GLENTEL Inc. reports record net income of $1.46 per share - sales grow to
$308.1 million

BURNABY, BC, March 10 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 4th quarter and year ended December 31, 2009.

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

    
    -------------------------------------------------------------------------
                                    Three months ended       Year ended
                                       December 31           December 31
    -------------------------------------------------------------------------
                                     2009       2008       2009       2008
    -------------------------------------------------------------------------
    Sales                           $90,895    $87,507   $308,093   $289,333
    -------------------------------------------------------------------------
    Income, before interest,
     taxes, impairment of goodwill
     and amortization                 9,911      9,394     30,729     26,908
    -------------------------------------------------------------------------
    Amortization                     (1,673)    (1,527)    (6,225)    (6,319)
    -------------------------------------------------------------------------
    Impairment of goodwill                      (4,625)               (4,625)
    -------------------------------------------------------------------------
    Operating income before
     interest and taxes               8,238      3,242     24,504     15,964
    -------------------------------------------------------------------------
    Net income                       $5,058       $897    $15,952     $9,523
    -------------------------------------------------------------------------
    Basic net income per common
     share                            $0.46      $0.08      $1.46      $0.89
    -------------------------------------------------------------------------
    Diluted net income per common
     share                            $0.45      $0.08      $1.45      $0.86
    -------------------------------------------------------------------------
    

Consolidated sales for the year ended December 31, 2009 grew 7%, to $308,093,000 compared to $289,333,000 for the same period in 2008. Operating income before impairment of goodwill, interest and taxes grew 19% to $24,504,000 compared to $20,589,000 in 2008. In the 4th quarter of 2008, management recorded an impairment charge of $4,625,000 against the goodwill of the Business Division. Consolidated net income and basic earnings per common share were $15,952,000, $1.46 per share, compared to $9,523,000, $0.89 per share, in the previous year (or $14,148,000, $1.30 per share, before a goodwill impairment write-down in 2008).

"I am pleased with the growing success of GLENTEL and its operating results, in spite of a weak economy in 2009 and the competitive pressures evidenced in the Canadian mobile phone marketplace," said Thomas Skidmore, GLENTEL's President and Chief Executive Officer. "Our Retail Division continued to expand its footprint and refresh its brands, while our Business Division took action on its cost structure with a realigned national sales focus to deliver integrated business solutions."

Growth in sales was due to a 9% increase in sales in the Retail Division. Sales were strengthened throughout the year, driven by consumers' adoption of Smartphone technology and the introduction of more choices in the selection of mobile phone devices. During the 2009 year, GLENTEL's Retail Division added 20 store locations, resulting in an 8% growth in number of stores operating at December 31, 2009 compared to 2008. Same-store activations of mobile phones and other wireless devices sold in the year increased 6% over the previous year in stores that were open throughout both 2009 and 2008. In the Business Division, sales were down 7% from the previous year and gross margin dropped by 4% due to the challenges in the economy.

Consolidated sales for the 4th quarter ended December 31, 2009 increased 4% to $90,895,000, compared to $87,507,000 in 2008. Operating income before goodwill impairment, interest and taxes was $8,238,000, compared to $7,867,000 in 2008. Consolidated net income and basic earnings per share for the three months ended December 31, 2009 were $5,058,000, $0.46 per share, compared to $897,000, $0.08 per share, for the same period in the previous year (or $5,522,000, $0.49 per share, before a goodwill impairment write-down in 2008). In the 4th quarter of 2009, the Company adjusted its future income tax asset allowing for expected future tax rate reductions. As a result, the future income tax asset was reduced and future income tax expense increased, reducing consolidated net income in the 4th quarter of 2009 by $550,000, $0.05 per share.

The Retail Division sales of mobile phone products and services grew 9% to $270,753,000 for the year ended December 31, 2009, compared to $249,033,000 in 2008. Divisional operating income before interest and taxes increased 18% to $38,561,000, compared to $32,673,000 in 2008. In the 1st and 2nd quarters of 2009, Apple introduced the new 3GS iPhone, while HTC introduced its new Android phone powered by Google; these new choices in Smartphone mobile devices assisted the growth of same-store activations of mobile phones, which grew by 26% and 10%, for 2009 and 2008 respectively. In the 2nd half of 2009, sales were relatively flat compared to the strong 3rd and 4th quarters in 2008 that were driven by consumers' immediate adoption of Smartphone technology, such as the BlackBerry Bold and the launch of the Apple iPhone.

Sales in the Retail Division in the 4th quarter ended December 31, 2009 increased 6% to $80,756,000, compared to $76,044,000 in 2008. Operating income before interest and taxes increased 4% to $11,517,000 for the 4th quarter of 2009, compared to $11,109,000 the same period the previous year. The 4th quarter was a challenging quarter. Net subscriber additions across the industry were down compared to the 4th quarter in 2008.

The Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $37,340,000 for the year ended December 31, 2009, compared to $40,300,000 in 2008. Divisional operating loss before interest and taxes was $1,216,000, compared to a loss of $4,642,000 (including a goodwill impairment charge of $4,625,000) for the previous year.

Sales in the Business Division in the 4th quarter ended December 31, 2009 were $10,139,000, compared to $11,463,000 in 2008. Operating loss before interest and taxes for the division for the 4th quarter of 2009 was $192,000 compared to a loss of $4,500,000 (including a goodwill impairment charge of $4,625,000) the same period the previous year.

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 two operating divisions - Retail and Business - that service thousands of consumers and commercial telecommunications customers. Together with its divisions, the company operates more than 280 locations across Canada located in retail malls, Costco Wholesale stores, and business centers. As the largest multi-carrier mobile phone retailer in Canada, it offers a choice of network carrier and wireless device or phone. To its business and government customers, GLENTEL offers wireless service, rental equipment, satellite and terrestrial network systems, tower sites and wireless asset monitoring. GLENTEL operates its business under the trading names GLENTEL Wireless, WirelessWave, The Telephone Booth (Tbooth and la cabine T) and WIRELESS etc.

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: For further information: Investor Relations Contact: Dale B. Belsher, Chief Financial Officer, GLENTEL Inc., (604) 415-6500, investors@glentel.com; Media Contact: Shafiq Jamal, James Hoggan & Associates, (604) 742-4269, sjamal@hoggan.com

Organization Profile

GLENTEL Inc.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890