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SBA Communications Corp. (SBAC)
Q2 FY08 Earnings Call
August 4, 2008, 10:00 AM ET
Pamela J. Kline - VP of Capital Markets
Anthony J. Macaione - Sr. VP and CFO
Kurt L. Bagwell - Sr. VP and COO
Jeffrey A. Stoops - President and CEO
Jonathan Atkin - RBC Capital Markets
Ric Prentis - Raymond James & Associates, Inc.
Simon Flannery - Morgan Stanley
Jason Armstrong - Goldman Sachs
Clayton Moran - Stanford Financial
Brett Feldman - Lehman Brothers
Brad Korch - Credit Suisse
Gray Powell - Wachovia
Jonathan Schildkraut - Jeffries & Company, Inc.
Previous Statements by SBAC
» SBA Communications Q1 2009 Earnings Call Transcript
» SBA Communications Corporation Q4 2008 Earnings Call Transcript
» SBA Communications Corporation Q3 2008 Earnings Call Transcript
I will now to turn the conference over to Pam Kline, Vice President, Capital Markets. Please go ahead.
Pamela J. Kline - Vice President of Capital Markets
Thank you for joining us this morning for SBA's second quarter 2008 earnings conference call. Here with me today are Jeff Stoops, our President and Chief Executive Officer; Kurt Bagwell, our Chief Operating Officer; and Tony Macaione, our Chief Financial Officer.
Before we get started, I need to get the standard SEC disclosure out. Some of the information we will discuss on this call is forward-looking, including but not limited to any guidance for 2008 and beyond. These forward-looking statements may be affected by the risks and uncertainties in our business. Everything we say here today is qualified in its entirety by cautionary statements and risk factors set forth in this morning's press release and our SEC filings, particularly those set forth in our Form 10-K for the fiscal year ended December 31, 2007, and our quarterly reports on Form 10-Q, which documents are publicly available.
These factors and others have affected historical results, may affect future results, and may cause future results to differ materially from those expressed in any forward-looking statement we may make. Our statements are as of today, August 04, 2008, and we have no obligation to update any forward-looking statement we may make.
Our comments will include non-GAAP financial measures as defined in Regulation G. The reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and other information required by Regulation G, have been posted on our website, www.sbasite.com.
Anthony J. Macaione - Senior Vice President and Chief Financial Officer
Thanks Pam and good morning everyone. As you saw from our press release this morning, our second quarter financial results were excellent and we were near or above the high end of our guidance for site leasing revenues, tower cash flow, adjusted EBITDA and equity free cash flow.
Total revenues were $112 million, up 11.6% over the year-earlier period. Site leasing revenues for the second quarter were $93.7 million or 17.8% increase over the second quarter 2007. This site leasing revenue growth was driven by both organic growth and acquisitions. Site leasing segment operating profit was $71.1 million. Site leasing contributed 98% of total segment operating profit in the second quarter.
Tower cash flow for the second quarter 2008, was $71.8 million or 23.8% increase over the year-earlier period. Tower cash flow margin was 78.1%, up 310 basis points over the year-earlier period and 60 basis points over the first quarter of 2008.
Our services revenue was $18.2 million compared to $20.7 million in the year-earlier period or a 12.2% decrease. Services segment operating profit was $1.4 million in the second quarter of 2008 and $2.7 million in the second quarter of 2007. Services segment operating profit margins were 7.9% in the second quarter, compared to 13% in year-earlier period. Kurt will discuss services in more details, shortly.
Our SG&A expenses for the second quarter were $12.5 million, including non-cash compensation charges of $2.4 million. This compares to SG&A expense of $11.6 million in the year-earlier period including non-cash compensation charges of $2.1 million. Other non-cash expenses for the second quarter included an other-than-temporary impairment charge of $2.5 million related to certain auction rate securities held at June 30, 2008.
As previously discussed, the company still holds three auction rate securities with a par value of $29.8 million which had a fair value of $9.3 million as of June 30, 2008. Net loss during the second quarter was $18.4 million, compared to a net loss of $15.1 million in the year-earlier period.
Net loss per share for the second quarter was $0.17 compared to a net loss of $0.15 in the year-earlier period. Excluding the $2.5 million non-cash impairment charge in the auction rate securities, our net loss per share would have been $0.15. Weighted average shares outstanding for the quarter were $107.1 million.
Adjusted EBITDA as we define it for the second quarter of 2008 was $63.5 million in the second quarter or 23.4% increase over the year-earlier period. Adjusted EBITDA margin was 57.7%, up 52.5% in the year-earlier period. Once again equity free cash flow increased materially in the quarter, reflecting a strong adjusted EBITDA growth.
Equity free cash flow for the current period was $37.9 million or 30.7% increase over the year-earlier period. Equity free cash flow per share for the current period was $0.35 per share, a 25% increase over the year-earlier period. While we are pleased with the growth in equity free cash flow per share, it would have been even high on a pro forma basis if we were to get full effect during the quarter for the convertible note offering in the TowerCo acquisition.