FiberTower Reports 2007 Fourth Quarter and Full-Year Results

SAN FRANCISCO, March 13 /PRNewswire-FirstCall/ -- FiberTower Corporation
(Nasdaq: FTWR), a wireless backhaul services provider, today reported results
for the fourth quarter and year ended December 31, 2007.
Positive developments during the fourth quarter of 2007 included the
following:
-- Billing T-1s grew by 18% to 14,201 in the fourth quarter from 12,030
at the end of the third quarter of 2007. Billing T-1s grew by 107%
year-over-year.
-- Billing sites grew 8% to 2,148 in the fourth quarter from 1,991 at the
end of the third quarter of 2007. Billing sites grew by 62%
year-over-year.
-- Billing customer locations grew 18% to 3,851 from 3,252 at the end of
the third quarter of 2007. Billing customer locations grew by 113%
year-over-year.
-- T-1s per billing site increased from 6.04 at September 30, 2007 to
6.61 at December 31, 2007.
-- FiberTower's customer location backlog grew 74% to 3,511 from 2,020 at
the end of the second quarter of 2007. Customer backlog grew by 120%
year-over-year.

Thomas Scott, Chief Financial Officer and Co-President of FiberTower,
said, "We are pleased with our 2007 results as they reflected steady progress
towards our objective of growing the business by converting customer backlog
into revenue generating assets while maintaining our cash liquidity. Our
quarterly and full year results demonstrated ongoing operational improvements
at both the market and site level."
Ravi Potharlanka, FiberTower's Chief Operating Officer and Co-President,
added, "We are pleased to announce the highest quarterly increase in Billing
T-1s in our history, and expect greater demand in 2008 driven by increases in
mobile broadband usage and new deployment activity from several wireless
carriers. FiberTower is well positioned to benefit from these industry trends
and maintain its position as the leading alternative provider of backhaul
services."
FiberTower continued to focus on penetrating its existing markets and
sites during the fourth quarter highlighting the commitment to site density
and efficiency. The Company's billing collocation rate grew to 1.79 billing
locations per billing site at December 31, 2007 compared to 1.63 at September
30, 2007, reflecting an increased ability to convert available customer
locations on already constructed sites. Additionally, T-1s per Top 100 Sites
increased from 18.4 at September 30, 2007 to 21.3 at December 31, 2007 and
T-1s per Top 200 Sites increased from 15.5 at September 30, 2007 to 18.1 at
December 31, 2007. The growing maturity of the Company's sites and markets
was further evidenced by the average number of T-1s per Top 500 Sites, which
grew from 8.4 at the end of 2006 to 13.4 at the end of 2007.
2007 Fourth Quarter Consolidated Results
Service revenues for the three months ended December 31, 2007 increased
$1.0 million, or 14%, to $8.3 million compared to $7.3 million for the third
quarter of 2007. The increase in service revenues during the fourth quarter
of 2007 was driven by multiple positive trends including the addition of new
billing customer locations at already constructed sites and the continued
expansion in new sites billing.
Operating expenses in the fourth quarter of 2007 increased by
$37.5 million from the third quarter of 2007. Net loss was $129.1 million for
the fourth quarter ended December 31, 2007 compared to a net loss of
$90.6 million in the third quarter of 2007. Net loss for the fourth quarter
included non-cash impairment charges totaling $99.5 million. This was
comprised of a charge to goodwill of $86.5 million and a charge to property
and equipment of $13.0 million. The charge to property and equipment resulted
from an in-depth analysis on the net realizable value of property and
equipment that was concluded in the fourth quarter. The net loss per share
for the fourth quarter of 2007 was $0.90 compared to a net loss per share of
$0.63 for the third quarter of 2007.
On an Adjusted EBITDA basis, the loss in the fourth quarter of 2007 was
$14.2 million versus a loss of $12.3 million for the third quarter of 2007.
Adjusted EBITDA is defined as net income (loss) from operations before
interest, taxes, depreciation and amortization, impairment charges,
stock-based compensation and other income (expense). The reconciliation of
Adjusted EBITDA, which is a non-GAAP financial measure, is located at the end
of this news release.
Fiscal Year 2007 Consolidated Results
Service revenues for the full year 2007 increased $13.4 million or 97%, to
$27.1 million as compared to $13.8 million for the same period in 2006. The
increase in service revenues during the year was driven by ongoing trends
including greater penetration in existing markets resulting in new customers
on existing sites, increased T-1s per site and continued expansion in sites
billing.
Operating expenses for the full year 2007 increased by $202.9 million from
the same period in 2006. Net loss was $272.1 million for the full year 2007
compared to a net loss of $57.3 million for the same period in 2006. The
sequential increase in operating expenses and net loss included goodwill
impairment charges of $147.9 million and cost of service non-cash impairment
charges of $17.6 million recorded in the third and fourth quarters of 2007.
The net loss per share for the full year 2007 was $1.90 compared to a net loss
per share of $1.11 for the same period in 2006.
On an Adjusted EBITDA basis, the loss in full year 2007 was $52.8 million
versus a loss of $40.3 million for the same period in 2006. Adjusted EBITDA
is defined as net income (loss) from operations before interest, taxes,
depreciation and amortization, impairment charges, stock-based compensation
and other income (expense). The reconciliation of Adjusted EBITDA, which is a
non-GAAP financial measure, is located at the end of this news release.
Liquidity and Capital Resources
Capital expenditures totaled $25.4 million in the fourth quarter ended
December 31, 2007 as compared to $31.9 million in the third quarter. The bulk
of capital investments made in the fourth quarter of 2007 were used by
FiberTower towards the continued build-out of existing markets, the deployment
of Sprint 4G backhaul locations in select markets, and additional deployments
in Atlanta. For the full year 2007, capital expenditures totaled $105.3
million compared to $94.7 million for the same period in 2006.
"Maintaining our cash liquidity remains a significant priority for us,"
said Thomas Scott. "We believe that our current cash position is sufficient
to support our continued growth. Additionally, we now have greater flexibility
in managing our capital spend through the deployment of a collocation-based
strategy, which we expect to facilitate our goal of reaching field EBITDA
positive across our markets by mid-2008. We also have the ability to reduce
overall capital expenditures as market conditions warrant."
Consolidated cash, cash equivalents and certificates of deposits at
December 31, 2007 were $228.3 million.
Conference Call Details
FiberTower has scheduled a conference call for Friday, March 14, 2008 at
9:00 a.m. Eastern Time to discuss 2007 fourth quarter and full year results.
Please dial 303-262-2139 and ask for the FiberTower call at least 10 minutes
prior to the start time. A telephonic replay of the call will be available
through 11:59 p.m. Eastern Time on March 21, 2008 and may be accessed by
dialing 303-590-3000 using the passcode 11109858#. An audio archive will also
be available on FiberTower's website at www.fibertower.com shortly
after the call and will be accessible for approximately ninety days.
About FiberTower
FiberTower is a backhaul and access services provider focused primarily on
the wireless carrier market. With its extensive spectrum footprint in 24 GHz
and 39 GHz bands, carrier-class microwave and fiber networks in 13 major
markets, customer commitments from six of the leading cellular carriers, and
partnerships with the largest tower operators in the U.S., FiberTower is
considered to be the leading alternative carrier for wireless backhaul.
FiberTower also provides backhaul and access service to government and
enterprise markets. For more information, please visit our website at
www.fibertower.com.
Use of Non-GAAP Financial Measures
This press release uses the Non-GAAP financial measure "Adjusted EBITDA."
Adjusted EBITDA is a financial measure used by the Company to monitor the
financial performance of its operations. This measurement, together with GAAP
measures such as revenue and income from operations, assists management in
decision-making processes relating to the operation of our business. In
addition, FiberTower's presentation of Adjusted EBITDA may not be comparable
to similarly titled measures reported by other companies. These Non-GAAP
financial measures should be viewed in addition to, and not as an alternative
for, the Company's reported financial results as determined in accordance with
GAAP.
Forward-Looking Statements
Statements included in this news release which are not historical in
nature are "forward-looking statements" within the meaning of Section 21E of
the U.S. Securities Exchange Act of 1934 and the U.S. Private Securities
Litigation Reform Act of 1995. Forward looking statements relate to
expectations, beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that are not
historical facts. These include, without limitation, statements regarding the
Company's planned capital expenditures, expected cost per site, anticipated
customer growth and expansion plans. There are many risks, uncertainties and
other factors that can prevent the achievement of goals or cause results to
differ materially from those expressed or implied by these forward-looking
statements including, without limitation, difficulties in integrating our
companies after our merger in 2006, anticipated negative cash flows and
operating losses, additional liquidity requirements, potential loss of
significant customers, downturns in the wireless communication industry,
regulatory costs and restrictions, potential loss of FCC licenses, equipment
supply disruptions and cost increases, and competition from alternative
backhaul service providers and technologies, along with those risk factors
described in the Company's filings with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
Investor Contact:
Gus Okwu / DRG&E
404-532-0086
gokwu@drg-e.com

Company Contact:
Ornella Napolitano, VP and Treasurer
FiberTower Corporation
202-251-5210
onapolitano@fibertower.com

Key Operating Metrics 4Q06 1Q07 2Q07 3Q07 4Q07

Billing Sites
Billing Sites Added 355 254 265 143 157
Ending Billing Sites 1,329 1,583 1,848 1,991 2,148
Billing Sites / Sites
Deployed 67% 70% 75% 75% 76%

Billing Customer
Locations
Billing Customer
Locations Added 470 402 613 433 599
Ending Billing Customer
Locations 1,804 2,206 2,819 3,252 3,851
Colo rate 1.36 1.39 1.53 1.63 1.79

Billing T-1 Equivalents
Billing T-1 Equiv. Added 1,713 1,454 1,884 1,823 2,171
Ending Billing T-1
Equivalents 6,869 8,323 10,207 12,030 14,201
T-1s per Customer
Location 3.81 3.77 3.62 3.70 3.69
T-1s/Billing Sites 5.17 5.26 5.52 6.04 6.61
T-1s per site/Top 100
Sites 12.7 13.2 14.2 18.4 21.3
T-1s per site/Top 200
Sites 10.7 11.3 12.2 15.5 18.1
Average MRC per T-1 $239 $234 $229 $218 $215

Sites Deployed
FiberTower Sites
Constructed 228 276 193 190 158
Ending Sites Deployed 1,996 2,272 2,465 2,655 2,813

Backlog
Customer Location
Backlog** 1,594 2,020 3,511

Billing Sites are the number of installed sites from which we currently
provide T1(s) to customer(s)
Customer Locations Billing are carrier locations at which we currently
provide T1(s). FiberTower sites could have multiple customer locations.
Colo rate is the number of customer locations per billing site
Billing T1 Equivalent: A T1 equivalent is either a T1 or another increment
of bandwidth of approximately 1.54 megabits per second
Average MRC per T-1 is the average monthly recurring revenue per T-1
Sites Deployed represents the number of sites installed and ready for
provision of services. FiberTower sites can be located at cell towers or on
rooftop locations.
Customer Location Backlog is the number of sold customer locations not yet
billing. (**Note that FiberTower reports backlog on a semi-annual basis)

FIBERTOWER CORPORATION
Consolidated Statements of Operations
(In thousands, except per share data)

(Unaudited)

Year Ended December 31,
2007 2006 2005
Service revenues $27,144 $13,763 $6,224
Operating expenses:
Cost of service revenues (excluding
depreciation and amortization) 54,197 35,952 19,118
Cost of service revenues - Impairment
of long-lived assets and other charges 17,551 589 106
Sales and marketing 7,906 6,479 3,822
General and administrative 27,026 18,038 4,444
Depreciation and amortization 18,459 9,077 3,096
Impairment of goodwill 147,893 - -
Total operating expenses 273,032 70,135 30,586
Loss from operations (245,888) (56,372) (24,362)
Other income (expense):
Interest income 18,159 6,326 2,683
Interest expense (44,887) (7,680) (223)
Miscellaneous income (expense), net 469 448 (7)
Total other income (expense), net (26,259) (906) 2,453

Net loss $(272,147) $(57,278) $(21,909)

Basic and diluted net loss per share $(1.90) $(1.11) $(4.92)

Weighted average number of shares used
in per share amounts:
Basic and diluted 143,049 51,542 4,457

FIBERTOWER CORPORATION
Consolidated Balance Sheets
(In thousands, except par value)

(Unaudited)
December 31, December 31,
2007 2006
Assets:
Current assets:
Cash and cash equivalents $223,330 $345,174
Certificates of deposit 5,000 5,000
Short-term investments - 15,253
Restricted cash and investments,
current portion 35,757 35,616
Accounts receivable, net of allowances
of $151 and $161 at December 31, 2007
and 2006, respectively 3,684 2,904
Prepaid expenses and other current
assets 1,840 2,624
Total current assets 269,611 406,571
Restricted cash and investments 1,222 34,906
Property and equipment, net 240,799 171,612
FCC licenses 342,000 342,000
Goodwill 86,093 243,388
Debt issuance costs, net 11,855 14,009
Intangible and other long-term assets, net 3,975 3,992
Total assets $955,555 $1,216,478

Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $13,672 $18,039
Accrued compensation and related
benefits 3,369 4,246
Accrued interest payable 4,629 5,333
Other accrued liabilities 3,555 3,528
Total current liabilities 25,225 31,146
Other liabilities 487 1,020
Deferred rent 4,223 1,648
Asset retirement obligations 3,311 2,119
Convertible senior secured notes 415,778 403,759
Deferred tax liability 93,561 102,964
Total liabilities 542,585 542,656
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 400,000
shares authorized, 146,242 and 144,971
shares issued and outstanding at
December 31, 2007 and 2006, respectively 146 145
Additional paid-in capital 787,371 776,077
Accumulated deficit (374,547) (102,400)
Total stockholders' equity 412,970 673,822
Total liabilities and stockholders'
equity $955,555 $1,216,478

FIBERTOWER CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended December 31,
2007 2006 2005
Operating activities
Net loss $(272,147) $(57,278)$(21,909)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 18,459 9,077 3,096
Decline in value of embedded derivative (634) (483) -
Accretion of convertible notes 12,653 1,742 -
Accretion of investments in debt securities (1,791) (480) -
Accretion of asset retirement obligations 327 205 65
Amortization of debt issuance costs 2,154 300 -
Stock-based compensation 9,150 6,402 234
Loss on disposal of equipment 746 116 5
Impairment and other charges on long-lived
assets 17,551 589 106
Impairment of goodwill 147,893 - -
Net changes in operating assets and
liabilities (excluding impact of business
acquisition):
Accounts receivable, net (781) (1,999) (495)
Prepaid expenses and other current assets 783 (651) (651)
Other long-term assets (284) (703) (158)
Accounts payable (4,367) (2,628) 11,661
Accrued compensation and related benefits (877) 1,507 1,151
Accrued interest payable (704) 5,333 -
Other accrued liabilities and deferred
rent 2,935 2,630 1,243
Net cash used in operating activities (68,934) (36,321) (5,652)
Investing activities
Cash and cash equivalents acquired in
merger, net of merger-related costs - 36,732 -
Maturities of certificates of deposit - 15,327 -
Purchases of short-term investments (75,603) (15,253) -
Maturities of short-term investments 91,191 - -
Maturities of restricted cash and
investments 35,000 2,052 170
Purchase of restricted securities - (68,479) -
Purchase of property and equipment (105,267) (94,670) (53,077)
Net cash used in investing activities (54,679) (124,291) (52,907)
Financing activities
Proceeds from issuance of convertible notes,
net - 388,190 -
Proceeds from issuance of convertible
preferred stock, net - - 149,828
Proceeds from exercise of stock options 1,769 660 47
Repayment (issuance) of notes receivable
from stockholders - 4,000 (4,000)
Cash provided by financing activities 1,769 392,850 145,875

Net increase (decrease) in cash and cash
equivalents (119,911) 232,238 87,316

Cash and cash equivalents at beginning of
year 345,174 112,936 25,620

Cash and cash equivalents at end of year
$225,263 $345,174 $112,936
Supplemental Disclosures
Cash paid for interest $36,872 $109 $-
Noncash investing and financing activities:
Fair value of First Avenue Networks'
common stock at date of merger $- $520,160 $-
Fair value of First Avenue Networks'
common stock options and
warrants assumed at date of merger $- $27,501 $-
Conversion of convertible preferred stock
to common stock $- $220,675 $-

Reconciliation of Non-GAAP Financial Measures:
This press release includes the use of a financial measure -- Adjusted
EBITDA -- that is a non-GAAP financial measure management uses to monitor the
financial performance of the Company. This measurement, together with GAAP
measures such as revenue and income from operations, assists management in its
decision-making processes relating to the operations of the Company's
business. Adjusted EBITDA is defined as net income (loss) from operations
before interest, taxes, depreciation and amortization, impairment charges,
stock-based compensation and other income (expense). Adjusted EBITDA is not a
substitute for operating income, net income (loss), or cash flow from
operating activities as determined in accordance with GAAP, as a measure of
performance or liquidity. In addition, the Company's presentation of Adjusted
EBITDA may not be comparable to similarly titled measures reported by other
companies. These non-GAAP financial measures should be viewed in addition to
-- and not as an alternative for -- the Company's reported financial results
as determined in accordance with GAAP. The non-GAAP financial measure is
presented for additional information and is reconciled to its most comparable
GAAP measure below.

Three Months Ended Three Months Ended
12/31/07 9/30/07
Net Loss $(129,069) $(90,639)
Depreciation & Amortization 5,097 4,987
Stock Based Compensation 2,814 2,002
Interest Income (3,403) (4,707)
Interest Expense 10,975 10,118
Impairment of Goodwill 86,486 61,407
Impairment of Long-Lived
Assets & Other Charges 13,050 4,501
Miscellaneous (Income)
Expense, Net (189) 66
Adjusted EBITDA $(14,239) $(12,265)

Twelve Months Ended Twelve Months Ended
12/31/07 12/31/06
Net Loss $(272,147) $(57,278)
Depreciation & Amortization 18,459 9,077
Stock Based Compensation 9,150 6,402
Interest Income (18,159) (6,326)
Interest Expense 44,887 7,680
Impairment of Goodwill 147,893 -
Impairment Long-Lived Assets
& Other Charges 17,551 589
Miscellaneous (Income)
Expense, Net (469) (448)
Adjusted EBITDA $(52,835) $(40,304)

SOURCE FiberTower Corporation

Gus Okwu of DRG&E, +1-404-532-0086, gokwu@drg-e.com, for FiberTower
Corporation; or Ornella Napolitano, VP and Treasurer of FiberTower
Corporation, +1-202-251-5210, onapolitano@fibertower.com