Multiband Announces 2010 First Quarter Results
First quarter EBITDA of $3.1 million, up 158% year-over-year from $1.2
million in 1Q09; Gross margin percentage improves to 27% in first quarter of
2010 from 24% for the same period last year; First quarter revenue of $60.2
million in-line with previous guidance; Company establishes EBITDA guidance
for 2010 of $12 million vs. $4.25 million in 2009
MINNEAPOLIS--(BUSINESS WIRE)--May 13, 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 first quarter ended March 31, 2010.
First Quarter 2010 Highlights
-- First quarter revenues were $60.2 million, a decrease of 3% compared to
$62.2 million for the quarter ended March 31, 2009. Revenues decreased
year-over-year primarily due to a 19% reduction in job volume,
partially
offset by an increase in incentive revenue earned. Revenues were down
11.4% from the fourth quarter 2009 primarily due to seasonality.
-- First quarter 2010 gross margins were 27% compared to 24% for the
year-ago period, favorably impacted by improved operational
efficiencies
and lower training/recruiting costs.
-- Adjusted EBITDA, a non-GAAP measure, was $3.1 million for the first
quarter of 2010, up 158% from $1.2 million for the same period in 2009.
First Quarter 2010 Results
Revenues for the three month period ended March 31, 2010 totaled $60.2
million versus $62.2 million for the same period in 2009. The 3% decrease in
revenues is primarily due to a 19% reduction in job volume which was caused
by the culmination of the 2009 national mandatory digital conversion from
analog to digital television signals. The decrease caused by the reduction
in volume was partially offset by $3.5 Million in incentive revenue earned
due to improvements in operating efficiencies and higher customer
satisfaction scores.
First quarter 2010 gross margin percentage was 27% compared to 24% for the
same period last year. Improved gross margin was primarily generated by the
Company's HSP segment driven by the increase in incentive revenue plus
improved installation procedures, inventory controls, fleet management, and
reduced employee turnover.
Selling, general and administrative expenses for the three month period
ended March 31, 2010, decreased approximately 2% to $13.5 million from $13.7
million in the same period last year.
Operating income was $342K in the quarter just ended compared to an
operating loss of $2.2 million in the same period last year.
Adjusted EBITDA, a non-GAAP measure, was $3.1 million for the first quarter
of 2010, a substantial improvement from $1.2 million in the first quarter of
2009.
In the first quarter of 2010, the Company incurred a net loss of $964K, or
approximately $0.10 per share compared to a net loss of $2.9 million or
$0.30 per share in the first quarter of 2009. GAAP net loss per common share
was $0.14 basic and diluted compared to a GAAP net loss of $0.28 per common
share for basic and diluted in the first quarter of 2009, a 50% improvement.
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 first
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 first three months of 2010, we have expanded 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, "Paramount to our success will be continued gains in
efficiencies in our HSP segment, which now sits atop the network of DIRECTV
operators in terms of mean times to install and various other performance
metrics that are critical to profitability. Further, we intend to launch
additional products into our HSP and MDU channels to improve revenue per
truck roll and aid in employee retention, which may further boost
profitability especially in seasonally slow periods."
Guidance
Mr. Mandel concluded, "For 2010, we are projecting revenues in the range of
$250 million, down from 2009. The 2009 revenues were boosted as a result of
the mandatory digital conversion initiative which primarily occurred during
2009. Though our overall 2010 revenue outlook is relatively flat compared to
2009, we have taken a cautious stance with regard to inputs we are receiving
from our HSP channel partners as we believe that is the most prudent course
of action. In MDU, we continue to negotiate for incremental financing in
order to fund capital expenditures, which would boost our ability to add
subscribers and the associated recurring revenues and cash flows from our
rights of entry across the country. While revenues may be flat, we are
experiencing improving margins as we constantly deploy new procedures and
technologies to aid in the productivity of our workforce. This quarter's
results, which more than doubled positive EBITDA and improved net income by
50% from the same period last year, were all accomplished in spite of a
lower top line revenue. Finally, we have assumed no mergers and acquisitions
activity in our guidance though opportunities abound within the MDU market
which, if executed, could further boost our scope and scale. One acquisition
of a number of MDU rights of entry occurred in April, 2010. Additionally, we
are in discussions with other professional services and distribution firms
that could diversify and compliment our business from our major channel
partner and add scope/scale. Absent these potential events and based upon
current trending we are placing EBITDA guidance for 2010 at approximately
$12 million or $1.22 per share."
Conference Call Information
The Company will hold a conference call today to discuss the results. The
conference call will take place Thursday, May 13, 2010 at 4:30 p.m. eastern
time. Interested parties should dial 866-394-1497 and use passcode 74568307.
There will be a playback available as well.
EBITDA Computation (1Q10 and 1Q09) (in thousands)
1Q10 1Q09
------- ----------
(i) Net Income ($964) ($2,881)
(ii) Non Operating
Gains/Losses 294 (154)
(iii) Adjusted Net Income (670) (3,035)
(Sum of (i)minus (ii))
(iv) Interest Expense 1,123 855
(v) Depreciation & Amortization 2,436 3,285
(vi) Taxes 200 100
------ -------
(vii) EBITDA $3,089 $1,205
====== =======
(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
-----------------------------------
March 31, 2010 March 31, 2009
(unaudited) (unaudited)
---------------- ----------------
REVENUES $ 60,248 $ 62,158
------------ ------------
COSTS AND EXPENSES
Cost of products and services
(exclusive of depreciation and
amortization shown separately
below) 43,953 47,316
Selling, general and administrative 13,517 13,740
Depreciation and amortization 2,436 3,285
(MORE TO FOLLOW) Dow Jones Newswires
May 13, 2010 16:01 ET (20:01 GMT)
*** end of story ***
(PR Wires) PRW: Multiband Announces 2010 First Quarter Results -2-
PRW: Multiband Announces 2010 First Quarter Results -2-
------------ ------------
Total costs and expenses 59,906 64,341
------------ ------------
INCOME (LOSS) FROM OPERATIONS 342 (2,183)
------------ ------------
OTHER EXPENSE
Interest expense (1,123) (855)
Interest income 5 7
Other income 12 250
---------------- ----------------
Total other expense (1,106) (598)
---------------- ----------------
NET LOSS BEFORE INCOME TAXES AND
NONCONTROLLING INTEREST IN
SUBSIDIARIES (764) (2,781)
PROVISION FOR INCOME TAXES 200 100
------------ ------------
NET LOSS (964) (2,881)
LESS: NET INCOME (LOSS) ATTRIBUTABLE
TO THE NONCONTROLLING INTEREST IN
SUBSIDIARIES - (296)
------------ ------------
NET LOSS ATTRIBUTABLE TO MULTIBAND
CORPORATION AND SUBSIDIARIES (964) (2,585)
Preferred stock dividends 381 73
------------ ------------
LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ (1,345) $ (2,658)
============ ============
LOSS PER COMMON SHARE -- BASIC AND
DILUTED:
LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $ (0.14) $ (0.28)
============ ============
Weighted average common shares
outstanding -- basic and diluted 9,791 9,650
============ ============
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
March 31, 2010 December 31, 2009
(unaudited) (audited)
---------------- -------------------
CURRENT ASSETS
Cash and cash equivalents $ 3,747 $ 2,240
Securities available for sale 6 7
Accounts receivable, net 13,072 14,336
Other receivable -- related party 518 518
Inventories 7,707 8,561
Prepaid expenses and other 8,629 549
Current portion of notes receivable 6 6
------------ --- --------------
Total Current Assets 33,685 26,217
------------ --- --------------
PROPERTY AND EQUIPMENT, NET 8,326 8,546
------------ --- --------------
OTHER ASSETS
Goodwill 38,067 38,067
Intangible assets, net 20,960 22,677
Other receivable -- related party
-- long term 980 1,011
Notes receivable -- long-term, net
of current portion 25 25
Other assets 2,889 2,988
------------ --- --------------
Total Other Assets 62,921 64,768
------------ --- --------------
TOTAL ASSETS $ 104,932 $ 99,531
============ === ==============
MULTIBAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(in thousands, except share and liquidation preference amounts)
March 31, 2010 December 31, 2009
(unaudited) (audited)
---------------- -------------------
CURRENT LIABILITIES
Line of credit $ 49 $ 49
Short term debt 6,932 66
Related parties debt -- short
term 1,327 1,345
Current portion of long-term
debt 112 228
Current portion of capital
lease obligations 428 489
Accounts payable 25,731 28,008
Accrued liabilities 25,150 22,026
Deferred service obligations
and revenue 2,591 2,602
------------ --- --------------
Total Current Liabilities 62,320 54,813
LONG-TERM LIABILITIES
Accrued liabilities -- long
term 3,404 4,415
Long-term debt, net of current
portion and original issue
discount 4,878 4,853
Related parties debt -
long-term, net of current
portion and original issue
discount 29,778 29,856
Capital lease obligations, net
of current portion 408 491
------------ --- --------------
Total Liabilities 100,788 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 (1,070 and
1,370 shares issued and
outstanding, $11,235 and
$14,385 liquidation
preference) 11 14
10% Class C (112,580 and
112,880 shares issued and
outstanding, $1,125,800
and $1,128,800 liquidation
preference) 1,461 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
(9,804,396 and 9,722,924
shares issued and
outstanding) 38,216 38,054
Stock subscriptions receivable (10) (26)
