UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2012
Towerstream Corporation
(Exact Name of Registrant as Specified in Charter)
|
Delaware |
001-33449 |
20-8259086 |
||
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
|
55 Hammarlund Way Middletown, RI |
02842 |
|
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (401) 848-5848
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 DFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
| Item 7.01. | Regulation FD Disclosure |
On November 8, 2012, Towerstream Corporation (the “Company”) issued a press release announcing results for the three and nine months ended September 30, 2012. A copy of the press release is attached to this report as Exhibit 99.1 and is being furnished pursuant to Item 2.02 and 7.01 and shall not be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The furnishing of the information in this Current Report on Form 8-K is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information contained in this Current Report on Form 8-K constitutes material investor information that is not otherwise publicly available.
The press release includes EBITDA calculations, which is not a generally accepted accounting principles (“GAAP”) financial measure. It is presented in the press release because the Registrant’s management uses this information in evaluating the operating efficiency and overall financial performance of its business. The Registrant’s management also believes that this information provides the users of the Registrant’s financial statements with valuable insight into its operating results. EBITDA is calculated as net income (loss) before interest, income taxes, depreciation and amortization. The Company defines adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding when applicable, stock-based compensation, other non-operating income or expenses, as well as gain or loss on (i) disposal of property and equipment, (ii) nonmonetary transactions, and (iii) business acquisitions. It is important to note, however, that non-GAAP financial measures as presented do not represent cash provided by or used in operating activities and may not be comparable to similarly titled measures reported by other companies. Neither should be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. A reconciliation of adjusted EBITDA, excluding non-recurring expenses and Small Cell rooftop tower locations expenses, net, as compared to the most directly comparable GAAP financial measure, net loss, is presented in a reconciliation table in the attached press release.
Any statements that are not historical facts contained in this Form 8-K are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”) which statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Forward-looking statements, include certain statements regarding intent, beliefs, expectations, projections, forecasts and plans, which are subject to numerous assumptions, risks, and uncertainties. A number of factors described from time to time in our periodic filings with the Securities and Exchange Commission could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements. All forward-looking statements included in this Form 8-K are based on information available at the time of the report. We assume no obligation to update any forward-looking statement. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On August 17, 2012, the Company’s Board of Directors approved and recommended for stockholder approval an amendment to its Certificate of Incorporation (the “Charter Amendment”) to increase the number of authorized shares of common stock from 70,000,000 to 95,000,000 . On November 2, 2012, the Company’s stockholders approved the Charter Amendment. The final voting results at the Company’s annual meeting of stockholders with respect to the Charter Amendment were 36,292,972 shares voted for, 11,900,131 shares voted against and 786,244 shares abstained. The Charter Amendment was filed with the Delaware Secretary of State and became effective on November 2, 2012.
| Item 5.07. | Submission of Matters to a Vote of Security Holders. |
On November 2, 2012, at the Company’s annual meeting of stockholders , the Company’s stockholders approved (i) electing the five directors named by the Company (Philip Urso, Jeffrey M. Thompson, Howard L. Haronian, M.D., Paul Koehler, and William J. Bush) to hold office until the next annual meeting of stockholders, (ii) the Charter Amendment described in Item 5.03 above; (iii) the amendment of the Company’s 2007 Incentive Stock Plan to increase the number of shares of common stock reserved for issuance from 2,500,000 shares of common stock to 5,000,000 shares of common stock (“Amendment of the 2007 Incentive Stock Plan”); (iv) the ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012 (the “Auditor Ratification”); (v) the approval of a non-binding advisory vote on the compensation of the Company’s executive officers (“Advisory Vote on Executive Compensation”) and (vi) the frequency of the approval of future stockholder non-binding advisory votes on the compensation of the Company’s executive officers (“Frequency of Advisory Vote on Executive Compensation”).
As of the record date for the meeting of September 4, 2012, 54,367,774 shares of common stock, constituting all of the outstanding capital stock of the Company, were issued and outstanding, of which a total of 48,979,347 shares were voted at the annual meeting. The vote for each proposal was as follows:
| Proposal | For | Against | Abstain |
Broker Non-
Votes |
||||||||||||
| 1. Election of five directors: | ||||||||||||||||
| Philip Urso | 19,703,784 | 1,915,946 | 138,067 | 27,221,550 | ||||||||||||
| Jeffrey M. Thompson | 21,084,663 | 538,826 | 134,308 | 27,221,550 | ||||||||||||
| Howard L. Haronian, M.D. | 17,646,145 | 3,982,098 | 129,554 | 27,221,550 | ||||||||||||
| Paul Koehler | 19,569,675 | 2,054,068 | 134,054 | 27,221,550 | ||||||||||||
| William J. Bush | 19,550,177 | 2,079,222 | 128,398 | 27,221,550 | ||||||||||||
| 2. Charter Amendment | 36,292,972 | 11,900,131 | 786,244 | N/A | ||||||||||||
| 3. Amendment of the 2007 Incentive Stock Plan | 14,056,000 | 7,416,654 | 285,143 | 27,221,550 | ||||||||||||
| 4. Auditor Ratification | 47,437,651 | 1,275,793 | 265,903 | N/A | ||||||||||||
| 5. Advisory Vote on Executive Compensation | 20,071,261 | 1,208,612 | 477,924 | 27,221,550 | ||||||||||||
| 3 Years | 2 Years | 1 Year | Abstain |
Broker Non-
Votes |
||||||||||||||||
| 6. Frequency of Advisory Vote on Executive Compensation | 13,043,561 | 685,490 | 7,489,956 | 538,790 | 27,221,550 | |||||||||||||||
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| 3.1 | Certificate of Amendment to Certificate of Incorporation of Towerstream Corporation | |
| 99.1 | Press Release, dated November 8, 2012 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TOWERSTREAM CORPORATION | |||
| Dated: November 8, 2012 | By: | /s/ Joseph P. Hernon | |
| Joseph P. Hernon | |||
| Chief Financial Officer | |||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 3.1 | Certificate of Amendment to Certificate of Incorporation of Towerstream Corporation | |
| 99.1 | Press Release, dated November 8, 2012 |
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
TOWERSTREAM CORPORATION
The undersigned, being the President and Chief Executive Officer of Towerstream Corporation, a corporation existing under the laws of the State of Delaware, does hereby certify under the seal of the said corporation as follows:
1. The certificate of incorporation of the Corporation is hereby amended by replacing Article Fourth in its entirety with the following:
FOURTH: A. Classes and number of Shares. The total number of shares of stock that the Corporation shall have authority to issue is one hundred million (100,000,000). The Classes and aggregate number of shares of each class which the Corporation shall have authority to issue are as follows:
| 1. | Ninety five million (95,000,000) shares of Common Stock, par value $0.001 per share (the “Common Stock”); and |
| 2. | Five million (5,000,000) shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”); and |
B. Blank Check Powers. The Corporation may issue any class of the Preferred Stock in any series. The
Board of Directors shall have authority to establish and designate series, and to fix the number of shares included in each such series and the variations in the relative rights, preferences and limitations as between series, provided that, if the stated dividends and amounts payable on liquidation are not paid in full, the shares of all series of the same class shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. Shares of each such series when issued shall be designated to distinguish the shares of each series from the shares of all other series.
2. The officers of the Corporation are authorized and directed to take such actions as are necessary in their discretion to effectuate the purposes of each of the above resolutions, including but not limited to the execution, delivery and filing of all necessary certificates, applications and other documents and the payment of all necessary fees in connection therewith.
3. The number of shares of the corporation outstanding and entitled to vote on an amendment to the Certificate of Incorporation is 54,367,774 and the foregoing change and amendment has been consented to and approved by the vote of the stockholders of the Corporation holding at least a majority of each class of stock outstanding and entitled to vote thereon.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto affixed and this Certificate of Amendment of the Corporation's Certificate of Incorporation, as amended, to be signed by Jeffrey M. Thompson, its President and Chief Executive Officer, this 2 nd day of November 2012.
| TOWERSTREAM CORPORATION | |||
| By: | /s/ Jeffrey M. Thompson | ||
| Jeffrey M. Thompson | |||
| President and Chief Executive Officer | |||
Towerstream Reports Third Quarter 2012 Results
MIDDLETOWN, R.I., November 8, 2012 – Towerstream Corporation (NASDAQ: TWER) (the “Company”), a leading 4G and Small Cell Rooftop Tower (“rooftop tower locations”) company, announced results for the third quarter ended September 30, 2012.
Third Quarter Operating Highlights
| · | Adjusted EBITDA profitability, excluding non-recurring expenses and net costs associated with the rooftop tower locations, was $1.5 million for the third quarter 2012 compared to $1.3 million for the second quarter 2012 and $1.1 million for the third quarter 2011. |
| · | Customer churn for the third quarter 2012 was 1.54% compared to 1.65% for the second quarter 2012 and 1.27% for the third quarter 2011. Customer churn remained within the Company’s target range of 1.4% to 1.7% for the twelfth consecutive quarter. |
| · | Average revenue per user (“ARPU”) of all customers increased to $714 compared to $708 for the second quarter 2012 and $709 for the third quarter 2011. |
| · | Customer upgrades for the third quarter were at record levels for the second consecutive quarter. |
Management Comments
“We made tremendous progress on our small cell network in the third quarter and now have more than 10,000 Wi-Fi and small cell antenna locations available for lease,” stated Jeffrey Thompson, President and Chief Executive Officer. “Earlier this week, AT&T announced its plans to deploy 40,000+ small cell antennas and we believe we are well positioned to be part of their solution.”
“We are pleased to report record adjusted EBITDA profitability for our fixed wireless business and our goal is to reach cash flow profitability for that business in the first half of 2013,” noted Joseph Hernon, Chief Financial Officer. “The launch of small cell in early 2013 presents a new backhaul revenue opportunity for our fixed wireless business”.
| Page 1 of 10 |
Selected Financial Data and Key Operating Metrics
(All dollars are in thousands except ARPU)
| (Unaudited) | ||||||||||||
| Three months ended | ||||||||||||
| 9/30/2012 | 6/30/2012 | 9/30/2011 | ||||||||||
| Selected Financial Data | ||||||||||||
| Revenues | $ | 8,127 | $ | 8,103 | $ | 6,776 | ||||||
| Gross margin | 45 | % | 54 | % | 67 | % | ||||||
| Adjusted gross margin excluding rooftop tower locations expenses | 71 | % | 70 | % | 73 | % | ||||||
| Depreciation and amortization | 3,399 | 3,348 | 2,299 | |||||||||
| Core operating expenses (1)(2) | 5,669 | 5,750 | 4,875 | |||||||||
| Operating loss (1) | (5,380 | ) | (4,714 | ) | (2,629 | ) | ||||||
| Gain (loss) on business acquisition | - | (40 | ) | - | ||||||||
| Net loss (1) | (5,408 | ) | (4,759 | ) | (2,620 | ) | ||||||
| Adjusted EBITDA (2) | (1,424 | ) | (884 | ) | 96 | |||||||
| Non-recurring expenses | 55 | 41 | 112 | |||||||||
| Rooftop tower locations expenses, net | 2,820 | 2,180 | 880 | |||||||||
| Adjusted EBITDA excluding non-recurring and rooftop tower locations expenses, net (2) | 1,451 | 1,337 | 1,088 | |||||||||
| Capital expenditures | ||||||||||||
| Wireless broadband | $ | 1,935 | $ | 3,779 | $ | 2,627 | ||||||
| Rooftop tower locations | 4,299 | 4,046 | 1,663 | |||||||||
| Key Operating Metrics | ||||||||||||
| Churn rate (2) | 1.54 | % | 1.65 | % | 1.27 | % | ||||||
| ARPU (2) | $ | 714 | $ | 708 | $ | 709 | ||||||
| ARPU of new customers (2) | 560 | 477 | 625 | |||||||||
(1) Includes stock-based compensation of $438, $392 and $415, respectively.
(2) See Non-GAAP Measures below for a definition and reconciliation of Adjusted EBITDA, and definitions of Core Operating Expenses, Churn, ARPU and ARPU of new customers.
Operating Outlook and Guidance
| · | Revenues for the fourth quarter 2012 are expected to range between $8.1 million to $8.2 million. |
| · | Adjusted EBITDA profitability is expected to range between $1.4 million to $1.6 million. |
Non-GAAP Measures
The terms “Adjusted EBITDA,” “Churn,” “Churn rate,” “ARPU,” and “Market Cash Flow” are measurements used by Towerstream to monitor business performance and are not recognized measures under generally accepted accounting principles (“GAAP”). Accordingly, investors are cautioned in using or relying upon these measures as alternatives to recognized GAAP measures. Our methods of calculating these measures may differ from other issuers and, accordingly, may not be comparable to similar measures presented by other issuers.
| Page 2 of 10 |
We focus on Adjusted EBITDA as a principal indicator of the operating performance of our business. EBITDA represents net income (loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, other non-operating income or expenses as well as gain or loss on (i) disposal of property and equipment, (ii) nonmonetary transactions, and (iii) business acquisitions. Adjusted Market EBITDA also excludes corporate overhead expenses and other centralized costs. We believe that Adjusted Market EBITDA trends are insightful indicators of our markets’ relative performance, and whether our markets are able to produce sufficient market cash flow to fund working capital and capital expenditure needs.
The term “Core Operating Expenses” includes customer support services, sales and marketing, and general and administrative expenses, and excludes cost of revenues, depreciation and amortization.
The terms “Churn” and “Churn rate” refer to the percent of revenue lost on a monthly basis from customers disconnecting from our network or reducing the amount of their bandwidth. The term “ARPU” refers to the monthly average revenue per user, or customer, being generated from those customers under contract at the end of each indicated period. We calculate ARPU by dividing our monthly recurring revenue (“MRR”) at the end of a period by the number of customers generating that MRR. “ARPU of new customers” is calculated in the same manner but only includes new customers who entered into contracts during the indicated period. Market Cash Flow represents the amount of cash generated in a market after deducting a market’s direct operating expenses from that market’s revenues. Market Cash Flow does not include (i) centralized costs which support all markets collectively or (ii) any network related capital expenditures incurred in a market.
The Non-GAAP measure, Adjusted EBITDA, excluding non-recurring expenses and rooftop tower locations expenses, net, has been reconciled to Net loss as follows:
(All dollars are in thousands)
| Three months ended | ||||||||||||
| 9/30/2012 | 6/30/2012 | 9/30/2011 | ||||||||||
| Reconciliation of Non-GAAP to GAAP: | ||||||||||||
| Adjusted EBITDA, excluding non-recurring expenses and rooftop tower locations expenses, net | $ | 1,451 | $ | 1,337 | $ | 1,088 | ||||||
| Depreciation and amortization | (3,399 | ) | (3,348 | ) | (2,299 | ) | ||||||
| Non-recurring expenses, primarily acquisition-related | (55 | ) | (41 | ) | (112 | ) | ||||||
| Rooftop tower locations expenses, net | (2,820 | ) | (2,180 | ) | (880 | ) | ||||||
| Stock-based compensation | (438 | ) | (392 | ) | (415 | ) | ||||||
| Loss on property and equipment | (48 | ) | (12 | ) | (1 | ) | ||||||
| Loss on nonmonetary transactions | (71 | ) | (78 | ) | (10 | ) | ||||||
| Interest expense | (37 | ) | (17 | ) | (9 | ) | ||||||
| Gain (loss) on business acquisition | - | (40 | ) | - | ||||||||
| Other income (expense), net | (1 | ) | (2 | ) | (4 | ) | ||||||
| Interest income | 10 | 14 | 22 | |||||||||
| Net loss | $ | (5,408 | ) | $ | (4,759 | ) | $ | (2,620 | ) | |||
| Page 3 of 10 |
Summary Condensed Consolidated Financial Statements
(All dollars are in thousands except per share amounts)
| Statement of Operations | (Unaudited) | (Unaudited) | ||||||||||||||
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | $ | 8,127 | $ | 6,776 | $ | 24,050 | $ | 19,310 | ||||||||
| Operating Expenses | ||||||||||||||||
| Cost of revenues (exclusive of depreciation) | 4,439 | 2,231 | 11,226 | 5,583 | ||||||||||||
| Depreciation and amortization | 3,399 | 2,299 | 10,029 | 6,487 | ||||||||||||
| Customer support services | 1,129 | 870 | 3,369 | 2,374 | ||||||||||||
| Sales and marketing | 1,518 | 1,348 | 4,458 | 4,069 | ||||||||||||
| General and administrative | 3,022 | 2,657 | 9,432 | 6,797 | ||||||||||||
| Total Operating Expenses | 13,507 | 9,405 | 38,514 | 25,310 | ||||||||||||
| Operating Loss | (5,380 | ) | (2,629 | ) | (14,464 | ) | (6,000 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Gain (loss) on business acquisition | - | - | (40 | ) | 1,045 | |||||||||||
| Interest income | 10 | 22 | 41 | 32 | ||||||||||||
| Interest expense | (37 | ) | (9 | ) | (76 | ) | (13 | ) | ||||||||
| Other income (expense), net | (1 | ) | (4 | ) | (8 | ) | (9 | ) | ||||||||
| Total Other Income (Expense) | (28 | ) | 9 | (83 | ) | 1,055 | ||||||||||
| Net Loss | $ | (5,408 | ) | $ | (2,620 | ) | $ | (14,547 | ) | $ | (4,945 | ) | ||||
| Net loss per common share – basic and diluted | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.27 | ) | $ | (0.11 | ) | ||||
| Weighted average common shares outstanding – basic and diluted | 54,403 | 51,599 | 54,361 | 45,517 | ||||||||||||
Analysis of Third Quarter Results of Operations
Revenues for the third quarter 2012 increased by less than 1% from the second quarter 2012 and increased 20% compared to the third quarter 2011. The year-over-year increase was driven by a 14% growth in our customer base from approximately 3,200 customers at the end of the third quarter 2011 to approximately 3,600 at the end of the third quarter 2012.
ARPU of all customers in the third quarter 2012 increased 1% compared to both the second quarter 2012 and the third quarter 2011. ARPU of new customers increased 17% in the third quarter 2012 compared to the second quarter 2012 and decreased 10% compared to the third quarter 2011. ARPU of new customers can fluctuate on a quarter-to-quarter basis depending upon the relative percentage of customers purchasing lower bandwidth service, known as multipoint, and higher bandwidth service, known as point-to-point.
Customer churn during the third quarter 2012 was 1.54% compared to 1.65% during the second quarter 2012 and 1.27% during the third quarter 2011. Our churn rate was within our targeted range of 1.4% to 1.7% and remains low compared to industry averages.
| Page 4 of 10 |
Cost of revenue increased 19% in the third quarter 2012 compared to the second quarter 2012 and increased by 99% compared to the third quarter 2011. The Company spent $2.1 million in the third quarter 2012 related to the construction of its rooftop tower locations as compared to $1.3 million in the second quarter 2012 and $0.4 million in the third quarter 2011. The year-over-year increase also related to additional network expenses associated with the acquisition of Color Broadband in the fourth quarter 2011.
Depreciation expense increased 9% in the third quarter 2012 compared to the second quarter 2012 and increased 56% compared to the third quarter 2011. The base of depreciable assets was 9% higher at the end of the third quarter 2012 as compared to the second quarter 2012 and 57% higher compared to the third quarter of 2011. The increased depreciable base reflects continued growth in the core business as well as spending on the rooftop tower locations.
Amortization expense decreased 18% in the third quarter 2012 compared to the second quarter 2012 and increased 25% compared to the third quarter 2011. The sequential decrease relates to customer based intangible assets recorded in connection with the acquisition of Pipeline Wireless which were fully amortized in May 2012. The year-over-year increase relates to customer based intangible assets recorded in connection with the acquisition of Color Broadband in the fourth quarter 2011.
Customer support expenses decreased by 4% in the third quarter 2012 compared to the second quarter 2012 and increased 30% compared to the third quarter 2011. Costs associated with rooftop tower locations totaled approximately $244,000 in the third quarter 2012 compared to approximately $252,000 in the second quarter 2012 and approximately $150,000 in the third quarter 2011. In addition, there were staffing additions and other costs incurred to support our customer base which increased 23% over the one year period.
Sales and marketing expenses increased by less than 1% in the third quarter 2012 compared to the second quarter 2012 and increased 13% compared to the third quarter 2011. The year-over-year increase primarily related to higher commissions and bonuses.
General and administrative expenses decreased by 1% in the third quarter 2012 compared to the second quarter 2012 and increased 14% compared to the third quarter 2011. Costs associated with rooftop tower locations totaled approximately $0.6 million in both the third quarter 2012 and the second quarter 2012 compared to approximately $0.3 million in the third quarter 2011. The year-over-year increase also relates to higher information technology spending.
Capital expenditures totaled $6.2 million for the third quarter 2012 as compared to $7.8 million for the second quarter 2012 and $4.3 million for the third quarter 2011. The Company spent $4.3 million in the third quarter 2012 related to the construction of its rooftop tower locations as compared to $4.0 million in the second quarter 2012 and $1.7 million in the third quarter 2011.
| Page 5 of 10 |
Balance Sheet
(All dollars are in thousands)
| (Unaudited) | (Audited) | |||||||
| September 30, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 23,132 | $ | 44,672 | ||||
| Other | 1,399 | 1,216 | ||||||
| Total Current Assets | 24,531 | 45,888 | ||||||
| Property and equipment, net | 39,990 | 27,531 | ||||||
| Other assets | 8,712 | 10,218 | ||||||
| Total Assets | 73,233 | 83,637 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | 4,608 | 3,564 | ||||||
| Deferred revenues and other | 2,360 | 2,277 | ||||||
| Total Current Liabilities | 6,968 | 5,841 | ||||||
| Long-Term Liabilities | 2,355 | 651 | ||||||
| Total Liabilities | 9,323 | 6,492 | ||||||
| Stockholders’ Equity | ||||||||
| Common stock | 54 | 54 | ||||||
| Additional paid-in-capital | 120,782 | 119,470 | ||||||
| Accumulated deficit | (56,926 | ) | (42,379 | ) | ||||
| Total Stockholders’ Equity | 63,910 | 77,145 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 73,233 | $ | 83,637 | ||||
| Statement of Cash Flows (Unaudited) | Nine months ended September 30, | |||||||
| 2012 | 2011 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | (14,547 | ) | $ | (4,945 | ) | ||
| Non-cash adjustments: | ||||||||
| Depreciation & amortization | 10,029 | 6,487 | ||||||
| Stock-based compensation | 1,353 | 661 | ||||||
| (Gain) loss on business acquisition | 40 | (1,045 | ) | |||||
| Other | 216 | 202 | ||||||
| Changes in operating assets and liabilities | (725 | ) | 102 | |||||
| Net Cash (Used in) Provided By Operating Activities | (3,634 | ) | 1,462 | |||||
| Cash Flows From Investing Activities | ||||||||
| Acquisitions of property and equipment | (17,382 | ) | (10,359 | ) | ||||
| Acquisition of business | - | (1,600 | ) | |||||
| Other | (501 | ) | (136 | ) | ||||
| Net Cash Used in Investing Activities | (17,883 | ) | (12,095 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Repayment of capital leases | (385 | ) | (97 | ) | ||||
| Proceeds from stock issuances | 397 | 309 | ||||||
| Net proceeds from sale of common stock | - | 38,835 | ||||||
| Other | (35 | ) | - | |||||
| Net Cash (Used in) Provided By Financing Activities | (23 | ) | 39,047 | |||||
| Net (Decrease) Increase In Cash and Cash Equivalents | (21,540 | ) | 28,414 | |||||
| Cash and Cash Equivalents – Beginning | 44,672 | 23,173 | ||||||
| Cash and Cash Equivalents – Ending | $ | 23,132 | $ | 51,587 | ||||
| Page 6 of 10 |
Market data for the three months ended September 30, 2012
(All dollars are in thousands)
| Market | Revenues |
Cost of
Revenues(1) |
Gross Margin (1) |
Operating
Costs |
Adjusted
Market EBITDA |
|||||||||||||||||||
| Los Angeles | $ | 1,995 | $ | 599 | $ | 1,396 | 70 | % | $ | 397 | $ | 999 | ||||||||||||
| New York | 1,858 | 435 | 1,423 | 77 | % | 320 | 1,103 | |||||||||||||||||
| Boston | 1,698 | 388 | 1,310 | 77 | % | 220 | 1,090 | |||||||||||||||||
| Chicago | 944 | 304 | 640 | 68 | % | 170 | 470 | |||||||||||||||||
| Miami | 413 | 117 | 296 | 72 | % | 94 | 202 | |||||||||||||||||
| San Francisco | 373 | 87 | 286 | 77 | % | 80 | 206 | |||||||||||||||||
| Las Vegas-Reno | 370 | 158 | 212 | 57 | % | 29 | 183 | |||||||||||||||||
| Dallas-Fort Worth | 158 | 83 | 75 | 48 | % | 90 | (15 | ) | ||||||||||||||||
| Seattle | 144 | 54 | 90 | 63 | % | 36 | 54 | |||||||||||||||||
| Providence-Newport | 132 | 65 | 67 | 51 | % | 30 | 37 | |||||||||||||||||
| Philadelphia | 30 | 22 | 8 | 26 | % | 32 | (24 | ) | ||||||||||||||||
| Nashville | 12 | 14 | (2 | ) | -% | 8 | (10 | ) | ||||||||||||||||
| Total | $ | 8,127 | $ | 2,326 | $ | 5,801 | 71 | % | $ | 1,506 | $ | 4,295 | ||||||||||||
| Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure | ||||||||||||||||||||||||
| Adjusted market EBITDA | $ | 4,295 | ||||||||||||||||||||||
| Centralized costs (1) | (940 | ) | ||||||||||||||||||||||
| Corporate expenses | (2,012 | ) | ||||||||||||||||||||||
| Rooftop tower locations expenses | (2,886 | ) | ||||||||||||||||||||||
| Depreciation and amortization | (3,399 | ) | ||||||||||||||||||||||
| Stock-based compensation | (438 | ) | ||||||||||||||||||||||
| Other income (expense) | (28 | ) | ||||||||||||||||||||||
| Net loss | $ | (5,408 | ) | |||||||||||||||||||||
Market data for the three months ended September 30, 2011
(All dollars are in thousands)
| Market | Revenues |
Cost of
Revenues(1) |
Gross Margin(1) |
Operating
Costs |
Adjusted
Market EBITDA |
|||||||||||||||||||
| Boston | $ | 1,695 | $ | 390 | $ | 1,305 | 77 | % | $ | 224 | $ | 1,081 | ||||||||||||
| New York | 1,533 | 349 | 1,184 | 77 | % | 310 | 874 | |||||||||||||||||
| Los Angeles | 1,087 | 223 | 864 | 79 | % | 263 | 601 | |||||||||||||||||
| Chicago | 870 | 266 | 604 | 69 | % | 151 | 453 | |||||||||||||||||
| Las Vegas-Reno | 409 | 180 | 229 | 56 | % | 44 | 185 | |||||||||||||||||
| San Francisco | 370 | 67 | 303 | 82 | % | 92 | 211 | |||||||||||||||||
| Miami | 365 | 81 | 284 | 78 | % | 100 | 184 | |||||||||||||||||
| Dallas-Fort Worth | 166 | 85 | 81 | 49 | % | 80 | 1 | |||||||||||||||||
| Seattle | 125 | 55 | 70 | 56 | % | 27 | 43 | |||||||||||||||||
| Providence-Newport | 120 | 51 | 69 | 58 | % | 24 | 45 | |||||||||||||||||
| Philadelphia | 23 | 15 | 8 | 35 | % | 28 | (20 | ) | ||||||||||||||||
| Nashville | 13 | 1 | 12 | 92 | % | 11 | 1 | |||||||||||||||||
| Total | $ | 6,776 | $ | 1,763 | $ | 5,013 | 74 | % | $ | 1,354 | $ | 3,659 | ||||||||||||
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| Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure | ||||||||||||||||||||||||
| Adjusted market EBITDA | $ | 3,659 | ||||||||||||||||||||||
| Centralized costs (1) | (761 | ) | ||||||||||||||||||||||
| Corporate expenses | (1,933 | ) | ||||||||||||||||||||||
| Rooftop tower locations expenses | (880 | ) | ||||||||||||||||||||||
| Depreciation and amortization | (2,299 | ) | ||||||||||||||||||||||
| Stock-based compensation | (415 | ) | ||||||||||||||||||||||
| Other income (expense) | 9 | |||||||||||||||||||||||
| Net loss | $ | (2,620 | ) | |||||||||||||||||||||
Market data for the nine months ended September 30, 2012
(All dollars are in thousands)
| Page 8 of 10 |
Market data for the nine months ended September 30, 2011
(All dollars are in thousands)
| (1) | Certain expenses are reported as Cost of Revenues for financial statement purposes but are included in other line items in the Market Data table, either because they are not specific to any market or they relate to rooftop tower locations. |
Conference Call and Webcast
A conference call led by President and Chief Executive Officer, Jeff Thompson, and Chief Financial Officer, Joseph Hernon, will be held on November 8, 2012 at 5:00 p.m. ET to review our financial results and provide an update on current business developments.
Interested parties may participate in the conference by dialing 877-755-7423 or 678-894-3069 (for international callers) . A telephonic replay of the conference may be accessed approximately two hours after the call through November 14, 2012 at 11:59 p.m. ET by dialing 800-585-8367 or 404-537-3406 (for international callers) using pass code 56988940.
The call will also be webcast and can be accessed in a listen-only mode on the Company’s website at http://ir.towerstream.com/events.cfm .
About Towerstream Corporation
Towerstream (NASDAQ: TWER) is a leading 4G and Small Cell Rooftop Tower company. The company owns, operates, and leases Wi-Fi and Small Cell rooftop tower locations to cellular phone operators, tower, Internet and cable companies and hosts a variety of customers on its network. Towerstream was originally founded in 2000 to deliver fixed-wireless high-speed Internet access to businesses and to date offers broadband services in over 12 urban markets including New York City, Boston, Los Angeles, Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle, Dallas-Fort Worth, Nashville, Las Vegas-Reno and the greater Providence area. For more information on Towerstream services, please visit www.towerstream.com and/or follow us @Towerstream.
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The Towerstream Corporation logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=6570
Safe Harbor
Certain statements contained in this press release are “forward-looking statements” within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the Company with the Securities and Exchange Commission, including, without limitation, risk related to our ability to deploy and expand rooftop tower locations in the New York City and other key markets. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.
INVESTOR CONTACT:
Terry McGovern
Vision Advisors
415-902-3001
mcgovern@visionadvisors.net
MEDIA CONTACT:
Todd Barrish
Indicate Media
646-396-6090
todd@indicatemedia.com
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