Exhibit 99.1
ERF WIRELESS REPORTS THIRD QUARTER 2007 RESULTS
COMPANY REPORTS 534% INCREASE IN REVENUES WITH STRONG OUTLOOK FOR THE FOURTH
QUARTER OF 2007 AND FISCAL 2008
LEAGUE CITY, Texas, Nov 19, 2007 (BUSINESS WIRE) -- 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 third quarter ended
September 30, 2007.
Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "Our management team and
employees have achieved outstanding results across all of our business units in
the third quarter. The 534% increase in revenue this quarter over the same prior
year quarter demonstrates continued progress under our diversified business
strategy. Additionally, we made substantial progress in laying a solid
foundation for future growth by recently completing cash-flow-positive WISP
acquisitions, developing new bank BranchNet systems, pursuing triple-play
fiber-to-the-home (FTTH) prospects and in designing and developing our
US-BankNet system, a secure enterprise-class wireless network for the banking
industry. With the completion of recently announced acquisitions, a sound
backlog of contracts secured, additional growth financing of $4.1 million and
committed credit sources of more than $23 million in place, and a solid pipeline
of new prospects, the company is well-positioned to achieve solid revenue growth
and anticipates exceeding its previously stated minimum objective of $5 million
of revenue for fiscal 2007. In addition, with the company's improving revenue
capabilities, growing asset base and diversified financial resources lining up
for a fast start in fiscal 2008, the potential for an early move to a national
market listing has significantly increased."
For the third quarter of 2007, the company reported total net sales of
$1,236,000, an increase of 534% compared with $195,000 in the third quarter of
2006. The increase in revenue during the third quarter of 2007, as compared to
the revenue generated in the third quarter of 2006, was primarily attributed to
the substantial percentage of completion progress to date on the $2+ million
project with the El Dorado Golf and Beach Club of San Jose del Cabo, Mexico, and
the multi-million dollar BranchNet, US-BankNet and WiNet projects with First
Federal Bank of Louisiana. The company also reported a Loss from Operations of
$1,320,000 for the third quarter of 2007, as compared to a Loss from Operations
of $1,220,000 for the third quarter of 2006. The 8% increase in Loss from
Operations was primarily attributed to an overall increase in gross profit of
$257,000, primarily attributable to the percentage of completion to date on the
El Dorado FTTH and First Federal Bank projects, partially offset by a $357,000
increase in operating expenses. Cash used for operating activities in the nine
months ended September 30, 2007, was $1,376,000, down from $2,502,000 in the
nine months ended September 30, 2006. Primary and fully-diluted Net Loss per
share for the company's third quarters of 2007 and 2006 were ($0.04) and
($0.10), respectively.
RECENT EVENTS
During and subsequent to the quarter ended September 30, 2007, ERF Wireless has
made significant progress with its strategic business plan, as evidenced by the
completion and announcement of numerous agreements and contracts. These include:
- -- The completion of the acquisition of assets and operations of two Central
Texas Wireless Internet Service Providers, Momentum Online and TSTAR
Internet, adds approximately 5,500 customers and $2.4 million in
annualized revenues. These acquisitions cover five counties in Central
Texas and give the company a footprint covering 3,200 square miles, when
integrated with the company's existing Central Texas WiNet and US-BankNet
System. These acquisitions also provide ERF Wireless a target market of
more than 22,500 businesses, over 550,000 residents and 36 regional and
community bank charters aggregating 462 branch locations and give the
company access to 55 towers, in addition to 78 towers that the company
already controls across the state.
- -- The completion of $1.9 million in equity investment from accredited
investors during the third quarter ended September 30, 2007, and an
additional $2.2 million in equity investment from accredited investors
subsequently, for a total of $4.1 million in equity since the beginning
of the third quarter ended September 30, 2007, through today.
- -- The completion of $10 million in funding commitment from BancLeasing Inc.
for funding the company's US-BankNet System. A total of $305,000 was
funded in September 2007.
- -- The company paid off in cash the remaining $366,000 balance of the
original $1,500,000 convertible debenture entered into with Global
Capital Funding Group L.P. in September 2007. The company now has no
outstanding convertible debentures other than the conversion feature
under its ongoing E-Bond investment program.
- -- The company announced in October 2007 the completion of a new $2 million
lease line, in addition to its existing $1 million lease line, with
Agility Ventures LLC to provide incremental expansion capital for its
growing wireless ISP operations.
- -- The company announced that its patent-pending ERF Wireless CryptoVue(TM)
Network Security Appliance would be marketed worldwide as a stand-alone
VPN security device for encrypting wired and wireless wide-area networks.
- -- The patent-pending CryptoVue Network Security Appliance has successfully
completed a testing program conducted by Motorola in its Schaumburg,
Illinois, labs to validate its use with the MOTOwi4 wireless broadband
solutions in applications requiring secure wireless communications. Under
a Product Affiliation Agreement recently signed with Motorola, ERF
Wireless has made its CryptoVue Network Security Appliance available to
Motorola and Authorized Motorola Canopy Solutions Providers wanting to
deploy secure wireless communications networks for non-financial
industries as well. Both companies are now referencing and cross-linking
the CryptoVue Network Appliance on their respective websites.
- -- The company announced that it is deploying US-BankNet in the state of
Texas to eventually provide the opportunity for connectivity to over 250
banks targeted in the state. The rollout of US-BankNet in Texas
complements the deployment of US-BankNet already underway in the state of
Louisiana. Additional states are anticipated for 2008.
- -- The company signed an agreement with CamSoft Data Systems to provide
technical support for the Iberville Bank WiNet network that will cover 12
Iberville Bank WiNet locations, thereby converting their BranchNet system
into a revenue-producing asset.
- -- The company signed a contract to acquire the largest transmission tower
facility in Galveston County, Texas, to serve as the transmission hub for
most of the company's banking and wireless broadband networks in the
southeastern part of Texas. This 1,120-foot-tall tower and associated
real estate is situated in an area south of Houston and provides a direct
line-of-sight to a circular ground level footprint 70 miles in diameter
that includes all the cities in three counties, including a population
base of more than 5 million people.
R. Greg Smith, CFO of ERF Wireless, commented, "The company expects to
substantially complete the construction of both the First Federal Bank of
Louisiana BranchNet, 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 the fourth
quarter of 2007. Additionally, the company enjoys the benefit of a strong
recurring revenue base from its existing WISP operations, enhanced by the
completion of the acquisitions of Momentum Online and TSTAR Internet in the
early fourth quarter of 2007, and will be launching the delivery of advanced
digital wireless products and services in the fourth quarter of 2007 under the
brand name WiNet(TM), utilizing Iberville 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, recently
completed acquisitions and a strong sales pipeline of opportunities going into
the fourth quarter of 2007, we are already positioned to achieve significant
growth in revenues for the fourth quarter of 2007 and into 2008, 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 additional WISP
operations."
About ERF Wireless
ERF Wireless Inc. is a fully reporting public corporation (OTCBB:ERFW) 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 more than 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.
SOURCE: ERF Wireless Inc.
ERF Wireless Inc.
Clareen O'Quinn, 281-538-2101 ext. 113
coquinn@erfwireless.com