UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 2003
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-19551
| Atlantic Tele-Network, Inc. | ||
| | ||
| (exact name of issuer as specified in its charter) | ||
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| Delaware |
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47-072886 |
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| (State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification Number) |
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| 19 Estate Thomas Havensite | ||
| P.O. Box 12030 | ||
| St. Thomas, U.S. Virgin Islands 00801 | ||
| (340) 777-8000 | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Yes x |
No o |
Indicate by a check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
| Yes o |
No x |
As of April 30, 2003, the registrant had outstanding 4,988,173 shares of its common stock ($.01 par value).
ATLANTIC TELE-NETWORK, INC.
INDEX TO FORM 10-Q
MARCH 31, 2003
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PAGE No: | |
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| PART I FINANCIAL INFORMATION |
2 | ||
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| Item 1 |
2 | ||
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Condensed Consolidated Balance Sheets at December 31, 2002 and March 31, 2003 |
2 | |
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3 | ||
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4 | ||
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5 | ||
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| Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | |
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| Item 3 |
13 | ||
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| Item 4 |
14 | ||
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| PART II OTHER INFORMATION |
15 | ||
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| Items |
15 | ||
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| 16 | |||
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| CERTIFICATES PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 |
17 | ||
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except per share amounts
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December 31, |
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March 31, |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
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$ |
30,651 |
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$ |
33,708 |
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| Accounts receivable, net of allowance |
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9,832 |
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8,229 |
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| Materials and supplies |
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4,421 |
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4,251 |
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| Prepayments and other current assets |
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4,542 |
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5,186 |
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| Total current assets |
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49,446 |
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51,374 |
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| FIXED ASSETS: |
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| Property, plant, and equipment |
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123,078 |
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124,730 |
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| Less accumulated depreciation |
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(36,219 |
) |
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(39,134 |
) |
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| Net fixed assets |
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86,859 |
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85,596 |
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| GOODWILL, NET |
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1,593 |
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1,593 |
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| OTHER INTANGIBLE ASSETS, NET |
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484 |
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|
436 |
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| INVESTMENT IN AND ADVANCES TO BERMUDA DIGITAL COMMUNICATIONS, LTD. |
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4,681 |
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5,268 |
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| OTHER ASSETS |
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4,443 |
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4,446 |
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| Total assets |
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$ |
147,506 |
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$ |
148,713 |
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| CURRENT LIABILITIES: |
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| Current portion of long-term debt |
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$ |
1,899 |
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$ |
1,651 |
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| Accounts payable and accrued liabilities |
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7,731 |
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7,005 |
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| Dividends payable |
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1,141 |
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1,141 |
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| Accrued taxes |
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5,525 |
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6,926 |
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| Advance payments and deposits |
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2,451 |
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2,536 |
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| Other current liabilities |
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2,430 |
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1,955 |
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| Total current liabilities |
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21,177 |
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21,214 |
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| DEFERRED INCOME TAXES |
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8,459 |
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8,922 |
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| LONG-TERM DEBT, excluding current portion |
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3,690 |
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3,364 |
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| Total liabilities |
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33,326 |
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33,500 |
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| MINORITY INTERESTS |
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20,074 |
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19,739 |
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| COMMITMENTS AND CONTINGENCIES (Note 8) |
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| STOCKHOLDERS’ EQUITY: |
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| Preferred stock, $.01 par value per share; 10,000,000 shares authorized, none issued and outstanding |
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— |
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— |
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| Common stock, $.01 par value per share; 20,000,000 shares authorized; 5,151,424 shares issued and 4,986,474 and 4,988,173 shares outstanding on December 31, 2002 and March 31, 2003, respectively. |
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52 |
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52 |
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| Treasury stock, at cost |
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(1,669 |
) |
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(1,984 |
) |
| Additional paid-in capital |
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55,914 |
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55,914 |
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| Retained earnings |
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39,809 |
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41,492 |
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| Total stockholders’ equity |
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94,106 |
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95,474 |
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| Total liabilities and stockholders’ equity |
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$ |
147,506 |
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$ |
148,713 |
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The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
2
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003
(Unaudited)
(Dollars in thousands, except per share amounts)
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For the Three Months Ended, |
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2002 |
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2003 |
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| TELEPHONE OPERATIONS: |
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| Operating revenues: |
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| Local exchange service revenues |
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$ |
6,158 |
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$ |
8,041 |
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| International long-distance revenues |
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8,518 |
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9,211 |
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| Other revenues |
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|
636 |
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863 |
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| Total telephone operating revenues |
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15,312 |
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18,115 |
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| Operating expenses: |
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| International long-distance expenses |
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2,668 |
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1,840 |
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| Telephone operating expenses |
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6,368 |
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7,510 |
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| General and administrative expenses |
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1,143 |
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1,663 |
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| Total telephone operating expenses |
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10,179 |
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11,013 |
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| Income from telephone operations |
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5,133 |
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7,102 |
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| OTHER OPERATIONS: |
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| Revenues of other operations |
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1,085 |
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1,262 |
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| Expenses of other operations |
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1,906 |
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2,108 |
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| Loss from other operations |
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(821 |
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(846 |
) |
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| OTHER INCOME (EXPENSE): |
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| Interest expense |
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(155 |
) |
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(99 |
) |
| Interest income |
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301 |
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138 |
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| Equity in earnings of Bermuda Digital Communications, Ltd |
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350 |
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|
542 |
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| Other income (expense), net |
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179 |
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182 |
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| Other income (expense), net |
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675 |
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763 |
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| INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS |
|
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4,987 |
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7,019 |
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| INCOME TAXES |
|
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2,547 |
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3,542 |
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| INCOME BEFORE MINORITY INTERESTS |
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2,440 |
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3,477 |
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| MINORITY INTERESTS |
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(423 |
) |
|
(665 |
) |
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| NET INCOME |
|
$ |
2,017 |
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$ |
2,812 |
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| NET INCOME PER SHARE: |
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| Basic |
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$ |
0.40 |
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$ |
0.56 |
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| Diluted |
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$ |
0.40 |
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$ |
0.56 |
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
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| Basic |
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4,992 |
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4,998 |
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| Diluted |
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5,047 |
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5,049 |
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The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
3
ATLANTIC TELE-NETWORK, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2003
(Unaudited)
(Dollars in thousands)
|
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For the Three Months Ended, March 31, |
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2002 |
|
2003 |
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| NET CASH PROVIDED BY OPERATING ACTIVITIES: |
|
$ |
12,649 |
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$ |
7,785 |
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| CASH FLOWS FROM INVESTING ACTIVITIES: |
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| Capital expenditures |
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(5,393 |
) |
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(1,652 |
) |
| Sale (purchase) of marketable securities, net |
|
|
6,385 |
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|
— |
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| (Advances to) repayments by Bermuda Digital Communications, Ltd. |
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(1,165 |
) |
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(45 |
) |
| Distribution to minority shareholders |
|
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(2,250 |
) |
|
(1,000 |
) |
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| Net cash used in investing activities |
|
|
(2,423 |
) |
|
(2,697 |
) |
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| CASH FLOWS FROM FINANCING ACTIVITIES: |
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| Repayment of long-term debt |
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(398 |
) |
|
(575 |
) |
| Purchase of common stock |
|
|
24 |
|
|
— |
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| Net cash from stock option exercise and share repurchase |
|
|
— |
|
|
(315 |
) |
| Dividends paid on common stock |
|
|
(1,012 |
) |
|
(1,141 |
) |
|
|
|
|
|
|
|
|
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| Net cash used in financing activities |
|
|
(1,386 |
) |
|
< | |