ERF Wireless First Quarter 2012 Revenues Increase 46% to $1,648,000 and Gross Profit Increases by 102% Due to Record Results Posted by Energy Broadband Subsidiary

Energy Broadband Continues Rapid Growth as It Surpasses $1,000,000 in Quarterly Revenues for the First Time Representing a 89% Increase in First Quarter 2012 Revenues as Compared to the Same Period in 2011

Marketwired

LEAGUE CITY, TX--(Marketwire -05/22/12)- ERF Wireless (ERFB.OB), a leading provider of enterprise-class wireless and broadband products and services, announced today that the company has filed its Form 10-Q with the Securities and Exchange Commission reporting results for the quarter ended March 31, 2012.

The company's financial results reflect its continued focus on growth by aggressively expanding its turnkey communications services to the oil and gas industry during a period of brisk oil and gas drilling activity in North America. These results include, but are not limited, to the following attributes:

  • The company reported overall Consolidated Revenues of $1,648,000 for the quarter ended March 31, 2012, as compared to $1,129,000 for the same prior year quarter ended March 31, 2011; an increase of $519,000 or 46%. The overall increase was comprised of a $478,000 increase in revenues in its oil and gas operations subsidiary, Energy Broadband Inc., plus a combined increase of $41,000 from its other business units.

  • The company's Energy Broadband Inc. subsidiary reported Revenues of $1,013,000 for the quarter ended March 31, 2012, as compared to revenues of $535,000 for the same prior year quarter ended March 31, 2011; an increase of $478,000 or 89%.

  • The company reported Gross Profits of $819,000 for the quarter ended March 31, 2012, as compared to $406,000 for the same prior year quarter ended March 31, 2011; an increase of $413,000 or 102%. This 102% increase in Gross Profits on its 46% increase in revenues drove the company's Overall Gross Margins to 50% for the quarter ended March 31, 2012, as compared to 36% for the same prior year quarter ended March 31, 2011. This 14% increase in its overall gross margins demonstrates continued solid performance in achieving its number one business objective of growing high margin revenue, while strengthening its position as the largest terrestrial wireless provider to the oil and gas industry in North America.

  • The company reported a Consolidated Net Loss of $960,000 for the quarter ended March 31, 2012, as compared to a Net Income of $159,000 for the same prior quarter ended March 31, 2011. The prior year net income of $159,000 included a $1,176,000 gain associated with the divestiture of certain non-core wireless broadband assets and operations in the first quarter of 2011. Excluding the one-time gain, the company's overall Consolidated Net Loss improved by $72,000 when compared to the same prior year quarter.

  • The company invested $526,000 in cash during the quarter ended March 31, 2012, for the purchase of assets in its Energy Broadband Inc. subsidiary for the continued expansion of networks and infrastructure, including increasing our Mobile Broadband Trailer (MBT) fleet to meet the growth being experienced in its oil and gas business.

  • Primary and fully-diluted net loss per share for the quarter ended March 31, 2012, was ($0.40). Primary and fully-diluted net income per share for the quarter ended March 31, 2011, was $0.18 when taking into account the divesture of certain assets in that quarter.

Richard Royall, CFO of ERF Wireless, commented, "During the first quarter of 2012, we continued to experience substantial growth of both revenues and gross profits in our Energy Broadband subsidiary's business in the oil and gas sector. Since Energy Broadband now represents more than 60% of the total ERF Wireless revenue this obviously has a very positive impact on the company's overall results. Based on oil and gas industry activity in the first quarter, we anticipate we will continue to see very positive results in 2012 as Energy Broadband delivers more and more reliable, cost-effective high-speed bandwidth to the industry."

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the first quarter of 2012, we have experienced a significant expansion of the drilling activity of our major oil and gas customers resulting in a very favorable expansion of revenue in Energy Broadband. I believe that this trend will continue for the future as oil prices remain strong and oil drilling activity continues to accelerate. Low natural gas prices have also resulted in a consolidation of drilling rigs in the more oil rich areas making it much easier for Energy Broadband to consolidate its resources and service its customers in a more concentrated fashion. With recent new major drilling customer wins and a corresponding substantial rig number increase with our existing customers, we anticipate that our financial results will continue to positively increase with the accelerating revenue to meet our objectives of cash flow positive and profitability during 2012."

Additional Highlights and Recent Events

  • The company announced during the quarter ended March 31, 2012, it engaged a major construction contractor to build out two additional high-speed wireless broadband networks in two separate areas of the Permian Basin region of West Texas adjacent to existing ERF Wireless networks. In addition, ERF Wireless has its own construction crews building three new networks that are near the extensive terrestrial wireless network system already owned and operated by ERF Wireless in Texas, New Mexico and Oklahoma. These new network segments are part of a larger expansion of the overall ERF Wireless network throughout North America which, when completed, will meet not only the immediate needs of the company's existing customers but also the growing demand by the oil and gas industry in general for more terrestrial wireless connectivity to support drilling activities.

  • Additionally, the company noted that, with the simultaneous expansion of the ERF Wireless network footprint and the corresponding increase in the number of drilling rigs that are being serviced, Energy Broadband is already utilizing some of the funding received late last year to expand its workforce of technicians, trucks, Mobil Broadband Trailers (MBTs) and other equipment required for service to its oil and gas customers.

The company expects all of this new activity to translate into increasing revenue and profitability for Energy Broadband as it continues its substantial growth rates in the oil and gas service industry.

About ERF Wireless
ERF Wireless Inc. is a fully reporting public corporation located in League City, Texas, and is the parent company of Energy Broadband Inc., ERF Enterprise Network Services, ERF Bundled Wireless Services, ERF Wireless Messaging Services and ERF Network Services. The company specializes in providing wireless and broadband product and service solutions to enterprise, commercial and residential clients on a regional, national and international basis. Its principals have been in the wireless broadband, network integration, triple-play FTTH, IPTV and content delivery business for more than 40 years. For more information, please visit our websites at www.erfwireless.com and www.erfwireless.net 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.

Contact:

ERF Wireless Inc.
Clareen O'Quinn
281-538-2101 ext. 113
Investor Relations Firm:
Investor Awareness Inc.
Tony Schor or James Foy
847-945-2222
www.investorawareness.com

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