Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - FiberTower CORP | a11-23816_1ex99d2.htm |
| 8-K - 8-K - FiberTower CORP | a11-23816_18k.htm |
Exhibit 99.1
|
|
Company Contact: |
|
Ornella Napolitano, VP and Treasurer | |
|
FiberTower Corporation | |
|
415.659.3580 | |
|
onapolitano@fibertower.com | |
|
| |
|
Investor Contact: | |
|
Cathy Mattison / Carolyn Capaccio | |
|
Lippert/Heilshorn & Associates, Inc. | |
|
415.433.3777 | |
|
cmattison@lhai.com |
FIBERTOWER REPORTS 2011 SECOND QUARTER RESULTS
San Francisco, CA, August 4, 2011 — FiberTower Corporation (NASDAQ: FTWR), a wireless backhaul services provider, reported results for the second quarter and six months ended June 30, 2011.
Highlights for the Quarter
· Service revenues net of early termination liability (ETL) grew 11% to $20.0 million in the 2011 second quarter from $18.1 million in the 2010 second quarter.
· Average monthly revenue per deployed site net of ETL was $2,003 in the 2011 second quarter compared to $1,925 in the 2010 second quarter.
· Adjusted EBITDA net of ETL was $1.2 million and improved $2.2 million from a negative $1.0 million in the 2010 second quarter.
· Deployed sites grew 6% to 3,335 at the end of the second quarter of 2011 from 3,136 at the end of the second quarter of 2010.
· Capital expenditures were $3.9 million in the second quarter of 2011 compared to $6.5 million in the 2010 second quarter.
· Cash and cash equivalents balance was $12.4 million at June 30, 2011.
Kurt Van Wagenen, FiberTower’s president and chief executive officer, stated, “Our second quarter 2011 results reflected solid Adjusted EBITDA performance despite a revenue decrease from the first quarter. We maintained sufficient liquidity as we collected ETLs associated with customer disconnects and closely managed our costs and working capital. We deployed 27 new sites in the quarter for 6% site growth and continue to execute on our capital plan. While the changing dynamics of the wireless industry and increased competition are creating near-term pressure on the business, we are pursuing opportunities with customers that leverage our microwave expertise as we explore alternatives to address our funding needs.”
2011 Second Quarter Consolidated Results
Service revenues for the three months ended June 30, 2011 increased by $5.0 million, or 27%, to $23.4 million, compared to $18.4 million for the second quarter of 2010. During the second quarter, FiberTower recorded $3.4 million of non-recurring revenue from the collection of early termination liabilities (ETL). Revenue excluding the ETL was $20.0 million, increasing 11% compared to the second quarter of 2010. This increase was primarily driven by selling additional capacity and Ethernet services.
In addition to the previously announced Clearwire service terminations, the Company is experiencing an increased level of TDM churn as carriers migrate to Ethernet, primarily from
AT&T in the second quarter. During the second quarter, FiberTower received service terminations from Clearwire and AT&T representing approximately $951 thousand in monthly recurring revenue and $8.3 million in early termination liabilities. The Company collected $3.3 million of ETL revenue from these customers of which $1.9 million came from Clearwire disconnections related to approximately $434 thousand in monthly recurring revenue. During the quarter ending June 30, 2011, FiberTower received service terminations from AT&T representing approximately $517 thousand of monthly recurring revenue, which was partially offset by new growth, and collected $1.4 million of ETL revenue. The Company had $5.6 million of uncollected ETL revenue due from AT&T at June 30, 2011.
Operating expenses were $31.5 million in the second quarter, compared to $28.0 million in the second quarter of 2010. Included in second quarter 2011 operating expenses is a $3.1 million impairment charge related to the write-off of excess equipment compared to a $0.9 million impairment charge in the second quarter of 2010. Excluding these charges, operating expenses increased primarily due to increases in cost of service revenues, including higher fiber service provider charges reflecting growth in Ethernet services and fiber network expansion and higher depreciation expense.
Net loss for the second quarter 2011 was $11.5 million, compared to a net loss of $13.1 million in the second quarter of 2010.
Second quarter 2011 Adjusted EBITDA net of ETL was $1.2 million, improving $2.2 million, compared to a negative $1.0 million in the second 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.
Consolidated Results for the Six Months Ended June 30, 2011
Service revenues for the six months ended June 30, 2011 rose 30%, to $46.9 million, compared to $36.2 million for the year ago period. During the first six months of 2011, FiberTower recorded $5.6 million of non-recurring revenue from the collection of ETLs, including $3.3 million from Clearwire and $2.1 million from AT&T. Revenue from ETLs during the six months ended June 30, 2010 was $0.9 million. Revenue for the first six months of 2011, net of ETLs was $41.3 million, improving 17% over the same year ago period.
During the first six months of 2011 FiberTower received service terminations from Clearwire and AT&T representing approximately $1.3 million in monthly recurring revenue and $10.9 million in early termination liabilities. For the six month period ended June 30, 2011, the Company collected $5.5 million of ETL revenue from these customers. For the six month period ending June 30, 2011, the Company collected $3.3 million of ETL revenue from Clearwire related to approximately $690 thousand in monthly recurring revenue. For the six month period ending June 30, 2011, FiberTower received service terminations from AT&T representing approximately $595 thousand of monthly recurring revenue and $7.5 million of early termination liabilities. The Company collected $2.1 million in ETL revenue from AT&T during the six month period ended June 30, 2011.
During July, the Company received service terminations from AT&T representing approximately $304 thousand in monthly recurring revenue and $4.1 million in early termination liabilities.
During July, the Company collected $5.6 million in ETL revenue from AT&T and may collect an additional $4.1 million in ETL revenue in the third quarter of 2011 related to the July service terminations.
Net loss for the first half of 2011 was $21.6 million, compared to a net loss of $24.9 million in the first half of 2010. For the six months ended June 30, 2011, Adjusted EBITDA net of ETL improved $4.9 million to $2.1 million, compared to a negative $2.8 million for the year ago period.
Liquidity and Capital Resources
During the second quarter of 2011, cash consumption was $2.0 million, compared to $5.3 million in the second quarter of 2010. Outstanding debt, including accretion, at June 30, 2011 was $168.5 million comprised of $133.1 million in the 9.0% Senior Secured Notes due 2016 and $35.4 million in the 9.0% Convertible Senior Secured Notes due 2012.
Capital expenditures for the second quarter of 2011 totaled $3.9 million, compared to $6.5 million in the second quarter of 2010. Based on the projects completed in the second quarter and the pipeline of new business, the Company is tightening its expected 2011 capital program range to $15-$17 million from $13-$17 million.
Consolidated cash and cash equivalents at June 30, 2011 were $12.4 million, compared to $21.3 million at December 31, 2010.
Thomas Scott, chief financial officer of FiberTower, stated, “On a sequential basis, our second quarter 2011 revenue variance reflected customer service terminations. We continued to execute our capital plan in the quarter, booking short payback, high-return projects as we work with our customers to rebuild revenue in light of churn. Given the volatility we are experiencing, our visibility on 2011 revenue and Adjusted EBITDA remains low, preventing us from providing a specific financial outlook. However, our liquidity at quarter-end reflects both ETL collections and our conservation of cash, and we continue to believe our cash position will be sufficient to cover our estimated liquidity needs at least through June 2012.”
Conference Call Details
FiberTower has scheduled a conference call for Friday, August 5th at 11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time to discuss the second quarter 2011 financial results. To participate on the live call, please dial 1-877-941-9205 at least 10 minutes before the start of the conference. International participants may dial 1-480-629-9818. The conference ID number is 4458067.
Management will review a slide presentation concurrently via webcast summarizing results for the 2011 second 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 August 10th by dialing 1-800-406-7325 or 1-303-590-3030, and entering pass code #4458067. 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 our expected range of 2011 capital expenditures, 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 |
|
Six Months Ended |
| ||||||||
|
|
|
June 30, |
|
June 30, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
Service revenues |
|
$ |
23,434 |
|
$ |
18,388 |
|
$ |
46,937 |
|
$ |
36,211 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of service revenues (excluding depreciation and amortization) |
|
19,017 |
|
15,205 |
|
35,172 |
|
29,202 |
| ||||
|
Sales and marketing |
|
649 |
|
1,130 |
|
1,347 |
|
2,149 |
| ||||
|
General and administrative |
|
3,409 |
|
4,610 |
|
8,812 |
|
9,707 |
| ||||
|
Depreciation and amortization |
|
8,380 |
|
7,038 |
|
16,395 |
|
13,409 |
| ||||
|
Total operating expenses |
|
31,455 |
|
27,983 |
|
61,726 |
|
54,467 |
| ||||
|
Loss from operations |
|
(8,021 |
) |
(9,595 |
) |
(14,789 |
) |
(18,256 |
) | ||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
(3,398 |
) |
(3,486 |
) |
(6,781 |
) |
(6,848 |
) | ||||
|
Miscellaneous income and expense, net |
|
22 |
|
30 |
|
41 |
|
245 |
| ||||
|
Total other expense, net |
|
(3,376 |
) |
(3,456 |
) |
(6,740 |
) |
(6,603 |
) | ||||
|
Loss before income taxes |
|
(11,397 |
) |
(13,051 |
) |
(21,529 |
) |
(24,859 |
) | ||||
|
Income tax provision |
|
(107 |
) |
— |
|
(109 |
) |
— |
| ||||
|
Net loss |
|
$ |
(11,504 |
) |
$ |
(13,051 |
) |
$ |
(21,638 |
) |
$ |
(24,859 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic and diluted net loss per share attributable to common stockholders |
|
$ |
(0.24 |
) |
$ |
(0.28 |
) |
$ |
(0.45 |
) |
$ |
(0.54 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Shares used in computing basic and diluted net loss per share |
|
46,101 |
|
45,692 |
|
45,968 |
|
45,648 |
| ||||
FIBERTOWER CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except par value)
|
|
|
June 30, 2011 |
|
December 31, 2010 |
| ||
|
|
|
(Unaudited) |
|
|
| ||
|
Assets: |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
12,371 |
|
$ |
21,314 |
|
|
Restricted cash and investments, current portion |
|
6,084 |
|
5,923 |
| ||
|
Accounts receivable, net of allowances of $53 and $43 at June 30, 2011 and December 31, 2010, respectively |
|
10,119 |
|
10,446 |
| ||
|
Prepaid expenses and other current assets |
|
2,061 |
|
2,001 |
| ||
|
Total current assets |
|
30,635 |
|
39,684 |
| ||
|
Restricted cash and investments, net of current portion |
|
2,177 |
|
4,067 |
| ||
|
Property and equipment, net |
|
213,977 |
|
222,214 |
| ||
|
FCC licenses |
|
287,495 |
|
287,495 |
| ||
|
Intangible and other long-term assets, net |
|
5,235 |
|
5,010 |
| ||
|
Total assets |
|
$ |
539,519 |
|
$ |
558,470 |
|
|
|
|
|
|
|
| ||
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
5,102 |
|
$ |
8,146 |
|
|
Accrued compensation and related benefits |
|
2,443 |
|
2,324 |
| ||
|
Accrued interest payable |
|
2,137 |
|
2,092 |
| ||
|
Other accrued liabilities |
|
1,463 |
|
2,118 |
| ||
|
Current portion of accrued restructuring costs |
|
920 |
|
1,230 |
| ||
|
Current portion of obligation under capital lease |
|
734 |
|
225 |
| ||
|
Total current liabilities |
|
12,799 |
|
16,135 |
| ||
|
Other liabilities |
|
1,455 |
|
1,138 |
| ||
|
Deferred rent |
|
7,728 |
|
7,613 |
| ||
|
Asset retirement obligations |
|
5,662 |
|
5,281 |
| ||
|
Accrued restructuring costs, net of current portion |
|
273 |
|
539 |
| ||
|
Obligation under capital lease, net of current portion |
|
3,280 |
|
3,687 |
| ||
|
Long-term debt |
|
168,510 |
|
164,827 |
| ||
|
Deferred tax liability |
|
71,904 |
|
71,904 |
| ||
|
Total liabilities |
|
271,611 |
|
271,124 |
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
Stockholders’ equity: |
|
|
|
|
| ||
|
Common stock, $0.001 par value; 400,000 shares authorized, 49,783 and 49,985 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |
|
50 |
|
50 |
| ||
|
Additional paid-in capital |
|
965,392 |
|
963,192 |
| ||
|
Accumulated deficit |
|
(697,534 |
) |
(675,896 |
) | ||
|
Total stockholders’ equity |
|
267,908 |
|
287,346 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
539,519 |
|
$ |
558,470 |
|
FIBERTOWER CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
|
|
|
Six Months Ended |
| ||||
|
|
|
June 30, |
| ||||
|
|
|
2011 |
|
2010 |
| ||
|
Operating activities |
|
|
|
|
| ||
|
Net loss |
|
$ |
(21,638 |
) |
$ |
(24,859 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
16,395 |
|
13,409 |
| ||
|
Impairment of long-lived assets and other charges |
|
3,358 |
|
976 |
| ||
|
Increase in carrying value of long-term debt |
|
3,683 |
|
5,120 |
| ||
|
Stock-based compensation |
|
2,228 |
|
1,782 |
| ||
|
Other |
|
696 |
|
858 |
| ||
|
Net changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Accounts receivable, net |
|
327 |
|
(1,156 |
) | ||
|
Prepaid expenses and other current assets |
|
(60 |
) |
48 |
| ||
|
Other long-term assets |
|
(457 |
) |
(360 |
) | ||
|
Accounts payable |
|
(3,044 |
) |
2,551 |
| ||
|
Accrued compensation and related benefits |
|
119 |
|
691 |
| ||
|
Accrued interest payable |
|
45 |
|
1,705 |
| ||
|
Other accrued liabilities |
|
(930 |
) |
(169 |
) | ||
|
Net cash provided by operating activities |
|
722 |
|
596 |
| ||
|
Investing activities |
|
|
|
|
| ||
|
Decrease (increase) in restricted cash and investments |
|
1,729 |
|
(100 |
) | ||
|
Purchase of property and equipment |
|
(11,312 |
) |
(8,979 |
) | ||
|
Net cash used for investing activities |
|
(9,583 |
) |
(9,079 |
) | ||
|
Financing activities |
|
|
|
|
| ||
|
Repurchases of common stock |
|
(134 |
) |
— |
| ||
|
Proceeds from exercise of stock options |
|
52 |
|
7 |
| ||
|
Net cash (used for) provided by investing activities |
|
(82 |
) |
7 |
| ||
|
Net decrease in cash and cash equivalents |
|
(8,943 |
) |
(8,476 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
21,314 |
|
50,669 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents at end of period |
|
$ |
12,371 |
|
$ |
42,193 |
|
|
|
|
|
|
|
| ||
|
Supplemental Disclosures |
|
|
|
|
| ||
|
Cash paid for interest on Notes due 2016 |
|
$ |
1,756 |
|
$ |
— |
|
|
Cash paid for interest on Notes due 2012 |
|
$ |
1,353 |
|
$ |
— |
|
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 and second quarters of 2011, the Company recorded $2.2 million and $3.4 million, respectively, in revenue recognized from the collection of early termination liabilities (ETL). 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 |
| ||||||||
|
|
|
6/30/11 |
|
3/31/11 |
|
6/30/10 |
| ||||
|
Net loss |
|
$ |
(11,504 |
) |
$ |
(10,134 |
) |
$ |
(13,051 |
) | |
|
Adjustments: |
|
|
|
|
|
|
| ||||
|
Depreciation and amortization |
|
8,380 |
|
8,015 |
|
7,038 |
| ||||
|
Stock-based compensation |
|
1,063 |
|
1,165 |
|
879 |
| ||||
|
Reduction in force - severance |
|
— |
|
454 |
|
— |
| ||||
|
Interest expense |
|
3,398 |
|
3,383 |
|
3,486 |
| ||||
|
Impairment of long-lived assets and other charges and credits |
|
3,146 |
|
244 |
|
967 |
| ||||
|
Income tax provision |
|
107 |
|
2 |
|
|
| ||||
|
Adjusted EBITDA |
|
4,590 |
|
3,129 |
|
(681 |
) | ||||
|
Early termination liability (“ETL”) |
|
(3,391 |
) |
(2,244 |
) |
(275 |
) | ||||
|
Adjusted EBITDA, net of ETL |
|
$ |
1,199 |
|
$ |
885 |
|
$ |
(956 |
) | |
|
|
|
|
|
|
|
|
| ||||
|
|
|
Six months ended |
|
|
|
| |||||
|
|
|
6/30/11 |
|
6/30/10 |
|
|
|
| |||
|
Net loss |
|
$ |
(21,638 |
) |
$ |
(24,859 |
) |
|
|
| |
|
Adjustments: |
|
|
|
|
|
|
|
| |||
|
Depreciation and amortization |
|
16,395 |
|
13,409 |
|
|
|
| |||
|
Stock-based compensation |
|
2,228 |
|
1,782 |
|
|
|
| |||
|
Reduction in force - severance |
|
454 |
|
— |
|
|
|
| |||
|
Interest expense |
|
6,781 |
|
6,848 |
|
|
|
| |||
|
Impairment of long-lived assets and other charges and credits |
|
3,390 |
|
869 |
|
|
|
| |||
|
Income tax provision |
|
109 |
|
— |
|
|
|
| |||
|
Adjusted EBITDA |
|
7,719 |
|
(1,951 |
) |
|
|
| |||
|
Early termination liability (“ETL”) |
|
(5,635 |
) |
(862 |
) |
|
|
| |||
|
Adjusted EBITDA, net of ETL |
|
$ |
2,084 |
|
$ |
(2,813 |
) |
|
|
| |
|
|
|
|
|
|
|
|
| ||||
|
FIBERTOWER CORPORATION Reconciliation of Revenue Adjusted for ETL (In thousands) | |||||||||||
|
| |||||||||||
|
|
|
Three months ended |
| ||||||||
|
|
|
6/30/11 |
|
3/31/11 |
|
6/30/10 |
| ||||
|
Service revenues |
|
$ |
23,434 |
|
$ |
23,503 |
|
$ |
18,388 |
| |
|
Early termination liability (“ETL”) |
|
(3,391 |
) |
(2,244 |
) |
(275 |
) | ||||
|
Service revenues, net of ETL |
|
$ |
20,043 |
|
$ |
21,259 |
|
$ |
18,113 |
| |
|
|
|
|
|
|
|
|
| ||||
|
|
|
Six months ended |
|
|
|
| |||||
|
|
|
6/30/11 |
|
6/30/10 |
|
|
|
| |||
|
Service revenues |
|
$ |
46,937 |
|
$ |
36,211 |
|
|
|
| |
|
Early termination liability (“ETL”) |
|
(5,635 |
) |
(862 |
) |
|
|
| |||
|
Service revenues, net of ETL |
|
$ |
41,302 |
|
$ |
35,349 |
|
|
|
| |