AP NEWS

Alaska Communications Reports Second Quarter 2018 Results

August 6, 2018

ANCHORAGE, Alaska--(BUSINESS WIRE)--Aug 6, 2018--Alaska Communications Systems Group, Inc. (NASDAQ: ALSK) today reported financial results for the second quarter of 2018.

“We reported strong second quarter results, with both the Business and Wholesale and the Consumer units posting top line growth. Business and Wholesale exceeded sales expectations for the first half of 2018, reflecting excellent execution and setting the foundation for revenue growth in the remainder of the year.

“We are seeing success in resolving the uncertainties around the Rural Healthcare (RHC) program. The FCC announced an increase in funding for the overall program while also approving our contracted rates for the prior funding year.

“Diverse revenue streams and the strength of our core business supported by continued improvements in the Alaska macro-economic climate bode well for Alaska Communications. The outlook for the rest of the year is strong for both top and bottom line performance. We look forward to reporting our continued progress,” said Anand Vadapalli, president and CEO of Alaska Communications.

Revenue Highlights: Second Quarter 2018 Compared to Second Quarter 2017

Total revenue: Revenue was $59.6 million, compared to $58.5 million.Total broadband revenue was $33.0 million, compared to $32.4 million. Business and Wholesale: Comprised 62.9 percent of total revenue.Revenue was $37.5 million, compared to $36.6 million.Broadband revenue was $26.3 million, compared to $25.9 million. Consumer: Comprised 15.9 percent of total revenue.Revenue was $9.5 million, compared to $9.3 million.Broadband revenue was $6.7 million, compared to $6.5 million. Regulatory: Comprised 21.2 percent of total revenue.Revenue was $12.6 million, compared to $12.7 million.

Financial Metrics: Second Quarter 2018 compared to Second Quarter 2017

Operating income was $8.3 million, compared to $5.8 million. Net income was $3.4 million, compared to a net loss of $2.8 million. Net cash provided by operating activities was $8.9 million, compared to $11.8 million. Capital expenditures were $8.4 million, compared to $5.4 million.

Balance Sheet Metrics: June 30, 2018 compared to December 31, 2017

Cash was $12.2 million, compared to $16.2 million. Net debt was $174.7 million, compared to $177.2 million.

Non-GAAP Metrics: Second Quarter 2018 compared to Second Quarter 2017

Adjusted EBITDA was $16.9 million, compared to $14.8 million. Adjusted free cash flow was $4.2 million, compared to $2.9 million.

Reconciliations of non-GAAP financial measures to GAAP financial measures can be found in tables at the end of this release.

Laurie Butcher, Alaska Communications senior vice-president of finance, said, “In the second quarter, we retired our convertible debt, further simplified our balance sheet and delivered strong financial results. Also, with the announcement of the RHC funding increase in June, we reversed previously recorded reserves and expect to begin receiving cash payments in the third quarter. These strong results and continued opportunities give us great confidence in our business and we expect to be at the high end of our 2018 guidance.”

2018 Guidance

The company reaffirms guidance as follows:

Total Revenue between $225 million and $230 million Adjusted EBITDA between $55 million and $58 million Capital Expenditures between $33 million and $35 million Adjusted Free Cash Flow between $5 million and $8 million

Conference Call

The Company will host a conference call and live webcast on Tuesday, August 7, 2018 at 2:00 p.m. Eastern Time to discuss the results. Parties in the United States and Canada can access the call at 1-800-683-1658 and enter pass code 987673. All other parties can access the call at 1-334-647-4509 and use the same code. On the call, the management team will answer questions submitted in advance.

The live webcast of the conference call will be accessible from the “Events Calendar” section of the Company’s website ( www.alsk.com ). The webcast will be archived for a period of 90 days. A telephonic replay of the conference call will also be available two hours after the call and will run until September 6, 2018 at 5:00 p.m. Eastern Time. To hear the replay, parties in the U.S. and Canada can call 1-888-203-1112 and enter pass code 6811228. All other parties can call 1-719-457-0820 and enter pass code 6811228.

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.

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 outflows of $2.0 million in the six-month period of 2018).

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, Federal and Alaska Universal Service Fund changes, funding through the rural health care universal service support mechanism and our ability to comply with the regulatory requirements to receive those support payments, adverse economic conditions, 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, our ability to service our debt and refinance as required, 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, the impact of natural or man-made disasters, changes in Company’s relationships with large customers, unforeseen changes in public policies, regulatory changes, changes in technology and standards, 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 .

This article has been truncated. You can see the rest of this article by visiting http://www.businesswire.com/news/home/20180806005541/en.

AP RADIO
Update hourly