Multiband Announces 2012 Third Quarter Results

2012 Year-to-Date Revenues of $227.7 million up 2.3% from $222.6 million in comparable period in 2011

Q3 of 2012 generated an operating profit of $3.5 million and net income of $1.6 million

Q3 Revenue in the MDU segment increases by 31.2% over the comparable period in 2011

EBITDA for the third quarter improves 71.4% to $6.0 million over the previous quarter

News provided by

Nov 14, 2012, 04:01 ET

MINNEAPOLIS, Nov. 14, 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 (MDUs), today announced financial results for the third quarter ended September 30, 2012.

Third Quarter Highlights

MDU segment revenue increases by 31.2% and 25.0% for the three and nine month periods in 2012 over the comparable periods in 2011 due to a 60.0% increase in the number of subscribers covered under its Master System Operator agreement with DIRECTV reflecting the consolidation occurring in the market. Total subscribers supported under this agreement now total 139,000
Q3 EBITDA grows by 71.4% to $6.0 million over $3.5 million reported for Q2. Company does not capitalize its vehicle leases. If these leases were capitalized, 2012 Adjusted EBITDA would total $10.1 million for the current quarter and $22.4 million year-to-date
Subsequent to the end of the quarter, the Company announced that DIRECTV had extended both the HSP and MDU contracts now expiring in 2016

James L. Mandel, CEO of Multiband, commented, "In 2012, our core HSP revenues with DIRECTV were lower than the previous year periods by $8 million and $15 million for the three and the nine months ended September 30. Although we have replaced that revenue via our diversification initiatives, the replacement revenue is not as profitable as what we experience from our HSP business. As we have shown in the past, we are able to improve our operations but it does take significant effort and time. We are confident that these new sources of revenue will produce materially better results in 2013."

Other Highlights

Operating income was $3.5 million for both the three and nine months ended September 30, 2012
Net income attributable to common stockholders was $1.6 million for the quarter ($0.07 per basic and fully diluted share)
Cash grew to $10.1 million from $8.7 million at the end of the second quarter, an increase of 16%

Conference Call Information
A conference call and live webcast will take place Wednesday, November 14, 2012 at 4:30 p.m. Eastern Time.

Anyone interested in participating should call 1-877-941-2069 if calling within the United States or 1-480-629-9713 if calling internationally. There will be a playback available until November 21, 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 4575294 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=102511

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
Cameron Donahue, Hayden IR, (651) 653-1854 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.

Multiband Corporation and Subsidiaries Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) (in thousands) (Unaudited)

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012

Net Income (GAAP)	$	1,627	$	121
Add (deduct):
Stock-based compensation expense		75		984
Non-cash reserves		183		330
Other than temporary impairment loss on available-for-sale securities		71		652
Gain on bargain purchase		(177)		(177)
Non-recurring acquisition and start-up expenses
Other		38		100
Total Non-GAAP adjustments		190		1,889

Interest expense		935		2,774
Depreciation and amortization		1,789		5,277
Provision for income taxes		1,015		185
Non-recurring acquisition expenses		467		1,221

EBITDA (Non-GAAP)		6,023		11,467

Adjustment for non-capitalized vehicles leases		4,072		10,902

Adjusted EBITDA (Non-GAAP)	$	10,095	$	22,369

MULTIBAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30, 2012 (unaudited)		September 30, 2011 (unaudited)				September 30, 2012 (unaudited)			September 30, 2011 (unaudited)

REVENUES	$	85,695	$	86,366	$		227,727	$		222,623

COSTS AND EXPENSES
Cost of products and services (exclusive of depreciation and amortization shown separately below)		62,893		60,332			167,750			160,201
Selling, general and administrative		17,557		17,014			51,218			45,131
Depreciation and amortization		1,789		1,566			5,277			4,986

Total costs and expenses		82,239		78,912			224,245			210,318

INCOME FROM OPERATIONS		3,456		7,454			3,482			12,305

OTHER EXPENSE
Interest expense		(935)		(1,038)			(2,774)			(2,989)
Interest income		6		7			19			19
Proceeds from life insurance		-		-			-			409
Gain on bargain purchase		177		-			177			-
Losses attributable to available for-sale securities		(71)		-			(652)			-
Other income	9		125				54			246

Total other expense	(814)		(906)				(3,176)			(2,315)

INCOME BEFORE INCOME TAXES		2,642		6,548			306			9,990

PROVISION FOR INCOME TAXES		1,015		2,869			185			4,369

NET INCOME		1,627		3,679			121			5,621

Preferred stock dividends		68		70			303			729
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	1,559	$	3,609	$	(182)		$	4,892

INCOME (LOSS) PER COMMON SHARE – BASIC:
INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	0.07	$	0.17	$		(0.01)	$		0.32
INCOME (LOSS) PER COMMON SHARE – DILUTED:
INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	0.07	$	0.16	$		(0.01)	$		0.26
Weighted average common shares outstanding – basic		21,690		21,595			21,744			15,418
Weighted average common shares outstanding - diluted		22,427		23,047			21,744			19,791

MULTIBAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS (in thousands)

	September 30, 2012 (unaudited)		December 31, 2011 (audited)
CURRENT ASSETS
Cash and cash equivalents	$	10,129	$	18,169
Available-for-sale securities		-		1,191
Accounts receivable, net		31,735		28,359
Inventories		11,065		14,276
Costs and estimated earnings in excess of billings on uncompleted contracts		1,633		998
Prepaid expenses and other		2,447		1,361
Income tax receivable		833		42
Deferred tax assets – current		6,814		6,862
Total Current Assets		64,656		71,258
PROPERTY AND EQUIPMENT, NET		11,815		6,304
OTHER ASSETS
Goodwill		37,796		37,796
Intangible assets, net		12,451		14,597
Restricted cash – certificate of deposit		1,682		-
Insurance collateral		10,898		8,061
Other assets		1,470		2,452
Deferred tax assets – long-term		949		1,134
Total Other Assets		65,246		64,040

TOTAL ASSETS	$	141,717	$	141,602

MULTIBAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS *LIABILITIES AND STOCKHOLDERS' EQUITY* (in thousands, except share and liquidation preference amounts)

	September 30, 2012 (unaudited)		December 31, 2011 (audited)
CURRENT LIABILITIES
Short-term debt	$	1,498	$	457
Related parties debt – short term		650		-
Current portion of long-term debt, net of original issue discount		34,369		4,936
Current portion of capital lease obligations		538		324
Accounts payable		28,031		32,354
Billings in excess of costs and estimated earnings on uncompleted contracts		24		41
Accrued liabilities - current		21,978		24,113
Deferred service obligations and revenue		503		1,570
Total Current Liabilities		87,591		63,795
LONG-TERM LIABILITIES
Accrued liabilities – long-term		5,889		5,352
Long-term debt, net of current portion and original issue discount		3,521		29,229
Capital lease obligations, net of current portion		884		274
Total Liabilities		97,885		98,650
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 (10,000 shares issued and outstanding, $100,000 liquidation preference)		41		41
6% Class H (0.00 and 1.00 shares issued and outstanding, $0 and $100,000 liquidation preference)		-		-
Common stock, no par value (21,640,959 and 21,612,380 shares issued and outstanding)		66,495		66,290
Stock-based compensation		49,857		49,000
Accumulated deficit		(75,663)		(75,481)
Total Stockholders' Equity	43,832		42,952

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	141,717	$	141,602