CARY, N.C.--(BUSINESS WIRE)--April 21, 2004--SpectraSite, Inc.
(NYSE: SSI), one of the largest wireless tower operators in the United
States, today reported results for the quarter ended March 31, 2004,
and updated its guidance for the remainder of the year.
The Company has designated the periods prior to January 31, 2003,
as "Predecessor Company" and the periods subsequent to January 31,
2003, as "Reorganized Company." As a result of the implementation of
fresh start accounting, the financial statements of the Reorganized
Company are not comparable to the Predecessor Company's financial
statements for prior periods.
Total revenues for the first quarter of 2004 were $84.6 million,
compared to revenues of $51.1 million for the two months ended March
31, 2003, and $25.6 million for the one month ended January 31, 2003.
Revenues associated with the 545 towers sold to SBC on February 10,
2003, were $0.4 million for the two months ended March 31, 2003, and
$1.2 million for the one month ended January 31, 2003. Operating
income for the first quarter of 2004 was $21.4 million, an increase
from operating income of $9.1 million for the two months ended March
31, 2003, and an operating loss of $3.2 million during the one month
ended January 31, 2003. Operating income associated with the 545
towers sold to SBC on February 10, 2003, was $0.2 million for the two
months ended March 31, 2003, and $0.7 million for the one month ended
January 31, 2003.
Other expense during the first quarter of 2004 was $1.6 million as
compared to other expense of $1.2 million during the two months ended
March 31, 2003, and other expense of $0.5 million during the one month
ended January 31, 2003. Other expense items during the first quarter
of 2004 primarily related to expenses associated with the public
offering of approximately 10.4 million shares of the Company's common
stock.
The Company's net income was $7.1 million for the first quarter of
2004 versus a net loss of $1.7 million during the two months ended
March 31, 2003, and net income of $345.0 million during the one month
ended January 31, 2003. The Company's net income during the one month
ended January 31, 2003, consisted principally of a gain on the early
extinguishment of debt related to the Company's emergence from chapter
11 on February 10, 2003. The Company's basic net income per share was
$0.15 during the first quarter of 2004 as compared to a basic net loss
of $0.04 per share during the two months ended March 31, 2003, and
basic net income per share of $2.24 during the one month ended January
31, 2003. The Company's diluted net income per share was $0.14 during
the first quarter of 2004 as compared to a diluted net loss of $0.04
per share during the two months ended March 31, 2003, and diluted net
income per share of $2.24 during the one month ended January 31, 2003.
Adjusted EBITDA increased to $45.2 million during the first
quarter of 2004 from $24.6 million during the two months ended March
31, 2003, and $12.2 million during the one month ended January 31,
2003. Other expense items in the amount of $1.6 million during the
first quarter of 2004 and $1.2 million during the two months ended
March 31, 2003, and $0.5 million during the one month ended January
31, 2003, are included in the Company's Adjusted EBITDA calculations.
The Company's presentation of Adjusted EBITDA is based on recent
regulations adopted by the Securities and Exchange Commission ("SEC")
related to non-GAAP financial measures. The Company defines Adjusted
EBITDA for the Reorganized Company as net income (loss) before
depreciation, amortization and accretion, interest, income tax expense
(benefit) and, if applicable, before discontinued operations and
cumulative effect of change in accounting principle. For the
Predecessor Company, Adjusted EBITDA also excludes gain on debt
discharge, reorganization items, and write-offs of investments in and
loans to affiliates. The Company uses a different definition of
Adjusted EBITDA for the fiscal periods prior to its reorganization to
enable investors to view the Company's operating performance on a
consistent basis before the impact of the items discussed above on the
Predecessor Company. Each of these historical items was incurred prior
to, or in connection with, the Company's reorganization and is
excluded from Adjusted EBITDA to reflect the results of the Company's
core operations. Adjusted EBITDA may not be comparable to a similarly
titled measure employed by other companies and is not a measure of
performance calculated in accordance with accounting principles
generally accepted in the United States.
Net cash provided by operating activities increased to $27.8
million during the first quarter of 2004 as compared to net cash
provided by operating activities of $11.9 million during the two
months ended March 31, 2003, and net cash provided by operating
activities of $5.9 million during the one month ended January 31,
2003. Purchases of property and equipment during the first quarter of
2004 were $6.3 million, as compared to $2.3 million for the two months
ended March 31, 2003, and $2.7 million the one month ended January 31,
2003. Free cash flow, defined as net cash provided by operating
activities less purchases of property and equipment, during the first
quarter of 2004 was $21.5 million as compared to free cash flow of
$9.7 million during the two months ended March 31, 2003, and $3.2
million during the one month ended January 31, 2003.
Based on trailing twelve-month revenues on towers owned or
operated as of March 31, 2003, and still owned or operated as of March
31, 2004, same tower revenue growth was 10.0%. The Company owned or
operated 7,582 towers and in-building sites as of March 31, 2004.
In describing the first quarter, Stephen H. Clark, President and
CEO, stated, "The first quarter of 2004 represents the first quarter
in which SpectraSite has operated solely as a site leasing and
licensing company and I am extremely pleased with our results. On an
annual and sequential basis, both revenues and Adjusted EBITDA
increased significantly. Through focus, diligence and sheer hard work,
our operating teams continue to exceed their goals. The results they
have achieved clearly have placed our company ahead of where we
thought we would be at this point during the year and, as a result, we
are increasing our guidance for the balance of 2004."
Amendment to Credit Facility
On February 9, 2004, SpectraSite Communications, Inc.
("Communications"), the Company's wholly-owned subsidiary, completed
an amendment to its credit facility that reduced the interest rate on
its term loan from, at Communications' option, Canadian Imperial Bank
of Commerce's base rate plus 1.75% per annum or the Eurodollar rate
plus 3.00% per annum to Canadian Imperial Bank of Commerce's base rate
plus 1.00% per annum or the Eurodollar rate plus 2.25% per annum. The
amendment also provides that the interest rate margins will
automatically be further reduced if Communications' credit ratings
improve. As a result of this transaction, the Company expects to
generate annual interest expense savings of approximately $1.9
million.
Acquisitions
Under the terms of an amended agreement with affiliates of SBC
Communications Inc. ("SBC"), completed on November 14, 2002, the
Company agreed to lease or sublease up to 600 SBC towers between May,
2003, and August, 2004, subject to the towers meeting certain
requirements. The agreement with SBC provides that the Company will
lease or sublease no more than 100 towers per quarter beginning with
the second quarter of 2003 and ending in the second quarter of 2004.
In the event that the Company leases or subleases fewer than 100 SBC
towers in any quarter, the final closing in the third quarter of 2004
may include additional SBC towers necessary to meet the 600 tower
commitment. During the first quarter of 2004 the Company leased or
subleased 6 SBC towers, for which it paid approximately $1.7 million
in cash. As of March 31, 2004, the Company was committed to leasing or
subleasing an additional 474 SBC towers during 2004.
Updated 2004 Guidance
The Company's 2004 outlook includes estimates and assumptions
relating to the Company's existing business without regard to possible
additional tower acquisitions under the Company's contract with
affiliates of SBC.
Without giving effect to possible SBC tower acquisitions during
2004, the Company expects 2004 site leasing and licensing revenues
will be between $342 million and $348 million, representing an
increase from the Company's prior guidance of $336 million to $341
million.
The Company has not changed its outlook for 2004 site operations
costs excluding depreciation, amortization and accretion expenses. The
Company expects these costs will be between $108 million and $111
million.
The Company expects 2004 selling, general and administrative
expenses will be between $48 million and $50 million representing a
reduction from its prior guidance range of $48 million to $51 million.
The Company's 2004 cash interest expense is expected to be
approximately $35 million to $38 million, representing a reduction
from the Company's prior guidance of $37 million to $41 million.
During 2004, the Company expects to spend approximately $15
million to $20 million in capital expenditures related to tower
upgrades, information technology purchases, and other general
corporate requirements. The Company also expects to spend between $25
million to $30 million in discretionary capital expenditures related
to its in-building initiative and the purchase of ground rights under
certain towers. The Company's overall capital expenditure range of $40
million to $50 million represents an increase from its prior guidance
range of $25 million to $40 million, primarily due to the allocation
of additional capital expenditures to the Company's initiative to
purchase ground rights under certain of its towers.
At March 31, 2004, the Company had approximately $639 million of
outstanding debt and approximately $84 million of cash on hand. Based
on current assumptions, the Company does not expect to require
borrowings from its $200 million unused revolving credit facility
during 2004.
Conference Call Information
The Company is planning to host a conference call on Thursday
April 22, 2004, at 11:00 a.m. Eastern Daylight Time to discuss first
quarter 2004 results. Dial in information is as follows: 800-261-6483,
access code 6513879. A replay of the conference call will be available
beginning two hours after the call has ended until April 29, 2004. The
replay dial in information is as follows: (800) 642-1687, access code
6513879.
Non-GAAP Financial Measures and Additional Information
For a discussion of non-GAAP financial measures, including their
usefulness to investors and material limitations, please see
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Non-GAAP Financial Measures" included in the
Company's SEC filings. Additional information may be found in the
Company's Form 10-Q report filed with the SEC or by accessing the
Company's website at www.spectrasite.com.
Adjusted EBITDA.
Adjusted EBITDA was calculated as follows for the periods
presented:
Reorganized Reorganized Predecessor
Company Company Company
Three Months Two Months One Month
Ended Ended Ended
March 31, March 31, Jan. 31,
2004 2003 2003
--------------------------------------
(in thousands)
Net income (loss) $7,130 $(1,692) $344,970
Depreciation, amortization and
accretion expenses 25,416 16,652 15,930
Interest income (214) (217) (137)
Interest expense 9,616 9,261 4,721
Gain on debt discharge -- -- (1,034,764)
Income tax expense 2,806 578 5
Reorganization items:
Adjust accounts to fair value -- -- 644,688
Professional and other fees -- -- 23,894
Loss (income) from operations
of discontinued segment, net of
income tax expense 124 (14) 686
Loss on disposal of
discontinued segment 343 -- --
Cumulative effect of change in
accounting principle -- -- 12,236
--------------------------------------
Adjusted EBITDA $45,221 $24,568 $12,229
======================================
Free Cash Flow.
Free cash flow (deficit) was calculated as follows for the periods
presented:
Reorganized Reorganized Predecessor
Company Company Company
Three Months Two Months One Month
Ended Ended Ended
March 31, March 31, Jan. 31,
2004 2003 2003
---------------------------------------
(in thousands)
Net cash provided by
operating activities $27,840 $11,927 $5,892
Less: Purchases of property
and equipment (6,309) (2,255) (2,737)
---------------------------------------
Free cash flow (deficit) $21,531 $9,672 $3,155
=======================================
About SpectraSite, Inc.
SpectraSite, Inc. (www.spectrasite.com), based in Cary, North
Carolina, is one of the largest wireless tower operators in the United
States. At March 31, 2004, SpectraSite owned or operated approximately
10,000 revenue producing sites, including 7,582 towers and in-building
sites primarily in the top 100 markets in the United States.
SpectraSite's customers are leading wireless communications providers,
including AT&T Wireless, Cingular, Nextel, Sprint PCS, T-Mobile and
Verizon Wireless.
Safe Harbor
This press release and oral statements made from time to time by
representatives of the Company may contain "forward-looking
statements" concerning the Company's financial outlook, future
expectations, financial and operating projections, plans and
strategies and the trading markets for its securities. These
forward-looking statements are subject to a number of risks and
uncertainties. The Company wishes to caution readers that certain
factors may impact the Company's actual results and could cause
results for subsequent periods to differ materially from those
expressed in any forward-looking statements made by or on behalf of
the Company. Such factors include, but are not limited to (i) the
Company's substantial capital requirements and debt, (ii) market
conditions, (iii) the Company's dependence on demand for wireless
communications and related infrastructure, (iv) competition in the
communications tower industry, including the impact of technological
developments, (v) consolidation in the wireless industry, (vi) future
regulatory actions, (vii) conditions in its operating areas and (viii)
management's estimates and assumptions included in the Company's 2004
outlook. These and other important factors are described in more
detail in the "Risk Factors" and the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections of
the Company's SEC filings and public announcements. The Company
undertakes no obligation to update forward-looking statements to
reflect subsequently occurring events or circumstances.
SPECTRASITE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31, 2004 and December 31, 2003
Reorganized Reorganized
Company Company
March 31, Dec.31,
2004 2003
----------------------
(unaudited)
(dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents $84,329 $60,410
Accounts receivable, net of allowance of
$6,918 and $7,849, respectively 9,067 7,880
Prepaid expenses and other 14,492 11,606
Assets held for sale -- 5,737
----------------------
Total current assets 107,888 85,633
Property and equipment, net 1,191,115 1,207,626
Customer contracts, net 177,551 179,359
Other assets 38,718 39,990
----------------------
Total assets $1,515,272 $1,512,608
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $8,657 $11,482
Accrued and other expenses 81,010 83,825
Liabilities under SBC agreement 48,721 49,528
Liabilities held for sale -- 2,903
----------------------
Total current liabilities 138,388 147,738
----------------------
Long-term portion of credit facility 439,155 439,555
Senior notes 200,000 200,000
Other long-term liabilities 56,056 55,582
----------------------
Total long-term liabilities 695,211 695,137
----------------------
Stockholders' equity:
Common stock, $0.01 par value, 250,000,000
shares authorized, 48,216,194 and
47,750,453 issued and outstanding
at March 31, 2004 and December 31, 2003,
respectively 482 478
Additional paid-in-capital 693,747 688,941
Accumulated deficit (12,556) (19,686)
----------------------
Total stockholders' equity 681,673 669,733
----------------------
Total liabilities and stockholders'
equity $1,515,272 $1,512,608
======================
SPECTRASITE, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Reorganized Reorganized Predecessor
Company Company Company
Three Months Two Months One Month
Ended Ended Ended
March 31, March 31, Jan. 31,
2004 2003 2003
------------------------------------
(in thousands, except per share
amounts)
Revenues $84,590 $51,108 $25,626
Operating expenses:
Costs of operations, excluding
depreciation, amortization
and accretion expenses 25,743 17,080 8,901
Selling, general and
administrative expenses 12,042 8,231 4,003
Depreciation, amortization and
accretion expenses 25,416 16,652 15,930
------------------------------------
Total operating expenses 63,201 41,963 28,834
------------------------------------
Operating income (loss) 21,389 9,145 (3,208)
------------------------------------
Other income (expense):
Interest income 214 217 137
Interest expense (9,616) (9,261) (4,721)
Gain on debt discharge -- -- 1,034,764
Other income (expense) (1,584) (1,229) (493)
------------------------------------
Total other income
(expense) (10,986) (10,273) 1,029,687
------------------------------------
Income (loss) from continuing
operations before income taxes 10,403 (1,128) 1,026,479
Income tax expense 2,806 578 5
------------------------------------
Income (loss) from continuing
operations 7,597 (1,706) 1,026,474
Reorganization items:
Adjust accounts to fair value -- -- (644,688)
Professional and other fees -- -- (23,894)
------------------------------------
Total reorganization
items -- -- (668,582)
------------------------------------
Income (loss) before discontinued
operations 7,597 (1,706) 357,892
Discontinued operations:
Income (loss) from operations
of discontinued broadcast
services division, net of income
tax expense (124) 14 (686)
Loss on disposal of
discontinued broadcast
services division, net of
income tax expense (343) -- --
------------------------------------
Income (loss) before cumulative
effect of change in accounting
principle 7,130 (1,692) 357,206
Cumulative effect of change in
accounting principle (Note 4) -- -- (12,236)
------------------------------------
Net income (loss) $7,130 $(1,692) $344,970
====================================
Basic earnings per share:
Income (loss) from continuing
operations $0.16 $(0.04) $6.66
Reorganization items -- -- (4.34)
Discontinued operations (0.01) -- --
Cumulative effect of change in
accounting principle -- -- (0.08)
------------------------------------
Net income (loss) $0.15 $(0.04) $2.24
====================================
Diluted earnings per share:
Income (loss) from continuing
operations $0.15 $(0.04) $6.66
Reorganization items -- -- (4.34)
Discontinued operations (0.01) -- --
Cumulative effect of change in
accounting principle -- -- (0.08)
------------------------------------
Net income (loss) $0.14 $(0.04) $2.24
====================================
Weighted average common shares
outstanding (basic) 47,880 47,174 154,014
====================================
Weighted average common shares
outstanding (diluted) 52,368 47,174 154,014
====================================
SPECTRASITE, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Reorganized Reorganized Predecessor
Company Company Company
Three Two One
Months Months Month
Ended Ended Ended
March 31, March 31, Jan. 31,
2004 2003 2003
--------------------------------------
(in thousands)
Operating activities
Net income (loss) $7,130 $(1,692) $344,970
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation 20,866 13,889 15,609
Cumulative effect of change in
accounting principle -- -- 12,236
Amortization of intangible
assets 3,855 2,509 252
Amortization of debt issuance
costs 1,067 790 425
Amortization of asset retirement
obligation 695 429 214
Write-off of debt issuance costs 7 1,614 --
(Gain) loss on disposal of assets 175 1,203 (84)
Write-off of customer contracts 567 -- --
Loss on disposal of discontinued
operations 343 -- --
Deferred income taxes 2,469 -- --
Gain on debt discharge -- -- (1,034,764)
Adjust accounts to fair value -- -- 644,688
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable (687) 1,488 5,045
Costs and estimated earnings in
excess of billings, net -- (944) (272)
Inventories -- 184 (2)
Prepaid expenses and other (2,782) (1,003) (2,238)
Accounts payable (2,822) (6,170) 13,549
Other liabilities (3,043) (370) 6,264
------------------------------------
Net cash provided by
operating activities 27,840 11,927 5,892
------------------------------------
Investing activities
Purchases of property and equipment (6,309) (2,255) (2,737)
Acquisitions of towers (1,671) -- --
Disposal of discontinued operations,
net of cash sold (551) -- --
Proceeds from the sale of assets 714 81,128 --
------------------------------------
Net cash provided by (used in)
investing activities (7,817) 78,873 (2,737)
------------------------------------
Financing activities
Proceeds from issuance of common
stock 4,506 -- --
Repayments of debt and capital
leases (522) (76,128) (10,884)
Repayments of executive notes 304 -- --
Debt issuance costs (392) -- --
------------------------------------
Net cash provided by (used in)
financing activities 3,896 (76,128) (10,884)
------------------------------------
Net increase (decrease) in cash
and cash equivalents 23,919 14,672 (7,729)
Cash and cash equivalents at
beginning of period 60,410 73,232 80,961
------------------------------------
Cash and cash equivalents at end
of period $84,329 $87,904 $73,232
====================================
Supplemental disclosures of cash flow
information:
Cash paid for interest $5,202 $3,263 $4,265
Cash paid for income taxes 1,245 602 5
Supplemental disclosures of non-cash
investing
and financing activities:
Common stock issued for deposits $-- $-- $408
Tower acquisitions applied against
liability under SBC contract 639 -- --
Interest capitalized 155 -- --
Capital lease obligations incurred
(terminated) related to property
and equipment (95) 68 --
CONTACT: SpectraSite, Inc.
Investor Relations Department, 919-466-5492
investorrelations@spectrasite.com
SOURCE: SpectraSite, Inc.
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