Glentel Inc. Reports 13% Increase in 4th Quarter Earnings Year Over Year and Earnings of $27.5 Million for the Year Ended 2012

BURNABY, BC, March 27, 2013 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 4th quarter and year ended December 31, 2012. Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data) follow.

  Three months ended
December 31
Year ended
December 31
  2012 2011 2012 2011
Sales $316,947 $174,883 $784,837 $583,653
Income before amortization, change in fair value of redeemable
financial instruments, finance income and expenses, and taxes
$16,424 $15,901 $49,550 $53,280
Income before change in fair value of redeemable financial
instruments, finance income and expenses, and taxes
$11,613 $14,149 $36,880 $43,311
Net income $10,936 $9,654 $27,471 $28,696
Basic net income per common share $0.49 $0.43 $1.24 $1.29
Diluted net income per common share $0.49 $0.43 $1.23 $1.28

"We are pleased to report strong earnings for 2012 and a 13% increase in our 4th quarter earnings year over year, while opening 44 retail stores in Canada and the United States, developing the 2013 rollout of 120 stores in Canada with Target® Canada, and adding 630 newly acquired retail stores in Australia and the United States in the last quarter of the year," stated Thomas Skidmore, GLENTEL's President and Chief Executive Officer. "We are pleased with our 2012 revenue growth and now look forward to a solid earnings contribution in 2013 from all divisions in Canada, the United States and Australia."

Consolidated highlights

4th Quarter 2012 compared to 2011

  • Consolidated sales increased 81%, to $316.9 million, compared to $174.9 million.
  • Income was $16.4 million before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes, compared to $15.9 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $11.6 million, compared to $14.1 million.
  • Net income and basic earnings per common share were $10.9 million and $0.49 per share, respectively, compared to $9.7 million and $0.43 per share.

Full year 2012 compared to 2011

  • Consolidated sales increased 34%, to $784.8 million compared to $583.7 million.
  • Income was $49.6 million before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes, compared to $53.3 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $36.9 million, compared to $43.3 million.
  • Net income and basic earnings per common share were $27.5 million and $1.24 per share, respectively, compared to $28.7 million and $1.29 per share.

Highlights for each business unit follow.

Retail Canada

4th Quarter 2012 compared to 2011

  • Sales of retail mobile phone products, tablets and services in the Retail Canada Division increased 9% to $122.7 million compared to $113.1 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $11.9 million compared to $14.9 million.

Full year 2012 compared to 2011

  • Sales of retail mobile phone products, tablets and services in the Retail Canada Division increased 7% to $406.7 million compared to $380.7 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $45.0 million compared to $49.6 million.
  • Consumers continue to migrate to smartphones versus feature phones. Smartphones come with a higher selling price and higher cost of goods than traditional features phones, resulting in increased sales and lower gross margins as a percentage of sales; however, additional commissions can be earned on the sale of smartphones.

Retail U.S. Division - Diamond Wireless

4th Quarter 2012 compared to 2011

  • Sales of retail mobile phone products, tablets and services in the Retail U.S. Division - Diamond Wireless increased 45% to $77.1 million, compared to $53.1 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes increased to $6.4 million, compared to $4.8 million.

Full year 2012 compared to 2011

  • Sales of mobile phone products and services in the Retail U.S. Division - Diamond Wireless increased 40% to $238.1 million, compared to $170.2 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes increased to $14.5 million, compared to $13.6 million.

Retail U.S. Division - Wireless Zone

(One month ended December 31, 2012)

  • On December 1, 2012, the Company acquired 100% of Middletown, Connecticut-based Automotive Technologies, Inc. ("ATI") dba Wireless Zone®. Wireless Zone is one of the six exclusive Verizon Wireless National Premium Retailers and at December 31, 2012, it operated 397 franchised and 20 corporate stores in 28 U.S. states. The primary reason for this acquisition was to allow the Company to expand its network of stores into the U.S. and complement the Diamond Wireless acquisition of 2010. With this acquisition, the Company now operates over 630 stores across the U.S.
  • Sales of retail mobile phone products, tablets and services were $67.3 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $2.7 million.

Retail Australia Division

(Two months ended December 31, 2012)

  • On November 1, 2012, the Company purchased 83% of Sydney, Australia-based AMT Group Pty Ltd ("AMT"), which operates under the Allphones retail brand. AMT is the leading independent multi-carrier mobile phone and telecommunications retailer in Australia, operating and managing over 200 stores at December 31, 2012. The primary reason for this acquisition was to allow the Company to enter into the Australia wireless retail market with a well-recognized brand in Allphones, a strong management team, strong systems and processes, an established network of franchisee/licensee and corporate stores and to use Australia as a catalyst to expand into Southeast Asia.
  • Sales of retail mobile phone products, tablets and services were $42.1 million.
  • Operating loss before change in fair value of redeemable financial instruments, interest and taxes was $0.2 million. AMT results incorporate one-time provisions of $1.1 million taken in the month of December 2012.

Business Division

4th Quarter 2012 compared to 2011

  • Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $7.8 million compared to $8.7 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes was $0.1 million compared to $0.5 million.

Full year 2012 compared to 2011

  • Sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services in the Business Division were $30.7 million compared to $32.8 million.
  • Operating income before change in fair value of redeemable financial instruments, interest and taxes increased to $0.6 million compared to $0.2 million.

Corporate

4th Quarter 2012 compared to 2011

  • Corporate operating and administrative expenses increased to $9.1 million (3% of sales), compared to $5.8 million (3% of sales). This includes Retail U.S. Division - Diamond Wireless and Retail U.S. Division - ATI corporate costs of approximately $2.2 million (2011 - $1.3 million).
  • The Company incurred corporate acquisition costs of $2.6 million in the 4th quarter of 2012 (2011 - $0.2 million)

Full year 2012 compared to 2011

  • Corporate operating expenses increased to $24.9 million (3% of sales), compared to $19.3 million (3% of sales). This includes corporate costs for Retail U.S. Division - Diamond Wireless of $5.6 million (2011 - $3.9 million), Retail U.S. Division - Wireless Zone of $0.8 million, and Retail Australia Division of $2.7 million.
  • The Company incurred corporate acquisition costs of $5.0 million for the year-ended December 31, 2012 (2011 - $0.3 million)

About GLENTEL

Celebrating its 50th anniversary in 2013 and based in Burnaby, BC, Canada, GLENTEL (TSX: GLN), is the largest independent multi-carrier mobile phone retailer in Canada and Australia. In the United States, GLENTEL operates two of the six National Premium Retailers for Verizon Wireless. GLENTEL is a leading provider of innovative and reliable wireless communications services and solutions, offering a choice of network carrier and wireless or mobile products to consumers and commercial customers. 

GLENTEL's brands - GLENTEL Wireless, WIRELESSWAVE, WAVE SANS FIL, Tbooth wireless, la cabine T sans fil, WIRELESS etc., SANS FIL etc…, Mac Station, Diamond Wireless, Wireless Zone, and Allphones - span three countries and two continents. The Company employs over 3,800 employees and operates more than 1,180 locations including more than 340 locations in Canada located in retail malls, Costco Wholesale stores, and business centres; more than 630 retail locations in the United States; and more than 200 retail locations in Australia. In addition, Target Canada has licensed GLENTEL to open and operate in 2013 more than 120 mobile communications sales and service kiosks within its stores, under the brand Target Mobile®.

Forward-Looking Statements

Statements in this release relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third-party manufacturing, managing rapid growth, limited intellectual property protection, and other risks and uncertainties described in Glentel's public filings with securities regulatory authorities.

NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

SOURCE: Glentel Inc.

For further information:

Investor Relations Contact
Jas Boparai, Chief Financial Officer
GLENTEL Inc.
604.415.6500
investors@glentel.com

Media Contact
Lois Grierson
GLENTEL Inc.
604.415.6534
lgrierson@glentel.com

For a copy of GLENTEL's annual report or for additional information visit www.glentel.com or www.sedar.com.

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