Multiband Announces First Quarter 2013 Results

Revenue for 1Q 2013 was $73.1 million compared to $72.2 million in 1Q 2012

1Q 2013 generated an operating profit of $0.8 million, a $1.5 million increase from an operating loss of $0.7 million in the year-ago period

Adjusted EBITDA for 1Q 2013 was $3.1 million compared to $1.9 million in 1Q 2012

May 15, 2013, 16:01 ET from Multiband Corporation

MINNEAPOLIS, May 15, 2013 /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 (MDUs), today announced financial results for first quarter ended March 31, 2013.

First Quarter 2013 Highlights

  • First quarter 2013 revenues increased by 1.2% to $73.1 million despite a $3.7 million, or 6.2%, reduction in HSP revenue from DIRECTV.  WildBlue fulfillment revenue increased by $2.5 million to $3.4 million in the quarter.  Multi-dwelling Unit (MDU) segment and Energy, Engineering & Construction (EE&C) segment revenues increased in Q1 2013 over the same period in 2012.
  • Operating income was $812,000 compared to an operating loss of $737,000 in the same period last year.  Improvement was driven by a 6.5% decrease in SG&A expenses due to a reduction in wages, benefits and other employee related expenses.
  • Q1 2013 Adjusted EBITDA was $3.1 million compared to $1.9 million in the same period last year.
  • Net loss attributable to common stockholders was $681,000 for the first quarter, or ($0.03) per basic and diluted share. This amount included a $1.0 million pre-tax charge related to the write-off of deferred financing fees.
  • In March 2013, Multiband executed a $30.0 million financing agreement with Fifth Third Bank.
  • The Company continued due diligence and activities related to its previously announced acquisition of MDU Communications International, Inc. (MDUC).

James L. Mandel, CEO of Multiband, commented, "Our diversification initiatives continued to deliver in first quarter 2013 with our WildBlue internet service fulfillment revenue increasing 273%, as well as a 21.8% increase in MDU system operator related revenue resulting from the addition of several large system operators midway through 2012.  The EE&C segment grew 19.9% and we expect revenues in this segment to increase throughout the remainder of 2013 as we increase our sales activity and footprint.  HSP revenue from DIRECTV in Q1 was down however, we are confident that this will bounce back in future quarters as we get into the busy part of the year."

Mr. Mandel concluded, "A major accomplishment for the quarter was the closing of our new $30 million debt facility with Fifth Third Bank, which includes a $20 million term loan and a $10 million revolving line of credit.  These facilities are provided at significantly lower rates of interest than we have been paying in the past as well as extended terms to April 2016." 

Conference Call Information:

A conference call and live webcast will take place May 15, 2013 at 4:30 p.m. Eastern time.  Anyone interested in participating should call 1-877-941-8416 if calling within the United States, or 1-480-629-9808 if calling internationally.  There will be a playback available until May 22, 2013.  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 4619280 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=104729.

About Multiband Corporation

Multiband Corporation (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, 2012, 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 Cameron Donahue, Hayden IR, (651) 707-3532 or cameron@haydenir.com

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 its 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.

Safe Harbor Statement

Cautionary Notice: In addition to statements of historical fact, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is intended to enjoy the protection of that Act.  These forward-looking statements reflect the Company's expectations or beliefs concerning future events.  The Company cautions that these and similar statements involve risk and uncertainties which could cause actual results to differ materially from our expectation, including, but not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts, fluctuations in margins, the introduction of new products and technology, the impact of adverse weather conditions and other risks noted in the Company's SEC filings, including its Annual Report on Form 10-K for its 2012 fiscal year.  Forward-looking statements are made in the context of information available as of the date stated.  The company undertakes no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur.

Multiband Corporation and Subsidiaries

Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)

(in thousands)

(unaudited)

EBITDA Computation:

1Q 2013

1Q 2012

Net Income

$

(613)

$

(1,353)

Non Operating:

Gains/Losses

681

900

Adjusted Net Income

68

(453)

Interest expense

834

914

Depreciation & Amortization

1,558

1,717

Taxes

(421)

(557)

EBITDA before infrequent items

2,039

1,621

Financing Fees

1,029

-

Non-recurring acquisition and start-up expenses

-

323

Adjusted EBITDA

$

3,068

$

1,944

 

 

MULTIBAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

Three Months Ended

March 31, 2013

March 31, 2012

(unaudited)

(unaudited)

REVENUES

$

73,068

$

72,227

COSTS AND EXPENSES

Cost of products and services (exclusive of depreciation and amortization shown separately below)

53,616

52,980

Selling, general and administrative

17,082

18,267

Depreciation and amortization

1,558

1,717

Total costs and expenses

72,256

72,964

INCOME (LOSS) FROM OPERATIONS

812

(737)

OTHER EXPENSE

Interest expense

(834)

(914)

Write-off of deferred financing costs

(1,029)

Interest income

5

6

Losses attributable to available-for-sale securities

(291)

Other income

12

26

Total other expense

(1,846)

(1,173)

LOSS BEFORE INCOME TAXES

(1,034)

(1,910)

BENEFIT FROM INCOME TAXES

(421)

(557)

NET LOSS

(613)

(1,353)

Preferred stock dividends

68

168

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(681)

$

(1,521)

LOSS PER COMMON SHARE – BASIC AND DILUTED

$

(0.03)

$

(0.07)

Weighted average common shares outstanding - basic and diluted

21,750,632

21,744,040

 

MULTIBAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

(in thousands)

March 31, 2013

December 31, 2012

(unaudited)

(audited)

CURRENT ASSETS

Cash and cash equivalents

$

1,799

$

18,056

Accounts receivable, net

24,655

20,312

Inventories

9,788

11,444

Costs and estimated earnings in excess of billings on uncompleted contracts

1,855

1,540

Prepaid expenses and other

8,352

1,181

Income tax receivable

550

621

Deferred tax assets

7,134

6,691

Total Current Assets

54,133

59,845

PROPERTY AND EQUIPMENT, NET

11,847

12,273

OTHER ASSETS

Goodwill

37,796

37,796

Intangible assets, net

10,313

10,987

Restricted cash - certificate of deposit

1,682

1,682

Insurance collateral

11,366

10,899

Other assets

2,526

1,553

Deferred tax assets

5,439

5,439

Total Other Assets

69,122

68,356

TOTAL ASSETS

$

135,102

$

140,474

 

 

MULTIBAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

(in thousands, except share and liquidation preference amounts)

March 31, 2013

December 31, 2012

(unaudited)

(audited)

CURRENT LIABILITIES

Line of credit

$

5,000

$

Insurance premium financing

6,613

Short-term debt

629

280

Related party debt

600

600

Current portion of long-term debt

4,247

17,396

Current portion of capital lease obligations

858

857

Accounts payable

22,545

24,075

Billings in excess of costs and estimated earnings on uncompleted contracts

63

68

Accrued liabilities

20,540

21,094

Deferred service obligations and revenue

400

361

Total Current Liabilities

61,495

64,731

LONG-TERM LIABILITIES

Accrued liabilities

6,256

6,982

Long-term debt, net of current portion

19,395

20,458

Capital lease obligations, net of current portion

1,483

1,630

Total Liabilities

88,629

93,801

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Cumulative convertible preferred stock, no par value:

8% Class A (12,696 shares issued and outstanding, $133,308 liquidation preference)

191

191

10% Class C (109,000 shares issued and outstanding, $1,090,000 liquidation preference)

1,411

1,411

10% Class F (150,000 shares issued and outstanding, $1,500,000 liquidation preference)

1,500

1,500

8% Class G (0 and 10,000 shares issued and outstanding, $0 and $100,000 liquidation preference)

41

Common stock, no par value (21,809,667 and 21,648,459 shares issued and outstanding)

117,356

116,775

Accumulated deficit

(73,985)

(73,245)

Total Stockholders' Equity

46,473

46,673

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

135,102

$

140,474

 

 

MULTIBAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three months ended March 31,

2013

2012

(unaudited)

(unaudited)

OPERATING ACTIVITIES

Net loss

$

(613)

$

(1,353)

Adjustments to reconcile net loss to cash flows from operating activities:

Depreciation and amortization

1,558

1,717

Amortization and expense related to debt issuance costs

829

9

Amortization of original issue discount

24

Loss (gain) on sale of property and equipment

1

(75)

Other-than-temporary impairment loss on available-for-sale securities

291

Change in allowance for doubtful accounts receivable

231

54

Stock based compensation expense

467

540

Deferred income taxes

(443)

(565)

Changes in operating assets and liabilities:

Accounts receivable

(4,574)

6,435

Costs and estimated earnings in excess of billings on uncompleted projects

(315)

(108)

Inventories

1,656

4,202

Prepaid expenses and other

1,341

146

Income tax receivable

72

Insurance collateral

(467)

(1,381)

Other assets

1

617

Accounts payable and accrued liabilities

(1,981)

(13,634)

Billings in excess of costs and estimated earnings on uncompleted projects

(5)

13

Deferred service obligations and revenue

39

(1,192)

Net cash flows from operating activities

(2,203)

(4,260)

INVESTING ACTIVITIES

Purchases of property and equipment

(359)

(686)

Purchases of intangible assets

(57)

(729)

Proceeds from purchase of land and building

685

Increase in restricted cash - certificate of deposit

(1,682)

Proceeds from sale of property and equipment

43

Collections on notes receivable

3

2

Net cash flows from investing activities

(413)

(2,367)

 

 

MULTIBAND CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

continued

Three months ended March 31,

2013

2012

(unaudited)

(unaudited)

FINANCING ACTIVITIES

Borrowings on line of credit

$

5,000

$

Payments for debt issuance costs

(2,257)

Payments on long-term debt

(34,211)

(26)

Payments on capital lease obligations

(188)

(118)

Payments on short-term debt

(1,989)

(909)

Proceeds from long-term debt

20,000

Payment of preferred stock dividends

(10)

(55)

Proceeds from exercise of options

14

Net cash flows from financing activities

(13,641)

(1,108)

DECREASE IN CASH AND CASH EQUIVALENTS

(16,257)

(7,735)

CASH AND CASH EQUIVALENTS - Beginning of Period

18,056

18,169

CASH AND CASH EQUIVALENTS - END OF PERIOD

$

1,799

$

10,434

Supplemental Cash Flows Information:

Cash paid for interest, net of amortization of OID and interest discount

$

748

$

883

Net cash paid (refunded) for federal and state income taxes

(60)

415

Non-cash investing and financing transactions:

Intrinsic value of preferred dividends

59

100

Conversion of preferred stock into common stock

100

100

Increase in prepaid expenses via short-term debt issued

8,062

4,240

Reduction in debt by other receivable

1

Reduction of accrued expenses with the issuance of stock options

258

Purchase of land and building via mortgage assumed

3,803

Purchase of property and equipment with the increase in capital lease obligations

43

243

SOURCE Multiband Corporation



RELATED LINKS

https://www.multibandusa.com