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FiberTower Reports First Quarter 2007 Results
SAN FRANCISCO, May 8 /PRNewswire-FirstCall/ -- FiberTower Corporation , a wireless backhaul services provider, today reported results for the first quarter ending March 31, 2007.
Service revenues for the three months ending March 31, 2007 increased $1.3 million or 31.9%, to $5.4 million as compared to $4.1 million for the fourth quarter of 2006. The increase in service revenues during the first quarter of 2007 was driven by an expansion in new sites billing, the addition of new customers on existing sites and continued growth in T-1s billing.
FiberTower continued with positive trends in the first quarter of 2007 compared to the fourth quarter of 2006 as highlighted by the following operating metrics:
* Billing sites grew 19% from 1,329 to 1,583
* The percentage of sites deployed that are billing increased from 67% to
70%
* Billing customer locations grew 22% from 1,804 to 2,206
* Billing T-1s added during the first quarter totaled 1,454
* T1s per billing site increased from 5.17 to 5.26
* Ending sites deployed increased by 14% from 1,996 to 2,272
The company continued the diversification of its customer base and acceleration of its customer commitments with more sites in additional markets. At the end of the first quarter, FiberTower had an average of 3.7 mobile carriers as customers per existing market. The Company currently counts six of the top eight wireless carriers as customers.
"We are especially pleased with the company's first quarter results as they reflect our success in deepening penetration in existing markets, garnering better contribution from our less mature markets and converting sites to revenue generating assets," said Michael Gallagher, FiberTower's President and CEO. "We continue to see growing backhaul demand from our existing customers and find our markets progressing nicely towards our previously stated goal of achieving field EBITDA positive in most of our existing markets by the end of 2007."
Operating expenses in the first quarter of 2007 decreased by $2.5 million or 9.3% from the fourth quarter of 2006, while net loss was $25.8 million for the first quarter ended March 31, 2007 compared to a net loss of $26.3 million in the fourth quarter of 2006. The 2007 first quarter net loss per share was $0.18 compared to a net loss per share of $0.19 for the fourth quarter of 2006.
On an EBITDA basis, the loss in the first quarter of 2007 was $12.9 million versus a loss of $15.6 million for the fourth quarter of 2006. EBITDA is defined as earnings (loss) from operations before interest, taxes, depreciation, amortization and stock-based compensation expenses. The reconciliation of EBITDA, which is a non-GAAP financial measure, is located at the end of this press release.
During the first quarter of 2007, FiberTower was selected as a prime fixed-wireless services partner by both Verizon Business and Qwest Communications International (Qwest) for their respective Networx Universal awards, which were granted by the U.S. General Services Administration (GSA) on March 29, 2007. FiberTower will operate under a fixed-wireless subcontract agreement with each carrier as they compete for telecommunications business from government agencies. The total Networx program is reported to be the largest telecommunications contract in US Government history, with an overall value estimated at $20 billion to be spread across all award winners and a contract term of ten years.
Liquidity and Capital Resources
Capital expenditures for the first quarter of 2007 were $21.2 million directed primarily towards investments in network equipment and site construction costs. The bulk of these capital investments were used by FiberTower towards the build-out of existing markets. Consolidated cash, cash equivalents, certificates of deposits and short-term investments at March 31, 2007 were $329.6 million.
Conference Call Details
FiberTower has scheduled a conference call for Wednesday, May 9, 2007 at 9:00 a.m. Eastern Time to discuss 2007 first quarter results. Please dial 303-205-0033 and ask for the FiberTower call at least 10 minutes prior to the start time. A telephonic replay of the call will be available through 11:59 p.m. Eastern Time on May 17, 2007 and may be accessed by dialing 303-590-3000 using the passcode 11089282#. An audio archive will also be available on FiberTower's website at http://www.fibertower.com/ shortly after the call and will be accessible for approximately ninety 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 microwave and fiber networks in 14 major markets, customer commitments from six of the leading cellular carriers, and partnerships with the largest tower operators in the U.S., 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 http://www.fibertower.com/ .
Use of Non-GAAP Financial Measures
This press release uses the Non-GAAP financial measure "EBITDA." EBITDA is used by investors to assist in their evaluation of common stock. The company uses EBITDA to monitor the financial performance of its operations. EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the funds actually available for capital expenditures. In addition, FiberTower's presentation of EBITDA may not be comparable to similarly titled measures reported by other companies. These NON-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported financial results as determined in accordance with GAAP.
Forward Looking Statements
Statements included in this news release which are not historical in nature are "forward-looking statements" within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. 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, without limitation, statements regarding the company's planned capital expenditures, expected cost per site, anticipated customer growth and expansion plans. 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 including, without limitation, difficulties in integrating our companies after our merger in 2006, anticipated negative cash flows and operating 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, and competition from alternative backhaul service providers and technologies, along with those risk factors described in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Investor Contact:
Gus Okwu / DRG&E
404-892-8178
gokwu@drg-e.com
Company Contact:
Ornella Napolitano, VP and Treasurer
FiberTower Corporation
202-251-5210
onapolitano@fibertower.com
Key Operating Metrics 3Q06 4Q06 1Q07
Billing Sites
Billing Sites Added 174 355 254
Ending Billing Sites 974 1,329 1,583
Billing Sites / Sites Deployed 55% 67% 70%
Billing Customer Locations
Billing Customer Locations Added 229 470 402
Ending Billing Customer Locations 1,334 1,804 2,206
Colo rate 1.37 1.36 1.39
Billing T-1 Equivalents
Billing T-1 Equiv. Added 604 1,713 1,454
Ending Billing T-1 Equivalents 5,156 6,869 8,323
T-1s per Customer Location 3.87 3.81 3.77
T-1s/Billing Sites 5.29 5.17 5.26
T-1s per site/Top 100 Sites 12.0 12.7 13.2
T-1s per site/Top 200 Sites 9.9 10.7 11.3
Average MRC per T-1 $237* $239 $234
Sites Deployed
FiberTower Sites Constructed 409 228 276
Ending Sites Deployed 1,768 1,996 2,272
Definitions:
Billing Sites are the number of installed sites from which we currently
provide T1(s) to customer(s).
Customer Locations Billing are carrier locations at which we currently
provide T1(s). FiberTower sites could have multiple customer (carrier)
locations.
Colo rate is the number of customer locations per billing site
Billing T1 Equivalent: A T1 equivalent is either a T1 or another increment
of bandwidth of approximately 1.54 megabits per second
Average MRC per T-1 is the average monthly recurring revenue per T-1.(Note
that third quarter 2006 Average MRC per T-1 excludes First Avenue Networks
revenues and billing T-1 equivalents for purposes of this calculation.)
Sites Deployed represents the number of sites installed and ready for
provision of services. FiberTower sites can be located at cell towers or
on rooftop locations.
FIBERTOWER CORPORATION
Consolidated Statements of Operations - (Unaudited)
(All amounts are in thousands, except per share data)
Three Months Ended
March 31,
2007 2006
Service revenues $5,420 $2,523
Operating expenses:
Cost of service revenues (excluding
depreciation and amortization) 11,423 6,324
Sales and marketing 2,022 879
General and administrative 7,197 1,842
Depreciation and amortization 3,906 1,027
Total operating expenses 24,548 10,072
Loss from operations (19,128) (7,549)
Other income (expense):
Interest income 5,358 1,119
Interest expense (12,189) (47)
Miscellaneous income, net 121 ---
Total other income (expense), net (6,710) 1,072
Net loss $(25,838) $(6,477)
Basic and diluted net loss per share $(0.18) $(1.25)
Weighted average number of shares
used in per share amounts:
Basic and diluted 142,321 5,126
FIBERTOWER CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)
(All amounts are in thousands, except par value)
March 31, 2007 December 31, 2006
Assets:
Current assets:
Cash and cash equivalents $268,510 $345,174
Certificates of deposit 5,000 5,000
Short term investments 56,068 15,253
Restricted cash and investments,
current portion 36,051 35,616
Accounts receivable, net of
allowances of $18 at March 31, 2007
and $161 at December 31, 2006 3,093 2,904
Prepaid expenses and other current assets 2,238 2,624
Total current assets 370,960 406,571
Restricted cash and investments 35,308 34,906
Property and equipment, net 188,798 171,612
FCC licenses 342,000 342,000
Goodwill 243,388 243,388
Debt issuance costs, net of
accumulated amortization of $819 at
March 31, 2007 and $300 at December
31, 2006 13,490 14,009
Intangible and other long-term assets, net 3,903 3,992
Total assets $1,197,847 $1,216,478
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $9,752 $18,039
Accrued compensation and related
benefits 3,244 4,246
Accrued interest payable 14,289 5,333
Other accrued liabilities 4,165 3,528
Total current liabilities 31,450 31,146
Other liabilities 5,299 4,787
Convertible senior secured notes 406,461 403,759
Deferred tax liability 102,964 102,964
Total liabilities 546,174 542,656
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value;
400,000 shares authorized, 145,659
and 144,971 shares issued and
outstanding at March 31, 2007 and 146 145
December 31, 2006, respectively
Additional paid-in capital 779,765 776,077
Accumulated deficit (128,238) (102,400)
Total stockholders' equity 651,673 673,822
Total liabilities and stockholders'
equity $1,197,847 $1,216,478
FIBERTOWER CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
(All amounts are in thousands)
Three Months Ended March 31,
2007 2006
Operating activities
Net loss $(25,838) $(6,477)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 3,906 1,027
Decline in value of embedded
derivative (312) ---
Accretion of convertible notes 3,014 ---
Accretion of interest income (1,073) ---
Amortization of debt issuance costs 519 ---
Impairment charge for long-lived
assets 149 ---
Stock-based compensation 2,336 20
Loss on disposal of equipment 160 4
Net changes in operating assets and
liabilities:
Accounts receivable, net (189) (439)
Prepaid expenses and other assets 402 55
Accounts payable (8,287) (990)
Accrued interest payable 8,956 (41)
Accrued compensation and related
benefits (1,002) (386)
Other accrued liabilities and
deferred rent 1,081 (171)
Net cash used in operating activities (16,178) (7,398)
Investing activities
Purchases of short-term investments (55,810) ---
Maturities of short-term investments 15,253 ---
Purchase of property and equipment (21,157) (23,255)
Net cash used in investing activities (61,714) (23,255)
Financing activities
Proceeds from exercise of stock
options 1,228 13
Cash provided by financing activities 1,228 13
Net increase (decrease) in cash and
cash equivalents (76,664) (30,640)
Cash and cash equivalents at
beginning of period 345,174 112,936
Cash and cash equivalents at end of
period $268,510 $82,296
Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of a financial measure that is not a GAAP measure. The non-GAAP financial measure is presented for additional information and is reconciled to its most comparable GAAP measure below.
Three Months Ended Three Months Ended
3/31/07 12/31/06
Net Loss $(25,838) $(26,321)
Total Other Income (Expense) (6,710) (3,379)
Depreciation & Amortization 3,906 4,674
Stock Based Compensation 2,336 2,654
EBITDA $(12,886) $(15,614)
FiberTower Corporation
CONTACT: investors, Gus Okwu of DRG&E, +1-404-892-8178, orgokwu@drg-e.com , for FiberTower Corporation; or Ornella Napolitano, VP andTreasurer of FiberTower Corporation, +1-202-251-5210, oronapolitano@fibertower.com
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