GLENTEL Inc. reports earnings per share of $0.25 for the 2nd quarter ended June 30, 2013

BURNABY, BC, July 30, 2013 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the three and six months ended June 30, 2013. Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data) follow.

  Three months ended
June 30
Six months ended
June 30
2013 20122 2013 20122
Sales $320,836 $144,709 $626,500 $293,056
Income before amortization, change in fair value
of redeemable financial instruments, gain on
disposition of property and equipment, finance
income and expenses, and taxes ("EBITDA")1
$11,915 $10,788 $25,874 $18,015
Income before change in fair value of
redeemable financial instruments, gain on
disposition of property and equipment,
finance income and expenses, and taxes ("EBIT")1
$5,853 $8,171 $13,459 $12,799
Net income $5,573 $5,058 $8,834 $8,380
Basic net income per common share $0.25 $0.23 $0.40 $0.38
Diluted net income per common share $0.25 $0.23 $0.39 $0.37

1EBITDA and EBIT are not defined under IFRS and, as a result, may not be comparable to similarly titled measures presented by other publicly traded entities, nor should they be construed as an alternative to other earnings measures determined in accordance with IFRS.
2The Company adopted amendments to IAS 19 effective January 1, 2013.  On adoption of this standard, which has been applied retrospectively, the Company now recognizes changes in defined benefit obligations and plan assets when they occur rather than utilizing the corridor approach.
 

"We are pleased to report strong sales and EBITDA growth for the three and six months ended June 30, 2013. In the second quarter of 2013, GLENTEL generated $11.9 million in EBITDA, a 10% increase from last year, and over the past six months has increased EBITDA by 43% over last year's figures. This growth is attributable to many factors, with the expansion of our geographic footprint being the catalyst," stated Thomas Skidmore, GLENTEL's President and Chief Executive Officer. "In the second quarter of 2013, the Retail Canada Division launched an additional 24 Target Mobile® locations in British Columbia, Alberta and Manitoba, taking our June 30, 2013 Target Mobile footprint to 48 locations across four Canadian provinces. We have seen strong results from our Retail U.S. Divisions, and look forward to operating 154 existing store-in-store mobile phone kiosks with our new partner, BJ's Wholesale Club Inc., beginning August 1, 2013. Retail Australia has continued to focus on its Southeast Asia expansion, operating 9 Allphones retail locations in the Philippines at June 30, 2013. Through the remainder of 2013, we will continue to seek organic growth in all our global divisions."

Consolidated highlights

3 months ended June 30, 2013 compared to respective period in 2012

  • Consolidated sales increased 122% to $320.8 million, compared to $144.7 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $11.9 million, compared to $10.8 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $5.9 million, compared to $8.2 million.
  • Net income and basic earnings per common share were $5.6 million and $0.25 per share, compared to $5.1 million and $0.23 per share.

6 months ended June 30, 2013 compared to respective period in 2012

  • Consolidated sales increased 114% to $626.5 million, compared to $293.1 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $25.9 million, compared to $18.0 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $13.5 million, compared to $12.8 million.
  • Net income and basic earnings per common share were $8.8 million and $0.40 per share, compared to $8.4 million and $0.38 per share.

Highlights for each business unit follow.

Retail Canada Division

3 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services in the Retail Canada Division increased 14% to $98.8 million compared to $86.5 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $8.7 million, compared to $12.6 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $7.3 million compared to $11.4 million.
  • Sales in the 2nd quarter of 2013 were higher than the same period in 2012. Our partners continued their emphasis on their secondary brands, with less focus on the premium brands. This strategy was advertised heavily by our partners, which resulted in increased store traffic and higher revenues but also lower margins, as secondary brands provide a lower contribution to margin. Customers' purchasing habits have continued to evolve in 2013, with the activation mix in this quarter seeing more upgrade activations than in the past.
  • The division successfully completed the second phase of the Target Mobile rollout in the 2nd quarter of 2013, opening a total of 24 new stores in British Columbia, Alberta, and Manitoba. The division will continue the phased rollout and is committed to open a total of over 124 stores across Canada in 2013.

6 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services in the Retail Canada Division increased 6% to $188.2 million compared to $177.1 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $18.1 million, compared to $22.1 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $15.3 million compared to $19.6 million.

Retail U.S. Division - Diamond Wireless

3 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services in the Retail U.S. Division
    - Diamond Wireless increased 19% to $60.3 million, compared to $50.7 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $4.9 million, compared to $2.6 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") increased to $4.7 million, compared to $1.9 million.
  • Sales increased based on increased sales turns in higher-priced smartphones. The Samsung Galaxy S4, HTC One, and the Apple iPhone 5 helped increase sales in the 2nd quarter of 2013. These smartphones have a higher selling price and higher cost of goods sold, which also increased sales from the prior period. The Verizon "Share everything plan" helped increase consumer interest in smartphones. The division continued to see margin improvements in the 2nd quarter of 2013 when compared to 2012 from hardware purchase programs and cost-control initiatives. The division continues to focus on the "connected device," such as mobile broadband and tablets that tie into Verizon Wireless' "Share Everything" program, where it saw increased acceptance by customers.

6 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services in the Retail U.S. Division
    - Diamond Wireless increased 20% to $121.5 million, compared to $101.0 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $8.4 million, compared to $4.8 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") increased to $7.3 million, compared to $3.6 million.

Retail U.S. Division - Wireless Zone®

3 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services were $113.6 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $5.9 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $4.8 million.
  • Verizon's "Share Everything Plan" continued to have a positive impact through the 2nd quarter of 2013. Continued acceptance of the iPhone 5 and Samsung line of products continues to drive customers to Wireless Zone stores, contributing to strong sales. The continued shift to smartphones contributed to higher carrier compensation per transaction.

6 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services were $216.8 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $11.8 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $9.9 million.

Retail Australia Division

3 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services were $40.9 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $1.9 million.
  • Operating loss before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $0.8 million.
  • The Australian retail environment continues to be challenged by aggressive competition driven particularly by the largest national wireless carrier. AMT results have been impacted by the loss of the Virgin Mobile Australia brand in its Allphones retail stores in June 2013, but this loss has been mitigated by the resurgence of the Vodafone brand and its new 4G network, along with successful product launches of the Samsung Galaxy S4 and HTC One. AMT continues to operate 45 Virgin Mobile corporate retail stores through its Retail Management Services business. The soft-launch of the Allphones-only MySaver brand, a Mobile Virtual Network Operator, on the Telstra network, contributed to 2nd quarter sales and allowed AMT to address untapped customers. AMT has partnered with the three largest carriers Optus, Telstra, and Vodafone on its MySaver initiative, with the launch of plans on the Optus and Vodafone networks expected in the 3rd quarter of 2013. The MySaver brand will allow customers to participate at a lower price point than that currently available from the larger national carriers; however, given its early stage, the initiative will take some time to mature.  Further, in partnership with Tao Corporation of the Philippines, AMT opened its first 9 mobile phone stores in Manila in the 2nd quarter of 2013 and is targeting to operate approximately 50 stores by year-end.

6 months ended June 30, 2013 compared to respective period in 2012

  • Sales of retail mobile phone products, tablets and services were $86.5 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $5.4 million.
  • Operating income before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $0.1 million.

Business Division

3 months ended June 30, 2013 compared to respective period in 2012

  • Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $7.2 million compared to $7.5 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $0.1 million, compared to $0.6 million.
  • Operating loss before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $0.4 million compared to income of $0.1 million.
  • In the 2nd quarter of 2013, the Business Division closed the first two tranches of its tower site sale, agreeing to net proceeds of $4.6 million for the sale of 16 tower site assets and related customer agreements.

6 months ended June 30, 2013 compared to respective period in 2012

  • Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $13.5 million compared to $14.9 million.
  • Income before amortization, change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBITDA") was $0.6 million, compared to $1.1 million.
  • Operating loss before change in fair value of redeemable financial instruments, gain on disposition of property and equipment, finance income and expenses, and taxes ("EBIT") was $0.2 million compared to income of $0.1 million.

Corporate

3 months ended June 30, 2013 compared to respective period in 2012

  • Corporate operating and administrative expenses increased to $9.8 million (3% of sales), compared to $5.2 million (4% of sales).

6 months ended June 30, 2013 compared to respective period in 2012

  • Corporate operating and administrative expenses increased to $18.9 million (3% of sales), compared to $10.5 million (4% of sales).

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 four countries and two continents. The Company employs over 3,700 employees and operates more than 1,200 locations including more than 400 locations in Canada located in retail malls, Costco Wholesale stores, Target Canada stores, and business centres; more than 610 retail locations in the United States; and more than 195 retail locations in Australia and the Philippines.

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 '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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