Multiband Announces 2010 Second Quarter Results
Record second quarter EBITDA of $7.3 million, up 249% year-over-year from a
$4.9 million loss in 2Q09
Gross margin expands to 32.5% in 2Q10 from 15.6% for the same period last
year
Record income from operations increases to $5.4 million from $7.7 million
loss in year-ago period
Company posts $0.24 per share Net Income
Company negotiates $10 million financing opportunity with institutional
investor
Company raises EBITDA guidance to $15-$17 Million
MINNEAPOLIS--(BUSINESS WIRE)--August 12, 2010--
Multiband Corporation, (NASDAQ:MBND), a leading Home Service Provider (HSP)
for DIRECTV and the nation's largest DIRECTV Master System Operator (MSO)
for Multiple Dwelling Units (MDU's), today announced financial results for
the second quarter and six months ended June 30, 2010.
Financial Highlights
-- Second quarter revenues were up 7.7% sequentially to $64.9 million from
$60.2 million in first quarter 2010 but down 3.7% compared to $67.4
million for the quarter ended June 30, 2009.
-- Second quarter 2010 gross margins were 32.5% compared to 15.6% for the
year-ago period.
-- Operating income increased to $5.4 million compared to an operating
loss
of $7.7 million in the year-ago period, a $13.1 million swing to the
positive.
-- Net income for the quarter attributable to common stockholders was $2.0
million, or $0.21 per share compared to a net loss of $7.2 million, or
$0.75 per share loss in the year-ago period, a $9.2 million positive
swing.
-- EBITDA, a non-GAAP measure, substantially exceeded guidance and was a
record $7.6 million for the second quarter of 2010, up $12.6 million
from $5.0 million loss for the same period in 2009 and up from $3.1
million sequentially in the first quarter of 2010.
-- Negotiated a $10 million funding opportunity with Lincoln Park Capital
Fund, LLC to be utilized at the Company's discretion for working
capital
or other general corporate purposes.
Second Quarter 2010 Financials
Revenues for the three month period ended June 30, 2010 increased 7.7%
sequentially to $64.9 million from $60.2 million in first quarter 2010 but
decreased 3.7% compared to $67.4 million for the quarter ended June 30,
2009. The year-over-year decrease in revenues is primarily due to fewer new
DirecTV subscriber installations and reduced DTV subsidies and more
stringent DTV credit standards, partially offset by an increase in earned
incentive revenue.
Second quarter 2010 gross margins improved to 32.5% compared to 15.6% for
the year-ago period. Improved margins were driven by efficiencies at the
Company's HSP segment including improved installation procedures, inventory
controls, fleet management, and reduced turnover. In addition, in the first
half of 2009, the Company incurred significant upfront costs due to the
substantial increase in the number of technicians employed by the Company.
Selling, general and administrative expenses decreased approximately 13% to
$13.5 million (20.8% of revenues) from $15.5 million (23.0% of revenues) in
the same period last year. The decrease in selling, general and
administrative expenses as a percentage of revenue is primarily due to
decreased insurance and telephone expense. The Company expects expenses to
stay consistent with second quarter levels for the remainder of the year.
Operating income was $5.4 million for the quarter ended June 30, 2010
compared to an operating loss of $7.7 million in the same period last year,
a $13.1 million positive swing.
EBITDA, a non-GAAP measure, was a record $7.3 million for the second quarter
of 2010, a substantial improvement from a $4.9 million loss in the second
quarter of 2009; and also up substantially from $3.1 million in the first
quarter of 2010.
In the second quarter of 2010, the Company generated net income of $2.4
million, or $0.24 per basic and diluted share compared to a net loss of $8.6
million or $0.89 loss per basic and diluted share in the second quarter of
2009, a $11 million positive swing.
James L. Mandel, CEO of Multiband, commented, "We spent 2009 repositioning
the Company and focusing our processes to significantly improve our
financial results and the resulting returns to our shareholders. The second
quarter results demonstrate the effectiveness of those efforts. Moving
forward, we have created a platform that will enable the company to leverage
our installation services to include other opportunities outside of the
DIRECTV single family home provisioning and we have already seen progress on
this front. Through the second three months of 2010, we have continued to
expand our installation services to include enhanced call and support center
services, security, and wireless high speed internet. We have the capacity
with our existing infrastructure to significantly expand these installation
services and we will update the investment community as we continue to
obtain additional customers in the consumer and commercial sectors."
Mr. Mandel continued, "Our new $10 million purchase agreement with Lincoln
Park Capital Fund, LLC provides us with additional flexibility to maintain
and expand current operations.
YTD 2010 Financial Results
Revenues for the six-month period ended June 30, 2010 decreased 3.5% to
$125.1 million from $129.6 million for the six months ended June 30, 2009.
Gross margins for the six month period improved to 29.9% compared to 19.6%
for the year-ago period.
Operating income was $5.8 million for the six months ended June 30, 2010
compared to an operating loss of $9.9 million in the same period last year.
The Company generated net income attributable to common stockholders of
$699, or $0.07 earnings per basic and diluted share compared to a net loss
of $9.8 million or $1.02 loss per basic and diluted share in the same period
of 2009. EBITDA, a non-GAAP measure, was a record $10.4 million for the
first six months of 2010, a 142% improvement from $4.3 million in the same
period in 2009.
The Company generated approximately $10.5 million in operating cash flow in
the period ended June 30, 2010 compared to cash used in operating activities
of $1.3 million in the same period last year, and had $5.3 million in cash
and cash equivalents as of June 30, 2010 compared to $2.2 million at
December 31, 2009.
Mr. Mandel concluded, "As previously announced, we have increased revenue
projections to the $250 million to $255 million range, up from our original
2010 top-line guidance of $250 million and have also again revised our
EBITDA projections from $14 million to $16 million to a new range of $15
million to $17 million."
Annual Meeting Information
Multiband will be hosting their annual meeting on August 18th at their
corporate headquarters located in New Hope, Minnesota. Proxies have been
mailed out and anyone who has not received their proxy, please contact Ms.
Suzanne Hemping at 763-504-3001.
Conference Call Information
A conference call and live webcast will take place at 4:30 p.m. Eastern
Time, on Thursday, August 12, 2010. Anyone interested in participating
should call 1-888-549-7742 if calling within the United States or
1-480-629-9859 if calling internationally. There will be a playback
available until August 19, 2010. To listen to the playback, please call
1-877-870-5176 if calling within the United States or 1-858-384-5517 if
calling internationally. Please use pin number 4345843 for the replay.
The call will also be accompanied live by webcast over the Internet and
accessible at http://viavid.net/dce.aspx?sid=00007961
About Multiband Corporation
Multiband Corporation (Nasdaq: MBND) is the largest nationwide DIRECTV
master system operator in the Multiple Dwelling Unit (MDU) market and one of
the largest full-service home service providers (HSPs), handling around 20%
of all DIRECTV's installations, maintenance and upgrades for residents of
single-family homes. Multiband is a full-service operator for a number of
other providers within the footprint as well, offering solutions for watch,
talk, surf and security, and is equipped with a retail store and an online
store to strive to be a customer's "one source solution" for all electronic
needs. Additionally, Multiband is a leading provider of software and
integrated billing services to MDUs on a single bill, including video,
voice, data and other value-added local services, both directly and through
strategic arrangements. Multiband is headquartered in Minneapolis, Minn.,
and has offices strategically placed around the continental United States.
Statements about our future expectations are "forward-looking statements"
within the meaning of applicable Federal Securities Laws, and are not
guarantees of future performance. When used herein, the words "may," "will,"
"should," "anticipate," "believe," "appear," "intend," "plan," "expect,"
"estimate," "approximate," and similar expressions are intended to identify
such forward-looking statements. These statements involve risks and
uncertainties inherent in our business, including those set forth in our
most recent Annual Report on Form 10-K for the year ended December 31, 2009,
and other filings with the SEC, and are subject to change at any time. Our
actual results could differ materially from these forward-looking
statements. We undertake no obligation to update publicly any
forward-looking statement.
EBITDA Computation (2Q10 and 2Q09) (in thousands)
2Q10 2Q09
------- ----------
(i) Net Income (Loss) $2,395 ($8,601)
(ii) Non Operating
Gains/Losses (322) (31)
(iii) Adjusted Net Income (Loss) 2,073 (8,632)
(Sum of (i)minus (ii))
(iv) Interest Expense 1,066 890
(v) Depreciation & Amortization 2,146 2,703
(vi) Taxes 1,983 102
----- ------- (PR Wires) PRW: Multiband Announces 2010 Second Quarter Results -2-
PRW: Multiband Announces 2010 Second Quarter Results -2-
(vii) EBITDA $7,268 ($4,937)
===== =======
(sum of (iii) +( iv) + (v) + (vi))
NON-GAAP Financial Measures
To comply with Regulation G promulgated pursuant to the Sarbanes-Oxley Act,
Multiband Corporation attached to this news release and will post to the
company's investor relations web site (www.multibandusa.com) any
reconciliation of differences between non-GAAP financial information that
may be required in connection with issuing the company's quarterly financial
results.
The Company, as is common in its industry, uses EBITDA as a measure of
performance to demonstrate earnings exclusive of interest and non-cash
events. The Company manages its business based on its cash flows. The
Company, in its daily management of its business affairs and analysis of its
monthly, quarterly and annual performance, makes its decisions based on cash
flows, not on the amortization of assets obtained through historical
activities. The Company, in managing its current and future affairs, cannot
affect the amortization of the intangible assets to any material degree, and
therefore uses EBITDA as its primary management guide. Since an outside
investor may base its evaluation of the Company's performance based on the
Company's net loss not its cash flows there is a limitation to the EBITDA
measurement. EBITDA is not, and should not be considered, an alternative to
net loss, loss from operations, or any other measure for determining
operating performance of liquidity, as determined under accounting
principals generally accepted in the United States (GAAP). The most directly
comparable GAAP reference in the Company's case is the removal of interest,
depreciation amortization, taxes and other non-cash expense.
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
------------------------------
------------------------------
June 30, June 30,
2010 June 30, 2009 2010 June 30,
2009
(unaudited) (unaudited) (unaudited)
(unaudited)
------------ --------------- ------------
---------------
REVENUES $ 64,888 $ 67,396 $ 125,136 $ 129,554
----------- ------- ----------- --------
COSTS AND
EXPENSES
Cost of products
and services
(exclusive of
depreciation and
amortization
shown separately
below) 43,814 56,894 87,767 104,210
Selling, general
and
administrative 13,500 15,509 27,017 29,249
Depreciation and
amortization 2,146 2,703 4,582 5,988
----------- ------- ----------- --------
Total costs and
expenses 59,460 75,106 119,366 139,447
----------- ------- ----------- --------
INCOME (LOSS)
FROM OPERATIONS 5,428 (7,710) 5,770
(9,893)
----------- ------- ----------- --------
OTHER EXPENSE
Interest expense (1,066) (890) (2,189)
(1,745)
Interest income 1 3 6 10
Other income 15 98 27 348
------------ ----------- ----------- --------
Total other
expense (1,050) (789) (2,156)
(1,387)
------------ ----------- ----------- --------
NET INCOME (LOSS)
BEFORE INCOME
TAXES AND
NONCONTROLLING
INTEREST IN
SUBSIDIARIES 4,378 (8,499) 3,614
(11,280)
PROVISION FOR
INCOME TAXES 1,983 102 2,183 202
----------- ------- ----------- --------
NET INCOME (LOSS) 2,395 (8,601) 1,431
(11,482)
LESS: NET LOSS
ATTRIBUTABLE TO
THE
NONCONTROLLING
INTEREST IN
SUBSIDIARIES - (1,482) -
(1,778)
----------- ------- ----------- --------
NET INCOME (LOSS)
ATTRIBUTABLE TO
MULTIBAND
CORPORATION AND
SUBSIDIARIES 2,395 (7,119) 1,431
(9,704)
Preferred stock
dividends 351 71 732 144
----------- ------- ----------- --------
INCOME (LOSS)
ATTRIBUTABLE TO
COMMON
STOCKHOLDERS $ 2,044 $ (7,190) $ 699 $
(9,848)
=========== ======= =========== ========
INCOME (LOSS) PER
COMMON SHARE --
BASIC:
INCOME (LOSS)
ATTRIBUTABLE
TO COMMON
STOCKHOLDERS $ 0.21 $ (0.75) $ 0.07 $
(1.02)
=========== ======= =========== ========
INCOME (LOSS) PER
COMMON SHARE --
DILUTED:
INCOME (LOSS)
ATTRIBUTABLE
TO COMMON
STOCKHOLDERS $ 0.20 $ (0.75) $ 0.07 $
(1.02)
=========== ======= =========== ========
Weighted average
common shares
outstanding --
basic 9,912 9,651 9,851 9,650
=========== ======= =========== ========
Weighted average
common shares
outstanding -
diluted 9,986 9,651 9,965 9,650
=========== ======= =========== ========
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Three Months Ended Six Months Ended
----------------------------
------------------------------
June 30, 2010 June 30, 2009 June 30, 2010 June 30,
2009
(unaudited) (unaudited) (unaudited)
(unaudited)
------------- ------------- -------------
NET INCOME (LOSS) $ 2,395 $ (8,601) $ 1,431 $ (11,482)
OTHER
COMPREHENSIVE
LOSS, NET OF
TAX:
Unrealized
losses on
securities:
Unrealized
holding
losses
arising
during
period (5) (38) (6) (8)
--- ------- --- ------- ------- --------
COMPREHENSIVE
INCOME (LOSS)
BEFORE
NONCONTROLLING
INTEREST IN
SUBSIDIARIES 2,390 (8,639) 1,425 (11,490)
--- ------- --- ------- ------- --------
COMPREHENSIVE
INCOME (LOSS)
ATTRIBUTABLE TO
THE
NONCONTROLLING
INTEREST IN
SUBSIDIARIES - (1,482) - (1,778)
--- ------- --- ------- ------- --------
COMPREHENSIVE
INCOME (LOSS)
ATTRIBUTABLE TO
MULTIBAND
CORPORATION AND
SUBSIDIARIES $ 2,390 $ (7,157) $ 1,425 $ (9,712)
=== ======= === ======= ======= ========
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
June 30, 2010 December 31, 2009
(unaudited) (audited)
--------------- -------------------
CURRENT ASSETS
Cash and cash equivalents $ 5,279 $ 2,240
Securities available for sale 1 7
Accounts receivable, net 15,727 14,336
Other receivable -- related party 518 518
Inventories 8,353 8,561
Prepaid expenses and other 6,752 549
Current portion of notes receivable 6 6
----------- --- --------------
Total Current Assets 36,636 26,217
----------- --- --------------
PROPERTY AND EQUIPMENT, NET 8,231 8,546
----------- --- --------------
OTHER ASSETS
Goodwill 38,067 38,067
Intangible assets, net 19,692 22,677
Other receivable -- related party --
long term 987 1,011
Notes receivable -- long-term, net of
current portion 24 25
Other assets 2,677 2,988
----------- --- --------------
Total Other Assets 61,447 64,768
----------- --- --------------
TOTAL ASSETS $ 106,314 $ 99,531
=========== === ==============
(PR Wires) PRW: Multiband Announces 2010 Second Quarter Results -3-
PRW: Multiband Announces 2010 Second Quarter Results -3-
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(in thousands, except share and liquidation preference amounts)
June 30, 2010 December 31, 2009
(unaudited) (audited)
--------------- -------------------
CURRENT LIABILITIES
Line of credit $ 49 $ 49
Short term debt 4,111 66
Related parties debt -- short
term 715 1,345
Current portion of long-term
debt - 228
Current portion of capital
lease obligations 395 489
Accounts payable 27,474 28,008
Accrued liabilities 27,152 22,026
Deferred service obligations
and revenue 2,131 2,602
----------- --- --------------
Total Current Liabilities 62,027 54,813
LONG-TERM LIABILITIES
Accrued liabilities -- long
term 2,577 4,415
Long-term debt, net of current
portion and original issue
discount 4,899 4,853
Related parties debt -
long-term, net of current
portion and original issue
discount 29,678 29,856
Capital lease obligations, net
of current portion 409 491
----------- --- --------------
Total Liabilities 99,590 94,428
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Cumulative convertible
preferred stock, no par
value:
8% Class A (14,171 shares
issued and outstanding,
$148,796 liquidation
preference) 213 213
10% Class B (770 and 1,370
shares issued and
outstanding, $8,085 and
$14,385 liquidation
preference) 8 14
10% Class C (112,280 and
112,880 shares issued and
outstanding, $1,122,800 and
$1,128,800 liquidation
preference) 1,457 1,465
10% Class F (150,000 shares
issued and outstanding,
$1,500,000 liquidation
preference) 1,500 1,500
8% Class G (11,595 shares
issued and outstanding,
$115,950 liquidation
preference) 48 48
6% Class H (1.25 shares
issued and outstanding,
$125,000 liquidation
preference) - -
8% Class J (100 shares issued
and outstanding, $10,000,000
liquidation preference) 10,000 10,000
15% Class E cumulative
preferred stock, no par value,
(220,000 shares issued and
outstanding, $2,200,000
liquidation preference) 2,200 2,200
Common stock, no par value
(9,944,638 and 9,722,924
shares issued and
outstanding) 38,547 38,054
Stock subscriptions receivable (1) (26)
Stock-based compensation and
warrants 46,996 46,572
Accumulated other comprehensive
income -- unrealized gain on
securities available for sale 1 7
Accumulated deficit (94,245) (94,944)
----------- --- --------------
Total Stockholders' Equity 6,724 5,103
--------------- -------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 106,314 $ 99,531
=========== === ==============
CONTACT: Company Contact
Multiband Corporation
James Mandel,
CEO
763-504-3000
or
Investor Contact
Hayden IR
Cameron
Donahue
651-653-1854
cameron@haydenir.com
SOURCE: Multiband Corporation
Copyright Business Wire 2010
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