SAN FRANCISCO, Nov. 16, 2011 /PRNewswire/ -- FiberTower
Corporation (NASDAQ: FTWR), a wireless backhaul services provider,
made several announcements today.
Missed Interest Payment
FiberTower announced that it had elected not to make the
$1.3 million semi-annual interest
payment due on November 15, 2011,
with respect to its 9.00% Convertible Senior Secured Notes Due 2012
(CUSIP Nos. 31567RAA8 and 31567RAC4) (the "2012 Notes"). The
indenture governing the 2012 Notes provides that the failure to
make such payment constitutes an event of default after a 30-day
cure period. This missed interest payment will not trigger
any significant cross-default provisions associated with other
outstanding FiberTower debt prior to the expiration of the cure
period. During such cure period, FiberTower will continue to
evaluate different options to manage its debt load.
Director Resignations
Additionally, on November 14,
2011, the Company's Chairman of the Board, John Kelly and another Board member,
Phil Kelley, resigned from the
Company's board of directors; on November
15, 2011, another director, Randall
Hack, resigned from the Company's board of directors.
These resignations were effective immediately and were not
the result of a disagreement with FiberTower on any matter relating
to FiberTower's operations, policies or practices.
Impairment Charges
FiberTower has also determined that material impairment charges
relating to its long-lived assets and FCC licenses will be required
under generally accepted accounting principles ("GAAP") as a result
of events occurring in the quarter ended September 30, 2011.
As a result of continued customer early service terminations
experienced in the quarter ended September 30, 2011, the
Company's decisions to limit investment in its legacy network, and
the Company's estimates of future cash flows expected to be
generated by its network as compared to its carrying value,
FiberTower determined that its network equipment and
construction-in-progress were impaired. Accordingly, during
the third quarter of 2011, FiberTower conducted an evaluation to
quantify the level of impairment. Although the Company has
not been able to finalize the quantification of the impairment
charges relating to its network equipment and
construction-in-progress, the Company estimates the impairment
charges for these assets in order to reduce network equipment and
construction-in-progress to their fair value and as calculated in
accordance with GAAP, to be in the range of $150 to $170 million in the third quarter of
2011.
At December 31, 2010, and through
June 30, 2011, FiberTower's FCC
Licenses had a carrying value of $287.5
million. Changing patterns in customer demand that
contributed to the early contract terminations discussed above
indicated the potential for changes in the manner in which the
Company's FCC license spectrum can be favorably deployed.
Accordingly, during the third quarter of 2011, FiberTower
conducted an assessment of the fair value of its FCC licenses and
concluded that the fair value of its FCC licenses was less than its
carrying value. Although the Company has not been able to
finalize the quantification of the impairment charges relating to
its FCC licenses, the Company estimates the impairment charges for
these assets, as calculated in accordance with GAAP, to be in the
range of $158 to $170 million in the
third quarter of 2011, which would reduce the carrying value of the
Company's FCC licenses to somewhere in the range of $87 to $129 million at September 30, 2011.
Inability to File 10-Q
As previously announced, FiberTower filed a Notification of Late
Filing, or Form 12b-25, with the Securities and Exchange Commission
with regard to its third quarter 2011 Form 10-Q report. This
allowed the Company an additional five calendar days to file the
Form 10-Q, which was otherwise due on November 9, 2011, and which expired on
November 14, 2011. The Company
continues to be unable to file its Form 10-Q for the quarter ended
September 30, 2011, as a result of
its inability to quantify the impairment charges discussed
above.
Notice from Nasdaq
FiberTower also announced that it received a letter from the
Nasdaq Stock Market (Nasdaq) on November 15,
2011 stating that it failed to timely file its quarterly
report on Form 10-Q for the period ended September 30, 2011, and as a result, no longer
complies with the rules required for continued listing on Nasdaq
under Nasdaq Listing Rule 5250(c)(1). FiberTower was provided
with an initial period of 60 calendar days during which to submit a
plan to regain compliance, and if Nasdaq accepts FiberTower's plan,
they may grant an extension of 180 calendar days, during which
FiberTower can regain compliance. If FiberTower does not regain
compliance, the Nasdaq staff will provide written notice that
FiberTower's common stock is subject to delisting.
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 fiber
and microwave networks in 13 major markets and master service
agreements with nine U.S. wireless carriers, FiberTower is an
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.
Forward-Looking Statements
This news release includes "forward-looking'" statements, as
that term is defined in the Private Securities Litigation Reform
Act of 1995 or by the Securities and Exchange Commission, or SEC,
in its rules, regulations and releases. 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 statements regarding, among other things, our
future financial performance and results of operations including
our financial and business prospects, the determination of asset
impairment charges for the quarterly period ended September 30, 2011, our ability to file our third
quarter report on Form 10-Q for the period ended September 30, 2011 in a timely fashion, the
deployment of our services, capital requirements, financing
prospects, planned capital expenditures, anticipated customer
growth, expansion plans, and anticipated cash balances.
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. These include, among other things, negative cash flows
and operating and net 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, competition from alternative backhaul service
providers and technologies, along with those risk factors described
in the company's Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q, as filed with the SEC.
SOURCE FiberTower Corporation