GLENTEL INC. REPORTS RECORD 1st QUARTER EARNINGS

BURNABY, BC, May 3 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 1st quarter ended March 31, 2011.

Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data), are:

  Three months ended
March 31
  2011 2010
Sales $121,062 $74,785
Income, before interest, taxes and
amortization
$10,763 $5,298
Operating income, before accretion,
interest and taxes
$8,195 $3,411
Net income $4,745 $2,327
Basic net income per share $0.39 $0.21
Diluted net income per share $0.38 $0.21

Adjusted financial highlights:

  Three months ended
March 31
  2011 2010
Net income as reported $4,745 $2,327
Add:    
  Redeemable financial instrument
  accretion costs
$972 -
Adjusted net income (1) $5,717 $2,327
Adjusted basic net income per share (1) $0.48 $0.21
Adjusted diluted net income per share (1) $0.47 $0.21

(1) Our financial results are prepared in accordance with International Financial Reporting Standards ("IFRS"). This press release refers to adjusted net income, adjusted basic and diluted net income per share, which are not measures recognized under IFRS in Canada and do not have a standardized meaning prescribed by IFRS. Adjusted net income excludes the effect of accretion costs recorded on a redeemable financial instrument in the amount of $972 for the three months ended March 31, 2011. These measures may differ from those used by, and may not be comparable to such measures as reported by other issuers. We disclose these measures, which have been derived from our financial statements and applied on a consistent basis, because we believe they are of assistance in understanding the results of our operations and financial position and are meant to provide further information about our financial results to investors.

Consolidated sales for the three months ended March 31, 2011 grew 62%, to $121,062,000 compared to $74,785,000 in the same period of 2010. Income before interest, taxes and amortization for the three months was $10,763,000 compared to $5,298,000 in 2010. Operating income before accretion, interest and taxes for the three months was $8,195,000 compared to $3,411,000 in 2010. Net income and basic earnings per share for the three months were $4,745,000, and $0.39 per share respectively, compared to $2,327,000, and $0.21 per share, for the same period in 2010. Adjusted net income and basic earnings per share for the three months were $5,717,000, and $0.48 per share respectively.

"We are pleased with the significant growth in sales and profitability of the Company in the 1st quarter, resulting from the stellar contribution of both the Retail Canada Division and our recently acquired Retail U.S. Division," said Thomas Skidmore, GLENTEL's President and Chief Executive Officer.

Retail Canada Division sales of mobile phone products and services were $77,026,000 for the 1st quarter compared to $63,255,000 for the same period in 2010. The wireless industry continues to experience significant growth with consumers' acceptance of smartphone technology. The Retail Canada Division saw same-store activations of mobile phones and other wireless devices sold during the year grow 12% over the previous year in stores that were open through both 2011 and 2010.  We continued to focus on the sale of smartphones, with sales predominately of iPhone, BlackBerry and Android devices.

For the Retail Canada Division, income before interest, taxes and amortization for the 1st quarter was $11,009,000 compared to $7,411,000 in 2010. Operating income before interest and taxes for the 1st quarter was $9,884,000 compared to $6,380,000 in the previous year.

The Retail U.S. Division continues to focus on smartphone sales, with strong sales from Android devices.  Towards the end of the 1st quarter, the division started selling the iPhone 4 and the HTC Thunderbolt. Same-store unit growth in the 1st quarter was 22% for stores open in both 2011 and 2010. For the 1st quarter ended March 31, 2011, sales of retail mobile phone products and services in the Retail U.S. Division were $36,434,000, and operating income before interest and taxes for the division was $2,946,000 for the quarter.

Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $7,602,000 for the 1st quarter compared to $11,530,000 in the same period in 2010. The 1st quarter of 2010 included revenue recognized from the installation of significant revenue projects that did not occur in the 1st quarter of 2011. The Business Division did see margins increase by 8% for the 1st quarter when compared to 2010, and reduced operating expenses for the 1st quarter of 2011 by 12% to $2,819,000 compared to $3,208,000 the previous year. For the Business Division, income before interest, taxes and amortization for the 1st quarter was $375,000 compared to $768,000 in 2010. Operating income before interest and taxes for the 1st quarter was a loss of $210,000 compared to income of $77,000 in 2010.

Corporate operating and administrative expenses for the 1st quarter ended March 31, 2011 were $5,248,000 compared to $2,881,000 the previous year. The majority of the increase was from adding resources that include consulting fees and software costs to the corporate functions to support the expansion of the Retail Canada Division. This also includes approximately $900,000 of Retail U.S. corporate costs and the related accretion expense of $972,000 for a redeemable financial instrument.

About GLENTEL
GLENTEL (TSX: GLN) is a leading provider of innovative and reliable telecommunications services and solutions in Canada and the United States. Founded in 1963 and headquartered in Burnaby, BC, GLENTEL comprises three operating divisions - Retail Canada, Retail US and Business - that service thousands of consumers and commercial communications customers. The company operates 290 stores across Canada located primarily in retail malls and Costco Wholesale, as well as 155 stores in the United States. To its business and government customers, GLENTEL offers wireless service, rental equipment, satellite and terrestrial network systems, tower sites, and wireless asset monitoring. As the largest multi-carrier mobile phone retailer in Canada, it offers a choice of network carrier and wireless device or phone to Canadian consumers. GLENTEL operates its business under the trading names Glentel Wireless, WIRELESSWAVE, WAVE SANS FIL, Tbooth wireless, la cabine T sans fil, WIRELESS etc. and SANS FIL etc., and Diamond Wireless - Verizon National Premium Retailer in the U.S.

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.

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

 

 

SOURCE Glentel Inc.

For further information:

Investor



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



Contact:
Melanie Mitchell
GLENTEL Inc.
604.415.7002
melanie.mitchell@glentel.com

 

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