Atlantic Tele-Network, Inc. Reports 2005 First Quarter Earnings Increase 12% Excluding Foreign Exchange Gains From 2004.ST. THOMAS, U.S. Virgin Islands -- Atlantic Tele-Network, Inc. (AMEX AMEX See: American Stock Exchange :ANK ANK Ankara (Turkey) ANK Attempted, Not Known ANK Alphanumeric Keyboard ANK Anunaki (ancient Sumerian Gods) ) today reported earnings of $3.0 million, or $0.61 per share, for the quarter ended March 31, 2005, compared to earnings of $3.1 million, or $0.63 per share, for the quarter ended March 31, 2004, a decrease of 3%. However, excluding the effects of foreign exchange gains recorded during the quarter ended March 31, 2004, net income for the quarter ended March 31, 2005 increased by approximately $300,000 or 12%. The Company's first quarter earnings were up 56% from reported fourth quarter 2004 earnings of $2.0 million, which included write-offs and other year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. adjustments of approximately $1.6 million. When adjusted to exclude these items from fourth quarter results, first quarter earnings were 13% lower consecutively due to seasonally higher revenues in the fourth quarter. 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 by 10% to $21.3 million for the first quarter of 2005, as compared to $19.4 million for the first quarter of 2004. The increase in telephone operating revenues is principally attributable to an $810,000 or 10% increase in local exchange revenues reflecting continued growth in both cellular and wireline subscribers. GT&T's cellular subscribers increased by 29% to 165,763 at March 31, 2005 and wireline subscribers (access lines) increased by 12% to 105,702 for the same period. International traffic volumes climbed by 9% over volumes in the first quarter of 2004 leading to a $698,000 or 7% increase in GT&T's international long distance revenues. The growth in lines and handsets in service contributed to the increase in international long distance traffic and revenues. Income from telephone operations increased to $9.5 million in the first quarter of 2005, as compared to $8.3 million for the period ended March 31, 2004, an increase of $1.2 million or 14%. Total telephone-operating expenses increased by 6% to $11.8 million. The large increase in lines and cellular subscribers contributed to a $1.1 million or 13% 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. . This increase was partially offset by a reduction in general and administrative expenses, primarily due to lower travel, legal and professional fees, and an 8% decline in international long distance expenses resulting from 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. . 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" on our statement of operations See Income statement. . For the quarter ended March 31, 2005, we recorded a loss for these operations of $1.6 million, or 26% higher than the loss reported for the comparable period of 2004. The widening loss on other operations was primarily due to an increase in expenses at Choice, particularly increased compensation expense, depreciation, and TV programming costs. The increase in these items mainly reflects Choice's continued investment in plant and growth in TV subscribers. While Choice's TV and 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 business expanded rapidly, with TV revenues up 33%, its dial-up Refers to using the regular "dial-up" telephone network to send data from a computer to a remote network or to a remote device. The computer's digital data are converted to analog signals in the same frequency range as human voice by a modem. internet subscriber base continued to decline and related revenues were 18% lower than in the first quarter of 2004. Losses at CHT and ATC were $314,000 combined for the quarter ended March 31, 2005, a $140,000 reduction in losses over the comparable quarter of 2004. Operations at CHT and ATC's call center business were substantially curtailed during 2004, as previously reported. Equity in the earnings of Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the Digital Communications Transmitting text, voice and video in binary form. See communications. (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 ), our cellular operator in Bermuda, was $590,000 for the three months ended March 31, 2005, a 19% increase over the three months ended March 31, 2004. The increase in earnings primarily reflects higher airtime air·time n. 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. revenues on a 16% increase in subscribers from 17,614 at March 31, 2004 to 20,400 at March 31, 2005. BDC recently launched "EV-DO (EVolution-Data Only) A 3G high-speed digital data service provided by cellular carriers worldwide that use the CDMA technology, including Verizon and Sprint in the U.S. EV-DO works on EV-DO cellphones as well as laptops and portable devices that have EV-DO modems. " high-speed mobile voice and data services and expects these services will begin to make a positive impact on operating results in coming quarters. Other income, excluding the effect of the Company's equity in earnings in BDC, was $434,000 in the first quarter of 2005, compared to $1.25 million in the first quarter of 2004. This decline is the result of a foreign exchange gain of $945,000 recorded in the quarter ended March 31, 2004 due to the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. at that time of GT&T's 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 assets and liabilities reflecting a 14% decline in the value of the Guyana dollar in relation to the U.S. dollar. There were no comparable gains during the March 2005 quarter. Cornelius B. Prior, Jr., Chairman of the Board and Chief Executive Officer of Atlantic Tele-Network, Inc., said: "Our first quarter results reflect similar factors to those prevalent in 2004 - GT&T and BDC continue to grow subscribers and revenues, without undue pressure on margins, and the smaller businesses in other operations continue to struggle. The results of our telephone operations for the first quarter are particularly impressive when considered in light of the major flooding in Guyana in January. As reported previously, our staff did an excellent job in restoring service and limiting the negative impact on our customers and operating results and we at ATN ATN Acute tubular necrosis, see there also made a significant cash donation to the civil services to help speed the recovery of the affected areas. We are also pleased with the way GT&T has responded to the new competitor in the cellular market and the continued strength of demand for GT&T's Cellink services." 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 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, 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, as well as the largest cellular service provider. ATN also owns 44% of Bermuda Digital Communications Ltd., providing cellular voice and data services in Bermuda as Cellular One, 100% of Choice Communications, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , providing wireless television and broadband and dial-up data services, 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 owns a satellite internet service business as well as 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. 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 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. annual report for the year ended December 31, 2004, which is on file with the Securities and Exchange Commission.
SCHEDULE A
ATLANTIC TELE-NETWORK, INC.
Statement of Operations Data
For the Three Months Ended March 31, 2005 and 2004
(in thousands, except per share data)
Three Months Ended
March 31,
(Unaudited)
------------------
2004 2005
------------------
Telephone operations:
Revenues:
International long-distance revenues $10,668 $11,366
Local exchange service revenues 7,810 8,620
Other revenues 905 1,279
------------------
Total telephone operating revenues 19,383 21,265
Expenses:
International long-distance expenses 1,380 1,270
Telephone operating expenses 8,033 9,083
General and administrative expenses 1,638 1,411
------------------
Total telephone operating expenses 11,051 11,764
------------------
Income from telephone operations 8,332 9,501
------------------
Other operations:
Revenues of other operations 1,287 1,425
Expenses of other operations 2,527 2,987
------------------
Loss from other operations (1,240) (1,562)
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Other income (expense):
Interest expense (53) (136)
Interest income 124 269
Equity in earnings of Bermuda Digital
Communications, Ltd. 497 590
Other income (expense) 1,182 301
------------------
Total other income (expense), net 1,750 1,024
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Income before income taxes and minority interest 8,842 8,963
Income taxes 4,804 5,016
------------------
Income before minority interest 4,038 3,947
Minority interest (893) (901)
------------------
Net income $3,145 $3,046
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Net income per share:
Basic $0.63 $0.61
==================
Diluted $0.63 $0.61
==================
Weighted average common stock outstanding:
Basic 5,024 5,014
==================
Diluted 5,024 5,014
==================
SCHEDULE B
ATLANTIC TELE-NETWORK, INC.
Selected Operations Statistics
For the Three Months Ended March 31, 2005 and 2004
(in thousands, except subscriber data)
Guyana Telephone & Telegraph Co., Ltd.
Subscriber data:
March 31, December 31, March 31,
2005 2004 2004
----------------------------------
Access lines (fixed) 105,702 103,267 94,599
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Cellular subscriber lines 165,763 150,852 128,228
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International long-distance traffic:
For the Three Months Ended
March 31, December 31, March 31,
2005 2004 2004
----------------------------------
International minutes of traffic:
Inbound 38,993 37,162 36,073
Outbound 7,683 6,827 6,810
---------------------------------
Total international minutes 46,676 43,989 42,883
International minutes of traffic mix:
Inbound 83.5% 84.5% 84.1%
Outbound 16.5% 15.5% 15.9%
---------------------------------
Total international minutes 100.0% 100.0% 100.0%
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