FiberTower Corporation (FTWR)
Q1 2010 Earnings Call
May 07, 2010 11:30 am ET
Kirsten Chapman - IR
Kurt Van Wagenen - President and CEO
Tom Scott - SVP and CFO
Romeo Reyes - Jefferies & Company
Ric Prentiss - Raymond James
Chris Cook - Zazove Associates
Previous Statements by FTWR
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Ladies and gentlemen. Thank you for standing by. Welcome to the FiberTower First Quarter 2010 Earnings Conference Call. During today
s presentation, all parties will be in a listen-only mode. Following the presentation the conference will be open for question. (Operator Instructions). This conference is being recorded today, Friday, May 7, 2010.
I would like to turn the conference over to Kirsten Chapman. Please go ahead.
Thank you (inaudible), good morning everyone and thank you for joining the FiberTower Corporation First Quarter 2010 Conference Call. Joining me today on the call are, Kurt Van Wagenen, FiberTower
s President and Chief Executive Officer, and Thomas Scott, Senior Vice President and Chief Financial Officer. Today, Kurt will open with an overview for the quarter, and Tom will follow with the financial detail. Then Kurt will conclude with closing remarks and open the call for questions.
Before we get underway, let me first inform you that FiberTower issued a press release yesterday, aftermarket close which provides the details of the Company
s quarterly financial and operating results. The Company has also prepared a slide presentation for today
s quarterly earnings conference call. If you are logged in to the webcast and would like to review the slide presentation you may do so at events and presentation section in Investor Relation section of the company
s website at www.fibertower.com. If you have any questions, please call Lippert/Heilshorn & Associates at 415-433-3777. A telephone replay of today
s call will be available until midnight Pacific Time on May 10th by dialing 1-303-590-3030 and entering passcode 4285977. A webcast replay will also be available at FiberTower website for 90 days.
Please note that information recorded on this call speaks only as of today, March 7th, 2010, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay. Before we begin, I will review Safe Harbor statement which can be found on slide 2 of the presentation. Management
s comments today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Information about the potential factors that could affect the Company
s financial results is available in the
as updated in Company
s SEC filings.
Also please note, the company uses some metrics not in accordance with Generally Accepted Accounting Principles commonly known as GAAP to monitor the financial performance of operations. Non-GAAP financial measures should be viewed in addition as an alternative for to reported financial results as determined in accordance with GAAP.
Adjusted EBITDA is defined as net income or loss from operations before interest, taxes, depreciation and amortization, impairment and restructuring charges, stock based compensation, gain on earlier extinguishment of debt, debt exchange expenses and other income expense.
During the first quarter, FiberTower recorded revenue associated with an early termination liability or ETL of $587,000 as these ETL is not recurring revenue, management has adjustment measurement metrics including revenue adjusted EBITDA and guidance through the call and presentation to exclude the impact of ETL. Reconciliations can be found at the end of the presentation.
As a reminder, you may access the slide presentation today at the events and presentation section in the Investor
s section of the company
s website at www.fibertower.com. It
s now my pleasure to turn the call over to Kurt Van Wagenen, CEO of FiberTower.
Please go ahead, Kurt.
Kurt Van Wagenen
Thank you, Kirsten. Good morning everyone. We are excited about the significant activity during the first quarter of 2010. FiberTower sales bookings were three times greater than our average quarterly sales bookings in 2009. The market is dynamic and we believe that our increasing traction with customers will drive to accelerating revenue growth in the later half of the year. We also believe that we are well positioned to continue our sales bookings momentum going forward. I will start with a brief overview of the first quarter operating results. We posted solid revenue of $17.2 million, up 17% compared to the first quarter for 2009.
The increase was primarily driven by selling incremental bandwidth to customers at existing sites. This on-net revenue growth allows us to deliver high incremental margins since we are leveraging our existing assets. In fact our incremental margin exceeded 100% in the first quarter.
New business for our core wireless backhaul services including recently announced agreements with the Verizon Wireless and MetroPCS, port continued revenue growth in the second half of 2010.
Capital expenditures were 2.5 million and were primarily used to add new customers at existing sites and support site additions beyond the first quarter. We expect our level of spending to begin increasing in the second quarter and continue to increase throughout the remainder of the year as we deliver sole business to customers.
Looking to the bottom-line, we reported adjusted EBITDA loss of $1.9 million, a $3.1 million improvement over last year
s first quarter. This improvement reflects our successful efforts to realize high site level margins while controlling cost.
Finally average revenue per deployed site increased 17% to $1842 compared to $1572 a year ago. Revenue per site remains our most important metrics since it reflects the capital efficiency of our network as we scale the business. Please note that in the first quarter we changed this metrics from revenue per billing site to revenue per deployed site as we believe it is more representative measure of our financial performance. All in all our first quarter results demonstrate that we are enhancing our position as a leading backhaul company serving wireless carrier nationwide. These providers are reporting growing data services that require additional backhaul and we are well positioned to support these growth.