- Increased total revenue 3.6% year over year, driven by 12.1%
fiber and broadband growth to business customers
- Continued investment delivers total fiber miles to over
155K, including expansion with wireless carriers and fiber to the
home
- Reported Net Income attributable to Alaska Communications of
$2.4 million, and Adjusted Free Cash Flow of $8.6 million
- Increased Adjusted EBITDA to $16.5 million from $13.9
million year over year
- Driven by market demand, the first Azure Stack Hub in Alaska
to be located in Company data center
- Reaffirms guidance despite COVID-19 impacts
Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today
reported financial results for the second quarter ended June 30,
2020.
“During the second quarter 2020, our superior network and
established partnerships delivered strong performance despite the
pandemic, led by Business and Wholesale broadband growth of 12.1%,
nearly all of which is fiber based revenue. We continue to
strategically augment our existing fiber-based network, which
includes the North Slope, a complete ring around the state of
Alaska, the Pacific Northwest and two under-sea cables to the Lower
48.”
“In addition, we are strengthening our fiber infrastructure with
several strategic initiatives to drive long-term growth. With
interest from anchor customers, we will be the first Alaska
provider of locally hosted Microsoft Azure Stack Hub cloud
services, enriching users’ computing experience with greater
flexibility, increased reliability and lower latency. Leveraging
our marine assets, we won our first subsea 100Gb IRU to a carrier
customer in April. In addition, we are enhancing our consumer
platform, and with our fixed-wireless CAF II program, we now offer
high-speed broadband access to over 16,000 rural Alaskans,” said
Bill Bishop, president & CEO.
Three Months Ended June 30, 2020 Compared to 2019
- Total revenue was $59.5 million, compared to $57.4 million, an
increase of 3.6%.
- Business and wholesale revenue was $40.0 million, compared to
$37.0 million, up 8.1%.
- Consumer revenue was $9.2 million, compared to $9.3 million, a
decrease of 1.8%.
- Regulatory revenue was $10.3 million, compared to $11.0
million, a decrease of 6.9%.
- Operating expenses were $53.4 million, compared to $54.2
million.
- Operating income was $6.1 million, compared to $3.2
million.
- Net income attributable to Alaska Communications was $2.4
million, compared to $35 thousand.
- Capital expenditures were $10.9 million, compared to $11.9
million, or excluding prefunded projects $7.8 million, compared to
$11.9 million.
- Adjusted EBITDA was $16.5 million, compared to $13.9
million.
- Adjusted Free Cash Flow was $8.6 million, compared with
Adjusted Free Cash Outflow of $3.1 million, or excluding prefunded
projects $5.4 million, compared to an outflow of $3.1 million.
Balance Sheet Highlights
- Cash was $46.0 million at June 30, 2020, compared to $28.3
million at December 31, 2019.
- Net debt was $131.7 million at June 30, 2020, compared to
$153.8 million at December 31, 2019.
Six Months Ended June 30, 2020 Compared to 2019
- Total revenue was $117.7 million, compared to $114.3 million,
an increase of 3.0%.
- Business and wholesale revenue was $78.8 million, compared to
$73.5 million, up 7.2%.
- Consumer revenue was $18.3 million, compared to $18.5 million,
a decrease of 1.2%.
- Regulatory revenue was $20.6 million, compared to $22.2
million, a decrease of 7.3%.
- Operating expenses were $105.8 million, compared to $105.1
million.
- Operating income was $11.9 million, compared to $9.2
million.
- Net income attributable to Alaska Communications was $4.8
million, compared to $0.3 million.
- Capital expenditures were $18.4 million, compared to $20.4
million, or excluding prefunded projects $14.7 million, compared to
$20.4 million.
- Adjusted EBITDA was $32.6 million, compared to $29.1
million.
- Adjusted Free Cash Flow was $18.7 million, compared with
Adjusted Free Cash Outflow of $0.1 million, or excluding prefunded
projects $11.2 million, compared to an outflow of $0.1
million.
Reconciliations of non-GAAP financial measures to GAAP financial
measures can be found in tables at the end of this release and on
the Company’s website at http://www.alsk.com in the investment data
section.
Laurie Butcher, Alaska Communications’ chief financial officer,
said, “We are pleased with our revenue performance, reflecting the
success of our sales and delivery teams in key strategic verticals.
Regarding capital spending, we have taken a conservative approach
in the first half of the year. As our fiber growth projects began
to ramp up during the second quarter, we expect capital spending on
growth projects to increase in the latter half of the year
resulting in total year expenditures consistent with our 2020
guidance. To date, we are encouraged we have not seen material
negative impacts from COVID-19. On the contrary, we benefited from
the CARES Act determination to accelerate AMT tax refunds, which
will positively impact adjusted free cash flow in 2020. While the
long-term impact of COVID remains unclear, we are confident in our
strategic plan for growth and affirm our 2020 guidance.”
Special Dividend Paid
On June 18, 2020, Alaska Communications paid a one-time cash
dividend of $0.09 per share, or $4.8 million, to shareholders of
record as of April 20, 2020. This reflects the board’s confidence
in the company’s strong performance over the past several years and
management’s ability to drive business and wholesale revenue
growth.
Russell 2000 and 3000 Index
Effective June 29, 2020, Alaska Communications was added as a
member of the small-cap Russell 2000® Index, the broad-market
Russell 3000® Index and the appropriate growth and value
indexes.
2020 Guidance
Management maintains its 2020 financial guidance as follows:
- Total Revenue to be between $232 million and $237 million
- Adjusted EBITDA to be between $63 million and $65 million
- Capital Expenditures excluding prefunded projects to be between
$39 million and $43 million
- Adjusted Free Cash Flow excluding prefunded projects to be
between $8 million and $10 million
Conference Call
The Company will host a conference call and live webcast on
Thursday, August 6, 2020 at 2:00 p.m. Eastern Time to discuss the
results. Parties in the United States and Canada can access the
call at 1-800-437-2398 and enter pass code 9971095. All other
parties can access the call at 1-323-289-6576 and use the same
code.
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 a period of 30
days. A telephonic replay of the conference call will also be
available two hours after the call and will run until September 5,
2020 at 5:00 p.m. Eastern Time. To hear the replay, parties in the
U.S. and Canada can call 1-888-203-1112 and enter pass code
9971095. All other parties can call 1-719-457-0820 and enter pass
code 9971095.
About Alaska
Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of
advanced broadband and managed IT 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.
Revenue Category
Definitions
Growth Revenues are defined as business broadband, managed IT
services, equipment sales and installations, wholesale broadband
and consumer broadband. Legacy Revenues are defined as business
voice and other, Wholesale voice and other, consumer voice and
other, and Access. CAF II Revenues are defined as high cost
support.
Non-GAAP Measures
In an effort to provide investors with additional information
regarding our financial results, we have provided certain non-GAAP
financial information, including Adjusted EBITDA, Adjusted Free
Cash Flow and Net Debt. Adjusted EBITDA eliminates the effects of
period to period changes in costs that are not directly
attributable to the underlying performance of the Company’s
business operations and is used by Management and the Company’s
Board of Directors to evaluate current operating financial
performance, analyze and evaluate strategic and operational
decisions and better evaluate comparability between periods.
Adjusted Free Cash Flow is a non-GAAP liquidity measured used by
Management and the Company’s Board of Directors to assess the
Company’s ability to generate cash and plan for future operating
and capital actions. Adjusted EBITDA and Adjusted Free Cash Flow
are common measures utilized by our peers (other telecommunications
companies) and we believe they provide useful information to
investors and analysts about the Company’s operating results,
financial condition and cash flows. Net Debt provides Management
and the Company’s Board of Directors with a measure of the
Company’s current leverage position. The definition and computation
of these non-GAAP measures are provided on Schedules 4, 6 and 9 to
this press release. Adjusted EBITDA and Adjusted Free Cash Flow
should not be considered a substitute for Net Income, 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 in
the tables in this release. Other companies may not calculate
non-GAAP measures in the same manner as Alaska Communications. The
Company does not provide reconciliations of guidance for Adjusted
EBITDA to Net Income, and Adjusted Free Cash Flow to Net Cash from
Operating Activities, in reliance on the unreasonable efforts
exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The
Company does not forecast certain items required to develop the
comparable GAAP financial measures. These items are charges and
benefits for uncollectible accounts, certain other non-cash
expenses, unusual items typically excluded from Adjusted EBITDA and
Adjusted Free Cash Flow, and changes in operating assets and
liabilities (generally the most significant of these items,
representing cash inflows of $21.2 million in the six-month period
of 2020).
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 the Company’s control. Such
factors include, without limitation changes in technology and
related standards, the impacts of the COVID-19 pandemic on the
economy of Alaska and on the Company, the impact of natural or
man-made disasters and accidents, Federal and Alaska Universal
Service Fund changes and our current and historical compliance with
the obligations of those programs, structural declines for voice
and other legacy services, maintenance or IT issues, third-party
intellectual property claims, potential pension shortfalls, the
success or failure of future strategic transactions, funding
through the rural health care universal service support mechanism
and our ability to comply and our history of compliance with the
regulatory requirements to receive those support payments, our
ability to service our debt and refinance as required, adverse
economic conditions, our success in providing broadband services on
the North Slope and Western Alaska, 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, employee benefit costs, our ability to
control other operating costs, disruption of our supplier’s
provisioning of critical products or services, the actions of
activist shareholders, changes in Company's relationships with
large customers, unforeseen changes in public policies, regulatory
changes, our internal control over financial reporting, and changes
in accounting standards or policies, which could affect reported
financial results. For further information regarding risks and
uncertainties associated with the Company’s 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.
Schedule 1 ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. CONSOLIDATED SCHEDULE OF OPERATIONS (Unaudited,
In Thousands Except Per Share Amounts) Three Months
Ended Six Months Ended June 30, June 30,
2020
2019
2020
2019
Operating revenues
$
59,456
$
57,395
$
117,722
$
114,304
Operating expenses: Cost of services and sales (excluding
depreciation and amortization)
27,134
26,356
54,248
51,983
Selling, general & administrative
16,225
18,718
31,619
35,374
Depreciation and amortization
10,033
9,200
19,873
17,879
Loss (gain) on disposal of assets, net
14
(95
)
100
(97
)
Total operating expenses
53,406
54,179
105,840
105,139
Operating income
6,050
3,216
11,882
9,165
Other income and (expense): Interest expense
(2,739
)
(3,096
)
(5,698
)
(6,152
)
Loss on extinguishment of debt
-
(31
)
-
(2,830
)
Interest income
68
95
143
170
Other income (expense), net
33
(122
)
414
-
Total other income and (expense)
(2,638
)
(3,154
)
(5,141
)
(8,812
)
Income before income tax expense
3,412
62
6,741
353
Income tax expense
(996
)
(46
)
(1,956
)
(144
)
Net income
2,416
16
4,785
209
Less net loss attributable to noncontrolling interest
(24
)
(19
)
(42
)
(53
)
Net income attributable to Alaska Communications
$
2,440
$
35
$
4,827
$
262
Net income per share attributable to Alaska Communications:
Net income applicable to common shares
$
2,440
$
35
$
4,827
$
262
Basic
$
0.05
$
0.00
$
0.09
$
0.00
Diluted
$
0.04
$
0.00
$
0.09
$
0.00
Weighted average shares outstanding: Basic
53,976
53,799
53,799
53,591
Diluted
54,342
54,569
54,295
54,599
Schedule 2 ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. CONSOLIDATED BALANCE SHEETS (Unaudited, In
Thousands Except Per Share Amounts) June 30,
December 31, Assets
2020
2019
Current assets: Cash and cash equivalents
$
44,379
$
26,662
Restricted cash
1,628
1,631
Short-term investments
134
134
Accounts receivable, net of allowance of $4,117 and $4,627
27,989
34,354
Materials and supplies
8,056
8,900
Prepayments and other current assets
13,591
9,617
Total current assets
95,777
81,298
Property, plant and equipment
1,436,987
1,424,904
Less: accumulated depreciation and amortization
(1,055,336
)
(1,042,546
)
Property, plant and equipment, net
381,651
382,358
Operating lease right of use assets
88,232
80,991
Other assets
10,191
12,598
Total assets
$
575,851
$
557,245
Liabilities and Stockholders' Equity Current
liabilities: Current portion of long-term obligations
$
9,059
$
8,906
Accounts payable, accrued and other current liabilities
43,929
39,108
Advance billings and customer deposits
3,639
3,761
Operating lease liabilities - current
10,065
2,795
Total current liabilities
66,692
54,570
Long-term obligations, net of current portion
163,589
167,476
Deferred income taxes
5,497
4,403
Operating lease liabilities - noncurrent
79,117
78,767
Other long-term liabilities, net of current portion
89,268
78,520
Total liabilities
404,163
383,736
Commitments and contingencies Alaska Communications stockholders'
equity: Common stock, $.01 par value; 145,000 authorized
548
541
Treasury stock, 1,000 shares at cost
(1,812
)
(1,812
)
Additional paid in capital
162,240
161,844
Retained earnings
15,342
15,367
Accumulated other comprehensive loss
(5,434
)
(3,277
)
Total Alaska Communications stockholders' equity
170,884
172,663
Noncontrolling interest
804
846
Total stockholders' equity
171,688
173,509
Total liabilities and stockholders' equity
$
575,851
$
557,245
Schedule 3 ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited,
In Thousands) Three Months Ended Six Months
Ended June 30, June 30,
2020
2019
2020
2019
Cash Flows from Operating Activities: Net income
$
2,416
$
16
$
4,785
$
209
Adjustments to reconcile net income to net cash providedby
operating activities: Depreciation and amortization
10,033
9,200
19,873
17,879
Loss (gain) on disposal of assets, net
14
(95
)
100
(97
)
Amortization of debt issuance costs and debt discount
294
303
644
606
Loss on extinguishment of debt
-
31
-
2,830
Amortization of deferred capacity revenue
(1,711
)
(1,133
)
(3,071
)
(2,259
)
Stock-based compensation
409
(9
)
718
489
Deferred income tax expense
996
46
1,950
138
Charge for uncollectible accounts
(165
)
665
(394
)
(32
)
Amortization of ROU asset
679
583
1,257
1,148
Other non-cash (income) expense, net
(33
)
123
(66
)
244
Changes in operating assets and liabilities
11,678
3,128
21,176
7,178
Net cash provided by operating activities
24,610
12,858
46,972
28,333
Cash Flows from Investing Activities: Capital expenditures
(10,949
)
(11,869
)
(18,412
)
(20,432
)
Capitalized interest
(315
)
(254
)
(631
)
(609
)
Change in unsettled capital expenditures
3,057
570
(702
)
(551
)
Proceeds on sale of assets
-
19
-
19
Net cash used by investing activities
(8,207
)
(11,534
)
(19,745
)
(21,573
)
Cash Flows from Financing Activities: Repayments of
long-term debt
(1,138
)
(10
)
(4,378
)
(171,768
)
Proceeds from the issuance of long-term debt
-
-
-
180,000
Debt issuance costs and discounts
-
(24
)
-
(2,683
)
Cash paid for debt extinguishment
-
(30
)
-
(1,252
)
Payment of cash dividend on common stock
(4,820
)
-
(4,820
)
-
Payment of withholding taxes on stock-based compensation
-
(143
)
(439
)
(448
)
Purchases of treasury stock
-
(149
)
-
(149
)
Proceeds from issuance of common stock
124
106
124
106
Net cash (used) provided by financing activities
(5,834
)
(250
)
(9,513
)
3,806
Change in cash, cash equivalents and restricted cash
10,569
1,074
17,714
10,566
Cash, cash equivalents and restricted cash, beginning of
period
35,438
24,477
28,293
14,985
Cash, cash equivalents and restricted cash, end of period
$
46,007
$
25,551
$
46,007
$
25,551
Supplemental Cash Flow Data:
Interest paid
$
2,789
$
3,039
$
5,708
$
6,114
Dividends payable at June 30,
2020
$
32
$
-
$
32
$
-
Income taxes paid, net
$
-
$
-
$
-
$
10
Schedule 4 ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED EBITDA (Unaudited, In Thousands)
Three Months Ended Six Months Ended June 30,
June 30,
2020
2019
2020
2019
Net income
$
2,416
$
16
$
4,785
$
209
Add (subtract): Interest expense
2,739
3,096
5,698
6,152
Loss on extinguishment of debt
-
31
-
2,830
Interest income
(68
)
(95
)
(143
)
(170
)
Depreciation and amortization
10,033
9,200
19,873
17,879
Other (income) expense, net
(33
)
122
(414
)
-
Loss (gain) on disposal of assets, net
14
(95
)
100
(97
)
Income tax expense
996
46
1,956
144
Stock-based compensation
409
(9
)
718
489
Cash severance expense
-
1,595
-
1,595
Net loss attributable to noncontrolling interest
24
19
42
53
Adjusted EBITDA
$
16,530
$
13,926
$
32,615
$
29,084
NonGAAP Measures: The Company provides certain non-GAAP
financial information, including Adjusted EBITDA, Adjusted Free
Cash Flow and Net Debt. Adjusted EBITDA eliminates the effects of
period to period changes in costs that are not directly
attributable to the underlying performance of the Company’s
business operations and is used by Management and the Company’s
Board of Directors to evaluate current operating financial
performance, analyze and evaluate strategic and operational
decisions and better evaluate comparability between periods.
Adjusted Free Cash Flow is a non-GAAP liquidity measure used by
Management to assess the Company’s ability to generate cash and
plan for future operating and capital actions. Adjusted EBITDA and
Adjusted Free Cash Flow are common measures utilized by our peers
(other telecommunications companies) and we believe they provide
useful information to investors and analysts about the Company’s
operating results, financial condition and cash flows. Net Debt
provides Management and the Board of Directors with a measure of
the Company’s current leverage position.
The Company does not provide reconciliations of guidance for
Adjusted EBITDA to Net Income, and Adjusted Free Cash Flow to Net
Cash Provided by Operating Activities, in reliance on the
unreasonable efforts exception provided under Item 10(e)(1)(i)(B)
of Regulation S-K. The Company does not forecast certain items
required to develop the comparable GAAP financial measures. These
items are charges and benefits for uncollectible accounts, certain
other non-cash expenses, unusual items typically excluded from
Adjusted EBITDA and Adjusted Free Cash Flow, and changes in
operating assets and liabilities (generally the most significant of
these items, representing cash inflows of $21.2 million in the
six-month period ended June 30, 2020).
Adjusted EBITDA and Adjusted Free Cash Flow are not GAAP measures
and should not be considered a substitute for net income, net cash
provided by operating activities, or net cash provided or used.
Adjusted EBITDA as computed above is not consistent with the
definition of Consolidated EBITDA referenced in our 2019 Senior
Credit Facility, and other companies may not calculate Non-GAAP
measures in the same manner we do.
Adjusted EBITDA is defined as net income before interest expense
and income, loss on extinguishment of debt, depreciation and
amortization, other income and expense, gain or loss on asset
purchases or disposals, provision for income taxes, stock-based
compensation, and net loss attributable to noncontrolling interest.
Schedule 5 ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITES TO
ADJUSTED FREE CASH FLOW (Unaudited, In Thousands)
Three Months Ended Six Months Ended June 30,
June 30,
2020
2019
2020
2019
Net cash provided by operating activities
$
24,610
$
12,858
$
46,972
$
28,333
Adjustments to reconcile net cash provided by operating activities
to adjusted free cash flow: Capital expenditures excluding
prefunded projects
(7,827
)
(11,869
)
(14,663
)
(20,432
)
Capital expenditures for prefunded projects
(3,122
)
-
(3,749
)
-
Milestone payments received for prefunded projects
6,640
-
11,780
-
Deferred cost of sales for prefunded projects
175
-
175
-
Amortization of revenue for prefunded projects
(482
)
-
(709
)
-
Amortization of deferred capacity revenue
1,711
1,133
3,071
2,259
Amortization of GCI capacity revenue
(516
)
(516
)
(1,032
)
(1,027
)
Amortization of debt issuance costs and debt discount
(294
)
(303
)
(644
)
(606
)
Interest expense
2,739
3,096
5,698
6,152
Interest paid
(2,789
)
(3,039
)
(5,708
)
(6,114
)
Interest income
(68
)
(95
)
(143
)
(170
)
Deferred income tax expense
(996
)
(46
)
(1,950
)
(138
)
Income tax expense
996
46
1,956
144
Income taxes paid, net
-
-
-
(10
)
Charge for uncollectible
accounts
165
(665
)
394
32
Amortization of ROU asset
(679
)
(583
)
(1,257
)
(1,148
)
Other (income) expense, net
(33
)
122
(414
)
-
Net loss attributable to
noncontrolling interest
24
19
42
53
Other non-cash income (expense),
net
33
(123
)
66
(244
)
Changes in operating assets and
liabilities
(11,678
)
(3,128
)
(21,176
)
(7,178
)
Adjusted free cash flow
$
8,609
$
(3,093
)
$
18,709
$
(94
)
Schedule 6 ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED FREE CASH FLOW (Unaudited, In Thousands)
Three Months Ended Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Adjusted EBITDA
$
16,530
$
13,926
$
32,615
$
29,084
Less: Capital expenditures excluding prefunded projects
(7,827
)
(11,869
)
(14,663
)
(20,432
)
Amortization of GCI capacity revenue
(516
)
(516
)
(1,032
)
(1,027
)
Cash severance expense
-
(1,595
)
-
(1,595
)
Income taxes paid, net
-
-
-
(10
)
Interest paid
(2,789
)
(3,039
)
(5,708
)
(6,114
)
5,398
(3,093
)
11,212
(94
)
Impact of prefunded projects: Capital expenditures for prefunded
projects
(3,122
)
-
(3,749
)
-
Milestone payments received for prefunded projects
6,640
-
11,780
-
Deferred cost of sales for prefunded projects
175
-
175
-
Amortization of revenue for prefunded projects
(482
)
-
(709
)
-
3,211
-
7,497
-
Adjusted free cash flow*
$
8,609
$
(3,093
)
$
18,709
$
(94
)
* Quarterly Adjusted Free Cash Flow fluctuates and should not be
viewed as an indicator of annual performance. Onetime events,
seasonality of capital spend and the timing of interest payments
may result in negative Adjusted Free Cash Flow in one or more
quarters.
NonGAAP Measures:Adjusted Free Cash Flow is
a non-GAAP liquidity measure and is defined as Adjusted EBITDA,
less recurring operating cash requirements which include capital
expenditures, cash income taxes refunded or paid, cash interest
paid, amortization of GCI capacity revenue, cash severance expense
for the Company's former Chief Executive Officer, and cash receipts
and payments, deferred costs and amortized revenue and expense
associated with certain prefunded special projects as defined in
the 2019 Senior Credit Facility. Amortization of deferred revenue
associated with our interconnection agreement with GCI is excluded
from Adjusted Free Cash Flow because no cash was received by the
Company in connection with this agreement. Amortization of all
other deferred revenue, including that associated with other IRU
capacity arrangements, is included in Adjusted Free Cash Flow
because cash was received by the Company, typically at contract
inception, and is being recognized as revenue over the term of the
relevant agreement. See Schedule 3 for Net cash provided by
operating activities, Net cash used by investing activities, and
Net cash (used) provided by financing activities.
Schedule 7
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
REVENUE BY CUSTOMER GROUP (Unaudited, In Thousands)
Three Months Ended Six Months Ended June
30, June 30,
2020
2019
2020
2019
Business and wholesale revenue Business broadband
$
16,258
$
15,437
$
31,897
$
30,704
Business voice and other
7,180
7,241
14,416
14,242
Managed IT services
1,300
1,517
2,527
3,176
Equipment sales and installations
1,192
1,008
2,606
1,888
Wholesale broadband
12,750
10,443
24,729
20,705
Wholesale voice and other
1,344
1,392
2,632
2,818
Total business and wholesale revenue
40,024
37,038
78,807
73,533
Growth in business and wholesale
8.1
%
7.2
%
Consumer revenue Broadband
6,796
6,694
13,488
13,162
Voice and other
2,380
2,647
4,829
5,380
Total consumer revenue
9,176
9,341
18,317
18,542
Total business, wholesale, and consumer revenue
49,200
46,379
97,124
92,075
Growth in business, wholesale and consumer revenue
6.1
%
5.5
%
Growth in broadband revenue
9.9
%
8.6
%
Regulatory revenue Access
5,333
6,093
10,751
12,382
High cost support
4,923
4,923
9,847
9,847
Total regulatory revenue
10,256
11,016
20,598
22,229
Total revenue
$
59,456
$
57,395
$
117,722
$
114,304
Growth in total revenue
3.6
%
3.0
%
Growth Revenues: Business broadband, Managed IT services,
Equipment sales and installations, Wholesale broadband, and
Consumer broadband Legacy Revenues: Business voice and
other, Wholesale voice and other, Consumer voice and other, and
Access CAF II Revenues: High Cost Support
Schedule 8
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC. KEY
OPERATING STATISTICS (Unaudited) Three Months
Ended June 30, March 31 June 30,
2020
2020
2019
Voice: Business access lines
66,939
67,406
68,978
Consumer access lines
21,769
22,227
24,302
Voice ARPU business
$
27.68
$
27.14
$
26.84
Voice ARPU consumer
$
34.35
$
34.11
$
33.96
Broadband: Business connections
14,661
14,689
15,141
Consumer connections
32,115
31,796
32,411
Broadband ARPU business
$
369.14
$
352.28
$
339.75
Broadband ARPU consumer
$
70.69
$
70.25
$
68.15
Monthly Average Churn: Business voice
0.8
%
0.9
%
1.0
%
Consumer broadband
2.6
%
2.3
%
2.8
%
Consumer voice
1.0
%
1.1
%
1.5
%
Schedule 9 ALASKA COMMUNICATIONS SYSTEMS GROUP,
INC. LONG TERM DEBT AND NET DEBT (Unaudited, In
Thousands) June 30, December 31,
2020
2019
2019 senior secured credit facility due 2024
$ 173,396
$ 177,750
Debt discount - 2019 senior secured credit facilities due 2024
(1,863)
(2,234)
Debt issuance costs - 2019 senior secured credit facilities due
2024
(1,590)
(1,863)
Capital leases and other long-term obligations
2,705
2,729
Total debt
172,648
176,382
Less current portion
(9,059)
(8,906)
Long-term obligations, net of current portion
$ 163,589
$ 167,476
Total debt
$ 172,648
$ 176,382
Plus debt discounts and debt issuance costs
3,453
4,097
Gross debt
176,101
180,479
Cash and cash equivalents
(44,379)
(26,662)
Net debt
$ 131,722
$ 153,817
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200805005973/en/
Media Contact Heather Cavanaugh, 907-564-7722 Director, External
Affairs and Corporate Communications
Investor Contact Tiffany Smith, 907-564-7556 Manager, Board and
Investor Relations investors@acsalaska.com
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