Exhibit 99.1
NEWS
FOR IMMEDIATE RELEASE
SBA COMMUNICATIONS CORPORATION REPORTS 4TH QUARTER RESULTS;
PROVIDES 2004 GUIDANCE
SBA COMMUNICATIONS CORPORATION (NASDAQ: SBAC); BOCA RATON,
FLORIDA, THURSDAY, FEBRUARY 26, 2004
- --------------------------------------------------------------------------------
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 140 basis 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 either the 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
2
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
3
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
4
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 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
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.
5
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 and twelve months ended December 31, 2003 and 2002
is calculated below:
For the Three Months For the Year
Ended December 31, Ended 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, 2003 December 31, 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 CONSENDSED 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 credit facility, 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 101/4% senior notes (296,925) --
Payment of restricted stock guarantee (936) --
Proceeds from issuance of 93/4% 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
December 31, 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
========= =========