TWER Towerstream Corporation (CE)

 

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): August 11, 2014

 

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.)

 

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 August 11, 2014, Towerstream Corporation (the “Company”) issued a press release (the “Press Release”) announcing results for the three and six months ended June 30, 2014. 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:

 

“Adjusted EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, deferred rent expense, 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. The Company believes that Adjusted Market EBITDA trends are insightful indicators of its markets’ relative performance, and whether its markets are able to produce sufficient market cash flow to fund working capital and capital expenditure needs.

 

“EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization.

 

“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.

 

“Net Cash Flows” represents Adjusted EBITDA less capital expenditures.

 

 

The following reconciliations of non-GAAP measures to GAAP financial measures are presented in the attached press release: (i) Adjusted Market EBITDA to Net Loss, Fixed Wireless Segment, (ii) Adjusted EBITDA to Net Loss, and (iii) Net Cash Flow to Net Cash Used in Operating Activities.

 

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 August 11, 2014

 

 

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: August 11, 2014	By: /s/ Joseph P. Hernon
	Joseph P. Hernon
	Chief Financial Officer

                      

 

EXHIBIT INDEX

 

 

Exhibit No.	Description
99.1	Press Release, dated August 11, 2014

 

Exhibit 99.1

 

Towerstream Reports Second Quarter 2014 Results

 

MIDDLETOWN, R.I., August 11, 2014 – Towerstream Corporation (NASDAQ: TWER) (the “Company”), a leading 4G and Small Cell Rooftop Tower company, announced results for the second quarter ended June 30, 2014.

 

Second Quarter Operating Highlights

 

HetNets Tower Corporation Subsidiary

 

●

Revenues increased to $0.7 million in the second quarter 2014 compared to $0.2 million in the second quarter 2013.

●

Expanded Wi-Fi locations for large cable company customer by approximately 20% over the twelve months ended June 30, 2014.

●

Signed Master Lease Agreement with a major US wireless carrier for small cell deployments.

 

Towerstream Corporation

 

●

Total customer average revenue per user (“ARPU”) totaled $760 during the second quarter 2014 as compared to $758 for the first quarter 2014 and $740 for the second quarter 2013.

●

Customer churn for the second quarter 2014 was 1.71% compared to 2.33% for the first quarter 2014 and 2.34% for the second quarter 2013.

●

New Cogent-like offering of 100 Mbps for $699 continues to gain traction with 13 customer installations and 9 buildings lit.

 

 

Management Comments

 

“Securing our first Master Lease Agreement with a US carrier was an important milestone for our subsidiary, Hetnets Tower Corporation," stated Jeffrey Thompson, President and CEO. "Our robust backhaul network, diverse portfolio of rooftop locations, and strong partnerships with equipment vendors will enable us to deliver a one stop, total solution to carriers as the densification begins over the next few quarters."

 

 

“Our new 100 megabit offering continues to gain traction and customer additions, and we have targeted additional buildings for deployment over the balance of the year,” stated Joseph Hernon, Chief Financial Officer. “Our newly formed customer retention team has restored churn to our historical levels of approximately 1.7 percent which has been our average for the past 36 months.”

 

 

Selected Financial Data and Key Operating Metrics

(All dollars are in thousands except ARPU)

		(Unaudited)
		Three months ended
		6/30/2014				3/31/2014				6/30/2013
Revenues		$	8,265			$	8,380			$	8,212
Gross margin
Consolidated			26	%			30	%			37	%
Fixed wireless			65	%			67	%			70	%
Capital expenditures
Fixed wireless		$	1,403			$	1,486			$	1,028
Shared wireless infrastructure			490				938				233
Corporate			205				113				46
Churn rate (1)			1.71	%			2.33	%			2.34	%
ARPU (1)		$	760			$	758			$	740
ARPU of new customers (1)			626				636				640
Cash and cash equivalents			17,289				21,206				36,387

(All dollars are in thousands except ARPU)

 

(1)

See Non-GAAP Measures below for the definitions of Churn, ARPU and ARPU of new customers.

 

Consolidated Statement of Operations (Unaudited)

(All dollars are in thousands except per share amounts)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Revenues		$	8,265			$	8,212			$	16,645			$	16,511
Operating Expenses
Cost of revenues			6,102				5,166				11,958				10,147
Depreciation and amortization			3,281				3,936				6,976				7,807
Customer support			1,147				1,181				2,319				2,579
Sales and marketing			1,399				1,524				2,821				2,965
General and administrative			2,667				2,636				5,345				5,773
Total Operating Expenses			14,596				14,443				29,419				29,271
Operating Loss			(6,331	)			(6,231	)			(12,774	)			(12,760	)
Other Income/(Expense)
Gain on business acquisition			-				63				-				1,004
Interest expense, net			(59	)			(59	)			(123	)			(94	)
Other income (expense), net			(4	)			(4	)			(7	)			(7	)
Total Other Income/(Expense)			(63	)			-				(130	)			903
Net Loss		$	(6,394	)		$	(6,231	)		$	(12,904	)		$	(11,857	)
Net loss per common share – basic and diluted		$	(0.10	)		$	(0.09	)		$	(0.19	)		$	(0.19	)
Weighted average common shares outstanding – basic and diluted			66,479				66,371				66,459				63,931

  

 

Statement of Operations - Segment Basis (Unaudited)

 

		Three Months Ended June 30, 2014
		Fixed Wireless				Shared Wireless Infrastructure				Corporate				Eliminations				Total
Revenues		$	7,572			$	739			$	-			$	(46	)		$	8,265
Operating Expenses
Cost of revenues			2,620				3,514				14				(46	)			6,102
Depreciation and amortization			2,081				977				223				-				3,281
Customer support			268				179				700				-				1,147
Sales and marketing			1,252				63				84				-				1,399
General and administrative			202				158				2,307				-				2,667
Total Operating Expenses			6,423				4,891				3,328				(46	)			14,596
Operating Income (Loss)		$	1,149			$	(4,152	)		$	(3,328	)		$	-			$	(6,331	)
Non-recurring expenses, primarily acquisition related			-				-				91				-				91
Non-cash expenses (a)			2,187				1,039				477				-				3,703
Adjusted EBITDA (b)			3,336				(3,113	)			(2,760	)			-				(2,537	)
Less: Capital expenditures			1,403				490				205				-				2,098
Net Cash Flow (b)		$	1,933			$	(3,603	)		$	(2,965	)		$	-			$	(4,635	)

 

 

		Three Months Ended June 30, 2013
		Fixed Wireless				Shared Wireless Infrastructure				Corporate				Eliminations				Total
Revenues		$	8,061			$	196			$	-			$	(45	)		$	8,212
Operating Expenses
Cost of revenues			2,385				2,797				29				(45	)			5,166
Depreciation and amortization			2,837				911				188				-				3,936
Customer support			286				134				761				-				1,181
Sales and marketing			1,322				111				91				-				1,524
General and administrative			171				145				2,320				-				2,636
Total Operating Expenses			7,001				4,098				3,389				(45	)			14,443
Operating Income (Loss)		$	1,060			$	(3,902	)		$	(3,389	)		$	-			$	(6,231	)
Non-recurring expenses, primarily acquisition related			-				-				47				-				47
Non-cash expenses (a)			2,917				914				458				-				4,289
Adjusted EBITDA (b)			3,977				(2,988	)			(2,884	)			-				(1,895	)
Less: Capital expenditures			1,028				233				46				-				1,307
Net Cash Flow (b)		$	2,949			$	(3,221	)		$	(2,930	)		$	-			$	(3,202	)

  

 

		Six Months Ended June 30, 2014
		Fixed Wireless				Shared Wireless Infrastructure				Corporate				Eliminations				Total
Revenues		$	15,258			$	1,479			$	-			$	(92	)		$	16,645
Operating Expenses
Cost of revenues			5,119				6,902				29				(92	)			11,958
Depreciation and amortization			4,618				1,919				439				-				6,976
Customer support			536				355				1,428				-				2,319
Sales and marketing			2,515				140				166				-				2,821
General and administrative			311				304				4,730				-				5,345
Total Operating Expenses			13,099				9,620				6,792				(92	)			29,419
Operating Income (Loss)		$	2,159			$	(8,141	)		$	(6,792	)		$	-			$	(12,774	)
Non-recurring expenses, primarily acquisition related			-				-				91				-				91
Non-cash expenses (a)			4,799				2,053				977				-				7,829
Adjusted EBITDA (b)			6,958				(6,088	)			(5,724	)			-				(4,854	)
Less: Capital expenditures			2,890				1,428				317				-				4,635
Net Cash Flow (b)		$	4,068			$	(7,516	)		$	(6,041	)		$	-			$	(9,489	)

 

 

		Six Months Ended June 30, 2013
		Fixed Wireless				Shared Wireless Infrastructure				Corporate				Eliminations				Total
Revenues		$	16,248			$	354			$	-			$	(91	)		$	16,511
Operating Expenses
Cost of revenues			4,719				5,448				71				(91	)			10,147
Depreciation and amortization			5,657				1,775				375				-				7,807
Customer support			561				379				1,639				-				2,579
Sales and marketing			2,619				158				188				-				2,965
General and administrative			318				334				5,121				-				5,773
Total Operating Expenses			13,874				8,094				7,394				(91	)			29,271
Operating Income (Loss)		$	2,374			$	(7,740	)		$	(7,394	)		$	-			$	(12,760	)
Non-recurring expenses, primarily acquisition related			-				-				113				-				113
Non-cash expenses (a)			5,853				1,780				1,042				-				8,675
Adjusted EBITDA (b)			8,227				(5,960	)			(6,239	)			-				(3,972	)
Less: Capital expenditures			2,116				369				149				-				2,634
Net Cash Flow (b)		$	6,111			$	(6,329	)		$	(6,388	)		$	-			$	(6,606	)

 

 

(a) Includes depreciation and amortization, stock-based compensation, deferred rent expense, loss on property and equipment, and loss on nonmonetary transactions.

 

(b) See Non-GAAP Measures below for a definition and reconciliation of (i) Adjusted EBITDA to Net Loss and (ii) Net Cash Flow to Net Cash Used in Operating Activities.

 

Effective January 1, 2013, the Company has two reportable segments. The Fixed Wireless segment provides fixed wireless broadband services to commercial customers and delivers access over a wireless network transmitting over both regulated and unregulated radio spectrum. The Shared Wireless Infrastructure segment offers a range of rental options on street level rooftops related to (i) the installation of customer owned Small Cells, (ii) Wi-Fi access and the offloading of mobile data, and (iii) backhaul, power and other related telecommunications.

 

 

The Corporate group includes corporate overhead and centralized activities which support our overall operations. Corporate overhead includes administrative personnel, including executive management, and other support functions such as information technology and facilities. Centralized operations include network operations, customer care, and the management of network assets. Corporate costs are not allocated to the segments because such costs are managed on a centralized basis. Management also believes that not allocating these centralized costs provides a better reflection of the direct operating performance of each segment.

 

 

 Summary Condensed Balance Sheet

(All dollars are in thousands)

		(Unaudited) June 30, 2014				(Audited) December 31, 2013
Assets
Current Assets
Cash and cash equivalents		$	17,289			$	28,182
Other			2,166				1,537
Total Current Assets			19,455				29,719
Property and equipment, net			36,837				38,485
Other assets			5,878				6,713
Total Assets			62,170				74,917
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses			3,401				3,774
Deferred revenues and other			2,117				2,247
Total Current Liabilities			5,518				6,021
Long-Term Liabilities			2,890				2,802
Total Liabilities			8,408				8,823
Stockholders’ Equity
Common stock			67				66
Additional paid-in-capital			154,744				154,172
Accumulated deficit			(101,049	)			(88,144	)
Total Stockholders’ Equity			53,762				66,094
Total Liabilities and Stockholders’ Equity		$	62,170			$	74,917

 

 

Summary Condensed Statement of Cash Flows (Unaudited)		Six Months Ended June 30,
		2014				2013
Cash Flows from Operating Activities
Net loss		$	(12,904	)		$	(11,857	)
Non-cash adjustments:
Depreciation & amortization			6,976				7,807
Stock-based compensation			555				667
Gain on business acquisition			-				(1,004	)
Other			279				61
Changes in operating assets and liabilities			(1,644	)			(2,402	)
Net Cash Used in Operating Activities			(6,738	)			(6,728	)
Cash Flows From Investing Activities
Acquisitions of property and equipment			(4,063	)			(2,120	)
Acquisition of a business, net of cash acquired			-				(223	)
Lease incentive payment from landlord			380				-
Other			(81	)			(108	)
Net Cash Used in Investing Activities			(3,764	)			(2,451	)
Cash Flows From Financing Activities
Payments on capital leases			(409	)			(376	)
Proceeds from stock issuances			22				291
Net proceeds from sale of common stock			-				30,499
Other			(4	)			-
Net Cash (Used in) Provided by Financing Activities			(391	)			30,414
Net (Decrease) Increase In Cash and Cash Equivalents			(10,893	)			21,235
Cash and cash equivalents – beginning			28,182				15,152
Cash and cash equivalents – ending		$	17,289			$	36,387

 

 

Fixed Wireless Segment Market data for the three months ended June 30, 2014

(All dollars are in thousands)

 

Market		Revenues				Cost of Revenues				Gross Margin								Operating Costs				Adjusted Market EBITDA
Los Angeles		$	1,996			$	573			$	1,423				71	%		$	469			$	954
New York			1,950				702				1,248				64	%			336				912
Boston			1,449				404				1,045				72	%			190				855
Chicago			734				293				441				60	%			128				313
Miami			381				118				263				69	%			79				184
San Francisco			285				124				161				56	%			58				103
Houston			174				66				108				62	%			38				70
Las Vegas-Reno			225				122				103				46	%			56				47
Seattle			75				48				27				36	%			12				15
Dallas-Fort Worth			160				100				60				38	%			46				14
Providence-Newport			65				51				14				22	%			1				13
Philadelphia			32				19				13				41	%			6				7
Total		$	7,526			$	2,620			$	4,906				65	%		$	1,419			$	3,487

  

 

Fixed Wireless Segment Market data for the three months ended June 30, 2013

(All dollars are in thousands)

 

Market		Revenues				Cost of Revenues				Gross Margin								Operating Costs				Adjusted Market EBITDA
Los Angeles		$	2,047			$	483			$	1,564				76	%		$	380			$	1,184
Boston			1,628				356				1,272				78	%			245				1,027
New York			1,940				634				1,306				67	%			372				934
Chicago			820				266				554				68	%			113				441
Miami			391				106				285				73	%			86				199
Houston			180				57				123				68	%			30				93
Las Vegas-Reno			274				141				133				49	%			41				92
San Francisco			320				113				207				65	%			117				90
Providence-Newport			114				50				64				56	%			19				45
Seattle			94				47				47				50	%			24				23
Philadelphia			40				19				21				53	%			16				5
Dallas-Fort Worth			162				100				62				38	%			66				(4	)
Nashville			6				13				(7	)			-	%			3				(10	)
Total		$	8,016			$	2,385			$	5,631				70	%		$	1,512			$	4,119

 

Fixed Wireless Segment Market data for the six months ended June 30, 2014

(All dollars are in thousands)

 

Market		Revenues				Cost of Revenues				Gross Margin								Operating Costs				Adjusted Market EBITDA
Los Angeles		$	4,036			$	1,134			$	2,902				72	%		$	937			$	1,965
New York			3,866				1,321				2,545				66	%			616				1,929
Boston			2,984				798				2,186				73	%			387				1,799
Chicago			1,459				587				872				60	%			269				603
Miami			750				221				529				71	%			174				355
Houston			346				124				222				64	%			56				166
San Francisco			561				251				310				55	%			149				161
Las Vegas-Reno			481				243				238				49	%			99				139
Providence-Newport			145				98				47				32	%			3				44
Dallas-Fort Worth			327				194				133				41	%			95				38
Seattle			140				96				44				31	%			17				27
Philadelphia			69				39				30				43	%			21				9
Nashville			2				13				(11	)			-	%			2				(13	)
Total		$	15,166			$	5,119			$	10,047				66	%		$	2,825			$	7,222

 

Fixed Wireless Segment Market data for the six months ended June 30, 2013

(All dollars are in thousands)

 

Market		Revenues				Cost of Revenues				Gross Margin								Operating Costs				Adjusted Market EBITDA
Los Angeles		$	4,117			$	1,013			$	3,104				75	%		$	792			$	2,312
Boston			3,298				686				2,612				79	%			461				2,151
New York			3,826				1,233				2,593				68	%			709				1,884
Chicago			1,733				572				1,161				67	%			226				935
Miami			768				205				563				73	%			169				394
Las Vegas-Reno			662				273				389				59	%			97				292
San Francisco			622				214				408				66	%			202				206
Houston			233				78				155				67	%			43				112
Providence-Newport			241				99				142				59	%			37				105
Seattle			231				92				139				60	%			64				75
Philadelphia			80				37				43				54	%			38				5
Dallas-Fort Worth			334				189				145				43	%			142				3
Nashville			11				28				(17	)			-	%			7				(24	)
Total		$	16,156			$	4,719			$	11,437				71	%		$	2,987			$	8,450

  

  

Operating Outlook and Guidance

 

●

Revenues for the third quarter 2014 are expected to range between $7.4 million to $7.7 million for the Fixed Wireless segment.

 

●

Revenues for the third quarter 2014 are expected to range between $800,000 to $1.0 million for the Shared Wireless Infrastructure segment.

 

●

Adjusted EBITDA, on a segment basis, is expected to range between profitability of $3.1 million to $3.4 million for the Fixed Wireless segment.

 

 

Non-GAAP Measures and Reconciliations to 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:

 

“Adjusted EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, deferred rent expense, 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.

 

“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.

 

“Corporate” includes corporate overhead and centralized activities which support our overall operations.

 

“EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization.

 

“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.

 

“Net Cash Flows” represents Adjusted EBITDA less capital expenditures.

 

"Shared Wireless Infrastructure, Net" represents the net operating results for that business segment.

 

A reconciliation of non-GAAP measures to GAAP financial measures is as follows (amounts in thousands):

 

I. Adjusted Market EBITDA to Net Loss, Fixed Wireless Segment

 

		For the three months ended June 30,
		2014				2013
Adjusted Market EBITDA		$	3,487			$	4,119
Fixed wireless, non-market specific
Other expenses			(303	)			(267	)
Depreciation and amortization			(2,081	)			(2,837	)
Shared wireless infrastructure, net			(4,106	)			(3,857	)
Corporate			(3,328	)			(3,389	)
Other income (expense)			(63	)			-
Net loss		$	(6,394	)		$	(6,231	)

 

 

		For the six months ended June 30,
		2014				2013
Adjusted Market EBITDA		$	7,222			$	8,450
Fixed wireless, non-market specific
Other expenses			(537	)			(510	)
Depreciation and amortization			(4,618	)			(5,657	)
Shared wireless infrastructure, net			(8,049	)			(7,649	)
Corporate			(6,792	)			(7,394	)
Other income (expense)			(130	)			903
Net loss		$	(12,904	)		$	(11,857	)

  

 

II. Adjusted EBITDA to Net Loss

 

 

		For the three months ended June 30,
		2014				2013
Adjusted EBITDA		$	(2,537	)		$	(1,895	)
Depreciation and amortization			(3,281	)			(3,936	)
Stock-based compensation			(263	)			(271	)
Loss on property and equipment			-				(17	)
Loss on non-monetary transactions			(68	)			(65	)
Deferred rent			(91	)			-
Non-recurring expenses			(91	)			(47	)
Operating Income (Loss)		$	(6,331	)		$	(6,231	)
Interest expense, net			(59	)			(59	)
Gain on business acquisition			-				63
Other income (expense), net			(4	)			(4	)
Net loss		$	(6,394	)		$	(6,231	)

 

 

		For the six months ended June 30,
		2014				2013
Adjusted EBITDA		$	(4,854	)		$	(3,972	)
Depreciation and amortization			(6,976	)			(7,807	)
Stock-based compensation			(555	)			(667	)
Loss on property and equipment			-				(59	)
Loss on non-monetary transactions			(136	)			(142	)
Deferred rent			(162	)			-
Non-recurring expenses			(91	)			(113	)
Operating Income (Loss)		$	(12,774	)		$	(12,760	)
Interest expense, net			(123	)			(94	)
Gain on business acquisition			-				1,004
Other income (expense), net			(7	)			(7	)
Net loss		$	(12,904	)		$	(11,857	)

 

III. Net Cash Flow to Net Cash Used in Operating Activities

 

		For the three months ended June 30,
		2014				2013
Net cash flow		$	(4,635	)		$	(3,202	)
Capital expenditures			2,098				1,307
Non-recurring expenses			(91	)			(47	)
Changes in operating assets and liabilities, net			1,004				(266	)
Other, net			(24	)			(97	)
Net cash used in operating activities		$	(1,648	)		$	(2,305	)

  

 

		For the six months ended June 30,
		2014				2013
Net cash flow		$	(9,489	)		$	(6,606	)
Capital expenditures			4,635				2,634
Non-recurring expenses			(91	)			(113	)
Changes in operating assets and liabilities, net			(1,644	)			(2,402	)
Other, net			(149	)			(241	)
Net cash used in operating activities		$	(6,738	)		$	(6,728	)

 

 

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 August 11, 2014 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 August 18, 2014 at 11:59 p.m. ET by dialing 855-859-2056 or 404-537-3406 (for international callers) using pass code 72260570.

 

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 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. For more information on Towerstream services, please visit www.towerstream.com  and/or follow us @Towerstream.

 

The Towerstream Corporation logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=6570

 

About HetNets Tower Corporation

 

HetNets Tower Corporation (“HetNets”) was formed in January 2013 as a wholly owned subsidiary of Towerstream Corporation (NASDAQ:TWER), and offers a neutral host, shared wireless infrastructure solution, either independently or as a turnkey service.  Its wireless communications infrastructure is available to wireless carriers, cable and Internet companies in major urban markets where the explosion in mobile data is creating significant demand for additional capacity and coverage.  HetNets offers a carrier-class Wi-Fi network for Internet access and the offloading of mobile data.  Its street level rooftop locations are ideal for the installation of customer owned small cells including DAS, Metro and Pico cells. Other solutions provided by HetNets include backhaul, power, and related small cell requirements. More information is available at http://www.hetnets.com.

 

 

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 small cell 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:

Monica Gould

The Blueshirt Group

212-871-3927

monica@blueshirtgroup.com

 

MEDIA CONTACT:

Todd Barrish

Indicate Media
917-861-0089

todd@indicatemedia.com

 

 

 

 

 

 

 

 

 

 

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