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)
|
(Former name or former address, if changed since last report)
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits
|
99.1
|
Press Release, dated March 17, 2011
|
TOWERSTREAM CORPORATION | |||
Dated: March 17, 2011
|
By:
|
/s/ Joseph Hernon | |
Joseph Hernon | |||
Chief Financial Officer | |||
Exhibit No.
|
Description
|
99.1
|
Press Release, dated March 17, 2011
|
|
·
|
Revenues increased 7% to $5.5 million during the fourth quarter 2010 compared to the third quarter 2010 and increased 35% compared to the same period last year
|
|
·
|
Gross margin remained strong at 75% during the fourth quarter 2010
|
|
·
|
Adjusted Market EBITDA profitability increased to $2.9 million in the fourth quarter 2010 as compared to $2.7 million for the third quarter 2010 and $2.0 million for the fourth quarter 2009
|
|
·
|
Adjusted EBITDA profitability, excluding non-recurring expenses of $0.3 million, increased to $0.7 million for the fourth quarter 2010 compared to $0.4 million for the third quarter 2010 and an Adjusted EBITDA loss of $0.2 million for the fourth quarter 2009
|
|
·
|
Customer churn for the fourth quarter 2010 was 1.36% compared to 1.60% during the third quarter 2010 and 1.43% during the fourth quarter 2009
|
|
·
|
Acquisition of Pipeline Wireless completed in December 2010 which increased the customer base in the Boston market by 32% and the market’s annual revenue base by 29%
|
(Unaudited)
|
||||||||||||
Three months ended
|
||||||||||||
12/31/2010
|
9/30/2010
|
12/31/2009
|
||||||||||
Selected Financial Data
|
||||||||||||
Revenues
|
$ | 5,452 | $ | 5,080 | $ | 4,042 | ||||||
Gross margin
|
75 | % | 75 | % | 75 | % | ||||||
Depreciation and amortization
|
1,658 | 1,557 | 1,070 | |||||||||
Core operating expenses (1)( 3)
|
3,842 | 3,681 | 3,520 | |||||||||
Operating loss (1)
|
(1,403 | ) | (1,409 | ) | (1,566 | ) | ||||||
Net loss (1)
|
(1,378 | ) | (1,387 | ) | (1,972 | ) | ||||||
Adjusted EBITDA (3)
|
374 | 382 | (263 | ) | ||||||||
Adjusted EBITDA excluding non-recurring
|
706 | 414 | (174 | ) | ||||||||
expenses(2)(3)
|
||||||||||||
Capital expenditures
|
$ | 1,457 | $ | 1,051 | $ | 1,165 | ||||||
Key Operating Metrics
|
||||||||||||
Churn rate (3)
|
1.36 | % | 1.60 | % | 1.43 | % | ||||||
ARPU (3)
|
$ | 682 | $ | 669 | $ | 715 | ||||||
ARPU of new customers (3)
|
661 | 543 | 561 | |||||||||
(Audited)
|
||||||||||||
Years ended
|
||||||||||||
12/31/2010
|
12/31/2009
|
|||||||||||
Selected Financial Data
|
||||||||||||
Revenues
|
$ | 19,646 | $ | 14,915 | ||||||||
Gross margin
|
75 | % | 75 | % | ||||||||
Depreciation and amortization
|
5,770 | 4,035 | ||||||||||
Core operating expenses (1)(3)
|
15,036 | 14,622 | ||||||||||
Operating loss (1)
|
(6,048 | ) | (7,432 | ) | ||||||||
Net loss (1)
|
(5,603 | ) | (8,625 | ) | ||||||||
Adjusted EBITDA (3)
|
568 | (2,537 | ) | |||||||||
Adjusted EBITDA excluding non-recurring
|
1,327 | (2,352 | ) | |||||||||
expenses(2)(3)
|
||||||||||||
Capital expenditures
|
$ | 5,660 | $ | 4,848 | ||||||||
Key Operating Metrics
|
||||||||||||
Churn rate (3)
|
1.35 | % | 1.67 | % | ||||||||
ARPU (3)
|
$ | 682 | $ | 715 | ||||||||
ARPU of new customers (3)
|
561 | 546 |
(1)
|
Includes stock-based compensation of $94, $220 and $227, respectively and $772 and $803, respectively.
|
(2)
|
Excludes non-recurring expenses of $332, $32 and $89, respectively and $759 and $185 respectively.
|
(3)
|
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.
|
|
·
|
Revenues for the first quarter 2011 are expected to range between $5.9 million to $6.1 million.
|
|
·
|
Adjusted EBITDA profitability is expected to range between $0.7 million to $0.8 million. The modest increase compared to the fourth quarter 2010 reflects professional services costs associated with being a public company and payroll tax expenses which are significantly higher in the first quarter compared to other quarters.
|
Three months ended
|
||||||||||||
12/31/2010
|
9/30/2010
|
12/31/2009
|
||||||||||
Reconciliation of Non-GAAP to GAAP:
|
||||||||||||
Adjusted EBITDA, excluding non-recurring expenses
|
$ | 706 | $ | 414 | $ | (174 | ) | |||||
Depreciation and amortization
|
(1,658 | ) | (1,557 | ) | (1,070 | ) | ||||||
Non-recurring expenses, primarily acquisition-related
|
(332 | ) | (32 | ) | (89 | ) | ||||||
Stock-based compensation
|
(94 | ) | (220 | ) | (227 | ) | ||||||
Loss on property and equipment
|
(25 | ) | (14 | ) | (7 | ) | ||||||
Interest expense
|
(1 | ) | - | (187 | ) | |||||||
Loss on derivative financial instruments
|
- | - | (219 | ) | ||||||||
Interest income
|
3 | 1 | 1 | |||||||||
Other income (expense), net
|
23 | 21 | - | |||||||||
Net loss
|
$ | (1,378 | ) | $ | (1,387 | ) | $ | (1,972 | ) | |||
Years ended
|
||||||||||||
12/31/2010
|
12/31/2009
|
|||||||||||
Reconciliation of Non-GAAP to GAAP:
|
||||||||||||
Adjusted EBITDA, excluding non-recurring expenses
|
$ | 1,327 | $ | (2,352 | ) | |||||||
Depreciation and amortization
|
(5,770 | ) | (4,035 | ) | ||||||||
Stock-based compensation
|
(772 | ) | (803 | ) | ||||||||
Non-recurring expenses, primarily acquisition-related
|
(759 | ) | (185 | ) | ||||||||
Loss on property and equipment
|
(74 | ) | (58 | ) | ||||||||
Interest expense
|
(1 | ) | (740 | ) | ||||||||
Loss on derivative financial instruments
|
- | (479 | ) | |||||||||
Interest income
|
4 | 27 | ||||||||||
Other income (expense), net
|
86 | - | ||||||||||
Gain on business acquisition
|
356 | - | ||||||||||
Net loss
|
$ | (5,603 | ) | $ | (8,625 | ) |
Statement of Operations
|
(Unaudited)
|
(Audited)
|
||||||||||||||
Three months ended December 31,
|
Years ended December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues
|
$ | 5,452 | $ | 4,042 | $ | 19,646 | $ | 14,915 | ||||||||
Operating Expenses
|
||||||||||||||||
Cost of revenues (exclusive of depreciation)
|
1,355 | 1,018 | 4,888 | 3,690 | ||||||||||||
Depreciation and amortization
|
1,658 | 1,070 | 5,770 | 4,035 | ||||||||||||
Customer support services
|
663 | 555 | 2,550 | 2,133 | ||||||||||||
Sales and marketing
|
1,255 | 1,205 | 5,088 | 5,546 | ||||||||||||
General and administrative
|
1,924 | 1,760 | 7,398 | 6,943 | ||||||||||||
Total Operating Expenses
|
6,855 | 5,608 | 25,694 | 22,347 | ||||||||||||
Operating Loss
|
(1,403 | ) | (1,566 | ) | (6,048 | ) | (7,432 | ) | ||||||||
Other Income (Expense)
|
||||||||||||||||
Interest income
|
3 | 1 | 4 | 27 | ||||||||||||
Interest expense
|
(1 | ) | (187 | ) | (1 | ) | (740 | ) | ||||||||
Gain on business acquisition
|
- | - | 356 | - | ||||||||||||
Loss on derivative financial instruments
|
- | (219 | ) | - | (479 | ) | ||||||||||
Other income (expense), net
|
23 | (1 | ) | 86 | (1 | ) | ||||||||||
Total Other Income (Expense)
|
25 | (406 | ) | 445 | (1,193 | ) | ||||||||||
Net Loss
|
$ | (1,378 | ) | $ | (1,972 | ) | $ | (5,603 | ) | $ | (8,625 | ) | ||||
Net loss per common share
|
$ | (0.04 | ) | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.25 | ) | ||||
Weighted average common shares outstanding – basic and diluted
|
37,891 | 34,634 | 35,627 | 34,607 |
Balance Sheet (Audited)
|
Years ended December 31,
|
|||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 23,173 | $ | 14,041 | ||||
Other
|
856 | 661 | ||||||
Total Current Assets
|
24,029 | 14,702 | ||||||
Property and equipment, net
|
15,266 | 13,635 | ||||||
Other assets
|
5,295 | 1,166 | ||||||
Total Assets
|
44,590 | 29,503 | ||||||
Liabilities and Stockholders’ Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
2,506 | 2,142 | ||||||
Deferred revenues and other
|
1,339 | 1,108 | ||||||
Total Current Liabilities
|
3,845 | 3,250 | ||||||
Long-Term Liabilities
|
724 | 842 | ||||||
Total Liabilities
|
4,569 | 4,092 | ||||||
Stockholders’ Equity
|
||||||||
Common stock
|
42 | 35 | ||||||
Additional paid-in-capital
|
75,333 | 55,127 | ||||||
Accumulated deficit
|
(35,354 | ) | (29,751 | ) | ||||
Total Stockholders’ Equity
|
40,021 | 25,411 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 44,590 | $ | 29,503 |
Statement of Cash Flows (Audited)
|
Years ended December 31,
|
|||||||
2010
|
2009
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net loss
|
$ | (5,603 | ) | $ | (8,625 | ) | ||
Non-cash adjustments:
|
||||||||
Depreciation & amortization
|
5,770 | 4,035 | ||||||
Stock-based compensation
|
772 | 803 | ||||||
Gain on business acquisition
|
(356 | ) | - | |||||
Other
|
149 | 1,079 | ||||||
Changes in operating assets and liabilities
|
(139 | ) | (272 | ) | ||||
Net Cash Provided By (Used In) Operating Activities
|
593 | (2,980 | ) | |||||
Cash Flows From Investing Activities
|
||||||||
Acquisitions of property and equipment
|
(5,660 | ) | (4,848 | ) | ||||
Acquisition of Sparkplug Chicago, Inc.
|
(1,170 | ) | - | |||||
Acquisition of Pipeline Wireless, LLC
|
(1,580 | ) | - | |||||
Other
|
(3 | ) | (96 | ) | ||||
Net Cash Used In Investing Activities
|
(8,413 | ) | (4,944 | ) | ||||
Cash Flows From Financing Activities
|
||||||||
Repayment of capital leases
|
(7 | ) | (25 | ) | ||||
Repayment of short-term debt
|
- | (2,750 | ) | |||||
Net proceeds from sale of common stock
|
16,958 | - | ||||||
Other
|
1 | - | ||||||
Net Cash Provided By (Used In) Financing Activities
|
16,952 | (2,775 | ) | |||||
Net Increase (Decrease) In Cash and Cash Equivalents
|
9,132 | (10,699 | ) | |||||
Cash and Cash Equivalents – Beginning
|
14,041 | 24,740 | ||||||
Cash and Cash Equivalents – Ending
|
$ | 23,173 | $ | 14,041 |
Market
|
Revenues
|
Cost of
Revenues(1) |
Gross Margin(1)
|
Operating Costs
|
Adjusted Market EBITDA
|
|||||||||||||||||||
New York
|
$ | 1,494 | $ | 322 | $ | 1,172 | 78 | % | $ | 274 | $ | 898 | ||||||||||||
Boston
|
1,243 | 208 | 1,035 | 83 | % | 184 | 851 | |||||||||||||||||
Los Angeles
|
909 | 184 | 725 | 80 | % | 257 | 468 | |||||||||||||||||
Chicago
|
762 | 256 | 506 | 66 | % | 174 | 332 | |||||||||||||||||
San Francisco
|
331 | 68 | 263 | 79 | % | 123 | 140 | |||||||||||||||||
Miami
|
290 | 80 | 210 | 72 | % | 104 | 106 | |||||||||||||||||
Providence/Newport
|
120 | 40 | 80 | 67 | % | 26 | 54 | |||||||||||||||||
Seattle
|
133 | 55 | 78 | 59 | % | 32 | 46 | |||||||||||||||||
Dallas-Fort Worth
|
141 | 64 | 77 | 55 | % | 51 | 26 | |||||||||||||||||
Nashville
|
19 | 7 | 12 | 63 | % | 5 | 7 | |||||||||||||||||
Philadelphia
|
10 | 12 | (2 | ) | 0 | % | 39 | (41 | ) | |||||||||||||||
Total
|
$ | 5,452 | $ | 1,296 | $ | 4,156 | 76 | % | $ | 1,269 | $ | 2,887 |
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
|
||||||||||||||||||||||||
Adjusted market EBITDA
|
$ | 2,887 | ||||||||||||||||||||||
Centralized costs (1)
|
(708 |
)
|
||||||||||||||||||||||
Corporate expenses
|
(1,830 |
)
|
||||||||||||||||||||||
Depreciation and amortization
|
(1,658 |
)
|
||||||||||||||||||||||
Stock-based compensation
|
(94 |
)
|
||||||||||||||||||||||
Other income (expense)
|
25 | |||||||||||||||||||||||
Net loss
|
$ | (1,378 |
)
|
Market
|
Revenues
|
Cost of
Revenues(1) |
Gross Margin(1)
|
Operating Costs
|
Adjusted Market EBITDA
|
|||||||||||||||||||
New York
|
$ | 1,353 | $ | 247 | $ | 1,106 | 82 | % | $ | 295 | $ | 811 | ||||||||||||
Boston
|
1,018 | 163 | 855 | 84 | % | 153 | 702 | |||||||||||||||||
Los Angeles
|
585 | 104 | 481 | 82 | % | 264 | 217 | |||||||||||||||||
San Francisco
|
273 | 68 | 205 | 75 | % | 77 | 128 | |||||||||||||||||
Providence/Newport
|
135 | 38 | 97 | 72 | % | 42 | 55 | |||||||||||||||||
Chicago
|
275 | 131 | 144 | 52 | % | 104 | 40 | |||||||||||||||||
Miami
|
179 | 67 | 112 | 63 | % | 72 | 40 | |||||||||||||||||
Seattle
|
115 | 54 | 61 | 53 | % | 29 | 32 | |||||||||||||||||
Dallas-Fort Worth
|
109 | 84 | 25 | 23 | % | 62 | (37 | ) | ||||||||||||||||
Total
|
$ | 4,042 | $ | 956 | $ | 3,086 | 76 | % | $ | 1,098 | $ | 1,988 |
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
|
||||||||||||||||||||||||
Adjusted market EBITDA
|
$ | 1,988 | ||||||||||||||||||||||
Centralized costs (1)
|
(724 |
)
|
||||||||||||||||||||||
Corporate expenses
|
(1,533 |
)
|
||||||||||||||||||||||
Depreciation
|
(1,070 |
)
|
||||||||||||||||||||||
Stock-based compensation
|
(227 |
)
|
||||||||||||||||||||||
Other income (expense)
|
(406 |
)
|
||||||||||||||||||||||
Net loss
|
$ | (1,972 |
)
|
Market
|
Revenues
|
Cost of
Revenues(1) |
Gross Margin(1)
|
Operating Costs
|
Adjusted Market EBITDA
|
|||||||||||||||||||
New York
|
$ | 5,783 | $ | 1,161 | $ | 4,622 | 80 | % | $ | 1,187 | $ | 3,435 | ||||||||||||
Boston
|
4,510 | 729 | 3,781 | 84 | % | 689 | 3,092 | |||||||||||||||||
Los Angeles
|
3,178 | 612 | 2,566 | 81 | % | 1,098 | 1,468 | |||||||||||||||||
Chicago
|
2,453 | 799 | 1,654 | 67 | % | 604 | 1,050 | |||||||||||||||||
San Francisco
|
1,161 | 246 | 915 | 79 | % | 362 | 553 | |||||||||||||||||
Miami
|
987 | 317 | 670 | 68 | % | 361 | 309 | |||||||||||||||||
Providence/Newport
|
495 | 162 | 333 | 67 | % | 112 | 221 | |||||||||||||||||
Seattle
|
510 | 217 | 293 | 57 | % | 127 | 166 | |||||||||||||||||
Nashville
|
59 | 29 | 30 | 51 | % | 18 | 12 | |||||||||||||||||
Dallas-Fort Worth
|
493 | 315 | 178 | 36 | % | 226 | (48 | ) | ||||||||||||||||
Philadelphia
|
17 | 54 | (37 | ) | 0 | % | 184 | (221 | ) | |||||||||||||||
Total
|
$ | 19,646 | $ | 4,641 | $ | 15,005 | 76 | % | $ | 4,968 | $ | 10,037 |
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
|
||||||||||||||||||||||||
Adjusted market EBITDA
|
$ | 10,037 | ||||||||||||||||||||||
Centralized costs (1)
|
(2,917 |
)
|
||||||||||||||||||||||
Corporate expenses
|
(6,626 |
)
|
||||||||||||||||||||||
Depreciation and amortization
|
(5,770 |
)
|
||||||||||||||||||||||
Stock-based compensation
|
(772 |
)
|
||||||||||||||||||||||
Other income (expense)
|
445 | |||||||||||||||||||||||
Net loss
|
$ | (5,603 |
)
|
Market
|
Revenues
|
Cost of
Revenues(1) |
Gross Margin(1)
|
Operating Costs
|
Adjusted Market EBITDA
|
|||||||||||||||||||
New York
|
$ | 5,218 | $ | 929 | $ | 4,289 | 82 | % | $ | 1,247 | $ | 3,042 | ||||||||||||
Boston
|
3,983 | 656 | 3,327 | 84 | % | 735 | 2,592 | |||||||||||||||||
Los Angeles
|
1,930 | 340 | 1,590 | 82 | % | 1,043 | 547 | |||||||||||||||||
San Francisco
|
984 | 218 | 766 | 78 | % | 414 | 352 | |||||||||||||||||
Providence/Newport
|
530 | 151 | 379 | 72 | % | 200 | 179 | |||||||||||||||||
Chicago
|
951 | 391 | 560 | 59 | % | 460 | 100 | |||||||||||||||||
Miami
|
590 | 259 | 331 | 56 | % | 382 | (51 | ) | ||||||||||||||||
Seattle
|
431 | 233 | 198 | 46 | % | 259 | (61 | ) | ||||||||||||||||
Dallas-Fort Worth
|
298 | 261 | 37 | 12 | % | 404 | (367 | ) | ||||||||||||||||
Total
|
$ | 14,915 | $ | 3,438 | $ | 11,477 | 77 | % | $ | 5,144 | $ | 6,333 |
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
|
||||||||||||||||||||||||
Adjusted market EBITDA
|
$ | 6,333 | ||||||||||||||||||||||
Centralized costs (1)
|
(2,787 |
)
|
||||||||||||||||||||||
Corporate expenses
|
(6,140 |
)
|
||||||||||||||||||||||
Depreciation
|
(4,035 |
)
|
||||||||||||||||||||||
Stock-based compensation
|
(803 |
)
|
||||||||||||||||||||||
Other income (expense)
|
(1,193 |
)
|
||||||||||||||||||||||
Net loss
|
$ | (8,625 |
)
|
(1)
|
Certain expenses are reported as Cost of Revenues for financial statement purposes but are included in Centralized costs in the Market Data table because they are not specific to any market. These costs totaled $59 and $62 respectively for the three months ended December 31, 2010 and 2009 and $247 and $252 respectively for the years ended December 31, 2010 and 2009.
|