Stock Alert for FiberTower Corp. (FTWR)
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    Stock Report for FiberTower Corp. (FTWR)

    FiberTower Corp. (FTWR) 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, FTWR is an alternative carrier for wireless backhaul.  The Company also provides backhaul and access service to government and enterprise markets.

    Share Statistics (27-Jan-12)   FY

    2009

    FY

    2010

    %

    Chg

    Q2

    2010

    Q2

    2011

    %

    Chg

    Symbol FTWR Revenue, $Mn 63.24 76.12 20.4% 18.39 23.43 27.4%
    Current price $0.18 Gross marg. 7.9% 20.0% 153.2% 17.3% 18.9% 9.2%
    52wk Range: $0.15-$4.10 Oper. margin -47.3% -34.2%
    Avg Vol (3m): 1,641,500 Net margin -3.4% -64.9% 1808.8% -71.0% -49.1% -30.8%
    Market Cap. 8.82M              
    Shares Outstanding 46.44M EPS, $ -4.22 -0.98 -76.8% -0.26 -0.20 -23.1%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of FiberTower Corp. (FTWR) dropped as much as 18.00% Friday, extending two straight days of losses. The troubled telecommunications services company saw its shares plummet nearly 39% Thursday, a day after it announced the receipt of a delisting notification from the Nasdaq stock exchange.

    Shares of FTWR have dropped 53.7% in the last five days; 13.6% in the last month; and 95.3% year-to-date.

    Although the Company has the right to appeal the Nasdaq’s determination, it does not intend to do so. Accordingly, the Company’s common stock will be suspended at the opening of business on January 30, 2012, and Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission to remove the Company’s securities from listing and registration on the Nasdaq.

    Beginning January 30, 2012, the Company expects trading on the OTC Pink-Limited Information Tier, operated by OTC Markets Group, using the same stock symbol it has on the Nasdaq, FTWR.

    FTWR also last week said it has engaged a corporate restructuring consultant to assist the Company with identifying and evaluating financial and strategic alternatives.

    The stock lost $0.04, or 17.05%, to close at $0.18.  Over 6.40 million shares exchanged hands during the session, versus the 10-day average of 4.10 million shares.  Over the past 52 weeks, FTWR shares have traded between $0.15 and $4.10.  Market capitalization currently stands at 8.82 million and it has 46.44 million outstanding shares.

    Source: http://www.fibertower.com/corp/news-press-releases.php

    Financial Summary

    FTWR reported service revenues of $23.4 million for the second quarter 2011, an increase of $5.0 million, or 27%, compared to $18.4 million reported in the prior year period  During the quarter, the Company recorded $3.4 million of non-recurring revenue from the collection of early termination liabilities (ETL). Revenue excluding the ETL was $20.0 million, increasing 11% compared to the second quarter of 2010. This increase was primarily driven by selling additional capacity and Ethernet services.

    Operating expenses were $31.5 million in the second quarter, compared to $28.0 million in the second quarter of 2010.  Included in second quarter 2011 operating expenses is a $3.1 million impairment charge related to the write-off of excess equipment compared to a $0.9 million impairment charge in the second quarter of 2010. Excluding these charges, operating expenses increased primarily due to increases in cost of service revenues, including higher fiber service provider charges reflecting growth in Ethernet services and fiber network expansion and higher depreciation expense.

    The Company posted a net loss of $11.5 million for the second quarter 2011, compared to a net loss of $13.1 million for the comparable quarter last year.

    At June 30, 2011, FTWR’s consolidated cash and cash equivalents totaled $12.4 million, compared to $21.3 million at December 31, 2010.

    In late September, FTWR did not have a specific financial outlook as visibility on 2011 revenue and Adjusted EBITDA remains low amid volatility.  However, CFO Thomas Scott said the Company’s liquidity at quarter-end reflects both ETL collections and its conservation of cash, and FTWR continues to believe its cash position will be sufficient to cover its estimated liquidity needs at least through June 2012.

    Source: http://www.fibertower.com/corp/downloads/investors/11-08-04%20FTWR%20Q211%20Results%20Release%20Final.pdf

    Financial Strength (27-Jan-2012)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.51 1.41 0.66
    Current Ratio (MRQ) 2.39 1.64 1.54 1.03
    LT Debt to Equity (MRQ) 64.12 39.12 44.05 97.01
    Total Debt to Equity (MRQ) 64.40 48.78 53.82 136.12
    Interest Coverage (TTM) -1.77 0.02 0.12 27.53

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    FTWR is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    The MACD for FTWR currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jan-27-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    AT&T Inc. T 29.16 173.16B 12.00 11.22 1.35 1.34
    Verizon Communications Inc. VZ 37.25 105.68B 14.90 13.30 0.92 0.89
    Comcast Corp. CMCSA 26.35 71.94B 17.45 14.02 1.27 1.18
    Wireless Communications Median       12.91 n/a 0.92 n/a
    FiberTower Corp. FTWR 0.22 9.89M n/a n/a 0.14 0.13

    Source: Thomson Financial

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