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| 8-K - MULTIBAND CORP | v166957_8k.htm |
Multiband
Announces Record Revenues and Returns to Positive EBITDA and Operating
Profit
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·
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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,
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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,
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·
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Management
forecasts 2009 revenues will exceed prior guidance of $240 million-260
million.
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Pro
forma Adjusted Third Quarter EPS was
$0.07
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MINNEAPOLIS--(BUSINESS
WIRE) -- 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
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NINE
MONTHS
ENDED
SEPT.
30, 2009
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THREE
MONTHS ENDED
SEPT
30, 2009
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THREE MONTHS ENDED
JUNE 30,
2009
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THREE
MONTHS ENDED
MARCH
31, 2009
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2009
YTD
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9/30/09
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6/30/09
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3/31/09
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Net
Income (Loss)
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($12,207 | ) | ($725 | ) | (8,601 | ) | ($2881 | ) | ||||||||
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Non
Operating
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Gains/Losses
(including stock related expense, provisions for reserves and other
accrued non-cash expense)
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$67 | 251 | (30 | ) | (154 | ) | ||||||||||
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Adjusted
Net Income
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($12,140 | ) | ($474 | ) | ($8,631 | ) | ($3,035 | ) | ||||||||
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Interest
Expense
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$2,771 | $1,026 | $890 | $855 | ||||||||||||
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Depreciation
and Amortization, including Impairment
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$8,402 | $2,414 | $2,703 | $3,285 | ||||||||||||
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Federal,
State, and Local Income and Excise Taxes
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$574 | $372 | $102 | $100 | ||||||||||||
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EBITDA
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($393 | ) | $3,338 | ($4,936 | ) | $1,205 | ||||||||||