BOCA RATON, Fla., May 4, 2009 (GLOBE NEWSWIRE) -- SBA Communications Corporation (Nasdaq:SBAC) ("SBA" or the "Company") today reported results for the quarter ended March 31, 2009. Highlights of the results include:
First quarter over year earlier period:
* Site leasing revenue growth of 29.2%
* Tower Cash Flow growth of 31.9%
* Net loss decreased from $19.2 million to $17.9 million
* Adjusted EBITDA growth of 32.9%
* Equity Free Cash Flow Per Share growth of 28.6%
Operating Results
Total revenues in the first quarter of 2009 were $135.1 million, compared to $109.9 million in the year earlier period, an increase of 22.9%. Site leasing revenue of $115.5 million was up 29.2% over the year earlier period. Site leasing segment operating profit (as defined below) of $87.9 million was up 30.6% over the year earlier period. Site leasing contributed 97.1% of the Company's total segment operating profit in the first quarter of 2009. Site development revenues were $19.6 million in the first quarter of 2009 compared to $20.5 million in the year earlier period, a 4.7% decrease. Site development segment operating profit margin was 13.3% in the first quarter of 2009, compared to 11.5% in the year earlier period.
Tower Cash Flow (as defined below) for the quarter ended March 31, 2009, was $89.3 million, a 31.9% increase over the year earlier period. Tower Cash Flow margin for the three months ended March 31, 2009 was 78.7%, compared to 77.5% in the year earlier period.
Net loss for the first quarter of 2009 was $17.9 million or $0.15 per share, compared to a net loss of $19.2 million or $0.18 per share in the year earlier period.
Adjusted EBITDA (as defined below) in the first quarter was $81.7 million, compared to $61.5 million in the year earlier period, a 32.9% increase. Adjusted EBITDA margin was 61.4% in the first quarter of 2009 compared to 56.9% in the year earlier period.
Net cash interest expense (as defined below) was $26.5 million in the first quarter of 2009, compared to $21.7 million in the year earlier period.
Equity free cash flow (as defined below) for the quarter ended March 31, 2009 was $52.8 million compared to $38.3 million in the year earlier period. Equity free cash flow per share was $0.45 in the quarter ended March 31, 2009 compared to $0.35 per share in the year earlier period, an increase of 28.6%.
"The first quarter was a good start to 2009 for SBA," commented Jeffrey A. Stoops, President and Chief Executive Officer. "Our results demonstrate that SBA is, once again, the industry leader for growth. We continue to execute well operationally, and enjoy the benefits of a top quality tower portfolio. Wireless use continues to grow, our wireless carrier customers continue to invest materially in their networks to capture that growth and as a result we continue to post material increases in site leasing revenue, Tower Cash Flow, Adjusted EBITDA and Equity Free Cash Flow Per Share. We expect demand from our customers to stay strong throughout 2009 and beyond as they focus on providing enhanced wireless voice and data services and ultimately next-generation technology in the form of LTE or WiMax. Based on our strong first quarter results and our positive views on continued customer demand, we are increasing the mid-point of our full year 2009 Outlook for site leasing revenue, Tower Cash Flow and Adjusted EBITDA.
"With our recent issuance of $500 million of 4.0% 2014 convertible notes, we have achieved a substantial portion of the refinancing goals that we want to achieve by mid-2010. This financing puts us in excellent shape. We now have sufficient cash on hand to repay all of our 2010 maturities. We intend to use a substantial portion of the proceeds from the offering to repay or repurchase secured debt, thereby freeing up collateral, which in turn will improve our position to successfully achieve the remainder of our refinancing goals. Our next goal is to refinance our 2005 CMBS ahead of the November 2010 anticipated repayment date. The capital markets are improving, we continue to produce excellent operating results and we expect to be able to materially deleverage our balance sheet over the next twelve months. As a result, we are increasingly comfortable in our ability to redirect a portion of our Equity Free Cash Flow back toward tower acquisitions. We remain convinced that the combination of strong customer demand, a top quality tower portfolio, strong operational performance, material portfolio growth that meets our investment criteria and appropriate balance sheet positioning will result in superior returns for our shareholders. That has been our history, and we believe it is our future."
Investing Activities
As of March 31, 2009 SBA owned 7,884 towers. During the first quarter of 2009, SBA purchased seven towers for approximately 274,000 shares of SBA common stock and built 25 towers. Total cash capital expenditures for the first quarter of 2009 were $11.7 million, consisting of $1.6 million of non-discretionary cash capital expenditures (tower maintenance and general corporate) and $10.1 million of discretionary cash capital expenditures (new tower builds, tower augmentations, tower acquisitions and related earn-outs, and ground lease buyouts). During the first quarter, the Company spent $4.9 million, in cash and stock, purchasing land and easements and extending lease terms with respect to land underlying its towers.
Since March 31, 2009, SBA has acquired six towers for approximately 231,000 shares of SBA common stock. The Company has agreed to purchase an additional 42 towers for an aggregate amount of $15.9 million, which the Company has the option to pay with cash or through the issuance of shares of SBA common stock. The Company anticipates that these acquisitions will be consummated by the end of the third quarter of 2009.
Financing Activities and Liquidity
SBA ended the first quarter with $2.5 billion of total debt, (recorded on the Company's balance sheet at a discounted carrying value of $2.4 billion), cash and cash equivalents, short-term investments and short-term restricted cash of $126.5 million, and net debt (as defined below) of $2.4 billion. Our Net Debt and Net Secured Debt to Annualized Adjusted EBITDA leverage ratios (as defined below) were 7.3x and 5.3x, respectively.
During the first quarter of 2009, the Company repurchased, in open market and privately negotiated transactions, $52.3 million of its 0.375% Convertible Senior Notes and $7.6 million of its 2005 and 2006 CMBS Notes for $42.0 million in cash and approximately 618,000 shares of SBA common stock.
Subsequent to March 31, 2009, the Company has repurchased $3.9 million of its 0.375% Convertible Senior Notes and $9.8 million of its 2005 CMBS Notes for $13.2 million in cash.
Subsequent to March 31, 2009, the Company issued $500 million of 4.0% Convertible Senior Notes due 2014. After application of a portion of the net proceeds to repurchase approximately $50 million of its Class A common stock concurrently with the offering and pay the premium for the convertible note hedges that were entered into concurrently with the offering, the Company has $376.5 million that will be used for general corporate purposes, including repurchases or repayments of SBA's outstanding debt.
Outlook
The Company is providing its second quarter 2009 Outlook and updating its Full Year 2009 Outlook for anticipated results. The Outlook provided is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Company's filings with the Securities and Exchange Commission.
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Quarter ending Full
June 30, 2009 Year 2009
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($'s in millions)
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Site leasing revenue $116.0 to $118.0 $464.0 to $480.0
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Site development revenue $18.0 to $20.0 $75.0 to $95.0
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Total revenues $134.0 to $138.0 $539.0 to $575.0
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Tower cash flow $89.0 to $91.0 $358.0 to $375.0
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Adjusted EBITDA(1) $81.0 to $83.0 $327.0 to $342.0
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Net cash interest expense(2) $29.0 to $30.0 $111.5 to $121.5
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Cash taxes paid $0.5 to $0.7 $2.0 to $3.0
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Non-discretionary cash
capital expenditures(3) $2.0 to $3.0 $6.0 to $9.0
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Equity free cash flow(4) $47.3 to $51.5 $193.5 to $222.5
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Discretionary cash capital
expenditures(5) $10.0 to $20.0 $40.0 to $60.0
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(1) Excludes acquisition related costs which were previously
capitalized but commencing January 1, 2009, pursuant to the
adoption of Statement of Financial Accounting Standard 141(R),
are required to be expensed and included within operating
expenses.
(2) Excludes amortization of deferred financing fees, non-cash
interest expense associated with the Optasite credit facility,
any non-cash interest expense associated with the adoption of FSP
APB 14-1 and any impact of interest rate hedging. Full year 2009
Outlook assumes an average one-month LIBOR rate of approximately
0.75%.
(3) Consists of tower maintenance and general corporate capital
expenditures.
(4) Defined as Adjusted EBITDA less net cash interest expense,
non-discretionary cash capital expenditures and cash taxes paid.
(5) Consists of new tower builds, tower augmentations, tower
acquisitions and related earn-outs and ground lease purchases.
The Company plans on building 80 to 100 new towers in 2009 for
its ownership. The guidance does not include any expenditures for
pending tower acquisitions, as the Company assumes that any
acquisitions will be paid for in stock.
Conference Call Information
SBA Communications Corporation will host a conference call on Tuesday, May 5, 2009 at 10:00 A.M. ET to discuss the quarterly results. The call may be accessed as follows:
When: Tuesday, May 5, 2009 at 10:00 A.M. Eastern Time
Dial-in number: (866) 254-5940
Conference call name: "SBA First Quarter Results"
Replay: May 5, 2009 at 12:00 P.M. through May 19, 2009
at 11:59 P.M.
Number: (800) 475-6701
Access Code: 994994
Internet access: www.sbasite.com
Information Concerning Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the Company's expectations or beliefs regarding (i) customer demand and activity throughout 2009 and beyond; (ii) the use of the net proceeds from the Company's recent debt offering and its intentions and abilities to refinance the 2005 CMBS Certificates and materially reduce leverage; (iii) its intent to use a portion of Equity Free Cash Flow on tower acquisitions and the impact of material tower portfolio growth on shareholder return; (iv) the Company's financial and operational guidance for the second quarter of 2009 and full year 2009; and (v) the ability to close pending acquisitions by the end of the third quarter of 2009. 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 disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's annual report on Form 10-K filed with the Commission on February 27, 2009 and the Company's reports filed on Form 10-Q. 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 all of these statements, including its financial guidance, 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 and retain as many site leasing tenants as planned at anticipated lease rates; (3) the impact, if any, of consolidation among wireless service providers; (4) the Company's ability to secure and deliver anticipated services business at contemplated margins; (5) the Company's ability to maintain expenses and cash capital expenditures at appropriate levels for our business; (6) the Company's ability to materially reduce its leverage during the next twelve months and successfully refinance its debt ahead of the respective maturity dates, on favorable terms, or at all; (7) the Company's ability to acquire land underneath towers on terms that are accretive; (8) the Company's ability to realize economies of scale from its tower portfolio; (9) the Company's ability to comply with covenants and the terms of its credit instruments; (10) market conditions and the state of the credit markets and capital markets, including the level of volatility, illiquidity and interest rates, that may affect the Company's ability to repurchase outstanding debt, refinance its outstanding debt, or access current borrowing availability; (11) the economic climate for the wireless communications industry in general and the wireless communications infrastructure providers in particular; and (12) the continued dependence on towers and outsourced site development services by the wireless carriers. With respect to the Company's plan for new builds, these factors also include identifying and obtaining a location attractive to our customers, availability of labor and supplies, executing new leases on such towers, obtaining the necessary regulatory and environmental permits on a timely basis and weather conditions that could impact our construction timelines. With respect to its expectations regarding pending tower acquisitions, these factors also include, in certain cases, satisfactorily completing due diligence, the ability and willingness of each party to fulfill their respective closing conditions and the availability of cash on hand, borrowing capacity under the senior credit facility or shares of the Company's Class A common stock to pay the anticipated consideration.
Information on non-GAAP financial measures is presented below under "Non-GAAP Financial Measures." This press release will be available on our website at www.sbasite.com.
About SBA
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.
