Multiband Announces 2012 Second Quarter Results

MINNEAPOLIS, Aug. 15, 2012 /PRNewswire/ -- 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 ended June 30, 2012.

Second Quarter Highlights

• Diversification strategy to deliver sustainable growth gaining traction;
  • MDU segment revenue increases by 15.1% to 6.1 million from $5.3 million due to a number of new operators
  • Cable fulfillment business generates $2.8 million in revenue and WildBlue fulfillment revenue increases $1.7 million for second quarter
  • Energy, Engineering & Construction (EE&C) segment generates $2.5 million in the second quarter
• Multiband's Board of Directors approved a stock repurchase plan for up to two million shares of the Company's common stock on June 4, 2012; through August 14, 2012, the Company has repurchased approximately 155,000 shares
• Subsequent to the end of the quarter, the Company entered into an agreement to acquire all of the outstanding stock of MDU Communications International, Inc., a company that owns, operates and services over 70,000 subscribers in 790 MDU properties encompassing 170,000 residences, which will add both scale and leverage to Multiband's existing MDU business segment

Revenues for the three month period ended June 30, 2012 of $69.8 million declined slightly by $2.0 million, or 2.8%, compared to $71.8 million for the quarter ended June 30, 2011. Field Services segment (FS) revenue of $61.2 million decreased 6.7% as a result of lower DIRECTV work order activity which was mostly offset by revenue generated by the cable fulfillment businesses acquired in late 2011 and early 2012 of $2.8 million, as well as an increase in WildBlue fulfillment revenue of $1.7 million over the comparable period in 2011. Multi-dwelling Unit (MDU) segment revenue increased by 15.1% to $6.1 million from $5.3 million and Energy, Engineering & Construction (EE&C) segment revenue improved to $2.5 million in the quarter. Revenues for the six month period ended June 30, 2012 of $142.0 million increased $5.7 million, or 4.2%, compared to $136.3 million for the comparable period in 2011.

For the quarter ended June 30, 2012, Multiband generated income from operations of $0.8 million compared to operating income of $4.5 million in the same period last year. Current period operating losses in the newly acquired cable fulfillment and Engineering and Wireless divisions were approximately $1 million of the decrease. The balance was generated by lower DIRECTV volumes coupled with the costs associated with planned increases in employee retention investments.

Adjusted EBITDA, a non-GAAP measure, was $3.5 million for the second quarter of 2012 compared to $6.4 million in the year-ago period. Additionally, Multiband maintains a revolving lease facility for the vehicles used in its daily operations, which are required to be treated as an operating lease for purposes of GAAP. Certain peers in the sector may have vehicle leases that qualify for capital lease treatment for GAAP purposes. Accordingly, the vehicle lease payments totalled $3.8 million and $2.3 million for the three months ended June 30, 2012 and 2011, respectively, would need to be added back to the adjusted EBITDA figures above in order to be comparable to a company whose vehicle leases are accounted for as capital leases. If these lease payments were added back, Multiband's adjusted EBITDA would be $7.3 million and $8.7 million for the three months ended June 30, 2012 and 2011, respectively. On a year-to-date basis, adjusted EBITDA was $5.1 million for 2012 and $9.5 million for 2011. Vehicle lease payments totaled $6.9 million in 2012 and $4.4 million in the comparable period in 2011. If these lease payments were added back, adjusted EBITDA would be $12.0 million and $13.9 million for the six months ended June 30, 2012 and 2011, respectively.

For the quarter ended June 30, 2012, Multiband incurred a net loss attributable to common stockholders of $0.2 million, or $(0.01) per basic and diluted share, compared to net income attributable to common stockholders of $1.8 million, or $0.12 per basic and $0.10 per diluted share in the year-ago period. For the six month period ended June 30, 2012, Multiband incurred a net loss attributable to common stockholders of $1.7 million, or $(0.08) per basic and diluted share, compared to net income attributable to common stockholders of $1.3 million, or $0.10 per basic and $0.09 per diluted share in the year-ago period.

James L. Mandel, CEO of Multiband, commented, "We have made great progress in diversifying our revenue and building a business that is more directly controlled by us, which should result in a more sustainable platform for growth. As expected, our core HSP business with DIRECTV is lower than the previous year, but these diversification initiatives, including businesses acquired in the last year, resulted in a 4% increase in year-to-date revenues. Contributions from our cable and satellite internet partners offset the decline in our DIRECTV work. On the MDU side of the business, we have seen increased activity in all business units as we have brought a number of new operators under our MSO umbrella. The engineering & wireless division, although still challenged by economic and competitive pressures, is showing signs of rebounding over the remainder of the year."

Mr. Mandel continued, "We continue to see improved operating metrics as a result of our investment in the employee retention programs that were initiated earlier this year. Our focus in the immediate future is the refinancing of our debt which we expect to be completed well in advance of its maturity date."

Mr. Mandel concluded, "The third and fourth quarters of our year are historically our strongest from a revenue and EBITDA perspective and we see nothing to indicate that 2012 will be any different."

Stock Buy Back Plan

During the quarter ended June 30, 2012, Multiband acquired 10,000 shares of its common stock under its previously announced stock buy back plan. Multiband continues to buy additional shares in the open market subject to SEC rules which include a limitation of the number of shares that can be purchased on a daily basis. As of August 14, 2012, the Company has repurchased approximately 155,000 shares in open market transactions.

Pending Acquisition of MDU Communications International, Inc.

In July, Multiband entered into an agreement to acquire all the outstanding stock of MDU Communications International, Inc., a company that owns subscribers in the MDU marketplace, in exchange for 4.3 million shares of Multiband common stock valued at $12.9 million. The transaction is expected to close in the fourth quarter.

Conference Call Information

A conference call and live webcast will take place Wednesday, August 15, 2012 at 9:00 a.m. Eastern Daylight Time.

Anyone interested in participating should call 1-877-941-2069 if calling within the United States or 1-480-629-9761 if calling internationally. There will be a playback available until August 22, 2012. 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 4559498 for the replay. The call will also be accompanied live by webcast over the Internet and accessible at http://public.viavid.com/index.php?id=101457.

About Multiband Corporation

Multiband Corporation (Nasdaq: MBND) engages with a vast and growing array of technologies including renewable energy, wireless infrastructure, electrical power systems, digital signage, commercial audio/video solutions, hospitality IPTV and VOD systems. Multiband completes nearly 20% of all DIRECTV's installations, maintenance and upgrades for residents of single-family homes. Multiband also supplies broadband cable and satellite internet solutions for homes and businesses across the nation. As 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), Multiband is a driven leader in a competitive industry. 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 partnerships. Multiband focuses on providing world-class customer service and the highest level of performance for all partners and customers, from multinational corporations to individual families. 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, 2011, 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.

Company Contact

Contact: James Mandel, CEO for Multiband Corporation at (763) 504-3000

Investor Contact

Brett Maas, Hayden IR, (646) 536-7331 or [email protected]

NON-GAAP Financial Measures

To comply with Regulation G promulgated pursuant to the Sarbanes-Oxley Act, Multiband has attached to this news release, and will post to the company's investor relations website (www.multibandusa.com), a reconciliation of differences between GAAP and non-GAAP financial information that may be required in connection with issuing the it's quarterly financial results.

Multiband, as is common in its industry, uses Adjusted EBITDA as a measure of performance to demonstrate earnings exclusive of interest and non-cash events. Multiband manages its business based on its cash flows. Multiband, 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. Multiband, in managing its current and future affairs, cannot affect the amortization of the intangible assets to any material degree, and therefore uses Adjusted EBITDA as its primary management guide.  Since an outside investor may base its evaluation of Multiband's performance based on the net income of loss and not its cash flows, there is a limitation to the Adjusted EBITDA measurement. Adjusted EBITDA is not, and should not be considered, an alternative to net income or loss, income or 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 Multiband's case is the removal of interest, depreciation, amortization, taxes and other non-cash expense.

SOURCE Multiband Corporation

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