SAN FRANCISCO, Aug. 4, 2011 /PRNewswire/ -- 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
|
|
|
|
|
|
|
|
|
|
|
SOURCE FiberTower Corporation