Q1 2023 ATN International Inc. Earnings Call

April 27, 2023

After the speaker's presentation, there will be a question and answer session to ask a question. During this session you'll need to press star one on your telephone you will then hear an automated message advising you that your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand the call.

There will be a question and answer session to ask a question. During this session you will need a press star one on your telephone you will then hear an automated message advising you that your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Justin.

Over to your speaker today, Justin Benincasa, Chief Financial Officer. Please go ahead.

And then of course, our Chief Financial Officer. Please go ahead, great. Thank you operator, and good morning, everyone. Today, We will review our first quarter of 2012.

Thank you operator, and good morning, everyone.

Okay.

Ill review, our first quarter of 2023.

With me here is Michael prior Aci's, Chief Executive Officer, Michael provided an update on our business and strategy as well as a high level overview of our quarterly results. I'll, then cover our financials and provides additional color where necessary.

With me here is Michael prior Aci's, Chief Executive Officer, Michael provide an update on our business and strategy as well as a high level overview of our quarterly results.

And then cover our financial and provides additional color where necessary.

A reminder, we released our first quarter.

As a reminder, we released our first quarter.

Our results.

Press release last night after market close.

The results press release.

Press release last night after market close.

Investors can find the release and results presented for this call 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 the presentation contain forward looking statements concerning our current expectations objectives and.

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.

Further information regarding the factors that may affect our future operating results. Please refer to our earnings release on our website at <unk> Dot com or the 8-K filing provided to the SEC.

Further information regarding the factors that may affect our future operating results.

Please refer to our earnings release on our website at <unk> Dot com or the 8-K filing provided to the SEC.

I'll now turn the call over to Michael for his prepared remarks.

Thank you Justin and thank you for joining us everyone.

I'd like to start the call today with three key takeaways from our Q1 performance.

One our strategy is working and is driving growth in subscribers in footprint or addressable market too.

One our strategy is working and is driving growth in subscribers in footprint or addressable market.

<unk> adjusted EBITDA performance is improving in line with subscriber and revenue growth.

Two adjusted EBITDA performance is improving in line with subscriber and revenue growth.

And three our three year outlook as announced at the beginning of 2022 is tracking to plan.

We expect revenue and EBITDA growth to ramp to bring us in line with the three year CAGR as we had forecast.

An ETF or central purpose is to provide connectivity for all.

In doing so we improve lives and communities and deliver lasting value for all our stakeholders.

We go where the need is and where most of the larger telecommunications companies prefer not to go.

Go where the need is and where most of the larger telecommunications companies prefer not to go.

To date that includes the Caribbean the rural and tribal lands of the U S southwest.

And Alaska.

Today, we are in the process of advancing initiatives to secure our vision and long term growth.

And Alaska.

Today, we are in the process of advancing initiatives to secure our vision and long term growth.

We call these strategic initiatives glass and steel and first to fiber.

They are core to our strategic three year play out.

First outlined in the beginning of 2022.

It is a plan with the intention to build a highly resilient customer base and average revenue per user or <unk> on the tail of relatively short term increases in capital expenditures.

To accomplish our goals. We are currently investing in quality assets to expand our strong market position, which should bode well for the consistency of future cash flows.

Internationally, we are investing in our first fiber strategic initiatives to expand our market leadership.

Internationally, we are investing in our first fiber strategic initiative to expand our market leadership.

Through this strategy, we are bringing fiber rich digital infrastructure to the Caribbean expanding our network reach and growing markets like came in in Guyana, and continually improving improving and strengthening.

Our network and services in places like Bermuda, and the U S Virgin Island.

These actions are providing us with several new growth levers and cash flow generators, while at the same time, reducing the risk of customer churn.

Domestically in Alaska, our fiber expansion continued to all segments.

Domestically in Alaska, our fiber expansion continued to all segments business carrier wholesale and retail.

This carrier wholesale and retail.

And the team is accomplishing that while also working to improve operating efficiency and margins.

In the lower 48, our glass and steel strategic initiatives is capitalizing on the changing needs of our wholesale mobile carrier customers.

Complement in effort to fill in the fiber and other connectivity gaps in the rural areas of the southwestern and Western United States.

The first that contract with AT&T was the first pillar of this strategy and we expect to enter into a similar arrangement with another national carrier in the current quarter.

These partnerships with the National mobile carriers are a testament to our strong and reliable offerings.

Scalability deep and broad local operating capabilities.

And brand reputation.

As important we are expanding our business in retail broadband operations in the region using government grants and anchor tenants wholesale our government customers to expand our high speed network in fixed line revenues.

As important we are expanding our business in retail broadband operations in the region using government grants and anchor tenants wholesale or government customers to expand our high speed network in fixed line revenues.

And as we discussed last quarter. The addition of sacred wind with intended to boost this sector.

And as we discussed last quarter. The addition of sacred wind with intended to boost this effort.

The early evidence is very positive with the team meshing, well with their new colleagues and hitting the ground running with some key early wins on new subsidized fiber build and customer growth.

The early evidence is very positive with the team meshing, well with their new colleagues and hitting the ground running with some key early wins on new subsidized fiber builds and customer growth.

The first quarter of 2023 marks the start of the second year of our three year investment plan.

We're already seeing the benefits of our expanded network and its associated customer additions.

Atms first quarter revenue reached the highest level in more than a decade.

This quarter, we showed consistency of execution and we're again rewarded with high levels of customer retention and progress on our key operational and financial metrics.

We expect our customer revenue and adjusted EBITDA growth trends to continue throughout 2023.

We're also working on augmenting this growth through improvements to the cost structure of several operations such as by accelerating the removal of legacy network and operating costs.

In total we are enthusiastic about the durability of our revenue our financial flexibility.

And our long term growth prospects.

<unk> continues to track to our three year plan.

We continue to track to our three year plan.

And to illustrate our progress in the quarter.

We grew the homes passed by our broadband networks to about 736000 at the end of the quarter, which was 21% higher than a year ago.

This includes an additional 108000 passed by fiber or other higher speed solutions.

Our ongoing network investments also are reflected in our subscriber levels.

As of March 31, 2023, 55% of our more than 216000 broadband subscribers.

We're connected to our fiber or other high higher speed networks, representing growth of nearly 18% year over year and high speed data subscribers.

We ended the quarter with more than 328000 mobile subscribers in our international segment.

And this is up 13% from a year ago Rick.

And this is up 13% from a year ago.

Reflecting the success of our sales and marketing efforts and investments.

Reflecting the success of our sales and marketing efforts.

Excellent.

As Justin will discuss we saw positive results across both of our operating segments, including strong performance in Alaska fiber and broadband customer additions that I've, just mentioned and of course, the mobile subscriber growth.

Yes.

As Jeff will discuss we saw positive results across both of our operating segments, including a strong performance in Alaska fiber and broadband customer additions that I've, just mentioned and of course, the mobile subscriber growth.

Both in the Caribbean and in the U S. Most of our expansion work is in markets that we believe will continue to benefit from growing demand and positive secular tailwind.

Putting us in an excellent position to benefit from this growth as we provide these communities with the connectivity capabilities that will help them thrive.

An example of this work is our by our subsidiary in the U S. Virgin Islands. We were just awarded a contract to bring high speed fiber based connectivity to all public schools in the territory.

The project is 100% fiber base delivering the fastest speeds.

Including an inter island fiber link between the two department of Education network operation centers, providing a critical additional layer of resilience for the schools connections.

Notably this public private initiative ensures that the territory benefits from a more digitized teaching and learning experience as it helps schools and libraries and obtaining affordable Internet access and telecommunication services.

In summary, we remain committed to providing connectivity for all we are working to be first to fiber in those markets that are aligned with our established criteria and where we believe we can also develop strong first mover advantages.

In addition, we continue to prioritize building and owning modern core digital communications infrastructure.

Distant with our glass and steel strategy.

Most importantly, as we execute towards these two strategic objectives underpinning our three year plan. We also are steadily expanding our overall broadband network and subscriber counts in turn this should generate revenue growth with higher incremental operating margins.

Most importantly, as we execute towards these two strategic objectives underpinning our three year plan. We also are steadily expanding our overall broadband network and subscriber count in turn this should generate revenue growth with higher incremental operating margins.

US confidence in our long term growth targets as well as our core financial objectives.

US confidence in our long term growth targets as well as our core financial objectives for this year.

For this year.

As Justin will expand upon momentarily our financial position enables us to be flexible and the execution of our strategies as we look to maximize value for stakeholders.

And with that I'll hand, the call back over to you adjustment great. Thank Michael.

Yes.

With much focus these days on the financial climate inclusive inclusive of interest rates and access to capital. Let me start by sharing a few words on our capital allocation strategy and how we expect the moves we're making today to expand ATM success now and in the years ahead.

Yes.

<unk> is in a strong competitive position given our solid balance sheet to make strategic investments in advanced connectivity as we set out to do last year, our operations generate significant cash flow that provides ample liquidity to support continued investment in advancing our growth initiatives.

As Michael talked about earlier.

That Michael talked about earlier.

We have a disciplined and balanced capital allocation strategy that will continue to adapt as we deploy capital to reward stockholders, including our quarterly dividend.

Organic investments to help secure future growth and our share buyback program.

Organic investments helped secure future growth and our share buyback program in.

In addition, we will work to maintain financial flexibility, allowing us to remain optimistic.

Opportunistic and making investments that can accelerate or enhance our strategy and returns.

All in our plan works to better serve customers by establishing a first to market advantage, which in turn will provide durable financial results for years to come.

All in our plan works to better serve customers by establishing a first to market advantage, which in turn will provide durable financial results for the years to come.

This is a playbook we deployed successfully in the past, we anticipate that temporarily heavy capital investment cycle will be followed by a substantial <unk>.

This is a playbook we have deployed successfully in the past, we anticipate that temporarily heavy capital investment cycle will be followed by a substantial <unk>.

Increase in monthly recurring revenues and free cash flow.

Turning to our results for the quarter total consolidated revenues increased 8% as we can as you can see in our accompanying slide presentation that we've added to our website along with some additional financial tables.

Operating income improved <unk> 6 million from $2 1 million a year ago.

Adjusted EBITDA was up 6% year over year. These improvements were primarily driven by continued strength in the international segment.

Steady results in the domestic business as we benefit from the investments we've made in network expansion upgrades totaling more than $200 million over the prior two years as well as from the secret wind acquisition, which closed in November of 2022.

Steady results in the domestic business as we benefit from the investment we've made in network expansion upgrades totaling more than $200 million over the prior two years as well as from the secret wind acquisition, which closed in November of 2022.

Turning now to our segment breakdown in our international segment revenues rose, 4% in the quarter and adjusted EBITDA was up 5%.

This increase was the product that the continued growth in broadband and mobile subscribers and the associated revenue, partially offset by the previously announced step down in federal high cost support subsidies for the U S where our denial.

This increase was the product of continued growth in broadband and mobile subscribers and the associated revenue, partially offset by the previously announced step down in federal high cost support subsidies for the U S where our denial.

Our strength internationally continues to be driven by superior customer support and great execution by the local teams to increase high speed data subscriber counts in Arco.

Our strength internationally continues to be driven by superior customer support and great execution by the local teams to increase high speed data subscriber count and ARPA.

We also see continued positive growth in our mobile subscriber base and revenues as the result of strong sales and marketing efforts.

We also see continued positive growth in our mobile subscriber base and revenues is the result of strong sales and marketing efforts.

Following our substantial network upgrades and expansions.

While these marketing and sales efforts are delivering real benefits. We are aware that overall expenses have room for improvement and we will continue to monitor and make the necessary moves to balance subscriber and revenue growth and margins in this climate.

While these marketing and sales efforts are delivering real benefits. We are aware that overall expenses have room for improvement and we will continue to monitor and make make the necessary moves to balance subscriber and revenue growth and margins in this climate.

In our U S segment revenues were up 12% in the quarter of note our Alaskan operations continued to perform well.

In our U S segment revenues were up 12% in the quarter of note our Alaskan operation continued to perform well.

<unk> a substantial top line contribution and strong operating cash flows.

During the period business and carrier services accounted for approximately 74% of assessment service revenues, mainly reflecting higher revenue performance from Alaska.

This was partially offset by expected reduction in legacy wholesale wireless revenue as we continue repositioning the lower 48 business around the glass deal strategy and carrier managed service contracts that provide stable long term recurring revenue.

As part of it.

Part of our effort to reposition this business we conducted a review of all of the sites that we're supporting our legacy roaming network.

This review was aimed at determining what was necessary to support the business in the future.

As a result, we recorded a restructuring charge of $2 9 million in Q1 to emphasize that we are no longer needed.

Yes.

Construction revenues, which align with the with the number of <unk> sites completed in a given quarter and roughly equivalent to construction costs were also lower year on year.

We expect to substantially complete the construction projects in 2023 with a small number of sites being completed in early 'twenty four.

Based on the schedule today, we estimate the construction revenue will be in the range of $12 million to $14 million with approximately 70% to 75% of that revenue coming in the second half of 2023.

Based on the schedule today, we estimate that construction revenue will be in the range of $12 million to $14 million with approximately 70% to 75% of that revenue coming in the second half of 2023.

Overall for the U S segment, adjusted EBITDA was up 16% year on year, mainly due to the contribution of our expansion in Alaska and mistake or wind acquisition.

Overall for the U S segment, adjusted EBITDA was up 16% year on year, mainly due to the contribution of our expansion in Alaska and the Sacred wind acquisition.

Atms total net loss for the quarter increased to $5 9 million or a loss of <unk> 44 per share mainly due to a $5 4 million increase in interest expense over last year.

We reported core capex for the quarter of $50 6 million, which includes $29 1 million for our U S segment, and $21 5 million for our international segment.

Higher capex spending in the U S included investments in fiber builds in Alaska infrastructure to support personnel and modest additional cost following the take the wind acquisition.

Higher capex spending in the U S included investments in fiber builds in Alaska infrastructure to support personnel and modest additional cost following the sacred wind acquisition.

International segment spending largely includes the continued fiber deployment in Guyana and mobile network investment.

In line with our previous announced guidance, we expect the slower capex spend for the rest of the year compared to our first quarter pacings.

In line with our previously announced guidance, we expect the slower capex spend for the rest of the year compared to our first quarter pacings.

Now turning to our balance sheet and cash flows we ended the quarter with cash and cash equivalents of $56 million.

Net cash provided by operating activities was $16 million in the quarter, we used approximately $27 million of cash to fund various working capital items, including the reduction in Capex payables and accrued balances.

At the end of the first quarter, our total debt outstanding was 465 million, including $33 million of debt from the Sacred wind acquisition and $249 1 million on Alaska Communications balance sheet.

At the end of the first quarter, our total debt outstanding was $465 million, including $33 million of debt from the Sacred wind acquisition and $249 1 million on Alaska Communications balance sheet.

This figure excludes the $48 1 million related to the first net customer receivables financing facility.

With a consolidated net debt to adjusted EBITDA ratio of two three times, we're continuing to maintain our strong balance sheet as well as the flexibility needed to execute our fiber build strategy.

Before we turn to our guidance I want to note that.

As we shared last quarter, we've changed how we report our adjusted EBITDA beginning in 2023 to be in line with most of our peers.

We're excluding noncash stock based based compensation and have provided a pro forma reconciliation table in our earnings release.

We're excluding noncash stock based compensation and have provided a pro forma reconciliation table in our earnings release.

For the first quarter of 2023 stock based compensation of $1 8 million compared with $1 5 million in the same period last year.

For the first quarter of 2023 stock based compensation was $1 8 million compared with $1 5 million in the same period last year.

As detailed in our news release, our longer term outlook continues to track to plan for 2023, our guidance remains the same with adjusted EBITDA in the range of $183 million to $193 million for the full year with somewhat more of that year on year growth perspective in the second half of the year.

As detailed in our news release, our longer term outlook continues to track to plan for 2023, and our guidance remains the same with adjusted EBITDA in the range of $183 million to $193 million for the full year with somewhat more of that year on year growth perspective in the second half of the year.

Capital expenditure is estimated to be in the range of $150 million to $170 million net of reimbursed amounts primarily for network expansion and upgrades, which are expected to further drive subscribers and revenue growth in the following period.

In summary, we delivered a solid financial results aligned to our plan.

Which we expect will yield durable recurring revenues and cash flow growth.

We're benefiting from our established leadership.

Our markets.

And as well as from our ongoing network expansion network upgrades and growth in our subscriber base.

Our markets and.

And as well as from our ongoing network expansion network upgrades and growth in our subscriber base.

As we invest in our accordance with our three year plan. We're also building out.

Our foundation and setting ATM up well for the long term.

We look forward to continuing to deliver value delivering value to all our stakeholders across our operations and updating everyone on our progress going forward.

And with that ill turn.

Turn it back over to Michael.

Remarks.

Thank you Justin.

ATM continued to execute at a high level this quarter with steady momentum across our markets.

Strategically our market approach enables ATM to deliver a strong product suite to customers and to secure our market leadership by growing subscribers and revenue and reducing churn.

Being the first to provide a community true high speed connectivity creates a unique opportunity to generate customer loyalty and build a strong base of revenue across all sectors consumer business will government, which in turn enhances operating cash flows and generate strong returns for our stakeholders.

Looking ahead, we will continue to serve our customers well advance our strategic broadband build outs and make progress toward our three year growth objectives.

With that operator, I'll hand, it back to you to open up for questions. Please.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

One moment for our first question.

Our first question comes from the line of Ric Prentiss with Raymond James Your line is open. Please go ahead.

Thanks, Good morning, everybody good morning.

Okay.

Start first on personal.

Hum.

In my notes the yearend call you had mentioned you'd be substantially complete with personnel this year and if youre still seeing it.

You didn't own it maybe we could have been $27 million revenue.

23 from <unk> that was two thirds in the back half.

How is that reconciled to reconcile to what you said about $12 million to $14 million and what percent complete audio is we're trying to sort of keep track of that and I know, it's a low margin point, yes, we were.

<unk>.

It was originally is that range some of that's going to fall into 2024, now and some of the site construction. They go away. So we are lowering that number down to the 12 to 14 again to be very back half of the year weighted.

Right.

Total contract, which again is a low margin might be less than that 85 million and I think I remember way back when that is correct.

Okay.

Is there a way of kind of help us understand what percent complete you are right now is it kind of again, it's about yes.

Yes, I missed that's about 75% complete today.

Okay, and obviously that is excluded from guidance.

Okay, and obviously that is excluded from the guidance because the long term guidance talked about ex construction.

About secret wind is secret when included in that guidance because candidly secret win was not there in 'twenty one it was attitude.

Honestly in 'twenty, two and it was in the first quarter. So it is a separate one on top of that guidance or is it kind of get rolled into it then it gets rolled into it.

Okay.

And I think I remember secret when might've been bringing about $10 million of annual EBITDA is that fair.

They did something like that last year.

Any reason to think that we'd go down instead of up as you look to spend capital there.

No, but it's really it's really a full integration. So we don't we don't really look at it that way I mean, it's already sort of obscure but.

But but I mean, if you're if you're trying to ascertain what it brings in as it comes in Thats about right.

But.

And then if you're if you're trying to ascertain what it brings in as it comes in Thats about right. Okay.

Okay. Okay.

And then the revenues were never disclose when it looks like the margins within that.

40% plus range kind of Ballparkish, just given before integrating that into the rest of the company.

Yes, it is higher margin than the visit that's going into that's correct right.

Sure Okay.

I'm stepping back away from it you mentioned you might be pursuing it might have a similar contracts a person with a second carrier so.

Second net going to be.

Second net you're gonna be.

Similar low margin contract to get stuff out there and you get some of their business off of it or how should we think about what this.

Second net I know theyre, probably don't want to be called out, but the second contract.

Yes, we are definitely not going to call it that.

We'll talk more about it when when it actually gets finalized it's like just to give you an idea way of thinking about it.

It's really.

The margins.

From the project itself a positive the returns are positive it looks attractive to us to do that but more importantly, when as we get sort of over the hump of sort of finishing off this.

From the project itself for positive returns are positive it looks attractive to us to do that.

But more importantly, when as we get sort of over the hump of sort of finishing off the.

The vast majority of that old Boming business, it really releases us too.

To optimize the business going forward. So that really we are really carrying two cost structures at the same time right now.

So that that's the main benefit that we see in it and it's a nice underpinning of long term recurring revenue.

As we continue to build out the fixed broadband revenue in the area.

Okay and that would also be kind of a construction project and would be outside of guidance I assume.

Again, I think we will talk more about it when there are details of the contract I think it will be different and in structure and the P&L impact on the first day.

Again, I think we'll talk more about it when there are details of the contract I think it will be different and in structure and the P&L impact on the first day.

Last one for me.

Public and private valuations.

The main diverged somewhat can you talk about what youre seeing in the marketplace as far as public versus private valuations and any M&A thoughts on your side as far as anything that might be interesting to buy or interesting yourself.

Yes, I think I think we do see the same there. So there are there are a lot of deals getting done still in the from infrastructure funds and and traditional P bonds in the space and.

Yes, I think I think we do see the same there. So there are there are a lot of deals getting done scale.

In the from infrastructure funds and and traditional P funds in the space.

And you know they are typically at multiples well in excess of how we're valued and other public companies are valued.

And.

So that means it's harder for us to participate in.

Bolt ons, but.

In in bolt ons, but.

<unk>.

But it also is kind of a validation of the value we've been building because we look at some of these.

Is that are being acquired and we like our infrastructure, we like our trajectory, we like our market position.

Much better.

So so I think.

So I think we.

We will continue to look at things, we always consider things if they come our process, but it's just not a core focus for US right now we're really focused on executing this plan.

Okay very good thanks, guys.

Thanks, Greg.

Thank you and our next and one moment for our next question.

Bolt ons, but.

Yeah.

Our next question is going to be from the line of Greg Burns with Sidoti. Your line is open. Please go ahead.

Good morning.

I know, you're you're you're guiding for capex to step down to 10% to 15% range.

After 24, but how should we think about next year does it.

<unk> stepped down towards that level next year or does this capex kind of stay elevated.

What we're looking at this year next year, and then you kind of.

Step down more significantly in 'twenty four.

I think I think it's more significantly in 'twenty, four but I think it would probably tend to step down a bit next year as well on its way to a lower level in 'twenty four 'twenty five.

Yes.

Okay and then.

With the international wireless growth what is your market share there.

Across some of your markets and.

I'm, just trying to get a sense of what the.

Growth opportunity as there is the growth are you taking share from anyone in particular in any markets or is it is it kind of greenfield growth.

The growth opportunity is there and is the growth are you taking share from anyone in particular in any markets or is it is it kind of greenfield growth.

Yes.

We don't give a market share statistics.

I'm not so I'm not going to do that now, but I can answer the second part of your question.

We are taking share so there is I think.

I would say of our subscriber growth more to date is about taking share that in the market and market growth.

Okay.

And then I guess lastly on the domestic wireless business. So is this the new.

A growth opportunity as there is the growth are you taking share from anyone in particular in any markets or is it does it kind of greenfield growth.

New.

Managed services contract does the wholesale.

Wireless component of your revenue does that.

Now go to zero or trend towards zero or completely converting all of that revenue into kind of long term managed service contracts. After this deal or for the most part most of that revenue.

It's really what we call carrier service revenue.

So already.

Those those roaming contracts appear under that line of carrier services revenues the fiscal year and the same in the same one.

And then I guess lastly on the domestic wireless business so with this.

Okay.

Right.

As you can say, but generally yes, they are replacing that wholesale wrong.

Okay perfect. Thank you.

Thank you and as a reminder, again to ask a question at this time. Please press star one on your telephone one moment for our next question.

Our next question comes from the line of.

Carson with Dws financial your line is open. Please go ahead.

Hey, good morning, good morning, Amit.

A follow up on this.

To be announced contract.

What kind of preparations are you taking as far as the roaming business is concerned with the towers.

Are there going to be more charges in Q2.

You didn't need to take towers offline.

How would that work on the cost money.

I think we right now we think we've taken the charges that we would anticipate net.

So by and large I think they are reflected in what we're doing now.

And we are we would be continuing to use our towers and site there will be some.

It'd be some sites that we won't use the new tower sites, but but by and large.

It'll be reuse.

And then on the.

Okay.

And then on the.

Alaska side is there any seasonality in the business that youre seeing this year as far as the fiber Bill goes and adding on new customers.

There's not a lot of seasonality in that business I mean, theres definitely quarters I mean, the numbers are big.

There are quarters.

It tends to come in larger than others, but generally it's fairly straightforward.

It could be for something that got delivered in the quarter as opposed to seasonality I would say more.

There is probably a flight from the residential fiber business, it's a little easier to sell and.

And be active in the second and third quarter.

Feels builds also.

Alaska side is there any seasonality in the business that youre seeing this year as far as the fiber build goes and adding on new customers.

Ken.

And to be easier to execute then although you both all year round.

Okay.

The fiber build in Alaska.

Are you primarily focused on residential or are you seeing demand from commercial.

It tends to come in larger than the others, but generally it is.

All things.

We're building continue to build fiber to towers, we are building.

Fairly straightforward.

Longer.

Longer routes government customers.

But a lot of the sort of expansion in cat.

And the capital spend that comes from that business has been lately.

Disproportionately around the residential.

And to be easier to execute then although we do both all year round.

Okay, great. Thank you.

Yes.

Thank you and one moment our next question.

Okay.

The fiber build in Alaska.

Are you primarily focused on residential or are you seeing demand from commercial.

And we have a follow up question from the line of Ric Prentiss with Raymond James Your line is open. Please go ahead.

All things.

We are building continue to build fiber to towers, we building.

We got a few more in.

Following up on <unk> question.

Longer.

Yeah.

Longer routes government customers.

Sites that you are reviewed and have taken a charge. How many sites are you left with we sounded like in the 500 site range are we below the 500 site range above 500, sorry, it's not moving as much room left.

But a lot of the sort of expansion in cat.

And the capital spend that comes from that business has been lately.

Disproportionately around the residential.

So I'm not going to give you a precise number of sites, but let me just I think one thing maybe we want to be clear on a.

Okay, great. Thank you.

Yes.

Thank you and one moment our next question.

A lot of that restructuring cost is operating costs.

Right. So it's it's.

And we have a follow up question from the line of Ric Prentiss with Raymond James Your line is open. Please go ahead.

<unk> for the business, including people that support.

Certain parts of the business. So some of some of it is sites, but some of it is.

We got a few were in.

I'm just following up on <unk> question.

<unk>.

People as well so it is not.

Sites that you reviewed and have taken a charge how many sites you left with we sounded like in the 500 site range are we below the 500 site range above 500, sorry, let me exposure left.

It is not material to our overall tower number of them.

But can you give us a bread basket size about how many you've got because also we've always wondered why couldn't you wouldn't you maybe put a debt financing on the towers are positioned them for potential sales on day, depending on where things yes.

So im not going to give you a precise number of sites, but let me just I think one thing maybe we want to be clear on it.

We own.

A lot of that restructuring cost is operating costs.

One a couple of hundred towers in that.

Sites sites are some towers that we still we prefer as part of that but we.

Right. So it's it's elements of the business, including people that support.

We did come down I think it was.

About 70 sites in the in the count through the restructuring.

But a lot of that emphasize was third party side, Yes third party sites right, yes, anything we own we rebuilt value of the asset and are using it.

People as well so it is.

It is not material to our overall tower number of them.

But can you give us a bread basket size about how many you've got because also we've always wanted to why couldn't you wouldn't you maybe put a debt financing on the towers are positioned them for potential sale someday, depending on where things.

Thank you I'm showing no further questions and I would like to turn the conference back over to Justin Benincasa for any further remarks.

I'm actually I'll take it this myself Michael Pryor. So thank you operator, and thank you all for joining US. This morning, we're excited about the future given the essential nature of our offerings. The expansion of our network. Our first mover advantages in underserved communities and the financial flexibility we have within our <unk>.

We own.

About 70 sites in the in the account through the restructuring.

Control.

But a lot of that.

Thank you everyone.

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

Actually I'll take it this myself Michael Pryor. So thank you operator, and thank you all for joining US. This morning, we're excited about the future given the essential nature of our offerings. The expansion of our network. Our first mover advantages in underserved communities and the financial flexibility we have within our control.

<unk>.

Thank you everyone.

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

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