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Jun 10, 2021
Alaska Communications Expands Connectivity Offerings With Low Earth Orbit Satellites


ANCHORAGE, Alaska--(BUSINESS WIRE)--Jun. 10, 2021-- Alaska Communications (NASDAQ: ALSK) has signed a Distribution Partner Agreement with OneWeb, the global communications network powered from space, to expand the company’s connectivity solutions across Alaska.

Through the agreement, Alaska Communications will sell OneWeb’s low Earth orbit (LEO) satellite service to its customers and use OneWeb’s infrastructure for critical middle mile connections. 

“We’re pleased to work with OneWeb to offer LEO services in Alaska,” said Bill Bishop, president and CEO of Alaska Communications. “We see this as a milestone moment in our ability to offer low-latency, high-speed service across Alaska, particularly in rural areas.”

LEO satellites deliver fiber-like connectivity performance to areas that have been inaccessible via terrestrial options. Businesses, local governments, schools, healthcare providers and resource developers need high speed, low latency connections to keep up with growing demands, like video conferencing, telehealth, cloud computing and more.

“We see this solution as an important piece of our toolkit,” said Bishop. “We’re known for creating custom solutions to meet our customer’s needs. Collaborating with OneWeb augments our capabilities in serving our business and government customers.”

“Alaska Communications has unparalleled experience delivering communications to Alaskans for more than 100 years and uniquely understands where the need is across the state,” said Neil Masterson, CEO of OneWeb. “We are thrilled to add our network to their offering and to be working together to see all of Alaska connected.”

LEO services through Alaska Communications and OneWeb will be available for service in the fourth quarter of 2021.

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.

About OneWeb

OneWeb is a global communications network powered from space, headquartered in London, enabling connectivity for governments, businesses, and communities. It is implementing a constellation of Low Earth Orbit satellites with a network of global gateway stations and a range of user terminals to provide an affordable, fast, high-bandwidth and low-latency communications service, connected to the IoT future and a pathway to 5G for everyone, everywhere. Find out more at http://www.oneweb.world

Alaska Communications Media Contact:
Heather Marron, 907-564-1326
Manager, Corporate Communications

Investor Contact:
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

OneWeb Media Contact:
Katie Dowd
[email protected]
Director, Communications

Source: Alaska Communications

May 11, 2021
Alaska Communications Extends Safety Net to Alaskans Impacted by Pandemic


ANCHORAGE, Alaska--(BUSINESS WIRE)--May 11, 2021-- Help is on the way for Alaskans struggling to afford broadband. Alaska Communications (NASDAQ: ALSK) will participate in the Emergency Broadband Benefit Program, which will help households struggling financially during the pandemic.

The Federal Communications Commission recently established the Emergency Broadband Benefit Program using COVID-19 relief funds.

The program will give eligible Alaska households a discount on broadband service of up to $75 a month.

“The pandemic demonstrated just how essential broadband access is for school, work, healthcare and quality of life,” said Bill Bishop, president and CEO of Alaska Communications. “We’re proud to offer our customers an affordable option for unlimited internet service; however, we don’t want a customer’s ability to pay to be the barrier. We’re proud to participate in the Emergency Broadband Benefit Program, which will help reduce the financial burden on Alaskans.”

As a participating provider, the company will receive reimbursement for delivering qualifying broadband services to eligible households.

A household is eligible if one member of the household: qualifies for the Lifeline program, receives government assistance such as free and reduce-priced school lunch or a Pell Grant, or experienced a substantial loss of income due to the pandemic.

Applications for the program open May 12, 2021.

Learn more at www.AlaskaCommunications.com/EBB.

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.

Media Contact:
Heather Marron, 907-564-1326
Manager, Corporate Communications

Investor Contact:
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications

May 06, 2021
Alaska Communications Reports First Quarter 2021 Results


  • Reported total revenue of $60.7 Million, an increase of 4.1% year over year
  • Reported Net Income attributable to Alaska Communications of $0.6 Million
  • Reported Adjusted EBITDA of $15.4 Million and Adjusted Free Cash Flow of $7.4 Million
  • Completed Oregon-based prefunded fiber project in April

ANCHORAGE, Alaska--(BUSINESS WIRE)--May 6, 2021-- Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today reported financial results for the first quarter of 2021.

“We are pleased with our first quarter 2021 results, showing revenue growth year over year in business and wholesale, consumer and regulatory. Total broadband revenues increased 4.4% year over year, and growth revenues continued to outpace declining legacy revenues. Our fiber footprint and market opportunities continue to increase. In April, we completed our Oregon-based prefunded fiber project, connecting our landing station on the Oregon coast to the main Pacific Northwest fiber corridor. We are currently in the final testing phase of this project. Additionally, we continue to see success in the natural resource sector, with a significant new customer win in the mining industry in Alaska.

“With the approval from our shareholders of the merger agreement, we continue to move forward with the transaction with ATN International, Inc. We anticipate receiving the remaining regulatory approvals over the coming months and expect to close the transaction mid-year,” said Bill Bishop, president & CEO.

First Quarter 2020 Compared to First Quarter 2019

  • Total revenue was $60.7 million, compared to $58.3 million, an increase of 4.1%.
    • Business and wholesale revenue was $41.0 million, compared to $38.8 million, up 5.6%.
    • Consumer revenue was $9.2 million, compared to $9.1 million, an increase of 0.4%.
    • Regulatory revenue was $10.5 million, compared to $10.3 million, an increase of 1.7%.
  • Operating expenses were $57.7 million, compared to $52.4 million.
  • Operating income was $3.0 million, compared to $5.8 million.
  • Net income attributable to Alaska Communications was $0.6 million, compared to $2.4 million.
  • Capital expenditures were $6.9 million, compared to $7.5 million, or excluding prefunded projects were $6.9 million, compared to $6.8 million.
  • Adjusted EBITDA was $15.4 million, compared to $16.1 million.
  • Adjusted Free Cash Flow was $7.4 million, compared to $10.1 million, or excluding prefunded projects was $5.8 million in both periods.

Balance Sheet Highlights

  • Cash was $23.4 million at March 31, 2021, compared to $21.0 million at December 31, 2020.
  • Net debt was $147.2 million at March 31, 2021, compared to $151.9 million at December 31, 2020.

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, “Our first quarter results are in line with our business plan, showing year over year revenue growth in all three of our business lines. Our total revenue showed growth of 4.1%, driven largely by broadband. Net income is lower year over year due in part to the transaction costs incurred in the first quarter of this year. I am pleased with our performance for the quarter, and the foundation that it sets for the year.

Conference Call

Due to the pending transaction, the Company will not hold a conference call.

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 $4.8 million in the three-month period of 2021).

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
March 31,

2021

 

2020

   
   
Operating revenues  

$

60,668

 

 

$

58,266

 

   
Operating expenses:    
Cost of services and sales (excluding depreciation and amortization)  

 

27,366

 

 

 

27,114

 

Selling, general & administrative  

 

18,289

 

 

 

15,394

 

Transaction and termination costs  

 

923

 

 

 

-

 

Depreciation and amortization  

 

11,048

 

 

 

9,840

 

Loss on disposal of assets, net  

 

84

 

 

 

86

 

   
Total operating expenses  

 

57,710

 

 

 

52,434

 

   
Operating income  

 

2,958

 

 

 

5,832

 

   
Other income and (expense):    
Interest expense  

 

(2,652

)

 

 

(2,959

)

Interest income  

 

3

 

 

 

75

 

Other income, net  

 

393

 

 

 

381

 

Total other income and (expense)  

 

(2,256

)

 

 

(2,503

)

   
Income before income tax expense  

 

702

 

 

 

3,329

 

   
Income tax expense  

 

(118

)

 

 

(960

)

   
Net income  

 

584

 

 

 

2,369

 

   
Less net loss attributable to noncontrolling interest  

 

(22

)

 

 

(18

)

   
Net income attributable to Alaska Communications  

$

606

 

 

$

2,387

 

   
Net income per share attributable to Alaska Communications:    
Net income applicable to common shares  

$

606

 

 

$

2,387

 

   
Basic  

$

0.01

 

 

$

0.04

 

Diluted  

$

0.01

 

 

$

0.04

 

   
Weighted average shares outstanding:    
Basic  

 

54,145

 

 

 

53,186

 

Diluted  

 

54,872

 

 

 

54,237

 

   

Schedule 2

     
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
     
  March 31,   December 31,
Assets  

2021

 

2020

     
Current assets:    
Cash and cash equivalents  

$

22,114

 

 

$

19,644

 

Restricted cash  

 

1,326

 

 

 

1,326

 

Short-term investments  

 

434

 

 

 

434

 

Accounts receivable, net of allowance of $4,290 and $4,060  

 

40,284

 

 

 

41,893

 

Materials and supplies  

 

9,093

 

 

 

7,624

 

Prepayments and other current assets  

 

7,217

 

 

 

6,404

 

Total current assets  

 

80,468

 

 

 

77,325

 

     
Property, plant and equipment  

 

1,457,458

 

 

 

1,452,943

 

Less: accumulated depreciation and amortization  

 

(1,070,449

)

 

 

(1,062,027

)

Property, plant and equipment, net  

 

387,009

 

 

 

390,916

 

     
Operating lease right of use assets  

 

88,135

 

 

 

89,821

 

Other assets  

 

11,873

 

 

 

11,370

 

Total assets  

$

567,485

 

 

$

569,432

 

     
Liabilities and Stockholders' Equity    
Current liabilities:    
Current portion of long-term obligations  

$

9,071

 

 

$

9,067

 

Accounts payable, accrued and other current liabilities  

 

51,355

 

 

 

49,700

 

Operating lease liabilities - current  

 

3,276

 

 

 

3,392

 

Total current liabilities  

 

63,702

 

 

 

62,159

 

     
Long-term obligations, net of current portion  

 

157,630

 

 

 

159,641

 

Deferred income taxes  

 

6,109

 

 

 

5,846

 

Operating lease liabilities - noncurrent  

 

79,631

 

 

 

81,103

 

Other long-term liabilities, net of current portion  

 

93,821

 

 

 

94,764

 

Total liabilities  

 

400,893

 

 

 

403,513

 

Commitments and contingencies    
Alaska Communications stockholders' equity:    
Common stock, $.01 par value; 145,000 authorized  

 

553

 

 

 

549

 

Treasury stock, 1,000 shares at cost  

 

(1,812

)

 

 

(1,812

)

Additional paid in capital  

 

163,038

 

 

 

163,317

 

Retained earnings  

 

10,048

 

 

 

9,442

 

Accumulated other comprehensive loss  

 

(5,976

)

 

 

(6,340

)

Total Alaska Communications stockholders' equity  

 

165,851

 

 

 

165,156

 

Noncontrolling interest  

 

741

 

 

 

763

 

Total stockholders' equity  

 

166,592

 

 

 

165,919

 

     
Total liabilities and stockholders' equity  

$

567,485

 

 

$

569,432

 

     
Schedule 3
     
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, In Thousands)
     
  Three Months Ended
  March 31,
 

2021

 

2020

Cash Flows from Operating Activities:    
Net income  

$

584

 

 

$

2,369

 

Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  

 

11,048

 

 

 

9,840

 

Loss on disposal of assets, net  

 

84

 

 

 

86

 

Amortization of debt issuance costs and debt discount  

 

258

 

 

 

350

 

Amortization of deferred capacity revenue  

 

(1,741

)

 

 

(1,360

)

Stock-based compensation  

 

389

 

 

 

309

 

Deferred income tax expense  

 

118

 

 

 

954

 

Charge for uncollectible accounts  

 

396

 

 

 

(229

)

Amortization of ROU assets  

 

836

 

 

 

578

 

Other non-cash income, net  

 

(27

)

 

 

(33

)

Changes in operating assets and liabilities  

 

4,765

 

 

 

9,498

 

Net cash provided by operating activities  

 

16,710

 

 

 

22,362

 

     
Cash Flows from Investing Activities:    
Capital expenditures  

 

(6,902

)

 

 

(7,463

)

Capitalized interest  

 

(161

)

 

 

(316

)

Change in unsettled capital expenditures  

 

(4,248

)

 

 

(3,759

)

Net cash used by investing activities  

 

(11,311

)

 

 

(11,538

)

     
Cash Flows from Financing Activities:    
Repayments of long-term debt  

 

(2,265

)

 

 

(3,240

)

Payment of withholding taxes on stock-based compensation  

 

(664

)

 

 

(439

)

Net cash used by financing activities  

 

(2,929

)

 

 

(3,679

)

     
Change in cash, cash equivalents and restricted cash  

 

2,470

 

 

 

7,145

 

     
Cash, cash equivalents and restricted cash, beginning of period  

 

20,970

 

 

 

27,993

 

     
Cash, cash equivalents and restricted cash, end of period  

$

23,440

 

 

$

35,138

 

     
Supplemental Cash Flow Data:    
Interest paid  

$

2,544

 

 

$

2,919

 

Dividends payable at March 31  

$

16

 

 

$

4,852

 

Income taxes refunded  

$

(349

)

 

$

-

 

     
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED EBITDA
(Unaudited, In Thousands)
   
Three Months Ended
March 31,

2021

 

2020

   
Net income

$

584

 

 

$

2,369

 

Add (subtract):  
Interest expense

 

2,652

 

 

 

2,959

 

Interest income

 

(3

)

 

 

(75

)

Depreciation and amortization

 

11,048

 

 

 

9,840

 

Other income, net

 

(393

)

 

 

(381

)

Loss on disposal of assets, net

 

84

 

 

 

86

 

Income tax expense

 

118

 

 

 

960

 

Stock-based compensation

 

389

 

 

 

309

 

Transaction-related costs

 

923

 

 

 

-

 

Net loss attributable to noncontrolling interest

 

22

 

 

 

18

 

   
Adjusted EBITDA

$

15,424

 

 

$

16,085

 

   

Non-GAAP 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 $4.8 million in the three-month period ended March 31, 2021).

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, depreciation and amortization, other income and expense, gain or loss on asset purchases or disposals, provision for income taxes, stock-based compensation, transaction-related costs, and net loss attributable to noncontrolling interest.

Schedule 5

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
(Unaudited, In Thousands)
     
  Three Months Ended
  March 31,
 

2021

 

2020

     
Net cash provided by operating activities  

$

16,710

 

 

$

22,362

 

Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow:    
Capital expenditures excluding prefunded projects  

 

(6,902

)

 

 

(6,836

)

Capital expenditures for prefunded projects  

 

-

 

 

 

(627

)

Milestone payments received for prefunded projects  

 

2,500

 

 

 

5,140

 

Milestone payments made for prefunded projects  

 

(600

)

 

 

-

 

Deferred cost of sales for prefunded projects  

 

175

 

 

 

-

 

Amortization of revenue for prefunded projects  

 

(524

)

 

 

(227

)

Amortization of deferred capacity revenue  

 

1,741

 

 

 

1,360

 

Amortization of GCI capacity revenue  

 

(511

)

 

 

(516

)

Amortization of debt issuance costs and debt discount  

 

(258

)

 

 

(350

)

Interest expense  

 

2,652

 

 

 

2,959

 

Interest paid  

 

(2,544

)

 

 

(2,919

)

Interest income  

 

(3

)

 

 

(75

)

Deferred income tax expense  

 

(118

)

 

 

(954

)

Income tax expense  

 

118

 

 

 

960

 

Income taxes refunded  

 

349

 

 

 

-

 

Charge for uncollectible accounts  

 

(396

)

 

 

229

 

Amortization of ROU assets  

 

(836

)

 

 

(578

)

Transaction-related costs  

 

923

 

 

 

-

 

Other income, net  

 

(393

)

 

 

(381

)

Net loss attributable to noncontrolling interest  

 

22

 

 

 

18

 

Other non-cash income, net  

 

27

 

 

 

33

 

Changes in operating assets and liabilities  

 

(4,765

)

 

 

(9,498

)

Adjusted free cash flow  

$

7,367

 

 

$

10,100

 

     
Schedule 6
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED FREE CASH FLOW
(Unaudited, In Thousands)
     
  Three Months Ended
  March 31,
 

2021

 

2020

     
Adjusted EBITDA  

$

15,424

 

 

$

16,085

 

     
Less:    
Capital expenditures excluding prefunded projects  

 

(6,902

)

 

 

(6,836

)

Amortization of GCI capacity revenue  

 

(511

)

 

 

(516

)

Income taxes refunded  

 

349

 

 

 

-

 

Interest paid  

 

(2,544

)

 

 

(2,919

)

 

 

5,816

 

 

 

5,814

 

Impact of prefunded projects:    
Capital expenditures for prefunded projects  

 

-

 

 

 

(627

)

Milestone payments received for prefunded projects  

 

2,500

 

 

 

5,140

 

Milestone payments made for prefunded projects  

 

(600

)

 

 

-

 

Deferred cost of sales for prefunded projects  

 

175

 

 

 

-

 

Amortization of revenue for prefunded projects  

 

(524

)

 

 

(227

)

 

 

1,551

 

 

 

4,286

 

Adjusted free cash flow*  

$

7,367

 

 

$

10,100

 

     

* 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.

Non-GAAP 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 by financing activities.

See Schedule 5 for the reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.

Schedule 7

   

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

REVENUE BY CUSTOMER GROUP

(Unaudited, In Thousands)

   
Three Months Ended
March 31,

2021

 

2020

Business and wholesale revenue    
Business broadband  

$

16,242

 

 

$

15,639

Business voice and other  

 

7,137

 

 

 

7,236

Managed IT services  

 

1,217

 

 

 

1,227

Equipment sales and installations  

 

2,618

 

 

 

1,414

Wholesale broadband  

 

12,636

 

 

 

11,979

Wholesale voice and other  

 

1,121

 

 

 

1,288

   
Total business and wholesale revenue  

 

40,971

 

 

 

38,783

Growth in business and wholesale  

 

5.6

%

 
Consumer revenue  
Broadband

 

6,945

 

 

 

6,692

Voice and other  

 

2,230

 

 

 

2,449

   
Total consumer revenue  

 

9,175

 

 

 

9,141

   
Total business, wholesale, and consumer revenue  

 

50,146

 

 

 

47,924

Growth in business, wholesale and consumer revenue  

 

4.6

%

 

Growth in broadband revenue

4.4

%

 
   
Regulatory revenue  
Access

 

5,599

 

 

 

5,418

High cost support  

 

4,923

 

 

 

4,924

   
Total regulatory revenue  

 

10,522

 

 

 

10,342

   
Total revenue

$

60,668

 

 

$

58,266

Growth in total revenue  

 

4.1

%

 
   

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

Schedule 8

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.

LONG TERM DEBT AND NET DEBT

(Unaudited, In Thousands)

     
 

March 31,

 

December 31,

 

2021

 

2020

2019 senior secured credit facility due 2024  

$

166,646

 

 

$

168,896

 

  Debt discount - 2019 senior secured credit facilities due 2024  

 

(1,384

)

 

 

(1,523

)

  Debt issuance costs - 2019 senior secured credit facilities due 2024  

 

(1,222

)

 

 

(1,341

)

Capital leases and other long-term obligations  

 

2,661

 

 

 

2,676

 

Total debt  

 

166,701

 

 

 

168,708

 

  Less current portion  

 

(9,071

)

 

 

(9,067

)

Long-term obligations, net of current portion  

$

157,630

 

 

$

159,641

 

     
Total debt  

$

166,701

 

 

$

168,708

 

  Plus debt discounts and debt issuance costs  

 

2,606

 

 

 

2,864

 

Gross debt  

 

169,307

 

 

 

171,572

 

Cash and cash equivalents  

 

(22,114

)

 

 

(19,644

)

Net debt  

$

147,193

 

 

$

151,928

 

 

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
[email protected]

Source: Alaska Communications Systems Group, Inc.

Mar 25, 2021
Alaska Communications Supports 988 National Suicide Prevention Hotline with Implementation of 10-digit Dialing


ANCHORAGE, Alaska--(BUSINESS WIRE)--Mar. 25, 2021-- Beginning April 24, 2021, Alaska Communications (NASDAQ: ALSK) will begin a six-month transition to help customers prepare for 10-digit dialing for all phone calls, including local calls.

This change supports the introduction of 988 abbreviated dialing for the National Suicide Prevention Lifeline. The transition period will help customers prepare for 10-digit dialing, which will be required by the Federal Communications Commission (FCC) beginning Oct. 24, 2021.

“Changing the National Suicide Prevention Lifeline’s current hotline number into an easy-to-remember 3-digit dialing code will quickly connect people in crisis with life-saving resources,” said Bill Bishop, president and CEO of Alaska Communications. “This is a positive step for our community, as Alaska consistently sees some of the highest suicide rates in the country.”

To further support access to mental health resources, Alaska Communications will make a donation to the American Foundation for Suicide Prevention, Alaska Chapter.

988 will be available nationwide starting July 16, 2022. In the meantime, to reach the National Suicide Prevention Lifeline, call 1-800-273-8255 (TALK).

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.

Media Contact:
Heather Marron, 907-564-1326
Manager, Corporate Communications

Investor Contact:
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications

Mar 15, 2021
Alaska Communications Reports Fourth Quarter and Year-end 2020 Results


  • Reported total revenue of $240.6 million, exceeding guidance and an increase of 3.8% year over year
  • Delivered strong fourth quarter revenue, driven by 12.7% increase in business and wholesale revenue
  • Met Adjusted EBITDA and Adjusted Free Cash Flow guidance
  • Increased broadband service locations in underserved areas by approximately 33%
  • Alaska Communications shareholders approved transaction with ATN International

ANCHORAGE, Alaska--(BUSINESS WIRE)--Mar. 15, 2021-- Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today reported financial results for the fourth quarter and year ended December 31, 2020.

“We are pleased with our strong financial performance for 2020, driven by broadband growth and increased customer cloud infrastructure during this unprecedented year. We are proud of our team and their continued exemplary customer service to our communities, particularly the education and healthcare areas. During 2020, we continued to invest in our network and expanded our broadband service by more than 3,700 locations in underserved areas of Alaska, an increase in locations of approximately 33%. In addition, we began mesh fixed wireless trials, offering internet speeds up to 1 Gig. In 2021, we plan to expand our mesh network as part of our strategy to upgrade one third of our network, extending our reach to approximately 42,000 new and existing customer locations with new or improved service.

“On March 12, 2021, our shareholders approved our merger with a subsidiary of ATN International, Inc. This transaction positions us to remain the premier communications partner within the state of Alaska, while providing significant opportunities to grow. We expect synergies in fiber infrastructure expansion and in the latest technologies for commercial customers, including next-generation managed services and private network solutions,” said Bill Bishop, President & CEO.

Fourth Quarter 2020 Compared to Fourth Quarter 2019

  • Total revenue was $62.3 million, compared to $58.3 million, an increase of 7.0%.
    • Business and wholesale revenue was $43.2 million, compared to $38.3 million, up 12.7%.
    • Consumer revenue was $9.0 million, compared to $9.2 million, a decrease of 2.6%.
    • Regulatory revenue was $10.2 million, compared to $10.8 million, a decrease of 5.2%.
  • Operating expenses were $68.2 million, including $9.6 million of transaction expenses, compared to $51.3 million.
  • Operating loss was $5.8 million, compared to operating income of $7.0 million.
  • Net loss attributable to Alaska Communications was $8.2 million, compared to net income of $2.6 million.
  • Capital expenditures were $15.3 million, compared to $13.2 million, or excluding prefunded projects were $13.5 million, compared to $10.0 million.
  • Adjusted EBITDA was $14.9 million, compared to $17.9 million.
  • Adjusted Free Cash Flow was $2.9 million, compared to $9.7 million, or excluding prefunded projects was $2.4 million, compared to $9.3 million.

Full Year 2020 Compared to Full Year 2019

  • Total revenue was $240.6 million, compared to $231.7 million, an increase of 3.8%.
    • Business and wholesale revenue was $162.9 million, compared to $150.6 million, up 8.2%.
    • Consumer revenue was $36.6 million, compared to $37.0 million, a decrease of 1.2%.
    • Regulatory revenue was $41.1 million, compared to $44.1 million, a decrease of 6.7%.
  • Operating expenses were $228.7 million, including $9.6 million of transaction expenses, compared to $209.8 million.
  • Operating income was $11.9 million, compared to $21.9 million.
  • Net loss attributable to Alaska Communications was $1.1 million, compared to net income of $4.9 million.
  • Capital expenditures were $48.2 million, compared to $44.8 million, or excluding prefunded projects were $39.9 million, compared to $41.4 million.
  • Adjusted EBITDA was $64.1 million, compared to $62.7 million.
  • Adjusted Free Cash Flow was $14.4 million, compared to $16.0 million, or excluding prefunded projects was $15.3 million, compared to $10.4 million.

Balance Sheet Highlights

  • Cash was $21.0 million at December 31, 2020, compared to $28.0 million at December 31, 2019.
  • Net debt was $151.9 million at December 31, 2020, compared to $153.8 million at December 31, 2019.

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, “In 2020, we delivered strong financial performance even with the impact of the COVID-19 pandemic. We exceeded revenue guidance, driven by increased broadband revenue, equipment sales and special project revenue coming online. Our business and wholesale growth offset our consumer and regulatory decreases, and our growth revenues continue to outpace our legacy declines. Regarding capex, due to the timing of certain projects, we were able to accelerate expansion of our fiber network and spent slightly more than guidance. Adjusted Free Cash Flow was on target, and even with incurring $7.2 million in payments associated with transaction costs in the fourth quarter, our cash balances remain strong. As a result, we are well positioned for 2021.”

2020 Performance

Operating Statement ($ in M)

2020 Guidance

2020 Performance

Total Revenue

$232 - $237

$240.6

Adjusted EBITDA

$63 - $65

$64.1

Capital Expenditures
(excluding prefunded projects)

$37 - $39

$39.9

Adjusted Free Cash Flow
(excl. prefunded projects)

$14 - $16

$15.3

Transaction Update

On December 31, 2020, Alaska Communications and ATN International, Inc. (NASDAQ: ATNI) signed a definitive agreement under which the Company will become a consolidated, majority owned subsidiary of ATN. After the expiration of the Hart-Scott-Rodino antitrust waiting period, on March 12, 2021, Alaska Communications held a special shareholder meeting where the Company’s shareholders approved the merger, pending certification of the vote results. The transaction is expected to close in the second half of 2021, subject to certain regulatory approvals and other conditions. Under the terms of the agreement, a subsidiary of ATN will acquire all the outstanding shares of Alaska Communications common stock for $3.40 per share in cash. Alaska Communications’ prior agreement to be acquired by an affiliate of Macquarie Capital and GCM Grosvenor, through its Labor Impact Fund, L.P., was terminated on December 31, 2020. The company paid a termination fee of $6.8 million.

Conference Call

Due to the pending transaction, the Company will not hold a conference call.

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 $15.9 million in the twelve-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

 

Twelve Months Ended

December 31,

 

December 31,

2020

 

2019

 

2020

 

2019

 
 
Operating revenues

$

62,333

 

$

58,262

 

$

240,569

 

$

231,694

 

 
Operating expenses:
Cost of services and sales (excluding depreciation and amortization)

 

30,316

 

 

26,847

 

 

112,443

 

 

105,615

 

Selling, general & administrative

 

17,610

 

 

14,512

 

 

65,773

 

 

66,718

 

Transaction and termination costs

 

9,550

 

 

-

 

 

9,550

 

 

-

 

Depreciation and amortization

 

10,560

 

 

9,851

 

 

40,667

 

 

37,276

 

Loss on disposal of assets, net

 

117

 

 

55

 

 

240

 

 

156

 

 
Total operating expenses

 

68,153

 

 

51,265

 

 

228,673

 

 

209,765

 

 
Operating (loss) income

 

(5,820

)

 

6,997

 

 

11,896

 

 

21,929

 

 
Other income and (expense):
Interest expense

 

(2,643

)

 

(2,910

)

 

(11,000

)

 

(12,059

)

Loss on extinguishment of debt

 

-

 

 

-

 

 

-

 

 

(2,830

)

Interest income

 

18

 

 

94

 

 

174

 

 

385

 

Other income (expense), net

 

(8

)

 

(17

)

 

439

 

 

175

 

Total other income and (expense)

 

(2,633

)

 

(2,833

)

 

(10,387

)

 

(14,329

)

 
(Loss) income before income tax benefit (expense)

 

(8,453

)

 

4,164

 

 

1,509

 

 

7,600

 

 

Income tax benefit (expense)

 

232

 

 

(1,537

)

 

(2,665

)

 

(2,765

)

 
Net (loss) income

 

(8,221

)

 

2,627

 

 

(1,156

)

 

4,835

 

 
Less net loss attributable to noncontrolling interest

 

(19

)

 

(17

)

 

(83

)

 

(93

)

 
Net (loss) income attributable to Alaska Communications

$

(8,202

)

$

2,644

 

$

(1,073

)

$

4,928

 

 
Net (loss) income per share attributable to Alaska Communications:
Net (loss) income applicable to common shares

$

(8,202

)

$

2,644

 

$

(1,073

)

$

4,928

 

 
Basic

$

(0.15

)

$

0.05

 

$

(0.02

)

$

0.09

 

Diluted

$

(0.15

)

$

0.05

 

$

(0.02

)

$

0.09

 

 
Weighted average shares outstanding:
Basic

 

54,179

 

 

53,012

 

 

54,013

 

 

53,379

 

Diluted

 

54,179

 

 

53,975

 

 

54,013

 

 

54,277

 

 

Schedule 2

 
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands Except Per Share Amounts)
 

December 31,

December 31,

Assets

2020

2019

 
Current assets:
Cash and cash equivalents

$

19,644

 

$

26,662

 

Restricted cash

 

1,326

 

 

1,331

 

Short-term investments

 

434

 

 

434

 

Accounts receivable, net of allowance of $4,060 and $4,627

 

41,893

 

 

34,354

 

Materials and supplies

 

7,624

 

 

8,900

 

Prepayments and other current assets

 

6,404

 

 

9,617

 

Total current assets

 

77,325

 

 

81,298

 

 
Property, plant and equipment

 

1,452,943

 

 

1,424,904

 

Less: accumulated depreciation and amortization

 

(1,062,027

)

 

(1,042,546

)

Property, plant and equipment, net

 

390,916

 

 

382,358

 

 
Operating lease right of use assets

 

89,821

 

 

80,991

 

Other assets

 

11,370

 

 

12,598

 

Total assets

$

569,432

 

$

557,245

 

 
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term obligations

$

9,067

 

$

8,906

 

Accounts payable, accrued and other current liabilities

 

49,700

 

 

42,869

 

Operating lease liabilities - current

 

3,392

 

 

2,795

 

Total current liabilities

 

62,159

 

 

54,570

 

 
Long-term obligations, net of current portion

 

159,641

 

 

167,476

 

Deferred income taxes

 

5,846

 

 

4,403

 

Operating lease liabilities - noncurrent

 

81,103

 

 

78,767

 

Other long-term liabilities, net of current portion

 

94,764

 

 

78,520

 

Total liabilities

 

403,513

 

 

383,736

 

 
Commitments and contingencies
Alaska Communications stockholders' equity:
Common stock, $.01 par value; 145,000 authorized

 

549

 

 

541

 

Treasury stock, 1,000 shares at cost

 

(1,812

)

 

(1,812

)

Additional paid in capital

 

163,317

 

 

161,844

 

Retained earnings

 

9,442

 

 

15,367

 

Accumulated other comprehensive loss

 

(6,340

)

 

(3,277

)

Total Alaska Communications stockholders' equity

 

165,156

 

 

172,663

 

Noncontrolling interest

 

763

 

 

846

 

Total stockholders' equity

 

165,919

 

 

173,509

 

 
Total liabilities and stockholders' equity

$

569,432

 

$

557,245

 

 

Schedule 3

 
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, In Thousands)
 

Three Months Ended

 

Twelve Months Ended

December 31,

 

December 31,

2020

 

2019

 

2020

 

2019

Cash Flows from Operating Activities:
Net (loss) income

$

(8,221

)

$

2,627

 

$

(1,156

)

$

4,835

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization

 

10,560

 

 

9,851

 

 

40,667

 

 

37,276

 

Loss on disposal of assets, net

 

117

 

 

55

 

 

240

 

 

156

 

Amortization of debt issuance costs and debt discount

 

292

 

 

304

 

 

1,234

 

 

1,215

 

Loss on extinguishment of debt

 

-

 

 

-

 

 

-

 

 

2,830

 

Amortization of deferred capacity revenue

 

(1,789

)

 

(1,255

)

 

(6,670

)

 

(4,655

)

Stock-based compensation

 

475

 

 

814

 

 

1,693

 

 

1,580

 

Deferred income tax (benefit) expense

 

(232

)

 

1,385

 

 

2,658

 

 

2,919

 

Charge for uncollectible accounts

 

739

 

 

(18

)

 

(216

)

 

257

 

Amortization of ROU assets

 

825

 

 

572

 

 

2,897

 

 

2,288

 

Other non-cash expense (income), net

 

8

 

 

18

 

 

(91

)

 

70

 

Changes in operating assets and liabilities

 

3,459

 

 

1,842

 

 

15,863

 

 

10,044

 

Net cash provided by operating activities

 

6,233

 

 

16,195

 

 

57,119

 

 

58,815

 

 
Cash Flows from Investing Activities:
Capital expenditures

 

(15,303

)

 

(13,208

)

 

(48,243

)

 

(44,764

)

Capitalized interest

 

(358

)

 

(396

)

 

(1,364

)

 

(1,379

)

Change in unsettled capital expenditures

 

(981

)

 

57

 

 

(579

)

 

640

 

Proceeds on sale of assets

 

-

 

 

5

 

 

-

 

 

25

 

Net cash used by investing activities

 

(16,642

)

 

(13,542

)

 

(50,186

)

 

(45,478

)

 
Cash Flows from Financing Activities:
Repayments of long-term debt

 

(2,267

)

 

(1,137

)

 

(8,908

)

 

(174,040

)

Proceeds from the issuance of long-term debt

 

-

 

 

-

 

 

-

 

 

180,000

 

Debt issuance costs and discounts

 

-

 

 

-

 

 

-

 

 

(2,683

)

Cash paid for debt extinguishment

 

-

 

 

-

 

 

-

 

 

(1,252

)

Payment of cash dividend on common stock

 

-

 

 

-

 

 

(4,836

)

 

-

 

Payment of withholding taxes on stock-based compensation

 

(17

)

 

(5

)

 

(456

)

 

(453

)

Purchases of treasury stock

 

-

 

 

-

 

 

-

 

 

(1,812

)

Proceeds from issuance of common stock

 

120

 

 

105

 

 

244

 

 

211

 

Net cash used by financing activities

 

(2,164

)

 

(1,037

)

 

(13,956

)

 

(29

)

 
Change in cash, cash equivalents and restricted cash

 

(12,573

)

 

1,616

 

 

(7,023

)

 

13,308

 

 
Cash, cash equivalents and restricted cash, beginning of period

 

33,543

 

 

26,377

 

 

27,993

 

 

14,685

 

 
Cash, cash equivalents and restricted cash, end of period

$

20,970

 

$

27,993

 

$

20,970

 

$

27,993

 

 
Supplemental Cash Flow Data:
Interest paid

$

2,705

 

$

2,992

 

$

11,137

 

$

12,228

 

Dividends payable at December 31, 2020

$

16

 

$

-

 

$

16

 

$

-

 

Income taxes paid, net

$

(4,311

)

$

(5,051

)

$

(4,307

)

$

(5,041

)

 
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED EBITDA
(Unaudited, In Thousands)
 

Three Months Ended

 

Twelve Months Ended

December 31,

 

December 31,

2020

 

2019

 

2020

 

2019

 
Net (loss) income

$

(8,221

)

$

2,627

 

$

(1,156

)

$

4,835

 

Add (subtract):
Interest expense

 

2,643

 

 

2,910

 

 

11,000

 

 

12,059

 

Loss on extinguishment of debt

 

-

 

 

-

 

 

-

 

 

2,830

 

Interest income

 

(18

)

 

(94

)

 

(174

)

 

(385

)

Depreciation and amortization

 

10,560

 

 

9,851

 

 

40,667

 

 

37,276

 

Other expense (income), net

 

8

 

 

17

 

 

(439

)

 

(175

)

Loss on disposal of assets, net

 

117

 

 

55

 

 

240

 

 

156

 

Income tax (benefit) expense

 

(232

)

 

1,537

 

 

2,665

 

 

2,765

 

Stock-based compensation

 

475

 

 

814

 

 

1,693

 

 

1,580

 

Transaction-related costs

 

9,550

 

 

-

 

 

9,550

 

 

-

 

Cash severance expense

 

-

 

 

120

 

 

-

 

 

1,715

 

Net loss attributable to noncontrolling interest

 

19

 

 

17

 

 

83

 

 

93

 

 
Adjusted EBITDA

$

14,901

 

$

17,854

 

$

64,129

 

$

62,749

 

Non-GAAP 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 $15.9 million in the twelve-month period ended December 31, 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, transaction-related costs, cash severance expense, and net loss attributable to noncontrolling interest.

Schedule 5

ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
(Unaudited, In Thousands)
         
 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

         
Net cash provided by operating activities  

$

6,233

 

 

$

16,195

 

 

$

57,119

 

 

$

58,815

 

Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow:        
Capital expenditures excluding prefunded projects  

 

(13,536

)

 

 

(9,981

)

 

 

(39,881

)

 

 

(41,355

)

Capital expenditures for prefunded projects  

 

(1,767

)

 

 

(3,227

)

 

 

(8,362

)

 

 

(3,409

)

Milestone payments received for prefunded projects  

 

2,615

 

 

 

3,785

 

 

 

16,895

 

 

 

9,070

 

Milestone payments made for prefunded projects  

 

-

 

 

 

-

 

 

 

(8,250

)

 

 

-

 

Deferred cost of sales for prefunded projects  

 

175

 

 

 

-

 

 

 

525

 

 

 

-

 

Amortization of revenue for prefunded projects  

 

(523

)

 

 

(113

)

 

 

(1,753

)

 

 

(113

)

Amortization of deferred capacity revenue  

 

1,789

 

 

 

1,255

 

 

 

6,670

 

 

 

4,655

 

Amortization of GCI capacity revenue  

 

(523

)

 

 

(522

)

 

 

(2,077

)

 

 

(2,071

)

Amortization of debt issuance costs and debt discount  

 

(292

)

 

 

(304

)

 

 

(1,234

)

 

 

(1,215

)

Interest expense  

 

2,643

 

 

 

2,910

 

 

 

11,000

 

 

 

12,059

 

Interest paid  

 

(2,705

)

 

 

(2,992

)

 

 

(11,137

)

 

 

(12,228

)

Interest income  

 

(18

)

 

 

(94

)

 

 

(174

)

 

 

(385

)

Deferred income tax benefit (expense)  

 

232

 

 

 

(1,385

)

 

 

(2,658

)

 

 

(2,919

)

Income tax (benefit) expense  

 

(232

)

 

 

1,537

 

 

 

2,665

 

 

 

2,765

 

Income taxes paid, net  

 

4,311

 

 

 

5,051

 

 

 

4,307

 

 

 

5,041

 

Charge for uncollectible accounts  

 

(739

)

 

 

18

 

 

 

216

 

 

 

(257

)

Amortization of ROU assets  

 

(825

)

 

 

(572

)

 

 

(2,897

)

 

 

(2,288

)

Transaction-related costs  

 

9,550

 

 

 

-

 

 

 

9,550

 

 

 

-

 

Other expense (income), net  

 

8

 

 

 

17

 

 

 

(439

)

 

 

(175

)

Net loss attributable to noncontrolling interest  

 

19

 

 

 

17

 

 

 

83

 

 

 

93

 

Other non-cash (expense) income, net  

 

(8

)

 

 

(18

)

 

 

91

 

 

 

(70

)

Changes in operating assets and liabilities  

 

(3,459

)

 

 

(1,842

)

 

 

(15,863

)

 

 

(10,044

)

Adjusted free cash flow  

$

2,948

 

 

$

9,735

 

 

$

14,396

 

 

$

15,969

 

         
Schedule 6
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
ADJUSTED FREE CASH FLOW
(Unaudited, In Thousands)
         
 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

         
Adjusted EBITDA  

$

14,901

 

 

$

17,854

 

 

$

64,129

 

 

$

62,749

 

         
Less:        
Capital expenditures excluding prefunded projects  

 

(13,536

)

 

 

(9,981

)

 

 

(39,881

)

 

 

(41,355

)

Amortization of GCI capacity revenue  

 

(523

)

 

 

(522

)

 

 

(2,077

)

 

 

(2,071

)

Cash severance expense  

 

-

 

 

 

(120

)

 

 

-

 

 

 

(1,715

)

Income taxes paid, net  

 

4,311

 

 

 

5,051

 

 

 

4,307

 

 

 

5,041

 

Interest paid  

 

(2,705

)

 

 

(2,992

)

 

 

(11,137

)

 

 

(12,228

)

 

 

2,448

 

 

 

9,290

 

 

 

15,341

 

 

 

10,421

 

Impact of prefunded projects:        
Capital expenditures for prefunded projects  

 

(1,767

)

 

 

(3,227

)

 

 

(8,362

)

 

 

(3,409

)

Milestone payments received for prefunded projects  

 

2,615

 

 

 

3,785

 

 

 

16,895

 

 

 

9,070

 

Milestone payments made for prefunded projects  

 

-

 

 

 

-

 

 

 

(8,250

)

 

 

-

 

Deferred cost of sales for prefunded projects  

 

175

 

 

 

-

 

 

 

525

 

 

 

-

 

Amortization of revenue for prefunded projects  

 

(523

)

 

 

(113

)

 

 

(1,753

)

 

 

(113

)

 

 

500

 

 

 

445

 

 

 

(945

)

 

 

5,548

 

Adjusted free cash flow*  

$

2,948

 

 

$

9,735

 

 

$

14,396

 

 

$

15,969

 

* 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.

Non-GAAP 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 by financing activities.

See Schedule 5 for the reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.

Schedule 7

         
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
REVENUE BY CUSTOMER GROUP
(Unaudited, In Thousands)
         
 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Business and wholesale revenue        
Business broadband  

$

16,288

 

 

$

15,427

 

$

64,238

 

 

$

61,785

Business voice and other  

 

7,189

 

 

 

7,218

 

 

28,936

 

 

 

28,660

Managed IT services  

 

1,148

 

 

 

1,529

 

 

5,052

 

 

 

6,494

Equipment sales and installations  

 

4,800

 

 

 

1,868

 

 

9,508

 

 

 

4,698

Wholesale broadband  

 

12,456

 

 

 

11,321

 

 

49,878

 

 

 

43,310

Wholesale voice and other  

 

1,282

 

 

 

929

 

 

5,256

 

 

 

5,617

         
Total business and wholesale revenue  

 

43,163

 

 

 

38,292

 

 

162,868

 

 

 

150,564

Growth in business and wholesale  

 

12.7

%

   

 

8.2

%

 
Consumer revenue        
Broadband  

 

6,706

 

 

 

6,709

 

 

27,180

 

 

 

26,589

Voice and other  

 

2,245

 

 

 

2,484

 

 

9,379

 

 

 

10,431

         
Total consumer revenue  

 

8,951

 

 

 

9,193

 

 

36,559

 

 

 

37,020

         
Total business, wholesale, and consumer revenue  

 

52,114

 

 

 

47,485

 

 

199,427

 

 

 

187,584

Growth in business, wholesale and consumer revenue  

 

9.7

%

   

 

6.3

%

 
Growth in broadband revenue  

 

6.0

%

   

 

7.3

%

 
         
Regulatory revenue        
Access  

 

5,295

 

 

 

5,853

 

 

21,448

 

 

 

24,416

High cost support  

 

4,924

 

 

 

4,924

 

 

19,694

 

 

 

19,694

         
Total regulatory revenue  

 

10,219

 

 

 

10,777

 

 

41,142

 

 

 

44,110

         
Total revenue  

$

62,333

 

 

$

58,262

 

$

240,569

 

 

$

231,694

Growth in total revenue  

 

7.0

%

   

 

3.8

%

 

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

 

December 31,

 

September 30,

 

December 31,

 

2020

 

2020

 

2019

       
Voice:      
Business access lines  

 

65,294

 

 

 

66,253

 

 

 

68,242

 

Consumer access lines  

 

20,578

 

 

 

21,229

 

 

 

22,829

 

       
Voice ARPU business  

$

28.61

 

 

$

27.98

 

 

$

26.56

 

Voice ARPU consumer  

$

34.77

 

 

$

34.13

 

 

$

33.90

 

       
Broadband:      
Business connections  

 

14,652

 

 

 

14,672

 

 

 

14,880

 

Consumer connections  

 

30,598

 

 

 

32,012

 

 

 

31,480

 

       
Broadband ARPU business  

$

371.60

 

 

$

364.04

 

 

$

343.83

 

Broadband ARPU consumer  

$

72.84

 

 

$

72.41

 

 

$

70.81

 

       
Monthly Average Churn:      
Business voice  

 

0.4

%

 

 

0.9

%

 

 

0.7

%

Consumer broadband  

 

1.5

%

 

 

3.0

%

 

 

2.9

%

Consumer voice  

 

1.1

%

 

 

1.1

%

 

 

1.3

%

       
Schedule 9
     
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
LONG TERM DEBT AND NET DEBT
(Unaudited, In Thousands)
   

 

 

December 31,

 

December 31,

 

2020

 

2019

2019 senior secured credit facility due 2024  

$

168,896

 

 

$

177,750

 

Debt discount - 2019 senior secured credit facilities due 2024  

 

(1,523

)

 

 

(2,234

)

Debt issuance costs - 2019 senior secured credit facilities due 2024  

 

(1,341

)

 

 

(1,863

)

Capital leases and other long-term obligations  

 

2,676

 

 

 

2,729

 

Total debt  

 

168,708

 

 

 

176,382

 

Less current portion  

 

(9,067

)

 

 

(8,906

)

Long-term obligations, net of current portion  

$

159,641

 

 

$

167,476

 

     
Total debt  

$

168,708

 

 

$

176,382

 

Plus debt discounts and debt issuance costs  

 

2,864

 

 

 

4,097

 

Gross debt  

 

171,572

 

 

 

180,479

 

Cash and cash equivalents  

 

(19,644

)

 

 

(26,662

)

Net debt  

$

151,928

 

 

$

153,817

 

 

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
[email protected]

Source: Alaska Communications Systems Group, Inc.

Mar 15, 2021
Alaska Communications Stockholders Approve Merger with ATN International, Inc.


ANCHORAGE, Alaska--(BUSINESS WIRE)--Mar. 15, 2021-- Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) (“Alaska Communications” or the “Company”) announced that, based on the preliminary voting results from a special meeting of stockholders held on Friday, March 12, 2021, Alaska Communications’ stockholders have approved the adoption of the previously announced merger agreement relating to the proposed transaction between Alaska Communications and a newly formed entity created by ATN International, Inc. (NASDAQ: ATNI) (“ATN”) and ATN’s financial partner Freedom 3 Capital, LLC (“F3C”), whereby Alaska Communications will become a consolidated, majority owned and operated subsidiary of ATN.

After certification by the inspector of elections, the final voting results will be filed with the U.S. Securities and Exchange Commission in a Form 8-K, which will also be available at www.sec.gov.

Approval by Alaska Communications’ stockholders is a condition to closing of the merger. Consummation of the merger remains subject to receipt of certain regulatory approvals and certain other customary closing conditions set forth in the merger agreement. The merger is expected to close in the third quarter of 2021.

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.

About ATN International, Inc.

ATN International, Inc. (NASDAQ: ATNI), headquartered in Beverly, Massachusetts, invests in and operates communications and technology businesses in the United States and internationally, including the Caribbean region, with a particular focus on markets with a need for significant infrastructure investments and improvements. Our operating subsidiaries today primarily provide: (i) advanced wireless and wireline connectivity to residential and business customers, including a range of high speed internet services, mobile wireless solutions, video services and local exchange services, and (ii) wholesale communications infrastructure services such as terrestrial and submarine fiber optic transport, communications tower facilities, managed mobile networks, and in-building wireless systems. For more information, please visit www.atni.com.

About Freedom 3 Capital

Freedom 3 Capital invests in companies at inflection points. We help middle-market companies address strategic growth opportunities by delivering unique capital solutions. Our investment process provides F3C the flexibility to tailor investment structures to the industry dynamics, the company’s specific requirements and the management team and owners’ long-term business objectives. Beyond the value of our capital, we believe our private equity approach to credit investing creates valuable, lasting partnerships with stakeholders and management teams. F3C is currently investing out of Fund 4 with offices in New York and Kansas City.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and these include statements using the words such as will and expected, and similar statements. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations of the Company. Risks and uncertainties include, but are not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the Company’s business and the price of its common stock, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the receipt of certain governmental and regulatory approvals, (iii) the failure of Project 8 Buyer, LLC (“Parent”) and Project 8 MergerSub, Inc. (“Merger Sub”) to obtain the necessary financing pursuant to the arrangements set forth in the commitment letters delivered pursuant to the definitive Agreement and Plan of Merger among Parent, Merger Sub and the Company (the “Merger Agreement”) or otherwise, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (v) the effect of the announcement or pendency of the transaction on the Company’s business relationships, operating results, and business generally, (vi) risks that the proposed transaction disrupts the Company’s current plans and operations and potential difficulties in the Company’s employee retention as a result of the transaction and (vii) the outcome of any legal proceedings that may be instituted against the Company or Parent or Merger Sub related to the Merger Agreement or the transaction contemplated thereby. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of the Company described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020 and other reports and documents filed from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Copies of these filings are available online at https://www.alsk.com/. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations.

Alaska Communications Media Contact
Heather Cavanaugh, 907-564-7722
Director, External Affairs and Corporate Communications

Alaska Communications Investor Contact
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications Systems Group, Inc.

Feb 24, 2021
Alaska Communications’ Xtreme Internet to Bring Speeds up to 1 Gig in Select Locations


ANCHORAGE, Alaska--(BUSINESS WIRE)--Feb. 24, 2021-- Alaska Communications (NASDAQ: ALSK) is bringing its fastest ever speeds to Alaskans with the launch of Xtreme Internet℠.

Beginning this spring, Alaska Communications will offer up to 1 Gig speeds to select residential locations.

“We’re investing in our network to meet the needs of Alaskans,” said Bill Bishop, president and CEO of Alaska Communications. “We’re bringing more speed, more reliability and more choices, all at a great, low price. Xtreme Internet will allow us to expand our broadband service to more locations in urban areas, giving customers choices in service providers.”

Xtreme Internet is delivered through 60 Ghz mesh fixed wireless using Facebook Connectivity's Terragraph technology. It has the capability to deliver fiber-like speeds in urban settings.

“This technology allows us to deliver service to neighborhoods more quickly, while providing the reliability and speed consumers need,” said Bishop.

Alaska Communications will debut this service in the Fairbanks area this spring. Select neighborhoods in Anchorage and Fairbanks will be ready later this year.

In 2021, Alaska Communications will upgrade approximately one third of its network through Xtreme Internet and other technologies, reaching 42,000 new and existing customers with new or improved service.

For more information about Xtreme Internet, visit AlaskaCommunications.com/Xtreme.

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.

Alaska Communications Media Contact:
Heather Marron, 907-564-1326
Manager, Corporate Communications

Investor Contact:
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications

Feb 03, 2021
Alaska Communications Expands Broadband to Underserved Locations in Rural Alaska


ANCHORAGE, Alaska--(BUSINESS WIRE)--Feb. 3, 2021-- In a year where access to internet connectivity became even more necessary, Alaska Communications (NASDAQ: ALSK) expanded broadband service by more than 3,700 locations in underserved areas of Alaska during 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210203005239/en/

Alaska Communications fixed wireless tower on the Kenai Peninsula. (Photo: Business Wire)

Alaska Communications fixed wireless tower on the Kenai Peninsula. (Photo: Business Wire)

This expansion is funded in part through the Federal Communications Commission (FCC) Connect America Fund Phase II (CAF II) program.

In 2020 alone, Alaska Communications launched or expanded high-speed service available to homes and businesses in Delta Junction, Fairbanks, Homer, Hope, Kake, Kasilof, Kenai, Ninilchik, North Pole, Soldotna, Sterling and Thorne Bay.

“The pandemic underscored just how critical the availability of affordable broadband service is for accessing work, education, healthcare and staying connected with friends and family,” said Bill Bishop, Alaska Communications president and CEO. “We’re thankful for federal programs like CAF II, which support rural broadband delivery.”

Once complete, the project will be the single largest deployment of affordable broadband under any one program in Alaska.

“Under the program, internet speeds are a minimum 10 Mbps download and 1 Mbps upload,” said Bishop. “However, we chose to deliver higher speeds, up to 50 Mbps download, 10 Mbps upload, whenever possible to deliver additional value to our customers.”

“We’re excited about what 2021 has in store,” said Bishop. “Network expansions and new technologies we plan to bring to market this year will positively impact thousands of lives in both rural and urban areas of Alaska.”

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.

Alaska Communications
Heather Marron, 907-564-1326
Manager, Corporate Communications

Investor Contact:
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications

Jan 04, 2021
Alaska Communications Announces Definitive Agreement to Be Acquired by ATN International, Inc. in a $332 Million Transaction; Merger Agreement with Macquarie Capital and GCM Grosvenor Has Been Terminated


ANCHORAGE, Alaska--(BUSINESS WIRE)--Jan. 4, 2021-- Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) (“Alaska Communications” or the “Company”) announced today that on December 31, 2020 it entered into a definitive agreement pursuant to which the Company will be acquired by a newly formed entity owned by ATN International, Inc. (NASDAQ: ATNI) (“ATN”) and Freedom 3 Capital, LLC (“FC3”) in an all cash transaction valued at approximately $332 million, including net debt. The merger will result in Alaska Communications becoming a consolidated, majority owned subsidiary of ATN and is expected to close in the second half of 2021. Alaska Communications’ prior agreement to be acquired by an affiliate of Macquarie Capital (“Macquarie”) and GCM Grosvenor (“GCM”), through its Labor Impact Fund, L.P., has been terminated.

Under the terms of the agreement, an affiliate of ATN will acquire all the outstanding shares of Alaska Communications common stock for $3.40 per share in cash. This represents a premium of approximately 78% over the closing per share price of $1.91 on November 2, 2020, the last trading day prior to the date when Alaska Communications’ original merger agreement with Macquarie and GCM was executed, a 70% premium to the 30-day volume weighted average price up to and including November 2, 2020 and a 4% premium to Macquarie and GCM’s prior binding agreement to acquire the Company.

The merger agreement follows the determination by the Alaska Communications Board of Directors, after consultation with its legal and financial advisors, that the ATN proposal constituted a “Superior Proposal” as defined in Alaska Communications’ previously announced merger agreement with Macquarie and GCM. Consistent with that determination and following the expiration of the negotiation period with Macquarie and GCM required under such agreement, Alaska Communications terminated that agreement. In connection with the termination, Alaska Communications paid Macquarie and GCM a $6.8 million break-up fee.

David W. Karp, Chairman of the Alaska Communications Board of Directors, said, "Today's announcement is the product of a comprehensive process that demonstrates what a strong business the team at Alaska Communications has built. The agreement with ATN is a great result for our stockholders, who will receive significant near-term value."

Bill Bishop, President and Chief Executive Officer of Alaska Communications, stated, "This transaction represents an exciting opportunity to augment our market position, as well as, expand our capabilities to better serve our customers. ATN has extensive telecommunications expertise, a strong track record of successfully investing in and operating capital-intensive businesses and has a strong financial position highlighted by its net cash position. These are critical attributes that will support our strategy to deliver superior customer service utilizing our fiber-based network solutions. We firmly believe this transaction will allow us to enhance our expanded fiber network services and drive long-term value for our employees and customers in Alaska."

Michael Prior, Chairman and Chief Executive Officer of ATN, stated, “This investment and merger allows us to enter a new market with many similar characteristics to our existing operations in the U.S. and elsewhere. Further, it aligns with our strategy to leverage the broad capabilities of our operating platform to enhance and augment leading providers of facilities-based communications services in distinctive markets. ATN has a long history of enabling its subsidiaries to gain and maintain strong market positions by investing in high quality infrastructure, the latest technologies and creative solutions to give customers a superior experience. We recognize the same determination and customer-centric approach in the Alaska Communications team. Our industry is rapidly changing, and communications requirements have never been more essential and critical than they are today. We look forward to combining our resources and experience with Alaska Communications’ market knowledge and reputation for superior service to provide industry-leading communications products and services to customers in Alaska and beyond.”

The merger is subject to the approval of Alaska Communications' stockholders, regulatory approvals and other customary closing conditions. The merger has fully committed debt and equity financing and is not subject to any condition with regard to financing. Alaska Communications’ Board of Directors has unanimously approved the agreement and recommends that Alaska Communications’ stockholders approve the proposed merger and merger agreement. Alaska Communications expects to hold a special meeting of stockholders to consider and vote on the proposed merger and merger agreement as soon as practicable after the mailing of the proxy statement to its stockholders.

TAR Holdings, LLC, which owns approximately 8.8% of the outstanding shares of Alaska Communications common stock, has entered into a voting agreement with ATN agreeing, among other things, to vote in favor of the merger. The voting agreement will automatically terminate upon the earliest of (a) the vote of stockholders on the merger, (b) any termination of the Merger Agreement, (c) any change in recommendation by the Board of Alaska Communications and (d) 14 months after the signing of the Merger Agreement. Under the voting agreement, TAR Holdings, LLC may sell shares of the Company’s stock in the open market through a broker dealer.

Advisors

Bank Street Group, LLC is serving as financial advisor and Morrison & Foerster LLP is serving as legal advisor to ATN in connection with the transaction.

B. Riley Securities, Inc. is serving as financial advisor and Sidley Austin LLP is serving as legal advisor to Alaska Communications in connection with the transaction.

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.

About ATN International, Inc.

ATN International, Inc. (Nasdaq: ATNI), headquartered in Beverly, Massachusetts, invests in and operates communications and technology businesses in the United States and internationally, including the Caribbean region, with a particular focus on markets with a need for significant infrastructure investments and improvements. Our operating subsidiaries today primarily provide: (i) advanced wireless and wireline connectivity to residential and business customers, including a range of high speed internet services, mobile wireless solutions, video services and local exchange services, and (ii) wholesale communications infrastructure services such as terrestrial and submarine fiber optic transport, communications tower facilities, managed mobile networks, and in-building systems. For more information, please visit www.atni.com.

About Freedom 3 Capital

Freedom 3 Capital invests in companies at inflection points. We help middle-market companies address strategic growth opportunities by delivering unique capital solutions. Our investment process provides F3C the flexibility to tailor investment structures to the industry dynamics, the company’s specific requirements and the management team and owners’ long-term business objectives. Beyond the value of our capital, we believe our private equity approach to credit investing creates valuable, lasting partnerships with stakeholders and management teams. F3C is currently investing out of Fund 4 with offices in New York and Kansas City.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in connection with the proposed acquisition of the Company by an entity held by ATN and F3C, whereby the Company will become a wholly owned subsidiary of an entity held by ATN and F3C (the “proposed merger”), pursuant to a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Project 8 Buyer, LLC, (“Parent”), and Project 8 MergerSub, Inc. (“Merger Sub”). The proposed merger will be submitted to the Company’s stockholders for their consideration at a special meeting of the stockholders. In connection therewith, the Company intends to file relevant materials with the United States Securities and Exchange Commission (SEC), including a proxy statement on Schedule 14A, which will be mailed or otherwise disseminated to the Company’s stockholders. STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED MERGER. Stockholders may obtain free copies of the definitive proxy statement, any amendments or supplements thereto and other documents containing important information about the Company or the proposed merger, once such documents are filed with the SEC, free of charge at the SEC's website at www.sec.gov, or from Alaska Communications at alsk.com or by directing a request to the Company’s Investor Relations Department at [email protected].

Participants in the Solicitation

The Company and ATN and certain of their directors and executive officers and other members of management and employees may be deemed to be "participants" in the solicitation of proxies from the Company’s stockholders in connection with the proposed merger. Information about the Company's directors and executive officers and their direct or indirect interests, by security holdings or otherwise, is set forth in the Company’s proxy statement on Schedule 14A for its 2020 annual meeting of stockholders filed with the SEC on April 29, 2020. To the extent holdings of the Company’s securities by such participants (or the identity of such participants) have changed, such information has been or will be reflected on Statements of Change in Ownership on Forms 3 and 4 subsequently filed with the SEC. Information about ATN directors and executive officers and their direct or indirect interests, by security holdings or otherwise, is set forth in Alaska Communications proxy statement on Schedule 14A for its 2020 annual meeting of stockholders filed with the SEC on August 6, 2020. Additional information regarding the participants in the proxy solicitation and a description of their direct or indirect interests, by security holdings or otherwise, will be included in the definitive proxy statement and may be included in relevant documents filed with the SEC regarding the proposed merger, if and when they become available. Free copies of these materials may be obtained as described in the preceding paragraph.

Alaska Communications Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and these include statements using the words such as will and expected, and similar statements. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations of the Company. Risks and uncertainties include, but are not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the Company’s business and the price of its common stock, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Merger Agreement by the stockholders of the Company, and the receipt of certain governmental and regulatory approvals, (iii) the failure of Parent and Merger Sub to obtain the necessary financing pursuant to the arrangements set forth in the commitment letters delivered pursuant to the Merger Agreement or otherwise, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (v) the effect of the announcement or pendency of the transaction on the Company’s business relationships, operating results, and business generally, (vi) risks that the proposed transaction disrupts the Company’s current plans and operations and potential difficulties in the Company’s employee retention as a result of the transaction, (vii) the outcome of any legal proceedings that may be instituted against the Company or Parent or Merger Sub related to the Merger Agreement or the transaction contemplated thereby. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the businesses of the Company described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020 and other reports and documents filed from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Copies of these filings are available online at https://www.alsk.com/. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations.

Alaska Communications Media Contact
Heather Cavanaugh, 907-564-7722
Director, External Affairs and Corporate Communications

Alaska Communications Investor Contact
Tiffany Smith, 907-564-7556
Manager, Board and Investor Relations
[email protected]

Source: Alaska Communications Systems Group Inc.