UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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May 7,
2015
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ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-28167
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52-2126573
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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600 Telephone Ave, Anchorage, Alaska
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99503
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s telephone number, including area code
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907 - 297 - 3000
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(Former name or former address, if changed since last report.)
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 7, 2015, Alaska Communications Systems Group, Inc. (the
“Company”) released its financial results for the quarter ended March
31, 2015. The press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference. A presentation of supplemental
information to be reviewed on the Company’s earnings call to be held on
May 8, 2015 will be made available on the Company’s Investor Relations
website at http://www.alsk.com at the time of the call and is
incorporated herein by reference.
Pursuant to General Instruction B.2 of Form 8-K, the information in this
Item 2.02 is being furnished to the Securities and Exchange Commission
and shall not be deemed to be “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities
of that section. Furthermore, the information in this Item 2.02 shall
not be deemed to be incorporated by reference into the filings of the
Corporation under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description
Exhibit
99.1 Alaska Communications Systems Group, Inc. Press Release
dated May 7, 2015.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 7, 2015
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Alaska Communications Systems Group, Inc.
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/s/ Leonard A. Steinberg
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Leonard A. Steinberg
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Corporate Secretary
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Exhibit Index
Exhibit No.
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Description
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99.1
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Alaska Communications Systems Group, Inc. Press Release dated May
7, 2015.
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Exhibit 99.1
Alaska
Communications Reports First Quarter 2015 Results
-Continued
Industry Leading Revenue Growth, Posting 10.1 Percent Total Broadband
Revenue Increase-
-Acquired
Terrestrial Fiber Network on the North Slope to Accelerate Growth-
ANCHORAGE, Alaska--(BUSINESS WIRE)--May 7, 2015--Alaska Communications
Systems Group, Inc. (NASDAQ: ALSK) today reported financial results for
the first quarter of 2015.
“We delivered yet another quarter of industry leading growth. Our
business is performing well across all categories, and we continue to
turn-up services for an increasing array of customers. In February, we
closed the sale of our wireless operations. Then in April, we completed
the wireless transition services ahead of schedule. We are on track to
achieve targeted synergies and run-rate Adjusted EBITDA exiting 2015,”
President and CEO Anand Vadapalli said.
“Additionally in April, we made a strategic acquisition of a fiber optic
network on the North Slope from ConocoPhillips that opens up a new set
of opportunities in broadband and IT managed services. We expect this
investment to be accretive to our growth over the years to come.
Concurrently, we entered into a multi-year services agreement with
ConocoPhillips, establishing an anchor tenant on the network.
“We are positioned as a strong and focused broadband provider,
continuing our proven track record of creating value for our
shareholders.”
First Quarter 2015 Revenue Highlights Compared to First Quarter 2014
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Total service and other:
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Revenue increased to $53.7 million from $52.7 million, up 2.0
percent.
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Total broadband revenue reached $18.1 million from $16.5 million,
up 10.1 percent.
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Business and wholesale service:
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Revenue grew to $28.4 million from $26.4 million, up 7.7 percent.
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Broadband revenues reached $11.6 from $10.6, up 9.6 percent.
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Consumer service:
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Revenue was consistent at $10.2 million, increasing 0.6 percent.
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Broadband revenues increased to $6.5 million, from $5.9 million up
10.9 percent.
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Consumer broadband average revenue per user grew $2.16, to $58.07
or 3.9 percent sequentially
First Quarter 2015 Earnings Highlights:
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Adjusted EBITDA was $12.5 million, consistent with expectations.
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Free cash flow was solid, at $5.1 million.
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Net capital expenditures were $3.4 million.
March 31, 2015 Balance Sheet Highlights
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Cash balances stand at $57.8 million, compared to $31.7 million at
Dec. 31, 2014. Cash balances are high to fund costs for the wind down
of the wireless operations which will take place this year.
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Debt balances were reduced significantly. The company received $276.4
in proceeds from the wireless sale and used $240.5 million of the
proceeds to pay down debt. Total debt now stands at $192.7 million.
2015 Operational Highlights:
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Purchased a fiber optic network on the North Slope on April 2 and
concurrently entered into a long-term commercial relationship with the
first anchor tenant, ConocoPhillips, to provide broadband and IT
managed services.
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Entered into a joint venture to provide additional carrier services
over the North Slope network.
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Closed the wireless sale on Feb. 2, and completed the wireless
transition services on April 17 ahead of schedule.
“With the wireless sale now complete, we are focused on refinancing
activities,” Chief Financial Officer Wayne Graham said. “We are pursuing
a strategy of replacing our existing term loan facility, with a new
facility in the range of $100 million to $120 million. We look forward
to completing this process in the next few months.”
2015 Guidance:
The company reaffirmed guidance for the year as follows:
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Total service and other revenue of approximately $220 million
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Run rate Adjusted EBITDA exiting 2015 of $54 million to $56 million
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Net capital expenditures range of $34 million to $36 million,
inclusive of $16 million of success based capital
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Net debt at year end of approximately $159 million
Conference Call
The company will host a conference call and live webcast on Friday, May
8, 2015 at 1:00 p.m. Eastern Standard Time to discuss the results. The
live webcast will include a slide presentation. Parties in the U.S. and
Canada can access the call at 1-888-461-2030 and enter pass code 933823.
All other parties can access the call at 1-719-457-2704.
The live webcast of the conference call will be accessible from the
"Events Calendar" section of the company's website (www.alsk.com).
The webcast will be archived for 90 days. A replay of the call will be
available two hours after the call and will run until June 9, 2015, at
4:00 p.m. EDT. To hear the replay, parties in the U.S. and Canada can
call 1-888-203-1112 and enter pass code 2186769. All other parties can
call 1-719-457-0820 and enter pass code 2186769.
About Alaska Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of advanced
broadband and IT managed 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.
Non-GAAP Measures
In an effort to provide investors with additional information regarding
our financial results, in particular with regards to our liquidity and
capital resources, we have disclosed certain non-GAAP financial
information such as Adjusted EBITDA, and Free Cash Flow, which
management utilizes to assess performance and believes provides useful
information to investors. The definition of these non-GAAP measures are
on Schedules 4 and 5 to this press release. Adjusted EBITDA, and Free
Cash Flow are non-GAAP measures and should not be considered a
substitute for 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 on our website at http://www.alsk.com in the
investment data section. Other companies may not calculate non-GAAP
measures in the same manner as ACS.
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 ACS' control.
Such factors include, without limitation, our ability to realize
targeted synergies following the sale of our wireless operations,
Universal Service Fund changes adverse economic conditions, adverse
conditions in the credit markets impacting the cost, including interest
rates, and/or availability of financing, including the refinancing of
our senior credit facility maturing in October 2016, and 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, and benefits costs, disruption of our supplier’s
provisioning of critical products or services, the impact of natural or
man-made disasters, changes in Company's relationships with large
customers, unforeseen changes in public policies, and changes in
accounting policies, which could result in an impact on earnings. For
further information regarding risks and uncertainties associated with
ACS' 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.
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Schedule 1
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ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
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CONSOLIDATED SCHEDULE OF OPERATIONS
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(Unaudited, In Thousands Except Per Share Amounts)
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Three Months Ended
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March 31,
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2015
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2014
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Operating revenues:
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Operating revenues, non-affiliates
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$
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65,211
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$
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76,545
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Operating revenues, affiliates *
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575
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1,786
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Total operating revenues
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65,786
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78,331
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Operating expenses:
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Cost of services and sales, non-affiliates
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26,305
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30,058
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Cost of services and sales, affiliates *
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4,961
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14,760
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Selling, general & administrative
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27,984
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24,595
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Depreciation and amortization
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8,941
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8,790
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(Gain) loss on disposal of assets, net
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(38,662
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401
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Earnings from equity method investments
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(3,056
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(8,523
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)
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Total operating expenses
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26,473
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70,081
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Operating income
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39,313
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8,250
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Other income and expense:
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Interest expense
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(10,047
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)
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(8,857
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)
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Interest income
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25
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8
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Total other income and expense
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(10,022
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)
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(8,849
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)
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Income (loss) before income tax (expense) benefit
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29,291
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(599
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)
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Income tax (expense) benefit
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(13,074
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)
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214
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Net income (loss)
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$
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16,217
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$
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(385
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)
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Basic and diluted
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$
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0.32
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$
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(0.01
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)
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Weighted average shares outstanding:
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Basic
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49,916
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48,913
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Diluted
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50,695
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48,913
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* Affiliate balances are related to activity with our equity method
investees TekMate and AWN.
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The remaining interest in TekMate was purchased on January 31, 2014
at which time it became
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a wholly owned subsidiary. On February 2, 2015 we sold our interest
in AWN.
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Schedule 2
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ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
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CONSOLIDATED BALANCE SHEETS
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(Unaudited, In Thousands Except Per Share Amounts)
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March 31,
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December 31,
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Assets
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2015
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2014
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Current assets:
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Cash and cash equivalents
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$
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57,827
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$
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31,709
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Restricted cash
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9,467
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467
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Accounts receivable-trade, net
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28,552
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30,900
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Materials and supplies
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4,687
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4,321
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Prepayments and other current assets
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7,939
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6,575
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Deferred income taxes
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13,071
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104,245
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Current assets held-for-sale
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-
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9,565
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Total current assets
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121,543
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187,782
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Property, plant and equipment
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1,321,745
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1,333,134
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Less: accumulated depreciation and amortization
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(969,549
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(976,401
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Property, plant and equipment, net
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352,196
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356,733
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Debt issuance costs
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2,212
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4,469
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Deferred income taxes
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12,157
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-
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Equity method investments
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-
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252,067
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Non-current assets held-for-sale
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2,523
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14,664
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Other assets
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253
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301
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Total assets
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$
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490,884
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$
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816,016
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Liabilities and Stockholders' Equity (Deficit)
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Current liabilities:
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Current portion of long-term obligations
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$
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4,384
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$
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15,521
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Accounts payable, accrued and other current liabilities,
non-affiliates
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75,873
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54,373
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Accounts payable, accrued and other current liabilities, affiliates,
net *
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-
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4,853
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Advance billings and customer deposits
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4,672
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4,490
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Current liabilities held-for-sale
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299
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18,728
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Total current liabilities
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85,228
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97,965
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Long-term obligations, net of current portion
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188,358
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418,447
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Deferred income taxes
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-
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81,267
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Other long-term liabilities
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22,739
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24,370
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Non-current liabilities held-for-sale
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2,050
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2,107
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Deferred GCI/AWN capacity revenue, net of current portion
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38,893
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56,734
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Total liabilities
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337,268
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680,890
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Commitments and contingencies
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Stockholders' equity (deficit):
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Common stock, $.01 par value; 145,000 authorized
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503
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497
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Additional paid in capital
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155,190
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154,368
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Accumulated earnings (deficit)
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1,629
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(14,588
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)
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Accumulated other comprehensive loss
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(3,706
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)
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(5,151
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)
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Total stockholders' equity
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153,616
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135,126
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Total liabilities and stockholders' equity
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$
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490,884
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$
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816,016
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* Affiliate balances are related to activity with our equity method
investment in AWN.
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On February 2, 2015 we sold our interest in AWN.
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Schedule 3
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ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(Unaudited, In Thousands)
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|
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|
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Three Months Ended
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March 31,
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2015
|
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2014
|
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Cash Flows from Operating Activities:
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Net income (loss)
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$
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16,217
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$
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(385
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)
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Adjustments to reconcile net income (loss) to net cash provided by
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|
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operating activities:
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Depreciation and amortization
|
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8,941
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|
|
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8,790
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Gain on wireless sale
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|
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(39,719
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)
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|
-
|
|
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Loss on the disposal of assets, net
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|
|
1,057
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|
|
|
401
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|
|
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Unrealized gain on ineffective hedge
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|
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(267
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)
|
|
|
-
|
|
|
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Amortization of debt issuance costs and debt discount
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|
|
3,681
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|
|
|
1,398
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|
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Amortization of ineffective hedge
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|
|
1,960
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|
|
|
607
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|
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Amortization of GCI/AWN deferred capacity revenue
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|
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(615
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)
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|
|
(841
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)
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|
|
Stock-based compensation
|
|
|
484
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|
|
|
653
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|
|
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Deferred income tax benefit
|
|
|
(2,515
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)
|
|
|
(227
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)
|
|
|
Provision for uncollectible accounts
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|
|
1,523
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|
|
|
565
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|
|
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Cash distribution from equity method investments
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|
|
3,056
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|
|
|
8,523
|
|
|
|
Earnings from equity method investments
|
|
|
(3,056
|
)
|
|
|
(8,523
|
)
|
|
|
Other non-cash expense (income), net
|
|
|
270
|
|
|
|
(3
|
)
|
|
|
Income taxes payable
|
|
|
13,612
|
|
|
|
-
|
|
|
|
Changes in operating assets and liabilities
|
|
|
(2,505
|
)
|
|
|
2,868
|
|
|
Net cash provided by operating activities
|
|
|
2,124
|
|
|
|
13,826
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(5,900
|
)
|
|
|
(7,164
|
)
|
|
|
Capitalized interest
|
|
|
(491
|
)
|
|
|
(738
|
)
|
|
|
Change in unsettled capital expenditures
|
|
|
(4,443
|
)
|
|
|
(7,186
|
)
|
|
|
Cash received in acquisition of business
|
|
|
-
|
|
|
|
68
|
|
|
|
Proceeds on wireless sale
|
|
|
276,388
|
|
|
|
-
|
|
|
|
Return of capital from equity investment
|
|
|
1,875
|
|
|
|
4,010
|
|
|
Net cash provided (used) by investing activities
|
|
|
267,429
|
|
|
|
(11,010
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
Repayments of long-term debt
|
|
|
(241,718
|
)
|
|
|
(13,354
|
)
|
|
|
Debt issuance costs
|
|
|
(1,027
|
)
|
|
|
-
|
|
|
|
Cash paid in acquisition of business
|
|
|
(291
|
)
|
|
|
-
|
|
|
|
Payment of withholding taxes on stock-based compensation
|
|
|
(399
|
)
|
|
|
(581
|
)
|
|
Net cash used by financing activities
|
|
|
(243,435
|
)
|
|
|
(13,935
|
)
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
26,118
|
|
|
|
(11,119
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
31,709
|
|
|
|
43,039
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
57,827
|
|
|
$
|
31,920
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Data:
|
|
|
|
|
|
Interest paid
|
|
$
|
3,384
|
|
|
$
|
6,562
|
|
|
Income taxes paid
|
|
$
|
1,977
|
|
|
$
|
13
|
|
|
|
|
|
|
|
|
|
|
Supplemental Non-cash Transactions:
|
|
|
|
|
|
Property acquired under capital leases
|
|
$
|
20
|
|
|
$
|
44
|
|
|
Additions to ARO asset
|
|
$
|
3
|
|
|
$
|
214
|
|
|
Accrued acquisition purchase price
|
|
$
|
(291
|
)
|
|
$
|
1,086
|
|
|
Contingent sale proceeds held in escrow
|
|
$
|
9,000
|
|
|
$
|
-
|
|
|
Net change in restricted cash
|
|
$
|
(9,000
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4
|
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
|
|
|
ADJUSTED EBITDA
|
|
|
(Unaudited, In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
16,217
|
|
|
$
|
(385
|
)
|
|
Add (subtract):
|
|
|
|
|
|
|
Interest expense
|
|
|
10,047
|
|
|
|
8,857
|
|
|
|
Interest income
|
|
|
(25
|
)
|
|
|
(8
|
)
|
|
|
Depreciation and amortization
|
|
|
8,941
|
|
|
|
8,790
|
|
|
|
Loss on disposal of assets, net
|
|
|
1,057
|
|
|
|
401
|
|
|
|
Earnings from equity method investment in TekMate
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
Earnings from equity method investment in AWN
|
|
|
(3,056
|
)
|
|
|
(8,511
|
)
|
|
|
Gain on sale of assets
|
|
|
(39,719
|
)
|
|
|
-
|
|
|
|
AWN distributions received/receivable, net
|
|
|
765
|
|
|
|
12,500
|
|
|
|
Income tax expense (benefit)
|
|
|
13,074
|
|
|
|
(214
|
)
|
|
|
Stock-based compensation
|
|
|
484
|
|
|
|
653
|
|
|
|
Long-term cash incentives
|
|
|
334
|
|
|
|
684
|
|
|
|
Formation of AWN and wireless sale transaction-related costs
|
|
|
4,346
|
|
|
|
172
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
12,465
|
|
|
$
|
22,927
|
|
|
NonGAAP Measures:
In an effort to provide investors with additional information
regarding the Company's results as determined by GAAP, the Company
also discloses certain non-GAAP information which management
utilizes to assess recurring performance and believes provides
useful information to investors regarding baseline operating
results.
The Company has disclosed Adjusted EBITDA as net income before
interest, depreciation and amortization, gain or loss on asset
purchases or disposals, earnings on equity method investments,
gain on the sale of our wireless operations, provisions for taxes,
transaction-related costs, stock-based compensation, and expenses
under the company’s long term cash incentive plan (“LTCI”). LTCI
expenses are considered part of an interim compensation structure
to mitigate the dilutive impact of additional share issuances for
executive compensation. Distributions from AWN are included in
Adjusted EBITDA.
|
|
|
|
|
|
|
|
|
Schedule 5
|
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
|
|
|
FREE CASH FLOW
|
|
|
(Unaudited, In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
12,465
|
|
|
$
|
22,927
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
Capital spending
|
|
|
|
|
|
|
Incurred capital expenditures
|
|
|
(5,900
|
)
|
|
|
(7,164
|
)
|
|
|
Milestone billings for fiber build project for a carrier customer
|
|
|
2,500
|
|
|
|
-
|
|
|
Net capital spending
|
|
|
(3,400
|
)
|
|
|
(7,164
|
)
|
|
|
|
|
|
|
|
|
|
|
Amortization of GCI/AWN capacity revenue
|
|
|
(615
|
)
|
|
|
(841
|
)
|
|
|
Cash interest expense
|
|
|
(3,384
|
)
|
|
|
(6,562
|
)
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
$
|
5,066
|
|
|
$
|
8,360
|
|
|
|
|
|
|
|
|
|
ACS continues to have net operating losses and is not a significant
taxpayer on ordinary income,
|
therefore Income taxes paid are not included on this schedule.
|
|
|
|
|
|
|
|
|
|
|
|
|
NonGAAP Measures:
In an effort to provide investors with additional information
regarding the Company's results as determined by GAAP, the Company
also discloses certain non-GAAP information which management
utilizes to assess recurring performance and believes provides
useful information to investors regarding baseline operating
results.
Free cash flow ("FCF") is defined as Adjusted EBITDA, less capital
expenditures that create an obligation to pay (“incurred capital
expenditures”), plus milestone billings for a fiber build project
for a carrier customer, less amortization of capacity revenue
(which is a non cash revenue item), less cash interest expense.
Note that incurred capital spending includes the costs associated
with a two year fiber build project with a strategic customer
however we are adding back the cash we receive from the customer
for the funding of that project to FCF. Accordingly, our capital
spending will be elevated because of this project, but the project
will be accretive to FCF.
|
|
|
|
|
|
|
Schedule 6
|
|
|
|
|
|
|
|
|
|
|
|
|
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
|
|
REVENUE GROWTH
|
|
(Unaudited, In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
Service revenue:
|
|
|
|
2015
|
|
|
2014
|
Business and wholesale customers
|
|
|
|
|
Voice
|
|
|
$
|
5,430
|
|
$
|
5,611
|
|
Broadband
|
|
|
11,632
|
|
|
10,611
|
|
IT Services
|
|
|
|
729
|
|
|
588
|
|
Other
|
|
|
|
1,699
|
|
|
1,681
|
|
Wholesale
|
|
|
|
8,942
|
|
|
7,913
|
|
Business and wholesale service revenue
|
|
|
28,432
|
|
|
26,404
|
|
|
|
|
|
|
Consumer customers
|
|
|
|
|
|
Voice
|
|
|
|
3,428
|
|
|
3,876
|
|
Broadband
|
|
|
6,499
|
|
|
5,861
|
|
Other
|
|
|
|
289
|
|
|
423
|
|
Consumer service revenue
|
|
|
10,216
|
|
|
10,160
|
|
|
|
|
|
|
Total service revenue
|
|
|
|
38,648
|
|
|
36,564
|
Growth in service revenue
|
|
|
5.7
|
%
|
|
Growth in broadband service revenue
|
|
|
10.1
|
%
|
|
|
|
|
|
|
|
Other revenue:
|
|
|
|
|
Equipment sales
|
|
|
|
1,577
|
|
|
837
|
Access
|
|
|
|
|
8,586
|
|
|
8,993
|
High cost support
|
|
|
|
4,921
|
|
|
6,274
|
Total service and other revenue
|
|
|
53,732
|
|
|
52,668
|
Growth in service and other revenue
|
|
|
2.0
|
%
|
|
Growth excluding equipment sales
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
Wireless and AWN related revenue:
|
|
|
|
Service revenue, equipment sales and other
|
|
|
6,058
|
|
|
19,477
|
Transition services
|
|
|
|
4,050
|
|
|
-
|
CETC
|
|
|
|
|
1,654
|
|
|
5,345
|
Amortization of deferred AWN capacity revenue
|
|
|
292
|
|
|
841
|
Total wireless & AWN related revenue
|
|
|
12,054
|
|
|
25,663
|
|
|
|
|
|
|
Total revenue
|
|
|
$
|
65,786
|
|
$
|
78,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 7
|
|
|
|
|
|
|
|
|
|
|
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
|
|
|
KEY OPERATING STATISTICS
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
December 31,
|
March 31,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Voice:
|
|
|
|
|
|
|
|
|
Consumer access lines
|
|
|
42,492
|
|
|
|
43,773
|
|
|
|
48,165
|
|
|
Business access lines
|
|
|
78,734
|
|
|
|
79,168
|
|
|
|
79,841
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice ARPU consumer
|
|
$
|
26.49
|
|
|
$
|
26.48
|
|
|
$
|
26.51
|
|
|
Voice ARPU business
|
|
$
|
22.93
|
|
|
$
|
23.31
|
|
|
$
|
23.43
|
|
|
|
|
|
|
|
|
|
|
|
Broadband:
|
|
|
|
|
|
|
|
|
Consumer connections
|
|
|
36,612
|
|
|
|
37,412
|
|
|
|
39,468
|
|
|
Business connections (2)
|
|
|
19,270
|
|
|
|
19,234
|
|
|
|
18,763
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU consumer
|
|
$
|
58.07
|
|
|
$
|
55.91
|
|
|
$
|
49.46
|
|
|
ARPU business (1) (2)
|
|
$
|
201.08
|
|
|
$
|
192.64
|
|
|
$
|
188.26
|
|
|
|
|
|
|
|
|
|
|
|
Wireless:
|
|
|
|
|
|
|
|
|
Postpaid connections
|
|
|
N/A
|
|
|
|
74,839
|
|
|
|
86,238
|
|
|
Lifeline connections
|
|
|
N/A
|
|
|
|
7,232
|
|
|
|
6,510
|
|
|
Prepaid connections
|
|
|
N/A
|
|
|
|
21,267
|
|
|
|
15,227
|
|
|
Total (3)
|
|
|
|
N/A
|
|
|
|
103,338
|
|
|
|
107,975
|
|
|
|
|
|
|
|
|
|
|
|
Churn:
|
|
|
|
|
|
|
|
|
|
|
Voice connections
|
|
|
1.0
|
%
|
|
|
1.2
|
%
|
|
|
1.0
|
%
|
|
|
Broadband connections
|
|
|
2.0
|
%
|
|
|
2.4
|
%
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Business broadband ARPU was restated to reflect the movement of IT
services revenue into a separate category.
|
|
(2
|
)
|
How we calculate broadband connections has changed to exclude
certain internal use circuits. Historical
|
|
|
amounts have been restated to reflect appropriate comparisons period
over period.
|
|
(3
|
)
|
The wireless business was sold to GCI on February 2, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 8
|
|
|
|
|
|
|
|
|
|
|
|
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
|
|
|
Long Term Debt
|
|
|
(Unaudited, In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
2010 senior credit facility term loan due 2016
|
|
|
$
|
81,292
|
|
|
$
|
322,700
|
|
|
Debt discount - 2010 senior credit facility term loan due 2016
|
|
|
(1,156
|
)
|
|
|
(1,014
|
)
|
|
6.25% convertible notes due 2018
|
|
|
|
|
114,000
|
|
|
|
114,000
|
|
|
Debt discount - 6.25% convertible notes due 2018
|
|
|
|
(6,712
|
)
|
|
|
(7,242
|
)
|
|
Capital leases and other long-term obligations
|
|
|
|
5,318
|
|
|
|
5,524
|
|
|
|
|
|
|
|
|
|
|
192,742
|
|
|
|
433,968
|
|
|
Less current portion
|
|
|
|
|
|
|
(4,384
|
)
|
|
|
(15,521
|
)
|
|
Long-term obligations, net of current portion
|
|
|
|
$
|
188,358
|
|
|
$
|
418,447
|
|
CONTACT:
Alaska Communications Systems Group, Inc.
Investor
Contact:
Tiffany Dunn, 907-297-3103
Manager, Board and Investor
Relations
investors@acsalaska.com
or
Media Contact:
Hannah
Blankenship, 907-564-1326
Associate Manager, Corporate Communications
Hannah.Blankenship@acsalaska.com
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