SOURCE: ERF Wireless Inc.

ERF Wireless Inc.

November 23, 2010 09:00 ET

ERF Wireless Reports 2010 Third-Quarter Results That Show Continued Progress in Becoming Cash Flow Positive

LEAGUE CITY, TX--(Marketwire - November 23, 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-Q with the Securities and Exchange Commission reporting results for the third quarter ended September 30, 2010.

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the third quarter of 2010 our Oil and Gas subsidiary, Energy Broadband, Inc., providing broadband services to the energy industry, again reported increased operating results. Specifically, we reported $629,000 of oil and gas revenues in the first three quarters of 2010. This can be attributed to our previous efforts invested to date in laying the foundation for future growth by acquiring and partnering with other large wireless network operators to expand our footprint in active oil and gas drilling regions and the expansion of our customer base as knowledge of our network capabilities spreads throughout the industry. Oil and gas wireless broadband services contributed $251,000 during the third quarter ended September 30, 2010, as compared to $114,000 for the third quarter of 2009. For additional comparison purposes, oil and gas wireless broadband services contributed a total of $72,000 in calendar year 2008 and $308,000 in calendar year 2009." Cubley added, "We expect this trend to continue at an even greater pace for the last quarter of 2010 based on the substantial increased activity we are experiencing in this sector."

For the third quarter of 2010, the company reported total net sales of $1,436,000, a decrease of 5% compared with $1,504,000 for the third quarter of 2009. The $68,000 decrease in net sales during the third quarter of 2010 as compared to the net sales generated in the third quarter of 2009 is primarily attributable to a $171,000 decrease in traditional wireless broadband services partially offset by a $137,000 increase in broadband services from oil and gas deployments of our Mobile Broadband Trailers (MBTs), a $5,000 decrease in banking network installation and services revenue, and a $29,000 decrease in wireless paging service and infrastructure construction revenues. For the quarter ended September 30, 2010, the company reported losses from operations of $1,902,000 compared to losses from operations of $2,132,000 for the quarter ended September 30, 2009.

For the quarters ended September 30, 2010 and 2009, cash used for operating activities was $1,605,000 and $2,207,000, respectively. Primary and fully-diluted net loss per share for the quarter ended September 30, 2010, was ($0.01). Primary and fully-diluted net loss per share for the quarter ended September 30, 2009, was ($0.02).

Dr. Cubley commented, "The 27% reduction in one quarter in our need for cash other than that produced from operations, as shown above, is a strong indication of our continuing commitment to bring ERF Wireless cash flow positive at the earliest possible time. We are continuing to reduce expenses and grow revenues and many of our longer term cash commitments are being fulfilled at the end of 2010. Achieving positive cash flow from our operations is now only a matter of continuing this trend until we reach our goal."

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 third quarter of 2010, approximately 98% of our revenue was generated from Internet services and 2% of our revenue was generated from construction services. We expect our Internet services to experience the most growth during the fiscal year 2011 as we devote significant capital resources to developing the sale of wireless products and services in the oil and gas market.

During the third quarter of fiscal 2010, 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 September 30, 2010, includes:

  • 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 announced that the growth of Energy Broadband, its wholly owned subsidiary, continues to support the commitment that ERF Wireless has made to become the dominant provider of terrestrial wireless broadband communications to the North American oil and gas industry.

  • The Company announced that Energy Broadband continues expansion of its energy industry business base with new contracts to provide communications service, equipment, and infrastructure to a number of oil, gas, and related energy sector companies throughout North America and has been providing wireless broadband connectivity to numerous oil, gas, and energy companies in this same area since 2008.

  • The Company participated in the Developing Unconventional Gas (DUG) Eagle Ford Conference & Exhibition show held in early October 2010 in San Antonio, Texas. The exhibition was sponsored by Hart Energy Publishing and showcased some of the latest technologies that are being applied to successfully develop unconventional gas plays.

  • The Company announced that their patent attorney recently received correspondence from the U.S. Patent Office stating that one of the patents previously applied for in connection with its CryptoVue® encrypted security device has been approved and that a patent will soon be issued.

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: Email Contact