FiberTower Reports 2007 Fourth Quarter and Full-Year Results
SAN FRANCISCO, March 13 /PRNewswire-FirstCall/ -- FiberTower Corporation (Nasdaq: FTWR), a wireless backhaul services provider, today reported results for the fourth quarter and year ended December 31, 2007.
Positive developments during the fourth quarter of 2007 included the following:
Thomas Scott, Chief Financial Officer and Co-President of FiberTower, said, "We are pleased with our 2007 results as they reflected steady progress towards our objective of growing the business by converting customer backlog into revenue generating assets while maintaining our cash liquidity. Our quarterly and full year results demonstrated ongoing operational improvements at both the market and site level."
Ravi Potharlanka, FiberTower's Chief Operating Officer and Co-President, added, "We are pleased to announce the highest quarterly increase in Billing T-1s in our history, and expect greater demand in 2008 driven by increases in mobile broadband usage and new deployment activity from several wireless carriers. FiberTower is well positioned to benefit from these industry trends and maintain its position as the leading alternative provider of backhaul services."
FiberTower continued to focus on penetrating its existing markets and sites during the fourth quarter highlighting the commitment to site density and efficiency. The Company's billing collocation rate grew to 1.79 billing locations per billing site at December 31, 2007 compared to 1.63 at September 30, 2007, reflecting an increased ability to convert available customer locations on already constructed sites. Additionally, T-1s per Top 100 Sites increased from 18.4 at September 30, 2007 to 21.3 at December 31, 2007 and T-1s per Top 200 Sites increased from 15.5 at September 30, 2007 to 18.1 at December 31, 2007. The growing maturity of the Company's sites and markets was further evidenced by the average number of T-1s per Top 500 Sites, which grew from 8.4 at the end of 2006 to 13.4 at the end of 2007.
2007 Fourth Quarter Consolidated Results
Service revenues for the three months ended December 31, 2007 increased $1.0 million, or 14%, to $8.3 million compared to $7.3 million for the third quarter of 2007. The increase in service revenues during the fourth quarter of 2007 was driven by multiple positive trends including the addition of new billing customer locations at already constructed sites and the continued expansion in new sites billing.
Operating expenses in the fourth quarter of 2007 increased by $37.5 million from the third quarter of 2007. Net loss was $129.1 million for the fourth quarter ended December 31, 2007 compared to a net loss of $90.6 million in the third quarter of 2007. Net loss for the fourth quarter included non-cash impairment charges totaling $99.5 million. This was comprised of a charge to goodwill of $86.5 million and a charge to property and equipment of $13.0 million. The charge to property and equipment resulted from an in-depth analysis on the net realizable value of property and equipment that was concluded in the fourth quarter. The net loss per share for the fourth quarter of 2007 was $0.90 compared to a net loss per share of $0.63 for the third quarter of 2007.
On an Adjusted EBITDA basis, the loss in the fourth quarter of 2007 was $14.2 million versus a loss of $12.3 million for the third quarter of 2007. Adjusted EBITDA is defined as net income (loss) from operations before interest, taxes, depreciation and amortization, impairment charges, stock-based compensation and other income (expense). The reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, is located at the end of this news release.
Fiscal Year 2007 Consolidated Results
Service revenues for the full year 2007 increased $13.4 million or 97%, to $27.1 million as compared to $13.8 million for the same period in 2006. The increase in service revenues during the year was driven by ongoing trends including greater penetration in existing markets resulting in new customers on existing sites, increased T-1s per site and continued expansion in sites billing.
Operating expenses for the full year 2007 increased by $202.9 million from the same period in 2006. Net loss was $272.1 million for the full year 2007 compared to a net loss of $57.3 million for the same period in 2006. The sequential increase in operating expenses and net loss included goodwill impairment charges of $147.9 million and cost of service non-cash impairment charges of $17.6 million recorded in the third and fourth quarters of 2007. The net loss per share for the full year 2007 was $1.90 compared to a net loss per share of $1.11 for the same period in 2006.
On an Adjusted EBITDA basis, the loss in full year 2007 was $52.8 million versus a loss of $40.3 million for the same period in 2006. Adjusted EBITDA is defined as net income (loss) from operations before interest, taxes, depreciation and amortization, impairment charges, stock-based compensation and other income (expense). The reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, is located at the end of this news release.
Liquidity and Capital Resources
Capital expenditures totaled $25.4 million in the fourth quarter ended December 31, 2007 as compared to $31.9 million in the third quarter. The bulk of capital investments made in the fourth quarter of 2007 were used by FiberTower towards the continued build-out of existing markets, the deployment of Sprint 4G backhaul locations in select markets, and additional deployments in Atlanta. For the full year 2007, capital expenditures totaled $105.3 million compared to $94.7 million for the same period in 2006.
"Maintaining our cash liquidity remains a significant priority for us," said Thomas Scott. "We believe that our current cash position is sufficient to support our continued growth. Additionally, we now have greater flexibility in managing our capital spend through the deployment of a collocation-based strategy, which we expect to facilitate our goal of reaching field EBITDA positive across our markets by mid-2008. We also have the ability to reduce overall capital expenditures as market conditions warrant."
Consolidated cash, cash equivalents and certificates of deposits at December 31, 2007 were $228.3 million.
Conference Call Details
FiberTower has scheduled a conference call for Friday, March 14, 2008 at 9:00 a.m. Eastern Time to discuss 2007 fourth quarter and full year results. Please dial 303-262-2139 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 March 21, 2008 and may be accessed by dialing 303-590-3000 using the passcode 11109858#. 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, 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 "Adjusted EBITDA." Adjusted EBITDA is a financial measure used by the Company to monitor the financial performance of its operations. This measurement, together with GAAP measures such as revenue and income from operations, assists management in decision-making processes relating to the operation of our business. In addition, FiberTower's presentation of Adjusted 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.
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 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
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.
Customer Location Backlog is the number of sold customer locations not yet billing. (**Note that FiberTower reports backlog on a semi-annual basis)
Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of a financial measure -- Adjusted EBITDA -- that is a non-GAAP financial measure management uses to monitor the financial performance of the Company. This measurement, together with GAAP measures such as revenue and income from operations, assists management in its decision-making processes relating to the operations of the Company's business. Adjusted EBITDA is defined as net income (loss) from operations before interest, taxes, depreciation and amortization, impairment charges, stock-based compensation and other income (expense). Adjusted EBITDA is not a substitute for operating income, net income (loss), or cash flow from 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. 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. The non-GAAP financial measure is presented for additional information and is reconciled to its most comparable GAAP measure below.
SOURCE FiberTower Corporation
