Alaska Communications Reports Fourth Quarter and Year-end 2019 Results
- Delivers Strong Fourth Quarter Leading 2019 to Meet or Exceed Guidance
-
Reports Revenue of
$231.7 Million and Net Income of$4.9 Million -
Increases Adjusted EBITDA to
$62.7 Million , Up from$60.2 Million in 2018 -
Posts Adjusted Free Cash Flow of
$16.0 Million , Up from$7.2 Million in 2018 -
Increases in
Fiber Miles 12% across Statewide Network in 2019 vs. 2018 -
The Board Approves One-time Dividend of
$0.09 per share totaling~$5 Million
“We are pleased with strong 2019 results and achievements, driven by demand for fiber infrastructure and high-performance broadband growth. Our strategic initiatives contributed to better than expected Adjusted EBITDA and Adjusted Free Cash Flow. As a result, the Board approved a one-time
“With our customer centric approach and prefunded projects, we have accelerated our fiber footprint expansion by over 16,000 fiber miles in 2019, increasing to 146,000 fiber miles across
Fourth Quarter 2019 Compared to Fourth Quarter 2018
-
Total revenue was
$58.3 million , compared to$58.7 million , a decrease of 0.7%-
Business and wholesale revenue was
$38.3 million , compared to$37.0 million , up 3.5%. -
Consumer revenue was steady at
$9.2 million for both periods. -
Regulatory revenue was
$10.8 million , compared to$12.5 million , a decrease of 13.6%, as expected due to the restructuring of the Alaska Universal Service program.
-
Business and wholesale revenue was
-
Operating expenses were
$51.3 million , compared to$53.8 million . -
Operating income was
$7.0 million , compared to$4.9 million . -
Net income was
$2.6 million , compared to$1.7 million . -
Capital expenditures excluding prefunded projects were
$10.0 million , compared to$12.5 million , which includes planned investments to continue our 5G wireless backhaul project. -
Adjusted EBITDA was
$17.9 million , compared to$14.1 million . -
Adjusted Free Cash Flow was
$9.7 million , including a tax refund of$5.1 million , compared to adjusted free cash outflow of$3.0 million .
Full Year 2019 Compared to Full Year 2018
-
Total revenue was
$231.7 million , compared to$232.5 million , a decrease of 0.3%.-
Business and wholesale revenue was
$150.6 million , compared to$144.6 million , up 4.1%. -
Consumer revenue was
$37.0 million , compared to$37.3 million , a decrease of 0.8%. -
Regulatory revenue was
$44.1 million , compared to$50.6 million , a decrease of 12.8%, as expected due to the restructuring of the Alaska Universal Service program.
-
Business and wholesale revenue was
-
Operating expenses were
$209.8 million , compared to$208.2 million . -
Operating income was
$22.0 million , compared to$24.3 million . -
Net income was
$4.9 million , compared to$9.1 million . -
Capital expenditures excluding prefunded projects were
$41.4 million , compared to$38.0 million , which includes planned investments to continue our 5G wireless backhaul project. -
Adjusted EBITDA was
$62.7 million , compared to$60.2 million . -
Adjusted Free Cash Flow was
$16.0 million , including a tax refund of$5.1 million , compared to$7.2 million . Compared to guidance, which was without prefunded projects or CEO severance, the company achieved$12.1 million .
Balance Sheet Highlights
-
Cash was
$28.3 million atDecember 31, 2019 , compared to$15.0 million atDecember 31, 2018 . -
Net debt was
$153.8 million atDecember 31, 2019 , compared to$161.2 million atDecember 31, 2018 .
Reconciliations of non-GAAP financial measures to GAAP financial measures can be found in tables at the end of this release and on the Company’s website at http://www.alsk.com in the investment data section.
“Also, in 2019, cost initiatives contributed to a 4.3% increase in Adjusted EBITDA and, combined with the AMT tax refund and net cash inflows associated with prefunded projects, drove an
2019 Performance and 2020 Guidance
Operating Statement ($ in M) |
2019 Guidance |
2019 Performance |
2020 Guidance |
Total Revenue |
|
|
|
Adjusted EBITDA |
|
|
|
Capital Expenditures
|
|
|
|
Adjusted Free Cash Flow
|
|
|
|
Conference Call
The Company will host a conference call and live webcast on
The live webcast of the conference call will be accessible from the "Events Calendar" section of the Company's website (www.alsk.com). The webcast will be archived for a period of 30 days. A telephonic replay of the conference call will also be available two hours after the call and will run until
About
Non-GAAP Measures
In an effort to provide investors with additional information regarding our financial results, we have provided certain non-GAAP financial information, including Adjusted EBITDA, Adjusted Free Cash Flow and Net Debt. Adjusted EBITDA eliminates the effects of period to period changes in costs that are not directly attributable to the underlying performance of the Company’s business operations and is used by Management and the Company’s Board of Directors to evaluate current operating financial performance, analyze and evaluate strategic and operational decisions and better evaluate comparability between periods. Adjusted Free Cash Flow is a non-GAAP liquidity measured used by Management and the Company’s Board of Directors to assess the Company’s ability to generate cash and plan for future operating and capital actions. Adjusted EBITDA and Adjusted Free Cash Flow are common measures utilized by our peers (other telecommunications companies) and we believe they provide useful information to investors and analysts about the Company’s operating results, financial condition and cash flows. Net Debt provides Management and the Company’s Board of Directors with a measure of the Company’s current leverage position. The definition and computation of these non-GAAP measures are provided on Schedules 4, 6 and 9 to this press release. Adjusted EBITDA and Adjusted Free Cash Flow should not be considered a substitute for Net Income, Net Cash Provided by Operating Activities and other measures of financial performance recorded in accordance with GAAP. Reconciliations of our non-GAAP measures to our nearest GAAP measures can be found in the tables in this release. Other companies may not calculate non-GAAP measures in the same manner as
Forward-Looking Statements
This press release includes certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's beliefs as well as on a number of assumptions concerning future events made using information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside the Company’s control. Such factors include, without limitation changes in technology and related standards, the impact of natural or man-made disasters and accidents,
Schedule 1 | ||||||||||||||||
CONSOLIDATED SCHEDULE OF OPERATIONS | ||||||||||||||||
(Unaudited, In Thousands Except Per Share Amounts) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
|
|
|
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Operating revenues |
$ |
58,262 |
|
$ |
58,689 |
|
$ |
231,694 |
|
$ |
232,468 |
|
||||
Operating expenses: | ||||||||||||||||
Cost of services and sales (excluding depreciation and amortization) |
|
26,847 |
|
|
27,914 |
|
|
105,615 |
|
|
107,509 |
|
||||
Selling, general & administrative |
|
14,512 |
|
|
17,249 |
|
|
66,718 |
|
|
66,647 |
|
||||
Depreciation and amortization |
|
9,851 |
|
|
8,572 |
|
|
37,276 |
|
|
33,908 |
|
||||
Loss on disposal of assets, net |
|
55 |
|
|
69 |
|
|
156 |
|
|
125 |
|
||||
Total operating expenses |
|
51,265 |
|
|
53,804 |
|
|
209,765 |
|
|
208,189 |
|
||||
Operating income |
|
6,997 |
|
|
4,885 |
|
|
21,929 |
|
|
24,279 |
|
||||
Other income and (expense): | ||||||||||||||||
Interest expense |
|
(2,910 |
) |
|
(3,238 |
) |
|
(12,059 |
) |
|
(13,429 |
) |
||||
Loss on extinguishment of debt |
|
- |
|
|
- |
|
|
(2,830 |
) |
|
- |
|
||||
Interest income |
|
94 |
|
|
82 |
|
|
385 |
|
|
156 |
|
||||
Other (expense) income, net |
|
(17 |
) |
|
(56 |
) |
|
175 |
|
|
23 |
|
||||
Total other income and (expense) |
|
(2,833 |
) |
|
(3,212 |
) |
|
(14,329 |
) |
|
(13,250 |
) |
||||
Income before income tax expense |
|
4,164 |
|
|
1,673 |
|
|
7,600 |
|
|
11,029 |
|
||||
Income tax (expense) benefit |
|
(1,537 |
) |
|
39 |
|
|
(2,765 |
) |
|
(2,041 |
) |
||||
Net income |
|
2,627 |
|
|
1,712 |
|
|
4,835 |
|
|
8,988 |
|
||||
Less net loss attributable to noncontrolling interest |
|
(17 |
) |
|
(8 |
) |
|
(93 |
) |
|
(92 |
) |
||||
Net income attributable to |
$ |
2,644 |
|
$ |
1,720 |
|
$ |
4,928 |
|
$ |
9,080 |
|
||||
Net income per share attributable to |
||||||||||||||||
Net income applicable to common shares |
$ |
2,644 |
|
$ |
1,720 |
|
$ |
4,928 |
|
$ |
9,080 |
|
||||
Basic and Diluted |
$ |
0.05 |
|
$ |
0.03 |
|
$ |
0.09 |
|
$ |
0.17 |
|
||||
Weighted average shares outstanding: | ||||||||||||||||
Basic |
|
53,012 |
|
|
53,185 |
|
|
53,379 |
|
|
53,042 |
|
||||
Diluted |
|
53,975 |
|
|
54,277 |
|
|
54,277 |
|
|
53,840 |
|
Schedule 2 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited, In Thousands Except Per Share Amounts) | ||||||||
|
|
|
||||||
Assets |
2019 |
|
2018 |
|||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
26,662 |
|
$ |
13,351 |
|
||
Restricted cash |
|
1,631 |
|
|
1,634 |
|
||
Short-term investments |
|
134 |
|
|
134 |
|
||
Accounts receivable, net of allowance of |
|
34,354 |
|
|
31,472 |
|
||
Materials and supplies |
|
8,900 |
|
|
6,737 |
|
||
Prepayments and other current assets |
|
9,617 |
|
|
12,169 |
|
||
Total current assets |
|
81,298 |
|
|
65,497 |
|
||
Property, plant and equipment |
|
1,424,904 |
|
|
1,390,622 |
|
||
Less: accumulated depreciation and amortization |
|
(1,042,546 |
) |
|
(1,017,442 |
) |
||
Property, plant and equipment, net |
|
382,358 |
|
|
373,180 |
|
||
Deferred income taxes |
|
- |
|
|
498 |
|
||
Operating lease right of use assets |
|
80,991 |
|
|
- |
|
||
Other assets |
|
12,598 |
|
|
16,010 |
|
||
Total assets |
$ |
557,245 |
|
$ |
455,185 |
|
||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term obligations |
$ |
8,906 |
|
$ |
2,289 |
|
||
Accounts payable, accrued and other current liabilities |
|
39,108 |
|
|
40,957 |
|
||
Advance billings and customer deposits |
|
3,761 |
|
|
4,024 |
|
||
Operating lease liabilities - current |
|
2,795 |
|
|
- |
|
||
Total current liabilities |
|
54,570 |
|
|
47,270 |
|
||
Long-term obligations, net of current portion |
|
167,476 |
|
|
168,023 |
|
||
Deferred income taxes |
|
4,403 |
|
|
2,315 |
|
||
Operating lease liabilities - noncurrent |
|
78,767 |
|
|
- |
|
||
Other long-term liabilities, net of current portion |
|
78,520 |
|
|
67,827 |
|
||
Total liabilities |
|
383,736 |
|
|
285,435 |
|
||
Commitments and contingencies | ||||||||
Common stock, |
|
541 |
|
|
533 |
|
||
|
(1,812 |
) |
|
- |
|
|||
Additional paid in capital |
|
161,844 |
|
|
160,514 |
|
||
Retained earnings |
|
15,367 |
|
|
10,439 |
|
||
Accumulated other comprehensive loss |
|
(3,277 |
) |
|
(2,675 |
) |
||
|
172,663 |
|
|
168,811 |
|
|||
Noncontrolling interest |
|
846 |
|
|
939 |
|
||
Total stockholders' equity |
|
173,509 |
|
|
169,750 |
|
||
Total liabilities and stockholders' equity |
$ |
557,245 |
|
$ |
455,185 |
|
Schedule 3 |
||||||||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||
(Unaudited, In Thousands) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
|
|
|
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net income |
$ |
2,627 |
|
$ |
1,712 |
|
$ |
4,835 |
|
$ |
8,988 |
|
||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization |
|
9,851 |
|
|
8,572 |
|
|
37,276 |
|
|
33,908 |
|
||||
Loss on disposal of assets, net |
|
55 |
|
|
69 |
|
|
156 |
|
|
125 |
|
||||
Amortization of debt issuance costs and debt discount |
|
304 |
|
|
331 |
|
|
1,215 |
|
|
1,353 |
|
||||
Loss on extinguishment of debt |
|
- |
|
|
- |
|
|
2,830 |
|
|
- |
|
||||
Amortization of deferred capacity revenue |
|
(1,255 |
) |
|
(1,101 |
) |
|
(4,655 |
) |
|
(4,098 |
) |
||||
Stock-based compensation |
|
814 |
|
|
548 |
|
|
1,580 |
|
|
1,757 |
|
||||
Deferred income tax expense |
|
1,385 |
|
|
658 |
|
|
2,919 |
|
|
2,767 |
|
||||
Charge for uncollectible accounts |
|
(18 |
) |
|
374 |
|
|
257 |
|
|
2,745 |
|
||||
Other non-cash expense, net |
|
18 |
|
|
57 |
|
|
70 |
|
|
225 |
|
||||
Changes in operating assets and liabilities |
|
2,414 |
|
|
(1,904 |
) |
|
12,332 |
|
|
8,425 |
|
||||
Net cash provided by operating activities |
|
16,195 |
|
|
9,316 |
|
|
58,815 |
|
|
56,195 |
|
||||
Cash Flows from Investing Activities: | ||||||||||||||||
Capital expenditures |
|
(13,208 |
) |
|
(12,525 |
) |
|
(44,764 |
) |
|
(37,957 |
) |
||||
Capitalized interest |
|
(396 |
) |
|
(545 |
) |
|
(1,379 |
) |
|
(2,001 |
) |
||||
Change in unsettled capital expenditures |
|
57 |
|
|
1,584 |
|
|
640 |
|
|
(227 |
) |
||||
Proceeds on sale of assets |
|
5 |
|
|
- |
|
25 |
|
|
1 |
|
|||||
Net cash used by investing activities |
|
(13,542 |
) |
|
(11,486 |
) |
|
(45,478 |
) |
|
(40,184 |
) |
||||
Cash Flows from Financing Activities: | ||||||||||||||||
Repayments of long-term debt |
|
(1,137 |
) |
|
(1,866 |
) |
|
(174,040 |
) |
|
(31,030 |
) |
||||
Proceeds from the issuance of long-term debt |
|
- |
|
|
- |
|
|
180,000 |
|
|
14,000 |
|
||||
Debt issuance costs and discounts |
|
- |
|
|
- |
|
|
(2,683 |
) |
|
- |
|
||||
Cash paid for debt extinguishment |
|
- |
|
|
- |
|
|
(1,252 |
) |
|
- |
|
||||
Cash proceeds from noncontrolling interest |
|
- |
|
|
- |
|
|
- |
|
|
40 |
|
||||
Payment of withholding taxes on stock-based compensation |
|
(5 |
) |
|
(5 |
) |
|
(453 |
) |
|
(415 |
) |
||||
Purchases of treasury stock |
|
- |
|
|
- |
|
|
(1,812 |
) |
|
- |
|
||||
Proceeds from issuance of common stock |
|
105 |
|
|
100 |
|
|
211 |
|
|
211 |
|
||||
Net cash used by financing activities |
|
(1,037 |
) |
|
(1,771 |
) |
|
(29 |
) |
|
(17,194 |
) |
||||
Change in cash, cash equivalents and restricted cash |
|
1,616 |
|
|
(3,941 |
) |
|
13,308 |
|
|
(1,183 |
) |
||||
Cash, cash equivalents and restricted cash, beginning of period |
|
26,677 |
|
|
18,926 |
|
|
14,985 |
|
|
16,168 |
|
||||
Cash, cash equivalents and restricted cash, end of period |
$ |
28,293 |
|
$ |
14,985 |
|
$ |
28,293 |
|
$ |
14,985 |
|
||||
Supplemental Cash Flow Data: | ||||||||||||||||
Interest paid |
$ |
2,992 |
|
$ |
3,531 |
|
$ |
12,228 |
|
$ |
14,254 |
|
||||
Income taxes (refunded) paid, net |
$ |
(5,051 |
) |
$ |
(1 |
) |
$ |
(5,041 |
) |
$ |
3 |
|
Schedule 4 | ||||||||||||||||
ADJUSTED EBITDA | ||||||||||||||||
(Unaudited, In Thousands) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
|
|
|
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Net income |
$ |
2,627 |
|
$ |
1,712 |
|
$ |
4,835 |
|
$ |
8,988 |
|
||||
Add (subtract): | ||||||||||||||||
Interest expense |
|
2,910 |
|
|
3,238 |
|
|
12,059 |
|
|
13,429 |
|
||||
Loss on extinguishment of debt |
|
- |
|
|
- |
|
|
2,830 |
|
|
- |
|
||||
Interest income |
|
(94 |
) |
|
(82 |
) |
|
(385 |
) |
|
(156 |
) |
||||
Depreciation and amortization |
|
9,851 |
|
|
8,572 |
|
|
37,276 |
|
|
33,908 |
|
||||
Other expense (income), net |
|
17 |
|
|
56 |
|
|
(175 |
) |
|
(23 |
) |
||||
Loss on disposal of assets, net |
|
55 |
|
|
69 |
|
|
156 |
|
|
125 |
|
||||
Income tax expense (benefit) |
|
1,537 |
|
|
(39 |
) |
|
2,765 |
|
|
2,041 |
|
||||
Stock-based compensation |
|
814 |
|
|
548 |
|
|
1,580 |
|
|
1,757 |
|
||||
Cash severance expense |
|
120 |
|
|
- |
|
|
1,715 |
|
|
- |
|
||||
Net loss attributable to noncontrolling interest |
|
17 |
|
|
8 |
|
|
93 |
|
|
92 |
|
||||
Adjusted EBITDA |
$ |
17,854 |
|
$ |
14,082 |
|
$ |
62,749 |
|
$ |
60,161 |
|
NonGAAP Measures:
The Company provides certain non-GAAP financial information, including Adjusted EBITDA, Adjusted Free Cash Flow and Net Debt. Adjusted EBITDA eliminates the effects of period to period changes in costs that are not directly attributable to the underlying performance of the Company’s business operations and is used by Management and the Company’s Board of Directors to evaluate current operating financial performance, analyze and evaluate strategic and operational decisions and better evaluate comparability between periods. Adjusted Free Cash Flow is a non-GAAP liquidity measure used by Management to assess the Company’s ability to generate cash and plan for future operating and capital actions. Adjusted EBITDA and Adjusted Free Cash Flow are common measures utilized by our peers (other telecommunications companies) and we believe they provide useful information to investors and analysts about the Company’s operating results, financial condition and cash flows. Net Debt provides Management and the Board of Directors with a measure of the Company’s current leverage position.
The Company does not provide reconciliations of guidance for Adjusted EBITDA to Net Income, and Adjusted Free Cash Flow to Net Cash Provided by Operating Activities, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K.
Adjusted EBITDA and Adjusted Free Cash Flow are not GAAP measures and should not be considered a substitute for net income, net cash provided by operating activities, or net cash provided or used. Adjusted EBITDA as computed above is not consistent with the definition of Consolidated EBITDA referenced in our 2019 Senior Credit Facility, and other companies may not calculate Non-GAAP measures in the same manner we do.
Adjusted EBITDA is defined as net income before interest expense and income, loss on extinguishment of debt, depreciation and amortization, other income and expense, gain or loss on asset purchases or disposals, provision for income taxes, stock-based compensation, cash severance expense for the Company's former Chief Executive Officer and net loss attributable to noncontrolling interest.
Schedule 5 | ||||||||||||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW | ||||||||||||||||
(Unaudited, In Thousands) | ||||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
|
|
|
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Net cash provided by operating activities |
$ |
16,195 |
|
$ |
9,316 |
|
$ |
58,815 |
|
$ |
56,195 |
|
||||
Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow: | ||||||||||||||||
Capital expenditures excluding prefunded projects |
|
(9,981 |
) |
|
(12,525 |
) |
|
(41,355 |
) |
|
(37,957 |
) |
||||
Capital expenditures for prefunded projects |
|
(3,227 |
) |
|
- |
|
|
(3,409 |
) |
|
- |
|
||||
Milestone payments received for prefunded projects |
|
3,785 |
|
|
- |
|
|
9,070 |
|
|
1,850 |
|
||||
Deferred cost of sales for prefunded projects |
|
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
||||
Amortization of revenue for prefunded projects |
|
(113 |
) |
|
- |
|
|
(113 |
) |
|
- |
|
||||
Amortization of deferred capacity revenue |
|
1,255 |
|
|
1,101 |
|
|
4,655 |
|
|
4,098 |
|
||||
Amortization of GCI capacity revenue |
|
(522 |
) |
|
(522 |
) |
|
(2,071 |
) |
|
(2,071 |
) |
||||
Amortization of debt issuance costs and debt discount |
|
(304 |
) |
|
(331 |
) |
|
(1,215 |
) |
|
(1,353 |
) |
||||
Interest expense |
|
2,910 |
|
|
3,238 |
|
|
12,059 |
|
|
13,429 |
|
||||
Interest paid |
|
(2,992 |
) |
|
(3,531 |
) |
|
(12,228 |
) |
|
(14,254 |
) |
||||
Interest income |
|
(94 |
) |
|
(82 |
) |
|
(385 |
) |
|
(156 |
) |
||||
Deferred income tax expense |
|
(1,385 |
) |
|
(658 |
) |
|
(2,919 |
) |
|
(2,767 |
) |
||||
Income tax expense (benefit) |
|
1,537 |
|
|
(39 |
) |
|
2,765 |
|
|
2,041 |
|
||||
Income taxes refunded (paid), net |
|
5,051 |
|
|
1 |
|
|
5,041 |
|
|
(3 |
) |
||||
Charge for uncollectible accounts |
|
18 |
|
|
(374 |
) |
|
(257 |
) |
|
(2,745 |
) |
||||
Other expense (income), net |
|
17 |
|
|
56 |
|
|
(175 |
) |
|
(23 |
) |
||||
Net loss attributable to noncontrolling interest |
|
17 |
|
|
8 |
|
|
93 |
|
|
92 |
|
||||
Other non-cash expense, net |
|
(18 |
) |
|
(57 |
) |
|
(70 |
) |
|
(225 |
) |
||||
Changes in operating assets and liabilities |
|
(2,414 |
) |
|
1,904 |
|
|
(12,332 |
) |
|
(8,425 |
) |
||||
Adjusted free cash flow |
$ |
9,735 |
|
$ |
(2,995 |
) |
$ |
15,969 |
|
$ |
7,226 |
|
Schedule 6 | ||||||||||||||||
ADJUSTED FREE CASH FLOW | ||||||||||||||||
(Unaudited, In Thousands) | ||||||||||||||||
|
|
|
|
|
|
|
||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||
|
|
|
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Adjusted EBITDA |
$ |
17,854 |
|
$ |
14,082 |
|
$ |
62,749 |
|
$ |
60,161 |
|
||||
Less: | ||||||||||||||||
Capital expenditures excluding prefunded projects |
|
(9,981 |
) |
|
(12,525 |
) |
|
(41,355 |
) |
|
(37,957 |
) |
||||
Amortization of GCI capacity revenue |
|
(522 |
) |
|
(522 |
) |
|
(2,071 |
) |
|
(2,071 |
) |
||||
Cash severance expense |
|
(120 |
) |
|
- |
|
|
(1,715 |
) |
|
- |
|
||||
Income taxes refunded (paid), net |
|
5,051 |
|
|
1 |
|
|
5,041 |
|
|
(3 |
) |
||||
Interest paid |
|
(2,992 |
) |
|
(3,531 |
) |
|
(12,228 |
) |
|
(14,254 |
) |
||||
|
9,290 |
|
|
(2,495 |
) |
|
10,421 |
|
|
5,876 |
|
|||||
Impact of prefunded projects: | ||||||||||||||||
Capital expenditures for prefunded projects |
|
(3,227 |
) |
|
- |
|
|
(3,409 |
) |
|
- |
|
||||
Milestone payments received for prefunded projects |
|
3,785 |
|
|
- |
|
|
9,070 |
|
|
1,850 |
|
||||
Deferred cost of sales for prefunded projects |
|
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
||||
Amortization of revenue for prefunded projects |
|
(113 |
) |
|
- |
|
|
(113 |
) |
|
- |
|
||||
|
445 |
|
|
(500 |
) |
|
5,548 |
|
|
1,350 |
|
|||||
Adjusted free cash flow* |
$ |
9,735 |
|
$ |
(2,995 |
) |
$ |
15,969 |
|
$ |
7,226 |
|
* Quarterly Adjusted Free Cash Flow fluctuates and should not be viewed as an indicator of annual performance. Onetime events, seasonality of capital spend and the timing of interest payments may result in negative Adjusted Free Cash Flow in one or more quarters. |
NonGAAP Measures:
Adjusted Free Cash Flow is a non-GAAP liquidity measure and is defined as Adjusted EBITDA, less recurring operating cash requirements which include capital expenditures, cash income taxes refunded or paid, cash interest paid, amortization of GCI capacity revenue, cash severance expense for the Company's former Chief Executive Officer, and cash receipts and payments, deferred costs and amortized revenue and expense associated with certain prefunded special projects as defined in the 2019 Senior Credit Facility. Amortization of deferred revenue associated with our interconnection agreement with GCI is excluded from Adjusted Free Cash Flow because no cash was received by the Company in connection with this agreement. Amortization of all other deferred revenue, including that associated with other IRU capacity arrangements, is included in Adjusted Free Cash Flow because cash was received by the Company, typically at contract inception, and is being recognized as revenue over the term of the relevant agreement.
See Schedule 3 for Net cash provided by operating activities, Net cash used by investing activities, and Net cash used by financing activities.
See Schedule 5 for the reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.
Schedule 7 | ||||||||||||||
REVENUE BY CUSTOMER GROUP | ||||||||||||||
(Unaudited, In Thousands) | ||||||||||||||
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Business and wholesale revenue | ||||||||||||||
Business broadband |
$ |
15,427 |
|
$ |
14,898 |
$ |
61,785 |
|
$ |
60,934 |
||||
Business voice and other |
|
7,218 |
|
|
7,341 |
|
28,660 |
|
|
28,429 |
||||
Managed IT services |
|
1,529 |
|
|
1,806 |
|
6,494 |
|
|
5,742 |
||||
Equipment sales and installations |
|
1,868 |
|
|
1,257 |
|
4,698 |
|
|
5,127 |
||||
Wholesale broadband |
|
11,321 |
|
|
10,141 |
|
43,310 |
|
|
38,362 |
||||
Wholesale voice and other |
|
929 |
|
|
1,545 |
|
5,617 |
|
|
6,000 |
||||
Total business and wholesale revenue |
|
38,292 |
|
|
36,988 |
|
150,564 |
|
|
144,594 |
||||
Growth in business and wholesale |
|
3.5 |
% |
|
4.1 |
% |
||||||||
Consumer revenue | ||||||||||||||
Broadband |
|
6,709 |
|
|
6,418 |
|
26,589 |
|
|
26,144 |
||||
Voice and other |
|
2,484 |
|
|
2,803 |
|
10,431 |
|
|
11,158 |
||||
Total consumer revenue |
|
9,193 |
|
|
9,221 |
|
37,020 |
|
|
37,302 |
||||
Total business, wholesale, and consumer revenue |
|
47,485 |
|
|
46,209 |
|
187,584 |
|
|
181,896 |
||||
Growth in business, wholesale and consumer revenue |
|
2.8 |
% |
|
3.1 |
% |
||||||||
Growth in broadband revenue |
|
6.4 |
% |
|
5.0 |
% |
||||||||
Regulatory revenue | ||||||||||||||
Access |
|
5,853 |
|
|
7,557 |
|
24,416 |
|
|
30,878 |
||||
High cost support |
|
4,924 |
|
|
4,923 |
|
19,694 |
|
|
19,694 |
||||
Total regulatory revenue |
|
10,777 |
|
|
12,480 |
|
44,110 |
|
|
50,572 |
||||
Total revenue |
$ |
58,262 |
|
$ |
58,689 |
$ |
231,694 |
|
$ |
232,468 |
||||
Growth in total revenue |
|
-0.7 |
% |
|
-0.3 |
% |
Growth Revenues: Business broadband, Managed IT services, Equipment sales and installations, Wholesale broadband, and Consumer broadband |
Legacy Revenues: Business voice and other, Wholesale voice and other, Consumer voice and other, and Access |
CAF II Revenues: High Cost Support |
Schedule 8 | ||||||||||||
KEY OPERATING STATISTICS | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
|
|
|
|
|
||||||||
2019 |
|
2019 |
|
2018 |
||||||||
Voice: | ||||||||||||
Business access lines |
|
67,248 |
|
|
67,606 |
|
|
69,382 |
|
|||
Consumer access lines |
|
22,864 |
|
|
23,565 |
|
|
25,784 |
|
|||
Voice ARPU business |
$ |
26.95 |
|
$ |
27.10 |
|
$ |
25.64 |
|
|||
Voice ARPU consumer |
$ |
33.85 |
|
$ |
33.98 |
|
$ |
34.04 |
|
|||
Broadband: | ||||||||||||
Business connections |
|
14,789 |
|
|
14,942 |
|
|
15,234 |
|
|||
Consumer connections |
|
31,476 |
|
|
31,466 |
|
|
32,793 |
|
|||
Broadband ARPU business |
$ |
345.93 |
|
$ |
346.97 |
|
$ |
324.37 |
|
|||
Broadband ARPU consumer |
$ |
70.82 |
|
$ |
69.87 |
|
$ |
65.00 |
|
|||
Monthly Average Churn: | ||||||||||||
Business voice |
|
0.7 |
% |
|
0.7 |
% |
|
1.0 |
% |
|||
Consumer broadband |
|
2.9 |
% |
|
3.0 |
% |
|
2.3 |
% |
|||
Consumer voice |
|
1.3 |
% |
|
1.4 |
% |
|
1.2 |
% |
Schedule 9 |
||||||||
LONG TERM DEBT AND |
||||||||
(Unaudited, In Thousands) | ||||||||
|
|
|
||||||
2019 |
|
2018 |
||||||
2019 senior secured credit facility due 2024 |
$ |
177,750 |
|
$ |
- |
|
||
Debt discount - 2019 senior secured credit facilities due 2024 |
|
(2,234 |
) |
|
- |
|
||
Debt issuance costs - 2019 senior secured credit facilities due 2024 |
|
(1,863 |
) |
|
- |
|
||
2017 senior secured credit facility due 2023 |
|
- |
|
|
171,750 |
|
||
Debt discount - 2017 senior secured credit facilities due 2023 |
|
- |
|
|
(2,024 |
) |
||
Debt issuance costs - 2017 senior secured credit facilities due 2023 |
|
- |
|
|
(2,182 |
) |
||
Capital leases and other long-term obligations |
|
2,729 |
|
|
2,768 |
|
||
Total debt |
|
176,382 |
|
|
170,312 |
|
||
Less current portion |
|
(8,906 |
) |
|
(2,289 |
) |
||
Long-term obligations, net of current portion |
$ |
167,476 |
|
$ |
168,023 |
|
||
Total debt |
$ |
176,382 |
|
$ |
170,312 |
|
||
Plus debt discounts and debt issuance costs |
|
4,097 |
|
|
4,206 |
|
||
Gross debt |
|
180,479 |
|
|
174,518 |
|
||
Cash and cash equivalents |
|
(26,662 |
) |
|
(13,351 |
) |
||
Net debt |
$ |
153,817 |
|
$ |
161,167 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200310005869/en/
Media Contact
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Investor Contact
Manager, Board and Investor Relations
investors@acsalaska.com
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