KeyOn Reports 2009 Annual Results

OMAHA, Neb.--(BUSINESS WIRE)-- KeyOn Communications Holdings, Inc. (OTCBB:KEYO), one of the largest providers of wireless broadband, satellite video and voice over Internet protocol (VoIP) services in the United States, reported its financial results for the year ended December 31, 2009.

Jonathan Snyder, President and CEO of KeyOn Communications, commented, “In the face of challenging economic times and a difficult capital market environment, we finished the year slightly down in revenues, about 10%, but our adjusted EBITDA (before stimulus application expenses) improved 40% year over year. In addition, during 2009, KeyOn achieved other milestones covering both financial and operational areas. We announced the acquisition of three companies in the last several months and, in February of 2010, raised $15 million through a secured convertible promissory note. This financing will provide the company with sufficient capital to pursue growth and other strategic initiatives in 2010.”

2009 Annual Consolidated Results

For the year ended December 31, 2009, the Company reported revenue of $6,898,232, a decrease of approximately 11%, as compared to $7,793,740 for the year ended December 31, 2008. This decrease was the result of a decline in our customer base. While customer disconnects have remained stable, limited marketing dollars were spent to acquire new subscribers until the fourth quarter of 2009 during which the company began to increase marketing expenses in effort to restart subscriber growth.

The operating loss, which included non-cash stock-based compensation expense of $0.7 million for the year ended December 31, 2009, was $4.7 million for the quarter ended December 31, 2009, as compared to an operating loss of $7.2 million for the quarter ended December 31, 2008, which included non-cash based stock compensation of $3.3 million.

The Company reported a net loss of $6.6 million, or $0.49 loss per common share, for the year ended December 31, 2009, compared to a net loss of $8.1 million, or $0.96 loss per common share, for the year ended December 31, 2008, a net loss improvement of 18%.

Adjusted EBITDA for the year ended December 31, 2009, was negative $903,997 compared to negative $819,329 in the prior year, a decline of $84,668. By removing expenses related to the Company’s federal broadband stimulus applications under ARRA, adjusted EBITDA for the year ended December 31, 2009, was negative $494,544 as compared to negative $819,329, an improvement of 40%.

Outlook

Jonathan Snyder continued, “Our EBITDA loss widened in the fourth quarter as we increased our marketing expenses to acquire new customers in order to grow our subscriber base again. This anticipated growth, combined with the recent announcements of our acquisitions under the Rural UniFi program, the $15 million capital raise, and the completion of our Round 2 ARRA applications, cause us to believe that KeyOn is well-positioned to have a very promising 2010.”

About KeyOn Communications Holdings, Inc.

KeyOn Communications Holdings Inc. (OTCBB:KEYO) is one of the largest providers of wireless broadband, satellite and voice over Internet protocol (VoIP) services in the United States, primarily targeting underserved markets with populations generally less than 50,000. KeyOn offers broadband services with VoIP and satellite video services to both residential and business subscribers across 11 Western and Midwestern states. Through a combination of organic growth and acquisitions, KeyOn has expanded its network footprint to reach approximately 50,000 square miles and cover nearly 2,500,000 people as well as small-to-medium businesses. With its successful track record of acquiring companies and growing its core subscriber base, KeyOn is one of the leading wireless broadband companies in the United States. Management intends to drive subscriber growth through additional acquisitions as well as organic growth across the company’s expanding footprint by offering bundled services including broadband, video, VoIP and related valuable services such as the Bullseye Club. The company also intends to opportunistically build mobile and/or nomadic WiMAX networks in and around its market footprint. More information on KeyOn can be found at http://www.keyon.com.

Non-GAAP Measures

This press release includes disclosure regarding “Adjusted EBITDA” which is a measurement used by KeyOn Communications to monitor business performance and is not recognized under GAAP (generally accepted accounting principles). Accordingly, investors are cautioned in using or relying upon these measures as alternatives to recognized GAAP measures.

“Adjusted EBITDA” is defined as earnings or loss from operations adjusted for depreciation, amortization, goodwill impairment, non-cash stock-based compensation, and broadband stimulus application expenses. Adjusted EBITDA should not be construed as an alternative to operating loss as defined by GAAP.

Safe Harbor Statement

Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements may include, without limitation, the company’s expectations regarding: future financial and operating performance and financial condition; plans, objectives and strategies; product development; industry conditions; the strength of its balance sheet; and liquidity and financing needs. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside of the company’s control, which could cause actual results to differ materially from such statements, including, without limitation, the company’s ability to secure ARRA stimulus funding, its ability to successfully complete accretive acquisitions and grow its business organically, the company’s reliance on multi-user unlicensed spectrum to service subscribers, competition from larger and better financed providers, the company’s reliance on third party sales representatives and new and more burdensome telecommunications’ regulations. For a more detailed description of the factors that could cause such a difference, please refer to the company’s filings with the Securities and Exchange Commission, including the information under the headings “Risk Factors” and “Forward-Looking Statements” in our Form 10-K filed on April 13, 2010. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The company undertakes no obligation to update or supplement such forward-looking statements.

CONTACT:

Company Contact:
KeyOn Communications Holdings, Inc.
Rory Erchul, 402-998-4044
VP of Marketing
rerchul@keyon.com
www.keyon.com
or
Investor Relations Contact:
Liviakis Financial Communications, Inc.
John Liviakis, 415-389-4670
John@Liviakis.com
www.liviakis.com

KEYWORDS:   United States  North America  Nebraska

INDUSTRY KEYWORDS:   Technology  Consumer Electronics  Internet  Networks  Telecommunications  Satellite  Mobile/Wireless  VoIP  Communications  Public Relations/Investor Relations

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