Good day and thank you for being here. Welcome to the ATN International Third Quarter 2021 Earnings Conference Call and Webcast. All participants are currently in listen-only mode. After the presentations, we will have a question-and-answer session. I will now turn the conference over to your speaker today, Justin Benincasa, Chief Financial Officer. Please proceed.

Thank you, Operator. Good morning everyone, and thank you for joining us on our call to review our third quarter 2021 results. With me here is Michael Prior, ATN's Chief Executive Officer. And during the call, I'll cover the relevant financial information, and Michael will provide an update on the business and outlook. Before I turn the call over to Michael for his comments, I would like to point out that this call and our press release contain forward-looking statements concerning our current expectations, objectives and underlying assumptions regarding our future operating results and are subject to the 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, please refer to our earnings release on our website at atni.com or to the 8-K filing provided to the SEC. And I'll at this time turn the call back over to Michael.

Okay. Thank you, Justin, and good morning all. This quarter, we took some major steps forward in our strategy and ambition of connecting more communities and people to all the benefits of true high-speed data access. With the close of the Alaska acquisition early in the quarter, the completion of some fiber builds in the Lower 48 and continued expansion of our broadband networks and subscriber base in our Caribbean markets, we have made great progress, and we are having a very positive impact on communities long on the other side of the digital divide. The other significance of the integration of ACS is the growth of our platform. Our teams are working on ways to utilize the added scale to expand the breadth of our service offerings, raise the quality of the customer experience, and improve operating efficiency. While revenues grew nicely for the period, we did see another quarter of higher expenses in our International Telecom segment, and we expect that to continue to negatively impact the segment's EBITDA comparisons for the next quarter or so before revenue growth and more normalized historical expense levels bring us back to more favorable year-on-year comparisons. Of course, from a consolidated standpoint, we expect to see strong year-on-year comparisons due to the addition of Alaska, as well as some growth we expect to deliver there. So, turning to some more details, starting with the International segment, the core value of this collection of businesses is the broadband and mobile subscribers served by our network infrastructure. Trends are good in both categories, as we see low churn, are adding market share, and we're expanding and upgrading our networks to cover more households with high-speed data services. We added nearly 38,000 mobile subscribers in this segment over the past year, representing a roughly 13% annual increase. As investors may recall, we had set out more than a year ago to improve our mobile competitive positioning in certain markets, and we are pleased with the results of our efforts. Our broadband subscriber base also continues to grow. We ended the quarter with about 144,000 broadband subscribers in this segment, 5% higher than a year-ago. We expect to continue to grow this base in large part because of expansion of our network reach into new communities, including new residential developments in Guyana and some less-densely settled areas of the Cayman Islands. In addition to coverage expansion, our broadband strategy includes a multi-year program to increase the data speeds we're capable of offering on our networks. At the lower to middle tiers of connected speeds, we typically pass along a speed increase to our customers without a change in the monthly service fee. But we are also seeing customers migrate to higher price plans to get additional speed boosts. Expenses were high again for this segment compared to the prior year, as noted earlier. Many of the same factors are involved, including the regulatory fee increase in Guyana late last year, and difficult comparisons with the unusually low expenses during the height of the initial outbreak of the pandemic, which was really the second and third quarters of last year. While there are a few areas where we expect the lower costs as we move into 2022, we see revenue growth as the main driver to increase EBITDA for this segment. And to do so, we need to maintain and continue to increase our core subscriber bases with similar or lower rates of churn and to pursue growth in the business and enterprise sector, particularly in Guyana, where we expect macroeconomic growth to increase commercial demand over both the near and medium-term. A rebound in tourism in places like the Cayman Islands would also be favorable to growth. Turning to the U.S. Telecom segment, the year-on-year impacts here are mainly driven by the addition of 10 weeks of Alaska Communications Systems. So, I'll start with adding some color there. As you may recall, more than 2/3 of the revenue generated from that business comes from wholesale, government, and business customers. In this somewhat shortened quarter, we saw some slight shortfalls in some expected larger contract growth and some higher expenses in certain categories, but we're optimistic on both counts. We expect to see renewed growth from the government and Carrier segment in coming quarters, and we believe cost savings from the completed integration and some other initiatives will start to be reflected in our results in early 2022. In the meantime, we are pleased to learn that we are part of several awards of significant funding under the emergency connectivity fund. Together with our partners, we will connect student homes in a number of villages in two remote areas of Alaska. We are using a LEO satellite solution for much of this and expect to begin offering service within the next month. This is a nice win for the company and for these communities and is the result of the combined effort among ATN parent company personnel and ACS employees. We also continue to connect homes and businesses in the Lower 48 under previously secured subsidy programs, particularly in Arizona, as we complete new fiber builds and connect more homes to the high-speed fixed wireless solutions we built out late last year. Thanks to these efforts, and including Alaska, we now have about 58,000 broadband subscribers in our U.S. Telecom segment, which gives us over 200,000 for the company as a whole. As noted in our release, domestically, we are continuing to pursue subsidy programs and other strategies as we look to connect more and more communities, homes, and businesses. With additional government funding becoming available and our successful track record, we expect to achieve continued progress in this regard in coming quarters. In addition to the very positive and growing social impacts generated by that connectivity, this strategy has the potential to create lasting value for our company. Additionally, by the end of the third quarter, we had completed and activated about half the total sites of our network build as part of the FirstNet agreement, and we should have about 65% done by the end of this year, as noted in the release. And we are pursuing other carrier revenue as well to service our areas well and enhance returns. Our approach is to pursue carrier services revenue, including tower backhaul, tower rental, middle mile transport, and field maintenance, alongside our work to meet the data connectivity needs of local residents and businesses. The result, we believe, is a robust connectivity environment for the communities we serve. And covering that a little bit more and looking at it from a higher-level perspective, we estimate that we pass more than 500,000 homes with our fixed data networks, with more than half of those in the U.S. Many of those homes are passed by fiber or other services with the ability to deliver speeds from 100 megabits to one gigabit. In the first nine months of 2021 alone, we upgraded over 100,000 homes passed into that category and virtually all of our geographic expansions are completed with this capability. Our plan is to continue to add homes and communities passed and connected with an emphasis on higher speed services. We will also be connecting more schools, more commercial buildings, and more towers, and we expect to report more detail around all those connections and our progress in future quarters. So, to sum it all up, we see a considerable runway ahead to drive revenue growth in both our International and U.S. Telecom segments and ultimately to leverage that growth into improved margin performance. And that's it for me. I'll turn it back over to you, Justin.

Great. Thanks, Michael. For the third quarter, total consolidated revenues were $166.8 million, up 49% from last year, and consolidated adjusted EBITDA was $36.8 million compared to $31.2 million. This growth primarily reflects our acquisition of Alaska Communications that closed on July 22 this year, providing an approximate 10-week contribution to our results. I'll speak more to the specifics of these comparisons as I cover the segment detail. Starting with the International segment, revenues were $85.3 million in the quarter compared to $82.5 million last year, and adjusted EBITDA was $26.9 million, down from $29.7 million a year ago. On the revenue side, subscriber and ARPU growth in several markets were offset partially by the anticipated reduction of FCC high-cost support in the U.S. Virgin Islands. In addition to the loss of the FCC support revenue, EBITDA was also reduced by higher regulatory fees, increased costs related to the expansion of our managed service business, and a more normalized pre-pandemic cost structure across all markets, as Michael noted. Capital expenditures for the segment in the quarter were $10.6 million and $32.5 million year-to-date. In the U.S. Telecom segment, revenues were $81.5 million for the quarter, up $53.4 million year-on-year, of which $46.8 million of the increase was from the addition of Alaska and $6 million represented additional construction revenue related to the FirstNet project. As we noted in the press release, we are on track to complete about 2/3 of the $85 million construction project by year-end. Adjusted EBITDA for the segment was $16.4 million, up $8.5 million from last year, again, mostly due to the addition of Alaska, which contributed $10.6 million. Partially offsetting this was $2 million of increased expenses supporting our private network operations. As I've noted in the past, as we bring more FirstNet sites online, and the mix of revenue moves from higher margin legacy wholesale roaming revenue to service and rental revenue, we will see a contraction in EBITDA margins. But along with that change in revenue will come a significant reduction in capital expenditures that previously was needed to support that legacy wholesale revenue. As we noted in the release, the Alaska results were consistent with expectations, and we expect the full-year results to be in line with the guidance from last quarter of revenue between $105 million to $109 million and adjusted EBITDA between $27 and $29 million. Capital expenditures in the U.S. Telecom segment this quarter were $17.4 million and $36.2 million year-to-date. The Alaska operations added approximately $8 million in CapEx in the third quarter. A significant portion of the year-to-date spending outside of Alaska is related to building the backhaul and towers as part of the FirstNet agreement. However, as I just mentioned, once this build is complete in 2022, we expect very little capital spending over the term of that agreement. The consolidated net loss for the quarter was $2.6 million or $0.22 per share, and includes $1.6 million of non-cash stock-based compensation expense. As presented in our statement of operations, we had $3.5 million of amortization of intangibles from the Alaska acquisition, and we expect this expense to be approximately $13 million annually for the next few years. Looking at the balance sheet on September 30, we had total cash and cash equivalents of $101.3 million. Year-to-date, we've returned $13 million to shareholders in the form of dividends and share buybacks, and we also purchased $13 million in additional equity in our Bermuda and Cayman operations at an accretive value. Total debt outstanding was $348.8 million, including the Alaska non-recourse debt but excludes the FirstNet customer receivable credit facility. With a consolidated net ratio of under two times, ATN retains its strong balance sheet and financial flexibility that goes with it. And with that, Operator, I'll turn the call back for questions.

Awesome. Your first question comes from Richard Prentiss of Raymond James. Your line is open.

Thanks. Good morning.

Hey, Rich.

A couple of questions, Michael, you touched on international markets and on the broadband side. I was a little surprised that in the 2Q and 3Q release the net adds in the data side of the broadband side were a little lighter than traditional there. How should we think about the trend going forward, as far as data subscribers in the International segments, and related note, it looks like if you calculate a rough ARPU as far as fixed revenue divided by total fixed subs, it looks like it was down maybe $1.5 quarter-to-quarter from 2Q to 3Q, anything to call out there?

No, I think the mix is changing. To address the first part, as we expand into new fiber regions like the Cayman Islands or Guyana, we anticipate a faster adoption rate. However, as these areas achieve a higher penetration rate, the net additions will begin to slow. While churn remains very favorable, net additions will decrease. Additionally, in some regions, we are transitioning lower speed subscribers to higher speed services, which we believe is quite beneficial, though this may not immediately reflect an ARPU increase due to our promotional strategies and other factors. Nevertheless, in the long run, we expect to see subscriber growth and an increase in ARPU as well.

Okay. On the U.S. side, obviously, you brought in Alaska, what should we think about what metrics you'll be able to report or how we can kind of monitor the company and model the company as you think about the Alaska operations? You did mention there's a big chunk in wholesale government, but what kind of metrics should we look for on Alaska?

I think it's a bit challenging to assess the situation due to the focus on wholesale and government. Key metrics to consider include the reach of the fiber network, which encompasses significant revenue from government and larger enterprises, as well as fiber-connected towers, which are important as well. Additionally, metrics related to connected communities, businesses, and homes will also be relevant, even if they represent a smaller portion of revenue, especially on the residential side. Overall, I don't believe the metrics differ much from those typically observed in other U.S. wireline operations. The main challenge lies in the large revenue contribution from wholesale and government, and we will continue to refine our approach to these aspects moving forward.

Okay, sounds good. And switching back to international, first I'd also ask, it sounds like margins will stay somewhat muted in the short-term with revenue growth slightly better margins in the future. But how should we think about aspiration to international markets? Are we heading going into the low-30% or below 30% range in the near-term, and when you get back to mid-day result what kind of profile do you think of international margins?

I don't necessarily want to give a target, certainly for the near term. But I think a healthy integrated telecom in those areas, once you've gotten to maturity, is certainly on the higher end of that range you're talking about, I think is where I would expect to be.

And last one for me, you touched on a little bit the opportunities of mid-model fiber, fixed wireless connectivity. How should we think about, again, kind of aspirationally, what you're thinking as far as putting capital to work? And I would also throw in maybe private network enterprise 5G Systems, like you talked about with some of the band like. How should we think about aspirational CapEx spending and returns you might achieve?

Yes, when we consider allocating capital in these new areas, we aim for minimum mid-teens returns as our target. We've observed that with many build-out projects, particularly with new fiber installations featuring anchor tenants, the initial returns might be lower due to the importance of establishing that asset and the potential for future revenue increases. It really varies based on the situation. For a lot of the initiatives we've discussed recently, we either have committed expenditure from wholesale or enterprise customers that cover most of our capital spending, often upfront, or we receive government subsidies, or it's a combination of both. So it really depends. However, in many cases, we have commitments or a clear path to covering the initial capital expenditure immediately, and then our focus shifts to growing revenues on top of that.

Any kind of goalpost, as far as how much money you might be thinking of spending on the CapEx side, as we look out over the next one, two, five years?

I believe we will have more to discuss about that in the fourth quarter. Typically, we outline our plans for the upcoming year, but I believe there are significant opportunities ahead. We assess each opportunity based on its risks and returns. I anticipate that we will find chances to make worthwhile investments that will drive our growth. Our perspective is that being among the first to establish fiber or being one of the two main infrastructure providers in a community is a highly valuable asset, offering substantial long-term earnings and cash flow potential, along with the flexibility to deliver additional services. We are inclined to pursue these opportunities while maintaining a cautious approach through a thorough return analysis.

Okay. Thanks guys, very well.

Yes, you too.

Our next question comes from the line of Greg Burns of Sidoti & Company. Your line is open.

Good morning.

Hi.

How much FCC support revenue are you still getting in the U.S. Virgin Islands, like how much was in this quarter?

Yes, we're getting about $10.9 million annually right now.

Okay. And that one, just remind me for what period it went down?

It was about $16 million, and it drops by third year, and it started in July.

Okay. Regarding your broadband initiative to enhance speeds and increase ARPUs, how much do you believe you can boost the ARPUs over time by raising network speeds for the communities you serve?

How much do we think? I can't quantify. Did you say?

Like what's the average ARPU now? And what's the incremental kind of model you could drive through higher speeds?

We don't publish an average or blended ARPU. It really depends on the communities, right? So, it really depends on communities. I expect when you look at where we are and the connections we have and some of the economic growth in places like Guyana on top of that, we certainly expect ARPUs to have upside to them. Then there are more mature markets where we don't see a lot of ARPU growth on core connectivity. So, it really depends on the market. And we don't publish right now a stated blend of that.

And then any update on private networks, your strategy there?

We continue to make good progress with the product development. We've been working with a lot of key partners that finished testing with sort of key partners that are critical to future opportunity, and we also have been building some exciting pipeline. But at the same time, it's been pretty early innings in terms of revenue and connections. And as you can see from the reports, the cost of funding the platform exceeds that at this point. So, that's why, as we stated last quarter we're continuing to explore our funding partners and other strategic alternatives to take the business to the next level.

Okay, thank you.

Sure.

Your next question comes from Hamed Khorsand of BWS. Your line is open.

Hi. Good morning. The first question I had was regarding your commentary about the homes passed on the wireless to fixed side. Is that going to be a new strategy for you? Are you going after that retail market? And what kind of investment are you going to do on or put forth as far as being able to capture that customer?

Yes, it's been part of our strategy, Hamed, but we're seeing expansion of it. We've had seen expansion recently. So, it depends on the situation, but for example, a lot of the Cares Acts build we talked about in previous quarter that we're adding customers to now that was bringing fiber to towers and broadcasting fixed wireless solutions over these rural communities. In that case, a lot of that was in the Navajo Nation. And then connecting people and building the customer base. And so, we have other situations like that, where even in the Cayman Islands, where we are primarily fiber-to-the-home, there are communities that are kind of sparsely settled where we bring fiber to the community and then deliver a wireless solution for that high-speed connectivity. So, we just see it as one of the tools in the toolbox. We want to connect as many people as we can with high-speed connections. And in some cases, the best way economically and technically to do that is with a wireless solution.

And then, on the international side, specifically on Guyana, are you seeing growth in that economy just through their expansion? Or is it purely because you're expanding your footprint there?

I think we are seeing growth in the economy, although that's not as pronounced, and we definitely see all the signs of economic activity growth in terms of builds and things like that and hotels being permitted and so on. But partly because of, I think of the pandemic, it's been somewhat muted from where we would have expected to see it, and just in terms of speed. There is just a lot of non-communications infrastructure that needs to be built out, and the government has plans around that. And I think that will help, and it will happen, but it's taking some time. So, to some extent, it's been building out new areas. But the government also has a major housing program where they are planning and putting in many tens of thousands of new homes, and we are building into both existing communities and newly built communities. And so, to that extent, there is direct benefit from the economic growth.

And then, last question, on the international side; both Guyana and the rest of the properties you have service in. But are you seeing any increase in competition now that these travel restrictions have rolled back?

Not particularly, aside from what we have already discussed. In Guyana, due to the anticipated high economic growth and the changes in licensing rules from last year, we are indeed witnessing increased competition, which we had always accounted for. In other markets, it’s a typical competitive landscape; there’s competition, but I wouldn’t say there have been any significant changes. In the U.S. Virgin Islands, the situation is somewhat different due to the program change and new funding, which likely means increased competition over a longer time frame. I want to clarify a point from earlier regarding the USF funding for the Virgin Islands, which decreased by a third earlier this year and is set to go to zero in the middle of next year. So it will likely drop by half next year and then be eliminated the following year. I might have misstated this before. However, this isn't the only program we're discussing, and we are continuing our conversations concerning the Virgin Islands.

Thank you.

Yes, no problem.

Our next question comes from the line of Rich Prentiss of Raymond James. Your line is open.

A couple of follow-up, we'd have missed if we didn't touch on the supply chain. Are you seeing any supply chain issues with labor or materials? And particularly for the FirstNet project, but also just for fiber in general. We have been hearing some fiber connectors or other items might be tough out there. So, update us on what you're seeing on the supply chain and how you're managing it?

Well, I think we're definitely seeing that. It's not been material to us overall, but it's significant in some projects, particularly FirstNet.

Regarding FirstNet, we have a substantial portion contracted. However, for sites that are further along in the pipeline, there are some risks associated with the supply chain.

I think there are a couple of different components to consider. First, the cost of materials has been a concern across the sector, including electronics, fiber, and steel. Additionally, there are delays in procurement, and the outlook seems mixed. Currently, these issues are definitely part of the operating environment that we need to manage. Lastly, securing specialty contracted labor, which typically falls under our capital expenditures rather than operating expenses, has become more difficult and costly.

And then, second follow-up was on OneWeb and the LEO that you're using in providing some service in Alaska. How should we think about, and obviously, OneWeb has come out of bankruptcy, they have kind of a B2B process maybe where I and other people who to go to the fee side, so you guys being bringing it to the consumer. What kind of margins does that business kind of bring to you given what they're providing you with the LEO network?

Yes, while I can't provide the exact pricing, I can share how we perceive it. We believe it’s a valuable tool for quickly and cost-effectively connecting underserved communities, especially in geographic areas like Alaska. Our partnership with them has proven beneficial because they have good coverage and capacity there, and after extensive testing, we are pleased with the solution. Our gross margin for a LEO connection will be lower compared to using our own fiber or fixed wireless, but the capital costs are significantly reduced. Therefore, from a free cash flow margin perspective, it's still an attractive option for us.

And I know sometimes the antenna cost for LEO could be expensive. Are you thinking of this from kind of more community settings versus single-family home or schools or businesses? How should we think about what's kind of the addressable market in the target market?

Yes. I think the addressable market is both of those. I think in some cases, it's a good provision for homes. However, in many cases, we will. In what I talked about recently, most of it is deployed direct to satellite, but in some cases, yes, we will. I believe the addressable market includes both options. In certain instances, it provides a good solution for homes. However, much of what they are focusing on, and what we are also considering, is primarily backhaul. This can be utilized for smaller communities to deliver high-quality service with good capacity. It's a combination, but we appreciate their strategy. As you mentioned, they aim to collaborate with local carriers, and I see significant potential in that partnership.

Could that be a type of fixed wireless asset component?

Yes. In some cases, we will. In what I talked about recently, most of it is deployed direct to satellite, but in some cases, yes, we will.

Okay, very good. Thanks for the follow-up, guys.

Sure.

There are no further questions at this time. I will now turn the call over to management for closing remarks.

Thank you, everybody, and we look forward to speaking with you at year-end. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect.