- Reported total revenue of $240.6 million, exceeding guidance
and an increase of 3.8% year over year
- Delivered strong fourth quarter revenue, driven by 12.7%
increase in business and wholesale revenue
- Met Adjusted EBITDA and Adjusted Free Cash Flow
guidance
- Increased broadband service locations in underserved areas
by approximately 33%
- Alaska Communications shareholders approved transaction with
ATN International
Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today
reported financial results for the fourth quarter and year ended
December 31, 2020.
“We are pleased with our strong financial performance for 2020,
driven by broadband growth and increased customer cloud
infrastructure during this unprecedented year. We are proud of our
team and their continued exemplary customer service to our
communities, particularly the education and healthcare areas.
During 2020, we continued to invest in our network and expanded our
broadband service by more than 3,700 locations in underserved areas
of Alaska, an increase in locations of approximately 33%. In
addition, we began mesh fixed wireless trials, offering internet
speeds up to 1 Gig. In 2021, we plan to expand our mesh network as
part of our strategy to upgrade one third of our network, extending
our reach to approximately 42,000 new and existing customer
locations with new or improved service.
“On March 12, 2021, our shareholders approved our merger with a
subsidiary of ATN International, Inc. This transaction positions us
to remain the premier communications partner within the state of
Alaska, while providing significant opportunities to grow. We
expect synergies in fiber infrastructure expansion and in the
latest technologies for commercial customers, including
next-generation managed services and private network solutions,”
said Bill Bishop, President & CEO.
Fourth Quarter 2020 Compared to Fourth Quarter 2019
- Total revenue was $62.3 million, compared to $58.3 million, an
increase of 7.0%.
- Business and wholesale revenue was $43.2 million, compared to
$38.3 million, up 12.7%.
- Consumer revenue was $9.0 million, compared to $9.2 million, a
decrease of 2.6%.
- Regulatory revenue was $10.2 million, compared to $10.8
million, a decrease of 5.2%.
- Operating expenses were $68.2 million, including $9.6 million
of transaction expenses, compared to $51.3 million.
- Operating loss was $5.8 million, compared to operating income
of $7.0 million.
- Net loss attributable to Alaska Communications was $8.2
million, compared to net income of $2.6 million.
- Capital expenditures were $15.3 million, compared to $13.2
million, or excluding prefunded projects were $13.5 million,
compared to $10.0 million.
- Adjusted EBITDA was $14.9 million, compared to $17.9
million.
- Adjusted Free Cash Flow was $2.9 million, compared to $9.7
million, or excluding prefunded projects was $2.4 million, compared
to $9.3 million.
Full Year 2020 Compared to Full Year 2019
- Total revenue was $240.6 million, compared to $231.7 million,
an increase of 3.8%.
- Business and wholesale revenue was $162.9 million, compared to
$150.6 million, up 8.2%.
- Consumer revenue was $36.6 million, compared to $37.0 million,
a decrease of 1.2%.
- Regulatory revenue was $41.1 million, compared to $44.1
million, a decrease of 6.7%.
- Operating expenses were $228.7 million, including $9.6 million
of transaction expenses, compared to $209.8 million.
- Operating income was $11.9 million, compared to $21.9
million.
- Net loss attributable to Alaska Communications was $1.1
million, compared to net income of $4.9 million.
- Capital expenditures were $48.2 million, compared to $44.8
million, or excluding prefunded projects were $39.9 million,
compared to $41.4 million.
- Adjusted EBITDA was $64.1 million, compared to $62.7
million.
- Adjusted Free Cash Flow was $14.4 million, compared to $16.0
million, or excluding prefunded projects was $15.3 million,
compared to $10.4 million.
Balance Sheet Highlights
- Cash was $21.0 million at December 31, 2020, compared to $28.0
million at December 31, 2019.
- Net debt was $151.9 million at December 31, 2020, compared to
$153.8 million at December 31, 2019.
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.
Laurie Butcher, Alaska Communications Chief Financial Officer,
said, “In 2020, we delivered strong financial performance even with
the impact of the COVID-19 pandemic. We exceeded revenue guidance,
driven by increased broadband revenue, equipment sales and special
project revenue coming online. Our business and wholesale growth
offset our consumer and regulatory decreases, and our growth
revenues continue to outpace our legacy declines. Regarding capex,
due to the timing of certain projects, we were able to accelerate
expansion of our fiber network and spent slightly more than
guidance. Adjusted Free Cash Flow was on target, and even with
incurring $7.2 million in payments associated with transaction
costs in the fourth quarter, our cash balances remain strong. As a
result, we are well positioned for 2021.”
2020 Performance
Operating Statement ($ in M)
2020 Guidance
2020 Performance
Total Revenue
$232 - $237
$240.6
Adjusted EBITDA
$63 - $65
$64.1
Capital Expenditures (excluding
prefunded projects)
$37 - $39
$39.9
Adjusted Free Cash Flow (excl.
prefunded projects)
$14 - $16
$15.3
Transaction Update
On December 31, 2020, Alaska Communications and ATN
International, Inc. (NASDAQ: ATNI) signed a definitive agreement
under which the Company will become a consolidated, majority owned
subsidiary of ATN. After the expiration of the Hart-Scott-Rodino
antitrust waiting period, on March 12, 2021, Alaska Communications
held a special shareholder meeting where the Company’s shareholders
approved the merger, pending certification of the vote results. The
transaction is expected to close in the second half of 2021,
subject to certain regulatory approvals and other conditions. Under
the terms of the agreement, a subsidiary of ATN will acquire all
the outstanding shares of Alaska Communications common stock for
$3.40 per share in cash. Alaska Communications’ prior agreement to
be acquired by an affiliate of Macquarie Capital and GCM Grosvenor,
through its Labor Impact Fund, L.P., was terminated on December 31,
2020. The company paid a termination fee of $6.8 million.
Conference Call
Due to the pending transaction, the Company will not hold a
conference call.
About Alaska
Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of
advanced broadband and managed IT services for businesses and
consumers in Alaska. The Company operates a highly reliable,
advanced statewide data network with the latest technology and the
most diverse undersea fiber optic system connecting Alaska to the
contiguous U.S. For more information, visit
www.alaskacommunications.com or www.alsk.com.
Revenue Category
Definitions
Growth Revenues are defined as business broadband, managed IT
services, equipment sales and installations, wholesale broadband
and consumer broadband. Legacy Revenues are defined as business
voice and other, Wholesale voice and other, consumer voice and
other, and Access. CAF II Revenues are defined as high cost
support.
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 Alaska Communications. The
Company does not provide reconciliations of guidance for Adjusted
EBITDA to Net Income, and Adjusted Free Cash Flow to Net Cash from
Operating Activities, in reliance on the unreasonable efforts
exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The
Company does not forecast certain items required to develop the
comparable GAAP financial measures. These items are charges and
benefits for uncollectible accounts, certain other non-cash
expenses, unusual items typically excluded from Adjusted EBITDA and
Adjusted Free Cash Flow, and changes in operating assets and
liabilities (generally the most significant of these items,
representing cash inflows of $15.9 million in the twelve-month
period of 2020).
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 impacts of the COVID-19 pandemic on the
economy of Alaska and on the Company, the impact of natural or
man-made disasters and accidents, Federal and Alaska Universal
Service Fund changes and our current and historical compliance with
the obligations of those programs, structural declines for voice
and other legacy services, maintenance or IT issues, third-party
intellectual property claims, potential pension shortfalls, the
success or failure of future strategic transactions, funding
through the rural health care universal service support mechanism
and our ability to comply and our history of compliance with the
regulatory requirements to receive those support payments, our
ability to service our debt and refinance as required, adverse
economic conditions, our success in providing broadband services on
the North Slope and Western Alaska, the effects of competition in
our markets, our relatively small size compared with our
competitors, the Company’s ability to compete, manage, integrate,
market, maintain, and attract sufficient customers for its products
and services, adverse changes in labor matters, including workforce
levels, labor negotiations, employee benefit costs, our ability to
control other operating costs, disruption of our supplier’s
provisioning of critical products or services, the actions of
activist shareholders, changes in Company's relationships with
large customers, unforeseen changes in public policies, regulatory
changes, our internal control over financial reporting, and changes
in accounting standards or policies, which could affect reported
financial results. For further information regarding risks and
uncertainties associated with the Company’s business, please refer
to the Company's SEC filings, including, but not limited to, the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
annual report on Form 10-K and quarterly reports on Form 10-Q.
Copies of the Company's SEC filings may be obtained by contacting
its investor relations department at (907) 564-7556 or by visiting
its investor relations website at www.alsk.com.
Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. CONSOLIDATED
SCHEDULE OF OPERATIONS (Unaudited, In Thousands Except Per
Share Amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Operating revenues
$
62,333
$
58,262
$
240,569
$
231,694
Operating expenses: Cost of services and sales (excluding
depreciation and amortization)
30,316
26,847
112,443
105,615
Selling, general & administrative
17,610
14,512
65,773
66,718
Transaction and termination costs
9,550
-
9,550
-
Depreciation and amortization
10,560
9,851
40,667
37,276
Loss on disposal of assets, net
117
55
240
156
Total operating expenses
68,153
51,265
228,673
209,765
Operating (loss) income
(5,820
)
6,997
11,896
21,929
Other income and (expense): Interest expense
(2,643
)
(2,910
)
(11,000
)
(12,059
)
Loss on extinguishment of debt
-
-
-
(2,830
)
Interest income
18
94
174
385
Other income (expense), net
(8
)
(17
)
439
175
Total other income and (expense)
(2,633
)
(2,833
)
(10,387
)
(14,329
)
(Loss) income before income tax benefit (expense)
(8,453
)
4,164
1,509
7,600
Income tax benefit (expense)
232
(1,537
)
(2,665
)
(2,765
)
Net (loss) income
(8,221
)
2,627
(1,156
)
4,835
Less net loss attributable to noncontrolling interest
(19
)
(17
)
(83
)
(93
)
Net (loss) income attributable to Alaska Communications
$
(8,202
)
$
2,644
$
(1,073
)
$
4,928
Net (loss) income per share attributable to Alaska
Communications: Net (loss) income applicable to common shares
$
(8,202
)
$
2,644
$
(1,073
)
$
4,928
Basic
$
(0.15
)
$
0.05
$
(0.02
)
$
0.09
Diluted
$
(0.15
)
$
0.05
$
(0.02
)
$
0.09
Weighted average shares outstanding: Basic
54,179
53,012
54,013
53,379
Diluted
54,179
53,975
54,013
54,277
Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited, In Thousands
Except Per Share Amounts)
December 31,
December 31,
Assets
2020
2019
Current assets: Cash and cash equivalents
$
19,644
$
26,662
Restricted cash
1,326
1,331
Short-term investments
434
434
Accounts receivable, net of allowance of $4,060 and $4,627
41,893
34,354
Materials and supplies
7,624
8,900
Prepayments and other current assets
6,404
9,617
Total current assets
77,325
81,298
Property, plant and equipment
1,452,943
1,424,904
Less: accumulated depreciation and amortization
(1,062,027
)
(1,042,546
)
Property, plant and equipment, net
390,916
382,358
Operating lease right of use assets
89,821
80,991
Other assets
11,370
12,598
Total assets
$
569,432
$
557,245
Liabilities and Stockholders' Equity Current
liabilities: Current portion of long-term obligations
$
9,067
$
8,906
Accounts payable, accrued and other current liabilities
49,700
42,869
Operating lease liabilities - current
3,392
2,795
Total current liabilities
62,159
54,570
Long-term obligations, net of current portion
159,641
167,476
Deferred income taxes
5,846
4,403
Operating lease liabilities - noncurrent
81,103
78,767
Other long-term liabilities, net of current portion
94,764
78,520
Total liabilities
403,513
383,736
Commitments and contingencies Alaska Communications
stockholders' equity: Common stock, $.01 par value; 145,000
authorized
549
541
Treasury stock, 1,000 shares at cost
(1,812
)
(1,812
)
Additional paid in capital
163,317
161,844
Retained earnings
9,442
15,367
Accumulated other comprehensive loss
(6,340
)
(3,277
)
Total Alaska Communications stockholders' equity
165,156
172,663
Noncontrolling interest
763
846
Total stockholders' equity
165,919
173,509
Total liabilities and stockholders' equity
$
569,432
$
557,245
Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, In
Thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Cash Flows from Operating Activities: Net (loss) income
$
(8,221
)
$
2,627
$
(1,156
)
$
4,835
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: Depreciation and amortization
10,560
9,851
40,667
37,276
Loss on disposal of assets, net
117
55
240
156
Amortization of debt issuance costs and debt discount
292
304
1,234
1,215
Loss on extinguishment of debt
-
-
-
2,830
Amortization of deferred capacity revenue
(1,789
)
(1,255
)
(6,670
)
(4,655
)
Stock-based compensation
475
814
1,693
1,580
Deferred income tax (benefit) expense
(232
)
1,385
2,658
2,919
Charge for uncollectible accounts
739
(18
)
(216
)
257
Amortization of ROU assets
825
572
2,897
2,288
Other non-cash expense (income), net
8
18
(91
)
70
Changes in operating assets and
liabilities
3,459
1,842
15,863
10,044
Net cash provided by operating activities
6,233
16,195
57,119
58,815
Cash Flows from Investing Activities: Capital expenditures
(15,303
)
(13,208
)
(48,243
)
(44,764
)
Capitalized interest
(358
)
(396
)
(1,364
)
(1,379
)
Change in unsettled capital expenditures
(981
)
57
(579
)
640
Proceeds on sale of assets
-
5
-
25
Net cash used by investing activities
(16,642
)
(13,542
)
(50,186
)
(45,478
)
Cash Flows from Financing Activities: Repayments of
long-term debt
(2,267
)
(1,137
)
(8,908
)
(174,040
)
Proceeds from the issuance of long-term debt
-
-
-
180,000
Debt issuance costs and discounts
-
-
-
(2,683
)
Cash paid for debt extinguishment
-
-
-
(1,252
)
Payment of cash dividend on common stock
-
-
(4,836
)
-
Payment of withholding taxes on stock-based compensation
(17
)
(5
)
(456
)
(453
)
Purchases of treasury stock
-
-
-
(1,812
)
Proceeds from issuance of common stock
120
105
244
211
Net cash used by financing activities
(2,164
)
(1,037
)
(13,956
)
(29
)
Change in cash, cash equivalents and restricted cash
(12,573
)
1,616
(7,023
)
13,308
Cash, cash equivalents and restricted cash, beginning of
period
33,543
26,377
27,993
14,685
Cash, cash equivalents and restricted cash, end of period
$
20,970
$
27,993
$
20,970
$
27,993
Supplemental Cash Flow Data: Interest paid
$
2,705
$
2,992
$
11,137
$
12,228
Dividends payable at December 31, 2020
$
16
$
-
$
16
$
-
Income taxes paid, net
$
(4,311
)
$
(5,051
)
$
(4,307
)
$
(5,041
)
Schedule 4 ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. ADJUSTED EBITDA (Unaudited, In Thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Net (loss) income
$
(8,221
)
$
2,627
$
(1,156
)
$
4,835
Add (subtract): Interest expense
2,643
2,910
11,000
12,059
Loss on extinguishment of debt
-
-
-
2,830
Interest income
(18
)
(94
)
(174
)
(385
)
Depreciation and amortization
10,560
9,851
40,667
37,276
Other expense (income), net
8
17
(439
)
(175
)
Loss on disposal of assets, net
117
55
240
156
Income tax (benefit) expense
(232
)
1,537
2,665
2,765
Stock-based compensation
475
814
1,693
1,580
Transaction-related costs
9,550
-
9,550
-
Cash severance expense
-
120
-
1,715
Net loss attributable to noncontrolling interest
19
17
83
93
Adjusted EBITDA
$
14,901
$
17,854
$
64,129
$
62,749
Non-GAAP 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. The Company does not forecast certain items
required to develop the comparable GAAP financial measures. These
items are charges and benefits for uncollectible accounts, certain
other non-cash expenses, unusual items typically excluded from
Adjusted EBITDA and Adjusted Free Cash Flow, and changes in
operating assets and liabilities (generally the most significant of
these items, representing cash inflows of $15.9 million in the
twelve-month period ended December 31, 2020).
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, transaction-related costs, cash severance expense,
and net loss attributable to noncontrolling interest.
Schedule 5
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. RECONCILIATION
OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH
FLOW (Unaudited, In Thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Net cash provided by operating
activities
$
6,233
$
16,195
$
57,119
$
58,815
Adjustments to reconcile net cash provided by operating activities
to adjusted free cash flow: Capital
expenditures excluding prefunded projects
(13,536
)
(9,981
)
(39,881
)
(41,355
)
Capital expenditures for prefunded projects
(1,767
)
(3,227
)
(8,362
)
(3,409
)
Milestone payments received for prefunded projects
2,615
3,785
16,895
9,070
Milestone payments made for prefunded projects
-
-
(8,250
)
-
Deferred cost of sales for prefunded projects
175
-
525
-
Amortization of revenue for prefunded projects
(523
)
(113
)
(1,753
)
(113
)
Amortization of deferred capacity revenue
1,789
1,255
6,670
4,655
Amortization of GCI capacity revenue
(523
)
(522
)
(2,077
)
(2,071
)
Amortization of debt issuance costs and debt discount
(292
)
(304
)
(1,234
)
(1,215
)
Interest expense
2,643
2,910
11,000
12,059
Interest paid
(2,705
)
(2,992
)
(11,137
)
(12,228
)
Interest income
(18
)
(94
)
(174
)
(385
)
Deferred income tax benefit (expense)
232
(1,385
)
(2,658
)
(2,919
)
Income tax (benefit) expense
(232
)
1,537
2,665
2,765
Income taxes paid, net
4,311
5,051
4,307
5,041
Charge for uncollectible accounts
(739
)
18
216
(257
)
Amortization of ROU assets
(825
)
(572
)
(2,897
)
(2,288
)
Transaction-related costs
9,550
-
9,550
-
Other expense (income), net
8
17
(439
)
(175
)
Net loss attributable to noncontrolling interest
19
17
83
93
Other non-cash (expense) income, net
(8
)
(18
)
91
(70
)
Changes in operating assets and liabilities
(3,459
)
(1,842
)
(15,863
)
(10,044
)
Adjusted free cash flow
$
2,948
$
9,735
$
14,396
$
15,969
Schedule 6 ALASKA
COMMUNICATIONS SYSTEMS GROUP, INC. ADJUSTED FREE CASH
FLOW (Unaudited, In Thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Adjusted EBITDA
$
14,901
$
17,854
$
64,129
$
62,749
Less:
Capital expenditures excluding prefunded projects
(13,536
)
(9,981
)
(39,881
)
(41,355
)
Amortization of GCI capacity revenue
(523
)
(522
)
(2,077
)
(2,071
)
Cash severance expense
-
(120
)
-
(1,715
)
Income taxes paid, net
4,311
5,051
4,307
5,041
Interest paid
(2,705
)
(2,992
)
(11,137
)
(12,228
)
2,448
9,290
15,341
10,421
Impact of prefunded projects: Capital
expenditures for prefunded projects
(1,767
)
(3,227
)
(8,362
)
(3,409
)
Milestone payments received for prefunded projects
2,615
3,785
16,895
9,070
Milestone payments made for prefunded projects
-
-
(8,250
)
-
Deferred cost of sales for prefunded projects
175
-
525
-
Amortization of revenue for prefunded projects
(523
)
(113
)
(1,753
)
(113
)
500
445
(945
)
5,548
Adjusted free cash flow*
$
2,948
$
9,735
$
14,396
$
15,969
* 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.
Non-GAAP 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
ALASKA COMMUNICATIONS SYSTEMS
GROUP, INC. REVENUE BY CUSTOMER GROUP (Unaudited, In
Thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Business and wholesale revenue Business
broadband
$
16,288
$
15,427
$
64,238
$
61,785
Business voice and other
7,189
7,218
28,936
28,660
Managed IT services
1,148
1,529
5,052
6,494
Equipment sales and installations
4,800
1,868
9,508
4,698
Wholesale broadband
12,456
11,321
49,878
43,310
Wholesale voice and other
1,282
929
5,256
5,617
Total business and wholesale
revenue
43,163
38,292
162,868
150,564
Growth in business and wholesale
12.7
%
8.2
%
Consumer revenue Broadband
6,706
6,709
27,180
26,589
Voice and other
2,245
2,484
9,379
10,431
Total consumer revenue
8,951
9,193
36,559
37,020
Total business, wholesale, and
consumer revenue
52,114
47,485
199,427
187,584
Growth in business, wholesale and consumer revenue
9.7
%
6.3
%
Growth in broadband revenue
6.0
%
7.3
%
Regulatory revenue
Access
5,295
5,853
21,448
24,416
High cost support
4,924
4,924
19,694
19,694
Total regulatory revenue
10,219
10,777
41,142
44,110
Total revenue
$
62,333
$
58,262
$
240,569
$
231,694
Growth in total revenue
7.0
%
3.8
%
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
ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. KEY OPERATING STATISTICS (Unaudited)
Three Months Ended
December 31,
September 30,
December 31,
2020
2020
2019
Voice:
Business access lines
65,294
66,253
68,242
Consumer access lines
20,578
21,229
22,829
Voice ARPU business
$
28.61
$
27.98
$
26.56
Voice ARPU consumer
$
34.77
$
34.13
$
33.90
Broadband:
Business connections
14,652
14,672
14,880
Consumer connections
30,598
32,012
31,480
Broadband ARPU business
$
371.60
$
364.04
$
343.83
Broadband ARPU consumer
$
72.84
$
72.41
$
70.81
Monthly Average Churn:
Business voice
0.4
%
0.9
%
0.7
%
Consumer broadband
1.5
%
3.0
%
2.9
%
Consumer voice
1.1
%
1.1
%
1.3
%
Schedule 9
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. LONG TERM DEBT
AND NET DEBT (Unaudited, In Thousands)
December 31,
December 31,
2020
2019
2019 senior secured credit facility due 2024
$
168,896
$
177,750
Debt discount - 2019 senior secured credit facilities due 2024
(1,523
)
(2,234
)
Debt issuance costs - 2019 senior secured credit facilities due
2024
(1,341
)
(1,863
)
Capital leases and other long-term obligations
2,676
2,729
Total debt
168,708
176,382
Less current portion
(9,067
)
(8,906
)
Long-term obligations, net of current portion
$
159,641
$
167,476
Total debt
$
168,708
$
176,382
Plus debt discounts and debt issuance costs
2,864
4,097
Gross debt
171,572
180,479
Cash and cash equivalents
(19,644
)
(26,662
)
Net debt
$
151,928
$
153,817
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210315005216/en/
Media Contact Heather Cavanaugh, 907-564-7722 Director, External
Affairs and Corporate Communications
Investor Contact Tiffany Smith, 907-564-7556 Manager, Board and
Investor Relations investors@acsalaska.com
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