Atlantic Tele-Network, Inc. Reports 2004 Income from Telephone Operations Increased by 19% and Recurring Earnings up 12% after Losses from Other Operations.ST. THOMAS, U.S. Virgin Islands -- Net Effect of Write-Offs and Other Adjustments Reduce GAAP GAAP
See: Generally Accepted Accounting Principles
See generally accepted accounting principles (GAAP). Net Income by 1%.
Atlantic Tele-Network, Inc. (AMEX AMEX
See: American Stock Exchange :ANK ANK Ankara (Turkey)
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ANK Anunaki (ancient Sumerian Gods) ) today reported its operating results for both the year and quarter ended December 31, 2004. ATN ATN Acute tubular necrosis, see there reported net income for the full year of $12.1 million, or $2.41 per share, compared to earnings of $12.2 million, or $2.44 per share ($2.43 diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), for 2003, a decrease of 1%. ATN posted net income for the quarter of $2.0 million, or $0.39 per share, compared to net income of $3.2 million, or $0.64 per share, for the quarter ended December 31, 2003. However, excluding the effects of $3.4 million in non-cash charges Non-Cash Charge
A charge off, made by a company against earnings, that does not require an initial outlay of cash.
Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. stemming from asset write-downs and a $1.8 million benefit associated with the recording of a tax asset, net income would have been $13.7 million, or $2.72 per share, for the year ended December 31, 2004, and $3.5 million, or $0.70 per share, for the quarter ended December 31, 2004, an increase of 12% and 10%, respectively, over the year earlier periods.
For the full year 2004, telephone operating revenues operating revenue
Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. rose 6% to $84.0 million, as compared to $78.9 million for 2003. International long distance revenues posted a 12% increase on an 18% increase in international traffic at the Company's principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , the Guyana Telephone & Telegraph telegraph, term originally applied to any device or system for distant communication by means of visible or audible signals, now commonly restricted to electrically operated devices. Attempts at long-distance communication date back thousands of years (see signaling). Company Ltd. (GT&T). During 2004, GT&T's cellular subscribers increased by 27% to 150,851 and wireline subscribers (access lines) increased by 11% to 103,267. This growth in lines and handsets in service contributed to the increase in international long distance traffic and revenues.
Local exchange service revenues were $33.1 million for the year ended December 31, 2004 and were essentially in line with 2003 results, despite the decline in the value of the Guyana dollar Noun 1. Guyana dollar - the basic unit of money in Guyana
dollar - the basic monetary unit in many countries; equal to 100 cents , which eroded e·rode
v. e·rod·ed, e·rod·ing, e·rodes
1. To wear (something) away by or as if by abrasion: Waves eroded the shore.
2. To eat into; corrode. growth in this category. The increase in GT&T's base of wireline and cellular subscribers during the year contributed additional Guyana dollar denominated revenues, which essentially offset the impact of the currency's decline. The growth in access lines mainly reflects the successful completion of the planned rollout of service to new areas of Guyana. On the cellular side, GT&T was able to expand its capacity and also commenced offering GSM/GPRS services and handsets in the fourth quarter in an overlay (1) A preprinted, precut form placed over a screen, key or tablet for identification purposes. See keyboard template.
(2) A program segment called into memory when required. to its existing TDMA (Time Division Multiple Access) A satellite and cellular phone technology that interleaves multiple digital signals onto a single high-speed channel. For cellular, TDMA triples the capacity of the original analog method (FDMA). network.
Income from telephone operations increased to $40.9 million in 2004, as compared to $34.5 million in 2003, an increase of $6.4 million or 19%. The improved margins are primarily attributable to a $2.0 million or 28% reduction in international long distance expenses due to more efficient routing of outbound traffic Traffic originating in the continental United States destined for overseas or overseas traffic moving in a general direction away from the continental United States. and a $0.6 million or 9% reduction in general and administrative expenses on lower compensation and related expenses, among other things. These savings were partially offset by a $1.3 million or 4% increase in telephone operating expenses Operating expenses
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (which includes depreciation expense) due to the large increase in GT&T's lines and cellular subscribers.
Net income from Bermuda Digital Communication's (BDC (Backup Domain Controller) In a Windows NT server, a copy of the Primary Domain Controller (PDC). The BDC is periodically synchronized with the PDC. See PDC.
BDC - Backup Domain Controller ) cellular operations in Bermuda were up 25% for the twelve months ended December 31, 2004, with the Company's equity in the earnings of BDC rising to $2.6 million from $2.0 million in 2003. Both increases reflect increased airtime air·time
1. The time during which a radio or television station is broadcasting. Also called airspace.
2. The time at which a radio or television program is broadcast. , long distance and roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. revenues. The increase in airtime and long distance revenue partly stems from a 14% increase in cellular subscribers, as well as increased average revenue per subscriber (ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ). Between the end of 2003 and early 2004, BDC entered into roaming agreements with the two largest U.S. CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. carriers. These arrangements drove the increase in long distance and roaming revenues, from both BDC's subscribers traveling abroad and visitors to Bermuda. BDC ended the year with over 20,000 subscribers, as compared to approximately 17,800 subscribers at the end of 2003.
The Company's three smaller, wholly-owned subsidiaries, Choice Communications (Choice), Call Home Telecom (CHT CHT Chart
CHT Center for Health Transformation (Washington, DC)
CHT Chittagong Hill Tracts (Bangladesh region)
CHT Certified Hypnotherapist
CHT Cylinder Head Temperature
CHT Certified Hand Therapist ), and Atlantic Tele-Center (ATC ATC Air Traffic Control
ATC Average Total Cost
ATC Certified Athletic Trainer
ATC At the Center (Hartford, Maine retreat center)
ATC Applied Technology Council
ATC All Things Considered ), are combined under the heading "Other Operations." Last year, revenues for other operations climbed 20% over 2003 levels but the loss of $6.3 million, before non-cash charges recorded in the fourth quarter, was 15% higher than 2003. The increased loss from other operations was primarily due to increased expenses at Choice of $1.9 million attributable to increased depreciation and compensation expense and TV programming costs. The increase in those items reflects Choice's additional investment in plant and strong growth in TV subscribers. Total revenues at Choice increased by approximately $668,000, or 15%, during the year, led by a 66% increase in TV service revenue, but was negatively impacted by an 11% decline in Choice's other revenues, mainly due to attrition Attrition
The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry.
Notes: in Choice's dial-up internet base. As to CHT, given the very small size of its collect-calling business and lack of prospects for growth, management has decided to terminate CHT's collect-calling operations and expects to re-deploy its assets to support the wholesale transport of traffic to Guyana and elsewhere.
In the fourth quarter of 2004, ATC's wholesale call center customer defaulted. As a result of the default, the Company is considering strategic alternatives. ATC's operations were further impacted by the flooding in Guyana in January 2005, which caused significant damage to the main facility.
In reviewing results for other operations, management determined that it was appropriate to record approximately $2.8 million in non-cash asset impairment Impairment
1. A reduction in a company's stated capital.
2. The total capital that is less than the par value of the company's capital stock.
1. This is usually reduced because of poorly estimated losses or gains.
2. charges. Based on the default of ATC's wholesale customer, the Company concluded that ATC's call center assets were impaired as of year-end and recorded a charge of $1.2 million against the $1.7 million of these assets on its books. Furthermore, given Choice's continued losses, management concluded that the goodwill and certain other intangibles on Choice's balance sheet were impaired and recorded a charge of $1.6 million in the fourth quarter. The Company also recorded a charge of $570,000 related to the write-off of secured loans made in connection with its investment in LighTrade, Inc. in 2001 as the recovery of these amounts is no longer likely. Additionally, the Company recorded a tax benefit of $1.8 million in the fourth quarter due to the reversal of a valuation allowance, which had previously been provided against certain tax assets. Taken together, these items reduced net income for the full year 2004 and fourth quarter by approximately $1.6 million.
Cornelius B. Prior, Jr., Chairman of the Board and Chief Executive Officer of Atlantic Tele-Network, Inc., said: "Our two largest contributing units, GT&T and BDC, continued to show healthy growth in subscribers, revenues, profits and cash flows in 2004. GT&T managed the continued growth of its wire-line and wireless networks, including the addition of over 32,000 cellular subscribers and over 10,000 new access lines, mainly in areas that had been without service. In addition, in October of 2004, GT&T celebrated the successful launch of GSM/GPRS cellular services, prior to the launch of services by a new cellular service provider in Guyana in December. More recently, we were extremely proud of the efforts of the staff and management of GT&T in fighting to maintain service in January 2005 in the face of unprecedented flooding of some of the major service areas. Our BDC affiliate also had an impressive year, with strong revenue growth due to breaking the 20,000 subscriber level and expanding roaming revenue through arrangements with Sprint and Verizon. Management fees and dividends paid to ATN by BDC last year exceeded $1.8 million. BDC is rolling out high-speed mobile data services (known as EVDO) in the first quarter of 2005 and we are hopeful that this will provide another source of growth and profits for that business.
"Unfortunately, the smaller units reported under "other operations" continue to detract from detract from
verb 1. lessen, reduce, diminish, lower, take away from, derogate, devaluate << OPPOSITE enhance
verb 2. the Company's overall performance. We wrote down ATC's call center assets and we have ceased CHT's collect calling business and are re-deploying its limited assets. We do not expect either of these businesses to have a significant impact on our results in 2005. Our Choice subsidiary, which is a CATV (Community Antenna TV) The original name for cable TV. It used a single antenna at the highest location in the community in order to deliver a quality signal to homes in areas with hilly terrain or other interference. and internet provider Internet provider - Internet Service Provider in the US Virgin Islands, appears to have improved business prospects with TV revenues up 66% last year and demand for broadband broadband
Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). data services expanding. We are working hard to accelerate growth and reduce operating losses operating loss
The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and will continue to watch this carefully."
For the quarter ended December 31, 2004 telephone operating revenues were $21.9 million, and were in line with the fourth quarter of 2003. Total minutes of use were essentially flat during the quarter despite the increase in cellular subscribers and lines in service. The average revenue per minute was lower due to a continued shift in the mix of traffic but income from telephone operations was up about 12%. International long distance revenues for the quarters ended December 31, 2004 and 2003 include approximately $527,000 and $750,000, respectively, related to traffic generated in prior periods as GT&T received payment on settled disputes with international carriers. The Company's fourth quarter 2004 earnings, when adjusted to exclude the net effect of write-offs and other adjustments, were essentially in line compared to earnings from the third quarter of 2004.
Atlantic Tele-Network, Inc. is a telecommunications company See telecom company. with headquarters in St. Thomas, U.S. Virgin Islands. Its principal subsidiary, Guyana Telephone and Telegraph Company, Limited, is 80% owned by ATN and is the national telephone service provider in the Cooperative Republic of Guyana for all local, long-distance and international service. ATN also owns 44% of Bermuda Digital Communications Transmitting text, voice and video in binary form. See communications. Ltd., doing business in Bermuda as Cellular One, 100% of Choice Communications, LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control , the largest Internet service provider Internet service provider (ISP)
Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Virgin Islands and the only wireless TV provider in the USVI USVI United States Virgin Islands
USVI US Vision, Inc. (stock symbol)
USVI United States Vegetation Index , as well as 100% of Atlantic Tele-Center, Inc., which operates a Web-enabled outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. call center in Guyana and a VSAT (Very Small Aperture satellite Terminal) A small earth station for satellite transmission that handles up to 56 Kbits/sec of digital transmission. VSATs that handle the T1 data rate (up to 1.544 Mbits/sec) are called "TSATs. Internet service provider focused on select Caribbean and Latin American markets.
This release contains forward-looking statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. Actual results could differ materially from these statements as a result of many factors, including matters discussed in the Company's Form 10K annual report for the year ended December 31, 2003, which is on file with the Securities and Exchange Commission.
Schedule A ATLANTIC TELE-NETWORK, INC. Statement of Operations Data For the Three and Twelve Months Ended December 31, 2004 and 2003 (In Thousands, Except Per Share Data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Telephone operations: Revenues: International long-distance revenues $12,232 $12,247 $46,861 $42,017 Local exchange service revenues 8,504 8,712 33,057 33,483 Other revenues 1,148 962 4,041 3,365 --------- --------- --------- --------- Total revenues from telephone operations 21,884 21,921 83,959 78,865 --------- --------- --------- --------- Expenses: International long-distance expenses 1,138 1,646 5,068 7,087 Telephone operating expenses 8,436 8,935 32,006 30,679 General and administrative expenses 1,437 1,661 6,032 6,637 --------- --------- --------- --------- Total telephone operating expenses 11,011 12,242 43,106 44,403 --------- --------- --------- --------- Income from telephone operations 10,873 9,679 40,853 34,462 Other operations: Revenues of other operations 1,356 860 5,293 4,422 Expenses of other operations (3,190) (2,872) (11,580) (9,896) Asset impairment (2,825) -- (2,825) -- --------- --------- --------- --------- Loss from other operations (4,659) (2,012) (9,112) (5,474) Other income (expense): Interest expense (101) (179) (281) (424) Interest income 218 127 587 511 Equity in earnings of Bermuda Digital Communications 553 382 2,568 2,030 Other income (expense): 276 826 1,473 631 Loss on investment (570) -- (570) -- --------- --------- --------- --------- Other income (expense), net: 376 1,156 3,777 2,748 --------- --------- --------- --------- Income before income taxes and minority interest 6,590 8,823 35,518 31,736 Income taxes 3,621 4,403 19,487 16,008 --------- --------- --------- --------- Income before minority interest 2,969 4,420 16,031 15,728 Minority interest (1,017) (1,277) (3,914) (3,484) --------- --------- --------- --------- Net income $1,952 $3,193 $12,117 $12,244 ========= ========= ========= ========= Net income per share: Basic $0.39 $0.64 $2.41 $2.44 ========= ========= ========= ========= Diluted $0.39 $0.64 $2.41 $2.43 ========= ========= ========= ========= Weighted average common stock outstanding: Basic 5,023 5,024 5,025 5,018 ========= ========= ========= ========= Diluted 5,023 5,024 5,025 5,033 ========= ========= ========= ========= Schedule B ATLANTIC TELE-NETWORK, INC. Selected Operations Statistics For the Periods Ended December 31, 2003 and 2004 (In Thousands, Except Subscribers and Access Line Data) (unaudited) Guyana Telephone & Telegraph Co., Ltd. As of As of As of As of 12/31/04 09/30/04 6/30/04 3/31/04 ------------------- ------------------- Access lines (fixed) 103,267 98,390 96,549 94,599 ========= ========= ========= ========= Cellular subscribers 150,851 143,945 137,236 128,228 ========= ========= ========= ========= As of As of As of As of 12/31/03 09/30/03 6/30/03 3/31/03 --------- --------- --------- --------- Access lines (fixed) 92,683 89,693 88,138 87,057 ========= ========= ========= ========= Cellular subscribers 118,658 107,807 104,852 92,756 ========= ========= ========= ========= International Long-Distance Traffic: For the Three For the Twelve Months Ended Months Ended December 31, December 31, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- International Minutes of Traffic: Inbound 37,162 36,596 150,111 124,341 Outbound 6,827 6,863 27,083 25,644 --------- --------- --------- --------- Total International Minutes 43,989 43,459 177,194 149,985 International Minutes of Traffic Mix: Inbound 84.5% 84.2% 84.7% 82.9% Outbound 15.5% 15.8% 15.3% 17.1% --------- --------- --------- --------- Total International Minutes 100.0% 100.0% 100.0% 100.0% ========= ========= ========= =========