ATN International, Inc.

My name is Sia, and I will be the conference operator today. At this time, I would like to welcome everyone to the ATN International Q1 2021 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star and the number 1 on your telephone keypad. To withdraw the question, press the pound key. Thank you. At this time, I would like to turn the conference over to Justin Benincasa, Chief Financial Officer. Please go ahead, sir.

Great. Thank you, everyone, and good morning. And thanks for joining us on our call to review our first quarter 2021 results. With me here is Michael Pryor, ATN's Chief Executive Officer. And during the call, I'll cover the relevant financial information, and Michael will provide an update on the business and outlook. Before I turn the call over to Michael for his comments, I'd like to point out that this call and our press release contain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operating results and are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliation to comparable gap measures, and for further information regarding the factors that may affect our future operating results, we would refer you to our earnings release on our website at atni.com or to the 8-K filing provided to the SEC.

And I'll turn it over to Michael for his comments. Michael Nutterman- Okay. Thank you, Justin. Good morning, all. So, this quarter was largely in line with the trends and expectations we discussed just two months ago. Our most important revenue drivers in international telecom, broadband and mobile subscriber levels, continue to show strength even as we await economic activity recovery from pandemic restrictions. However, the quarter showed we have some more work to do on the cost side of the equation. And as expected, activity and related expense has picked up in several areas of our U.S. telecom operations. particularly the FirstNet build and other infrastructure builds and private network development efforts. Meanwhile, the Alaska communications acquisition, which we announced at the start of the quarter, continues to move promisingly towards a close. And the partial exit from our Indian renewable energy business was completed in January, freeing up resources to focus on communications services businesses closer to home. Now I'll turn to some more detail on the individual operating segments, starting with international telecom. Fixed data subscribers in this segment increased by about 9% year on year as we continue to see growth in this space every quarter. Our past and ongoing investments in our network and service quality have enabled us to capture underlying demand. Mobile subscribers also increased by 9% year on year. This was the third consecutive quarter of good growth in this metric, and as you can see in the information in our press release, we saw year-on-year growth in both postpaid and prepaid subscribers. We credit better retail and marketing strategies for these share gains. Video subscribers continued to decline, though, with some recent signs of leveling off, and voice subscribers remained steady. Expenses rose faster than revenue for this segment year-on-year, While some of that was new regulatory fees and some of it more one-time in nature, we are implementing cost reduction initiatives in several markets, and we will be working hard to bring expense levels down over the next few quarters. Conditions in these markets are still fairly difficult as overall economic activity remains historically low due to the pandemic. Roaming, both inbound and outbound, revenues from hospitality customers and other commercial customers all continue to feel some negative impacts. So we would expect to see a pickup in revenue as travel restrictions ease and the vaccination rollout drives increased tourist travel. In US telecom, we started to see a more significant impact of the first net construction inflows and outflows. We delivered a lot of sites in the first quarter and expect that pace to continue throughout the year and into the first half of 2022 in accordance with our obligations. In addition to the important FirstNet activity, our engineering and operational teams are very busy with middle-mile fiber builds, expansion of our broadband network, and private network trials and deployments. Much of the middle-mile fiber and broadband activity is related to public-private partnership solutions with federal, state, and local subsidy programs helping to make these investments financially sound for us. We have a lot of experience in that realm, and we are closely examining the recently passed and proposed federal infrastructure programs to see where we might be part of the solution to identified areas of the digital divide. Our private network capabilities also can be part of that solution. As mentioned briefly on the February call, GeoVerse partnered with other providers to win a bid to build out two mid-sized cities with a neutral host wireless network to support both local education and municipal services. Financially, results for U.S. Telecom were in line with the transition phase we spoke about last quarter, which we expect to last throughout the year. Operational and capital spending has increased as we ramp up our capabilities in several areas and pursue growth opportunities. Of course, this segment will look very different following close of the Alaska Communications deal. To illustrate the impact, if you added ACS's most recently reported quarterly results, which were for the fourth quarter of last year, revenue reported for this segment would be over $100 million for the quarter, with adjusted EBITDA of roughly $20 million. And of course, we are hoping to do better than that. On that front, very pleased that Alaska Communications shareholders voted to approve our acquisition of the company on March 12th, and we look forward to gaining regulatory approvals in coming months. In the meantime, we've been working with Alaska Communications management team to identify opportunities to gain revenue synergies and potentially accelerate execution of their business strategy. While still early in the process, we have identified several stage one priorities, including the opportunity to accelerate growth of the company's fiber-based revenues, the expansion of anchor tenant fiber builds, and cross-selling next-generation managed services and private network solutions. The teams are also hard at work on the blocking and tackling of integration planning, including opportunities for cost efficiencies. So more to come. on both fronts, but for now, I'll turn it back over to you, Justin.