SAN FRANCISCO, May 5, 2011 /PRNewswire/ -- FiberTower
Corporation (NASDAQ: FTWR), a wireless backhaul services provider,
today reported results for the first quarter ended March 31, 2011.
Highlights for the Quarter
- Service revenues net of early termination liability (ETL) grew
23% to $21.3 million in the 2011
first quarter from $17.2 million in
the 2010 first quarter.
- Average monthly revenue per deployed site net of ETL increased
16% to $2,142 in the 2011 first
quarter from $1,842 in the 2010 first
quarter.
- Adjusted EBITDA net of ETL was $885,000 and improved $2.7
million from a loss of $1.9
million in the 2010 first quarter.
- Deployed sites grew 6% to 3,308 at the end of the first quarter
of 2011 from 3,119 at the end of the first quarter of 2010.
- Capital expenditures were $7.4
million in the first quarter of 2011 compared to
$2.5 million in the 2010 first
quarter.
- Cash and cash equivalents balance was $14.4 million at March 31,
2011.
Kurt Van Wagenen, FiberTower's
president and chief executive officer, stated, "Our first quarter
2011 results were solid, with year-over-year revenue growth of 23%,
sequential revenue growth of 6%, and Adjusted EBITDA improving from
first quarter 2010's loss level. In accordance with our
capital plan, we deployed 32 new sites in the quarter, increasing
our total deployed sites 6% from the first quarter of 2010 while we
continued to experience mid-teens percent growth in average monthly
revenue per site year-over-year. Our team remains focused on
meeting customer projects and delivering operational excellence
that leverages the Company's unique position as a pure-play
wireless backhaul services provider with a strong sales funnel,
nationwide spectrum assets, and both fiber and microwave
expertise."
Mr. Van Wagenen continued, "While
we delivered good financial results in the first quarter, we are
also facing considerable challenges this year, including a recent
customer termination, increasing churn in TDM services as the
wireless carriers accelerate their migration to Ethernet, and the
need for incremental funding to support our growing new business
pipeline. To address these challenges, we have reduced our
cost base and capital plan from 2010 levels. In addition, we
have shortened our payback requirements on capital projects to help
liquidity into 2012 while we explore alternatives to address our
funding needs."
2011 First Quarter Consolidated Results
Service revenues for the three months ended March 31, 2011 increased by $5.7 million, or 32%, to $23.5 million, compared to $17.8 million for the first quarter of 2010.
During the first quarter, FiberTower recorded $2.2 million of non-recurring revenue associated
with an early termination liability (ETL) of certain circuits.
Revenue excluding the ETL was $21.3
million, increasing 23% compared to the first quarter of
2010. The sale of incremental bandwidth to customers at existing
sites as well as turning up new service sold in previous quarters
drove the increase in service revenues during the first quarter of
2011.
Operating expenses were $30.3
million in the first quarter, compared to $26.5 million in the first quarter of 2010.
Included in first quarter 2011 operating expenses is
$0.5 million for severance related to
our Q1 reduction in force. Excluding this charge, operating
expenses increased primarily due to increases in cost of service
revenues and depreciation.
Net loss for the first quarter 2011 was $10.1 million, compared to net loss of
$11.8 million in the first quarter of
2010.
First quarter 2011 Adjusted EBITDA net of ETL was $885,000, improving $2.7
million, compared to a loss of $1.9
million in the first quarter of 2010. Adjusted EBITDA
is defined as net income (loss) from operations before interest,
taxes, depreciation and amortization, impairment and restructuring
charges, severance related to reduction in force, stock-based
compensation, gain on early extinguishment of debt, debt exchange
expenses and other income (expense). The reconciliation of
Adjusted EBITDA, which is a non-GAAP financial measure, to net loss
is provided at the end of this release.
Liquidity and Capital Resources
During the first quarter of 2011, cash consumption was
$6.9 million, compared to
$3.1 million in the first quarter of
2010. The first quarter of 2011 cash outlays reflect payment
of increased purchases of property and equipment at the end of
2010. Outstanding debt, including accretion, at March 31, 2011 was $166.7
million comprised of $131.6
million in the 9.0% Senior Secured Notes due 2016 and
$35.1 million in the 9.0% Convertible
Senior Secured Notes due 2012. Capital expenditures for the first
quarter of 2011 totaled $7.4 million,
compared to $2.5 million in the first
quarter of 2010. Consolidated cash and cash equivalents at
March 31, 2011 were $14.4 million, compared to $21.3 million at December
31, 2010.
Thomas Scott, chief financial
officer of FiberTower, stated, "FiberTower continues to enjoy a
number of projects in our pipeline that offer short-term paybacks
at good margins and give us the opportunity to replace churned
revenue. Therefore, we are adjusting our 2011 capital program
upward from $10-15 million to
$13-17 million. Given uncertainty
with our funding efforts, visibility on 2011 revenue and Adjusted
EBITDA remains low, preventing us from providing a specific
financial outlook and reducing our confidence in remaining Adjusted
EBITDA positive for the year. However, we believe our cash
position will be sufficient to cover our estimated liquidity needs
until at least March 31, 2012."
Conference Call Details
FiberTower has scheduled a conference call for Friday, May 6th at 11:30
a.m. Eastern Time / 8:30 a.m. Pacific
Time to discuss the first quarter 2011 financial results.
To participate on the live call, please dial 1-877-941-7133
at least 10 minutes before the start of the conference.
International participants may dial 1-480-629-9818. The
conference ID number is 4434774.
Management will review a slide presentation concurrently via
webcast summarizing results for the 2011 first quarter.
Investors may access the webcast and presentation from the
"Investor Relations" section of the company's website at
http://www.fibertower.com/corp/investors-presentations-and-events.shtml.
A telephone replay will be available until midnight PT on May
11th by dialing 1-800-406-7325 or 1-303-590-3030, and
entering pass code #4434774. A webcast replay will also be
available at the web address above for 90 days.
About FiberTower
FiberTower is a backhaul and access services provider focused
primarily on the wireless carrier market. With its extensive
spectrum footprint in 24 GHz and 39 GHz bands, carrier-class fiber
and microwave networks in 13 major markets and master service
agreements with nine U.S. wireless carriers, FiberTower is
considered to be the leading alternative carrier for wireless
backhaul. FiberTower also provides backhaul and access service to
government and enterprise markets. For more information, please
visit our website at www.fibertower.com.
Forward-Looking Statements
This news release includes "forward-looking" statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995 or by the Securities and Exchange Commission, or SEC, in its
rules, regulations and releases. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. These
include statements regarding, among other things, our future
financial performance and results of operations including guidance
for expected positive 2011 Adjusted EBITDA, our expected range of
2011 capital expenditures and expected 2011 SG&A reductions,
our financial and business prospects, the deployment of our
services, capital requirements, financing prospects, planned
capital expenditures, expected cost per site, anticipated customer
growth, expansion plans, and anticipated cash balances.
There are many risks, uncertainties and other factors that can
prevent the achievement of goals or cause results to differ
materially from those expressed or implied by these forward-looking
statements. These include, among other things, negative cash
flows and operating and net losses, additional liquidity
requirements, potential loss of significant customers, downturns in
the wireless communication industry, regulatory costs and
restrictions, potential loss of FCC licenses, equipment supply
disruptions and cost increases, competition from alternative
backhaul service providers and technologies, along with those risk
factors described in the company's Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, as filed with the SEC.
FIBERTOWER
CORPORATION
|
|
Condensed
Consolidated Statements of Operations
|
|
(unaudited)
|
|
(In
thousands, except per share data)
|
|
|
|
Three Months Ended
|
|
|
|
March
31,
|
|
|
|
2011
|
|
2010
|
|
Service
revenues
|
|
$ 23,503
|
|
$ 17,823
|
|
Operating
expenses:
|
|
|
|
|
|
Cost of service revenues
(excluding
|
|
|
|
|
|
depreciation
and amortization)
|
|
16,155
|
|
13,997
|
|
Sales and
marketing
|
|
698
|
|
1,019
|
|
General and
administrative
|
|
5,403
|
|
5,097
|
|
Depreciation and
amortization
|
|
8,015
|
|
6,371
|
|
Total operating
expenses
|
|
30,271
|
|
26,484
|
|
Loss from
operations
|
|
(6,768)
|
|
(8,661)
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
|
(3,385)
|
|
(3,362)
|
|
Miscellaneous income and
expense, net
|
|
19
|
|
215
|
|
Total other expense,
net
|
|
(3,366)
|
|
(3,147)
|
|
Net loss
|
|
$(10,134)
|
|
$(11,808)
|
|
|
|
|
|
|
|
Basic and diluted net loss
per share attributable to
|
|
|
|
|
|
common
stockholders
|
|
$ (0.21)
|
|
$ (0.26)
|
|
|
|
|
|
|
|
Shares used in computing
basic and diluted
|
|
|
|
|
|
net
loss per share
|
|
45,833
|
|
45,645
|
|
|
|
|
|
|
FIBERTOWER
CORPORATION
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
thousands, except par value)
|
|
|
|
|
|
|
|
March
31, 2011
|
|
December 31, 2010
|
|
|
(Unaudited)
|
|
|
|
Assets:
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
14,378
|
|
$
21,314
|
|
Restricted cash and
investments, current portion
|
4,197
|
|
5,923
|
|
Accounts receivable, net
of allowances of $37 and $43
|
|
|
|
|
at March 31,
2011 and December 31, 2010, respectively
|
9,801
|
|
10,446
|
|
Prepaid expenses and other
current assets
|
2,019
|
|
2,001
|
|
Total current
assets
|
30,395
|
|
39,684
|
|
Restricted cash and
investments, net of current portion
|
4,051
|
|
4,067
|
|
Property and equipment,
net
|
221,510
|
|
222,214
|
|
FCC licenses
|
287,495
|
|
287,495
|
|
Intangible and other
long-term assets, net
|
5,084
|
|
5,010
|
|
Total assets
|
$
548,535
|
|
$
558,470
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
4,847
|
|
$
8,146
|
|
Accrued compensation and
related benefits
|
2,535
|
|
2,324
|
|
Accrued interest
payable
|
1,926
|
|
2,092
|
|
Other accrued
liabilities
|
2,050
|
|
2,118
|
|
Current portion of accrued
restructuring costs
|
1,183
|
|
1,230
|
|
Current portion of
obligation under capital lease
|
483
|
|
225
|
|
Total current
liabilities
|
13,024
|
|
16,135
|
|
Other
liabilities
|
1,559
|
|
1,138
|
|
Deferred rent
|
7,652
|
|
7,613
|
|
Asset retirement
obligations
|
5,471
|
|
5,281
|
|
Accrued restructuring
costs, net of current portion
|
313
|
|
539
|
|
Obligation under capital
lease, net of current portion
|
3,479
|
|
3,687
|
|
Long-term debt
|
166,679
|
|
164,827
|
|
Deferred tax
liability
|
71,904
|
|
71,904
|
|
Total
liabilities
|
270,081
|
|
271,124
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders’
equity:
|
|
|
|
|
Common stock, $0.001 par
value; 400,000 shares authorized,
|
|
|
|
|
49,610 and 49,985 shares
issued and outstanding at
|
|
|
|
|
March 31, 2011 and
December 31, 2010, respectively
|
50
|
|
50
|
|
Additional paid-in
capital
|
964,434
|
|
963,192
|
|
Accumulated
deficit
|
(686,030)
|
|
(675,896)
|
|
Total stockholders’
equity
|
278,454
|
|
287,346
|
|
Total liabilities
and stockholders’ equity
|
$
548,535
|
|
$
558,470
|
|
|
|
|
|
FIBERTOWER
CORPORATION
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(unaudited)
|
|
(In
thousands)
|
|
|
Three Months Ended
|
|
|
March
31,
|
|
|
2011
|
|
2010
|
|
Operating
activities
|
|
|
|
|
Net loss
|
$(10,134)
|
|
$(11,808)
|
|
Adjustments to reconcile
net loss to net cash used for
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
8,015
|
|
6,371
|
|
Increase in carrying value
of long-term debt
|
1,852
|
|
1,725
|
|
Stock-based
compensation
|
1,165
|
|
903
|
|
Other
|
553
|
|
486
|
|
Net changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
645
|
|
788
|
|
Prepaid expenses and other
current assets
|
(18)
|
|
(73)
|
|
Other long-term
assets
|
(189)
|
|
(61)
|
|
Accounts
payable
|
(3,299)
|
|
(423)
|
|
Accrued compensation and
related benefits
|
211
|
|
355
|
|
Accrued interest
payable
|
(166)
|
|
1,594
|
|
Other accrued
liabilities
|
70
|
|
(419)
|
|
Net
cash used for operating activities
|
(1,295)
|
|
(562)
|
|
Investing
activities
|
|
|
|
|
Decrease (increase) in
restricted cash and investments
|
1,742
|
|
(45)
|
|
Purchase of property and
equipment
|
(7,435)
|
|
(2,536)
|
|
Net
cash used for investing activities
|
(5,693)
|
|
(2,581)
|
|
Financing
activities
|
|
|
|
|
Proceeds from exercise of
stock options
|
52
|
|
7
|
|
Cash provided by financing
activities
|
52
|
|
7
|
|
Net decrease in cash and
cash equivalents
|
(6,936)
|
|
(3,136)
|
|
Cash and cash equivalents
at beginning of period
|
21,314
|
|
50,669
|
|
|
|
|
|
|
Cash and cash equivalents
at end of period
|
$ 14,378
|
|
$ 47,533
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures
|
|
|
|
|
Cash
paid for interest on Notes due 2016
|
$ 1,756
|
|
$
-
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures:
This news release includes the use of Adjusted EBITDA, which is
a non-GAAP financial measure management uses to monitor the
financial performance of the company's operations. This
measurement, together with GAAP measures such as revenue and loss
from operations, assists management in its decision-making
processes relating to the operation of the company's business.
Adjusted EBITDA is defined as net income (loss) from
operations before interest, taxes, depreciation and amortization,
impairment and restructuring charges, severance related to
reduction in force, stock-based compensation, gain on early
extinguishment of debt, debt exchange expenses and other income
(expense). Adjusted EBITDA is not a substitute for loss from
operations, net loss, or cash flow provided by (used for) operating
activities as determined in accordance with GAAP, as a measure of
performance or liquidity. In addition, the company's
presentation of Adjusted EBITDA may not be comparable to similarly
titled measures reported by other companies. This non-GAAP
financial measure should be viewed in addition to, and not as an
alternative for, the company's reported financial results as
determined in accordance with GAAP.
During the first quarter of 2011, the company recorded
$2.2 million in revenue associated
with an early termination liability (ETL) of certain circuits. As
this is not recurring revenue, the company has Adjusted revenue and
Adjusted EBITDA to exclude the ETL. The following table shows the
calculation of the company's total Adjusted EBITDA reconciled to
net loss and the reconciliation of revenue and Adjusted EBITDA
excluding the ETL.
FIBERTOWER
CORPORATION
|
|
Reconciliation of GAAP to
Adjusted EBITDA
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
3/31/11
|
|
12/31/10
|
|
3/31/10
|
|
Net loss
|
|
$(10,134)
|
|
$(12,757)
|
|
$(11,808)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
8,015
|
|
7,656
|
|
6,371
|
|
Stock-based
compensation
|
|
1,165
|
|
1,133
|
|
903
|
|
Reduction in force
- severance
|
|
454
|
|
-
|
|
-
|
|
Interest
expense
|
|
3,385
|
|
3,254
|
|
3,362
|
|
Impairment of
long-lived assets and other charges
|
|
|
|
|
|
|
|
and credits
|
|
244
|
|
1,968
|
|
(98)
|
|
Income tax
provision
|
|
-
|
|
20
|
|
-
|
|
Adjusted EBITDA
|
|
3,129
|
|
1,274
|
|
(1,270)
|
|
Early termination
liability ("ETL")
|
|
(2,244)
|
|
(329)
|
|
(587)
|
|
Adjusted EBITDA, net of
ETL
|
|
$
885
|
|
$
945
|
|
$ (1,857)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIBERTOWER
CORPORATION
|
|
Reconciliation of Revenue
Adjusted for ETL
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
3/31/11
|
|
12/31/10
|
|
3/31/10
|
|
Service revenues
|
|
$ 23,503
|
|
$ 20,464
|
|
$ 17,823
|
|
Early termination
liability ("ETL")
|
|
(2,244)
|
|
(329)
|
|
(587)
|
|
Service revenues, net of
ETL
|
|
$ 21,259
|
|
$ 20,135
|
|
$ 17,236
|
|
|
|
|
|
|
|
|
SOURCE FiberTower Corporation