UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the quarterly period ended March 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from to
Commission file number 000-30110
SBA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
| Florida |
65-0716501 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 5900 Broken Sound Parkway NW Boca Raton, Florida |
33487 | |
| (Address of principal executive offices) |
(Zip code) |
(561) 995-7670
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 45,675,480 shares of Class A common stock and 5,455,595 shares of Class B common stock as of April 30, 2003.
SBA COMMUNICATIONS CORPORATION
INDEX
| Page | ||
| PART I—FINANCIAL INFORMATION |
||
| Item 1. Unaudited Financial Statements |
||
| Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
3 | |
| Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 |
4 | |
| Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2003 |
5 | |
| Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
6 | |
| 7 | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
27 | |
| 29 | ||
| PART II—OTHER INFORMATION |
||
| 30 | ||
| 30 | ||
| 31 | ||
| 32 |
2
ITEM 1: UNAUDITED FINANCIAL STATEMENTS
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except par values)
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
47,857 |
|
$ |
61,141 |
| ||
| Accounts receivable, net of allowances of $5,765 and $5,572 in 2003 and 2002, respectively |
|
28,163 |
|
|
36,292 |
| ||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
|
11,371 |
|
|
10,425 |
| ||
| Prepaid and other current assets |
|
5,012 |
|
|
5,741 |
| ||
| Total current assets |
|
92,403 |
|
|
113,599 |
| ||
| Property and equipment, net |
|
1,121,934 |
|
|
1,140,625 |
| ||
| Deferred financing fees, net |
|
23,363 |
|
|
24,517 |
| ||
| Other assets |
|
23,050 |
|
|
21,853 |
| ||
| Intangible assets, net |
|
3,874 |
|
|
4,321 |
| ||
| Total assets |
$ |
1,264,624 |
|
$ |
1,304,915 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
13,877 |
|
$ |
16,810 |
| ||
| Accrued expenses |
|
15,294 |
|
|
15,081 |
| ||
| Deferred revenue |
|
14,422 |
|
|
12,427 |
| ||
| Interest payable |
|
12,459 |
|
|
22,919 |
| ||
| Long-term debt, current portion |
|
60,066 |
|
|
189,397 |
| ||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
|
2,016 |
|
|
2,362 |
| ||
| Other current liabilities |
|
1,917 |
|
|
3,595 |
| ||
| Total current liabilities |
|
120,051 |
|
|
262,591 |
| ||
| Long-term liabilities: |
||||||||
| Long-term debt |
|
969,102 |
|
|
834,885 |
| ||
| Deferred tax liabilities, net |
|
18,429 |
|
|
18,429 |
| ||
| Deferred revenue |
|
1,889 |
|
|
1,944 |
| ||
| Other long-term liabilities |
|
3,166 |
|
|
1,593 |
| ||
| Total long-term liabilities |
|
992,586 |
|
|
856,851 |
| ||
| Commitments and contingencies (see Note 15) |
||||||||
| Shareholders’ equity: |
||||||||
| Common stock—Class A par value $.01 (200,000 shares authorized, 45,675 and 45,674 shares issued and outstanding in 2003 and 2002, respectively) |
|
457 |
|
|
457 |
| ||
| Common stock—Class B par value $.01 (8,100 shares authorized, 5,456 shares issued and outstanding) |
|
55 |
|
|
55 |
| ||
| Additional paid-in capital |
|
673,215 |
|
|
672,946 |
| ||
| Accumulated deficit |
|
(521,740 |
) |
|
(487,985 |
) | ||
| Total shareholders’ equity |
|
151,987 |
|
|
185,473 |
| ||
| Total liabilities and shareholders’ equity |
$ |
1,264,624 |
|
$ |
1,304,915 |
| ||
The accompanying condensed notes to consolidated financials are an integral part of these consolidated financial statements.
3
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| For the three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues: |
||||||||
| Site development |
$ |
20,674 |
|
$ |
31,404 |
| ||
| Site leasing |
|
37,547 |
|
|
32,540 |
| ||
| Total revenues |
|
58,221 |
|
|
63,944 |
| ||
| Cost of revenues (exclusive of depreciation, accretion and amortization shown below): |
||||||||
| Cost of site development |
|
18,694 |
|
|
24,680 |
| ||
| Cost of site leasing |
|
12,960 |
|
|
11,240 |
| ||
| Total cost of revenues |
|
31,654 |
|
|
35,920 |
| ||
| Gross profit |
|
26,567 |
|
|
28,024 |
| ||
| Operating expenses: |
||||||||
| Selling, general and administrative |
|
8,483 |
|
|
9,374 |
| ||
| Restructuring and other charges |
|
976 |
|
|
37,736 |
| ||
| Asset impairment charge |
|
452 |
|
|
16,381 |
| ||
| Depreciation, accretion and amortization |
|
25,605 |
|
|
26,053 |
| ||
| Total operating expenses |
|
35,516 |
|
|
89,544 |
| ||
| Operating loss |
|
(8,949 |
) |
|
(61,520 |
) | ||
| Other income (expense): |
||||||||
| Interest income |
|
129 |
|
|
9 |
| ||
| Interest expense |
|
(17,681 |
) |
|
(13,216 |
) | ||
| Non-cash interest expense |
|
(5,077 |
) |
|
(6,152 |
) | ||
| Amortization of debt issuance costs |
|
(1,155 |
) |
|
(1,850 |
) | ||
| Other |
|
44 |
|
|
79 |
| ||
| Total other expense |
|
(23,740 |
) |
|
(21,130 |
) | ||
| Loss before provision for income taxes and cumulative effect of changes in accounting principles |
|
(32,689 |
) |
|
(82,650 |
) | ||
| Provision for income taxes |
|
(521 |
) |
|
(579 |
) | ||
| Loss before cumulative effect of changes in accounting principles |
|
(33,210 |
) |
|
(83,229 |
) | ||
| Cumulative effect of changes in accounting principles |
|
(545 |
) |
|
(80,592 |
) | ||
| Net loss |
$ |
(33,755 |
) |
$ |
(163,821 |
) | ||
| Basic and diluted loss per common share before cumulative effect of changes in accounting principles |
$ |
(0.65 |
) |
$ |
(1.70 |
) | ||
| Cumulative effect of changes in accounting principles |
|
(0.01 |
) |
|
(1.64 |
) | ||
| Basic and diluted loss per common share |
$ |
(0.66 |
) |
$ |
(3.34 |
) | ||
| Basic and diluted weighted average number of common shares |
|
51,130 |
|
|
49,010 |
| ||
The accompanying condensed notes to consolidated financial statements are an integral part of these consolidated financial statements.
4
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(unaudited)
(in thousands)
| Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total |
||||||||||||||||||
| Class A |
Class B |
||||||||||||||||||||
| Number |
Amount |
Number |
Amount |
||||||||||||||||||
| BALANCE, December 31, 2002 |
45,674 |
||||||||||||||||||||