SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2004
SPECTRASITE, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
001-31769 56-2027322
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(Commission File Number) (I.R.S. Employer Identification Number)
100 REGENCY FOREST DRIVE
SUITE 400
CARY, NORTH CAROLINA 27511
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(Address of principal executive offices) (Zip Code)
(919) 468-0112
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(Registrant's telephone number, including area code)
ITEM 9. REGULATION FD DISCLOSURE.
As previously disclosed in Note 14 to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the period
ended December 31, 2003, certain previously reported quarterly financial data
has been restated from amounts previously reported to reflect the
reclassification of the Company's broadcast services division to discontinued
operations. Note 14 is repeated below. The Company is furnishing this
information pursuant to Regulation FD and encourages you to read the audited
financial statements and all of the accompanying footnotes in their entirety.
14. RESTATED SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The Company has set forth selected quarterly financial data for the eleven
months ended December 31, 2003, the one month ended January 31, 2003 and the
year ended December 31, 2002. Because certain of the data set forth in the
following tables has been restated from amounts previously reported on Form 10-Q
for the applicable period, the following tables and the accompanying footnotes
reconcile the amounts presented with those previously reported and describe the
reason for the differences.
The following table sets forth quarterly financial information for the
eleven months ended December 31, 2003 and the one month ended January 31, 2003
(dollars in thousands, except per share amounts):
PREDECESSOR COMPANY REORGANIZED COMPANY REORGANIZED COMPANY
ONE MONTH ENDED JANUARY 31, 2003 TWO MONTHS ENDED MARCH 31, 2003 THREE MONTHS ENDED JUNE 30, 2003
----------------------------------- ---------------------------------- -----------------------------------
PREVIOUSLY PREVIOUSLY PREVIOUSLY
REPORTED DISCONTINUED RESTATED REPORTED DISCONTINUED RESTATED REPORTED DISCONTINUED RESTATED
AMOUNTS OPERATIONS(3) AMOUNTS AMOUNTS(4) OPERATIONS(3) AMOUNTS AMOUNTS OPERATIONS(3) AMOUNTS
-------- ------------ -------- -------- ------------ -------- -------- ------------ --------
Revenue..........$ 26,793 $(1,167) $ 25,626 $ 54,644 $(3,536) $ 51,108 $ 80,911 $(3,345) $ 77,566
Operating income
(loss)(1)...... (3,894) 686 (3,208) 9,183 (38) 9,145 13,394 999 14,393
Other income
(expense)...... (493) -- (493) (1,229) -- (1,229) (1,841) -- (1,841)
Discontinued
operations..... -- (686) (686) -- 14 14 (596) (1,110) (1,706)
Net income
(loss)(2)...... 344,970 -- 344,970 (1,692) -- (1,692) (7,574) -- (7,574)
Net income (loss)
per common
share (basic)..$ 2.24 $ -- $ 2.24 $ (0.04) $ -- $ (0.04) $ (0.16) $ -- $ (0.16)
Net income (loss)
per common
share (diluted)$ 2.24 $ -- $ 2.24 $ (0.04) $ -- $ (0.04) $ (0.16) $ -- $ (0.16)
Adjusted EBITDA .$ 11,688 $ 541 $ 12,229 $ 24,780 $ (212) $ 24,568 $ 37,179 $ 732 $ 37,911
REORGANIZED COMPANY
THREE MONTHS ENDED SEPTEMBER 30, 2003 REORGANIZED
-------------------------------------- COMPANY
PREVIOUSLY ENDED
REPORTED DISCONTINUED RESTATED DECEMBER 31,
AMOUNTS OPERATIONS AMOUNTS 2003
-------- ------------ -------- ------------
Revenue.......... $ 83,860 $(4,361) $79,499 $ 81,572
Operating income
(loss)(1)...... 15,089 256 15,345 16,553
Other income
(expense)...... 1,134 -- 1,134 (823)
Discontinued
operations..... -- (248) (248) (17,620)
Net income
(loss)(2)...... 3,214 -- 3,214 (13,634)
Net income (loss)
per common
share (basic).. $ 0.07 $ -- $ 0.07 $ (0.29)
Net income
(loss) per
common share
(diluted)...... $ 0.06 $ -- $ 0.06 $ (0.29)
Adjusted EBITDA . $ 41,898 $ (26) $41,872 $ 41,524
-------------------------
(1) Represents revenues less operating expenses.
(2) Includes a charge in the one month ended January 31, 2003 of $12,236, or
$0.08 per share, for the cumulative effect of a change in accounting for
asset retirement obligations related to the adoption of SFAS 143.
(3) On December 16, 2003, the Company decided to sell its broadcast services
division. In accordance with SFAS 144, the financial results of this
division for the first nine months of 2003 have been reclassified to
discontinued operations to reflect the results of operations for broadcast
services as discontinued operations as of December 31, 2003. See Note 1 for
a more detailed discussion of the Company's discontinued operations. The
column titled "Discontinued Operations" reflects the amounts that have been
reclassified.
(4) On July 31, 2003, the Company's Board of Directors approved a two-for-one
forward stock split of Spectrasite, Inc.'s common stock, effected in the
form of common stock dividend to stockholders of record on August 14, 2003.
All share and per share information for the reorganized company has been
presented to reflect the stock split.
Adjusted EBITDA was calculated as follows for the 2003 restated periods
presented above:
REORGANIZED REORGANIZED
PREDECESSOR COMPANY REORGANIZED COMPANY REORGANIZED
COMPANY TWO COMPANY THREE COMPANY
ONE MONTH MONTHS THREE MONTHS MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED ENDED
JANUARY 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2003 2003 2003 2003 2003
----------- ----------- ------------ ------------- -------------
Net income (loss)................ $ 344,970 $ (1,692) $ (7,574) $ 3,214 $ (13,634)
Depreciation, amortization and
accretion expense.............. 15,930 16,652 25,359 25,393 25,794
Interest income.................. (137) (217) (279) (143) (177)
Interest expense................. 4,721 9,261 18,604 12,563 10,435
Gain on debt discharge........... (1,034,764) -- -- -- --
Income tax expense............... 5 578 95 597 1,486
Reorganization items:
Adjust accounts to fair
value....................... 644,688 -- -- -- --
Professional and other
fees........................ 23,894 -- -- -- --
Loss (income) from operations
of discontinued division,
net of income tax expense...... 686 (14) 1,110 248 643
Loss on disposal of
discontinued division, net
of income tax expense.......... -- -- 596 -- 16,977
Cumulative effect of change in
accounting principle........... 12,236 -- -- -- --
Adjusted EBITDA.................. $ 12,229 $ 24,568 $ 37,911 $ 41,872 $ 41,524
As discussed in Note 11, on February 10, 2003, the Company sold its rights
to 545 SBC towers to Cingular. In 2003, revenues and costs of operations,
excluding depreciation, amortization and accretion expense, related to the 545
towers, were as follows:
PREDECESSOR REORGANIZED
COMPANY COMPANY
ONE MONTH TWO-MONTHS
ENDED ENDED
JANUARY 31, MARCH 31,
2003 2003
----------- ---------
Revenues ..................................................... $1,202 $ 368
Cost of operations, excluding depreciation, amortization and
accretion expense .......................................... $ 465 $ 195
The following table sets forth quarterly financial information for the year
ended December 31, 2002 (dollars in thousands, except per share amounts):
PREDECESSOR COMPANY PREDECESSOR COMPANY PREDECESSOR COMPANY
THREE MONTH ENDED THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 2002 JUNE 30, 2002 SEPTEMBER 30, 2002
---------------------------------- ---------------------------------- ----------------------------------
PREVIOUSLY PREVIOUSLY PREVIOUSLY
REPORTED DISCONTINUED RESTATED REPORTED DISCONTINUED RESTATED REPORTED DISCONTINUED RESTATED
AMOUNTS OPERATIONS(3) AMOUNTS AMOUNTS OPERATIONS(3) AMOUNTS AMOUNTS OPERATIONS(3) AMOUNTS
-------- ------------ -------- -------- ------------ -------- -------- ------------ --------
Revenue............ $ 72,404 $(6,449) $ 65,955 $ 75,869 $(6,229) $ 69,640 $ 79,340 $(7,320) $ 72,020
Operating Income
(loss) before
restructuring
and non-recurring
charges(1)........ (18,629) 424 (18,205) (21,922) 100 (21,822) (16,167) (1,005) (17,172)
Restructuring and non-
recurring charges. -- -- -- (28,570) 1,176 (27,394) -- -- --
Other income
(expense)......... (387) 109 (278) (10,795) (119) (10,914) 1,997 121 2,118
Discontinued
operations........ 2,012 (525) 1,487 (4,797) (1,127) (5,924) (51,147) 846 (50,301)
Net loss(2)........ (452,531) -- (452,531) (127,568) -- (127,568) (134,592) -- (134,592)
Net loss per common
share (basic and
diluted).......... $ (2.95) $ -- $ (2.95) $ (0.83) $ -- $ (0.83) $ (0.87) $ -- $ (0.87)
Adjusted EBITDA.... $ 25,622 $ 62 $ 25,684 $ (10,662) $ 717 $ (9,945) $ 34,488 $(1,298) $ 33,190
PREDECESSOR COMPANY
THREE MONTHS ENDED
DECEMBER 31, 2002
----------------------------------
PREVIOUSLY
REPORTED DISCONTINUED RESTATED
AMOUNTS OPERATIONS AMOUNTS
-------- ------------ --------
Revenue............ $ 81,721 $(6,811) $ 74,910
Operating Income
(loss) before
restructuring
and non-recurring
charges(1)........ (11,619) (185) (11,804)
Restructuring and non-
recurring charges. -- -- --
Other income
(expense)......... (1,744) (2) (1,746)
Discontinued
operations......... (5,320) 385 (4,935)
Net loss(2)........ (60,293) -- (60,293)
Net loss per common
share (basic and
diluted)........... $ (0.39) $ -- $ (0.39)
Adjusted EBITDA.... $ 32,652 $ (622) $ 32,030
------------------------
(1) Represents revenues less operating expenses excluding restructuring and
non-recurring charges.
(2) Includes a charge in the quarter ended March 31, 2002 of $376,753, or $2.45
per share, for the cumulative effect of a change in accounting for goodwill
related to the adoption of SFAS 142.
(3) On December 16, 2003, the Company decided to sell its broadcast services
division. In accordance with SFAS 144, the financial results of this
division for 2002 have been reclassified to discontinued operations to
reflect the results of operations for broadcast services as discontinued
operations as of December 31, 2002. See Note 1 for a more detailed
discussion of the Company's discontinued operations. The column titled
"Discontinued Operations" reflects the amounts that have been reclassified.
Adjusted EBITDA was calculated as follows for the 2002 restated periods
presented above:
PREDECESSOR
PREDECESSOR PREDECESSOR COMPANY PREDECESSOR
COMPANY COMPANY THREE COMPANY
THREE MONTHS THREE MONTHS MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2002 2002 2002 2002
--------- -------- ------------- ------------
Net income (loss)....................................... $ (452,531) $(127,568) $(134,592) $ (60,293)
Depreciation, amortization and accretion expense........ 44,167 50,185 48,244 45,580
Interest income......................................... (84) (293) (148) (330)
Interest expense........................................ 58,697 61,795 67,018 39,026
Reorganization expense.................................. -- -- 1,854 2,475
Income tax expense...................................... 169 12 513 637
Loss (income) from operations of
discontinued division, net of income tax expense...... (1,487) 5,924 4,674 3,578
Loss on disposal of discontinued
division, net of income tax expense................... -- -- 45,627 1,357
Cumulative effect of change in accounting principle..... 376,753 -- -- --
---------- --------- --------- ---------
Adjusted EBITDA......................................... $ 25,684 $ (9,945) $ 33,190 $ 32,030
========== ========= ========= =========
As discussed in Note 11, on February 10, 2003, the Company sold its rights
to 545 SBC towers to Cingular. In 2002, revenues and costs of operations,
excluding depreciation, amortization and accretion expense, related to the 545
towers, were as follows:
PREDECESSOR
PREDECESSOR PREDECESSOR COMPANY PREDECESSOR
COMPANY COMPANY THREE COMPANY
THREE MONTHS THREE MONTHS MONTHS THREE MONTHS
ENDED ENDED ENDED ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2002 2002 2002 2002
--------- -------- ------------- ------------
Revenues..............................................$ 2,646 $ 2,707 $ 2,770 $ 4,928
Cost of operations, excluding depreciation,
amortization and accretion expense.................$ 1,496 $ 1,410 $ 1,433 $ 1,499
ADJUSTED EBITDA
Adjusted EBITDA consists of net income (loss) before depreciation,
amortization and accretion, interest, income tax expense (benefit) and, if
applicable, before discontinued operations and cumulative effect of change in
accounting principle. For the periods prior to January 31, 2003, Adjusted EBITDA
also excludes gain on debt discharge, reorganization items, and writeoffs of
investments in and loans to affiliates. We use a different definition of
Adjusted EBITDA for the fiscal periods prior to our reorganization to enable
investors to view our operating performance on a consistent basis before the
impact of the items discussed above on the predecessor company. Each of these
historical items was incurred prior to, or in connection with, our bankruptcy
and is excluded from Adjusted EBITDA to reflect, as accurately as possible, the
results of our core operations. Management does not expect any of these items to
have a material financial impact on our operations on a going-forward basis
because none of these pre-reorganization items is expected to occur in the
foreseeable future.
Adjusted EBITDA may not be comparable to a similarly titled measure
employed by other companies and 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:
o it is the primary measure 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 revenue
under our long-term contracts, our ability to obtain and
maintain our customers and our ability to operate our leasing
and licensing business effectively;
o 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
o 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:
o 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;
o in presentations to our Board of Directors to enable it to
have the same measurement of operating performance used by
management;
o for planning purposes, including the preparation of our annual
operating budget;
o for compensation purposes, including the basis for incentive
quarterly and annual bonuses for certain employees, including
our sales force;
o as a valuation measure in strategic analyses in connection
with the purchase and sale of assets; and
o with respect to compliance with our credit facility, which
requires us to maintain certain financial ratios based on
Annualized EBITDA (as defined in our credit agreement).
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. Management compensates for these limitations by considering the
economic effect of the excluded expense items independently as well as in
connection with its 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 GAAP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
SPECTRASITE, INC.
By: /s/ Steven C. Lilly
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Steven C. Lilly
Vice President of Finance and Treasurer
Dated: February 25, 2004