UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 15, 2016
Towerstream Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware |
001-33449 |
20-8259086 | ||
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer | ||
88 Silva Lane 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) |
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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 March 15, 2015, Towerstream Corporation (the “Company”) issued a press release (the “Press Release”) announcing results for the twelve months ended December 31, 2015. 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 Company uses certain Non-GAAP measures to monitor the Company's business performance and that of its segments. These Non-GAAP measures are not recognized under generally accepted accounting principles ("GAAP"). Accordingly, investors are cautioned about using or relying on these measures as alternatives to recognized GAAP measures. The Company’s methods of calculating these measures may not be comparable to similar measures presented by other companies.
A definition of key Non-GAAP measures that the Company employs, and how it uses them to monitor business performance, are as follows:
“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.
“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.
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 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release, dated March 15, 2016
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.
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TOWERSTREAM CORPORATION |
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Dated: March 15, 2016 |
By: /s/ Philip Urso |
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Philip Urso |
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Interim Chief Executive Officer |
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Exhibit 99.1
Towerstream Reports 2015 Financial Results
and Corporate Update
Time Warner Cable Agreement Lowers Cash Burn Significantly
MIDDLETOWN, R.I., March 15, 2016 – Towerstream Corporation (NASDAQ: TWER) (the “Company”), a leading Fixed Wireless Fiber Alternative company, announced results for the year ended December 31, 2015.
2015 Operating Highlights and Corporate Update
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HetNets Tower Corporation has closed its operations effective immediately. |
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Company signed an agreement with Time Warner Cable to immediately take over $7mm worth of annual lease obligations. |
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Company has entered into a 3-year agreement with renewal options to provide backhaul services for $1.6mm/year with Time Warner Cable. |
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Valuable backhaul equipment will be redeployed for On-Net installations and expected to significantly lower future capital expenditures. |
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Cash burn for Q2 2016 expected to be under $2.9mm. |
Management Comments
“Our immediate focus is to reduce cash burn, and to ignite the On-Net sales model,” stated Philip Urso, interim CEO.
Selected Financial Data and Key Operating Metrics
(All dollars are in thousands except ARPU information)
Years Ended |
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12/31/2015 |
12/31/2014 |
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Selected Financial Data |
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Revenues |
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Continuing |
$ | 27,905 | $ | 29,936 | ||||
Discontinued |
3,370 | 3,100 | ||||||
Gross margin |
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Continuing |
62 | % | 66 | % | ||||
Capital expenditures |
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Continuing |
$ | 6,951 | $ | 5,950 | ||||
Discontinued |
240 | 2,221 | ||||||
Churn rate (1) |
1.88 | % | 1.85 | % | ||||
ARPU (1) |
$ | 764 | $ | 772 | ||||
ARPU of new customers (1) |
640 | 639 | ||||||
Cash and cash equivalents |
15,116 | 38,027 |
(1) |
See Non-GAAP Measures below for the definitions of Churn, ARPU and ARPU of new customers. |
Page 1 of 5
Consolidated Statement of Operations
(All dollars are in thousands except per share amounts)
Year Ended December 31, 2015 |
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Continuing Operations |
Discontinued Operations |
Consolidated |
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Revenues |
$ | 27,905 | $ | 3,370 | $ | 31,275 | ||||||
Operating Expenses |
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Cost of revenues |
10,604 | 17,751 | 28,355 | |||||||||
Depreciation and amortization |
9,643 | 4,033 | 13,676 | |||||||||
Customer support services |
4,426 | 710 | 5,136 | |||||||||
Sales and marketing |
5,864 | 146 | 6,010 | |||||||||
General and administrative |
9,958 | 2,008 | 11,966 | |||||||||
Total Operating Expenses |
40,495 | 24,648 | 65,143 | |||||||||
Operating Loss |
(12,590 | ) | (21,278 | ) | (33,868 | ) | ||||||
Other Income/(Expense) |
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Interest expense, net |
(6,653 | ) | - | (6,653 | ) | |||||||
Provision for income taxes |
38 | - | 38 | |||||||||
Total Other Income/(Expense) |
(6,615 | ) | - | (6,615 | ) | |||||||
Net Loss |
$ | (19,205 | ) | $ | (21,278 | ) | $ | (40,483 | ) | |||
Net loss per common share – basic and diluted |
$ | (0.28 | ) | $ | (0.32 | ) | $ | (0.60 | ) | |||
Weighted average common shares outstanding – basic and diluted |
67,932 | 67,932 | 67,932 | |||||||||
Year Ended December 31, 2014 |
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Continuing Operations |
Discontinued Operations |
Consolidated |
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Revenues |
$ | 29,936 | $ | 3,100 | $ | 33,036 | ||||||
Operating Expenses |
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Cost of revenues |
10,300 | 14,220 | 24,520 | |||||||||
Depreciation and amortization |
9,682 | 3,958 | 13,640 | |||||||||
Customer support services |
4,127 | 683 | 4,810 | |||||||||
Sales and marketing |
5,341 | 229 | 5,570 | |||||||||
General and administrative |
9,767 | 569 | 10,336 | |||||||||
Total Operating Expenses |
39,217 | 19,659 | 58,876 | |||||||||
Operating Loss |
(9,281 | ) | (16,559 | ) | (25,840 | ) | ||||||
Other Income/(Expense) |
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Interest expense, net |
(1,673 | ) | - | (1,673 | ) | |||||||
Provision for income taxes |
(78 | ) | - | (78 | ) | |||||||
Total Other Income/(Expense) |
(1,751 | ) | - | (1,751 | ) | |||||||
Net Loss |
$ | (11,032 | ) | $ | (16,559 | ) | $ | (27,591 | ) | |||
Net loss per common share – basic and diluted |
$ | (0.16 | ) | $ | (0.25 | ) | $ | (0.41 | ) | |||
Weighted average common shares outstanding – basic and diluted |
66,804 | 66,804 | 66,804 |
Page 2 of 5
Summary Condensed Balance Sheet
(All dollars are in thousands)
December 31, 2015 |
December 31, 2014 |
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Assets |
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Current Assets |
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Cash and cash equivalents |
$ | 15,116 | $ | 38,027 | ||||
Other |
783 | 901 | ||||||
Current assets of discontinued operations |
1,249 | 1,336 | ||||||
Current assets held for sale |
5,315 | 11,109 | ||||||
Total Current Assets |
22,463 | 53,373 | ||||||
Property and equipment, net |
21,235 | 23,147 | ||||||
Other assets |
5,023 | 6,863 | ||||||
Long-term assets of discontinued operations |
- | 938 | ||||||
Total Assets |
48,721 | 82,321 | ||||||
Liabilities and Stockholders’ Equity |
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Current Liabilities |
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Accounts payable and accrued expenses |
2,506 | 2,713 | ||||||
Deferred revenues and other |
2,543 | 2,288 | ||||||
Current liabilities of discontinued operations |
3,907 | 197 | ||||||
Total Current Liabilities |
8,956 | 5,198 | ||||||
Long-Term Liabilities |
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Long-term debt |
34,695 | 32,101 | ||||||
Other |
2,524 | 3,060 | ||||||
Total Long-Term Liabilities |
37,219 | 35,161 | ||||||
Total Liabilities |
46,175 | 40,359 | ||||||
Stockholders’ Equity |
2,546 | 41,962 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 48,721 | $ | 82,321 |
Non-GAAP Measures
We use certain Non-GAAP measures to monitor the Company's business performance and that of our segments. These Non-GAAP measures are not recognized under generally accepted accounting principles ("GAAP"). Accordingly, investors are cautioned about using or relying on these measures as alternatives to recognized GAAP measures. Our methods of calculating these measures may not be comparable to similar measures presented by other companies.
A definition of the Non-GAAP measures that we employ, and how we use them to monitor business performance, are as follows:
“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.
Page 3 of 5
“ARPU of new customers” is calculated in the same manner but only includes new customers who entered into contracts during the indicated period.
“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.
Conference Call and Webcast
A conference call led by interim Chief Executive Officer, Philip Urso, Chief Financial Officer, Joseph Hernon, and Chief Operations Officer, Arthur Giftakis, will be held on March 15, 2016 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 April14, 2016 at 11:59 p.m. ET by dialing 855-859-2056 or 404-537-3406 (for international callers) using pass code 84829903.
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 Corporation (Nasdaq:TWER) is a leading Fixed Wireless Fiber Alternative company delivering high-speed Internet access to businesses. To date the company offers its broadband services in 12 urban markets including New York City, Boston, Los Angeles, Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle, Dallas-Fort Worth, Houston, Las Vegas-Reno, and the greater Providence area. In 2014, Towerstream launched its On-Net fixed wireless service offering building owners and property managers a redundant and reliable dense urban network that directly connects with Towerstream’s fiber backbone. On-Net building tenants have access to 100 Mbps of dedicated, symmetrical Internet connectivity, with a premier SLA, for an industry-leading price of $699/month. For more information on Towerstream services, please visit www.towerstream.com and/or follow us @Towerstream.
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. 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.
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INVESTOR CONTACT:
Terry McGovern
Vision Advisors
415-902-3001
mcgovern@visionadvisors.net
MEDIA CONTACT:
Todd Barrish
Indicate Media
917-861-0089
todd@indicatemedia.com
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