2007-05-09 02:13:28 -

SAN FRANCISCO, May 8 /PRNewswire-FirstCall/ -- FiberTower Corporation , a wireless backhaul services provider, today reported results for the first quarter ending March 31, 2007.

Service revenues for the three months ending March 31, 2007 increased $1.3 million or 31.9%, to $5.4 million as compared to $4.1 million for the fourth quarter of 2006. The increase in service revenues during the first quarter of 2007 was driven by an expansion in new sites billing, the addition of new customers on existing sites and continued growth in T-1s billing.

FiberTower continued

with positive trends in the first quarter of 2007 compared to the fourth quarter of 2006 as highlighted by the following operating metrics:

* Billing sites grew 19% from 1,329 to 1,583 * The percentage of sites deployed that are billing increased from 67% to 70% * Billing customer locations grew 22% from 1,804 to 2,206 * Billing T-1s added during the first quarter totaled 1,454 * T1s per billing site increased from 5.17 to 5.26 * Ending sites deployed increased by 14% from 1,996 to 2,272

The company continued the diversification of its customer base and acceleration of its customer commitments with more sites in additional markets. At the end of the first quarter, FiberTower had an average of 3.7 mobile carriers as customers per existing market. The Company currently counts six of the top eight wireless carriers as customers.

"We are especially pleased with the company's first quarter results as they reflect our success in deepening penetration in existing markets, garnering better contribution from our less mature markets and converting sites to revenue generating assets," said Michael Gallagher, FiberTower's President and CEO. "We continue to see growing backhaul demand from our existing customers and find our markets progressing nicely towards our previously stated goal of achieving field EBITDA positive in most of our existing markets by the end of 2007."

Operating expenses in the first quarter of 2007 decreased by $2.5 million or 9.3% from the fourth quarter of 2006, while net loss was $25.8 million for the first quarter ended March 31, 2007 compared to a net loss of $26.3 million in the fourth quarter of 2006. The 2007 first quarter net loss per share was $0.18 compared to a net loss per share of $0.19 for the fourth quarter of 2006.

On an EBITDA basis, the loss in the first quarter of 2007 was $12.9 million versus a loss of $15.6 million for the fourth quarter of 2006. EBITDA is defined as earnings (loss) from operations before interest, taxes, depreciation, amortization and stock-based compensation expenses. The reconciliation of EBITDA, which is a non-GAAP financial measure, is located at the end of this press release.

During the first quarter of 2007, FiberTower was selected as a prime fixed-wireless services partner by both Verizon Business and Qwest Communications International (Qwest) for their respective Networx Universal awards, which were granted by the U.S. General Services Administration (GSA) on March 29, 2007. FiberTower will operate under a fixed-wireless subcontract agreement with each carrier as they compete for telecommunications business from government agencies. The total Networx program is reported to be the largest telecommunications contract in US Government history, with an overall value estimated at $20 billion to be spread across all award winners and a contract term of ten years.

Liquidity and Capital Resources

Capital expenditures for the first quarter of 2007 were $21.2 million directed primarily towards investments in network equipment and site construction costs. The bulk of these capital investments were used by FiberTower towards the build-out of existing markets. Consolidated cash, cash equivalents, certificates of deposits and short-term investments at March 31, 2007 were $329.6 million.

Conference Call Details

FiberTower has scheduled a conference call for Wednesday, May 9, 2007 at 9:00 a.m. Eastern Time to discuss 2007 first quarter results. Please dial 303-205-0033 and ask for the FiberTower call at least 10 minutes prior to the start time. A telephonic replay of the call will be available through 11:59 p.m. Eastern Time on May 17, 2007 and may be accessed by dialing 303-590-3000 using the passcode 11089282#. An audio archive will also be available on FiberTower's website at http://www.fibertower.com/ shortly after the call and will be accessible for approximately ninety days.

About FiberTower

FiberTower is a backhaul and access services provider focused primarily on the wireless carrier market. With its extensive spectrum footprint in 24 GHz and 39 GHz bands, carrier-class microwave and fiber networks in 14 major markets, customer commitments from six of the leading cellular carriers, and partnerships with the largest tower operators in the U.S., FiberTower is considered to be the leading alternative carrier for wireless backhaul. FiberTower also provides backhaul and access service to government and enterprise markets. For more information, please visit our website at http://www.fibertower.com/ .

Use of Non-GAAP Financial Measures

This press release uses the Non-GAAP financial measure "EBITDA." EBITDA is used by investors to assist in their evaluation of common stock. The company uses EBITDA to monitor the financial performance of its operations. EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the funds actually available for capital expenditures. In addition, FiberTower's presentation of EBITDA may not be comparable to similarly titled measures reported by other companies. These NON-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported financial results as determined in accordance with GAAP.

Forward Looking Statements

Statements included in this news release which are not historical in nature are "forward-looking statements" within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These include, without limitation, statements regarding the company's planned capital expenditures, expected cost per site, anticipated customer growth and expansion plans. There are many risks, uncertainties and other factors that can prevent the achievement of goals or cause results to differ materially from those expressed or implied by these forward-looking statements including, without limitation, difficulties in integrating our companies after our merger in 2006, anticipated negative cash flows and operating losses, additional liquidity requirements, potential loss of significant customers, downturns in the wireless communication industry, regulatory costs and restrictions, potential loss of FCC licenses, equipment supply disruptions and cost increases, and competition from alternative backhaul service providers and technologies, along with those risk factors described in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Investor Contact: Gus Okwu / DRG&E 404-892-8178 gokwu@drg-e.com Company Contact: Ornella Napolitano, VP and Treasurer FiberTower Corporation 202-251-5210 onapolitano@fibertower.com Key Operating Metrics 3Q06 4Q06 1Q07 Billing Sites Billing Sites Added 174 355 254 Ending Billing Sites 974 1,329 1,583 Billing Sites / Sites Deployed 55% 67% 70% Billing Customer Locations Billing Customer Locations Added 229 470 402 Ending Billing Customer Locations 1,334 1,804 2,206 Colo rate 1.37 1.36 1.39 Billing T-1 Equivalents Billing T-1 Equiv. Added 604 1,713 1,454 Ending Billing T-1 Equivalents 5,156 6,869 8,323 T-1s per Customer Location 3.87 3.81 3.77 T-1s/Billing Sites 5.29 5.17 5.26 T-1s per site/Top 100 Sites 12.0 12.7 13.2 T-1s per site/Top 200 Sites 9.9 10.7 11.3 Average MRC per T-1 $237* $239 $234 Sites Deployed FiberTower Sites Constructed 409 228 276 Ending Sites Deployed 1,768 1,996 2,272 Definitions: Billing Sites are the number of installed sites from which we currently provide T1(s) to customer(s). Customer Locations Billing are carrier locations at which we currently provide T1(s). FiberTower sites could have multiple customer (carrier) locations. Colo rate is the number of customer locations per billing site Billing T1 Equivalent: A T1 equivalent is either a T1 or another increment of bandwidth of approximately 1.54 megabits per second Average MRC per T-1 is the average monthly recurring revenue per T-1.(Note that third quarter 2006 Average MRC per T-1 excludes First Avenue Networks revenues and billing T-1 equivalents for purposes of this calculation.) Sites Deployed represents the number of sites installed and ready for provision of services. FiberTower sites can be located at cell towers or on rooftop locations. FIBERTOWER CORPORATION Consolidated Statements of Operations - (Unaudited) (All amounts are in thousands, except per share data) Three Months Ended March 31, 2007 2006 Service revenues $5,420 $2,523 Operating expenses: Cost of service revenues (excluding depreciation and amortization) 11,423 6,324 Sales and marketing 2,022 879 General and administrative 7,197 1,842 Depreciation and amortization 3,906 1,027 Total operating expenses 24,548 10,072 Loss from operations (19,128) (7,549) Other income (expense): Interest income 5,358 1,119 Interest expense (12,189) (47) Miscellaneous income, net 121 --- Total other income (expense), net (6,710) 1,072 Net loss $(25,838) $(6,477) Basic and diluted net loss per share $(0.18) $(1.25) Weighted average number of shares used in per share amounts: Basic and diluted 142,321 5,126 FIBERTOWER CORPORATION Condensed Consolidated Balance Sheets (unaudited) (All amounts are in thousands, except par value) March 31, 2007 December 31, 2006 Assets: Current assets: Cash and cash equivalents $268,510 $345,174 Certificates of deposit 5,000 5,000 Short term investments 56,068 15,253 Restricted cash and investments, current portion 36,051 35,616 Accounts receivable, net of allowances of $18 at March 31, 2007 and $161 at December 31, 2006 3,093 2,904 Prepaid expenses and other current assets 2,238 2,624 Total current assets 370,960 406,571 Restricted cash and investments 35,308 34,906 Property and equipment, net 188,798 171,612 FCC licenses 342,000 342,000 Goodwill 243,388 243,388 Debt issuance costs, net of accumulated amortization of $819 at March 31, 2007 and $300 at December 31, 2006 13,490 14,009 Intangible and other long-term assets, net 3,903 3,992 Total assets $1,197,847 $1,216,478 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $9,752 $18,039 Accrued compensation and related benefits 3,244 4,246 Accrued interest payable 14,289 5,333 Other accrued liabilities 4,165 3,528 Total current liabilities 31,450 31,146 Other liabilities 5,299 4,787 Convertible senior secured notes 406,461 403,759 Deferred tax liability 102,964 102,964 Total liabilities 546,174 542,656 Commitments and contingencies Stockholders' equity: Common stock, $0.001 par value; 400,000 shares authorized, 145,659 and 144,971 shares issued and outstanding at March 31, 2007 and 146 145 December 31, 2006, respectively Additional paid-in capital 779,765 776,077 Accumulated deficit (128,238) (102,400) Total stockholders' equity 651,673 673,822 Total liabilities and stockholders' equity $1,197,847 $1,216,478 FIBERTOWER CORPORATION Condensed Consolidated Statements of Cash Flows (unaudited) (All amounts are in thousands) Three Months Ended March 31, 2007 2006 Operating activities Net loss $(25,838) $(6,477) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,906 1,027 Decline in value of embedded derivative (312) --- Accretion of convertible notes 3,014 --- Accretion of interest income (1,073) --- Amortization of debt issuance costs 519 --- Impairment charge for long-lived assets 149 --- Stock-based compensation 2,336 20 Loss on disposal of equipment 160 4 Net changes in operating assets and liabilities: Accounts receivable, net (189) (439) Prepaid expenses and other assets 402 55 Accounts payable (8,287) (990) Accrued interest payable 8,956 (41) Accrued compensation and related benefits (1,002) (386) Other accrued liabilities and deferred rent 1,081 (171) Net cash used in operating activities (16,178) (7,398) Investing activities Purchases of short-term investments (55,810) --- Maturities of short-term investments 15,253 --- Purchase of property and equipment (21,157) (23,255) Net cash used in investing activities (61,714) (23,255) Financing activities Proceeds from exercise of stock options 1,228 13 Cash provided by financing activities 1,228 13 Net increase (decrease) in cash and cash equivalents (76,664) (30,640) Cash and cash equivalents at beginning of period 345,174 112,936 Cash and cash equivalents at end of period $268,510 $82,296 Reconciliation of Non-GAAP Financial Measures:

This press release includes the use of a financial measure that is not a GAAP measure. The non-GAAP financial measure is presented for additional information and is reconciled to its most comparable GAAP measure below.

Three Months Ended Three Months Ended 3/31/07 12/31/06 Net Loss $(25,838) $(26,321) Total Other Income (Expense) (6,710) (3,379) Depreciation & Amortization 3,906 4,674 Stock Based Compensation 2,336 2,654 EBITDA $(12,886) $(15,614)

Source: FiberTower Corporation