Atlantic Tele-Network, Inc. Reports Third Quarter Results

http://www.businesswire.com/news/home/20091029006572/en

Third Quarter Highlights:

-- Total revenue up 18% to $65.9 million

-- Wireless revenue increased 41% to $42.9 million

-- Operating income up 13% to $23.1 million, or 35% of revenue

-- Net income increased 18% to $11.9 million, or $0.78 per diluted share

-- Acquisition of Alltel properties continues to progress towards anticipated
close
SALEM, Mass.--(Business Wire)--
Atlantic Tele-Network, Inc. (NASDAQ: ATNI) today reported results for the third
quarter and nine months ended September 30, 2009.

Third Quarter Financial Results

For the three months ended September 30, 2009, revenue was $65.9million, 18%
above the $55.9 million reported for the third quarter of 2008 and a 9%
sequential increase over the second quarter of 2009`s revenue of $60.3 million.
Driving these revenue increases were 41% year-over-year and 18% sequential
increases in the Company`s wireless revenue fueled by significant growth in the
Company`s existing U.S. wireless business. The growth in wireless revenue more
than offset the year-over-year and sequential decreases in international long
distance revenue from the Company`s Guyana operations.

Despite incurring approximately $2.0 million in acquisition-related expenses
associated with the Company`s pending acquisition of Alltel properties, third
quarter 2009 operating income increased 13% over the third quarter of 2008 to
$23.1 million from $20.4 million.

Net income attributable to ATN`s stockholders1 was $11.9 million for the quarter
compared to $10.1 million for the same period in 2008 and $9.6 million for the
second quarter of 2009. On a per share basis, net income attributable to ATN`s
stockholders increased 18% to $0.78 per diluted share from $0.66 per diluted
share for last year`s third quarter and was up 24% from the $0.63 per diluted
share earned in the second quarter of 2009.

Commenting on the third quarter results, Michael T. Prior, Chief Executive
Officer said, "This was another very strong quarter for ATN with double digit
revenue, operating income and earnings growth as compared to last year. Wireless
revenue accounted for roughly two-thirds of our third quarter revenue, driven by
a 60% increase in U.S. rural wireless revenue. If you exclude expenses related
to the pending Alltel acquisition, operating and net income would show even more
robust gains as all of our operations remained tightly focused on controlling
costs - allowing profit growth to keep pace with revenue growth. However, we
expect the Alltel related expenses to continue to increase as we rapidly add
headcount and other resources, and incur transactional expenses such as legal
and accounting fees, through the anticipated close in the next two to three
months."

Update on Agreement to Acquire Alltel Properties

* On June 9, 2009 the Company announced a definitive agreement to acquire
certain wireless assets from Verizon Wireless, which were part of Alltel
Corporation prior to its acquisition by Verizon Wireless. Under the terms of the
agreement, the Company will acquire wireless properties, including wireless
spectrum licenses and network assets serving approximately 800,000 subscribers
primarily in rural areas across Georgia, North Carolina, South Carolina,
Illinois, Ohio and Idaho for approximately $200 million in cash. Initial
expectations are for this transaction to add approximately $450 million in
annual revenue and be accretive to the Company`s earnings upon completion. The
acquisition is subject to customary closing conditions and regulatory approvals,
including the receipt of required consents and approvals from the Department of
Justice and the Federal Communications Commission.
* On September 30, 2009, the Company announced that Frank O`Mara, a former
Executive Vice President of Alltel Communications has joined Atlantic
Tele-Network as Chief Executive Officer of its newly-formed subsidiary, Atlantic
Wireless Communications Corporation. O`Mara`s duties as CEO will include leading
the transition and operation of the former Alltel Wireless properties, licenses
and network assets that ATN contracted to acquire.

"As we have previously stated, this transaction will provide us with important
revenue and geographic diversification," Mr. Prior said. "Once completed, we
expect to have well over one million retail subscribers in the U.S. and
internationally and wireless revenue should account for more than 80% of our
total revenues. We recognize that we will face some significant challenges in
undertaking this expansion, but as evidenced by our hire of Frank O`Mara to lead
our U.S. retail wireless operations, we are confident that the people we are
bringing on board will have the experience and insight to manage those risks."

Third Quarter 2009 Operating Highlights

The following operating results for the quarter ended September 30, 2009 are
compared against the same period in 2008 unless otherwise indicated.

Wireless Revenue

Wireless revenue increased 41%, to $42.9 million from $30.4 million. Our U.S.
rural wireless business increased revenue by 60%, to $31.8 million from $19.9
million, benefiting from our ongoing investment in new base stations and the
growth in recurring voice and data traffic. We ended the third quarter with a
total of 564 base stations in our U.S. network, up from 396 base stations at the
end of last year`s third quarter and 537 base stations at the end of the 2009
second quarter. Wireless revenue in Guyana increased by $0.1 million as compared
to the prior year. At the end of the third quarter, we had approximately 277,000
subscribers in Guyana, up from the 273,000 we had at the end of last year`s
third quarter, and up from 266,000 as of the end of the 2009 second quarter.

Local Telephone and Data Revenue

Local telephone and data revenue increased 9% to $13.9 million compared to $12.8
million in 2008. Local telephone and data revenue generated by our Guyana
operations increased 8% to $8.1 million compared to $7.5 million in 2008, while
access lines increased 6% to 144,000 from 136,000. Sovernet`s local telephone
and data revenue increased 17%, to $4.8 million from $4.1 million in 2008,
largely as a result of its acquisition of ION in August 2008. Data revenue at
our Virgin Islands subsidiary remained fairly stable as compared to the prior
year.

International Long Distance Revenue

International long distance revenue, all of which is generated by our GT&T
subsidiary, declined 23% to $9.1 million from $11.8 million in 2008. We believe
this decrease is a result of continued and considerable illegal bypass
activities in the quarter resulting in lost revenue opportunities, as well as an
overall reduction in call volume into Guyana attributable to the current
difficult global economic environment.

Year-To-Date 2009 Results

For the nine months ended September 30, 2009, revenue was $182.2million, up 20%
from the $152.0 million reported for the same period in 2008. Operating income
increased $3.9 million, or 7%, to $58.0 million for the nine months ended
September 30, 2009 from $54.1 million for the same period in 2008, in part due
to the inclusion of $4.7 million of operating losses at two early stage
businesses acquired during the third quarter of 2008, for which results were not
included in the first half of 2008. Net income attributable to ATN`s
stockholders1 was $30.4 million for the nine months ended September 30, 2009, as
compared to $28.2 million for the same period in 2008, an increase of $2.2
million or 8%. On a per share basis, net income attributable to ATN`s
stockholders1 increased by 7% to $1.98 per diluted share from $1.85 per diluted
share for the nine months ended September 30, 2008.

Conference Call Information

Atlantic Tele-Network will host a conference call tomorrow, Friday, October 30,
2009 at 11:00 a.m. Eastern Time (ET) to discuss its third quarter results for
2009. The call will be hosted by Michael Prior, President and Chief Executive
Officer, and Justin Benincasa, Chief Financial Officer. The dial-in numbers are
US/Canada: (888) 661-5174 and International: (913) 312-1493. A replay of the
call will be available from 1:00 p.m. (ET) October 30, 2009 until 11:59 p.m.
(ET) on November 6, 2009. The replay dial-in numbers are US/Canada: (888)
203-1112 and International: (719) 457-0820, access code 2465739. Additionally, a
live simulcast (listen only) will be available during the call at
http://ir.atni.com. A replay will be available on our website shortly after the
conclusion of the call.

About Atlantic Tele-Network

Atlantic Tele-Network, Inc. (NASDAQ:ATNI) is a telecommunications company
operating high quality digital wireless, wireline, and both terrestrial and
submarine fiber optic networks in North America and the Caribbean. Its principal
subsidiaries include: Commnet Wireless, LLC, which provides voice and data
wireless roaming services for U.S. and international carriers in rural areas
throughout the United States; Guyana Telephone & Telegraph Company, Ltd., which
is the national telephone service provider for all local, long-distance and
international services in Guyana, as well as a wireless service provider;
Bermuda Digital Communications, Ltd., which is the leading provider of wireless
voice and data services in Bermuda operating as Cellular One, and also an
early-stage wireless provider in Turks & Caicos through its IslandCom
subsidiary; Sovernet, Inc., which provides wireline voice and data services to
businesses and homes in New England and high capacity communications network
transport services in New York State through its ION subsidiary; and Choice
Communications, LLC, which provides wireless broadband services in the U.S.
Virgin Islands.

Cautionary Language Concerning Forward-Looking Statements

This news release contains forward-looking statements relating to, among other
matters, the future financial performance and results of operations of the
Company; the proposed transaction with Verizon Wireless, including whether the
transaction will be completed and, if so, the expected timetable for such
completion and the expected benefits of the transaction; demand for our services
and industry trends; the pace of our network expansion and improvement,
including our realization of the benefits of these investments; and management`s
plans and strategy for the future. These forward-looking statements are based on
estimates, projections, beliefs, and assumptions and are not guarantees of
future events or results. Actual future events and results could differ
materially from the events and results indicated in these statements as a result
of many factors, including, among others, (1) the ability of ATN to secure
financing for the balance of the purchase price of the Alltel acquisition, which
is dependent on market conditions; there can be no assurances that such
financing will be available to ATN at all or on terms that are favorable to ATN;
(2) the ability of ATN to operate a retail wireless business and integrate these
operations into its existing operations; (3) the ability to receive the
requisite regulatory consents and approvals to consummate the transaction; (4)
the general performance of the acquired Alltel operations; (5) significant
political and regulatory risk facing our exclusive license to provide local
exchange and international voice and data services in Guyana; (6) any
significant decline in the price or volume, including bypass activities, of
international long distance calls to Guyana; (7) the regulation of rates that
GT&T may charge for local wireline telephone service; (8) significant tax
disputes between GT&T and the Guyanese tax authorities; (9) the derivation of a
significant portion of our U.S. wireless revenue from a small number of
customers and the extent to which our wholesale customers build or acquire
overlapping networks; (10) our ability to maintain favorable roaming
arrangements, including the rates Commnet charges its wholesale customers; (11)
the current global economic recession, along with difficult and volatile
conditions in the capital and credit markets; (12) increased competition; (13)
economic, political and other risks facing our foreign operations; (14)
regulatory changes affecting our businesses; (15) the loss of certain FCC
licenses; (16) rapid and significant technological changes in the
telecommunications industry; (17) our reliance on a limited number of key
suppliers and vendors for timely supply of equipment and services relating to
our network infrastructure; (18) any loss of any key members of management; (19)
the adequacy and expansion capabilities of our network capacity and customer
service system to support our customer growth; (20) dependence of our wireless
and wireline revenue on the reliability and performance of our network
infrastructure; (21) the occurrence of severe weather and natural catastrophes;
and (22) our ability to realize the value that we believe exists in businesses
that we acquire. These and other additional factors that may cause actual future
events and results to differ materially from the events and results indicated in
the forward-looking statements above are set forth more fully under Item 1A
"Risk Factors" of the Company`s Annual Report on Form 10-K for the year ended
December 31, 2008 and the Company`s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009, which are on file with the SEC. The Company
undertakes no obligation to update these forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors that may
affect such forward-looking statements.

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Balance Sheets
(in Thousands)

September 30, December 31,
2009 2008
Assets:
Cash and Cash Equivalents $ 95,442 $ 79,665
Other Current Assets 45,563 51,656

Total Current Assets 141,005 131,321

Fixed Assets, net 207,647 198,230
Goodwill and Other Intangible Assets, net 76,960 76,351
Other Assets 13,644 13,919

Total Assets $ 439,256 $ 419,821

Liabilities and Stockholders` Equity:
Current Liabilities $ 49,459 $ 47,912

Long Term Debt 72,811 73,311
Other Liabilities 35,188 36,938

Total Liabilities 157,458 158,161

Stockholders` Equity 281,798 261,660

Total Liabilities and Stockholders` Equity $ 439,256 $ 419,821

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, Except per Share Data)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenue:
Wireless $ 42,880 $ 30,388 $ 111,120 $ 74,927
Local Telephone and Data 13,918 12,807 40,471 37,321
International Long Distance 9,133 11,794 29,412 36,736
Other Revenue 11 919 1,200 2,968

Total Revenue 65,942 55,908 182,203 151,952

Operating Expenses:
Termination and Access Fees 11,250 9,612 32,583 25,544
Internet and Programming 422 869 1,609 2,631
Engineering and Operations 6,519 6,431 20,976 18,217
Sales, Marketing and Customer Services 4,073 3,123 11,473 8,741
General and Administrative 8,694 7,228 26,290 19,902
Acquisition-Related Charges 2,072 - 2,479 59
Depreciation and Amortization 9,763 8,289 28,756 22,790

Total Operating Expenses 42,793 35,552 124,166 97,884

Operating Income 23,149 20,356 58,037 54,068

Other Income (Expense):
Interest Income (Expense), net (874 ) (389 ) (2,519 ) (727 )
Other Income 13 (4 ) 49 364

Other Income (Expense), net (861 ) (393 ) (2,470 ) (363 )

Income Before Income Taxes 22,288 19,963 55,567 53,705
Income Taxes 9,919 8,538 24,217 22,570

Income Before Equity in Earnings of Unconsolidated Affiliates 12,369 11,425 31,350 31,135
Equity in Earnings of Unconsolidated Affiliates - - - 735
Net Income 12,369 11,425 31,350 31,870
Less: Net Income Attributable to Non-Controlling Interests, net of tax (433 ) (1,286 ) (976 ) (3,659 )

Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders $ 11,936 $ 10,139 $ 30,374 $ 28,211

Net Income Weighted Average Per Share Attributable to Atlantic Tele-Network, Inc. Stockholders
Basic $ 0.78 $ 0.67 $ 1.99 $ 1.85
Diluted $ 0.78 $ 0.66 $ 1.98 $ 1.85
Weighted Average Common Shares Outstanding
Basic 15,237 15,203 15,233 15,216
Diluted 15,398 15,266 15,304 15,281

ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Cash Flow Statement
(in Thousands)

Nine Months Ended September 30,
2009 2008

Net Income $ 31,350 $ 31,870
Depreciation and Amortization 28,756 22,790
Change in Working Capital 7,588 (17,883 )
Other 3,107 2,845

Net Cash Provided by Operating Activities 70,801 39,622

Capital Expenditures (40,273 ) (34,611 )
Acquisitions of Businesses, Net of Cash Acquired (24 ) (23,052 )
Other (647 ) 4,669

Net Cash Used in Investing Activities (40,944 ) (52,994 )

Increase in Long-Term Debt, Net -- 24,812
Dividends Paid on Common Stock (8,221 ) (7,293 )
Distributions to Non-Controlling Interests (5,546 ) (2,159 )
Other (313 ) (860 )

Net Cash Used in Financing Activities (14,080 ) 14,500

Net Change in Cash and Cash Equivalents 15,777 1,128

Cash and Cash Equivalents, Beginning of Period 79,665 71,173

Cash and Cash Equivalents, End of Period $ 95,442 $ 72,301

1 As a result of our adoption of Statement of Financial Accounting Standard No.
160, Non-Controlling Interests in Consolidated Financial Statements- an
Amendment of ARB No. 51, the financial statement line item that had been
entitled "Net income" under the previous reporting method is now entitled "Net
income attributable to Atlantic Tele-Network, Inc. Stockholders."

Atlantic Tele-Network, Inc.
Michael T. Prior, 978-619-1300
Chief Executive Officer
or
Justin D. Benincasa, 978-619-1300
Chief Financial Officer

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