Towerstream widens loss as revenue growth slows in 1Q
TOWERSTREAM CORP. reported a first-quarter 2014 net loss of $6.5 million, compared with a net loss of $5.6 million the year before, as the company's revenue showed less significant growth for the quarter. Towerstream's sales increased 1 percent in the first quarter to $8.4 million.
MIDDLETOWN – Towerstream Corp. reported a first-quarter net loss of $6.5 million, or 10 cents per share, widening by 15.7 percent the $5.6 million, or 9 cent-per-share, loss posted for the same three-month period last year.
The year-over-year increase in the company’s quarterly net loss followed net loss increases of 5.2 percent and 13.6 percent in the fourth and third quarters of 2013, respectively.
While its bottom line fell, the fixed-antenna 4G and Wi-Fi/small-cell network services provider saw an increase in revenue. Sales rose 1 percent to $8.4 million in the three months ended March 31, compared with $8.3 million in the 2013 first quarter.
The gain was less significant than sales increases recorded in the fourth and third quarters last year of 3.6 percent and 3.4 percent, respectively.
Customer churn – which refers to the percent of revenue lost on a monthly basis from customers disconnecting from the Towerstream network or reducing their bandwidth – was 2.33 percent in the first quarter, compared with 1.78 percent during the fourth quarter and 1.63 percent in the first quarter of 2013.
“We launched a new, Cogent-like 100-megabyte offering targeted at buildings where our wireless technology has a significant cost advantage over fiber,” said Joseph Hernon, chief financial officer for Towerstream, in a statement. “Initial customer response has been encouraging, and we believe that the program will contribute strongly to our fixed wireless segment during 2014.”
Total average revenue per user increased to $758 during the first quarter from $727 for the same period last year, the company reported.
Towerstream’s Los Angeles market gave the strongest performance in the first quarter, with revenue of $2.04 million, but that figure represented a decrease of 1.5 percent compared with the $2.07 million reported in the first quarter of 2013. Earnings before interest, taxes, depreciation and amortization in the market for the quarter fell 10.5 percent to $1.01 million.
The company also reported that the Providence-Newport market showed revenue of $80,000 in the 2014 first quarter, a decline of 37 percent compared with the 2013 first-quarter revenue of $127,000.
Towerstream’s Boston market revenue fell 8.1 percent to $1.53 million compared with last year’s revenue of $1.67 million.