Anterix Inc (NASDAQ:ATEX) Q1 2021 Earnings Conference Call - Final Transcript
Sep 16, 2020 • 04:30 pm ET
ended June 2020 with approximately $125 million of cash and are debt-free. As a reminder, during our last update call in May, I stated that we expect to spend a total of $50 million to $60 million during our current fiscal year, which is inclusive of $20 million to $30 million in spectrum-clearing investments and approximately $30 million of operating expenses. We remain on track to spend within this forecasted range. And as I've discussed previously, we do expect our expenses to continue to gradually rise over this fiscal year as we add resources to enhance our organizational capabilities.
The funding of our business plan would be assisted by the initial demand that we are seeing for prepaid leases. Based on our current discussions with our potential investor-owned utility customers, we now believe some of these customers will opt to prepay their spectrum lease there upfront or over the first two years of the lease. Prepayments of IOU spectrum leases appear to be an easier path forward for them, providing them the ability to capitalize their spectrum investment. It is still too early to tell that this will be a trend for a majority of our utility customers going forward. But as we've discussed, utilities have a strong preference to capitalize these leases.
To be clear, the IOU's decision to prepay their leases is not intended to reduce the cost of their spectrum lease. Therefore, we expect that the discount rate for these prepayments will be based closer to the IOU's cost of capital than to ours. No matter how the customer chooses to pay their lease, even if we receive upfront payments representing the entire terminal lease, we will use the GAAP straight-line method of accounting to recognize revenues over the full term of the lease. Again, I'll repeat that it's too early to tell if this early indication will continue for every utility customer, but it does potentially mean that we could get to free cash flow faster and provide us with additional strategic options. Having a significant cash balance will provide us with the ability to invest in the growth of our business without tapping the financial markets and could even give us an opportunity to return cash to shareholders, including share buybacks earlier than anticipated. We will provide more updates on the emergence of this trend as we sign customer contracts.
I'd also like to provide a detailed update on our 900 megahertz spectrum clearing process and the investments we made both in the past quarter and in the current quarter to bring broadband to the market. In our fiscal first quarter that ended on June 30th, we spent $6 million with the spending representative of initial deposits and final payments for channel acquisitions and spectrum swaps to relocate for what we refer to as re-tune incumbents out of the broadband allocation. In addition, in our current fiscal quarter through August 31, we spent $1.4 million on incumbent transactions and have an additional $2.2 million committed