EXHIBIT 99.1
ERF WIRELESS REPORTS SECOND QUARTER 2007 RESULTS
REPORTS 526% INCREASE IN REVENUES AND STRONG OUTLOOK FOR THE SECOND HALF OF 2007
LEAGUE CITY, Texas--(BUSINESS WIRE)--August 13, 2007--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-QSB with the
Securities and Exchange Commission reporting results for the second quarter
ended June 30, 2007.
Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "I am pleased with the
results that our management team and employees have achieved across all our
business units in the second quarter. Moreover, in addition to the 526% increase
in revenue this quarter, the timing of our second quarter report doesn't allow
us to fully reflect in this 10Q the significant progress we've already made this
year in securing numerous bank network contracts and in designing and developing
our US-BankNet system; a secure enterprise-class wireless network for the
banking industry. With a sound backlog of contracts already in place, the
company is also well-positioned to achieve solid revenue growth in the second
half of 2007."
For the second quarter of 2007, the company reported total net sales of
$2,424,000, an increase of 526% compared with $387,000 in the second quarter of
2006. The increase in revenue during the second quarter of 2007 as compared to
the revenue generated in the second quarter of 2006 was primarily attributed to
the substantial progress to date on the $2+ million project with the El Dorado
Golf and Beach Club of San Jose del Cabo, Mexico. The company also reported a
reduced Loss from Operations of $751,000 for the second quarter of 2007, as
compared to a Loss from Operations of $1,443,000 for the second quarter of 2006.
The 48% decrease in Loss from Operations was primarily attributed to an overall
increase in gross profit of $829,000, primarily attributable to the El Dorado
FTTH project, partially offset by a $137,000 increase in operating expenses.
Cash used for operating activities in the second quarter of 2007 was $234,000,
down from $1,776,000 in the second quarter of 2006. Primary and fully-diluted
Net Loss per share for the company's second quarters of 2007 and 2006 were
($0.04) and ($0.13), respectively.
RECENT EVENTS
During and subsequent to the quarter ended June 30, 2007, ERF Wireless has made
significant progress with its strategic business plan; as evidenced by the
completion and announcement of numerous agreements. These include:
o The announcement of a contract with First Federal Bank of
Louisiana to install a BranchNet encrypted enterprise-class
banking network to interconnect the bank's 14 locations throughout
Southwestern Louisiana, including the construction of a 300-mile
fault-tolerant, encrypted 60-Mb/s network backbone looping from
Lake Charles up the western side of the state to Natchitoches,
across to Alexandria, and then down the central portion of the
state back to Lake Charles.
o The completion of the initial segment of US-BankNet in part of the
state of Louisiana providing contracting financial institutions in
Louisiana with high-speed connectivity to key banking service
providers, the Federal Reserve, fiber gateways and the Internet.
o The announcement of the company's first US-BankNet contract with
First Federal Bank of Louisiana to supply bandwidth transport
across US-BankNet under a seven-year agreement with a number of
renewal options that could extend it up to 25 years.
o The announcement of the company's second US-BankNet contract with
Iberville Bank to supply bandwidth transport across US-BankNet
under a seven-year agreement including renewal provisions to
extend it up to 25 years, thereby facilitating the delivery of
additional digital services, including fast access to key banking
service providers, redundant routing across the network, encrypted
WAN IP transport and access to a 50-mbps Level 3 Internet gateway.
o The completion of a three-year testing and certification process
for the delivery of Wireless Internet Service Products ("WISP")
securely across a financial institution's BranchNet system and the
company's US-BankNet infrastructure; allowing for the delivery of
advanced digital wireless products and services under the brand
name WiNet(TM).
o The announcement of a ten-year WiNet System agreement with First
Federal Bank of Lake Charles, Louisiana, utilizing the banks
excess bandwidth and wireless infrastructure to provide wireless
Internet products and services to the banks commercial and retail
customers across southwest and central Louisiana.
o The completion of the design, development and assembly of the
Fiber-to-the Home ("FTTH") headend facility and the acceptance of
the network at the Critical Design Review for the $2+ million
contract for the El Dorado Golf and Beach Club in San Jose del
Cabo.
o The announcement of a second ten-year WiNet System Agreement with
Iberville Bank in Plaquemine, Louisiana; utilizing the banks
excess bandwidth and wireless infrastructure to provide wireless
Internet products and services to the bank's commercial and retail
customers in the Greater Baton Rouge area.
o The completion and certification of the first segment of the
company's US-BankNet system in the State of Texas.
Additionally, on the financing front; the company entered into an Investment
Agreement and Registration Rights Agreement with Dutchess Private Equities Fund,
Ltd. The Investment Agreement has no upfront commitment fee shares, no warrants,
no fees per draw down, no due diligence fees and no inactivity fees for
utilization of the line. Pursuant to this investment agreement, Dutchess shall
commit to purchase up to $10,000,000 of our common stock over the course of 36
months at a maximum of a 7% discount to the market price at the time of the draw
down.
The company has also completed a $1 million Master Lease Agreement with Agility
Solutions Corp. to provide for expansion capital for its growing wireless ISP
operations.
R. Greg Smith, CFO of ERF Wireless, commented, "The company expects to complete
the construction of both the First Federal Bank of Louisiana BranchNet, the two
US-BankNet contracts and the El Dorado FTTH network during the balance of
calendar 2007 and, accordingly, will be recognizing the associated revenues for
these projects on a percentage of completion method of accounting in subsequent
quarters of 2007. Additionally, the company enjoys the benefit of a strong
recurring revenue base from its WISP operations and will be launching the
delivery of advanced digital wireless products and services in the second half
of 2007 under the brand name WiNet(TM); utilizing the banks' excess bandwidth
and wireless infrastructure to provide wireless Internet products and services
to the banks' commercial and retail customers." Smith added, "With a strong
backlog going into the second half of 2007, we are already positioned to achieve
significant growth in revenues for the second half of 2007 as compared to the
second half of 2006, and that is without any contribution from additional
contracts expected for our product and service offerings for financial
institutions, additional anticipated FTTH projects in upscale gated communities
or planned acquisitions of existing WISP operations."
ABOUT ERF WIRELESS
ERF Wireless Inc. is a fully reporting public corporation (OTCBB: ERFW - News)
that specializes in providing secure wireless and broadband product and secure
service solutions to banking and commercial clients on a national and
international basis. Its principals have been in the network integration,
triple-play FTTH, IPTV content delivery, and Internet banking and encryption
technology businesses for over 20 years and have constructed encrypted, wireless
broadband networks, fiber to the home projects, as well as secure Internet
banking solutions for hundreds of banks across America. For more information
about ERF Wireless, please visit www.erfwireless.com 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.
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CONTACT:
ERF Wireless Inc.
Clareen O'Quinn, 281-538-2101 ext. 113
coquinn@erfwireless.com