SOURCE: ERF Wireless Inc.

ERF Wireless Inc.

April 04, 2011 09:00 ET

ERF Wireless 2010 Annual Results Show 30 Percent Improvement in Annual Cash Flow

LEAGUE CITY, TX--(Marketwire - April 4, 2011) - 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, 2010. During the fourth quarter of 2010, the company's negative cash outflow from operations decreased 37% compared to the third quarter cash outflow, resulting in cash needs of only $476,000 for the entire quarter. The 2010 negative cash outflows from operations decreased 30%, compared to 2009 cash outflows. 

Richard Royall, CFO of ERF Wireless, commented, "During 2010, we experienced a dramatic improvement in the oil and gas sector which positively impacted our communication contracts and we continue to see very positive results as our wholly owned subsidiary, Energy Broadband Inc., delivers reliable, cost-effective high-speed bandwidth to an industry that has traditionally been served by VSAT providers only. With the recently completed divestiture of our Central and North Texas WISP operations for $3,000,000 in cash and 100,000 shares of public stock, we'll allocate these additional proceeds toward additional strategic acquisitions in oil and gas territories, Mobile Broadband Trailers (MBTs), wireless equipment and general working capital."

Primary and fully-diluted net loss per share for the twelve months ended December 31, 2009, was ($0.07). For 2010, the company reported total net sales of $5,915,000, an increase of 7% compared with $5,533,000 for 2009. The $382,000 increase in net sales during 2010 as compared to the net sales generated in 2009 is primarily attributable to a $608,000 increase in wireless broadband services from oil and gas deployments of our MBTs in Energy Broadband, partially offset by a $121,000 decline in the Wireless Bundled Services subsidiary due to a decline in our retail wireless and dial-up customer base, a $58,000 decline in our paging service and infrastructure construction revenues in the Wireless Messaging Services subsidiary, and a $47,000 decline in banking network installation and services revenues in the Enterprise Network Services subsidiary. For the twelve months ended December 31, 2010, the company reported losses from operations of $8,511,000 compared to losses from operations of $8,872,000 for the twelve months ended December 31, 2009. For the twelve months ended December 31, 2010 and 2009, cash used for operating activities was $2,081,000 and $2,959,000, respectively. Primary and fully-diluted net loss per share for the twelve months ended December 31, 2010, was ($0.04).

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During calendar year 2010, we experienced very favorable results in Energy Broadband from overall increased oil and gas drilling activity, both in North America and worldwide. We continued to lay the foundation for future growth by partnering with other large wireless network operators to provide Energy Broadband wireless connectivity in regions where ERF Wireless does not currently own networks and thus expand our operational footprint in active oil and gas drilling regions in preparation for the dramatic increases being experienced in the oil and gas industry. Our primary focus during 2010 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 the training of sales, marketing and operations teams for the full deployment of our MBT wireless product and service offerings. Given the foundation that we have put in place during the last two years, 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 2011."

Recent Events

During fiscal 2010 and the first quarter of fiscal 2011, the company made significant progress with its strategic business plan as evidenced by the completion and announcement of numerous agreements and business developments. These include:

  • The completion, closing and funding associated with the divestiture of certain wireless broadband assets and operations that were not core to the company's vertical market focus in oil and gas through its subsidiary, Energy Broadband Inc. ERF Wireless received $3 million in cash and 100,000 shares of KeyOn Communications Holdings Inc. stock for the two wireless networks that were sold. The cash proceeds will be used primarily to retire certain liabilities and to provide for aggressive growth for Energy Broadband.

  • The completion of a Master Services Agreement with KeyOn Communications to deliver wireless connectivity to the Energy Broadband oil and gas operations in four of the 11 states where KeyOn has networks, with initial focus in Texas and Kansas.

  • The completion of a Master Services Agreement with Skybeam Inc. to deliver wireless connectivity to Energy Broadband for its oil and gas operations in Texas, Colorado and Oklahoma.

  • The completion of a Master Services Agreement with Bluebird Broadband Services to deliver wireless connectivity to Energy Broadband for its oil and gas operations in the Haynesville Shale market covering northwest Louisiana and northeast Texas.

  • The company opened a new office in Odessa, Texas, to support the growth of the oil and gas business in that region and completed the first phase of a new terrestrial wireless network that will cover more than 5,000 square miles of new coverage for its oil and gas customers to the west and south of the Midland/Odessa area.

  • The company completed the design and has begun the implementation of a new wireless broadband network in the Eagle Ford Shale covering approximately 25,000 square miles of territory in Southwest Texas.

  • The company announced that it ranked number 137 on Deloitte's 2010 Technology Fast 500™, an annual ranking by Deloitte LLP of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America. ERF Wireless grew by 760% from 2005-2009.

  • The company received correspondence from the U.S. Patent Office that the second patent previously applied for relating to other aspects of the CryptoVue encrypted security device has been approved and that the patent is being issued.

  • The company announced that it has repaid all of its outstanding convertible debt as of close of business August 4, 2010. As reported in its 10-Q for the first quarter of 2010, the company received approximately $600,000 USD in financing through convertible debentures with several institutional investors during the first quarter of 2010.

  • The company entered into a contract with the world's leading oil and gas services company in support of BP and the U.S. Coast Guard. The company was selected to provide its world-class integrated communications systems to provide bandwidth to the U.S. Coast Guard's Incident Command Center that was set up on Galveston Island to search for and respond to all reports of oil affecting the Texas Gulf Coast that may be associated with the BP Deepwater Horizon spill off the coast of Louisiana.

  • The company completed the deployment of a BranchNet™ and BankNet™ encrypted enterprise-class wireless banking network for First Federal Bank of Louisiana that spans virtually the entire western region of Louisiana from Lake Charles in the south to Natchitoches in the north. This high-speed broadband network connects all 14 of First Federal's current branch locations with their Operations Center and is ERF Wireless' largest bank project to date.

  • The company launched a marketing campaign in support of its WiNet Agreement with West Texas State Bank in Monahans, Texas. This agreement calls for the utilization of the bank's excess bandwidth and wireless infrastructure to provide Internet products and services to the bank's commercial and retail customers in the Monahans and Kermit areas. ERF Wireless plans to operate and support its WiNet product offerings through its Wireless Bundled Services subsidiary.

About ERF Wireless

ERF Wireless Inc. is a fully reporting public corporation located in League City, Texas, and is the parent company of Energy Broadband Inc., 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