$2.7 Million Adjusted EBITDA Improvement on 22% Quarterly Revenue Growth
SAN FRANCISCO, Aug. 7 /PRNewswire-FirstCall/ -- FiberTower Corporation
(Nasdaq: FTWR), a wireless backhaul services provider, today reported results
for the quarter ended June 30, 2008.
Service revenues for the three months ended June 30, 2008 increased
$2.2 million, or 22%, to $11.9 million compared to $9.7 million for the first
quarter of 2008. The increase in service revenues during the second quarter
of 2008 was driven by new billing customers at existing sites, the expansion
of billing sites and the addition of new billing T-1 equivalents and other
bandwidth services.
Highlights for the second quarter of 2008 included the following:
-- Billing sites grew 10% sequentially to 2,584 from 2,347 at the end of
the first quarter of 2008. Billing sites grew 40% year-over-year.
-- Billing customer locations grew 17% sequentially to 5,279 from 4,500 at
the end of the first quarter of 2008. Billing customer locations grew
87% year-over-year.
-- Billing T-1 equivalents grew 17% sequentially to 20,127 from 17,153 at
the end of the first quarter of 2008. Billing T-1 equivalents grew 97%
year-over-year.
-- Average monthly revenue per site grew 11% sequentially to $1,605 from
$1,440 in the first quarter of 2008.
-- Adjusted EBITDA improved from a loss of $12.5 million in the first
quarter of 2008 to a loss of $9.8 million in the second quarter of
2008.
-- Customer location backlog at June 30, 2008 was 2,300 locations.
'Our strong second quarter results are indicative of our focus on pursuing
growth opportunities while closely managing our costs,' said Kurt Van Wagenen,
President and Chief Executive Officer of FiberTower. 'We experienced
significant adjusted EBITDA improvement by realizing the expected cost savings
from our previously announced workforce reduction and by continuing to achieve
solid revenue growth, largely associated with turning up our sold backlog.'
During the second quarter of 2008, FiberTower continued to improve its
penetration of existing markets and sites. FiberTower's billing sites per
sites deployed increased to 86% at June 30, 2008 compared to 81% at March 31,
2008. The billing customer location rate per site increased to 2.04 at June
30, 2008, compared to 1.92 at March 31, 2008, reflecting a continued ability
to add new customer locations to already constructed sites. The
attractiveness of the Company's sites and markets was further evidenced by an
8% increase in T-1 equivalents on FiberTower's Top 500 sites to 16.8 at June
30, 2008 from 15.6 at March 31, 2008.
Operating expenses in the second quarter of 2008 decreased by
$77.1 million from the first quarter of 2008. In addition to reductions in
one-time charges, the Company benefited from Sales & Marketing and General &
Administrative expense decreases as a result of the workforce reduction
implemented in the second quarter of 2008. Net loss was $41.5 million for the
second quarter of 2008 compared to a net loss of $120.0 million for the first
quarter of 2008. Second quarter 2008 net loss included impairment charges to
property and equipment and a restructuring charge totaling $14.1 million
($0.10 per share). First quarter 2008 net loss included impairment charges to
goodwill and property and equipment totaling $90.9 million ($0.63 per share).
The net loss per share for the second quarter of 2008 was $0.29 compared to a
net loss per share of $0.83 for the first quarter of 2008.
On an Adjusted EBITDA basis, the loss in the second quarter of 2008
improved by 22% to $9.8 million compared to a loss of $12.5 million in the
first quarter of 2008. Adjusted EBITDA is defined as net income (loss) from
operations before interest, taxes, depreciation and amortization, impairment
and restructuring charges, stock-based compensation and other income
(expense). The reconciliation of Adjusted EBITDA, which is a non-GAAP
financial measure, is located at the end of this news release.
Six Months 2008 Consolidated Results
Service revenues for the six months ended June 30, 2008 increased
$10.0 million, or 86%, to $21.6 million compared to $11.6 million for the
corresponding period in 2007. The increase in service revenues during the
first six months of 2008 was driven by new billing customers at existing
sites, the expansion of billing sites and the addition of new billing T-1
equivalents and other bandwidth services.
Operating expenses for the first six months ended June 30, 2008 increased
by $113.3 million from the corresponding period in 2007. Net loss was
$161.5 million for the first six months of 2008 compared to a net loss of
$52.4 million for the corresponding period in 2007. The net loss for the
first six months of 2008 included impairment charges to goodwill and property
and equipment and a restructuring charge totaling $105.1 million ($0.73 per
share). The net loss per share for the first six months of 2008 was $1.12
compared to a net loss per share of $0.37 for the corresponding period in
2007.
On an Adjusted EBITDA basis, the loss in the first six months of 2008
improved by 15% to $22.2 million compared to a loss of $26.1 million for the
corresponding period in 2007.
Liquidity and Capital Resources
Capital expenditures totaled $9.8 million in the second quarter of 2008
compared to $16.7 million in the first quarter of 2008. The bulk of the
capital investments made by FiberTower in the second quarter of 2008 were used
towards the continued build-out of existing markets and adding new customers
to existing sites. FiberTower now anticipates spending no more than
$60 million for capital expenditures in 2008.
Consolidated cash, cash equivalents and certificates of deposits at
June 30, 2008 were $177.4 million compared to $198.2 million at the end of
March 31, 2008.
'Our second quarter results demonstrate our focus on cost control and the
efficient management of our capital expenditures,' said Thomas Scott, Chief
Financial Officer of FiberTower. 'We saw significant reduction in our SG&A
expenses during the second quarter and continued improvement in our
operational efficiency. These improvements, combined with our revised capital
expenditure guidance, keep us on track to meet our 2008 field EBITDA objective
and to exit the year with cash in excess of $115 million.'
Conference Call Details
FiberTower has scheduled a conference call for Friday, August 8, 2008 at
11:00 a.m. Eastern Time to discuss 2008 second quarter results. Please dial
303-262-2143 and ask for the FiberTower call at least 10 minutes prior to the
start time. A telephonic replay of the call will be available through
11:59 p.m. Eastern Time on August 16, 2008 and may be accessed by dialing
303-590-3000 using the passcode 11117836#. An audio archive will also be
available on FiberTower's website at http://www.fibertower.com shortly after
the call and will be accessible for approximately ninety 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 microwave and fiber networks in 13 major
markets, customer commitments from six of the leading cellular carriers, and
partnerships with the largest tower operators in the U.S, 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
http://www.fibertower.com.
Use of Non-GAAP Financial Measures
This news release uses the Non-GAAP financial measure 'adjusted EBITDA.'
Adjusted EBITDA is a financial measure used by the Company to monitor the
financial performance of its operations. This measurement, together with GAAP
measures such as revenue and loss from operations, assists management in
decision-making processes relating to the operation of our business. In
addition, FiberTower's presentation of adjusted EBITDA may not be comparable
to similarly titled measures reported by other companies. These Non-GAAP
financial measures should be viewed in addition to, and not as an alternative
for, the Company's reported financial results as determined in accordance with
GAAP.
Forward-Looking Statements
Statements included in this news release which are not historical in
nature are 'forward-looking statements' within the meaning of Section 21E of
the U.S. Securities Exchange Act of 1934 and the U.S. Private Securities
Litigation Reform Act of 1995. 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, without limitation, statements regarding the
Company's expected charges and cost savings associated with the Company's
reduction in workforce, planned capital expenditures, expected cost per site,
anticipated customer growth, expansion plans, target Field EBITDA 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
including, without limitation, anticipated negative cash flows and operating
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, and competition from alternative backhaul service
providers and technologies, along with those risk factors described in the
Company's filings with the Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Investor Contact:
Gus Okwu / DRG&E
404-532-0086
gokwu@drg-e.com
Company Contact:
Ornella Napolitano, VP and Treasurer
FiberTower Corporation
202-251-5210
onapolitano@fibertower.com
Key Operating Metrics 2Q07 3Q07 4Q07 1Q08 2Q08
Billing Sites
Billing Sites Added 265 143 157 199 237
Ending Billing Sites 1,848 1,991 2,148 2,347 2,584
Billing Sites/Sites Deployed 75% 75% 76% 81% 86%
Average Monthly Revenue/Site* $1,203 $1,261 $1,337 $1,440 $1,605
Billing Customer Locations
Billing Customer Locations Added 613 433 599 649 779
Ending Billing Customer Locations 2,819 3,252 3,851 4,500 5,279
Collocation Rate 1.53 1.63 1.79 1.92 2.04
Billing T-1 Equivalents
Billing T-1 Equiv. Added 1,884 1,823 2,171 2,952 2,974
Ending Billing T-1 Equivalents 10,207 12,030 14,201 17,153 20,127
T-1s per Customer Location 3.62 3.70 3.69 3.81 3.81
T-1s/Billing Site 5.52 6.04 6.61 7.31 7.79
T-1s/Billing Site (Top 500 Sites) NA NA NA 15.6 16.8
Average MRC per T-1 $229 $218 $215 $207 $203
Sites Deployed
FiberTower Sites Constructed 193 190 158 98 98
Ending Sites Deployed 2,465 2,655 2,813 2,911 3,009
Backlog
Customer Location Backlog** 2,020 3,511 2,300
Billing Sites are installed sites from which we provide revenue producing
service(s) to customer(s).
Average Monthly Revenue/Site is the average monthly revenue per billing
site. (*Note that FiberTower considers this newly reported metric as a more
appropriate measure of the Company's ability to scale and leverage its
existing network and will be replacing Average MRC per T-1 in future
reporting.)
Billing Customer Locations are carrier locations at which we currently
provide revenue producing service(s). FiberTower sites could have multiple
customer locations.
Collocation Rate is the number of customer locations per billing site.
Billing T1 Equivalent: A T1 equivalent is either a T1 or another increment
of bandwidth of approximately 1.54 megabits per second.
Average MRC per T-1 is the average monthly recurring revenue per T-1.
Sites Deployed represents installed sites that are ready for the provision
of services. FiberTower sites can be located on cell towers, rooftops, or
other points of bandwidth aggregation.
Customer Location Backlog is the number of sold customer locations not yet
billing. (**Note that FiberTower reports backlog on a semi-annual basis.)
FIBERTOWER CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Service revenues $11,868 $6,191 $21,574 $11,611
Operating expenses:
Cost of service revenues
(excluding depreciation and
amortization) 16,180 13,982 32,401 25,256
Cost of service revenues
- impairment of long-lived
assets and other charges 8,617 75 13,433 224
Sales and marketing 1,656 1,908 3,581 3,930
General and administrative 4,691 5,669 10,963 12,866
Depreciation and amortization 6,698 4,385 11,818 8,223
Restructuring charge 5,524 - 5,524 -
Impairment of goodwill - - 86,093 -
Total operating expenses 43,366 26,019 163,813 50,499
Loss from operations (31,498) (19,828) (142,239) (38,888)
Other income (expense):
Interest income 1,333 4,691 3,674 10,049
Interest expense (11,336) (11,689) (22,909) (23,946)
Miscellaneous income, net 37 225 10 346
Total other income
(expense), net (9,966) (6,773) (19,225) (13,551)
Net loss $(41,464) $(26,601) $(161,464) $(52,439)
Basic and diluted net loss
per share $(0.29) $(0.19) $(1.12) $(0.37)
Weighted average number of
shares used in per share
amounts:
Basic and diluted 144,286 142,808 144,165 142,534
FIBERTOWER CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)
(In thousands, except par value)
June 30, December 31,
2008 2007
Assets:
Current assets:
Cash and cash equivalents $172,401 $223,330
Certificates of deposit 5,000 5,000
Restricted cash and investments, current portion 18,194 35,757
Accounts receivable, net of allowances of $148 at
June 30, 2008 and $151 at December 31, 2007 4,528 3,684
Prepaid expenses and other current assets 2,166 1,840
Total current assets 202,289 269,611
Restricted cash and investments 1,233 1,222
Property and equipment, net 242,194 240,799
FCC licenses 342,000 342,000
Goodwill - 86,093
Debt issuance costs, net 10,740 11,855
Intangible and other long-term assets, net 4,103 3,975
Total assets $802,559 $955,555
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $6,135 $13,672
Accrued compensation and related benefits 3,446 3,369
Accrued interest payable 4,528 4,629
Other accrued liabilities 2,072 3,555
Current portion of accrued restructuring costs 2,164 -
Total current liabilities 18,345 25,225
Other liabilities 797 487
Deferred rent 5,395 4,223
Asset retirement obligations 3,710 3,311
Long-term accrued restructuring costs, net of
current portion 2,829 -
Convertible senior secured notes 422,891 415,778
Deferred tax liability 93,561 93,561
Total liabilities 547,528 542,585
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 400,000 shares
authorized, 150,499 and 146,242 shares issued
and outstanding at June 30, 2008 151 146
and December 31, 2007, respectively
Additional paid-in capital 790,891 787,371
Accumulated deficit (536,011) (374,547)
Total stockholders' equity 255,031 412,970
Total liabilities and stockholders' equity $802,559 $955,555
FIBERTOWER CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Six Months Ended
June 30,
2008 2007
Operating activities
Net loss $(161,464) $(52,439)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 11,818 8,223
Decline in value of embedded derivative - (538)
Accretion of convertible notes 7,113 6,124
Accretion of investments in debt securities (655) (1,059)
Accretion of asset retirement obligations 209 152
Amortization of debt issuance costs 1,115 1,052
Stock-based compensation 3,136 4,334
Loss on disposal of equipment 170 160
Impairment of long-lived assets and other charges 13,433 224
Restructuring charge 4,993 -
Impairment of goodwill 86,093 -
Net changes in operating assets and liabilities:
Accounts receivable, net (844) (1,181)
Prepaid expenses and other current assets (326) 300
Other long-term assets (277) 30
Accounts payable (7,537) (5,007)
Accrued compensation and related benefits 77 (1,244)
Accrued interest payable (101) (88)
Other accrued liabilities and deferred rent 188 2,776
Net cash used in operating activities (42,859) (38,181)
Investing activities
Purchases of short-term investments - (76,945)
Maturities of short-term investments - 72,405
Maturities of restricted cash and investments 18,207 17,776
Purchase of property and equipment (26,523) (47,919)
Net cash used in investing activities (8,316) (34,683)
Financing activities
Proceeds from exercise of stock options 246 1,461
Cash provided by financing activities 246 1,461
Net decrease in cash and cash equivalents (50,929) (71,403)
Cash and cash equivalents at beginning of period 223,330 345,174
Cash and cash equivalents at end of period $172,401 $273,771
Supplemental Disclosures
Cash paid for interest $18,124 $18,723
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. This measurement, together with GAAP measures such as revenue and
loss from operations, assists management in its decision-making processes
relating to the operations 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,
stock-based compensation and other income (expense). Adjusted EBITDA is not a
substitute for operating income, net income (loss), or cash flow used in
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. The following table shows the calculation
of the Company's total Adjusted EBITDA reconciled to net loss.
Three months Three months
ended 6/30/08 ended 6/30/07
Net loss $(41,464) $(26,601)
Depreciation & amortization 6,698 4,385
Stock-based compensation 911 1,998
Interest income (1,333) (4,691)
Interest expense 11,336 11,689
Impairment of goodwill - -
Impairment of long-lived assets and
other charges 8,617 75
Restructuring charge 5,524 -
Miscellaneous (income), net (37) (225)
Adjusted EBITDA $(9,748) $(13,370)
Six months Six months
ended 6/30/08 ended 6/30/07
Net loss $(161,464) $(52,439)
Depreciation & amortization 11,818 8,223
Stock-based compensation 3,136 4,334
Interest income (3,674) (10,049)
Interest expense 22,909 23,946
Impairment of goodwill 86,093 -
Impairment of long-lived assets and
other charges 13,433 224
Restructuring charge 5,524 -
Miscellaneous (income), net (10) (346)
Adjusted EBITDA $(22,235) $(26,107)
SOURCE FiberTower Corporation
