Alaska Communications Systems Group, Inc. (“ACS”) (NASDAQ:ALSK) today reported financial results for its third quarter ended September 30, 2012.
“The fundamentals of our value proposition to the Alaskan customer remain strong. We are successfully executing against our business plan to grow retail revenue, with a focus on business customers and broadband services. Broadband revenues have increased across the board both sequentially and year over year. Broadband Data as a percentage of service revenue now stands at 46% for the quarter, up 10% from a year ago. Importantly, we have good momentum in winning new customer relationships in the small and medium business segment. Demand for our broadband products is strong and we are making important strides in accelerating our product roadmap which allows us to provide the most advanced broadband services to our customers in Alaska. We recently launched our statewide 4G LTE network, which further cements our leadership position in wireless communications.
“We have also made solid progress on the Alaska Wireless Network (“AWN”) joint-venture transaction, which positions us to provide the most expansive, fastest wireless services in the state. We now have two important agreements that were necessary for AWN. We have a new three-year contract with the International Brotherhood of Electrical Workers ('IBEW') which also provides the framework to improve our operating model and costs over time. Additionally, we have executed an amended credit agreement with our senior lenders that also puts in place a framework to accelerate debt reductions. We remain on track to close the AWN transaction sometime in the second quarter of 2013.
“While our business plan combined with AWN puts us on a path to grow and pay down debt, we believe further strengthening of our balance sheet is warranted. Making a decision now to accelerate deleveraging has also helped us secure the continued support from our senior lenders on favorable terms. To that end, our Board of Directors has elected to suspend our common dividend and accelerate our deleveraging plans, which we believe will position us to be one of the best capitalized telecom companies based in Alaska.