updated 10/28/2010 4:17:01 PM ET 2010-10-28T20:17:01

BOCA RATON, Fla., Oct. 28, 2010 (GLOBE NEWSWIRE) -- SBA Communications Corporation (Nasdaq:SBAC) ("SBA" or the "Company") today reported results for the quarter ended September 30, 2010. Highlights of the results include:

-- Third quarter over year earlier period:

  • Site leasing revenue growth of 13%
  • Tower Cash Flow growth of 14%
  • Net loss decreased from $50.2 million to $34.6 million
  • Adjusted EBITDA growth of 15%
  • Equity Free Cash Flow Per Share growth of 26%

Operating Results

Total revenues in the third quarter of 2010 were $158.6 million compared to $139.3 million in the year earlier period, an increase of 13.9%. Site leasing revenue of $135.7 million was up 12.6% over the year earlier period. Site leasing Segment Operating Profit of $105.4 million was up 14.6% over the year earlier period. Site leasing contributed 97.5% of the Company's total Segment Operating Profit in the third quarter of 2010. Site development revenues were $23.0 million in the third quarter of 2010 compared to $18.7 million in the year earlier period, a 22.5% increase. Site development Segment Operating Profit Margin was 11.7% in the third quarter of 2010 compared to 11.2% in the year earlier period.

Tower Cash Flow for the third quarter of 2010 was $106.5 million, a 13.8% increase over the year earlier period. Tower Cash Flow Margin for the third quarter of 2010 was 79.4% compared to 78.6% in the year earlier period.

Net loss for the third quarter of 2010 was $34.6 million compared to $50.2 million in the year earlier period. Net loss attributable to SBA Communications Corporation for the third quarter of 2010 was $34.5 million or $(0.30) per share compared to a net loss attributable to SBA Communications Corporation of $50.1 million or $(0.43) per share in the year earlier period.

Adjusted EBITDA in the third quarter of 2010 was $97.7 million compared to $84.9 million in the year earlier period, an increase of 15.1%. Adjusted EBITDA Margin was 62.2% in the third quarter of 2010 compared to 61.6% in the year earlier period.

Net Cash Interest Expense was $37.5 million in the third quarter of 2010 compared to $36.1 million in the year earlier period.

Equity Free Cash Flow for the third quarter of 2010 was $56.8 million compared to $45.9 million in the year earlier period, an increase of 23.5%. Equity Free Cash Flow Per Share was $0.49 for the third quarter of 2010 compared to $0.39 per share in the year earlier period, an increase of 25.6%.

"We produced another strong quarter of results in the third quarter," said Jeffrey A. Stoops, President and CEO. "Activity levels from our carrier customers have increased in the second half of 2010, providing us the foundation for strong 2011 financial results. We expect carrier activity to stay strong through the remainder of this year and all of 2011. Against this backlog of strong leasing demand, we have been actively looking for quality opportunities to grow our tower portfolio both domestically and internationally. We are very excited about the towers we have under contract to purchase. We believe we will be able to continue to identify and consummate additional quality tower acquisitions and we are confident in achieving our goal of a minimum of 5% to 10% portfolio growth in 2011. Given our expectations about strong continued organic growth and another year of material portfolio growth, we are very optimistic about achieving our goal of over 20% growth in equity free cash flow per share in 2011."

Investing Activities

As of September 30, 2010 SBA owned 8,705 towers, and managed or leased approximately 5,400 actual or potential additional communication sites. During the third quarter of 2010, SBA purchased 86 towers for approximately $52.7 million in cash (exclusive of any working capital adjustments). SBA also built 38 towers during the third quarter of 2010. In addition, the Company spent $11.2 million to purchase land and easements and to extend lease terms with respect to land underlying its towers. Total cash capital expenditures for the third quarter of 2010 were $79.9 million, consisting of $2.7 million of non-discretionary cash capital expenditures (tower maintenance and general corporate) and $77.2 million of discretionary cash capital expenditures (new tower builds, tower augmentations, tower acquisitions and related earn-outs, and purchasing land and easements).

Subsequent to September 30, 2010, the Company acquired 80 towers and related assets and liabilities from third party sellers for an aggregate consideration of $40.7 million in cash. The Company has agreed to purchase an additional 512 towers for an aggregate amount of $166.1 million. The Company anticipates that these acquisitions will be consummated by the end of the first quarter of 2011.

Financing Activities and Liquidity

SBA ended the third quarter with $3.1 billion of total debt (recorded on the Company's balance sheet at a discounted carrying value of $2.8 billion), $0.2 billion of cash and cash equivalents, short-term restricted cash and short-term investments and $2.8 billion of Net Debt (as defined below). SBA's Net Debt and Net Secured Debt to Annualized Adjusted EBITDA Leverage Ratios (as defined below) were 7.2x and 2.6x, respectively. SBA's $500.0 million Senior Credit Facility is undrawn and fully available.

SBA did not repurchase any shares of its common stock in the third quarter and has remaining authorization to repurchase an additional $151.3 million of its common stock under its current $250.0 million common stock repurchase plan.

Outlook

The Company is providing its fourth quarter 2010 Outlook, updating its Full Year 2010 Outlook, and providing its Full Year 2011 Outlook for anticipated results. The Outlook provided is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Company's filings with the Securities and Exchange Commission.

The Company's Full Year 2011 Outlook is based on the following assumptions: (1) 9% organic leasing revenue growth on owned towers, (2) new tower builds in the U.S. and internationally of 200 to 240 towers in 2011 for the Company's ownership, (3) the acquisition of only those tower assets under contract at the time of this press release, and (4) no additional stock repurchases. The Company intends to spend additional capital in 2011 on acquiring and building revenue producing assets not yet identified or under contract, the impact of which is not reflected in the 2011 guidance.


Conference Call Information

SBA Communications Corporation will host a conference call on Friday, October 29, 2010 at 10:00 A.M. EDT to discuss the quarterly results. The call may be accessed as follows:

Information Concerning Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the Company's expectations or beliefs regarding (i) customer demand and activity through the end of 2010 and for the full year 2011; (ii) the Company's financial and operational guidance for the fourth quarter of 2010, full year 2010 and 2011, including its expectations regarding equity free cash flow per share in 2011, and (iii) the Company's expectations regarding tower acquisitions and tower portfolio growth and its belief that pending acquisitions will close by the end of the first quarter of 2011. These forward-looking statements may be affected by the risks and uncertainties in the Company's business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's annual report on Form 10-K filed with the Commission on March 1, 2010. The Company wishes to caution readers that certain important factors may have affected and could in the future affect the Company's actual results and could cause the Company's actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company. With respect to the Company's expectations regarding all of these statements, including its financial and operational guidance, such risk factors include, but are not limited to: (1) the ability and willingness of wireless service providers to maintain or increase their capital expenditures; (2) the Company's ability to secure and retain as many site leasing tenants as planned at anticipated lease rates; (3) the impact, if any, of consolidation among wireless service providers; (4) the Company's ability to secure and deliver anticipated services business at contemplated margins; (5) the Company's ability to maintain expenses and cash capital expenditures at appropriate levels for our business; (6) the Company's ability to acquire land underneath towers on terms that are accretive; (7) the Company's ability to realize economies of scale from its tower portfolio; (8) the Company's ability to comply with covenants and the terms of its credit instruments; (9) the economic climate for the wireless communications industry in general and the wireless communications infrastructure providers in particular and (10) the continued dependence on towers and outsourced site development services by the wireless carriers. With respect to the Company's plan for new builds, these factors also include zoning approvals, weather, availability of labor and supplies and other factors beyond the Company's control that could affect the Company's ability to build 200 to 240 towers in 2011. With respect to its expectations regarding the ability to close pending tower acquisitions, these factors also include satisfactorily completing due diligence, the ability and willingness of each party to fulfill their respective closing conditions and the availability of cash on hand, borrowing capacity under the senior credit facility or shares of the Company's Class A common stock to pay the anticipated consideration. 

This press release contains non-GAAP financial measures. Reconciliation of each of these non-GAAP financial measures is presented below under "Non-GAAP Financial Measures." Please refer to the Company's Form 8-K filed with the Commission on October 29, 2010 and the Company's Form 10-K filed with the Commission on March 1, 2010 for the definition of each of these non-GAAP measures and a more detailed explanation of why management believes they are useful in managing the Company.

This press release will be available on our website at www.sbasite.com .

About SBA

SBA is a leading independent owner and operator of wireless communications infrastructure in North and Central America. SBA generates revenue from two primary businesses – site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts. 

For additional information about SBA, please contact Mark DeRussy, Director of Finance, at (561) 226-9531 or visit our website at www.sbasite.com .

Non-GAAP Financial Measures

This press release includes disclosures regarding our Site Leasing Segment Operating Profit, Site Development Segment Operating Profit, Tower Cash Flow, Tower Cash Flow Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Equity Free Cash Flow, Equity Free Cash Flow Per Share, Net Debt, Leverage Ratio and Secured Leverage Ratio, which are non-GAAP financial measures. These non-GAAP measures are not intended to be alternative measures of performance as determined in accordance with GAAP. Rather, they are presented as additional information because management believes that they are useful in monitoring the performance of the Company.

Segment Operating Profit and Segment Operating Profit Margin

The reconciliation of Site Leasing Segment Operating Profit and Site Development Segment Operating Profit and the calculation of Segment Operating Profit Margin are as follows:

Total Segment Operating Profit is the total of the Segment Operating Profits of the two segments. 

Tower Cash Flow and Tower Cash Flow Margin

The tables below set forth the reconciliation of Tower Cash Flow to its most comparable GAAP measurement and the calculation of Tower Cash Flow Margin. Tower Cash Flow for each of the periods set forth in the Outlook section above will be calculated in the same manner.

The calculation of Tower Cash Flow Margin is as follows:

 

Adjusted EBITDA, Annualized Adjusted EBITDA and Adjusted EBITDA Margin

The table below sets forth the reconciliation of Adjusted EBITDA to its most comparable GAAP measurement.  Adjusted EBITDA for each of the periods set forth in the Outlook section above will be calculated in the same manner: 

The calculation of Adjusted EBITDA Margin is as follows:

Equity Free Cash Flow and Equity Free Cash Flow Per Share

The table below sets forth the reconciliation of Equity Free Cash Flow for the three months ended September 30, 2010 and 2009 and the calculation of Equity Free Cash Flow Per Share for such periods. Equity Free Cash Flow for each of the periods set forth in the Outlook section above will be calculated in the same manner.

Net Debt, Leverage Ratio, and Secured Leverage Ratio

Net Debt is calculated using the notional principal amount of outstanding debt. Under GAAP policies, the notional principal amount of the Company's outstanding debt is not necessarily reflected on the face of the Company's financial statements.

The Debt and Leverage calculations are as follows:

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