ATN International(ATNI) - 2024 Q4 - Annual Report

Revenue and Income - As of December 31, 2024, total revenue reached $729.1 million, with International Telecom contributing$377.5 million and US Telecom contributing $351.6 million[222]. - The company recorded$74 million in construction revenue from the FirstNet Agreement with AT&T, expecting an additional $6 million as sites are completed[205]. - Operating income for International Telecom was$75.8 million, while US Telecom reported an operating loss of $44.4 million[222]. - The company reported a net loss before income taxes of$50.9 million for the year ended December 31, 2024[222]. - Total revenue for the year ended December 31, 2024, decreased by $33.1 million, or 4.3$729.1 million from $762.2 million in 2023[233]. - Communication services revenue declined by$27.3 million, or 3.7%, to $707.8 million in 2024 compared to$735.1 million in 2023[233]. - The US Telecom segment's revenue decreased by $39.9 million, or 10.2$351.6 million in 2024 from $391.5 million in 2023, primarily due to a reduction in Fixed revenues[228]. - Net loss attributable to ATN International, Inc. stockholders increased by$11.9 million, or 81.8%, to $26.4 million in 2024 from$14.5 million in 2023[233]. Operating Expenses - Total operating expenses amounted to $729.9 million, with significant costs in communication services and selling, general, and administrative expenses[222]. - Operating expenses for the year ended December 31, 2024, decreased by$19.2 million, or 2.6%, to $729.9 million from$749.0 million in 2023[233]. - Selling, general and administrative expenses decreased by $13.8 million, or 5.7$228.9 million, reflecting ongoing cost reduction initiatives[260]. - Depreciation and amortization expenses decreased by $3.3 million, or 2.3$138.3 million, with expectations of further declines due to reduced capital expenditures[268]. Revenue Breakdown - Fixed revenue decreased by $14.4 million, or 3.0$458.4 million from $472.8 million for the years ended December 31, 2024 and 2023, respectively[240]. - Mobility revenue decreased by$2.5 million, or 2.2%, to $110.0 million for the year ended December 31, 2024, down from$112.5 million in 2023[236]. - International Telecom segment's Mobility revenue decreased by $1.3 million, or 1.2$107.2 million for the year ended December 31, 2024[241]. - US Telecom segment's Mobility revenue decreased by $1.2 million, or 30.0$2.8 million due to the conclusion of retail mobility services under its own brand[241]. - International Telecom segment's Fixed revenue increased by $7.0 million, or 2.9$246.2 million, driven by network upgrades and expansions[242]. - US Telecom segment's Fixed revenue decreased by $21.4 million, or 9.2$212.2 million, primarily due to the end of the Emergency Connectivity Fund and Affordable Care Programs[242]. - Carrier Services revenue decreased by $9.6 million, or 6.7$133.3 million, with a notable decrease in US Telecom segment's revenue by $8.6 million, or 6.7$0.8 million, or 11.6%, to $6.1 million, attributed to a reduction in non-recurring project-related revenue[248]. - Managed Services revenue increased by$0.9 million, or 5.5%, to $17.4 million, with growth in both International and US Telecom segments[253]. Grants and Agreements - The company recognized$178.3 million in grants under various government programs aimed at deploying broadband connectivity in underserved areas[214]. - The company was awarded $150.2 million in construction grants, with$10.8 million disbursed in capital expenditures during the year ended December 31, 2024[212]. - The company expects to complete the FirstNet network build by the end of 2025, with ongoing maintenance and transport services provided to AT&T[205][206]. - The Verizon CMS Agreement will enhance wireless services in the southwestern United States, with an initial term ending in 2030[207][209]. Impairments and Charges - Goodwill impairment charge recorded during the year ended December 31, 2024, was $35.3 million[229]. - The company recorded a goodwill impairment of$35.3 million for the quarter ended September 30, 2024, due to a shift in operations and delays in network upgrades[274][275]. - The company recorded an impairment of $35.3 million for its US Telecom segment during the quarter ended September 30, 2024, due to a shift in operations and delays in network upgrades[380]. Cash Flow and Liquidity - Cash provided by operating activities was$127.9 million in 2024, an increase of $16.3 million from$111.6 million in 2023, reflecting improvements in working capital[304]. - Cash used in investing activities decreased by $61.3 million to$103.8 million in 2024, primarily due to increased cash inflows from government reimbursements[296]. - As of December 31, 2024, total liquidity was approximately $89.2 million, with$557.4 million in debt net of unamortized deferred financing costs[293]. - As of December 31, 2024, the outstanding amount under the 2023 CoBank Term Loan was $125.9 million, with$58.6 million outstanding under the 2023 CoBank Revolving Loan and $111.4 million available[313]. - The company has$111.4 million available under the CoBank Credit Facility, $89.0 million under the Alaska Revolving Facility, and$9.2 million under the Receivables Credit Facility as of December 31, 2024[370]. Debt and Financing - The 2023 CoBank Credit Agreement imposes a maximum Total Net Leverage Ratio of 3.25 to 1.0, measured quarterly[310]. - A two-year forward starting interest rate swap agreement was entered into in October 2023, with a notional amount of $50.0 million and a fixed SOFR rate of 4.896$300 million secured term loan and a $90 million revolving facility, with$300 million outstanding under the term facility as of December 31, 2024[319]. - The 2024 Alaska Credit Facility requires maintaining a maximum Consolidated Net Total Leverage Ratio of 4.75:1.00, stepping down to 4.50:1.00 in Q3 2027[325]. - The 2024 Alaska Term Facility requires quarterly principal payments starting in Q4 2026, with amounts of $1.875 million and$3.75 million due in specified periods[324]. - The 2024 Alaska Credit Agreement includes customary covenants and events of default, with Holdings and its subsidiaries as guarantors[328]. - Future minimum principal repayments for debt facilities are projected at $8.3 million in 2025, escalating to$371.2 million in 2029[361]. Interest and Tax - Interest income increased to $1.2 million for the year ended December 31, 2024, compared to$0.5 million in 2023, attributed to higher cash balances and interest rates[276]. - Interest expense rose to $49.5 million in 2024 from$42.7 million in 2023, driven by increased borrowings under credit facilities[278]. - The effective tax rate increased to 37.5% in 2024 from 31.9% in 2023, influenced by changes in unrecognized tax positions and valuation allowances[282][283]. Legal and Contingencies - The company has accrued $13.8 million for legal contingencies as of December 31, 2024, due to probable adverse outcomes from ongoing legal proceedings[381]. Future Projections - The company plans to invest approximately$90 million to $100 million in capital expenditures for network expansion and upgrades in 2025[300]. - For 2025, capital expenditures are expected to be approximately$90 million to $100 million, primarily for network maintenance and upgrades[360]. - The company expects to incur approximately$6 million in construction costs related to the FirstNet Agreement, primarily in 2025[363]. - The company has committed to pay approximately $37.0 million in software licensing and maintenance services in 2025[368].