Towerstream Reports First Quarter 2011 Results

Towerstream Corporation, a leading 4G service provider delivering high-speed wireless Internet access to businesses in 11 major metropolitan areas in the U.S., announced results for the first quarter ended March 31, 2011.

What we believe is the largest

"We continue to achieve significant progress building what we believe is the largest and fastest Wi-Fi offload network in Manhattan," added Mr. Thompson. "The NYC network will be ready for clients in the second half of 2011."

"Adjusted EBITDA profitability from our core business continues to increase and our financial position remains strong," stated Joseph Hernon, Chief Financial Officer. "Cash balances decreased only $1.2 million in the first quarter although we invested in broad outline that amount on our Wi-Fi offload program."

The terms Adjusted EBITDA

The terms "Adjusted EBITDA," "Churn," "Churn rate," "ARPU," and "Market Cash Flow" are measurements used by Towerstream to monitor business performance and are not recognized measures pursuant to this agreement generally accepted accounting principles. Consequently, investors are cautioned in using or relying upon these measures as alternatives to recognized GAAP measures. Our methods of calculating these measures may differ from other issuers and, consequently, may not be comparable to similar measures presented by other issuers.

We focus on Adjusted EBITDA as a principal indicator of the operating performance of our business. EBITDA represents net income earlier interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as net income earlier interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, other non-operating income or expenses as then as gain or loss on disposal of property and equipment, nonmonetary transactions, and business acquisitions. Adjusted Market EBITDA as well excludes corporate overhead expenses and other centralized costs. We believe that Adjusted Market EBITDA trends are insightful indicators of our markets' relative performance, and whether our markets are able to produce sufficient market cash flow to fund working capital and capital expenditure needs.

The term "Core Operating Expenses" includes customer support services, sales and marketing, and general and administrative expenses, and excludes cost of earnings, depreciation and amortization.

The terms Churn

The terms "Churn" and "Churn rate" refer to the percent of revenue lost on a monthly basis from clients disconnecting from our network or reducing the amount of their bandwidth. The term "ARPU" refers to the monthly average revenue per user, or customer, being generated from those customers in accordance with contract at the end of each indicated period. We calculate ARPU by dividing our monthly recurring revenue at the end of a period by the number of clients generating that MRR. ARPU of new clients is calculated in the same manner however only includes new customers who entered into contracts while the indicated period. Market Cash Flow represents the amount of cash generated in a market afterwards deducting a market's direct operating expenses from that market's earnings. Market Cash Flow does not include centralized costs which support all markets collectively or any network related capital expenditures incurred in a market.

Revenues for the first quarter 2011 increased 9% from the fourth quarter 2010 and increased 40% compared to the first quarter 2010. These increases were driven by a 43% growth in our customer base from in broad outline 2,100 clients at the end of the first quarter 2010 to in broad outline 2,900 at the end of the first quarter 2011.

Capital expenditures totaled $2.6 million for the first quarter 2011 as compared to $1.5 million for the fourth quarter 2010 and $1.4 million for the first quarter 2010. The Company spent $1.1 million in the first quarter 2011 related to the construction of a Wi-Fi offload network, primarily in New York City, compared to $0.1 million in the fourth quarter 2010 and $0.2 million in the first quarter 2010.

Conference call led

A conference call led by President and Chief Executive Officer, Jeff Thompson, and Chief Financial Officer, Joseph Hernon, will be held on May 10, 2011 at 5:00 p.m. ET to review our financial results and provide an update on current business developments.

Towerstream's wireless broadband solution network delivers high-speed Internet access supporting VoIP (Voice over Internet Protocol), bandwidth on demand, wireless redundancy, VPNs, disaster recovery, bundled data, and video services, and can be delivered in days. Unlike cable Internet and DSL, Towerstream connections are symmetrical, which means that the upload and download speeds are identical. This creates a more stable connection, suitable for VoIP (Voice over Internet Protocol) and web hosting, as then as many other business applications. Companies utilizing multiple appliances simultaneously, just as streaming video and VoIP (Voice over Internet Protocol), can prioritize their bandwidth to secure mission-critical activities. All of Towerstream's products are backed by its Service Level Agreement and have the ability to be up and running within a week.

The meaning of applicable federal securities laws

Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are along these lines prospective. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from place to place in reports filed by the Company with the Securities and Exchange Commission. Even though the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Accordingly, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or if not.