BOCA RATON, Fla., Nov. 5 /PRNewswire-FirstCall/ --
SBA Communications Corporation (Nasdaq: SBAC) ("SBA" or the "Company")
announced increases in total revenues and EBITDA for the three months ended
September 30, 2002, over the same period in 2001.
For the three months ended September 30, 2002, total revenues increased
6.4% to $67.0 million from the third quarter of 2001, due to higher site
leasing revenue that offset lower site development revenue. Site leasing
revenue increased to $36.0 million for the quarter, a 29.9% increase over the
third quarter of 2001. Site development revenue for the quarter decreased
12.1% to $31.0 million from the third quarter of 2001. Earnings before
interest, taxes, depreciation, amortization, non-cash charges and unusual or
non-recurring expenses ("EBITDA") for the quarter were $19.6 million, a 16.9%
increase over the third quarter of 2001. The net loss of $(31.7) million
included a $1.2 million restructuring and other charge. Loss per share was
$(.62) for the three months ended September 30, 2002. Excluding the effects of
the restructuring and other charge, loss per share was $(.60) for the three
months ended September 30, 2002.
In the third quarter, the Company built 23 towers, ending the quarter with
3,875 owned tower sites. At quarter-end, SBA had 23 remaining new build
towers, the majority of which are expected to be completed by year-end. Based
on tenant leases executed as of September 30, 2002, annualized gross revenue
added was approximately $4,700 per tower (.26 on a broadband equivalent
basis). Same tower revenue and cash flow growth, net of tenant terminations,
for the trailing twelve months on the 3,464 towers owned as of September 30,
2001 was 17% and 23%, respectively.
The Company ended the quarter with $42.3 million of cash and cash
equivalents. At September 30, 2002, the outstanding principal balance under
the senior credit facility was $248.0 million, leaving $35.9 million
immediately available to the Company (net of $16.1 million of letters of
credit currently outstanding). The Company is in compliance with all
financial covenants applicable to any indebtedness of the Company as of
September 30, 2002. Free cash flow, or EBITDA less net cash interest, taxes
and cash capital expenditures, was $(8.5) million for the third quarter of
2002. Cash capital expenditures in the quarter were $13.5 million.
"Cell-site related wireless carrier capital expenditures were generally
lower than anticipated in the third quarter and we felt the effect," commented
Jeffrey A. Stoops, SBA's President and Chief Executive Officer. "As a result
we posted results below expectations in those parts of our business which are
directly affected by current period customer spending -- our services business
and the volume of tower space we lease. Notwithstanding the effects of
reduced quarterly carrier spending, however, we continue to be generally
pleased with the progress of our core business of tower ownership and
improvements in our overhead cost structure. We posted material year-over-
year increases in leasing revenues, tower cash flows and EBITDA. We also
produced a material year-over-year savings in selling, general and
administrative expenses as a percentage of revenues. We believe these are
consistent trends, and evidence in our opinion of the continued underlying
strength and attractiveness of the tower ownership model.
"Attaining sustained positive free cash flow continues to be our primary
financial goal. We materially reduced our free cash flow deficit of
($13.9) million in the second quarter to ($8.5) million in the third quarter,
despite lower EBITDA. As we complete our new tower builds in the fourth
quarter or early in 2003, we expect total cash capital expenditures to
stabilize at an annual rate of $10.0 to $15.0 million per year and our tower
cash flow to continue to grow sequentially. Assuming no improvement in
carrier cell-site activity from third quarter levels, we now expect to produce
approximately break-even free cash flow in the first quarter of 2003 but not
attain sustained positive free cash flow until 2004. We remain fully funded
through our sustained free cash flow target. Our focus continues to be on
capturing as much business as possible, maintaining liquidity, cutting
expenses and improving our balance sheet. We believe we have made much
progress in those areas this year and we intend to continue to focus our
efforts there as we work through the current wireless carrier capital
expenditure environment."
A conference call has been scheduled for Wednesday, November 6, 2002 at
10:00 AM EST to discuss third quarter results and the Company's fourth quarter
guidance. The toll free dial-in number is 800-851-3058. The name of the
conference call is "SBA 2002 Third Quarter Results." A replay will be
available from November 6, 2002 at 5:00 PM to November 20, 2002 at 11:59 PM.
The replay number is 800-642-1687. The access code is 5951180. You may also
listen to this conference call via a webcast that can be accessed via the
Internet at: www.sbasite.com.
SBA is a leading independent owner and operator of wireless communications
infrastructure in the continental United States, Puerto Rico and the U.S.
Virgin Islands. SBA generates revenue from two primary businesses -- site
leasing and site development services. The primary focus of the Company is
the leasing of antenna space on its multi-tenant towers to a variety of
wireless service providers under long-term lease contracts. Since it was
founded in 1989, SBA has participated in the development of over 20,000
antenna sites in the United States.
For additional information, contact:
Pam Kline, Vice President - Capital Markets
(561) 995-7670
Information Concerning Forward-Looking Statements
This press release includes forward-looking statements, including
statements regarding (i) the progress of the Company's core business of tower
ownership and improvements in the Company's cost structure; (ii) the
likelihood that Company's trends of attaining year-over-year increases in
leasing revenue, tower cash flows and EBITDA and year-over-year declines in
SG&A as a percentage of revenue will be consistent; (iii) the Company's
ability to be free cash flow break even in the first quarter of 2003 and
attain sustained positive free cash flow in 2004; (iv) expectations regarding
the Company's future financial results, including its capital expenditure
levels, continued growth of tower cash flow, and the Company's ability to
capture as much business as possible, maintain liquidity, remain fully funded,
cut expenses and improve its balance sheet and (v) the Company's expectation
that the majority of remaining new build projects will be completed by year-
end. These forward-looking statements may be affected by the risks and
uncertainties in the Company's business. This information is qualified in its
entirety by cautionary statements and risk factor disclosure contained in the
Company's Securities and Exchange Commission filings, including the Company's
report on Form 10-K filed with the Commission on March 21, 2002. The Company
wishes to caution readers that certain important factors may have affected and
could in the future affect the Company's actual results and could cause the
Company's actual results for subsequent periods to differ materially from
those expressed in any forward-looking statement made by or on behalf of the
Company. With respect to the Company's future financial performance,
including its financial trends, its ability to be free cash flow break even by
2003 and free cash flow positive by 2004, and, such factors include, but are
not limited to, (1) the ability and willingness of wireless service providers
to maintain or increase their capital expenditures, (2) the Company's ability
to secure as many site leasing tenants as planned at anticipated lease rates,
(3) the Company's ability to expand our site leasing business, (4) the
Company's ability to retain current lessees on towers, (5) the Company's
ability to secure and deliver anticipated services business at contemplated
margins, (6) the Company's ability to continue to comply with covenants and
the terms of its senior credit facility, as amended, (7) the business climate
for the wireless communications industry in general and the wireless
communications infrastructure providers in particular, and (8) the continued
dependence on towers and outsourced site development services by the wireless
communications industry. With respect to the Company's ability to complete
the majority of its remaining new build obligations by year-end, such factors
include the Company's ability to complete construction of new towers that it
is currently obligated to construct on a timely and cost-efficient basis,
including our ability to successfully address zoning issues, carrier design
changes, changing local market conditions and the impact of adverse weather
conditions. The Company undertakes no obligation to update forward-looking
statements to reflect events or circumstances after the date hereof.
SUMMARY HISTORICAL FINANCIAL AND OTHER DATA
(In thousands except per share and tower data)
For the three months For the nine months
ended September 30, ended September 30,
Operating Data: 2002 2001 2002 2001
Revenues:
Site development $31,087 $35,359 $97,863 $100,872
Site leasing 35,961 27,674 102,736 72,872
Total revenues 67,048 63,033 200,599 173,744
Cost of revenues:
Site development 25,885 27,223 79,126 77,455
Site leasing 13,331 9,886 36,282 26,124
Total cost of revenues 39,216 37,109 115,408 103,579
Gross profit 27,832 25,924 85,191 70,165
Operating expenses:
Restructuring and other
charge 1,225 24,399 76,428 24,399
Selling, general and
administrative 8,983 10,009 27,356 31,409
Depreciation and amortization 26,378 20,145 76,625 53,520
Total operating expenses 36,586 54,553 180,409 109,328
Operating loss (8,754) (28,629) (95,218) (39,163)
Other income (expense):
Interest income 338 1,578 434 6,785
Interest expense (14,249) (14,099) (41,042) (34,736)
Non-cash amortization of
original issue discount
and debt issuance costs (8,461) (7,614) (24,748) (21,870)
Other 11 54 (29) (142)
Total other expense (22,361) (20,081) (65,385) (49,963)
Loss before provision for income
taxes, extraordinary item
and cumulative effect of
change in accounting
principle (31,115) (48,710) (160,603) (89,126)
Provision for income taxes (558) (408) (1,637) (1,240)
Loss before extraordinary item
and cumulative effect of change
in accounting principle (31,673) (49,118) (162,240) (90,366)
Extraordinary item - write-off of
deferred financing fees -- -- -- (5,069)
Cumulative effect of change in
accounting principle -- -- (80,592) --
Net loss $(31,673) $(49,118) $(242,832) $(95,435)
Basic and diluted loss per common
share before extraordinary
item and cumulative effect of
change in accounting principle $(0.62) $(1.03) $(3.24) $(1.91)
Extraordinary item -- -- -- (0.11)
Cumulative effect of change in
accounting principle -- -- (1.61) --
Basic and diluted loss per common
share $(0.62) $(1.03) $(4.85) $(2.02)
Basic and diluted weighted
average number of common shares 50,745 47,600 50,055 47,172
Other Data:
Earnings before interest, taxes,
depreciation, amortization,
non-cash charges, and
unusual or non-recurring
expenses (EBITDA)(1) $19,597 $16,769 $59,695 $41,289
Annualized tower cash flow(2) $90,520 $71,152
(1) EBITDA represents earnings (loss) before interest, taxes,
depreciation, amortization, non-cash compensation, restructuring and other
charge, extraordinary item, other income (expense) and cumulative effect of
change in accounting principle. EBITDA is commonly used in the communications
industry to analyze companies on the basis of operating performance, leverage
and liquidity. EBITDA is not intended to represent cash flows for the periods
presented, nor has it been presented as an alternative to operating income or
as an indicator of operating performance and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with accounting principles generally accepted in the United States.
Companies calculate EBITDA differently and, therefore, EBITDA as presented by
us may not be comparable to EBITDA reported by other companies.
Non-cash compensation expense of $0.7 million and $0.9 million is included
in selling, general and administrative expense for the three months ended
September 30, 2002 and September 30, 2001, respectively, and $1.9 million and
$2.5 million for the nine months September 30, 2002 and 2001, respectively.
(2) "Tower cash flow" is defined as site leasing revenue less cost of site
leasing revenue (exclusive of depreciation). We believe tower cash flow is
useful because it allows you to compare tower performance before the effect of
expenses (selling, general and administrative) that do not relate directly to
tower performance. "Annualized tower cash flow" is defined as tower cash flow
for the respective calendar quarter attributable to our site leasing business
multiplied by four.
Balance Sheet Data: As of As of
September 30, December 31,
2002 2001
Cash and cash equivalents $42,349 $13,904
Current assets $111,734 $92,287
Total assets $1,323,978 $1,429,011
Current liabilities $79,068 $113,701
Total debt $1,011,627(1) $845,453
Common shareholders' equity $215,579 $450,644
(1) Includes fair value of interest rate swap of $7,156 as of September
30, 2002
Growth in Leasing: Annualized Owned Tenants Annual
Leasing Tower on Owned Revenue/
Revenue (1) Sites Towers Tower
June 30, 2002
reported $136,125 3,858 8,189 $35,284
From added
towers (2) 345 23 23
Organic (3) 4,484 -- 160
Terminations (550) -- (44)
Dispositions/
reclassifications (7) (6)(4) (1)
September 30, 2002 $140,397 3,875 8,327 $36,231
(1) Run-rate leasing revenues as of end of quarter; reported on an
operational basis, some of which has not yet begun to be recorded as revenue
for financial statement purposes; excludes lease-sublease revenues of
approximately $5.0 million per year.
(2) Reflects first tenants on new builds when contracted for upon
completion date.
(3) Includes all other leasing revenue growth beyond that reflected from
added towers, including first-time tenants and all increased revenues from
existing tenants, such as rent escalators, amendments, microwave, generators,
etc.
(4) Dispositions reflect the removal, sale, conveyance or other legal
transfer of owned tower sites. Reclassifications reflect the combination for
reporting purposes of multiple acquired tower structures on a single parcel of
real estate, which we market and customers view as a single location, into a
single owned tower site.
Portfolio Aging:
Average
Date Added to Owned Tower Age Average Tower Cash Flow
Portfolio Sites (Months) Revenue
Margin (1)
1998 and prior 477 51.2 $53,750 78.5%
1999 661 37.9 45,842 74.4%
2000 1,207 25.4 34,921 67.0%
2001 1,345 15.2 28,612 60.0%
2002 185 6.0 20,667 60.7%
Combined 3,875 26.3 36,231 68.6%
(1) Run-rate leasing revenues as of end of quarter; reported on an
operational basis, some of which has not yet begun to be recorded as revenue
for financial statement purposes; excludes lease-sublease revenues of
approximately $5.0 million per year.
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SOURCE SBA Communications Corporation