SOURCE: ERF Wireless, Inc.

ERF Wireless, Inc.

April 05, 2010 11:00 ET

ERF Wireless Reports 2009 Annual Results

LEAGUE CITY, TX--(Marketwire - April 5, 2010) -  ERF Wireless (OTCBB: ERFW), a leading provider of enterprise-class wireless and broadband products and services, announced today that the company has filed its Form 10-K with the Securities and Exchange Commission reporting results for the year ended December 31, 2009.

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the calendar year of 2009, despite a substantial downturn in overall oil and gas drilling activity both in North America and worldwide, we continued to lay the foundation for future growth by acquiring additional Wireless Internet Service Provider (WISP) operations and partnering with other large wireless network operators to expand our footprint in active oil and gas drilling regions in preparation for the recovery of the oil and gas industry that we were certain would occur. Our primary focus during 2009 has been on working with our customers and partners in the oil and gas sector to ramp up our capabilities and product offerings, including the introduction of our go-to-market strategy for our branded product and service offerings. Additionally, we were very active in training sales, marketing and operations teams for the full deployment of our Mobile Broadband Trailer (MBT) wireless product and service offerings. Although our results for 2009 do not include significant revenues from the oil and gas sector, we expect to begin realizing substantially more recurring wireless circuit, construction and services revenues from all of our oil and gas contracts in calendar year 2010."

For 2009, the company reported total net sales of $5,533,000, an increase of 7% compared with $5,155,000 for 2008. The $378,000 increase in net sales during 2009 as compared to the net sales generated in 2008 is primarily attributable to a $1,164,000 increase in recurring WISP services from acquisitions and oil and gas deployments of our Mobile Broadband Trailers (MBTs), partially offset by a $583,000 decline in wireless paging service and infrastructure construction revenues and a $203,000 decline in banking network installation and services revenues. For the twelve months ended December 31, 2009, the company reported losses from operations of $7,642,000 compared to losses from operations of $7,619,000 for the twelve months ended December 31, 2008. For the twelve months ended December 31, 2009 and 2008, cash used for operating activities was $2,959,000 and $4,048,000, respectively. Primary and fully-diluted net loss per share for the twelve months ended December 31, 2009, was ($0.07). Primary and fully-diluted net loss per share for the twelve months ended December 31, 2008, was ($0.15).

Richard Royall, CFO of ERF Wireless, commented, "We spent a considerable amount of time and effort during calendar 2009 working with our investment banking team and others in seeking a significant round of financing that would be used to capitalize on the growth expected from all of our oil and gas contracts. With the substantial downturn in overall oil and gas drilling activity both in North America and worldwide during the year of 2009, we were unable to secure a major round of funding from the street on acceptable terms and, as a result, principally financed our operations from our existing lines of credit. During 2010 there has been a dramatic turnaround in the oil and gas sector which positively affects our communication contracts and we anticipate that we will be able to seek cost-effective sources of growth capital. We remain optimistic on being able to close on outside financing in this calendar year, with proceeds to be devoted toward additional strategic acquisitions in oil and gas territories, Mobile Broadband Trailers, wireless equipment and general working capital." Royall added, "The company intends to convert $3,000,000 of the $5,448,811 Angus Capital line of credit that was outstanding at December 31, 2009, into Series A preferred stock over the next 120 days, thereby reducing its long-term debt and improving its consolidated shareholders' equity."

RECENT EVENTS

Historically, our revenues have been generated primarily from Internet and construction services. Our Internet revenues result from our offering of broadband and basic communications services to residential and enterprise customers. Our construction revenues result from the construction of bank networks and other services associated with providing wireless products and services to the regional banking industry. During the year of 2009, approximately 91% of our revenue was generated from Internet services and 6% of our revenue was generated from construction services. We expect our Internet services to experience the most growth during the fiscal year 2010 as we devote significant capital resources to developing the sale of wireless products and services in the oil and gas market.

During the year of fiscal 2009, the company advanced its strategic business plan as evidenced by a number of agreements and activities. A summary of milestones during and subsequent to the year ended December 31, 2009, includes:

  • The entry into two exclusive reseller agreements with Schlumberger to market our wireless services and products to the oil and gas industry in the United States, Canada and the Gulf of Mexico.
  • The integration of the Centramedia asset acquisition, providing the company access to a large geographic area in the Panhandle of Texas with active oil and gas drilling activity.
  • The acquisition and integration of Frontier Internet LLC and iTexas.net, two wireless companies in the oil and gas rich Barnett Shale.
  • The announcement of a Master Services Agreement with Platinum Communications for the provisioning and delivery of bandwidth services to mobile and static oil and gas customers throughout the Canadian Province of Alberta.
  • The announcement of a Master Services Agreement with Partnership Broadband to deliver digital oilfield solutions in north central Texas. The network has some 160 towers and covers more than 15,000 square mile in the oil and gas rich Barnett Shale.
  • The announcement of a Master Services Agreement with The Computer Works to deliver digital oilfield solutions in north central Arkansas. The network has some 42 towers and covers more than 3,000 square miles in the oil and gas rich Fayetteville Shale.
  • The announcement of a Master Services Agreement with Southwestern Wireless to deliver digital oilfield solutions in West Texas and New Mexico. The network added more than 37,000 square miles in these oil and gas rich territories.
  • The company registered and obtained FCC approval for nearly 90 WiMAX 3.665-GHz transmission locations in strategic oil and natural gas development and production areas in the United States.
  • The completion of a BranchNet encrypted enterprise-class wireless banking network for West Texas State Bank located in the oil and gas rich Permian Basin including the Midland and Odessa, Texas, markets. The network is comprised of FCC-licensed frequencies creating a 165-Mbps backbone, delivering speeds in excess of 40 Mbps to each branch bank location. Additionally, the company entered into a WiNet agreement with the bank and has begun reselling digital oilfield solutions from this network to its oil and gas customers in this region.
  • The announcement of energy sector expert, Douglas Gibson joining ERF Wireless as energy industry consultant. In the mid-1990's, Gibson founded Petrosol, a company that generated over $110 million in total sales through 2002. In 2002, Petrosol became a partner of Sensa, which developed fiber optic sensing technologies for use within the oil and gas industry. Schlumberger acquired Sensa in 2001.
  • The announcement of the immediate start of design, development and construction of a new wireless network in the oil and gas rich Haynesville Shale in northwestern Louisiana and northeastern Texas This network will cover hundreds of natural gas drilling rigs in one of the fastest growing gas shale developments in North America.

About ERF Wireless

ERF Wireless Inc. is a fully reporting public corporation located in League City, Texas, and is the parent company of ERF Oil & Gas Services, ERF Enterprise Network Services, ERF Bundled Wireless Services, ERF Wireless Messaging Services and ERF Network Services. The company specializes in providing wireless and broadband product and service solutions to enterprise, commercial and residential clients on a regional, national and international basis. Its principals have been in the wireless broadband, network integration, triple-play FTTH, IPTV and content delivery business for more than 40 years. For more information, please visit our websites at www.erfwireless.com and www.erfwireless.net or call 281-538-2101. (ERFWG)

Forward-looking statements in this release regarding ERF Wireless Inc. are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products, increased levels of competition, new products and technological changes, the company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.

Contact Information

  • Contact:
    ERF Wireless Inc.
    Clareen O'Quinn, 281-538-2101 ext. 113
    Email Contact
    or
    Rubenstein Investor Relations Inc.
    Tim Clemensen, 212-843-9337
    Email Contact