Global Signal Inc. Announces Second Quarter 2004 Earnings
Highlights * Completed IPO in June, raising net proceeds of
approximately $132 million SARASOTA, Fla., July 30
/PRNewswire-FirstCall/ -- Global Signal Inc. (NYSE:GSL) today
reported financial results for the quarter ended June 30, 2004. Net
income for the quarter ended June 30, 2004, was $5.1 million, or
$0.11 per diluted common share, compared with $5.5 million, or
$0.13 per diluted common share, for the second quarter of 2003. For
the three months ended June 30, 2004, Adjusted EBITDA (earnings
before interest, income tax expense (benefit), depreciation,
amortization, accretion and non-cash stock-based compensation
expense) was $24.5 million or $0.52 per diluted common share
compared to $21.4 million or $0.50 per diluted common share for the
second quarter 2003. Adjusted FFO in the second quarter of 2004 was
$17.1 million, or $0.36 per diluted common share. For the quarter
ended June 30, 2004, we declared dividends totaling $0.3125 per
share of common stock. For a reconciliation and discussion of GAAP
net income to Adjusted EBITDA and Adjusted FFO, refer to the tables
following the presentation of GAAP results. Mr. Wesley Edens,
Global Signal's Chairman and CEO, stated, "We are pleased with the
results of our first quarter since the completion of our IPO in
early June. Wireless demand drivers continue to fuel the growth in
our business. We expect that our ability to generate stable
dividends and realize growth will differentiate us from our
competitors." Investment Activity From December 2003 through the
end of July 2004, we purchased or entered into definitive
agreements to purchase 471 towers for an aggregate purchase price
of approximately $227 million. The 471 towers are generally located
in areas of high population density and high traffic volume and are
primarily in the eastern and southeastern United States. These
towers generate a significant amount of their revenue from
telephony and investment grade tenants. David Grain, Global
Signal's President, stated, "During the second quarter, we saw
strong leasing activity in our existing portfolio from the wireless
telephony carriers. On the investment side, we have made
significant progress in acquiring high quality assets and shifting
our revenue mix towards higher growth telephony tenants. We expect
these trends to continue enabling us to achieve our goals of
increasing earnings and dividends." The Company's business strategy
is to focus on increasing its earnings and dividends to
stockholders by growing Adjusted EBITDA through: * lease-up of
existing sites with high quality tenants; * acquisition of towers
primarily designed for telephony tenants and; * financing newly
acquired assets, on a long-term basis, using equity and low cost
fixed rate debt obtained through the issuance of asset-backed
securities. Capital Markets Activity In June 2004, we issued 8.05
million shares of common stock at $18.00 per share for net cash
proceeds of approximately $132.2 million through an underwritten
initial public offering. We utilized a portion of these proceeds to
pay down our credit facility by $33.4 million and to finance the
above mentioned tower acquisitions. Conference Call Management will
conduct a conference call on July 30, 2004 to review the financial
results for the three months ended June 30, 2004. The conference
call is scheduled for 1:30 p.m. eastern time. A copy of this
earnings release and quarterly financial supplement is posted to
the Investors section of the Global Signal website provided below.
All interested parties are welcome to participate on the live call.
The conference call can be accessed by dialing (877) 616-4483 ten
minutes prior to the scheduled start and referencing the Global
Signal Second Quarter 2004 Earnings Call. For those who are not
available to listen to the live call, a replay will be available
until 11:59 p.m. eastern time on Friday, August 6, 2004 by dialing
(800) 642-1687; please reference access code "8850290." About
Global Signal Global Signal owns or manages over 3,300 wireless
communications towers and other communications sites. Global Signal
is organized and conducts its operations to qualify as a real
estate investment trust (REIT) for federal income tax purposes. For
more information on Global Signal and to be added to our e-mail
distribution list, please visit http://www.gsignal.com/ . Safe
Harbor Certain items in this press release and associated earnings
conference call may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including, but not necessarily limited to, statements relating to
our ability to deploy capital, close acquisitions, pay dividends,
generate growth, secure financing and increase revenues and
earnings. Words such as "anticipate(s)," "expect(s)," "intend(s),"
"plan(s)," "target(s)," "project(s)," "believe(s)," "seek(s),"
"estimate(s)" and similar expressions are intended to identify such
forward- looking statements. These statements are based on
management's current expectations and beliefs and are subject to a
number of factors that could lead to actual results materially
different from those described in the forward-looking statements;
Global Signal can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ
materially from Global Signal's expectations include, but are not
limited to, our continued ability to acquire new towers at
attractive prices which will generate returns consistent with
expectations; the possibility that the towers that we have acquired
and will acquire may not generate sufficient additional income to
justify their acquisition; possibilities that conditions to closing
of transactions will not be satisfied and other risks detailed from
time to time in Global Signal's SEC reports including its Form S-11
filed June 2, 2004. Such forward-looking statements speak only as
of the date of this press release. Global Signal expressly
disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based. GLOBAL SIGNAL INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands except per share data)
(Unaudited) Three Months Ended Six Months Ended June 30, June 30,
2003 2004 2003 2004 Revenues $41,909 $44,139 $83,143 $87,583 Direct
site operating expenses (excluding depreciation, amortization and
accretion) 13,652 13,318 26,949 26,717 Gross margin 28,257 30,821
56,194 60,866 Other expenses: Selling, general and administrative
(excluding non-cash stock-based compensation) 6,694 5,855 13,211
12,414 State franchise, excise and minimum taxes 208 165 417 337
Depreciation, amortization and accretion 11,176 11,954 22,352
23,792 Non-cash stock-based compensation expense for services - 608
- 3,212 18,078 18,582 35,980 39,755 Operating income 10,179 12,239
20,214 21,111 Interest expense, net 5,092 6,803 10,809 12,893 Loss
on early extinguishment of debt - - - 8,449 Minority interest in
net (income) loss of subsidiary (3) (9) 3 - Income (loss) from
continuing operations before income tax 5,090 5,445 9,402 (231)
Income tax benefit (expense) 343 (102) 419 (112) Income (loss) from
continuing operations 5,433 5,343 9,821 (343) Income (loss) from
discontinued operations 95 (270) 195 (261) Income (loss) before
gain (loss) on sale of properties 5,528 5,073 10,016 (604) (Loss)
gain on sale of properties (27) (6) (85) 134 Net income (loss)
$5,501 $5,067 $9,931 $(470) Basic income (loss) per common share:
Income (loss) from continuing operations $0.13 $0.12 $0.24 $(0.01)
Income (loss) from discontinued operations $0.00 $(0.01) $0.00
$0.00 Net income (loss) $0.13 $0.11 $0.24 $(0.01) Diluted income
(loss) per common share: Income (loss)from continuing operations
$0.13 $0.11 $0.23 $(0.01) Income (loss) from discontinued
operations $0.00 $0.00 $0.00 $0.00 Net income (loss) $0.13 $0.11
$0.23 $(0.01) Weighted average number of common shares outstanding
Basic 41,000 44,461 41,000 42,760 Diluted 42,900 47,183 42,897
42,760 GLOBAL SIGNAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands except share and per share data) December 31, 2003 June
30, 2004 Assets (unaudited) Current assets: Cash and cash
equivalents $9,661 $42,050 Accounts receivable, net 987 1,024
Prepaid expenses and other current assets 6,919 7,850 Interest rate
swap asset, at fair value - 7,555 17,567 58,479 Restricted cash -
22,451 Fixed assets, net 362,231 422,894 Intangible assets:
Leasehold interests, net 12,916 9,968 Lease absorption value, net
114,049 114,325 Deferred debt issuance costs, net 11,227 14,884
Other 2,485 2,677 Other assets 4,565 6,094 $525,040 $651,772
Liabilities and Stockholders' Equity Current liabilities: Accounts
payable and accrued expenses $16,255 $19,415 Dividends payable -
5,201 Deferred revenue 10,857 12,089 Interest rate swap
liabilities, at fair value 1,970 - Current portion of long-term
debt 6,535 7,959 35,617 44,664 Long-term debt 257,716 408,797 Other
long-term liabilities 5,437 6,361 Total liabilities 298,770 459,822
Minority interest in subsidiary 817 - Stockholders' equity:
Preferred stock, $0.01 par value, 20,000,000 shares authorized, no
shares issued or outstanding at December 31, 2003 and June 30, 2004
- - Common stock, $0.01 par value, 150,000,000 shares authorized,
41,000,000 shares issued and outstanding at December 31, 2003, and
50,497,527 shares issued and outstanding at June 30, 2004 410 505
Additional paid-in capital 206,089 188,707 Accumulated other
comprehensive income (loss) (1,133) 2,738 Retained earnings 20,087
- 225,453 191,950 $525,040 $651,772 GLOBAL SIGNAL INC.
RECONCILIATION OF GAPP INCOME TO ADJUSTED EBITDA (in thousands)
(Unaudited) Three Months Ended Six Months Ended June 30, June 30,
2003 2004 2003 2004 Net Income (loss) $ 5,501 $ 5,067 $ 9,931 $
(470) Depreciation, amortization, and accretion 11,176 11,954
22,352 23,792 Interest 5,092 6,803 10,809 12,893 Income tax expense
(343) 102 (419) 112 Loss on early extinguishment of debt - - -
8,449 Non-cash stock based compensation - 608 - 3,212 Adjusted
EBITDA $21,426 $24,534 $42,673 $47,988 We define Adjusted EBITDA as
earnings before interest, income tax expense (benefit),
depreciation, amortization, accretion and non-cash stock-based
compensation expense. Adjusted EBITDA is not a measure of
performance calculated in accordance with accounting principles
generally accepted in the United States, or "GAAP." We use Adjusted
EBITDA as a measure of operating performance. Adjusted EBITDA
should not be considered in isolation or as a substitute for
operating income, net income or loss, cash flows provided by
operating, investing and financing activities or other income
statement or cash flow statement data prepared in accordance with
GAAP. We believe Adjusted EBITDA is useful to an investor in
evaluating our operating performance because: * it is one of the
primary measures used by our management to evaluate the economic
productivity of our operations, including the efficiency of our
employees and the profitability associated with their performance,
the realization of contract revenues under our tenant leases, our
ability to obtain and maintain our customers and our ability to
operate our leasing business effectively; * it is widely used in
the wireless tower industry to measure operating performance
without regard to items such as depreciation and amortization,
which can vary depending upon accounting methods and the book value
of assets; and * we believe it helps investors meaningfully
evaluate and compare the results of our operations from period to
period by removing the impact of our capital structure (primarily
interest charges from our outstanding debt) and asset base
(primarily depreciation and amortization) from our operating
results. Our management uses Adjusted EBITDA: * in presentations to
our board of directors to enable it to have the same measurement of
operating performance used by management; * for planning purposes,
including the preparation of our annual operating budget; * for
compensation purposes, including as the basis for annual incentive
bonuses for certain employees; * as a valuation measure in
strategic analyses in connection with the purchase and sale of
assets; * with respect to compliance with our credit facility,
which requires us to maintain certain financial ratios based on
Consolidated EBITDA which is equivalent to Adjusted EBITDA except
that Consolidated EBITDA (i) annualizes the Adjusted EBITDA
contributed from newly acquired towers until such towers have been
owned for twelve months and (ii) excludes asset impairment charges,
gains or losses on the disposition of fixed assets, extraordinary
gains or losses, gains or losses on foreign currency exchange and
certain other non-cash charges; and * as a measurement of operating
performance because it assists us in comparing our operating
performance on a consistent basis as it removes the impact of our
capital structure (primarily interest charges from our outstanding
debt) and asset base (primarily depreciation and amortization) from
our operating results. There are material limitations to using a
measure such as Adjusted EBITDA, including the difficulty
associated with comparing results among more than one company and
the inability to analyze certain significant items, including
depreciation and interest expense, that directly affect our net
income or loss. We compensate for these limitations by considering
the economic effect of the excluded expense items independently as
well as in connection with our analysis of net income. Adjusted
EBITDA should be considered in addition to, but not as a substitute
for, other measures of financial performance reported in accordance
with generally accepted accounting principles. GLOBAL SIGNAL INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED FFO (in thousands)
(Unaudited) Three Months Ended Six Months Ended June 30, June 30,
2003 2004 2003 2004 Net income $ 5,501 $ 5,067 $ 9,931 $ (470) Real
estate depreciation & amortization 10,485 11,310 20,970 22,554
(Gain) loss on disposal of assets 27 6 85 (134) Loss on
extingusihment of debt - - - 8,449 Non-cash stock base compensation
expense for services - 608 - 3,212 Accretion 97 144 194 334
Adjusted FFO $ 16,110 $ 17,135 $ 31,180 $ 33,945 We believe
Adjusted Funds From Operations, or Adjusted FFO, is an appropriate
measure of the performance of REITs because it provides investors
with an understanding of our ability to incur and service debt and
make capital expenditures. Adjusted FFO, for our purposes,
represents net income available for common stockholders (computed
in accordance with GAAP), excluding gains (or losses) on the
disposition of real estate assets and real estate depreciation,
amortization, accretion and non-cash stock-based compensation
expense. Adjusted FFO does not represent cash generated from
operating activities in accordance with GAAP and therefore should
not be considered an alternative to net income as an indicator of
our operating performance or as an alternative to cash flow
provided by operations as a measure of liquidity and is not
necessarily indicative of funds available to fund our cash needs
including our ability to pay dividends. In addition, Adjusted FFO
may not be comparable to similarly titled measurements employed by
other companies. Our management uses Adjusted FFO: * in monthly
management reports given to our board of directors; * to provide a
measure of our REIT operating performance that can be compared to
other companies using an accepted REIT industry-wide measurement;
and * as an important supplemental measure of operating
performance. Supplemental Unaudited Financial Information For the
months of June 2003 and 2004 our revenue mix for the primary
technology categories was as follows: GLOBAL SIGNAL INC. REVENUE
PRECENTAGE BY TENANT TECHNOLOGY TYPE (Unaudited) Precent of
Revenues for the Month of Month of Tenant Technology Type June 2003
June 2004 Telephony (PCS, cellular, ESMR) 38.9% 43.2% Mobile Radio
27.0 23.1 Paging 22.0 21.3 Broadcast 7.0 7.7 Wireless data and
other 5.1 4.7 Total 100.0% 100.0% Capital expenditures for the
three and six months ended June 30, 2003 and 2004 were as follows:
GLOBAL SIGNAL INC. CAPITAL EXPENDITURES (in thousands) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2003 2004
2003 2004 Maintenance $ 711 $ 854 $ 1,475 $ 1,419 EBITDA enhancing*
647 1,070 1,847 2,042 Corporate 258 679 348 2,628 Total capital
expenditures $ 1,616 $ 2,603 $ 3,670 $ 6,089 *EBITDA enhancing
capital expenditure generally represent tower improvements to
accommodate additional tenants or equipment. Tower portfolio
activity from December 31, 2003 through June 30, 2004 was as
follows: GLOBAL SIGNAL INC. TOWER PORTFOLIO ACTIVITY* (Unaudited)
Owned Managed Total As of December 21, 2003 2,457 819 3,276
Acquisitions 147 - 147 Dispositions (9) (54) (63) As of June 30,
2004 2,595 765 3,360 * Excludes 69 and 32 sites held for disposal
by sale at December 31, 2003 and June 30, 2004, respectively.
Contact: Gail Scalfaro Director of Investor Relations 941-308-5227
DATASOURCE: Global Signal Inc. CONTACT: Gail Scalfaro, Director of
Investor Relations, Global Signal Inc., +1-941-308-5227 Web site:
http://www.gsignal.com/
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