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FiberTower Reports 2009 Fourth Quarter and Full Year Results
Mar 04, 2010 (03:03 PM EST)


SAN FRANCISCO, March 4 /PRNewswire-FirstCall/ -- FiberTower Corporation (Nasdaq: FTWR), a wireless backhaul services provider, today reported results for the fourth quarter and year ended December 31, 2009.

Highlights for the fourth quarter of 2009 included the following:

  • Service revenues grew 17% to $16.7 million from $14.3 million in the fourth quarter of 2008.  Service revenues grew 28% on an annual basis.  
  • Average monthly revenue per billing site grew 15% to $1,995 from $1,732 in the fourth quarter of 2008.  
  • Adjusted EBITDA improved to a loss of $2.2 million in the fourth quarter of 2009 as compared to a loss of $4.9 million in the fourth quarter of 2008.  Annually, Adjusted EBITDA improved by 60%.  
  • Cash and cash equivalents balance of $50.7 million at December 31, 2009.
  • Completion of a debt transaction resulting in reductions in outstanding indebtedness and future cash interest payments and, extensions to maturities.

"Our consistent growth trends continued in the fourth quarter as we benefit from the dramatic increase in data demand that is driving the wireless industry," said Kurt Van Wagenen, FiberTower's President and Chief Executive Officer.  "In addition, we experienced an increase in sales activity toward the end of the year. We expect this momentum to continue in 2010 as we leverage our many accomplishments over the past year."  

2009 Fourth Quarter Consolidated Results

Service revenues for the three months ended December 31, 2009 increased by $2.4 million, or 17%, to $16.7 million compared to $14.3 million for the fourth quarter of 2008.  The sale of additional capacity and co-locations on our network drove most of the increase in service revenues during the fourth quarter of 2009.

Operating expenses in the fourth quarter decreased by $50.1 million, or 59%, from the fourth quarter of 2008.  Excluding an impairment charge to FCC licenses of $54.5 million in the fourth quarter of 2008, operating expenses increased by $4.4 million or 15% in the fourth quarter 2009.  The increase was primarily attributable to $4.2 million in legal and other costs related to completing the debt exchange transaction that closed on December 22, 2009 and an additional $3.2 million in stock-based compensation as a result of the debt exchange transaction.

On an Adjusted EBITDA basis, the loss in the fourth quarter of 2009 improved to $2.2 million compared to a loss of $4.9 million in the fourth quarter of 2008, representing a 55% improvement. Adjusted EBITDA is defined as net income (loss) from operations before interest, taxes, depreciation and amortization, impairment and restructuring charges, 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 income (loss) is provided at the end of this news release.

Net loss was $27.8 million for the fourth quarter compared to a net loss of $62.7 million for the fourth quarter of 2008 which includes the above mentioned impairment charge, and a corresponding recognition of an income tax benefit of $20.2 million.

On December 18, 2009, the Company completed a 1-for-10 reverse stock split of our common stock.                

Twelve Months 2009 Consolidated Results

Service revenues for the twelve months ended December 31, 2009 increased by $14.0 million, or 28%, to $63.2 million compared to $49.2 million for 2008.  Increases throughout the year were driven by sales of additional capacity and increased co-locations.  

Operating expenses for the year ended December 31, 2009 decreased by $159.6 million, or 58%, compared to 2008.  Operating expenses in 2008 included the above mentioned impairment charge to FCC licenses of $54.5 million, a goodwill impairment charge of $86.1 million, restructuring charges of $6.1 million and impairment charges to property and equipment of $16.4 million.  

On an Adjusted EBITDA basis, the loss in 2009 improved to $13.3 million compared to a loss of $33.6 million in 2008 representing a 60% improvement on an annual basis.

Net loss for 2009 was $2.1 million compared to a net loss of $249.8 million for 2008.  The 2009 net loss includes a gain of $98.2 million on the early extinguishment of debt related to repurchases of debt during the first six months of 2009.                    

Liquidity and Capital Resources

During the fourth quarter of 2009, cash consumption was $34.3 million compared to $9.2 million in the fourth quarter of 2008.  Consolidated cash consumption for the fourth quarter of 2009 was $4.8 million excluding the impact of placing in escrow $11.0 million related to interest payments on the new 9% Senior Secured Notes due 2016, $12.7 million paid to note-holders as part of the debt exchange transaction, $3.8 million paid for debt exchange related expenses and $2.0 million in retention bonuses which were accelerated as a consequence of the transaction.

Outstanding debt, including accretion, at December 31, 2009 was $154.5 million comprised of $124.4 million in the 9.0% Senior Secured Notes due 2016 and $30.1 million in the 9.0% Convertible Senior Secured Notes due 2012.

Capital acquisitions for the fourth quarter of 2009 totaled $5.9 million of which $4.2 million was an indefeasible right of use of fiber acquired under a capital lease.  The majority of the capital investments made by FiberTower in the fourth quarter were used towards adding incremental customers at existing sites.

Consolidated cash and cash equivalents at December 31, 2009 were $50.7 million compared to $85.0 million at September 30, 2009.  In addition, at December 31, 2009, FiberTower held $11.6 million in restricted cash and investments primarily comprised of $11.0 million in cash and U.S. government agency bonds to be used for the payment of the first six semi-annual cash interest payments for the Notes due 2016.          

"Over the last twelve months, we have taken actions to ensure that FiberTower is ideally positioned to actively participate in emerging opportunities," said Thomas Scott, Chief Financial Officer of FiberTower.  "Entering into 2010, we are now better able to consider other areas of investment activity including new site deployment and opportunistic fiber purchases."  

Conference Call Details

FiberTower has scheduled a conference call for Friday, March 5, 2010 at 11:30 a.m. Eastern Time to discuss 2009 fourth quarter results.  Please dial 480-629-9723 and ask for the FiberTower call (ID #4218083) 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 March 12, 2010 and may be accessed by dialing 303-590-3030 using the passcode ID #4218083.  During the call, the Company will review a slide presentation that summarizes results for the fourth quarter and 2009 full year and provides guidance for 2010 results.  The presentation may be accessed at http://www.fibertower.com/corp/investors-presentations-and-events.shtml.  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 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, guidance for expected ranges of 2010 revenue, Adjusted EBITDA and 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 including, among other things, 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, 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.



Investor Contact:

Gus Okwu / DRG&E

404-532-0086

gokwu@drg-e.com


Company Contact:

Ornella Napolitano, VP and Treasurer

FiberTower Corporation

415-659-3580

onapolitano@fibertower.com



    
    
    
                             FIBERTOWER CORPORATION                         
                      Consolidated Statements of Operations                 
                      (In thousands, except per share data)                 
    
                                Three Months Ended            Year Ended      
                                   December 31,              December 31,     
                                -------------------       ----------------    
                                 2009         2008         2009       2008 
                                 ----         ----         ----       ---- 
                             (unaudited)  (unaudited)  (unaudited)            
      Service revenues         $16,733      $14,270      $63,244    $49,227 
      Operating expenses:                                                   
        Cost of service
         revenues (excluding                                 
         depreciation and                                                  
         amortization)          15,249       17,270       58,220     79,808 
        Sales and                                                           
         marketing               1,204          855        3,262      5,456 
        General and                                                         
         administrative         11,037        4,744       27,834     20,237 
        Depreciation and                                                    
         amortization            6,800        6,989       27,840     24,897 
        Restructuring                                                       
         charges                    81          125          372      6,087 
        Impairment of FCC                                                   
         licenses                    -       54,505            -     54,505 
        Impairment of                                                       
         goodwill                    -            -            -     86,093 
                                   ---          ---          ---     ------ 
          Total operating                                                   
           expenses             34,371       84,488      117,528    277,083 
                                ------       ------      -------    ------- 
      Loss from operations     (17,638)     (70,218)     (54,284)  (227,856)
                               -------      -------      -------   -------- 
      Other income (expense):                                               
        Interest income             36          559          295      5,316 
        Interest expense       (10,150)     (13,436)     (47,605)   (47,742)
        Gain on early                                                       
         extinguishment of                                                  
         debt, net                   -            -       98,248          - 
        Miscellaneous                                                       
         income (expense),                                                  
         net                      (206)         216          (39)       264 
                                  ----          ---          ---        --- 
          Total other                                                       
           income                                                           
           (expense), net      (10,320)     (12,661)      50,899    (42,162)
                               -------      -------       ------    ------- 
      Loss before income                                                    
       taxes                   (27,958)     (82,879)      (3,385)  (270,018)
      Income tax benefit           160       20,189        1,247     20,189 
                                   ---       ------        -----     ------ 
      Net loss                $(27,798)    $(62,690)     $(2,138) $(249,829)
                              ========     ========      =======  ========= 
                                                                            
      Basic and diluted net
       loss per share                                  
       attributable to                                                  
       common stockholders      $(1.53)      $(4.16)      $(0.13)   $(16.65)
                                ======       ======       ======    ======= 
                                                                            
      Shares used in                                                        
       computing net loss                                                   
       per share                17,771       14,531       15,481     14,462 
                                ======       ======       ======     ====== 
    
    
    
                          FIBERTOWER CORPORATION                     
                        Consolidated Balance Sheets                  
                    (In thousands, except par value)                 
    
                                            December 31,   December 31,
                                               2009           2008     
                                           -------------  ------------- 
                                            (unaudited)                 
      Assets:                                                        
      Current assets:                                                
        Cash and cash equivalents             $50,669       $154,357 
        Restricted cash and                                          
         investments, current portion           3,898            343 
        Accounts receivable, net of
         allowances of $50 and $37        
         at December 31, 2009 and                                 
         December 31, 2008, respectively        6,824          6,652 
        Prepaid expenses and other                                   
         current assets                         2,119          2,502 
                                                -----          ----- 
          Total current assets                 63,510        163,854 
      Restricted cash and investments           7,702            134 
      Property and equipment, net             221,417        236,585 
      FCC licenses                            287,495        287,495 
      Debt issuance costs, net                    466          9,599 
      Intangible and other long-term                                 
       assets, net                              3,836          3,802 
                                                -----          ----- 
          Total assets                       $584,426       $701,469 
                                             ========       ======== 
                                                                     
      Liabilities and Stockholders’ Equity:                          
      Current liabilities:                                           
        Accounts payable                       $3,209         $3,826 
        Accrued compensation and                                     
         related benefits                       1,769          2,052 
        Accrued interest payable                  465          4,628 
        Other accrued liabilities               1,138          1,984 
        Current portion of accrued                                   
         restructuring costs                    1,215          1,342 
        Current portion of obligations                               
         under capital lease                      253              - 
                                                  ---            --- 
          Total current liabilities             8,049         13,832 
      Other liabilities                           809          1,419 
      Deferred rent                             7,206          6,175 
      Asset retirement obligations              4,550          4,048 
      Accrued restructuring costs, net                               
       of current portion                       1,560          2,436 
      Obligations under capital lease,                               
       net of current portion                   3,471              - 
      Long-term debt                          154,528        430,317 
      Deferred tax liability                   71,904         73,372 
                                               ------         ------ 
          Total liabilities                   252,077        531,599 
                                              -------        ------- 
      Commitments and contingencies                 -              - 
      Stockholders’ equity:                                          
        Common stock, $0.001 par value;
         400,000 shares authorized,   
         45,701 and 15,052 shares issued
         and outstanding at December 31,
         2009 and December 31, 2008,                                  
         respectively                              46             15 
        Additional paid-in capital            958,817        794,231 
        Accumulated deficit                  (626,514)      (624,376)
                                             --------       -------- 
          Total stockholders’ equity          332,349        169,870 
                                              -------        ------- 
          Total liabilities and                                      
           stockholders’ equity              $584,426       $701,469 
                                             ========       ======== 
    
    
    
                             FIBERTOWER CORPORATION                         
                      Consolidated Statements of Cash Flows                 
                                 (In thousands)                             
    
                                                       Year Ended December 31, 
                                                       ----------------------- 
                                                           2009       2008 
                                                           ----       ---- 
                                                       (unaudited)            
      Operating activities                                                  
        Net loss                                         $(2,138) $(249,829)
        Adjustments to reconcile net loss to net cash                       
         used in operating activities:                                
          Depreciation and amortization                   27,840     24,897 
          Gain on early extinguishment of debt, net      (98,248)         - 
          Non-cash payment-in-kind of interest            33,529          - 
          Decline in value of embedded derivative              -          - 
          Accretion of convertible notes                  15,572     14,539 
          Accretion of investments in debt                                  
           securities                                          -       (917)
          Accretion of asset retirement obligations          501        440 
          Amortization of debt issuance costs              1,365      2,256 
          Stock-based compensation                         8,016      6,274 
          Loss on disposal of equipment                      254         68 
          Impairment of long-lived assets and other                         
           charges                                           270     16,439 
          Restructuring charges                              372      4,046 
          Impairment of FCC licenses                           -     54,505 
          Impairment of goodwill                               -     86,093 
          Income tax benefit                              (1,247)   (20,189)
          Net changes in operating assets and liabilities:                  
            Accounts receivable, net                        (172)    (2,968)
            Prepaid expenses and other current                              
             assets                                          383       (662)
            Other long-term assets                          (333)      (127)
            Accounts payable                                (617)    (9,846)
            Accrued compensation and related benefits       (283)    (1,317)
            Accrued interest payable                      (4,163)        (1)
            Other accrued liabilities                        559      1,342 
                                                             ---      ----- 
          Net cash (used) in operating activities        (18,540)   (74,957)
      Investing activities                                                  
        Purchases of short-term investments                    -          - 
        Maturities of short-term investments                   -          - 
        Maturities of certificates of deposit                  -      5,000 
        Maturities of restricted cash and                                   
         investments                                           -     37,419 
        Increase in restricted cash and investments      (11,123)         - 
        Deposit under capital lease obligation              (500)         - 
        Purchase of property and equipment                (8,632)   (36,795)
                                                          ------    ------- 
         Net cash (used) provided in investing                           
          activities                                     (20,255)     5,624 
      Financing activities                                                  
        Cash paid for repurchases of Notes due 2012      (52,180)         - 
        Cash paid upon redemption of Interim Notes       (12,713)         - 
        Proceeds from exercise of stock options                -        360 
                                                             ---        --- 
        Cash (used) provided in financing activities     (64,893)       360 
                                                         -------        --- 
      Net decrease in cash and cash equivalents         (103,688)   (68,973)
      Cash and cash equivalents at beginning of year     154,357    223,330 
                                                         -------    ------- 
                                                                            
      Cash and cash equivalents at end of year           $50,669   $154,357 
                                                         =======   ======== 
    
    

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, stock-based compensation, gain on early extinguishment of debt,   debt exchange expenses and other income (expense).  Adjusted EBITDA is not a substitute for operating income, net income (loss), or cash flow used in 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.  The following table shows the calculation of the Company's total Adjusted EBITDA reconciled to net income (loss).

    
    
    
    
                                     Three Months Ended        Year Ended      
                                        December 31,           December 31,      
                                     -------------------    ----------------  
                                        2009      2008      2009       2008 
                                        ----      ----      ----       ---- 
                                                                             
    Net loss                         $(27,798) $(62,690)  $(2,138) $(249,829)
         Depreciation and                                                    
          amortization                  6,800     6,989    27,840     24,897 
         Stock-based compensation       4,462     1,548     8,016      6,274 
         Exchange offer and redemption                                         
          of debt expenses              4,222         -     4,476          - 
         Impairment of FCC licenses         -    54,505         -     54,505 
         Impairment of goodwill             -         -         -     86,093 
         Interest income                  (36)     (559)     (295)    (5,316)
         Interest expense              10,150    13,436    47,605     47,742 
         Gain on early extinguishment
          of debt, net                      -         -   (98,248)         - 
         Impairment of long-lived
          assets and other charges and                                              
          credits                         150     2,030       681     22,262 
         Income tax benefit              (160)  (20,189)   (1,247)   (20,189)
                                         ----   -------    ------    ------- 
                                                                             
    Adjusted EBITDA                   $(2,210)  $(4,930) $(13,310)  $(33,561)
                                      =======   =======  ========   ======== 
    
    

SOURCE FiberTower Corporation