WISP Acquisitions, Growing Bank Networks and Fiber-to-the-Home Projects Contribute to 225% Growth in Revenue Over 2006 and Position the Company for Additional Growth in 2008
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-KSB with the Securities and Exchange Commission reporting results for the fiscal year ended December 31, 2007.
Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "We’ve achieved outstanding results across all of our business units in 2007. The increase in revenue in 2007 exceeded my personal goal of $5 million and demonstrated continued progress under our focused business strategy. We’ve made substantial progress by acquiring several cash-flow-positive Wireless Internet Service Providers (WISPs), winning a triple-play fiber-to-the-home (FTTH) project, and designing and expanding our US-BankNet system, a secure enterprise-class wireless network owned by ERF Wireless that produces long-term recurring revenue. With our growing pipeline of prospects being cultivated, the company is well-positioned to continue achieving solid revenue growth in 2008.”
For the fiscal year 2007, the company reported total net sales of $5,569,000, an increase of 225% compared with $1,716,000 in fiscal year 2006. The increase in revenues was primarily attributable to the substantial progress made on the El Dorado Golf and Beach Club of San Jose del Cabo, Mexico FTTH project, an increase in recurring wireless WISP services during the year, 4th quarter WISP acquisitions of over 5,500 customers, and an increase in banking network services resulting from the design and construction of a major banking network in western Louisiana. The company also reported Loss from Operations of $5,773,000 for 2007, as compared to Loss from Operations of $5,304,000 for 2006. Cash used for operating activities in fiscal 2007 was $2,739,000, up from $2,677,000 in fiscal 2006. Primary and fully-diluted Net Loss per share for the company's fiscal years 2007 and 2006 were ($0.17) and ($0.37), respectively. The Loss from Operations can be primarily attributed to the company's increased personnel and operating expenses, including resources associated with completed acquisitions and certain management resources necessary to handle the company’s anticipated growth across all of the company’s lines of business. The company’s total assets increased to $8,366,000 for the period ended December 31, 2007 as compared to 2,224,000 at December 31, 2006, while the company’s additional paid in capital increased to $19,098,000 at December 31, 2007, as compared to $9,065,000 at December 31, 2006.
Key operational and financial highlights included:
-- The acquisition of three Central Texas WISPs - Momentum Online, TSTAR Internet and Total Access - adding some 5,500 customers and more than $2.5 million in annualized revenues.
-- The completion of more than $4.7 million in cash equity investment from accredited investors during 2007.
-- The completion of $23 million in funding commitment for growth, including the build-out of the company-owned US-BankNet system and lease financing of WISP equipment.
-- The retirement of the remaining convertible debenture entered into with Global Capital Funding Group L.P. leaving the company no outstanding convertible debentures other than the conversion feature under its ongoing E-Bond investment program.
-- The launch of the ERF Wireless CryptoVue® Network Security Appliance as a stand-alone VPN security device for encrypting wired and wireless wide-area networks worldwide. This launch included an agreement with Motorola and Authorized Motorola Canopy Solutions Providers that they would market the device to non-financial industries.
-- The continued deployment of US-BankNet in Texas and Louisiana.
-- The acquisition, through an affiliate, of 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. The 1,120-foot-tall tower provides a 70-mile diameter footprint that includes all the cities in three counties that include a population base of more than 5 million people.
R. Greg Smith, former CFO and current CEO of the company’s ENS subsidiary, added, “We continued to build a solid foundation in 2007 by adding significant new sources for profitable recurring revenue while, at the same time, expanding our US-BankNet system and developing a strong pipeline of banking network prospects for 2008.”
Richard Royall, ERF Wireless’ recently appointed CFO, concluded, “The company is currently serving more than 10,000 WISP customers and has an approximate 50,000 square-mile footprint of wireless high-speed broadband coverage. The company now owns or leases 204 towers and we anticipate negotiating master tower usage contracts in additional states in the near future. Finally, with the company’s efforts in 2007 attracting equity growth financing of $4.7 million and committed credit sources of more than $23 million, we believe 2008 will be a year of growth which allows the company to expand its products and services to existing and new customers on a worldwide basis.”
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.
ERF Wireless Inc.
Clareen O'Quinn, 281-538-2101 ext. 113
coquinn@erfwireless.com