Alaska Communications Systems (ALSK) Reports Q4 EPS of $0.05, Revenues Mis;; Provides FY20 Revenue Outlook

Alaska Communications Systems (NASDAQ: ALSK) reported Q4 EPS of $0.05, versus $0.03 reported last year. Revenue for the quarter came in at $58.3 million versus the consensus estimate of $58.69 million.

• Delivers Strong Fourth Quarter Leading 2019 to Meet or Exceed Guidance
• Reports Revenue of $231.7 Million and Net Income of $4.9 Million
• Increases Adjusted EBITDA to $62.7 Million, Up from $60.2 Million in 2018
• Posts Adjusted Free Cash Flow of $16.0 Million, Up from $7.2 Million in 2018
• Increases in Fiber Miles 12% across Statewide Network in 2019 vs. 2018
• The Board Approves One-time Dividend of $0.09 per share totaling ~$5 Million

Fourth Quarter 2019 Compared to Fourth Quarter 2018

• Total revenue was $58.3 million, compared to $58.7 million, a decrease of 0.7%
  • Business and wholesale revenue was $38.3 million, compared to $37.0 million, up 3.5%.
  • Consumer revenue was steady at $9.2 million for both periods.
  • Regulatory revenue was $10.8 million, compared to $12.5 million, a decrease of 13.6%, as expected due to the restructuring of the Alaska Universal Service program.
• Operating expenses were $51.3 million, compared to $53.8 million.
• Operating income was $7.0 million, compared to $4.9 million.
• Net income was $2.6 million, compared to $1.7 million.
• Capital expenditures excluding prefunded projects were $10.0 million, compared to $12.5 million, which includes planned investments to continue our 5G wireless backhaul project.
• Adjusted EBITDA was $17.9 million, compared to $14.1 million.
• Adjusted Free Cash Flow was $9.7 million, including a tax refund of $5.1 million, compared to adjusted free cash outflow of $3.0 million.

“We are pleased with strong 2019 results and achievements, driven by demand for fiber infrastructure and high-performance broadband growth. Our strategic initiatives contributed to better than expected Adjusted EBITDA and Adjusted Free Cash Flow. As a result, the Board approved a one-time $0.09 per share dividend, while continuing to invest in attractive value creating projects.

“With our customer centric approach and prefunded projects, we have accelerated our fiber footprint expansion by over 16,000 fiber miles in 2019, increasing to 146,000 fiber miles across Alaska and the Pacific Northwest. In 2020, we expect the strength of our fiber footprint and relationships to continue to improve results and sustain long-term growth for our shareholders,” said Bill Bishop, President & CEO.

GUIDANCE:

Alaska Communications Systems sees FY2020 revenue of $232-237 million.

Laurie Butcher, Alaska Communications chief financial officer, said, “We met or exceeded our guidance in all areas for 2019. Business and wholesale revenue growth of 4.1% substantially offset anticipated decreases in regulatory revenue. Regulatory revenue declines are expected to have less of an impact in 2020 and future years.

“Also, in 2019, cost initiatives contributed to a 4.3% increase in Adjusted EBITDA and, combined with the AMT tax refund and net cash inflows associated with prefunded projects, drove an $8.7 million increase in Adjusted Free Cash Flow year over year. Our guidance for 2020 reflects our confidence for continued growth in total revenue and Adjusted EBITDA, while maintaining consistent capital expenditures, exclusive of prefunded projects.”

For earnings history and earnings-related data on Alaska Communications Systems (ALSK) click here.

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