ERF Wireless Second Quarter 2012 Revenues Increase 29% to $1,687,000 and Gross Profit Increases by 59% Due to Record Results Posted by Energy Broadband Oil and Gas Subsidiary

Energy Broadband Continues Rapid Growth as It Surpasses $1,000,000 in Quarterly Revenues for the Second Straight Quarter, Representing a 49% Increase in Second Quarter 2012 Revenues as Compared to the Same Period in 2011

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LEAGUE CITY, TX--(Marketwire -08/17/12)- ERF Wireless (ERFB), 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 June 30, 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 $1,687,000 for the quarter ended June 30, 2012, as compared to $1,311,000 for the same prior year quarter ended June 30, 2011; an increase of $376,000 or 29%. The overall increase was comprised of a $380,000 increase in revenues in our oil and gas operations subsidiary, Energy Broadband Inc., plus a combined increase of $24,000 from our wireless bundled services and wireless messaging services business units and a $28,000 decline in our enterprise network services.

  • The company's Energy Broadband Inc., subsidiary reported Revenues of $1,022,000 for the quarter ended June 30, 2012, as compared to revenues of $642,000 for the same prior year quarter ended June 30, 2011; an increase of $380,000 or 59%.

  • The company reported Gross Profit of $746,000 for the quarter ended June 30, 2012, as compared to $501,000 for the same prior year quarter ended June 30, 2011; an increase of $245,000 or 49%. This 49% increase in Gross Profits on our 29% increase in Revenues drove our overall Gross Margins to 44% for the quarter ended June 30, 2012, as compared to 38% for the same prior year quarter ended June 30, 2011. This 6% increase in our overall gross margins demonstrates continued solid performance against our number one business objective of growing high margin revenue while maintaining and strengthening our position as the largest terrestrial wireless provider to the oil and gas industry in North America.

  • The company reported a Consolidated Net Loss of $1,352,000 for the quarter ended June 30, 2012 as compared to a Consolidated Net Loss of $1,150,000 for the same prior quarter ended June 30, 2011.

  • Primary and fully-diluted net loss per share for the quarter ended June 30, 2012, was ($0.46). Primary and fully-diluted net loss per share for the quarter ended June 30, 2011, was ($1.06).

Richard Royall, CFO of ERF Wireless, commented, "During the second 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. Energy Broadband now represents 61% of the total ERF Wireless revenue and continues to have a very positive impact on the company's overall results. Based on oil and gas industry activity in the second quarter, we anticipate we will continue to see very positive results in 2012 as Energy Broadband delivers more reliable, cost-effective high-speed bandwidth to the industry."

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the second 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 the appointment of Mr. Tom Wiedebush as Chief Operating Officer (COO) to take over all of the day-to-day high-level operational management responsibilities previously conducted by its Chief Executive Officer. Mr. Wiedebush joined the ERF Board of Directors in December 2011, bringing more than 35 years of experience as a banking executive to ERF Wireless. Mr. Wiedebush's background includes serving as Chief Operating Officer of Stearns Financial Services, a $1 billion diversified financial organization, and as Group Executive - Western Region of Marquette Banks, a $6 billion bank with operations in eight states.

  • The company announced that it has recently initiated expansion of its existing terrestrial broadband networks through a combination of construction and contractual agreements into major oil and gas drilling areas in the states of Kansas, Nebraska and Montana, allowing our Energy Broadband subsidiary to meet the communications needs of existing Fortune 200 customers' increased drilling in these markets. Additionally, the company is in the process of building a new terrestrial broadband network in the Bakken Shale area of North Dakota as well as has significantly expanded its existing networks in Texas, New Mexico and Oklahoma.

  • The company announced that it has recently integrated several additions into the communications services that Energy Broadband provides its oil and gas customers in remote locations throughout North America; including wide acceptance of a wireless intercom system produced by Energy Broadband that provides all of the on-site drilling personnel with a local wireless telephone communication system to their respective trailers and the rig floor. Additionally, Energy Broadband provides voice services to the outside world via VoIP technology that now includes E911 service in many areas.

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. and its subsidiaries 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
Email Contact
Investor Relations Firm:
Investor Awareness Inc.
Tony Schor or James Foy
847-945-2222
www.investorawareness.com

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