LEAGUE CITY, TX--(Marketwire - Nov 21, 2011) - ERF Wireless (OTCBB: [ 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 third quarter ended September 30, 2011. The company reported quarterly revenues of $1,331,000 for the three-month period ended September 30, 2011, as compared to $882,000 in revenues for the three-month period ended September 30, 2010; an increase of $449,000 or 51%.

The quarterly results also included a Gross Profit improvement of 129% for the current quarter result as compared to the prior year quarter, with Gross Profit Margins increasing to 33% for the current quarter from 21% for the prior year quarter. Net losses were $1,339,000 and $2,329,000, respectively for the three- and nine-month periods ended September 30, 2011, as compared to net losses of $2,296,000 and $6,230,000 for the prior year three- and nine-month periods ended September 30, 2010. The nine-month period ended September 30, 2011, included a one-time gain of $1,176,000 associated with the divestiture of certain non-core wireless broadband assets and operations. Adjusted EBITDA losses, as defined below, excluding the one-time gain, were $423,000 and $458,000, respectively for the three- and nine-month periods ended September 30, 2011, as compared to Adjusted EBITDA losses of $818,000 and $2,568,000 respectively for the same prior year reporting periods ended September 30, 2010; or Adjusted EBITDA improvements of $3,959,000 and $2,110,000 respectively when compared to the prior year three- and nine-month periods ended September 30, 2010. Including the one-time gain on divestiture, the Company posted Positive Adjusted EBITDA of $718,000 for the nine-month period ended September 30, 2011, as compared to an Adjusted EBITDA Loss of $2,568,000 for the nine-month period ended September 30, 2010, or an Adjusted EBITDA improvement of $3,286,000.

Richard Royall, CFO of ERF Wireless, commented, "During the third quarter of 2011, we continued to generate substantial growth in the oil and gas sector and have dramatically improved our overall financial condition since fiscal year end, including 182% increase in net sales for our oil and gas subsidiary Energy Broadband Inc. for the quarter ended September 30, 2011. We also achieved a $1.5 million improvement in our liquidity position and a $1.1 million improvement in our Shareholders' Equity for the nine-month period ended September 30, 2011. Lastly, we retired some $1.5 million in certain debt and capital leases in the first nine months of 2011, resulting in an overall $1.1 million decrease in current liabilities and an increase of $0.4 million in current assets."

Dr. H. Dean Cubley, CEO of ERF Wireless, commented, "During the quarter and nine-month period ended September 30, 2011, we continued to experience dramatic improvements in our financial and operational results, including a 200% increase in revenues for the nine-month period ended September 30, 2011, in our oil and gas Energy Broadband subsidiary as compared to the same prior year nine-month period in 2010." Dr. Cubley added, "The results have paved the way for our recently announced closing of a $3 Million debt financing with Dakota Capital Fund LLC that will allow us to expand our operational footprint in active oil and gas drilling regions in preparation for additional increases being experienced in the oil and gas industry. Given the foundation that we have put in place during the last two years, along with recent new contract wins with major oil and gas producers, we expect to begin realizing substantially more recurring wireless circuit, construction and services revenues from all of our oil and gas contracts for the balance of calendar year 2011 and into calendar 2012."

The Company's financial condition improved dramatically as compared to the most recent fiscal year ended December 31, 2010, and the prior year same quarterly and nine-month reporting period ended September 30, 2010, including, but not limited to, the following attributes:

• The Company reported revenues of $1,331,000 for the quarter ended September 30, 2011, as compared to revenues of $882,000 for the same prior year quarter ended September 30, 2010; an increase of $449,000 or 51%.
• The Company reported a net loss applicable to common shareholders of $1,348,000 for the quarter ended September 30, 2011, as compared to a net loss to applicable to common shareholders of $2,296,000 for the same prior quarter ended September 30, 2010; an improvement of $948,000 or 41%.
• The Company's Energy Broadband, Inc. subsidiary reported revenues of $709,000 for the quarter ended September 30, 2011, as compared to revenues of $251,000 for the same prior year quarter ended September 30, 2010; an increase of $458,000 or 182%.
• The Company reported a reduction of $459,000 or 23% decline in operating expenses in the quarter ended September 30, 2011, as compared to the same prior year quarter ended September 30, 2010.
• The Company reported revenues of $3,772,000 for the nine-month period ended September 30, 2011, as compared to revenues of $2,817,000 for the same prior year nine-month period ended September 30, 2010; an increase of $955,000 or 34%.
• The Company reported a net loss applicable to common stock holders of $2,341,000 for the nine-month period ended September 30, 2011, as compared to a net loss applicable to common stock holders of $6,230,000 for the same prior year nine-month period ended September 30, 2010; an improvement of $3,889,000 or 62%.
• The Company's Energy Broadband, Inc. subsidiary reported revenues of $1,887,000 for the nine-month period ended September 30, 2011, as compared to revenues of $629,000 for the same prior year nine-month period ended September 30, 2010; an increase of $1,258,000 or 200%.
• The Company reported a reduction of $1,522,000 or 26% decline in operating expenses in the nine-month period ended September 30, 2011, as compared to the same prior year nine-month period ended September 30, 2010.
• The Company's liquidity position improved by $1,545,000 for the nine-month period ended September 30, 2011, as compared to the most recent balance sheet at fiscal year ended December 31, 2010; including a $448,000 increase in Current Assets, a $1,097,000 decrease in Current Liabilities that included $1,536,000 retirement of long-term debt and capital lease obligations.
• Lastly, the Company invested $1,616,000 in cash during the nine-month period ended September 30, 2011, primarily for the purchase of assets in its Energy Broadband, Inc. subsidiary for the continued expansion of networks and infrastructure, including increasing its Mobil Broadband Trailer, ("MBT") fleet associated with the increased oil and gas business growth being experienced.

Recent Events

During and subsequent to the third quarter ended September 30, 2011, the company continued to make progress with its strategic business plan as evidenced by the completion and announcement of numerous significant agreements and activities. These include:

• The Company announced that it has secured $3,000,000 in debt financing from Dakota Capital Fund LLC. The funding will be utilized by the Company to quickly expand its Energy Broadband subsidiary's presence in the major oil and gas exploration regions of North America.
• The Company announced that it had finalized the requirements for the Energy Broadband Stock Dividend.
• The Company's stock now trades under the symbol ERFB.OB.
• The Company announced that its patent attorney received correspondence from the U.S. Patent Office that a third patent for the CryptoVue® encrypted security device has been approved and that a patent will be issued as soon as the proper forms are submitted.
• The Company announced that its Enterprise Network Services (ENS) division has been actively working with its existing banking network customers in Texas and Louisiana to meet their needs for expanded and upgraded services, including the addition of new service areas. ENS recently completed the addition of one new branch for one bank customer and is now in the process of finalizing plans for the addition of four to eight branches for two other bank customers.
• The Company announced that it had been ranked number 337 on the Deloitte's 2011 Technology Fast 500, an annual ranking by Deloitte LLP of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America.
• The Company announced that in an expanded effort to create greater awareness about the company's recent significant developments, including the increase in its oil and gas business activities and related revenue increases, it has retained the services of Investor Awareness, Inc. as its new investor relations firm.

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. (ERFB)

The company refers in this press release to a non-GAAP financial measure called Adjusted EBITDA for illustration purposes because of management's belief that this measure is a financial indicator of the company's ability to internally generate operating cash flow. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and stock based compensation expense. Management also believes that this non-GAAP financial measure is useful information to investors because it is widely used by professional research analysts in the valuation and investment recommendation of companies in the company's peer group. Adjusted EBITDA is not utilized in any of the company's SEC filings and should not be considered an alternative to net income, as defined by U.S. GAAP.

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.