Ladies and gentlemen, today's conference is scheduled to begin shortly, please continue to stand by and thank you for your patience. Ladies and gentlemen, thank you for standing by. And welcome to ATN International Q4 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. I will now like to turn the conference over to your speaker for today. Justin Benincasa, Chief Financial Officer. You may begin.

Great, thank you, Operator, and good afternoon, everyone. Today, we'll be reviewing our Fourth Quarter 2021, Earnings results. With me here is Michael Prior ATN's Chief Executive Officer, Michael will provide an update on the business strategy and recently announced 3-year growth plan and outlook. And I'll cover relevant financial information and provide additional color where necessary. As a reminder, we released our fourth quarter earnings press release last night after market closed, and investors can find the release and summary slides on our Investor Relations website. Before I turn the call over to Michael, I'd like to point out that this call, our press release, and slides, contain forward-looking statements concerning our current expectations, objectives, and underlying assumptions regarding our future operating results. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. Also, in an effort to provide useful information to investors, our comments today include non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect our future operating results. we refer you to our earnings release on our website at atni.com, or to the 8-K filings provided to the SEC. And I will now turn the call over to Michael.

Okay. Thank you, Justin. And welcome everyone to our fourth quarter and full-year 2021, Earnings Call. Especially appreciate you joining us in what seems to be a very busy new cycle. So as many of you know, ATN is focused on building a strong communications network and subscriber base in traditionally under built, or under served, market segments. This delivers higher recurring revenues, durable cash flows, and long-term shareholder value. 2022, actually marks our 35th year as a company. And we took this milestone as an opportunity to reflect on the organization we have become, what our purpose is, and where we aspire to be in the future. It became clear to us during the process that what we actually do is much more than providing digital infrastructure and communication services. We provide access to opportunity in the global marketplace, a marketplace for both ideas and commerce. And where we can go includes greater reach, profitability, and growth, as well as greater positive impact for the people and communities we serve. In Alaska, for example, we've recently provided high-speed data services to schools and students in some of the region's most remote and rural communities. We did this through a partnership with OneWeb's Low Earth Orbit satellite network, LEO network. And as a result of our efforts, more Alaskan students now have access to the world's top online learning solutions, Setting up these students and their communities for a more prosperous future. And we're not stopping there. In Alaska and in the Lower 48, and we are working on numerous proposed projects, many of which are partially funded by government grants to bring fiber into poorly served communities. This includes tribal lands and other rural areas. and we're doing the same internationally, rapidly deploying fiber and other high-speed solutions to…

Ladies and gentlemen, please standby. Your conference will resume momentarily. Please standby. Your conference will resume momentarily.

Yes. I think we're back.

You're connected in?

Thank you, Operator. Not sure what happened there, everybody. But I believe, I know where we left off, so I'm just going to jump right back in. The Alaska acquisition has also greatly expanded our reach. We now have more than 250,000 domestic homes passed by broadband networks, representing about half of our company's total broadband homes passed. We also have approximately 5,900 fiber route miles, 200 fiber connected towers, and 275 owned tower sites in our domestic segment alone. We expect all of those metrics to grow as we execute on our plan. Beyond these key coverage expansions, we're also investing in increasing our base of higher-speed services through fiber and other solutions. This includes fiber and other infrastructure builds for our carrier service customers and is thus in line with our pivot to a more sustainable revenue mix in the U.S. And looking beyond 2021, we have recently set a 3-year growth plan for our business as we often do, but is our latest growth plan, and we've shared some of our targets with Investors in this release. These targets are significantly based on and in line with our commitment to advancing our fiber first platform strategy. For example, we aim to achieve a revenue CAGR, excluding construction revenue of 4% to 6% over the next three years, which should lead to between annual revenue, between $770 million and $810 million in 2024. And we think we can improve our operating margins alongside that revenue growth, resulting in a target adjusted EBITDA CAGR of between 8% to 10% over the same three-year period. The following 2024, we expect capex to return to more normalized levels, let's say, 10% to 15% of revenue, and we expect to do all this without increasing leverage. Targeting a net debt ratio of less than 1.5 times by the end of 2024. Given our balance sheet strength, human capital, quality risk management controls, and long-term vision, we believe that we have adequate resources to accomplish these goals, inclusive of both organic and inorganic growth opportunities. And now, Justin will cover Q4 and 2021, financial results. Justin.

Great. Thank you, Michael. As Michael provided a high-level view of the company's mission and vision, I'll now share how we look at our financial model and strategy. Over the past three decades, ATN has developed a compelling, focused market strategy to excel and overlook markets. By entering these markets early in their growth cycles, we build strong footholds, lasting customer relationships, and cutting-edge network infrastructure. Our success has always been driven by our people and operating platform investments. By centralizing and developing a best practice approach to IT, accounting, customer care, and other productivity and risk-reduction processes, we can support our portfolio companies in ways that others cannot in markets of our target size. This enabled us to win business and set up teams for success. Our operations in the international markets provide strong examples of how we execute this playbook, and we remain excited about our progress to-date in Alaska. With these operating platform capabilities, we can enter markets that are often overlooked by others and find long-term enduring success. While risk can never be completely eliminated, it can be successfully mitigated and this approach has served us well throughout our operating history. With that, I will move on to our financials. In the fourth quarter of 2021, total consolidated revenues were a $187.6 million of 52% year-over-year. Operating loss was $20.3 million, and adjusted EBITDA increased to $42.3 million from $30.5 million a year ago. Alaska, with this expansive fiber network was the key driver of our top line growth in domestic sales contributions. The year-over-year increase in operating loss for the company is mainly due to Alaska transaction costs, lower profitability in our legacy, domestic business, and the reduction in federal high-cost support subsidies for the U.S. Virgin Islands. Now, turning to our segment breakdown. In…

All right. Thanks, Justin. Just to reiterate, we're currently in an exciting build out phase, and positioned well for future growth and profitability, which should in turn, improve our ability to deliver shareholder value. And there are multiple forms that could take. As mentioned previously, we expect these changes to really start picking up steam in the second half of this year, as our long-term investments and refreshed approach in the U.S. come to fruition. Our work in Alaska is off to a good start from several different angles. And we believe, the business and market both show great long-term development potential. On the international side, Diana is poised to be our next serious growth generator, as highlighted in our newly updated mission and vision. We're proud of the work we're doing to help raise people's living standards. And we look forward to executing this value creation playbook in more markets going forward. And now, Operator we'll turn it back to you to open up for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Ric Prentiss with Raymond James. Your line is open.

Hey, this is Brent on a Ric. Good afternoon.

Afternoon, Brent.

A few questions. First, what are you assuming on 2022 capex reimbursement, since you said 150 is net of reimbursements? Is that all FirstNet, or is there any assumption on broadband stimulus or some other item? And along those lines, you mentioned government grants. What is the timing and sizing of what kind of grants you might be able to get to bring fiber and broadband into rural areas?

Justin, you want to answer.

Yeah, I would say on the reimbursable, it's a relatively small number and it's mostly around grants we've already received. And I will let Michael speak to the opportunities around future grants.

Yeah. And Justin I wasn't sure too, Brent, on that first part. I think you're asking reimbursable amounts. But I think you also understand that the range includes a lot more than just FirstNet. Including all of the other fiber builds and other builds we're undertaking. So in terms of the -- Yeah. Okay. So in terms of the -- in terms of the opportunity, I mean, look, there are tens of millions of households in the U.S. without high-speed connectivity or adequate high-speed connectivity, I think, by the government numbers. And there's billions of dollars that have been assigned under the infrastructure plan, I think it's about $65 billion, there has been money allocated from previous bills, including Cares Act. So there is a serious government drive to close that gap. And for us if we look at the places we're used to operating, we're operate in today, particularly in the both the last and in the Western and Southwestern United States, we see a lot of opportunity for us to utilize that public private partnership and get more communities and people connected. So as Justin said, we're doing that now,

Ladies and gentlemen, please standby. Please standby. Your call will resume all momentarily, ladies and gentlemen, please standby. Connected.

Okay. Is Brent still with any question?

If you can hear me.

Sorry about that. I'll just state for everybody, we -- we're not providing the telecommunications to our headquarters, unfortunately. So I don't know what's going on or what end, but I apologize to everybody. I think I just maybe repeating myself a little bit, but I -- because I'm not sure where we dropped. But the second part of your question was whether we see opportunity in the federal and state plans, right. There are millions -- tens of millions of households that need to be connected with high-speed connectivity. That's an absolute bipartisan push to do so, there has been billions of dollars allocated to help carriers and communities to accomplish that. And I think we've had a great history of using those public private partnerships to accomplish our mission. And we see plenty of opportunity for us to do that. And it's -- both really in all our operating areas in the U.S. So both up in Alaska and down in the Southwest and Western United States.

Great and then appreciate you guys giving guidance. Glad to see that for 2022 as well as the three-year guidance and get some clarity about what you guys are expecting. Can you help us circle kind of a range on the adjusted EBITDA line in '24? In other words, what's the starting point on that? The assumption for the 8% to 10% growth rate, considering '21 has half a year of Alaska in it.

Yes, that is adjusted for Alaska -- full-year Alaska.

Okay. So we can just add what Alaska did in '21 to what ATNI standalone did?

That's another way to think about it is if you took our annual rate now of adjusted EBITDA, this CAGR assumes -- it's applied to that where we grow from that --

The CAGR assumes a full-year contribution from Alaska, so it's not just a partial year when compared to a full year.

Got it. Got it. Okay. And then last question, the corporate costs on the adjusted EBITDA line came in a little higher, obviously full-quarter of Alaska on the books now, is this $8 million a quarter range a good run rate going forward?

I would say our fourth-quarter probably was a little bit higher than we anticipated some of that was because we have costs that are audit costs around bringing in Alaska that we had to take the whole year and a quarter, but it's -- so it's quite a little high, but probably not a bad indication.

Okay. Got it. Thanks, guys. Stay well.

Sure. You too.

Thank you. Our next question comes from the line of Greg Burns with Sidoti. Your line is open.

Morning. How does the private networks business fit in with the new fiber first strategy in the domestic markets?

Hey, Greg. It's not directly related. It is related to rolling out additional digital infrastructure and connectivity, but it's really not a focal point of that broader strategy. It's a relatively small piece.

Okay, but you are still continuing to invest in that opportunity?

Yes, we are. As we said before, we are looking at alternatives in terms of that funding. And I would just say, it's not really -- doesn't really have a material impact from an income statement standpoint, EBITDA standpoint this year or in our three-year forecast.

Okay. And in terms of your legacy, the wholesale wireless business, you talked about phasing it out. So how much revenue, is still tied to those kinds of legacy wholesale wireless contracts? What's your plans for continuing with those contracts when they come up for renewal? And I guess, what does it mean for the amount of investment you need to put into that business? Are you going to just re-purpose that towards fiber?

Yes. So Greg, the first thing I wanted to say just to give some overall context, I mean, one of the reasons we did provide the guidance both for the year and for the full-year is we're trying to -- we've realized that our stories coming across overly complex. And so we're trying to help simplify it for everybody, and you talked about fundamentally the whole business. I'm not going to get into all the puts and takes. But the transformation of the move, the transition that's happening, is basically like we're bit with AT&T and FirstNet, expanded, right? Which is we are moving from a roaming model over our networks to one where we are providing critical elements for their own network in the areas we're traditionally operating. So that's what we mean by Glass and Steel. We're really pivoting to more of backhaul, towers, field services, technical services. So we think that's really more of what the carriers want and that works for us. It really actually reduces risk and makes it much more predictable over the long term, and we like the ability to leverage those investments for additional opportunities.

Okay. So, the other carriers outside of AT&T signed up for that model? Have you signed contracts and then regarding -- that's something that needs to happen?

Yes, obviously, we need to transition all our customers there, but I'm not going to talk about the interim steps. But that's the goal. And that's where we're expecting to get.

And then in terms of the capex guidance. So is it -- are you expecting it to stay at this level for the next three years or 2022 guidance level for the next three years or is it stepped down as we head towards '24? Like, how should we think about capex over that? For your timeframe?

I think -- I think you should think of over the three-year time frame that we're going to be definitely leaning into some of these markets and expanding where we see opportunity right now. As we sit here today, we see opportunity to invest, so we will. How that plays out in any given year could be somewhat lumpy, but I think you would expect them to be on the higher side and then over the next three years.

Okay. Thank you.

Thank you. Our next question comes from the line of Hamed Khorsand with BWS Financial. Your line is open.

I just wanted to start off with why are you required to take that impairment on the U.S. Virgin Islands if you're saying that revenue starting to increase because travels going up?

So the way you do that, Hamed is you kind of look at the overall market, kind of where you think the valuation is in the market. But we carry a significantly higher level of fixed assets in that market after post hurricane as we built out resiliency and repair the network. So our carrying costs on the fixed assets is higher than any other market by far. So when you sit back and you do the model, you have to kind of look at it and say okay, then if you have high fixed asset costs, you can lead to an impairment on those things like goodwill and that's what that was.

And then we got I was just going to ask you about fiber build that you're planning this year. What would the timing be as far as the capex is concerned, the spend and the timing as to when you think you could actually generate revenue off the new investments?

I think it's an ongoing thing on this. And so we have to, as we mentioned before, just this is a small piece of it, but in the U.S we have some fiber builds to towers that are turning off with under contracts. In the year, we had some -- we have some fiber to new communities that under that reimbursable program that's turning up this year, in places like Guyana or Cayman, we've built to households, last year continuing to build this year. And so the revenue as soon as we have the active network up there, we're pretty rapidly adding revenue, signing up revenue, so give you an example, we built fiber into a mining town in the interior of Guyana. And we added fiber customers, broadband customers at an incredibly quick rate. As soon as we built to this community, I mean, it was rapid. So generally speaking, the places we're building the need has been identified. And when we complete the bills, we're adding revenue rather quickly.

And I would add to that.

And that will keep going throughout this three-year period.

And I would add to that, that some of our fiber build is success based. In other words, we already have a signed contract on it. So that -- obviously that one is immediately.

And then lastly, increase in marketing and network resource that increased this past quarter is that going to be a continuing process in ‘22?

I would say probably yes more than a no. I think we will continue -- we saw success on that and we're going to keep leaning into it.

Could you just share what success means? What time -- what kind of time frame you're looking at it for us, generating income?

I would say, the way I look at that is if you look at -- we were at the subscriber growth in markets in our international markets that we provide, right? You can see the impact of that. So there's some upfront investment to get the customer, and to be clear, it's related to both mobile and broadband --

Right.

-- in those markets.

Okay. Thank you.

Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Michael for closing remarks.

I think I'm just going to hang up before it hangs up on us. Thank you, everybody. I appreciate it.

Thanks, everyone. Take care.

Ladies and gentlemen this concludes today's conference call. Thank you for your participation. You may now disconnect.