Anterix, Inc. (NASDAQ:ATEX) Q3 2023 Earnings Conference Call February 14, 2023 8:30 AM ET Company Participants Natasha Vecchiarelli - IR Robert Schwartz - President, CEO & Director Ryan Gerbrandt - COO Christopher Guttman-McCabe - Chief Regulatory & Communications Officer Conference Call Participants James Ratcliffe - Evercore ISI Simon Flannery - Morgan Stanley George Sutton - Craig-Hallum Walter Piecyk - LightShed Partners Michael Crawford - B. Riley Securities Operator Good day, everyone, and welcome to ...

Financial Performance - Spectrum revenues for the three months ended December 31, 2022, were $578 million, compared to $385 million for the same period in 2021, representing a 50.1% increase[15] - The net loss for the three months ended December 31, 2022, was $8.0 million, compared to a net loss of $12.7 million for the same period in 2021, indicating a 37.5% improvement[15] - The net loss for the nine months ended December 31, 2022, was $31.859 million, compared to a net loss of $26.502 million for the same period in 2021, representing a 20.5% increase in losses[24] - The Company recognized total spectrum revenue of $1.311 million for the nine months ended December 31, 2022, compared to $749,000 for the same period in 2021, representing a 75.1% increase[42] - Interest income increased by $0.4 million, or 4444%, to $0.4 million for the three months ended December 31, 2022, and by $0.6 million, or 1118%, to $0.7 million for the nine months ended December 31, 2022, due to higher interest rates[105] Operating Expenses - Operating expenses for the three months ended December 31, 2022, totaled $14.8 million, up from $12.7 million in the same period of 2021, reflecting a 16.3% increase[15] - General and administrative expenses increased by $1.9 million, or 18%, to $12.1 million for the three months ended December 31, 2022, primarily due to higher stock compensation and headcount costs[97] - Non-cash compensation expense attributable to stock awards was $13.411 million for the nine months ended December 31, 2022, compared to $10.047 million for the same period in 2021, reflecting a 33.5% increase[24] - Product development expenses increased by $0.2 million, or 7%, to $3.0 million for the nine months ended December 31, 2022, driven by higher IT-related costs[99] - Sales and support expenses increased by $0.1 million, or 10%, to $1.4 million for the three months ended December 31, 2022, primarily due to higher headcount costs[98] Assets and Liabilities - Total current assets decreased to $72.5 million as of December 31, 2022, down from $115.8 million as of March 31, 2022, a decline of 37.3%[13] - Total liabilities increased to $98.6 million as of December 31, 2022, compared to $91.7 million as of March 31, 2022, an increase of 7.5%[13] - The accumulated deficit as of December 31, 2022, was $(353.9) million, up from $(313.8) million as of March 31, 2022, reflecting a worsening of 12.8%[13] - The balance of contract liabilities increased to $61.367 million as of December 31, 2022, from $54.678 million at March 31, 2022[46] - The balance of contract assets increased to $736,000 as of December 31, 2022, from $638,000 at March 31, 2022[44] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of $18.676 million for the nine months ended December 31, 2022, compared to a net cash provided of $27.037 million for the same period in 2021[24] - The company reported a total cash and cash equivalents balance of $57.511 million at the end of the period, down from $127.764 million at the end of the previous year[24] - Net cash used in investing activities was $20.6 million for the nine months ended December 31, 2022, compared to $16.3 million for the same period in 2021, primarily for acquiring and retuning wireless licenses[116] - Net cash used in financing activities was $8.8 million for the nine months ended December 31, 2022, compared to $0.5 million for the same period in 2021, mainly due to stock repurchases[117] - The company may need to raise additional capital to implement business plans and initiatives, with potential financing through debt or equity offerings[110] Agreements and Contracts - The company plans to continue its efforts in commercializing spectrum assets to targeted utility and critical infrastructure customers[10] - The Xcel Energy Agreement provides for $80 million in scheduled prepayments over 20 years, with $8 million received in December 2022[27] - The Evergy Agreement resulted in a prepayment of $30.2 million for a 20-year term, covering service territories in Kansas and Missouri with a population of approximately 3.9 million[89] - The company has secured dedicated long-term usage of its 900 MHz Broadband Spectrum for Xcel Energy, enabling the deployment of a private LTE network[27] - The company has a contingent liability of $20.2 million related to the SDG&E Agreement for the sale of 900 MHz Broadband Spectrum, with $0.2 million received as a milestone payment during the quarter ended September 30, 2022[77][78] Market and Regulatory Risks - Future projections indicate potential challenges in achieving operating and financial guidance due to regulatory and competitive risks[10] - The company does not expect a material impact on financial condition from a 10% change in market interest rates due to the short-term nature of its financial instruments[125] - The company is currently not exposed to market risk from foreign currency fluctuations as all transactions are in U.S. dollars[126] - Inflationary factors have increased operating expenses, which may adversely affect revenues if not controlled[127] Internal Controls and Governance - Management concluded that disclosure controls and procedures were effective as of the end of the reporting period[128] - There were no changes in internal control over financial reporting that materially affected the company during the reporting period[129]

PART I. FINANCIAL INFORMATION [Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Anterix's consolidated financial statements reflect a decrease in assets, increased net losses, and negative cash flows from operations and investing activities [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$255.9 million** from **$278.0 million**, driven by reduced cash and declining equity Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 (Unaudited) | March 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $70,114 | $105,624 | | Intangible assets | $159,469 | $151,169 | | Total assets | $255,935 | $278,044 | | **Liabilities & Equity** | | | | Total current liabilities | $29,903 | $9,636 | | Total liabilities | $89,846 | $91,746 | | Total stockholders' equity | $166,089 | $186,298 | | Total liabilities and stockholders' equity | $255,935 | $278,044 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Net loss for the three months ended September 30, 2022, increased to **$10.6 million** due to higher operating expenses Consolidated Statements of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Spectrum revenues | $398 | $182 | $733 | $364 | | Operating expenses | $13,943 | $12,083 | $27,996 | $24,209 | | Gain from disposal of intangible assets, net | ($2,905) | ($10,230) | ($3,553) | ($10,230) | | Loss from operations | ($10,660) | ($1,707) | ($23,732) | ($13,669) | | Net loss | ($10,643) | ($1,777) | ($23,839) | ($13,787) | | Net loss per share (basic and diluted) | ($0.56) | ($0.10) | ($1.27) | ($0.77) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased to **$166.1 million** due to net loss and stock repurchases - For the six months ended September 30, 2022, total stockholders' equity decreased by approximately **$20.2 million**[20](index=20&type=chunk) - Key activities impacting equity included a **$23.8 million** net loss, **$8.8 million** in equity-based compensation, and **$4.7 million** for the retirement of common stock under the repurchase program[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating, investing, and financing activities led to a **$35.5 million** decrease in cash Cash Flow Summary (in thousands) | Activity | Six Months Ended Sep 30, 2022 | Six Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($17,948) | ($12,592) | | Net cash used in investing activities | ($12,373) | ($12,075) | | Net cash (used in) provided by financing activities | ($5,189) | $7,996 | | **Net change in cash and cash equivalents** | **($35,510)** | **($16,671)** | | Cash and cash equivalents, beginning of period | $105,624 | $117,538 | | Cash and cash equivalents, end of period | $70,114 | $100,866 | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, 900 MHz spectrum commercialization, and key lease agreements - The company is the largest holder of licensed spectrum in the 900 MHz band and is focused on leasing it to utility and critical infrastructure customers for private broadband networks following the FCC's Report and Order[28](index=28&type=chunk) - During the six months ended September 30, 2022, the company began recognizing revenue of **$0.1 million** from its long-term lease agreement with Evergy after delivering cleared spectrum for 45 counties[30](index=30&type=chunk) - On October 28, 2022, after the quarter ended, the company entered into a 20-year agreement with Xcel Energy for dedicated use of its 900 MHz spectrum across eight states[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 900 MHz spectrum commercialization, increased revenues, rising expenses, and liquidity [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Spectrum revenues increased, operating expenses rose, and a reduced gain from asset disposal led to a higher loss Spectrum Revenues (in thousands) | Period | Q3 2022 | Q3 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Spectrum revenues | $398 | $182 | $216 | 119% | Operating Expenses (in thousands) | Period | Q3 2022 | Q3 2021 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Operating expenses | $13,943 | $12,083 | $1,860 | 15% | - The increase in G&A expenses for Q3 2022 was primarily due to **$1.6 million** higher stock compensation expense and **$0.6 million** higher headcount and related costs[103](index=103&type=chunk) - The gain from disposal of intangible assets decreased to **$2.9 million** in Q3 2022 from **$10.2 million** in Q3 2021, as the company exchanged narrowband for broadband licenses in a different number of counties with varying cost bases[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$70.1 million** in cash, deemed sufficient for 12 months, and continues its share repurchase - The company holds **$70.1 million** in cash and cash equivalents as of September 30, 2022[117](index=117&type=chunk) - Net cash used in operating activities was **$17.9 million** for the six months ended September 30, 2022, compared to **$12.6 million** for the same period in 2021[120](index=120&type=chunk) - The company has a share repurchase program with **$30.3 million** remaining authorization as of September 30, 2022. For the six months ended, the company repurchased **$4.7 million** worth of stock[125](index=125&type=chunk)[127](index=127&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate sensitivity on cash, deemed immaterial, with no foreign currency risk - The company's main market risk is interest rate changes affecting its cash and cash equivalents, but this risk is considered immaterial due to the short-term nature of the investments[129](index=129&type=chunk) - There is no foreign currency risk as all operations and transactions are denominated in U.S. dollars[129](index=129&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2022, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[131](index=131&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter[132](index=132&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings - The company is not involved in any material legal proceedings[135](index=135&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors disclosed in the 2022 Annual Report - No material changes have occurred to the risk factors disclosed in the 2022 Annual Report[136](index=136&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **54,450** shares, with **$30.3 million** remaining under the share repurchase program Issuer Purchases of Equity Securities (for the three months ended September 30, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value Remaining for Purchase (in thousands) | | :--- | :--- | :--- | :--- | | July 2022 | — | — | $32,313 | | August 2022 | — | — | $32,313 | | September 2022 | 54,450 | $36.73 | $30,313 | | **Total** | **54,450** | **$36.73** | **$30,313** | - The Board authorized a share repurchase program of up to **$50.0 million** on September 29, 2021, valid through September 29, 2023[139](index=139&type=chunk) [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - None[140](index=140&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Not applicable[140](index=140&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No other material information was reported - None[141](index=141&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) The report lists various exhibits filed with Form 10-Q, including corporate governance documents and certifications - Exhibits filed include the Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO certifications (Rule 13a-14, 15d-14, and Section 906), and Inline XBRL data files[142](index=142&type=chunk)

Financial Data and Key Metrics Changes - At the end of the quarter, the company had $86 million in cash and approximately $50 million in remaining contracted proceeds due to be paid in the next few years, indicating a strong financial position [9][10] - The capital-efficient model allows the vast majority of contracted proceeds to result in free cash flow, with multi-decade customer lease contracts providing significant future value [9] Business Line Data and Key Metrics Changes - The company is focused on becoming the de facto private broadband solution for utilities, with a strong emphasis on closing individual deals to capture the sector [7][10] - There are over 60 prospective customers in the pipeline, demonstrating growing demand for 900 megahertz private LTE [16] Market Data and Key Metrics Changes - The company is seeing increased interest from various sectors, including pipelines, gas companies, freight rail operators, and government installations, reflecting a broader demand for private broadband networks [17] - The public industry focus on private LTE is measurable, with over 50% of the nationwide spectrum value represented by participation from utility leaders and organizations [11] Company Strategy and Development Direction - The company aims to pioneer the transformation of utility sector communication capabilities and monetize its nationwide spectrum asset [18] - The strategic focus remains on the utility sector, with ongoing efforts to address critical challenges such as grid monetization and renewable energy integration [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to close significant contracts, highlighting the complexity and evolving nature of the deals [12][19] - The company remains optimistic about achieving its target of $1.8 billion in contracted proceeds around fiscal 2024, emphasizing long-term value opportunities [41] Other Important Information - The company has established an active ecosystem program with over 80 members, indicating strong collaboration within the industry [11][51] - Legislative support, including the recent Inflation Reduction Act, reinforces the importance of the issues the company is addressing for utilities [19] Q&A Session Summary Question: Update on the fourth contract under LOI - Management clarified that there is no direct correlation between the number of LOIs discussed previously and the current four deals, indicating progress in the pipeline [20][21] Question: Commentary on Phase III of the pipeline - Management noted that the pipeline includes both parent company and operating company opportunities, with significant potential for growth [27][28] Question: Progress on the four deals since the last call - Management indicated that progress is being made across all deals, with varying timelines for completion [31][33] Question: Status of the third LOI not included in the four deals - Management confirmed that all deals remain in the pipeline, with no losses to competition, and emphasized ongoing development across all phases [38][39] Question: Competitive landscape regarding private networks - Management acknowledged increased interest from competitors but emphasized the company's leading position in the private LTE movement and its substantial market footprint [42][44]

Anterix Inc. (NASDAQ:ATEX) Q4 2022 Earnings Conference Call May 20, 2022 8:30 AM ET Company Participants Natasha Vecchiarelli – Vice President of Investor Relations and Corporate Communications Rob Schwartz – President and Chief Executive Officer Tim Gray – Chief Financial Officer Ryan Gerbrandt – Chief Operating Officer Chris Guttman-McCabe – Chief Regulatory and Communications Officer Conference Call Participants Walter Piecyk – LightShed Phil Cusick – JPMorgan Simon Flannery – Morgan Stanley Mike Crawfor ...

Anterix Inc. (NASDAQ:ATEX) Q3 2022 Earnings Conference Call February 3, 2022 5:00 PM ET Company Participants Tim Gray - CFO Rob Schwartz - President & CEO Ryan Gerbrandt - COO Chris Guttman-McCabe - Chief Regulatory and Communications Officer Conference Call Participants Simon Flannery - Morgan Stanley Walter Piecyk - LightShed Partners Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you na ...

Anterix Inc. (NASDAQ:ATEX) Q2 2022 Earnings Conference Call November 3, 2021 4:45 PM ET Company Participants Natasha Vecchiarelli - Director of Investor Relations & Corporate Communications Rob Schwartz - President & Chief Executive Officer Tim Gray - Chief Financial Officer Ryan Gerbrandt - Chief Operating Officer Conference Call Participants Chase White - Height Capital Katherine Knop - B. Riley Walter Piecyk - LightShed Partners George Sutton - Craig-Hallum Capital Operator Good afternoon, ladies and gen ...