Towerstream buys 2 properties, builds Wi-Fi offload program in NYC

Towerstream Corp. (TWER) said it plans to acquire fixed-wireless assets in Las Vegas and Reno, Nev., from One Velocity Inc., adding two more cities to its stable of delivering wireless Internet access to businesses. The purchase price was not disclosed. The company’s stock was up 7% at press time to $4.53.
Towerstream already operates in 11 markets, including New York City and Los Angeles. The company said the deal is expected to close this quarter. As a result of the announcement, Towerstream increased its revenue guidance for the second quarter to between $6.4 million and $6.7 million.
In its first-quarter results, Towerstream noted it spent $1.2 million building a Wi-Fi offload network in New York City. That news is significant as operators are scrambling to get better wireless coverage in the city due to a high penetration of smartphones. “We continue to achieve significant progress building what we believe is the largest and fastest Wi-Fi offload network in Manhattan,” said CEO Jeff Thompson. “The NYC network will be ready for customers in the second half of 2011.”
The company reported a net loss for the quarter of $1.5 million on revenues of nearly $6 million.
“Adjusted EBITDA profitability from our core business continues to increase and our financial position remains strong,” said CFO Joseph Hernon. “Cash balances decreased only $1.2 million in the first quarter even though we invested approximately that amount on our Wi-Fi offload program.”