TechDogs-"Radius Global Infrastructure Reports Second Quarter 2023 Results"

Communication And Collaboration Software

Radius Global Infrastructure Reports Second Quarter 2023 Results

By Business Wire

Business Wire
Overall Rating

Revenue Increased 30% YoY

NEW YORK--(BUSINESS WIRE)--Radius Global Infrastructure, Inc. (Nasdaq: RADI) (“Radius” or the “Company”), one of the largest international owners and acquirors of real property interests and similar contractual rights underlying essential digital infrastructure assets, today reported financial results for the quarter ended June 30, 2023.

Bill Berkman, Co-Chairman and CEO of Radius Global Infrastructure, commented:

“We generated quarterly Revenue of $42.5 million in the second quarter of 2023, up 30% from the second quarter of 2022, with Gross Profit increasing to $40.0 million, up 31% year-over-year. In the second quarter, our Annualized In-Place Rents increased by 34% year-over-year to $176.7 million. Our revenues are primarily triple net, inflation-linked rents underlying mission-critical communications sites. In the second quarter, we invested $110.9 million to acquire 223 communication sites that are generating $8.3 million of annual rent. As of June 30, 2023, Radius has approximately $358.5 million of total cash and cash equivalents, restricted cash (including long-term restricted cash), and short-term investments.”

RECENTLY ANNOUNCED TRANSACTION

As previously announced on March 1, 2023, Radius entered into a definitive agreement under which EQT Active Core Infrastructure (“EQT”) and the Public Sector Pension Investment Board (“PSP”), through certain of their controlled affiliates, will acquire the Company (the “Merger”). The Company has since obtained all antitrust and direct foreign investment approvals required in connection with the Merger except for one foreign direct investment approval that remains outstanding. The parties still expect the Merger to close in the third quarter of 2023, subject to the conditions set forth in the Merger Agreement, although there can be no assurance that the Merger will occur by that date. On June 15, 2023, the Merger was approved by the Company’s stockholders.

For additional information relating to this pending transaction, please refer to the definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on May 12, 2023 (as amended and supplemented) and other relevant materials that the Company has filed and may file with the SEC in connection with the Merger.

QUARTERLY RESULTS

Revenue increased 30% to $42.5 million for the three months ended June 30, 2023, as compared to revenue of $32.6 million for the three months ended June 30, 2022. The increase was primarily attributable to the additional revenue streams acquired through investments in real property interests made during the past year and also includes foreign exchange rate movements.

Gross Profit rose 31% to $40.0 million during the three months ended June 30, 2023, as compared to gross profit of $30.5 million in the corresponding prior year period, reflecting a gross profit (which we also refer to as ground cash flow) margin of approximately 94% during the three months ending June 30, 2023. Ground cash flow margin was impacted by expenses associated with fee simple interests acquired, primarily for property taxes.

Annualized In-Place Rents (“AIPR”) were $176.7 million as of June 30, 2023, an increase of $45.0 million, or 34% over AIPR of $131.7 million as of June 30, 2022. On a constant currency basis, AIPR would have increased 29% year-over-year to $170.5 million as of June 30, 2023.

YEAR-TO-DATE RESULTS

GAAP Revenue increased 32% to $83.7 million for the six months ended June 30, 2023, as compared to revenue of $63.2 million for the six months ended June 30, 2022.

GAAP Gross Profit rose 32% to $79.4 million in the first half of 2023, as compared to gross profit of $60.3 million in the corresponding prior year period.

Investments in Real Property Interests and Related Intangible Assets, as identified in the Company’s Consolidated Statements of Cash Flows, was $150.4 million and $259.7 million for the six months ended June 30, 2023 and 2022, respectively. This represented a decrease of $109.3 million, or 42%, for the six months ended June 30, 2023 over the corresponding prior year period.

Acquisition Capex was $159.1 million and $254.1 million for the six months ended June 30, 2023 and June 30, 2022, respectively, or a decrease of $95.0 million, or 37%, for the six months ended June 30, 2023 over the corresponding prior year period.

Please refer to the GAAP financial disclosures, reconciliations and comparisons to non-GAAP financial measurements set forth below and in the Company’s Form 10-Q for the quarter ended June 30, 2023.

LIQUIDITY

As of June 30, 2023, Radius had $358.5 million of total cash and cash equivalents, restricted cash (including long-term restricted cash), and short-term investments. Of this amount, approximately $320.1 million was available to deploy for asset acquisitions after excluding amounts that are required to be held in interest escrow accounts under certain long-term debt agreements.

FINANCING TRANSACTIONS

The summary below presents significant financing activities that have occurred in 2023.

  • In May and June 2023, Radius borrowed €50 million and €100 million, respectively (an aggregate of $162 million in USD equivalent) in floating rate loans under an upsized and amended multi-currency financing facility. The €50 million borrowing has a cash pay coupon based on the three-month EURIBOR plus 3.50% and 1.50% payment-in-kind. The €100 million borrowing has a cash pay coupon based on the three-month EURIBOR plus 5.00%. Interest on the borrowings is payable quarterly and each loan will mature in November 2028.
  • In July 2023, Radius made two borrowings totaling €110 million (or $121 million in USD equivalent as of the funding date) of the €1,750 million available under an upsized and amended financing facility that Radius entered into in December 2021. The fixed interest borrowing of €65 million accrues interest at an annual rate of approximately 6.4%. The floating rate interest rate loan of €45 million accrues interest based on the three-month EURIBOR plus 3.50%. Interest on the borrowings is payable quarterly and each loan will mature in July 2031.

OUTLOOK FOR 2023

As previously noted, the Company is not providing guidance with respect to the outlook for Acquisition Capex in 2023 in light of the pending Merger with EQT and PSP.

About the Company

Radius Global Infrastructure, Inc., through its various subsidiaries, is a multinational owner and acquiror of triple net rental streams and real properties leased to wireless operators, wired operators, wireless tower companies, and other digital infrastructure operators as part of their infrastructure required to deliver a wide range of services.

For further information see https://www.radiusglobal.com.

FORWARD-LOOKING STATEMENTS AND DISCLAIMERS

Certain matters discussed in this press release, including the attachments, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, capital expenditures, plans and objectives, macroeconomic conditions and our proposed transaction with certain affiliates of EQT and PSP. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “expect,” “anticipate,” “estimate,” “outlook,” “plan,” “continue,” “intend,” “should,” “may,” “will,” or similar expressions, their negative or other variations or comparable terminology.

Forward-looking statements are subject to significant risks and uncertainties and are based on current beliefs, assumptions and expectations based upon our historical performance and on our current plans, estimates and expectations in light of information available to us. Any forward-looking statement speaks only as of the date on which it is made. Except as required by law, we are not obligated to, and do not intend to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy, liquidity and our proposed transaction with certain affiliates of EQT and PSP. Actual results may differ materially from those set forth in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Certain important factors that we think could cause our actual results to differ materially from expected results are summarized below. Other factors besides those summarized could also adversely affect us. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for management to predict all such risks and uncertainties or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Important other factors that could cause our actual results to differ materially from those expressed in or contemplated by the forward-looking statements include, but are not limited to: our proposed transaction with certain affiliates of EQT and PSP may not be completed in a timely manner or at all, including the risk that the last remaining required direct foreign investment approval is not obtained, is delayed or is subject to unanticipated conditions that could adversely affect us or our ability to satisfy the conditions to closing of the Merger; the possibility that any or all of the various conditions to the consummation of the Merger may not be satisfied or waived, , including the failure (a) to receive and the last remaining required direct foreign investment approval (or any conditions, limitations or restrictions placed on such approvals) and (b) to satisfy conditions related to (i) there being no event of default under certain of the Company’s existing debt facilities, (ii) certain waivers of change of control provisions under certain of the debt agreements of the Company and its subsidiaries being in full force and effect at the closing, including the possibility that such waivers fail to be in full force and effect at the closing because any two of William H. Berkman, Scott G. Bruce and Richard I. Goldstein have ceased to continue in their current capacities as Chief Executive Officer, President and Chief Operating Officer of the Company, respectively, at the closing, and (iii) the Company having a specified minimum cash balance and the Company or any of its subsidiaries having an additional specified amount of additional cash, in each case at the closing; the possibility that compliance with the minimum cash condition to the consummation of the proposed transaction may limit the growth of the Company’s business, depending on the availability to the Company of other sources of capital that are permitted under the terms of the definitive agreement entered into in connection with the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction, including in circumstances that would require us to pay a termination fee or other expenses; the effect of the announcement or pendency of the proposed transaction on our ability to retain and hire key personnel, our ability to maintain the relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; risks related to diverting management’s attention from our ongoing business operations; the risk that stockholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability; the extent that wireless carriers (mobile network operators, or “MNOs”) or tower companies consolidate their operations, exit the wireless communications business or share site infrastructure to a significant degree; the extent that new technologies reduce demand for wireless infrastructure; competition for assets; whether the tenant leases for the wireless communication tower, antennae or other digital communications infrastructure located on our real property interests are renewed with similar rates or at all; the extent of unexpected lease cancellations, given that most of the tenant leases associated with our assets may be terminated upon limited notice by the MNO or tower company and unexpected lease cancellations could materially impact cash flow from operations; economic, political, cultural, and regulatory risks and other risks to our operations, including risks associated with fluctuations in foreign currency exchange rates and local inflation rates; the effect of the Electronic Communications Code in the United Kingdom, which may limit the amount of lease income we generate in the United Kingdom; the extent that we continue to grow at an accelerated rate, which may prevent us from achieving profitability or positive cash flow at a company level (as determined in accordance with GAAP) for the foreseeable future, particularly given our history of net losses and negative net cash flow; the fact that we have incurred a significant amount of debt and may in the future incur additional indebtedness; the extent that the terms of our debt agreements limit our flexibility in operating our business; and the other factors, risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in our subsequent filings under the Exchange Act.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in USD thousands, except share and per share amounts)

Three months
ended
June 30,
2023

Six months
ended
June 30,
2023

Three months
ended
June 30,
2022

Six months
ended
June 30,
2022

Revenue

$

42,475

$

83,689

$

32,568

$

63,167

Cost of service

2,421

4,313

2,027

2,868

Gross profit

40,054

79,376

30,541

60,299

Operating expenses:

Selling, general and administrative

25,486

54,950

21,205

43,892

Share-based compensation

5,389

10,573

5,496

10,088

Amortization and depreciation

23,950

47,035

19,324

38,075

Impairment - decommissions

1,500

2,550

1,272

2,037

Total operating expenses

56,325

115,108

47,297

94,092

Operating loss

(16,271

)

(35,732

)

(16,756

)

(33,793

)

Other income (expense):

Realized and unrealized gain (loss) on foreign currency debt

(11,982

)

(27,461

)

58,667

82,899

Interest expense

(18,957

)

(36,628

)

(16,714

)

(32,812

)

Other income (expense), net

3,751

6,966

(3,164

)

(2,072

)

Gain on extinguishment of debt

942

942

Total other income (expense), net

(27,188

)

(57,123

)

39,731

48,957

Income (loss) before income tax expense (benefit)

(43,459

)

(92,855

)

22,975

15,164

Income tax expense (benefit)

(201

)

(1,785

)

(577

)

(3,743

)

Net income (loss)

(43,258

)

(91,070

)

23,552

18,907

Net income (loss) attributable to noncontrolling interest

(1,402

)

(3,629

)

1,385

1,177

Net income (loss) attributable to stockholders

(41,856

)

(87,441

)

22,167

17,730

Stock dividend payment to holders of Series A Founders Preferred Stock

(40,832

)

(40,832

)

Net loss attributable to common stockholders

$

(41,856

)

$

(87,441

)

$

(18,665

)

$

(23,102

)

Loss per common share:

Basic and diluted

$

(0.43

)

$

(0.90

)

$

(0.20

)

$

(0.25

)

Weighted average common shares outstanding:

Basic and diluted

98,315,969

97,075,883

93,506,412

92,809,563

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in USD thousands, except share and per share amounts)

June 30,
2023

December 31,
2022

Assets

Current assets:

Cash and cash equivalents

$

282,012

$

224,258

Restricted cash

2,817

1,971

Short-term investments

19,914

39,205

Total cash, cash equivalents, restricted cash, and short-term investments

304,743

265,434

Trade receivables, net

10,496

8,200

Prepaid expenses and other current assets

29,091

28,773

Total current assets

344,330

302,407

Real property interests, net:

Right-of-use assets - finance leases, net

458,401

379,052

Telecom real property interests, net

1,651,931

1,569,676

Real property interests, net

2,110,332

1,948,728

Intangible assets, net

12,239

12,121

Property and equipment, net

1,222

1,241

Goodwill

80,509

80,509

Deferred tax asset

1,636

306

Restricted cash, long-term

53,766

88,054

Other long-term assets

18,552

20,124

Total assets

$

2,622,586

$

2,453,490

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

55,383

$

48,767

Rent received in advance

33,781

26,551

Finance lease liabilities, current

13,355

15,589

Telecom real property interest liabilities, current

6,549

7,975

Total current liabilities

109,068

98,882

Finance lease liabilities

22,766

22,277

Telecom real property interest liabilities

1,252

4,483

Long-term debt, net of debt discount and deferred financing costs

1,692,943

1,503,352

Deferred tax liability

147,073

131,229

Other long-term liabilities

12,318

10,473

Total liabilities

1,985,420

1,770,696

Commitments and contingencies

Stockholders’ equity:

Series A Founder Preferred Stock, $0.0001 par value; 1,600,000 shares authorized; 1,600,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Series B Founder Preferred Stock, $0.0001 par value; 1,386,033 shares authorized; 1,386,033 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Class A Common Stock, $0.0001 par value; 1,590,000,000 shares authorized; 99,717,040 and 95,283,563 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

10

10

Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized; 10,255,811 and 12,795,694 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

1,088,385

1,060,055

Accumulated other comprehensive loss

(51,324

)

(85,936

)

Accumulated deficit

(426,260

)

(338,819

)

Total stockholders’ equity attributable to Radius Global Infrastructure, Inc.

610,811

635,310

Noncontrolling interest

26,355

47,484

Total liabilities and stockholders’ equity

$

2,622,586

$

2,453,490

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in USD thousands)

Six months
ended
June 30,
2023

Six months
ended
June 30,
2022

Cash flows from operating activities:

Net income (loss)

$

(91,070

)

$

18,907

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Amortization and depreciation

47,035

38,075

Amortization of finance lease and telecom real property interest liabilities discount

917

733

Impairment - decommissions

2,550

2,037

Realized and unrealized loss (gain) on foreign currency debt

27,461

(82,899

)

Amortization of debt discount and deferred financing costs

3,504

2,715

Provision for bad debt expense

303

207

Share-based compensation

10,573

10,088

Deferred income taxes

(5,632

)

(5,626

)

Gain on extinguishment

(942

)

Change in assets and liabilities:

Trade receivables, net

(2,232

)

(881

)

Prepaid expenses and other assets

3,123

(507

)

Accounts payable, accrued expenses and other long-term liabilities

9,265

5,483

Rent received in advance

6,318

2,414

Net cash provided by (used in) operating activities

12,115

(10,196

)

Cash flows from investing activities:

Investments in real property interests and related intangible assets

(150,402

)

(259,721

)

Advance deposits made for real property interest investments

(138

)

(22,686

)

Proceeds from sales of real property interests

262

Proceeds from maturities of short-term investments

20,000

Purchases of property and equipment

(348

)

(195

)

Net cash used in investing activities

(130,626

)

(282,602

)

Cash flows from financing activities:

Proceeds from borrowings under debt agreements

158,760

427,003

Repayments of term loans and other debt

(112,129

)

Debt issuance costs

(2,933

)

(12,571

)

Proceeds from exercises of stock options

257

260

Repayments of finance lease and telecom real property interest liabilities

(16,408

)

(7,407

)

Net cash provided by financing activities

139,676

295,156

Effect of change in foreign currency exchange rates on cash, cash equivalents and restricted cash

3,147

(19,208

)

Net change in cash and cash equivalents and restricted cash

24,312

(16,850

)

Cash and cash equivalents and restricted cash at beginning of period

314,283

632,193

Cash and cash equivalents and restricted cash at end of period

$

338,595

$

615,343

Supplemental disclosure of cash and non-cash transactions:

Cash paid for interest

$

32,793

$

30,063

Cash paid for income taxes

$

2,684

$

1,371

See accompanying notes to condensed consolidated financial statements.

Non-GAAP Financial Measures

We use certain additional financial measures not defined by generally accepted accounting principles in the United States (“GAAP”) that provide supplemental information we believe is useful to analysts and investors to evaluate our financial performance and ongoing results of operations, when considered alongside other GAAP measures such as net income, operating income and gross profit. These non-GAAP measures exclude the financial impact of items management does not consider in assessing our ongoing operating performance, and thereby facilitate review of our operating performance on a period-to-period basis.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP measures. EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and further adjusting for non-cash impairment—decommissions expense, realized and unrealized gains and losses on foreign currency debt, realized and unrealized foreign exchange gains/losses associated with non-debt transactions and balances denominated in a currency other than the functional currency, share-based compensation expense and transaction-related costs recorded in selling, general and administrative expenses incurred for incremental business acquisition pursuits (successful and unsuccessful) and related financing and integration activities.


Contacts

Investor Relations:
Jason Harbes, CFA
Email: investorrelations@radiusglobal.com
Phone: 1-484-278-2667


Read full story here

First published on Thu, Aug 10, 2023

Liked what you read? That’s only the tip of the tech iceberg!

Explore our vast collection of tech articles including introductory guides, product reviews, trends and more, stay up to date with the latest news, relish thought-provoking interviews and the hottest AI blogs, and tickle your funny bone with hilarious tech memes!

Plus, get access to branded insights from industry-leading global brands through informative white papers, engaging case studies, in-depth reports, enlightening videos and exciting events and webinars.

Dive into TechDogs' treasure trove today and Know Your World of technology like never before!

Disclaimer - Reference to any specific product, software or entity does not constitute an endorsement or recommendation by TechDogs nor should any data or content published be relied upon. The views expressed by TechDogs’ members and guests are their own and their appearance on our site does not imply an endorsement of them or any entity they represent. Views and opinions expressed by TechDogs’ Authors are those of the Authors and do not necessarily reflect the view of TechDogs or any of its officials. All information / content found on TechDogs’ site may not necessarily be reviewed by individuals with the expertise to validate its completeness, accuracy and reliability.

Tags:

Radius Global Infrastructure Inc. Wireless Operators Wired Operators Wireless Tower Digital Infrastructure Assets

References:

Join The Discussion

  • Dark
  • Light