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8-K - 8-K - BOINGO WIRELESS, INC.a12-26583_18k.htm

Exhibit 99.1

 

PRESS RELEASE

GRAPHIC

 

 

CONTACTS:

 

 

 

Christian Gunning

Vice President, Corporate Communications

cgunning@boingo.com

(310) 586-4009

Andrew Greenebaum / Laura Foster

Addo Communications

andrewg@addocommunications.com /

lauraf@addocommunications.com

(310) 829-5400

 

Boingo Wireless Reports Third Quarter 2012 Financial Results

 

LOS ANGELES — November 8, 2012 — Boingo Wireless, Inc. (NASDAQ: WIFI), the world’s leading Wi-Fi software and services provider, today announced the company’s financial results for the third quarter ended September 30, 2012.

 

Third Quarter 2012 Financial Highlights

 

Boingo Wireless reported revenue of $26.0 million, compared to $24.7 million for the third quarter of 2011, an increase of 5.4 percent.

 

Net income attributable to common stockholders was $2.8 million, or $0.07 per diluted share.  This is compared to net income attributable to common stockholders of $1.7 million, or $0.05 per diluted share, for the third quarter of 2011.

 

Adjusted EBITDA was $8.4 million, compared to $8.2 million for the third quarter of 2011, an increase of 2.5 percent.  Adjusted EBITDA, which is a non-GAAP financial measure, is defined below and reconciled to net income (loss), the most comparable measure under GAAP, in the section entitled “Use of non-GAAP financial measures.”

 

Management Commentary

 

“Boingo’s third quarter financial performance was in-line to ahead of our expectations and demonstrates continued progress against our strategic growth initiatives,” said David Hagan, President and Chief Executive Officer of Boingo Wireless. “Benefitting from the acquisition of Cloud Nine Media, we saw strong growth in sponsorship revenue during the quarter and are optimistic about the long-term prospects for this revenue stream.  At the same time, we expanded our network footprint to over 550,000 global hotspots, which include significant new roaming partnerships and M&O network additions.”

 

Mr. Hagan continued, “Core to our investment thesis is the continued exponential growth in mobile data and the opportunity this growth creates for carriers to offload traffic from their cellular networks onto our Wi-Fi network. As such, we are very pleased to announce that we signed a U.S. based tier 1 carrier to a global roaming contract subsequent to quarter-end.”

 

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Business Highlights

 

Key accomplishments include:

 

·                  An agreement with a U.S. based tier 1 carrier for global roaming.

·                  A partnership with the Competitive Carriers Association (CCA) to offer Wi-Fi offload solutions to CCA carrier members.

·                  An agreement with the City of Dallas to manage and operate Wi-Fi services throughout the Dallas Love Field Airport (DAL).

·                  An agreement to manage and operate Wi-Fi services at the three most highly-trafficked airports in Norway: Oslo Airport (OSL); Bergen Airport, Flesland (BGO); and Stavanger Airport, Sola (SVG).

·                  A bi-lateral agreement with Linktel Corporate, a leading Brazilian wireless service provider, for Boingo customers to access over 1,400 additional hotspots throughout Brazil.

·                  The introduction of an updated version of its Wi-Finder app for iOS to include a data tracker to help monitor usage, and a VPN for Macbook and Window users.

·                  Strong sponsorship activity included:

·                  Google Offers to expand its sponsorship of Boingo Wi-Fi from six New York subway stations and more than 200 Manhattan hotzones, to 24 additional locations across the country.

·                  Google Play to offer complimentary Boingo Wi-Fi access at more than 4,000 U.S. hotspots.

·                  A Microsoft offer for complimentary Boingo Wi-Fi access at high-traffic New York and San Francisco locations.

 

Business Outlook

 

Boingo Wireless is revising guidance for the full year ending December 31, 2012, as follows:

 

Full Year 2012

 

·                  Revenue is expected to be in the range of $101.0 million to $103.0 million.

·                 Adjusted EBITDA is expected to be in the range of $30.5 million to $32.5 million.

·                  Net income attributable to common stockholders is expected to be in the range of $7.5 million to $8.5 million, or $0.21 to $0.23 per diluted share.

 

Conference call information

 

Members of Boingo Wireless’ management will host a conference call to discuss its third quarter 2012 financial results beginning at 4:30 pm ET (1:30 pm PT), today, November 8, 2012. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-0789 ten minutes prior to the scheduled start time. International callers should dial (201) 689-8562. In addition, the call will be broadcast live over the Internet hosted on the Investor Relations section of the company’s website at http://investors.boingo.com and will be archived online upon completion of the conference call.

 

2



 

Use of non-GAAP financial measures

 

To supplement Boingo Wireless’ financial statements presented on a GAAP basis, Boingo Wireless provides Adjusted EBITDA as a supplemental measure of its performance.  The company defines Adjusted EBITDA as net income (loss) attributable to common stockholders plus depreciation, accretion of convertible preferred stock, income taxes, amortization of intangible assets, stock-based compensation expense, non-controlling interests expense and interest expense (income), net. Boingo Wireless believes Adjusted EBITDA is useful to investors in evaluating its operating performance. Boingo’s management uses Adjusted EBITDA in conjunction with accounting principles generally accepted in the United States, or GAAP, and operating performance measures as part of its overall assessment of the company’s performance for planning purposes, including the preparation of its annual operating budget, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance. Adjusted EBITDA should not be considered as an alternative financial measure to net (loss) income, which is the most directly comparable financial measure calculated in accordance with GAAP, or any other measure of financial performance calculated in accordance with GAAP.

 

About Boingo Wireless

 

Boingo Wireless, Inc. (NASDAQ: WIFI), the world’s leading Wi-Fi software and services provider, makes it easy, convenient and cost-effective for people to enjoy Wi-Fi access on their laptop or mobile device at more than 550,000 hotspots worldwide. With a single account, Boingo users and Boingo’s wholesale partners can access the mobile Internet via Boingo Network locations that include the top airports around the world, major hotel chains, cafés and coffee shops, restaurants, convention centers and metropolitan hot zones. Boingo, through its Concourse Communications Group subsidiary, operates Wi-Fi and/or Cellular DAS networks at large-scale venues worldwide such as airports, major sporting arenas, malls, and convention centers, as well as restaurants and retail establishments. The company’s Cloud Nine media platform enables brand advertisers to reach a captive audience through high engagement Wi-Fi sponsorships. For more information about Boingo, please visit http://www.boingo.com and http://cloudnine.com.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This press release contains “forward-looking statements” that involves risks, uncertainties and assumptions. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. These forward-looking statements include the quotations from management in this press release, as well as any statements regarding Boingo’s strategic plans and future guidance. Forward-looking statements are based on the company’s current expectations and assumptions regarding its business, the economy and other future conditions. Since forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, as well as other risk and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (“SEC”), including Boingo’s Form 10-K for the year ended December 31, 2011 filed with the SEC on April 13, 2012 and Form 10-Q for the quarter ended June 30, 2012 filed with the SEC on August 14, 2012.  Any forward-looking statement made by Boingo in this press release speaks only as of the date on which it is made. Factors or events that could cause the company’s actual results to differ may emerge from time to time, and it is not possible for Boingo to predict all of them. Boingo undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

 

Boingo, Boingo Wireless, the Boingo Wireless Logo and Don’t Just Go. Boingo. are registered trademarks of Boingo Wireless, Inc. All other trademarks are the properties of their respective owners.

 

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Boingo Wireless, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

26,017

 

$

24,688

 

$

74,506

 

$

68,659

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

Network access

 

10,061

 

9,647

 

29,577

 

27,153

 

Network operations

 

3,693

 

4,097

 

10,895

 

11,765

 

Development and technology

 

2,300

 

2,449

 

7,792

 

7,192

 

Selling and marketing

 

2,567

 

1,955

 

7,237

 

5,410

 

General and administrative

 

2,971

 

3,236

 

9,455

 

8,610

 

Amortization of intangible assets

 

296

 

323

 

778

 

1,392

 

Total costs and operating expenses

 

21,888

 

21,707

 

65,734

 

61,522

 

Income from operations

 

4,129

 

2,981

 

8,772

 

7,137

 

Interest and other (expense) income, net

 

33

 

13

 

170

 

(292

)

Income before income taxes

 

4,162

 

2,994

 

8,942

 

6,845

 

Income taxes

 

1,101

 

1,194

 

2,468

 

1,985

 

Net income

 

3,061

 

1,800

 

6,474

 

4,860

 

Net income attributable to non-controlling interests

 

284

 

138

 

579

 

420

 

Net income attributable to Boingo Wireless, Inc.

 

2,777

 

1,662

 

5,895

 

4,440

 

Accretion of convertible preferred stock

 

 

 

 

(1,633

)

Net income attributable to common stockholders, basic

 

$

2,777

 

$

1,662

 

$

5,895

 

$

2,807

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.05

 

$

0.17

 

$

0.13

 

Diluted

 

$

0.07

 

$

0.05

 

$

0.16

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in computing net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

Basic

 

35,080

 

33,139

 

34,618

 

20,865

 

Diluted

 

37,337

 

36,678

 

37,324

 

24,453

 

 

4



 

Boingo Wireless, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

 

September 30,

 

December 31,

 

 

 

2012

 

2011

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

57,350

 

$

93,933

 

Restricted cash

 

465

 

465

 

Marketable securities

 

37,219

 

 

Accounts receivable, net of allowances of $92 and $107, respectively

 

12,019

 

7,382

 

Prepaid expenses and other current assets

 

2,152

 

1,103

 

Deferred tax assets

 

2,088

 

2,366

 

Total current assets

 

111,293

 

105,249

 

Property and equipment, net

 

45,971

 

39,717

 

Goodwill

 

26,744

 

25,512

 

Other intangible assets, net

 

10,547

 

9,511

 

Deferred tax assets

 

4,781

 

4,083

 

Other assets

 

4,946

 

4,848

 

Total assets

 

$

204,282

 

$

188,920

 

 

 

 

 

 

 

Liabilities, convertible preferred stock and stockholders’ equity (deficit)

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

5,293

 

$

4,573

 

Accrued expenses and other liabilities

 

10,949

 

12,759

 

Deferred revenue

 

17,817

 

13,575

 

Current portion of capital leases

 

42

 

205

 

Total current liabilities

 

34,101

 

31,112

 

Deferred revenue, net of current portion

 

27,108

 

27,754

 

Long-term portion of capital leases

 

140

 

197

 

Other liabilities

 

307

 

778

 

Total liabilities

 

61,656

 

59,841

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

Preferred stock, $0.0001 par value, 5,000 shares authorized, no shares issued and outstanding

 

 

 

Common stock, $0.0001 par value; 100,000 shares authorized, 35,162 and 33,584 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

 

4

 

3

 

Additional paid in capital

 

178,372

 

170,721

 

Accumulated deficit

 

(35,947

)

(41,842

)

Total common stockholders’ equity

 

142,429

 

128,882

 

Non-controlling interests

 

197

 

197

 

Total stockholders’ equity

 

142,626

 

129,079

 

Total liabilities, convertible preferred stock and stockholders’ equity

 

$

204,282

 

$

188,920

 

 

5



 

Boingo Wireless, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2012

 

2011

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

6,474

 

$

4,860

 

Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization of property and equipment

 

11,672

 

8,894

 

Amortization of intangible assets

 

778

 

1,392

 

Stock-based compensation

 

2,163

 

2,275

 

Forgiveness of notes receivable from stockholder

 

 

103

 

Excess tax benefits from stock-based compensation

 

(1,531

)

 

Change in fair value of preferred stock warrants

 

 

140

 

Change in deferred income taxes

 

(420

)

(857

)

Changes in operating assets and liabilities, net of effect of acquisition:

 

 

 

 

 

Accounts receivable

 

(4,053

)

2,054

 

Unbilled receivables

 

671

 

(304

)

Prepaid expenses and other assets

 

1,767

 

54

 

Accounts payable

 

(821

)

55

 

Accrued expenses and other liabilities

 

(3,552

)

419

 

Deferred revenue

 

3,596

 

901

 

Net cash provided by operating activities

 

16,744

 

19,986

 

Cash flows from investing activities

 

 

 

 

 

Increase in restricted cash

 

 

(65

)

Purchase of marketable securities

 

(52,232

)

 

Sales of marketable securities

 

15,013

 

1,000

 

Purchases of property and equipment

 

(15,755

)

(13,154

)

Acquisition, net of cash acquired

 

(3,185

)

 

Contractual payments related to business acquisition

 

(14

)

(127

)

Net cash used in investing activities

 

(56,173

)

(12,346

)

Cash flows from financing activities

 

 

 

 

 

Excess tax benefits from stock-based compensation

 

1,531

 

 

Proceeds from exercise of stock options

 

2,124

 

602

 

Payments of capital leases

 

(189

)

(330

)

Payments to non-controlling interests

 

(620

)

(547

)

Proceeds from issuance of common stock upon initial public offering

 

 

48,297

 

Offering costs

 

 

(2,529

)

Net cash provided by financing activities

 

2,846

 

45,493

 

Net increase in cash and cash equivalents

 

(36,583

)

53,133

 

Cash and cash equivalents at beginning of period

 

93,933

 

25,721

 

Cash and cash equivalents at end of period

 

$

57,350

 

$

78,854

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Cash paid for taxes

 

650

 

$

1,194

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

Conversion of convertible preferred stock into common stock

 

 

124,602

 

Property and equipment and software maintenance costs in accounts payable, accrued expenses and other liabilities

 

4,129

 

2,247

 

Accretion of convertible preferred stock

 

 

1,633

 

Exercise and conversion of preferred stock warrants into common stock

 

 

272

 

 

6



 

Boingo Wireless, Inc.

Schedule of Non-GAAP Reconciliations

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Net income attributable to common Stockholders

 

$

2,777

 

$

1,662

 

$

5,895

 

$

2,807

 

Depreciation and amortization of Property and equipment

 

3,798

 

3,555

 

11,672

 

8,894

 

Accretion of convertible preferred stock

 

 

 

 

1,633

 

Income tax expense

 

1,101

 

1,194

 

2,468

 

1,985

 

Amortization of intangible assets

 

296

 

323

 

778

 

1,392

 

Stock-based compensation expense

 

218

 

1,374

 

2,163

 

2,275

 

Non-controlling interests

 

284

 

138

 

579

 

420

 

Interest expense (income), net

 

(33

)

(13

)

(170

)

292

 

Adjusted EBITDA

 

$

8,441

 

$

8,233

 

$

23,385

 

$

19,698

 

 

7