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, 2005
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: 65,715,954 shares of Class A common stock as of May 6, 2005.
SBA COMMUNICATIONS CORPORATION
INDEX
2
PART I – FINANCIAL INFORMATION
ITEM 1: UNAUDITED FINANCIAL STATEMENTS
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
| March 31, 2005 |
December 31, 2004 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 19,017 | $ | 69,627 | ||||
| Restricted cash |
2,024 | 2,017 | ||||||
| Accounts receivable, net of allowances of $1,261 and $1,731 in 2005 and 2004, respectively |
13,292 | 21,125 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
17,793 | 19,066 | ||||||
| Prepaid and other current expenses |
4,475 | 4,327 | ||||||
| Assets held for sale |
10 | 10 | ||||||
| Total current assets |
56,611 | 116,172 | ||||||
| Property and equipment, net |
742,827 | 745,831 | ||||||
| Deferred financing fees, net |
17,834 | 19,421 | ||||||
| Other assets |
35,656 | 34,455 | ||||||
| Intangible assets, net |
1,108 | 1,365 | ||||||
| Total assets |
$ | 854,036 | $ | 917,244 | ||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 11,260 | $ | 15,204 | ||||
| Accrued expenses |
13,472 | 14,997 | ||||||
| Deferred revenue |
10,145 | 10,810 | ||||||
| Interest payable |
7,101 | 3,729 | ||||||
| Long term debt, current portion |
3,250 | 3,250 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
534 | 1,251 | ||||||
| Other current liabilities |
1,574 | 1,762 | ||||||
| Total current liabilities |
47,336 | 51,003 | ||||||
| Long-Term Liabilities: |
||||||||
| Long-term debt |
879,091 | 924,456 | ||||||
| Deferred revenue |
393 | 384 | ||||||
| Other long-term liabilities |
31,519 | 30,072 | ||||||
| Total long-term liabilities |
911,003 | 954,912 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ deficit: |
||||||||
| Preferred stock - $.01 par value, 30,000 shares authorized, none issued or outstanding |
— | — | ||||||
| Common Stock - Class A par value $.01, 200,000 shares authorized, 65,619 and 64,903 shares issued and outstanding in 2005 and 2004, respectively |
656 | 649 | ||||||
| Common stock - Class B par value $.01, 8,100 shares authorized, none issued or outstanding |
— | — | ||||||
| Additional paid-in capital |
746,111 | 740,037 | ||||||
| Accumulated deficit |
(851,070 | ) | (829,357 | ) | ||||
| Total shareholders’ deficit |
(104,303 | ) | (88,671 | ) | ||||
| Total liabilities and shareholders’ deficit |
$ | 854,036 | $ | 917,244 | ||||
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 March 31, |
||||||||
| 2005 |
2004 As restated |
|||||||
| Revenues: |
||||||||
| Site leasing |
$ | 38,342 | $ | 33,934 | ||||
| Site development |
19,962 | 16,925 | ||||||
| Total revenues |
58,304 | 50,859 | ||||||
| Cost of revenues (exclusive of depreciation accretion and amortization shown below): |
||||||||
| Cost of site leasing |
12,045 | 11,651 | ||||||
| Cost of site development |
19,249 | 16,363 | ||||||
| Total cost of revenues |
31,294 | 28,014 | ||||||
| Gross profit |
27,010 | 22,845 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
7,200 | 7,181 | ||||||
| Restructuring and other charges |
17 | 163 | ||||||
| Asset impairment charges |
214 | 17 | ||||||
| Depreciation, accretion and amortization |
21,643 | 22,815 | ||||||
| Total operating expenses |
29,074 | 30,176 | ||||||
| Operating loss from continuing operations |
(2,064 | ) | (7,331 | ) | ||||
| Other income (expense): |
||||||||
| Interest income |
247 | 142 | ||||||
| Interest expense |
(10,004 | ) | (13,828 | ) | ||||
| Non-cash interest expense |
(7,342 | ) | (7,257 | ) | ||||
| Amortization of debt issuance costs |
(798 | ) | (838 | ) | ||||
| Loss from write-off of deferred financing fees and extinguishment of debt |
(1,486 | ) | (22,217 | ) | ||||
| Other |
150 | 62 | ||||||
| Total other expense |
(19,233 | ) | (43,936 | ) | ||||
| Loss from continuing operations before provision for income taxes |
(21,297 | ) | (51,267 | ) | ||||
| Provision for income taxes |
(246 | ) | (233 | ) | ||||
| Loss from continuing operations |
(21,543 | ) | (51,500 | ) | ||||
| (Loss) gain from discontinued operations, net of income taxes |
(170 | ) | 75 | |||||
| Net loss |
$ | (21,713 | ) | $ | (51,425 | ) | ||
| Basic and diluted loss per common share amounts: |
||||||||
| Loss from continuing operations |
$ | (0.33 | ) | $ | (0.92 | ) | ||
| (Loss) gain from discontinued operations |
— | — | ||||||
| Net loss per common share |
$ | (0.33 | ) | $ | (0.92 | ) | ||
| Weighted average number of common shares |
65,260 | 55,684 | ||||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
4
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(unaudited)
(in thousands)
| Common Stock Class A |
Additional Capital |
Accumulated Deficit |
Total |
|||||||||||||
| Shares |
Amount |
|||||||||||||||
| BALANCE, December 31, 2004 |
64,903 | $ | 649 | $ | 740,037 | $ | (829,357 | ) | $ | (88,671 | ) | |||||
| Common stock issued in connection with acquisitions |
649 | 6 | 5,682 | — | 5,688 | |||||||||||
| Non-cash compensation |
— | — | 115 | — | 115 | |||||||||||
| Common stock issued in connection with stock option plans |
67 | 1 | 277 | — | 278 | |||||||||||
| Net loss |
— | — | — | (21,713 | ) | (21,713 | ) | |||||||||
| BALANCE, March 31, 2005 |
65,619 | $ | 656 | $ | 746,111 | $ | (851,070 | ) | $ | (104,303 | ) | |||||
The accompanying condensed notes are an integral part of these consolidated financial statements.
5
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in thousands)
| For the three months ended March 31, |
||||||||
| 2005 |
2004 As restated |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | (21,713 | ) | $ | (51,425 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Depreciation, accretion, and amortization |
21,643 | 22,815 | ||||||
| Non-cash restructuring and other charges |
17 | 163 | ||||||
| Asset impairment charges |
214 | 17 | ||||||
| Non-cash items reported in discontinued operations (primarily depreciation, asset impairment charges, and gain/loss on sale of assets) |
(64 | ) | (441 | ) | ||||
| Non-cash compensation expense |
115 | 115 | ||||||
| (Credit) provision for doubtful accounts |
(300 | ) | 360 | |||||
| Amortization of original issue discount and debt issuance costs |
8,140 | 7,540 | ||||||
| Interest converted to term loan |
— | 554 | ||||||
| Loss from write-off of deferred financing fees and extinguishment of debt |
1,486 | 22,217 | ||||||
| Amortization of deferred gain on derivative |
(33 | ) | (178 | ) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Short term investments |
— | 15,200 | ||||||
| Accounts receivable |
8,132 | 2,973 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
1,272 | (1,732 | ) | |||||
| Prepaid and other current assets |
145 | 767 | ||||||
| Other assets |
(985 | ) | (367 | ) | ||||
| Accounts payable |
(3,944 | ) | (554 | ) | ||||
| Accrued expenses |
(1,016 | ) | (769 | ) | ||||
| Deferred revenue |
(991 | ) | (1,655 | ) | ||||
| Interest payable |
3,372 | (14,023 | ) | |||||
| Other liabilities |
1,225 | 1,203 | ||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
||||||||