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 September 30, 2004
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 x 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: 64,166,824 shares of Class A common stock as of November 8, 2004.
SBA COMMUNICATIONS CORPORATION
INDEX
| Page | ||||
| PART I - FINANCIAL INFORMATION |
||||
| Item 1. |
Unaudited Financial Statements | |||
| Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 |
3 | |||
| 4 | ||||
| 6 | ||||
| Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003 |
7 | |||
| 8 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 34 | ||
| Item 4. |
Controls and Procedures | 36 | ||
| PART II - OTHER INFORMATION |
||||
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 36 | ||
| Item 6. |
Exhibits | 38 | ||
| 39 | ||||
| CERTIFICATIONS |
40 | |||
2
PART I – FINANCIAL INFORMATION
ITEM 1: UNAUDITED FINANCIAL STATEMENTS
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
| September 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 20,996 | $ | 8,338 | ||||
| Short-term investments |
— | 15,200 | ||||||
| Restricted cash |
6,354 | 10,344 | ||||||
| Accounts receivable, net of allowances of $2,006 and $1,400 in 2004 and 2003, respectively |
15,157 | 19,414 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
16,777 | 10,227 | ||||||
| Prepaid and other current expenses |
5,386 | 5,009 | ||||||
| Assets held for sale |
203 | 1,751 | ||||||
| Total current assets |
64,873 | 70,283 | ||||||
| Property and equipment, net |
798,202 | 854,857 | ||||||
| Deferred financing fees, net |
18,282 | 24,253 | ||||||
| Other assets |
32,502 | 31,181 | ||||||
| Intangible assets, net |
1,626 | 2,408 | ||||||
| Total assets |
$ | 915,485 | $ | 982,982 | ||||
| LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 12,805 | $ | 11,352 | ||||
| Accrued expenses |
16,688 | 17,866 | ||||||
| Deferred revenue |
12,824 | 11,137 | ||||||
| Interest payable |
5,322 | 20,319 | ||||||
| Long term debt, current portion |
3,251 | 11,538 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
478 | 1,168 | ||||||
| Other current liabilities |
2,527 | 2,059 | ||||||
| Liabilities held for sale |
— | 608 | ||||||
| Total current liabilities |
53,895 | 76,047 | ||||||
| Long Term Liabilities: |
||||||||
| Long-term debt |
884,775 | 859,220 | ||||||
| Deferred revenue |
476 | 511 | ||||||
| Other long-term liabilities |
3,811 | 3,327 | ||||||
| Total long term liabilities |
889,062 | 863,058 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ (deficit) equity: |
||||||||
| Preferred stock - $.01 par value, 30,000 shares authorized, none issued or outstanding |
— | — | ||||||
| Common Stock - Class A par value $.01, 200,000 shares authorized, 59,965 and 55,016 shares issued and outstanding in 2004 and 2003, respectively |
597 | 550 | ||||||
| Common stock - Class B par value $.01, 8,100 shares authorized, none issued or outstanding |
— | — | ||||||
| Additional paid-in capital |
703,742 | 679,961 | ||||||
| Accumulated deficit |
(731,811 | ) | (636,634 | ) | ||||
| Total shareholders’ (deficit) equity |
(27,472 | ) | 43,877 | |||||
| Total liabilities and shareholders’ (deficit) equity |
$ | 915,485 | $ | 982,982 | ||||
The accompanying condensed notes 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 September 30, |
For the nine months ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Site leasing |
$ | 36,965 | $ | 32,169 | $ | 106,352 | $ | 94,916 | ||||||||
| Site development |
21,778 | 15,425 | 59,597 | 45,758 | ||||||||||||
| Total revenues |
58,743 | 47,594 | 165,949 | 140,674 | ||||||||||||
| Cost of revenues (exclusive of depreciation, accretion and amortization shown below): |
||||||||||||||||
| Cost of site leasing |
10,532 | 10,486 | 31,384 | 31,830 | ||||||||||||
| Cost of site development |
20,169 | 14,646 | 55,740 | 41,877 | ||||||||||||
| Total cost of revenues |
30,701 | 25,132 | 87,124 | 73,707 | ||||||||||||
| Gross profit |
28,042 | 22,462 | 78,825 | 66,967 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling, general and administrative |
7,374 | 7,777 | 21,652 | 22,992 | ||||||||||||
| Restructuring and other charges |
3 | 957 | 223 | 2,033 | ||||||||||||
| Asset impairment charges |
155 | 50 | 1,714 | 10,767 | ||||||||||||
| Depreciation, accretion and amortization |
20,511 | 21,000 | 61,755 | 63,337 | ||||||||||||
| Total operating expenses |
28,043 | 29,784 | 85,344 | 99,129 | ||||||||||||
| Operating loss from continuing operations |
(1 | ) | (7,322 | ) | (6,519 | ) | (32,162 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
88 | 120 | 285 | 373 | ||||||||||||
| Interest expense |
(11,270 | ) | (21,534 | ) | (36,816 | ) | (61,177 | ) | ||||||||
| Non-cash interest expense |
(7,022 | ) | (1,410 | ) | (21,035 | ) | (7,210 | ) | ||||||||
| Amortization of debt issuance costs |
(900 | ) | (1,343 | ) | (2,611 | ) | (3,770 | ) | ||||||||
| Loss from write-off of deferred financing fees and extinguishment of debt |
(2,092 | ) | (408 | ) | (24,764 | ) | (5,250 | ) | ||||||||
| Other |
3 | (25 | ) | 74 | (16 | ) | ||||||||||
| Total other expense |
(21,193 | ) | (24,600 | ) | (84,867 | ) | (77,050 | ) | ||||||||
| Loss from continuing operations before provision for income taxes and cumulative effect of change in accounting principle |
(21,194 | ) | (31,922 | ) | (91,386 | ) | (109,212 | ) | ||||||||
| Provision for income taxes |
(278 | ) | (433 | ) | (827 | ) | (1,368 | ) | ||||||||
| Loss from continuing operations before cumulative effect of change in accounting principle |
(21,472 | ) | (32,355 | ) | (92,213 | ) | (110,580 | ) | ||||||||
| (Loss) gain from discontinued operations, net of income taxes |
(2,538 | ) | 12,689 | (2,964 | ) | (9,878 | ) | |||||||||
| Loss before cumulative effect of change in accounting principle |
(24,010 | ) | (19,666 | ) | (95,177 | ) | (120,458 | ) | ||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (545 | ) | |||||||||||
| Net loss |
$ | (24,010 | ) | $ | (19,666 | ) | $ | (95,177 | ) | $ | (121,003 | ) | ||||
(continued)
4
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in thousands, except per share amounts)
| For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Basic and diluted loss per common share amounts: |
||||||||||||||||
| Loss from continuing operations before cumulative effect of changes in accounting principle |
$ | (0.37 | ) | $ | (0.62 | ) | $ | (1.63 | ) | $ | (2.15 | ) | ||||
| (Loss) gain from discontinued operations |
(0.05 | ) | 0.24 | (0.05 | ) | (0.19 | ) | |||||||||
| Cumulative effect of change in accounting principle |
— | — | — | (0.01 | ) | |||||||||||
| Net loss per common share |
$ | (0.42 | ) | $ | (0.38 | ) | $ | (1.68 | ) | $ | ||||||