SBA Communications Corporation Reports 4th Quarter Results;
Provides 2004 Guidance BOCA RATON, Fla., Feb. 26
/PRNewswire-FirstCall/ -- SBA Communications Corporation ("SBA" or
the "Company") today reported results for the fourth quarter ended
December 31, 2003. Highlights of the results include: * Sequential
and year-over-year growth in site leasing revenue, site leasing
gross profit and site leasing gross profit margin * Same tower
revenue and gross profit growth of 9.3% and 16.1%, respectively *
Site leasing gross profit margin of 68.9% * Services revenue and
margin improved sequentially * Refinancings produce substantial
reduction in debt service requirements and improved liquidity
Operating Results Total revenues in the fourth quarter of 2003 were
$57.6 million, compared to $57.4 million in the year earlier
period. Site leasing revenue of $32.9 million and site leasing
gross profit (formerly referred to as tower cash flow) of $22.7
million were up 8.9% and 17.0%, respectively, over the year earlier
period. Same tower revenue and site leasing gross profit growth on
the 3,020 towers owned at December 31, 2002 and 2003 were 9.3% and
16.1%, respectively. Site leasing gross profit margin in the fourth
quarter was 68.9%, a 140basis point sequential improvement over the
third quarter of 2003 and a 480 basis point improvement over the
fourth quarter of 2002. Site leasing contributed 92.5% of the
Company's gross profit in the fourth quarter. Site development
revenues were $24.7 million compared to $20.2 million in the third
quarter of 2003 and $27.2 million in the year earlier period.
Selling, general and administrative expenses were $7.9 million in
the fourth quarter, compared to $8.0 million in the year earlier
period. Net loss from continuing operations for the fourth quarter
was ($53.1) million or ($.98) per share, compared to ($29.4)
million or ($.57) per share in the year earlier period. Net loss in
the fourth quarter of 2003 was ($51.2) million, or ($.95) per
share, compared to a net loss of ($30.3) million, or ($.59) per
share, in the year earlier period. The Company's refinancing
activities contributed materially to the fourth quarter net loss.
Excluding $25.2 million of charges relating to asset
impairment,write-off of deferred financing fees and extinguishment
of debt, fourth quarter 2003 net loss per share from continuing
operations was ($.52) and net loss per share was ($.48). Adjusted
EBITDA was $16.8 million, compared to $15.4 million in the year
earlier period, or a 9% increase. Adjusted EBITDA margin was 29.1%,
a 230 basis point improvement over the year earlier period. Cash
provided by operating activities for the three months ended
December 31, 2003 was $12.5 million, compared to $38.0 million for
the three months ended December 31, 2002. The Company sold 787
towers in 2003 and intends to dispose of 61 other towers located in
the Company's western region. The results of the 787 towers sold
and the 61 towers held for sale are reflected as discontinued
operations in accordance with generally accepted accounting
principles for the three and twelve month periods ended December
31, 2003, the comparable periods of 2002 and for all other purposes
of this release. Investing Activities During the quarter, SBA built
3 towers and sold 19 towers, ending the quarter with 3,093 towers.
SBA received approximately $10 million of gross cash proceeds from
tower sales in the fourth quarter. Excluding the 61 towers held for
sale, SBA owned, as of December 31, 2003, 3,032 towers in
continuing operations. Capital expenditures for the fourth quarter
were $2.9 million, down from $21.4 million in the year earlier
period. Financing Activities SBA ended the year with $118.2 million
borrowed under its$195 million senior credit facility, $275.8
million of 9.75% senior discount notes, $406.4 million of 10.25%
senior notes and $65.7 million of 12% senior discount notes
outstanding and net debt of $832.3 million. Debt amounts as of
December 31, 2003 exclude approximately $4.6 million of deferred
gain from a termination of a derivative in 2002. In the fourth
quarter, SBA repurchased $153.3 million in principal amount of its
12% senior discount notes through a tender offer, and repurchased
$83.6 million of its 10.25% senior notes in open market
transactions. The Company paid cash of $246.6 million plus accrued
interest, and exchanged 1.0 million shares of its Class A common
stock. Cash payments were funded through the Company's December
issue of 9.75% senior discount notes, which generated gross
proceeds of $275 million. Since December 31, 2003, the Company has
refinanced its $195 million senior credit facility with a new $400
million senior credit facility, consisting of a $75 million
revolving credit facility and a $325 million term loan of which
$275 million was funded at closing. The remaining $50 million term
loan is available to be drawn until November 15, 2004 subject to
covenant compliance. The facility provides for loans at eitherthe
Eurodollar rate plus a spread of 350 basis points or the Base Rate
(as defined in the facility) plus a spread of 250 basis points. The
revolving credit facility matures in July of 2008 and the term loan
matures in October of 2008. The term loan begins amortizing in
September 2004 at the rate of 1% per annum. Approximately $152
million of proceeds from the new facility were used to repay
borrowings and assignment fees under SBA's prior senior secured
credit facility. The balance of the proceeds from the new facility
may be used for general corporate purposes. Since December 31,
2003, the Company has repurchased in open market purchases an
additional $19.3 million principal amount of its 12% senior
discount notes and $48.6 million principal amount of its 10.25%
senior notes. The Company paid cash of $66.0 million plus accrued
interest and exchanged 1.0 million shares of its Class A common
stock. The Company has also called for redemption on March 1, 2004
the remaining $46.3 million of its 12% senior discount notes. On a
pro forma basis giving effect to the new $400 million senior credit
facility and the first quarter debt repurchases and redemptions
described above, liquidity at December 31, 2003 would have been
$78.2 million, consisting of $57.2 million of cash, short term
investments and restricted cash and approximately $21 million of
additional availability under the new senior credit facility. "We
are very happy with our fourth quarter results," commented Jeffrey
A. Stoops, President and Chief Executive Officer. "Our leasing
business continued to perform strongly, and we saw good improvement
in our services segment. Our customers are clearly more active. Our
leasing and services backlogs are at their highest levels in over
twelve months, and we believe our customers will stay busy
improving their wireless networks through the year. As a result, we
expect material growth in both our leasing and services businesses
in 2004. "We have also made substantial progress in our liquidity
position and cash flows. Starting with our high yield debt
repurchases in mid-2003 and continuing through our recent
refinancings and debt repurchases, we have reduced our 2004 debt
service requirements by over $50 million and lengthened our
maturities. Since June 30, 2003, we have lowered our weighted
average cost of debt by approximately 210 basis points. Our capital
structure now better matches our expected operational results. We
intend to use our improved liquidity, cash flow and anticipated
operational results to reduce our overall leverage and ultimately
our cost of capital." Outlook The Company has provided its First
Quarter 2004 and Full Year 2004 Outlook. Information regarding
potential risks that could cause the actual results to differ from
these forward-looking statements is set forth below and in the
Company's filings with the Securities and Exchange Commission. (in
millions) Quarter ending March 31, 2004 Full year 2004 Site leasing
revenue $33.0 to $34.5 $134.0 to $140.0 Site development revenue
20.0 to 24.0 90.0 to 120.0 Total revenues 53.0 to 58.5 224.0 to
260.0 Site leasing gross profit 23.0 to 24.5 93.0 to 100.0 Net cash
interest expense* 12.5 to 14.0 49.0 to 53.0 Non-cash interest
expense* 7.0 to 7.5 27.0 to 28.0 Adjusted EBITDA 17.0 to 19.0 72.0
to 80.0 Cash flow from operating activities (30.0) to (35.0) .1 to
7.0 Capital expenditures 1.5 to 3.0 5.0 to 8.0 * Excludes
amortization of deferred financing costs Refer to the attached
exhibits for a reconciliation of Adjusted EBITDA to the most
comparable GAAP measures. Conference Call Information SBA
Communications Corporation will host a conference call Friday,
February 27, 2004 at 10:00 A.M. EST to discuss the quarterly
results. The call may be accessed as follows: Dial-in number:
888-423-3280 Conference call name: "SBA Fourth Quarter Results"
Replay: February 27, 2004 at 3:15 p.m. to March 12, 2004 at 11:59
p.m. Number: 800-475-6701 ID: 721090 Information Concerning
Forward-Looking Statements This press release includes
forward-looking statements, including statements regarding (i) the
Company's estimate of wireless carrier activity and demand during
2004; (ii) the Company's first quarter 2004 and full year 2004
guidance; (iii) the Company's ability to sell an additional 61
towers located in its western region; (iv) the Company's
expectations regarding reducing leverage and its cost of capital;
and (v) the Company's estimates regarding material growth in its
leasing business and services business in 2004. 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 31, 2003. 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 expectations regarding wireless carrier activity and
demand, 2004 guidance, and the Company's expectations regarding our
site leasing business, services business, leverage and cost of
capital, such risk 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 its 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 increase revenues and maintain or decrease expenses and
cash capital expenditures, (7) the Company's ability to continue to
comply with covenants and the terms of its senior credit facility
and to access sufficient capital to fund its operations, (8) the
business climate for the wireless communications industry in
general and the wireless communications infrastructure providers in
particular, and (9) the continued dependence on towers and
outsourced site development services by the wireless communications
industry. With respect to the Company's ability to sell an
additional 61 towers, such factors include, but are not limited to
(1) the ability of the Company to identify suitable purchasers for
the additional 61 towers; (2) the ability of the Company and such
purchasers to enter into agreements on mutually acceptable terms;
(3) the ability of the Company and such purchasers to satisfy all
closing conditions and potential adjustments to the purchase price
and (4) any indemnification obligations that may arise under the
agreements. The Company undertakes no obligation to update
forward-looking statements to reflect events or circumstances after
the date hereof. Information on Non-GAAP financial measures is
presented below under "Unaudited Consolidated Statements of
Operations." This press release will be available on our website at
http://www.sbasite.com/ through March 12, 2004. For additional
information about SBA, please contact Pam Kline, Vice-
President-Capital Markets, at (561) 995-7670, or visit our website
at http://www.sbasite.com/. SBA is a leading independent owner and
operator of wireless communications infrastructure in the United
States. 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.
SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share amounts) For the three months For the year ended December 31,
ended December 31, 2003 2002 2003 2002 Revenues: Site leasing
$32,925 $30,248 $127,842 $115,081 Site development 24,663 27,177
84,218 125,041 Total revenues 57,588 57,425 212,060 240,122 Cost of
revenues (exclusive of depreciation, accretion and amortization
shown below): Cost of site leasing 10,249 10,863 42,021 40,650 Cost
of site development 22,832 23,346 77,810 102,473 Total cost of
revenues 33,081 34,209 119,831 143,123 Gross profit 24,507 23,216
92,229 96,999 Operating expenses: Selling, general and
administrative 7,858 7,958 31,244 34,352 Restructuring and other
charges 68 1,132 2,505 47,762 Asset impairment charges 6,199 --
16,965 25,545 Depreciation, accretion and amortization 20,881
21,508 84,380 85,728 Total operating expenses 35,006 30,598 135,094
193,387 Operating loss from continuing operations (10,499) (7,382)
(42,865) (96,388) Other income (expense): Interest income 319 167
692 601 Interest expense (20,323) (14,497) (81,501) (54,822)
Non-cash interest expense (2,066) (7,615) (9,277) (29,038)
Amortization of debt issuance costs (1,345) (1,155) (5,115) (4,480)
Write-off of deferred financing fees and loss on extinguishment of
debt (18,968) -- (24,219) -- Other 185 (140) 169 (169) Total other
expense (42,198) (23,240) (119,251) (87,908) Loss from continuing
operations before provision for income taxes and cumulative effect
of change in accounting principle (52,697) (30,622) (162,116)
(184,296) Provision for income taxes (452) 1,268 (1,820) (309) Loss
from continuing operations before cumulative effect of change in
accounting principle (53,149) (29,354) (163,936) (184,605) Gain
(loss) from discontinued operations, net of income taxes 1,981
(983) (7,690) (3,717) Loss before cumulative effect of change in
accounting principle (51,168) (30,337) (171,626) (188,322)
Cumulative effect of change in accounting principle -- -- (545)
(60,674) Net loss $(51,168) $(30,337) $(172,171) $(248,996) For the
three months For the year ended December 31, ended December 31,
2003 2002 2003 2002 Basic and Diluted Loss Per Common Share
Amounts: Loss from continuing operations before cumulative effect
of change in accounting principle $(0.98) $(0.57) $(3.14) $(3.66)
Loss from discontinued operations 0.03 (0.02) (0.15) (0.07)
Cumulative effect of change in accounting principle -- -- (0.01)
(1.20) Net loss per common share $(0.95) $(0.59) $(3.30) $(4.93)
Weighted average number of common shares 54,124 51,055 52,204
50,491 Other Data: Adjusted EBITDA $16,764 $15,415 $63,633 $63,759
Annualized site leasing gross profit (quarterly gross profit
multiplied by 4) $90,704 $77,516 Non-GAAP Financial Measures This
press release includes disclosures regarding Adjusted EBITDA, net
loss per share excluding certain charges and pro forma liquidity as
of December 31, 2003, which are non-GAAP financial measures.
Adjusted EBITDA is defined as loss from continuing operations plus
net interest expenses, taxes, depreciation, accretion and
amortization, asset impairment charges, non-cash compensation,
restructuring and other charges, and other non-recurring expenses.
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by
Total Revenues for the applicable period. We have included
information regarding Adjusted EBITDA and Adjusted EBITDA margin
because we believe these items are indicators of the profitability
and performance of our core operations and reflect the changes in
our operating results. In addition, Adjusted EBITDA is a component
of the calculation used by certain of our lenders to determine
compliance with some of our debt instruments. Adjusted EBITDA is
not intended to be an alternative measure of net loss as determined
in accordance with generally accepted accounting principles.
Adjusted EBITDA for the three andtwelve months ended December 31,
2003 and 2002 is calculated below: For the three months ended For
the year ended December 31, December 31, 2003 2002 2003 2002 (in
thousands) Net loss $(51,168) $(30,337) $(172,171) $(248,996)
Cumulative effect of change in accounting principle -- -- 545
60,674 (Gain)loss from discontinued operations, net of income taxes
(1,981) 983 7,690 3,717 Loss from continuing operations (53,149)
(29,354) (163,936) (184,605) Interest income (319) (167) (692)
(601) Interest expense 20,323 14,497 81,501 54,822 Non-cash
interest expense 2,066 7,615 9,277 29,038 Amortization of debt
issuance costs 1,345 1,155 5,115 4,480 Write off of deferred
financing fees and loss on extinguishment of debt 18,968 -- 24,219
-- Depreciation, accretion and amortization 20,881 21,508 84,380
85,728 Asset impairment charges 6,199 -- 16,965 25,545 Provision
(benefit) for taxes 452 (1,268) 1,820 309 Other expenses (185) 140
(169) 169 Non-cash compensation (included in selling, general and
administrative) 115 157 832 1,112 Restructuring and other charges
68 1,132 2,505 47,762 Other non-recurring expenses -- -- 1,816 --
Adjusted EBITDA $16,764 $15,415 $63,633 $63,759 Net loss per share
from continuing operations and net loss per share in each case
excluding charges relating to asset impairment, write-off of
deferred financing fees and extinguishment of debt, have been
presented to permit comparisons of actual results to the Company's
Fourth Quarter 2003 Outlook calculated on the same basis and
including the same items of revenue or expense. Net loss per share
for the three months ended December 31, 2003 excluding charges
relating to asset impairment, write-off of deferred financing fees
and extinguishment of debt is calculated below. For the three
months ended December 31, 2003 Per Share (in thousands except per
share data) Net loss $(51,168) $(0.95) Add back: Asset impairment
charges 6,199 0.11 Write-off of deferred financing fees and loss on
extinguishment of debt 18,968 0.35 Net loss adjusted for above
items $(26,001) $(0.48) Net loss from continuing operations
$(53,149) (0.98) Add back: Asset impairment charges 6,199 0.11
Write-off of deferred financing fees and loss on extinguishment of
debt 18,968 0.35 Net loss from continuing operations adjusted for
above items $27,982 $(0.52) Weighted average number of common
shares 54,124 Pro forma liquidity at December 31, 2003 has been
presented because of the material changes to the Company's debt
structure that have occurred in the first quarter to 2004 and the
Company's belief that such information is more meaningful to an
understanding of the Company's liquidity position than actual
December 31, 2003 balance sheet information, which has also been
presented. SBA COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
December 31, December 31, 2003 2002 ASSETS Current assets: Cash and
cash equivalents $8,338 $61,141 Short term investments 15,200 --
Restricted cash 10,344 -- Accounts receivable, net of allowances of
$1,400 and $5,572 in 2003 and 2002, respectively 19,414 36,292
Other current assets 15,236 15,554 Assets held for sale 395 202,409
Total current assets 68,927 315,396 Property and equipment, net
856,213 940,961 Deferred financing fees, net 24,253 24,517 Other
long-term assets 33,589 22,491 Total assets $982,982 $1,303,365
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts
payable and accrued expenses $29,061 $30,753 Interest payable
20,319 22,919 Long-term debt, current portion 11,538 60,083 Other
current liabilities 14,521 17,099 Liabilities held for sale 608
2,685 Total current liabilities 76,047 133,539 Long-term
liabilities: Long-term debt 859,220 964,199 Deferred revenue 511
703 Other long-term liabilities 3,327 1,434 Total long-term
liabilities 863,058 966,336 Shareholders' equity 43,877 203,490
Total liabilities and shareholders' equity $982,982 $1,303,365 SBA
COMMUNICATIONS CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the year
ended December 31, 2003 2002 CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(172,171) $(248,996) Depreciation, accretion and
amortization 84,380 85,664 Other non-cash items reflected in
Statements of Operations 70,841 185,094 Changes in operating assets
and liabilities (12,858) (3,955) Net cash provided by (used in)
operating activities (290,808) 17,807 CASH FLOWS FROM INVESTING
ACTIVITIES: Capital expenditures (15,136) (86,361) Acquisitions and
related earn-outs (3,126) (29,724) Proceeds from sale of towers
192,450 -- Receipt (payment) of restricted cash (18,732) 8,000
Proceeds from termination of interest note swap agreement -- 5,369
Net cash provided by (used in) investing activities 155,456
(102,716) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
employee stock purchase/option plans 31 329 Borrowings under senior
creditfacility, net of financing fees 356,955 143,809 Repayment of
senior credit facility and notes payable (505,085) (445) Bank
overdraft borrowings (repayments) 400 (11,547) Repurchase of 12%
senior discount notes and 10 1/4% senior notes (296,925) -- Payment
of restricted stock guarantee (936) -- Proceeds from issuance of 9
3/4% senior discount notes, net of financing fees 267,109 -- Net
cash provided by (used in) financing activities (178,451) 132,146
Net increase (decrease) in cash and cash equivalents (52,803)
47,237 CASH AND CASH EQUIVALENTS: Beginning of period 61,141 13,904
End of period $8,338 $61,141 UNAUDITED SUPPLEMENTAL INFORMATION:
For the three For the year months ended ended December 31, December
31, 2003 2003 (in thousands) SELECTED CAPITAL EXPENDITURE DETAIL:
Tower new build construction: Towers completed in period $974
$3,060 Towers completed in prior periods 489 4,357 Work in process
323 1,203 1,786 8,620 Operating tower expenditures: Tower
upgrades/augmentations 325 2,305 Maintenance/improvement capital
expenditures 441 2,908 766 5,213 General corporate expenditures 373
1,303 Totals $2,925 $15,136 DATASOURCE: SBA Communications
Corporation CONTACT: Pam Kline, Vice-President-Capital Markets, SBA
Communications Corporation, +1-561-995-7670 Web site:
http://www.sbasite.com/
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