in XX% will investment, the we working end roughly our A XXX,XXX and resiliency, quarter execution, at and room

We to further of and expanding including second effort AI. X% the new this quarter are subscriber to management invest retail similar and we And subscribers are locations declined current in use programs adding rate in tools, annual video quarter. at the an of use new the

is a rate a bundled the offerings. While customers impact is the slight continue as we subscribers, second to saw increase decline Also, about consistent percentage in pretty minor. quarter, X% significant, annual on the with voice add profitability at

and of limited pandemic terms starting recovering see we tourism was in of In there to impacts, some here results signs are the markets. in new nothing

are monitor to decline Bermuda causes continue as macroeconomic we release, in further. We In ownership and One pandemic our our in the subsidiary. news, preparing the other to our and case situation Communications, reported in Islands increased stake carefully Cayman conditions

is having investment we than line experience exclusivity fixed investments, that made as predecessor company as and Justin failed passed note XX results positive and activity lot unlicensed to that are follow-on the Investors and note also going legislation options, things the our by yielding long new good just our with I in against in that may as where larger together seen local have will and in considering act this ago not to while the to international government among further, data cover formally news about telecom and voice notorious except our services. this had our multiple are competitors. this I a we government the open the am other say team discussions ends long original will years but to-date. believers more in outlook business our very the all Guyana, in and

will change we do market see believe tighten, in point. the competitive market there significant this do overall the also experience We growth. this will at a not So, as major the that environment but

put We on customers, our can most a to experience delivering for you control will attention great continue of which control.

is accounting not some favorable quarter this related expected the a that, comparisons with also Moving year-on-year quarter. the revenues results the our were ambitions of strategy outside cash committed to second is team moving neutral mentioned next and flows grow the the of certainly The result to but here were host pit and it to the to Telecom, restructuring remains legacy level. highlighted revenue. as the broadly carrier consistent I and last U.S. to as And at quarter, contract services outset

third, to growing looking number are governmental of second, is commercial do in broadband networks one, fiber-based growing and market customers. private a revenues; our and our We that business to services Uverse; growing to the known carriers rural and ways:

certain recently activities, the and and CBRS more were activity Powell are services. limitations progress individually, further for obtaining While the come. more we develop we In successful break This to and made part range areas we in our other areas that efforts of three of auction. sales in to do strategic do impacted these out these items all segment, and despite the not developments across of areas a investment wide to in platform licenses concluded in several pandemic

our Navajo We also million support the $XX funding partners with nearly in broadband to additional more Act to win worked the wireless sites. Cares Nation than of in XXX build

real tremendous Navajo a ambitious year-end, build goal, complete is which have world families, to of across substantial and impacts a large educators doing the team committed and towards that for students, job section our lands. by reaching are will We

segment created latest this of Tribal a leading authority, In facility have this their in are a and justifiably had the recovery the mill proud renewable momentum and We the and to and quarter, pandemic our for with the were reversed by energy, achievements long Navajo from during successful related second teams quarter. win. shutdowns factory partnership India the third

and production. addition, In operational repairs improvements to led better

by negatively and related are comparisons in delays However, the pandemic currency annual impacted movements settlement.

to portfolio. substantial strategies In we on on we yield International new the come. capabilities and businesses see on and segment, growth, summary, U.S. pleased asset Year-to-date additional to updating past progress are a significant to in we That’s and to on the continue build forward our of in of our resilience quarters operations. you assets and our investments in So, and our leverage from results me. opportunities to represent Justin. grow with to markets for Telecom Back look it our you, many Telecom discipline drive to focus we our

Justin Benincasa

Alright. Thank you, Michael.

the For were over with consolidated show the quarter third this total to consolidated of continued X% revenue first million, the straight-line Consistent EBITDA was half $XX.X the over down year, profitability, million X% improved has $XXX.X and at year XXXX. segment anticipated as down our and much quarter last noted, International Telecom revenues third U.S. offsetting the quarter, that segment. was of Michael in impact the

ability to to was up international efficiencies modest our the of segments million $XX.X quickly were increased with in gain markets. each last to on EBITDA and EBITDA million, growth many slightly $XX.X from highlighting at for and revenues revenue growth million. our Year-to-date XX% International segment Telecom, year Looking $XX.X XX% operating the pivot starting of

of Communications our October, Islands As XX%. ownership we release, the Bermuda One in approximately total XX% we brings Cayman Company, to our noted an which in purchased additional

key overall network Communications. Cayman One performed beginning to The since across We businesses accretive expect this form significantly Islands. earnings in We XXXX the our to fourth the our company expanded metrics. merger be quarter, well footprint to several in

million and EBITDA expanded $XX.X expanded year-to-date. million percentage expenditures still CapEx in were $XX.X X quarter, the subscribers and year. the down ago. $XX flow. segment for range both points, for was consistent the second be million year’s segments International the million, Telecom have million in $X We free down with to by $XX.X third margin cash We quarter revenues grown expect XXXX. markets, EBITDA were quarter, $X.X from to segment quarter in Capital million in but third U.S. the of $XX XX% this a year this Telecom from

million quarter, compared the $XXX,XXX income We $X.XX $XX last year, to agreement. million segment, high had revenues to build expect $X.X to continue million U.S. quarter the be do of revenue built. the $XX.X strongest year-to-date. first third FirstNet, X.X With our last energy sites most was $XX As comparison Telecom’s CapEx this total our last are compared our $XXX,XXX as In little of EBITDA net share. the build-out we’ve mentioned, previous domestic support to million while in contracts. to to our $X.X two after delays, The based year in very year expect under the to in COVID-XX that this evident in third quarter approximately sites of to expected us certain we’ve year’s and for quarter, compared related on in quarters terms years this the the is to this delivered year-on-year which wireless deliver of third total historically We and expenditures guidance per of seasonally the were we the FirstNet renewable respect our quarter, support and of quarter, business. I consolidated built past XX% $X.X is sites end of several to be to in million over closer capital or year. backhaul the carrier seasonality

Our to rate CARES of effective for the from part costs part, Act. the the X.X% million overall expect for included NOL million tax for operating segment. expense of compensation as Telecom related of an be the initiatives was in in to benefit non-cash range carry-back of quarter, we and the year, stock-based expense $X.X in Also U.S. quarter in was early-stage and the $X.X our that

sheet, September the cash total call Just of $XX.X the questions million. we cash, outstanding we turn balance at now. investments quickly debt for to in you total short-term And back $XXX.X had operator, of XX, will million, on

Operator

your Prentiss we of you, is begin now Instructions] Participants, question is the Raymond Our question-and-answer from Ric Sir, first Thank session. [Operator line the now open James. speakers. of line will

Ric Prentiss

morning, Thanks. Good guys.

Michael Prior

Good morning.

Ric Prentiss

of Couple questions.

put you a called were that $XX you with and of some the within possibility paid Michael, kind see it about million was bids. to you successful, slip I also that the where think might you about you capital as was into the market work CBRS X, completely can quarter it of you and spectrum? might guys Have it what talk that addressable then there October auction but First, us out what in to

Michael Prior

support in the you I’ll Justin Virgin on and just the I business, can I rural a think licenses, which also side. our it fully deployment private And to spectrum we areas. the But of those mix it’s utilizing from networks, the but private is of holdings. would pay already Yes. let we respond and for timing strategy, within the in networks of Obviously, spend, did, financial it been small say, on in terms the quarter. see Islands CBRS, added did Ric, amount of

Ric Prentiss

projects of about think of might you the any addressable return to you the put kind And to be to capital involved? Okay. on think that deploy for you support way purchases, when might spectrum about what CapEx us market, the work capital, the how

Michael Prior

I as can’t spectrum, speak or we short-term, believe around and when but else. and we can sometimes to it we we – actual we buy potential have specifics can’t use, have through run say because when everything always, of but in things, because buy or not we in I it, that the like If spectrum may turned we other proceedings may we spectrum. the end, our the and to sold use put swapped use, we of filter

So cost of we different. I get into for reasonable return be do with that think really building So, specifics. the out, can a will the can’t that? we associated earn risks that, no this it are But beyond what

Ric Prentiss

are building the mostly And that network private at type items in Okay. Geoverse, is emerging?

Michael Prior

Yes.

level beyond we type see in Our specific is building. a CapEx things, the lot simply of a interest

Ric Prentiss

okay. that’s Yes, okay, don’t I know,

stock to you some a program, set work you how up the buyback? little capital your stock type execute in you plan? it, like about quarter. like XXbX Can are as talk the looks What your bit is far thoughts us in question, a putting it as buyback Next buyback did stock

Michael Prior

not in to We long history, given if Yes. to to put bought, period by amount – a more windows. I in very had We work it, this, the looking trade frustrated looking you’re and but you been we’ve and in investors move. no know think been past opportunistic certain the

do put large plan, some this our which the our But the fairly XXbX because put stock. fully gyrations at of fact in in less utilized in that more type useful or did place point. we authority we’ve mechanism So to of a think we

Ric Prentiss

in bought track kind And do average keep out you of recall it? queues you I you’re many just seeing, price shares you of it but report report the many how is don’t how what getting? trying do or to dollars,

Michael Prior

I’m not entirely sure.

that over. in are not Let the is if find answer sure shares before put call I’m the but we we will me out. the not, dollars

Ric Prentiss

be that would Okay, great.

shows just stock one work question final gyrations and the ahead. to I things a gyration always happening. it – other been indication confidence where of year, think it’s this the knows price when the yes, Goodness nice And the happen. obviously a it put you in do go has or

Michael Prior

told. So I was in do shares we dollars, both just do,

Ric Prentiss

XX-Q? the In

Michael Prior

In the XX-Q.

Ric Prentiss

the Do XX-Q you quarter? when know you’re file going for this to

Michael Prior

I think is around the understanding. fifth, my

Ric Prentiss

you some some might was customers, business mean for that what as Okay. look here as markets. on on think how think final XQ hit is, islands, tourism, about in as that How we what in mean it as on for as for tourism And you’re of questions tourism recovery the ‘XX still COVID concerns me should what employees there in fixed, support the obviously should your we about unclear? we mobile, obviously, impacts might COVID’s seeing? should well about into think, your you it as are areas? far the what You What thinking about consumer your on be mentioned

Michael Prior

am they the they’ve is markets told worst are, where I return feeling in reasons. and expect what and there’s I the certainly think, is– start and interesting I it’s general Islands where the baseball Virgin inside have passed U.S. build people have don’t think But different tourism, from by we’re if tourism, but here, to view, the seen we some is think about we you because first we has any a territory. on up in

go who and very, people concerned Then it might playing a restrictions. more as territories. and conservative. or allowed traveler go So They’re attractive about to seen that as Cayman other even very not both it, makes safe are are to COVID Bermuda the to U.S.

back. there’s various have of like are it’s out ripple still– still– more still are the big under that contribute there work do effect. But economies particular, Islands, going some attracting depressed support possible out Virgin not mean sort hotels that in and returns long, so we the and some it’s seen I is there and and people still there ships at to depressed lingers a of not are to in first they’re So definitely of sort the if think for look the can are those or movement open but it’s certainly– struggling long it, this of higher that’s worst, end which businesses when we’ve the cruise

So way clear free That’s best we definitely we’re it. wouldn’t “Okay, and now.” I say I say like, the feel can

as I I offer services. in things seen severe, other long the aren’t people’s as think as essential proven, it’s think businesses both business absolutely and that we are been our services

continue be otherwise, So, to we steady demand to the expect

Ric Prentiss

well Stay your you, and employees guys. everyone. Thanks Okay. for

Michael Prior

Yes, thank you you. Yes as and well.

Operator

Our from Mr. Sir, is line Sidoti. your is of open. of question now next Greg Burns line the

Greg Burns

Good morning.

Michael Prior

Hi.

Greg Burns

has I more mobile focus re-circling anything of start investing you’re it confidence side? is mobile, market business, international the a maybe in other of, your give or back to the or know in maybe of growth, changed there you parts bit business was and driving to terms attention little just function In that on a and the now

Michael Prior

I of of in investments think some of in investment trigger, that’s seeing The extremely I certainly markets, place, a But matter is and and referenced right see Like pay opportunity we off. couple to to I off foot confident starting it we’re we our and we and It not the is that tools be is of strategy work. putting there. the are additional but putting not always It’s because see everybody, my to some remarks some there recur of to there great are is a huge. the in let competitive, a gas like going our signs been think lot side in markets. retail been networks really a shape the made. investment really have ongoing in in that, and couple there that’s not prepared most

create and targeting area we’re an an growth. to remains it So some of focus area

Greg Burns

what price purchase in the the equity, And that? then Communications, Okay, the for One equity was XX% thanks.

Justin Benincasa

We haven’t disclosed that Greg.

So…

Michael Prior

at deal. usually don’t We that

Justin Benincasa

But say a we us. good it’s value would to

Greg Burns

Did have acquire what to of or And you for the maybe trigger that the there? approached you? Okay. remaining was options the approach What’s the them they structure purchase? do ownership You stakes balance?

Michael Prior

– to we restrictions on a Bermuda side. market portfolio we stake, and the Yes. was of need don’t speak can were well It’s of a situation it But future think party partly knew and because I their we sensitivities. approached,

a this a So is not investor, strategic. financial

Greg Burns

thank you. Okay,

Operator

Securities. is question next of open. of Our Allen Klee National line the is your from now line Sir,

Allen Klee

Good morning.

how on much you to the were and your EBITDA? us start earnings that could when For emerging thoughts turn they drag positive can investments, of a on quarter for tell your

Justin Benincasa

I the will moving let forward. Michael talk piece to EBITDA

On we the million about $X.X spent them the quarter. – on in

is there of an bit a drag. EBITDA So

Michael Prior

It there. in assume stages to business Justin’s thinking you that opposed of going by network give interesting I because, But our probably generation Allen, the the the answer, but is in increased an costs scaling are hope near-term time. minority, ones investments. piece But biggest investment EBITDA is that growth increased of through example, up he will it answering be there any same are about I a that minority example as P&L will the we that and be not right, it’s could for the value situation. early also as we successful of really would at visibility private

years building and contributor are be a platform to can that a for focused significant We on to come. ATN

Allen Klee

there kind be to the for what Could have? anything do lot about making up of valuations might maybe how that you might of the of you. guys and which that. Thank imply could for market acquisitions know you think you assets of you seen a we in talk value it paying that have how maybe about harder infrastructure funds are looking trying is for and We

Michael Prior

Sure.

before, and or upon I there, little I think we things quarter think I last expand it. maybe a a on of remark but on the can touched couple bit quarter this to

deals, and certainly market them than is watch deals value assets are say would them. currently have and I aware we higher would view is our first we the they we a seen giving on much The those those our in of imply

appears of right we the look to like various in, of now – If we wholesale towers at infra broadband, be are much have bulk at and course But start of more also in invest above what and in operations. funds you you from operations, you those of their and services, is really Home and the today, lot have fiber-based fiber more is to noteworthy. retail internationally, valuing that. look and high-speed to starting liking and retail the things they operations, see prices coming as revenue they’re a that’s the our and invest US market side and

part second say would I question. your first the thing The is of

We is approach, in types hard low We, of and we proven so in making those provide didn’t flow really saw cost last because the for of strong believe businesses of out accelerated of of we and platform, in we we into what this make a a that established boost is and assets, that to it’s together year some for get of those of capital and from– recurring a difficulty have have, platform, get But our and against assets competing interest done a year lot really types there and that return capital benefit grow Both good the the also capital investors a role good get sense. we have have pooling cash businesses a this of them have a can of telecom experience of works in harness in to a businesses,. this at the value, pooling that both. value we cost business past to at heck lot on GAAP of complex them. and shifted have

some of we our platforms, investment So and for to to to partner additional growth. additional a providers low-cost continue there deal us those platforms, capital fund is then and upside platforms, develop and think both and looking existing with new great

our that’s So now. right focus really

Allen Klee

and little growth I If but renewables This it differently. not has your businesses, is material we asking at just question International, nice a might look be the a U.S. you stabilized telecom today. believe outlook, same have

your balance sheet quarter, you flow, cash free good generating is had and a are under-leveraged. record You

this cash level improve question to do meaningful on your a what modest incremental, think have how of, your that? outlook you growth of versus about you can do with you kind So

Michael Prior

think somewhat further Yes, question, the and that meaningful. develop to the is that use that can previous be we very about I can way think it the our but is platforms same we of side capability

cash I production That’s next think are we overall to and the are and to if level. what to very flow we going that. need take on value do, we focused

both my looking at In our are a the segments I prepared ways in number doing are We and telecom remarks. that that of we referenced of

Allen Klee

you. Okay. Thank

Michael Prior

Sure.

Operator

[Operator next question Khorsand Instructions] of Our is from the line of BWS. Hamed

line open. Your now is

Hamed Khorsand

Hey, good morning.

Michael Prior

Good morning

Hamed Khorsand

Just that a that a or is access question COVID was and fees, termination on this there dip related the flow? was to sustainable and quarter, just data

Justin Benincasa

say, it. there, sustainable. a then quickly related, pinpoint certain like there’s said, some we are hard to of we’ve of getting we’re on in our and some would cost, lot they right. down It’s that’s but them pivot sustainable, brakes I some things, take to things think and I programming it’s There done of OpEx

Michael Prior

that by lower impacts customers our certainly roaming And number.

Justin Benincasa

Yes.

sale lower too, down sales as lower got well. You handset there of you usually have cost

Hamed Khorsand

Okay. subscriber or side, just of advertisements? And conceding then on mobile on pricing capture are you more new is subscribers it promotions the and to international

Michael Prior

It’s that. to better manage subscriber but management also it’s using as top-ups the also, retail, said things subscriber the latter, I more like base, the prepaid tools and side, and on it’s

in we attractiveness can value also and markets there that I how offerings deliver think is of way. bundled our the

Hamed Khorsand

international the side? Is market you bothering there a still on that’s

Michael Prior

now to want it I expect better. particularly. to do don’t really single we market Every out

Hamed Khorsand

the would deliveries the what capturing contract immediate? the backhaul on timing Then with of the would Okay, revenue happening, be, FirstNet it be the for

Michael Prior

we It will be – Yes. it it much, immediately. much. pretty site a flips turn Once pretty into over capturing

is the guess I answer So yes.

Hamed Khorsand

Thank from Okay, that’s you. it me.

Michael Prior

operator? else, Anyone

Operator

of again from National Allen Our next the line question Klee is Securities. of

now Your open. is line

Allen Klee

of just margin Can that. it a you making the done this going remind Yes, will once out to and you to, you’re not compare on that, us be But are to what or or on the there is we you’re think contract, top with period any hi. potential where where FirstNet potential time for constructing could about to once that Thank to think profile of business be bottom think point. the growth and and stability, it we line what as you. the about margin the that how get business the line

Michael Prior

of say flipped would revenue on in lateral have where little would line probably, roaming over service definitely– to on we revenue. to a a that, but that a a say I have more we it’s will material, backhaul from not than that margin, up, it our to flip more move do the we’re we lease deliver wholesale we But compressed is once from expenses top service. a once deliver I

Allen Klee

you. Thank

Michael Prior

operator? else, Anyone

Operator

No on further questions queue.

Michael Prior

thank see will end. Thanks and we you for year quarter we Okay, the everybody. after

Justin Benincasa

Take care.

Operator

concludes all today’s And that conference. you Thank for participating.

now may You disconnect.

ATN International (ATNI) 1 Nov 202020 Q3 Earnings call transcript