Investor Presentation Nasdaq: ATNI Third Quarter 2023 ATN International Vision, Mission & Core Values ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-12593 ATN INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction ...

Subscriber Growth - Broadband homes passed increased by 22% year-over-year, reaching over 746,000[5] - Broadband customers grew by 6% year-over-year, exceeding 217,000[5] - High-speed data (HSD) broadband customers now represent 59% of the total broadband customer base[5] - International mobile subscribers increased by 14% year-over-year to 399,100, with stable blended mobile churn rates[6] Financial Performance - Total consolidated revenues increased by 4% year-over-year to $186 million[16] - Adjusted EBITDA increased by 10% year-over-year to $46 million[16] - International Telecom revenue was $92 million, while US Telecom revenue was $94 million[15] Future Outlook - The company anticipates full-year Adjusted EBITDA to be in the range of $183 million to $193 million[30] - Capital expenditures for the full year are projected to be between $160 million and $170 million, primarily for network expansion and upgrades[30] - The company projects a revenue CAGR of 4-6% and an Adjusted EBITDA CAGR of 8-10% over the three-year period from 2022 to 2024, excluding construction revenue[31]

Financial Data and Key Metrics Changes - Total Q2 consolidated revenues increased by 4% year-over-year, with operating income improving to $2.4 million from $1.7 million last year, and adjusted EBITDA rising 10% to $4.1 million driven by strong subscriber growth [16][19] - Total net income for the quarter increased to $800,000, reflecting a loss of $0.03 per share, which includes the impact of preferred dividends [16] Business Line Data and Key Metrics Changes - International revenues rose 4% in the quarter, with adjusted EBITDA up 7%, driven by strong broadband and mobile subscriber growth, partially offset by a reduction in federal high-cost support subsidies for the U.S. Virgin Islands [17] - In the U.S. segment, revenues were up 4% due to growth in fixed revenues from strong enterprise sales in Alaska, despite reductions in legacy roaming revenues [18] Market Data and Key Metrics Changes - The high-speed subscriber base and international mobile subscriber base each grew by double digits, with homes passed by high-speed data networks increasing 10% sequentially and 66% year-over-year [8][9] - The international mobile subscriber base reached over 399,000, marking a 14% increase from the same period last year [9] Company Strategy and Development Direction - The company is focused on its Glass & Steel and First-to-Fiber strategies, targeting regions such as Alaska, the Western U.S., rural tribal lands, and the Caribbean [7] - A long-term agreement with Verizon Wireless was announced, emphasizing the transition from wholesale roaming services to providing infrastructure and technical services, which will generate stable long-term recurring revenue [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive positioning and the positive momentum heading into the second half of 2023, driven by growing revenue, improved margins, and expanding subscriber bases [14] - The company expects to reduce capital expenditures and increase operating cash flows, aiming to lower the net leverage ratio by the end of 2024 [22] Other Important Information - The company completed a $300 million debt refinancing, extending and expanding its senior secured credit facilities, which enhances financial flexibility [13][21] - The company was awarded a $10 million grant to build a fiber and fixed wireless network in New Mexico, which will serve over 11,000 unserved and underserved locations [11] Q&A Session Summary Question: Was the recent acquisition the November acquisition of Sacred Wind? - Yes, it was the last year's acquisition of Sacred Wind [26] Question: Is the Verizon contract more about recurring revenues rather than construction? - Yes, it will be more consistent recurring revenue without construction revenue [28] Question: Are there any near-term headwinds from the new North American wireless carrier contract? - No, there are no near-term headwinds anticipated [38] Question: Will interest rates impact capital expenditure plans? - Interest expense has increased, but there has been no need to adjust capital spending plans based on interest expense [40] Question: What is the status of government subsidies and BEAD? - The company is working with local state broadband offices to identify sustainable projects for the BEAD program [43] Question: What metrics will be provided for 2024 guidance? - The focus will be on key metrics such as EBITDA and CapEx, with no specific guidance on subscriber metrics at this time [49]

PART I [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited Q1 2023 financials show revenue growth to $185.8 million, but a net loss of $7.1 million due to higher expenses [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets slightly decreased to $1.70 billion, while total liabilities increased to $942.3 million and equity declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,700,015** | **$1,707,869** | | Cash and cash equivalents | $56,016 | $54,660 | | Net fixed assets | $1,056,363 | $1,055,954 | | **Total Liabilities** | **$942,266** | **$938,571** | | Long-term debt, including current portion | $464,681 | $421,900 | | **Total Equity** | **$664,526** | **$676,829** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2023 revenue grew 8.0% to $185.8 million, but net loss widened to $7.1 million due to higher operating and interest expenses Q1 2023 vs. Q1 2022 Statement of Operations (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $185,774 | $172,019 | | Income from Operations | $636 | $108 | | Interest Expense | $(8,807) | $(3,363) | | Net Loss | $(7,055) | $(1,957) | | Net Loss Attributable to ATN Stockholders | $(5,885) | $(948) | | Diluted Net Loss Per Share | $(0.44) | $(0.13) | | Dividends Per Share | $0.21 | $0.17 | - The company recorded a **$2.9 million restructuring expense** in Q1 2023, which was not present in the prior-year period[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2023 operating cash flow improved to $16.0 million, while investing activities used $52.8 million and financing provided $38.0 million Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,012 | $11,388 | | Net cash used in investing activities | $(52,762) | $(34,468) | | Net cash provided by financing activities | $37,999 | $19,228 | | **Net change in cash** | **$1,249** | **$(3,852)** | - Capital expenditures increased to **$50.6 million** in Q1 2023 from $34.2 million in Q1 2022[21](index=21&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business segments, the Sacred Wind acquisition, upcoming debt maturity, government program reliance, and a new Verizon agreement - The company operates through two segments: International Telecom (Bermuda, Cayman Islands, Guyana, US Virgin Islands) and US Telecom (Alaska and the western United States)[30](index=30&type=chunk) - On November 7, 2022, the company acquired Sacred Wind Enterprises for **$44.6 million**, with purchase price allocation finalized in Q1 2023[65](index=65&type=chunk) - Subsequent to quarter end, on May 10, 2023, Commnet signed a seven-year Carrier Managed Services Master Agreement with Verizon, estimated at approximately **$200 million** over the initial term[147](index=147&type=chunk)[149](index=149&type=chunk) - The company's 2019 CoBank Credit Facility, with **$122.0 million** outstanding, matures on April 10, 2024, with refinancing actively pursued for 2023[32](index=32&type=chunk)[34](index=34&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 revenue growth driven by segment performance and acquisitions, increased net loss due to higher expenses, and critical debt refinancing needs [Results of Operations](index=58&type=section&id=Results%20of%20Operations) Q1 2023 total revenue increased 8.0% to $185.8 million, driven by both International and US Telecom segments, despite minimal operating income Revenue by Segment (in thousands) | Segment | Q1 2023 Revenue | Q1 2022 Revenue | % Change | | :--- | :--- | :--- | :--- | | International Telecom | $90,408 | $86,787 | 4.1% | | US Telecom | $95,367 | $85,232 | 12.0% | | **Total Revenue** | **$185,774** | **$172,019** | **8.0%** | - Fixed revenue increased by **12.7%** to **$117.8 million**, driven by growth in Alaska and the Sacred Wind acquisition[187](index=187&type=chunk)[188](index=188&type=chunk) - A **$2.9 million restructuring charge** was recorded in Q1 2023 related to decommissioning cell sites in the US Telecom segment[212](index=212&type=chunk) - Interest expense more than doubled to **$8.8 million** from $3.4 million year-over-year due to increased borrowings and higher interest rates[218](index=218&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company had $61.0 million cash and $464.7 million debt, with a critical CoBank Credit Facility refinancing due April 2024 - The 2019 CoBank Credit Facility, with **$122.0 million** outstanding, matures in April 2024, creating a significant refinancing need[266](index=266&type=chunk) - Management is actively pursuing debt financing options to extend the maturity, expecting completion during 2023[266](index=266&type=chunk) - Full-year 2023 capital expenditures are projected to be between **$160 million** and **$170 million**, net of reimbursable amounts[234](index=234&type=chunk) - The company repurchased **$1.4 million** of its common stock in Q1 2023, with **$18.0 million** remaining authorized for future repurchases[238](index=238&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=89&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency fluctuations, mainly from Guyana operations, and interest rate sensitivity on its $372.6 million variable-rate debt - The company's main foreign currency exposure is to the Guyana Dollar[272](index=272&type=chunk) - As of March 31, 2023, **$372.6 million** of variable-rate debt was outstanding; a 100-basis-point change in interest rates would alter annual interest expense by **$3.7 million**[275](index=275&type=chunk) [Item 4. Controls and Procedures](index=91&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[276](index=276&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter[277](index=277&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=91&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, detailed in Note 14, primarily involve GTT in Guyana and Alaska Communications, with **$15.3 million** accrued for potential liabilities - For details on legal proceedings, the report directs readers to Note 14 of the Unaudited Condensed Consolidated Financial Statements[278](index=278&type=chunk) - As of March 31, 2023, the company has accrued **$15.3 million** for various probable claims, legal actions, and regulatory proceedings[144](index=144&type=chunk) [Item 1A. Risk Factors](index=91&type=section&id=Item%201A.%20Risk%20Factors) A key risk factor is the ability to refinance the 2019 CoBank Credit Facility, maturing April 2024 with **$122.0 million** outstanding - A significant risk is the maturity of the 2019 CoBank Credit Facility on April 10, 2024, with **$122.0 million** outstanding as of March 31, 2023[282](index=282&type=chunk) - Inability to refinance this debt on favorable terms could adversely impact operations or financial results[282](index=282&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2023, the company repurchased 71,563 shares of common stock, with **$18.0 million** remaining authorized under the 2016 Repurchase Plan Share Repurchases in Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Plan | | :--- | :--- | :--- | :--- | | Jan 2023 | — | $— | — | | Feb 2023 | — | $— | — | | Mar 2023 | 71,563 | $39.69 | 35,656 | - As of March 31, 2023, **$18.0 million** remains authorized for share repurchases under the 2016 Repurchase Plan[283](index=283&type=chunk) [Item 5. Other Information](index=95&type=section&id=Item%205.%20Other%20Information) A significant subsequent event is Commnet Wireless's seven-year Carrier Managed Services Master Agreement with Verizon, valued at approximately **$200 million** - On May 10, 2023, subsidiary Commnet entered into a Carrier Managed Services Master Agreement with Verizon Wireless[286](index=286&type=chunk) - The agreement has an initial seven-year term and is expected to generate approximately **$200 million** in total payments from Verizon[287](index=287&type=chunk)[288](index=288&type=chunk) [Item 6. Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes standard exhibits such as Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files[291](index=291&type=chunk)

Financial Data and Key Metrics Changes - Total consolidated revenues increased by 8% year-over-year, reaching the highest level in over a decade [17][10] - Operating income improved to $0.6 million from $0.1 million a year ago [17] - Adjusted EBITDA rose by 6% year-over-year, driven by strength in the international segment and steady domestic results [17][18] - Net loss for the quarter increased to $5.9 million, or a loss of $0.44 per share, primarily due to a $5.4 million increase in interest expense [21] Business Line Data and Key Metrics Changes - International segment revenues rose by 4%, with adjusted EBITDA up by 5%, supported by growth in broadband and mobile subscribers [18] - U.S. segment revenues increased by 12%, with adjusted EBITDA up by 16%, mainly due to strong performance in Alaska and the Sacred Wind acquisition [19][21] - Homes passed by broadband networks grew to approximately 736,000, a 21% increase year-over-year [11] Market Data and Key Metrics Changes - Mobile subscribers in the international segment increased by 13% year-over-year, reaching over 328,000 [11] - 55% of broadband subscribers were connected to fiber or higher-speed networks, reflecting an 18% year-over-year growth in high-speed data subscribers [11] Company Strategy and Development Direction - The company is focused on providing connectivity in underserved areas, including the Caribbean and rural U.S. regions [5][6] - Strategic initiatives include "glass and steel" and "first to fiber," aimed at expanding market leadership and improving customer retention [6][7] - The company is investing in quality assets to enhance market position and reduce customer churn [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of revenue and long-term growth prospects, tracking to the three-year plan established in 2022 [10][14] - The company anticipates continued revenue and EBITDA growth trends throughout 2023 [10][25] - Management highlighted the importance of maintaining financial flexibility to support strategic investments [15][16] Other Important Information - The company reported core CapEx for the quarter of $50.6 million, with expectations for lower CapEx spending for the remainder of the year [22][24] - The consolidated net debt to adjusted EBITDA ratio was 2.3 times, indicating a strong balance sheet [23] Q&A Session Summary Question: Update on FirstNet contract completion and revenue expectations - Management indicated that the FirstNet project is about 75% complete, with revised revenue expectations of $12 million to $14 million for the year [28][30] Question: Impact of Sacred Wind acquisition on guidance - The Sacred Wind acquisition is included in the overall guidance, contributing approximately $10 million of annual EBITDA [32] Question: Market share and growth opportunities in international wireless - Management noted that subscriber growth is primarily from taking market share rather than overall market growth [46] Question: Future CapEx expectations - Management expects CapEx to step down significantly in 2024, with a gradual decrease starting next year [44][45] Question: Preparations for roaming business changes - Management believes they have accounted for necessary charges and will continue to utilize existing towers while phasing out some sites [51] Question: Seasonality in Alaska's fiber build business - There is minimal seasonality in the Alaska business, although certain quarters may see larger numbers due to project timing [52][53]

Acquisitions and Investments - The company acquired Sacred Wind Enterprises for $44.4 million, enhancing its infrastructure reach and broadband services in rural Southwest[133]. - The acquisition of Alaska Communications was completed for approximately $339.5 million, expanding broadband telecommunication services in Alaska[136]. - The company has been awarded $145.5 million in grants under the Tribal Broadband Connectivity Program to deploy broadband connectivity on tribal lands[144]. - The company anticipates receiving approximately $20.1 million over 10 years from the Rural Digital Opportunities Fund to provide broadband and voice coverage to over 10,000 households[141]. - The company was allocated up to $207 million under the Replace and Remove Program to remove and replace communications equipment deemed a national security risk[145]. - The company expects to invest approximately $160 million to $170 million in telecommunication networks and business support systems for the year ending December 31, 2023, aimed at driving future subscriber and revenue growth[181]. Revenue and Financial Performance - Total revenue for the year ended December 31, 2022, increased by $142.6 million, or 25.9%, to $725.7 million compared to $602.7 million in 2021[157]. - Communication services revenue rose by $142.6 million, or 25.9%, to $692.2 million in 2022 from $549.6 million in 2021[157]. - Operating income for the year ended December 31, 2022, was $7.9 million, a significant increase of $22.9 million, or 152.9%, from a loss of $15.0 million in 2021[157]. - The company reported a net loss attributable to ATN International, Inc. stockholders of $5.6 million in 2022, an improvement of $16.5 million, or 74.5%, from a loss of $22.1 million in 2021[157]. - Net income (loss) attributable to ATN International, Inc. stockholders was a loss of $5.6 million for the year ended December 31, 2022, compared to a loss of $22.1 million for the year ended December 31, 2021[174]. Segment Performance - US Telecom segment revenue surged by $110.8 million, or 42.7%, to $370.2 million in 2022, largely due to a full year of Alaska operations included in the results[154]. - International Telecom segment revenue increased by $12.7 million, or 3.7%, to $355.6 million in 2022, driven by improved retail and marketing strategies[154]. - Mobility revenue increased by $7.7 million, or 7.5%, to $110.0 million in 2022, with all growth attributed to business customers[156]. - Fixed revenue increased by $109.8 million, or 33.4%, to $438.4 million, with $75.9 million from business customers and $33.9 million from consumer customers[159]. - US Telecom segment fixed revenue rose by $109.9 million, or 115.4%, to $205.1 million, primarily due to a full year of Alaska operations included in 2022 results[159]. Expenses and Costs - Total operating expenses increased by $100.1 million, or 16.2%, to $717.8 million in 2022 from $617.7 million in 2021[157]. - Operating expenses for the US Telecom segment rose by $102.5 million to $375.9 million in 2022, primarily due to the inclusion of Alaska operations[154]. - Cost of communication services increased by $63.6 million, or 25.5%, to $312.9 million, with US Telecom segment costs rising by 53.8%[166]. - Selling, general and administrative expenses increased by $43.5 million, or 23.1%, to $231.8 million, with US Telecom segment expenses rising by 53.0%[168]. - Depreciation and amortization expenses increased by $32.4 million, or 31.5%, to $135.1 million in 2022 compared to $102.7 million in 2021[157]. Cash Flow and Liquidity - Cash used in investing activities was $167.2 million and $426.6 million for the years ended December 31, 2022 and 2021, respectively, reflecting a decrease of $259.4 million[179]. - For the year ended December 31, 2022, cash provided by operating activities was $102.9 million, an increase of $22.4 million compared to $80.5 million in 2021, primarily due to a net income increase of $13.2 million[181]. - As of December 31, 2022, total liquidity was approximately $59.7 million in cash, cash equivalents, and restricted cash[178]. - The company had $99.0 million outstanding in borrowings under the 2019 CoBank Credit Facility, with $75.0 million available for future borrowings[184]. Debt and Financing - The Alaska Credit Facility was amended to increase the Revolving Credit Commitment from $35.0 million to $75.0 million and the Term Loan Commitment from $210 million to $230 million[188]. - The company assumed $31.6 million of term debt in connection with the acquisition of Sacred Wind Enterprises, with $31.4 million outstanding as of December 31, 2022[193]. - The company reported compliance with all financial covenants of the 2019 CoBank Credit Facility as of December 31, 2022[184]. - The Receivables Credit Facility had $46.2 million outstanding as of December 31, 2022, with $22.3 million of availability remaining[192]. - The company accrued $14.7 million for legal and regulatory contingencies as of December 31, 2022[209]. Future Outlook - Future fixed revenue growth is expected in US Telecom segment due to expanded broadband access in Alaska and western United States[159]. - The company expects to incur construction costs of approximately $22 million in 2023 related to the FirstNet Agreement[203]. - The company is a recipient of the Connect America Fund Phase II program, expecting to spend $12.5 million in capital expenditures in 2023[205]. - For 2023, the company expects capital expenditures to be approximately $160 million to $170 million, primarily for network expansion and upgrades[203]. Internal Controls and Compliance - As of December 31, 2022, the company concluded that its disclosure controls and procedures were effective at the reasonable assurance level[213]. - The internal control over financial reporting was assessed as effective as of December 31, 2022, based on COSO criteria[214]. - There were no changes in internal control over financial reporting during the quarter ended December 31, 2022, that materially affected the internal controls[216].

ATN International, Inc. (NASDAQ:ATNI) Q4 2022 Results Conference Call February 23, 2023 10:00 AM ET Company Participants Michael Prior - CEO Justin Benincasa - CFO Conference Call Participants Rick Prentiss - Raymond James Greg Burns - Sidoti Hamed Khorsand - BWS Financial Operator Good day and thank you for standing by. Welcome to the ATN International Q4 and Year-end 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and ...

ATN International, Inc. (NASDAQ:ATNI) Q3 2022 Earnings Conference Call October 27, 2022 10:00 AM ET Company Participants Michael Prior - CEO Justin Benincasa - CFO Conference Call Participants Ric Prentiss - Raymond James Greg Burns - Sidoti & Company Hamed Khorsand - BWS Financial Operator Good day, and thank you for standing by. Welcome to the ATN International third quarter 2022 earnings conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentatio ...