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| 8-K - FORM 8-K - MULTIBAND CORP | v328655_8-k.htm |
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
November 14, 2012 MINNEAPOLIS --(Business Wire)-- 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 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
Brett Maas, Hayden IR, (646) 536-7331 or brett@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 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 | ||||