Multiband Announces Record Revenues and Returns to Positive
EBITDA
-- Multiband announces record revenues of $71.4 million in 3Q09, up 6%
sequentially and 480% YoY, fueled by a substantial increase in its
installation workforce during the first half of the year and steady
growth in its MDU segment,
-- EBITDA of positive $3.3 million or $0.35 per share(an improvement of
$8.3
million over 2Q09) was driven by strong HSP revenues and improvements in
operating efficiencies; Company returns to positive operating profit of
$588K,
-- Management forecasts 2009 revenues will exceed prior guidance of $240
million-260 million.
-- Pro forma Adjusted Third Quarter EPS was $0.07
MINNEAPOLIS--(BUSINESS WIRE)--November 16, 2009--
Multiband Corporation (NASDAQ:MBND) today reported record results, including
3Q09 revenues of $71.4 million, up 6% over 2Q09. In the third quarter, the
Company generated record HSP (home service provider) revenues of $64.8
million, up 7% sequentially and 777% YoY, aided by higher install volumes in
support of DIRECTV. The company is benefiting from its significantly
expanded installation workforce which is servicing the strong demand for
satellite video services across the bulk of its geographies. During the
period the Company completed a record 457 271 work orders related to this
activity.
Multiband's MDU (multiple dwelling unit) segment posted solid operating
results with revenues up 35% YoY to $6.6 million from $4.9 million in 3Q08.
These gains were driven by increased number of Revenue Generating Units,
increased sale of services to third parties in the Call and Support Center
and greater activity in the Master System Operator division. The Company
believes that activity in the MDU sector will remain steady and anticipates
stronger construction related activity and revenues for the balance of the
year as several of the Company's major customers have announced their intent
to initiate additional projects.
EBITDA for the quarter was positive $3.34 million, a dramatic improvement
from an EBITDA loss of $4.94 million in the prior quarter. The Company
generated an operating profit of $588K, up sharply from a loss of $7.7
million in 2Q09. On an adjusted basis (adding back amortization expense
incurred for the DirecTECH acquisition earlier this year), EPS was $0.07, a
significant reversal from ($0.60) with comparable amortization adjustment in
2Q09. GAAP net loss per common share was ($0.05), substantially better than
($0.75) in the prior three months.
In the first half of 2009, the Company hired net new technicians of 500 and
gross new technicians in excess of 1,150, which significantly boosted
operating expenses while new employees completed their rigorous training
process without generating meaningful revenues. These recruiting and
training expenses totaled several thousand dollars per new hire, which
resulted in negative EBITDA in the second quarter. During 3Q09 the pace of
new hires returned to normal levels. Management believes the Company is now
at scale and capable of meeting greater installation volumes from its major
channel partners without incurring significant incremental one-time expense.
Commentary
"We remain comfortable with our demand forecast in our core HSP segment, as
our largest customer continues to take market share in the video segment
across the U.S. We see strong demand for satellite video services across our
markets and believe we are taking share from subscale operators unable to
meet installation requirements of our channel partners.
"Meanwhile, our MDU segment continues to expand strongly as we tactically
build out triple-play services to high value properties, negotiate
additional rights of entry (ROE) contracts for future expansion and pursue
strategic acquisitions to bolt subscale businesses onto our market-leading
franchise. We believe we now have a strong foundation in place for revenue
gains in the foreseeable future, and anticipate that we will reap the
rewards of our prior period investments by delivering continued growth,"
said Jim Mandel, CEO.
On the strategic front, we continually see opportunities for growth,
including niche acquisitions that could tuck nicely into our HSP or MDU
footprint, sales opportunities to push additional products through our
substantial installation fleet and organic growth opportunities to deliver
video to emerging operators in suburban and rural markets where there is
substantial pent-up demand for triple-play services.
Raising Guidance
Multiband is raising the range of revenue guidance for the balance of 2009
because of stronger than expected performance in its HSP and MDU segments,
driven by strength at DirecTV and robust backlog from the Company's MDU
strategy. Specifically, management projects 2009 revenues will exceed the
range of prior guidance of $240 million-$260 million.
Earnings Conference Call
Multiband Corporation will host its third quarter 2009 earnings conference
call today at 11:00 AM EST. The conference may be listened to by calling
(866) 394-1497 and using Conference ID 40943662. The call will also be
available at www.Multibandusa.com sometime later today.
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, taxes,
depreciation, amortization 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 principles 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.
About Multiband Corporation. Multiband Corporation (www.multibandusa.com) is
the largest DIRECTV installation provider and an enabler of video and
triple-play solutions to the MDU segment. The company employs approximately
3,900 professionals, has over 30 Field Offices, and serves customers in all
48 of the lower continental U.S. Contact: Jim Mandel, CEO, 763-504-3000.
Multiband Financial Summary for 1Q09, 2Q09 and 3Q09
In 000's
NINE MONTHS THREE MONTHS THREE MONTHS THREE MONTHS
ENDED SEPT. ENDED SEPT ENDED JUNE 30, ENDED MARCH
30, 2009 30, 2009 2009 31, 2009
2009 YTD 9/30/09 6/30/09 3/31/09
------------- ------------- -------------- -------------
Net Income (Loss) ($12,207) ($725) (8,601) ($2881)
Non Operating
Gains/Losses
(including stock
related expense,
provisions for
reserves and
other accrued
non-cash
expense) $67 251 (30) (154)
Adjusted Net
Income ($12,140) ($474) ($8,631) ($3,035)
Interest Expense $2,771 $1,026 $890 $855
Depreciation and
Amortization,
including
Impairment $8,402 $2,414 $2,703 $3,285
Federal, State,
and Local Income
and Excise
Taxes $574 $372 $102 $100
EBITDA ($393) $3,338 ($4,936) $1,205
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