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Section 1: 8-K (FORM 8-K)

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UNITED STATES

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): May 5, 2020

 

 

BOINGO WIRELESS,INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware   001-35155   95-4856877
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

 

10960 Wilshire Blvd., 23rd Floor
Los Angeles, California
  90024
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (310586-5180

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common Stock, $0.0001 par value   WIFI   The NASDAQ Stock Market LLC
(Title of each class)   (Trading symbol)   (Name of each exchange on which registered)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 5, 2020, Boingo Wireless, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
No.
  Description
99.1   Press release dated May 5, 2020 entitled “Boingo Wireless Reports First Quarter 2020 Financial Results” issued by Boingo Wireless, Inc. on May 5, 2020.
104   Cover Page Interactive Data File (embedded within XBRL document)

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BOINGO WIRELESS, INC.
   
Date: May 5, 2020 By: /s/ Peter Hovenier
    Peter Hovenier
    Chief Financial Officer

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

 

PRESS RELEASE

 

Boingo Wireless Reports First Quarter 2020 Financial Results

 

Strong DAS access fee revenue of $8.2 million increased 27.3% year-over-year

Generated $19.0 million in net cash provided by operating activities

Maintains solid financial position with strong cash and liquidity position

 

LOS ANGELES – May 5, 2020 – Boingo Wireless (NASDAQ: WIFI), the leading distributed antenna system (“DAS”) and Wi-Fi provider that serves carriers, consumers, property owners and advertisers worldwide, today announced the Company's financial results for the first quarter ended March 31, 2020.

 

First Quarter 2020 Financial Highlights

 

·Revenue of $59.9 million decreased 9.9% compared to $66.5 million in the first quarter of 2019.

 

oMilitary/multifamily revenue of $22.7 million decreased 12.3% compared to $25.9 million in the first quarter of 2019.

 

oDAS revenue of $22.2 million decreased 7.9% compared to $24.1 million in the first quarter of 2019. DAS revenue for the quarter was comprised of $14.0 million of build-out project revenue and $8.2 million of access fee revenue. DAS access fee revenue increased 27.3% year-over-year.

 

oWholesale Wi-Fi revenue of $9.7 million decreased 11.6% compared to $11.0 million in the first quarter of 2019.

 

oRetail revenue of $3.0 million decreased 24.6% compared to $3.9 million in the first quarter of 2019.

 

oAdvertising and other revenue of $2.3 million increased 48.6% compared to $1.5 million in the first quarter of 2019.

 

·Net loss attributable to common stockholders was $(4.6) million, or $(0.10) per diluted share, compared to net loss of $(5.2) million, or $(0.12) per diluted share, in the first quarter of 2019.

 

·Adjusted EBITDA of $18.7 million decreased 2.1% compared to $19.1 million in the first quarter of 2019. Adjusted EBITDA, which is a non-GAAP financial measure, is defined below and is reconciled to net loss attributable to common stockholders, the most comparable measure under GAAP, in the schedule entitled “Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA.”

 

·Net cash provided by operating activities of $19.0 million decreased 19.8% compared to $23.7 million in the first quarter of 2019.

 

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·Free cash flow was $(3.6) million compared to $(8.6) million in the first quarter of 2019. Free cash flow, which is a non-GAAP financial measure, is defined below and is reconciled to net cash provided by operating activities, the most comparable measure under GAAP, in the schedule entitled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows."

 

·Cash, cash equivalents and marketable securities were $175.2 million at March 31, 2020 compared to $80.6 million at December 31, 2019. The increase was primarily due to the Company’s decision to draw $100.0 million from its $150.0 million revolving credit facility as a precautionary measure to preserve financial flexibility. As of March 31, 2020, the Company had approximately $50.0 million of remaining borrowing capacity under its revolving credit facility.

 

Business Highlights

 

·The Company launched one new DAS venue location with Tier One carriers during the first quarter of 2020 for a total of 73 DAS venues live comprised of 39,500 DAS nodes and an additional 10,800 nodes in backlog. This compares to 59 venues live comprised of 31,100 nodes as of March 31, 2019.

 

·The Company deployed wireless infrastructure to cover an additional 4,000 military beds in the quarter, bringing the total footprint to 359,000 military beds on 64 military bases as of March 31, 2020. The Company completed construction on the first two cell sites on a military base during the quarter.

 

·The Company executed five new multifamily agreements during the quarter, representing over 2,700 new beds.

 

·The Company appointed Michael Zeto as Senior Vice President, Global Strategy and Emerging Businesses, to help drive innovation and identify new opportunities that contribute to profitable growth. Mr. Zeto joins Boingo from AT&T where he most recently served as Vice President, Internet of Things Solutions and General Manager, Smart Cities.

 

Management Commentary in Response to COVID-19 Pandemic

 

“The last 90 days have been an extraordinary time in history and our hearts go out to those who have lost loved ones or who have been infected by the coronavirus,” commented Mike Finley, Chief Executive Officer of Boingo Wireless. “Since Boingo has been deemed an essential business, we have been able to not only support our existing wireless networks, but continue to build out new neutral-host networks at a time when many other companies are not as fortunate. In addition, we were delighted to provide complimentary Wi-Fi service to more than 10,000 Air Force, Army and Marine beds set up for quarantine purposes around the country. I am incredibly proud of the Boingo team for going the extra mile to ensure our customers and our venue partners have the connectivity they need.”

 

Mr. Finley continued, “Boingo delivers a vital neutral solution in the essential space of connectivity, and is supported by a business model with approximately 95% contractual or recurring revenue. We have a strong balance sheet with ample liquidity and the ability to continue using our cash flow to fund our network builds where we have carrier commitments. Our focus on reducing expenses and increasing profitability at the end of 2019 has prepared us well to weather the recent events. While we cannot predict the nature, duration or scope of the overall impact of the COVID-19 pandemic on our business, we believe that Boingo will emerge from this period with velocity and continue to deliver a critical, and essential, service to our military men and women, our venues, our customers and our partners.”

 

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Conference Call Information

 

Members of Boingo Wireless’ management will host a conference call to discuss their first quarter 2020 financial results beginning at 4:30 p.m. ET (1:30 p.m. PT), today, May 5, 2020. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-9716 and enter the passcode: 13701323 ten minutes prior to the scheduled start time. International callers should dial +1 (201) 493-6779 and enter the same passcode. The conference call will be broadcast live over the Internet in the Investor Relations section of the Company’s website at http://investors.boingo.com. In addition, a supplement reflecting the Company’s key business metrics will be made available in the Investor Relations section of the Company’s website. The supplement and webcast will be archived online upon completion of the conference call.

 

Use of Non-GAAP Financial Measures

 

To supplement Boingo Wireless’ financial statements presented on a GAAP basis, Boingo Wireless provides Adjusted EBITDA and free cash flow as supplemental measures of its performance.

 

The Company defines Adjusted EBITDA as net loss attributable to common stockholders plus depreciation and amortization of property and equipment, stock-based compensation expense, amortization of intangible assets, income tax expense, interest expense and amortization of debt discount, interest income and other expense, net, non-controlling interests, and excludes charges or gains that are nonrecurring, infrequent, or unusual. 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 other 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 attributable to common stockholders, 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.

 

The Company defines free cash flow as net cash provided by operating activities, less purchases of property and equipment. Boingo Wireless believes that free cash flow provides investors with additional useful information to measure operating liquidity because it reflects the amount of cash generated by the Company's operations after the purchases of property and equipment that can be used for strategic opportunities. Free cash flow should not be considered as an alternative financial measure to net cash provided by operating activities, 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.

 

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About Boingo Wireless

 

Boingo Wireless, Inc. (NASDAQ: WIFI) helps the world stay connected. Our vast footprint of DAS, Wi-Fi and small cells reaches more than a billion people annually, making Boingo one of the largest providers of indoor wireless networks. You’ll find Boingo connecting people at airports, stadiums, military bases, convention centers, multifamily communities and commercial properties. To learn more about the Boingo story, visit www.boingo.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 future growth opportunities, operations and financial performance due to COVID-19, strategic plans and transactions and any 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 the impact of health epidemics, including the recent COVID-19 pandemic, on the Company’s business, the Company's ability to maintain its existing relationships and establish new relationships with venue partners, its ability to complete build-outs and sign venue contracts, its ability to maintain revenue growth and achieve profitability, its ability to execute on its strategic and business plans, its ability to successfully compete with new technologies and adapt to changes in the wireless industry, as well as other risks 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, 2019 filed with the SEC on March 2, 2020, which the Company incorporates by reference into this press release. 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 Wi-Finder, Boingo Broadband, and the Boingo Wireless Logo 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
March 31,
 
    2020     2019  
Revenue   $ 59,886     $ 66,473  
Costs and operating expenses:                
Network access     28,759       31,411  
Network operations     13,287       14,142  
Development and technology     6,985       8,999  
Selling and marketing     5,579       5,867  
General and administrative     6,750       8,294  
Amortization of intangible assets     1,111       1,131  
Total costs and operating expenses     62,471       69,844  
Loss from operations     (2,585 )     (3,371 )
Interest expense and amortization of debt discount     (2,349 )     (2,395 )
Interest income and other expense, net     254       719  
Loss before income taxes     (4,680 )     (5,047 )
Income tax expense     (45 )     (192 )
Net loss     (4,725 )     (5,239 )
Net loss attributable to non-controlling interests     (92 )     (86 )
Net loss attributable to common stockholders   $ (4,633 )   $ (5,153 )
                 
Net loss per share attributable to common stockholders:                
Basic   $ (0.10 )   $ (0.12 )
Diluted   $ (0.10 )   $ (0.12 )
                 
Weighted average shares used in computing net loss per share attributable to common stockholders:                
Basic     44,272       43,527  
Diluted     44,272       43,527  

 

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Boingo Wireless, Inc.

Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands, except per share amounts)

 

    March 31,
2020
  December 31,
2019
 
Assets                
Current assets:                
Cash and cash equivalents   $ 145,916     $ 40,401  
Marketable securities     29,301       40,214  
Accounts receivable, net     37,910       33,350  
Prepaid expenses and other current assets     8,519       8,235  
Total current assets     221,646       122,200  
Property and equipment, net     384,636       380,243  
Operating lease right-of-use assets, net     14,557       15,196  
Goodwill     58,579       58,579  
Intangible assets, net     13,829       14,940  
Other assets     9,843       9,309  
Total assets   $ 703,090     $ 600,467  
                 
Liabilities and stockholders’ equity                
Current liabilities:                
Accounts payable   $ 31,608     $ 24,298  
Accrued expenses and other liabilities     54,940       65,152  
Deferred revenue     66,133       61,229  
Current portion of operating leases     2,586       2,695  
Current portion of long-term debt     972       778  
Current portion of finance leases     2,344       2,721  
Current portion of notes payable     1,131       1,527  
Total current liabilities     159,714       158,400  
Deferred revenue, net of current portion     171,557       166,660  
Long-term portion of operating leases     16,633       17,357  
Long-term debt     264,890       162,708  
Long-term portion of finance leases     131       572  
Long-term portion of notes payable     25       95  
Deferred tax liabilities     1,005       993  
Other liabilities     182       201  
Total liabilities     614,137       506,986  
                 
Commitments and contingencies                
Stockholders’ equity:                
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; 44,314 and 44,224 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively     4       4  
Additional paid-in capital     236,048       234,638  
Accumulated deficit     (145,606 )     (140,973 )
Accumulated other comprehensive loss     (2,445 )     (1,426 )
Total common stockholders’ equity     88,001       92,243  
Non-controlling interests     952       1,238  
Total stockholders’ equity     88,953       93,481  
Total liabilities and stockholders’ equity   $ 703,090     $ 600,467  

 

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Boingo Wireless, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

    Three Months Ended
March 31,
 
    2020     2019  
Cash flows from operating activities                
Net loss   $ (4,725 )   $ (5,239 )
Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating
activities:
               
Depreciation and amortization of property and equipment     18,646       19,009  
Amortization of intangible assets     1,111       1,131  
Impairment loss and loss on disposal of fixed assets and intangible assets held for sale, net     (30 )     91  
Stock-based compensation     1,537       2,344  
Amortization of deferred financing costs and debt discount, net of amounts capitalized     2,343       2,256  
Non-cash operating lease cost     639       438  
Gains and amortization of premiums/discounts for marketable securities     (81 )     (207 )
Change in deferred income taxes     (12 )      
Changes in operating assets and liabilities:                
Accounts receivable     (4,912 )     4,307  
Prepaid expenses and other assets     (1,071 )     (13 )
Accounts payable     (166 )     1,397  
Accrued expenses and other liabilities     (3,253 )     (1,481 )
Deferred revenue     9,801       439  
Operating lease liabilities     (794 )     (729 )
Net cash provided by operating activities     19,033       23,743  
Cash flows from investing activities                
Purchases of marketable securities     (15,032 )     (36,665 )
Proceeds from maturities of marketable securities     25,965        
Purchases of property and equipment     (22,592 )     (32,390 )
Net cash used in investing activities     (11,659 )     (69,055 )
Cash flows from financing activities                
Debt issuance costs           (1,687 )
Proceeds from credit facility     100,000       3,500  
Principal payments on credit facility           (194 )
Payments of acquisition related consideration           (1,952 )
Proceeds from exercise of stock options     185       6  
Payments of finance leases and notes payable     (1,285 )     (1,853 )
Payments of withholding tax on net issuance of restricted stock units     (461 )     (32,907 )
Payments to non-controlling interest     (262 )      
Net cash provided by (used in) financing activities     98,177       (35,087 )
Effect of exchange rates on cash     (36 )     3  
Net increase (decrease) in cash and cash equivalents     105,515       (80,396 )
Cash and cash equivalents at beginning of period     40,401       149,412  
Cash and cash equivalents at end of period   $ 145,916     $ 69,016  
Supplemental disclosure of non-cash investing and financing activities                
Property and equipment costs included in accounts payable, accrued expenses and other liabilities   $ 39,754     $ 39,309  
Capitalized stock-based compensation included in property and equipment costs   $ 149     $ 230  
Purchase price for business acquisition included in accrued expenses and other liabilities   $     $ 2,961  
Debt issuance costs included in accrued expenses and other liabilities   $     $ 125  
Financed sale of intangible assets held for sale   $ 277     $ 311  

 

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Boingo Wireless, Inc.

Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA
(Unaudited)

(In thousands)

 

  

Three Months Ended

March 31,

 
   2020   2019 
Net loss attributable to common stockholders  $(4,633)  $(5,153)
Depreciation and amortization of property and equipment   18,646    19,009 
Stock-based compensation expense   1,537    2,344 
Amortization of intangible assets   1,111    1,131 
Income tax expense   45    192 
Interest expense and amortization of debt discount   2,349    2,395 
Interest income and other expense, net   (254)   (719)
Non-controlling interests   (92)   (86)
Adjusted EBITDA  $18,709   $19,113 

 

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Boingo Wireless, Inc.

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows
(Unaudited)

(In thousands)

 

  

Three Months Ended

March 31,

 
   2020   2019 
Net cash provided by operating activities  $19,033   $23,743 
Purchases of property and equipment   (22,592)   (32,390)
Free cash flows  $(3,559)  $(8,647)

 

 

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Boingo Wireless, Inc.

Revenue Summary

(Unaudited)

(In thousands)

 

  

Three Months Ended

March 31,

 
   2020   2019 
Revenue:        
Military/multifamily  $22,707   $25,897 
DAS   22,196    24,095 
Wholesale—Wi-Fi   9,743    11,020 
Retail   2,959    3,926 
Advertising and other   2,281    1,535 
Total revenue  $59,886   $66,473 

 

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Boingo Wireless, Inc.
Key Business Metrics

(Unaudited)

(In thousands)

 

  

Three Months Ended

March 31,

 
   2020   2019 
Key business metrics:          
DAS nodes(1)   39.5    31.1 
DAS nodes in backlog(2)   10.8    13.7 
Subscribers—military(3)   135    147 
Subscribers—retail(3)   70    113 
Connects(4)    66,512    78,625 

 

 

(1)This metric represents the number of active DAS nodes as of the end of the period. A DAS node is a single communications endpoint, typically an antenna, which transmits or receives radio frequency signals wirelessly. This measure is an indicator of the reach of the Company’s DAS network.

 

(2)This metric represents the number of DAS nodes under contract but not yet active as of the end of the period.

 

(3)This metric represents the number of paying customers who are on a month-to-month subscription plan at a given period end.

 

(4)This metric shows how often individuals connect to the Company’s global Wi-Fi network in a given period. The connects include wholesale and retail customers in both customer pay locations and customer free locations where Boingo is a paid service provider or receives sponsorship or promotion fees. The Company counts each connect as a single connect regardless of how many times that individual accesses the network at a given venue during their 24-hour period. This measure is an indicator of paid activity throughout Boingo’s network.

 

CONTACTS:

PRESS:

Melody Walker

Senior Director, Marketing Communications
[email protected]

(424) 256-7036

 

INVESTORS:

Kimberly Orlando and Ariel Papermaster

ADDO Investor Relations

[email protected]

(310) 829-5400

 

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