Look Communications reports fiscal 2009 results

Updates shareholders following closing of Inukshuk transaction

TORONTO and MONTRÉAL, Dec. 4 /CNW/ - Look Communications Inc. ("Look" or the "Corporation") (TSX Venture: LOK and LOK.A) today reported its financial and operating results for the fiscal year ended August 31, 2009.

The major event for fiscal 2009 was the sale of Look's spectrum and broadcast licence to the Inukshuk Wireless Partnership ("Inukshuk") (a joint venture between Rogers Communications and Bell Canada ("Bell")) which was announced by the Corporation on May 5, 2009 (the "Agreement"). Pursuant to the Agreement, Look is obligated to support an application by Inukshuk to the CRTC for the grant of a licence under the Broadcasting Act.

"The last quarter of fiscal 2009 and the first quarter of fiscal 2010 were very busy for Look. Following the Corporation's sale of its major operating assets, the Corporation obtained regulatory approval for the transfer of its spectrum licenses, and as a result, received the full consideration of $80 million in cash due from Inukshuk. In addition, the Corporation substantially completed the restructuring of its operations, which dealt with all its subscribers and employees and commenced the shut down of its network," said Gerald McGoey, Vice Chairman and CEO of Look.

While the Agreement contemplated Inukshuk making up to three separate payments to Look over a period of up to three years, depending upon regulatory approval, the parties were able to complete the transaction in less than four months. The majority of the human resource restructuring expenses were contingent upon, among other things, the entire consideration of $80 million being received by Look. Having closed the transaction much earlier than anticipated, all human resource restructuring payments were made subsequent to year end.

"I am pleased with the speed of closing the transaction and the dedication of all employees towards a 'soft landing' for all of our subscribers, suppliers and regulatory authorities. This is a tremendous accomplishment considering the complex nature of a seven party transaction in an economic and financial environment that is more severe than anyone had anticipated," said Gerald McGoey.

The Board of Directors and Management would like to acknowledge the ongoing support of Look's parent company, Unique Broadband Systems, Inc., in helping Look to realize the maximum value for its remaining assets by, amongst other things, indicating that it will consider the sale of its controlling interest in Look to facilitate the full value of Look's tax losses. The Board of Directors and Management will continue to pursue various opportunities available to the Corporation while attempting to monetize its approximately $360 million of tax losses.

In addition to the above, the Corporation has also taken steps to significantly reduce its cash burn through the elimination and reduction of other operating expenses.

The Corporation's remaining assets consist of the Milton facility and related infrastructure, which has been listed for sale, approximately $360 million of tax losses and the Corporation's present cash position of approximately $40 million. The Corporation continues to look at those companies in the entertainment, information and communications field as well as Income Trusts which are best suited to realizing the full value of Look's financial capital and tax losses. To facilitate achieving this objective, the Board of Directors has retained BMO Capital Markets to assist in this process.

The Corporation will continue to keep its shareholders apprised of any material developments as they occur.

Operating highlights include the following:

    
    -   The Corporation entered into an agreement, as discussed above, with
        Inukshuk for the sale of its spectrum and broadcast licence for
        $80 million of cash. The final $50 million short-term receivable,
        outstanding at August 31, 2009, was collected by Look in September
        2009;

    -   During the first and fourth quarters of fiscal 2009, the Corporation
        completed the sale of its web hosting and domain name business and
        its Internet business recording gains of $4.2 million and
        $1.6 million respectively. The Corporation also successfully executed
        an agreement whereby its video subscribers transitioned to Bell; and

    -   The Corporation has reduced its full-time equivalent staff from:

        -   70 at August 31, 2008, to
        -   64 at August 31, 2009, to
        -   ~5 by December 31, 2009.

    Financial highlights for the year ended August 31, 2009 included the
    following:

    -   Cash and cash equivalents at August 31, 2009 totalled $14.3 million
        which represents an increase of $10.7 million from August 31, 2008 as
        a result of the first instalment of $30 million paid to the
        Corporation by Inukshuk which was partially offset by a payment of
        $16 million to Bell in settlement of its outstanding payables and
        litigation;

    -   Net income from all operations was $45.5 million, or $0.36 per share
        on a basic basis; and

    -   Operating expenses, excluding impairment and restructuring charges
        related to the sale of the spectrum and broadcast licence to
        Inukshuk, for the year totalled $15.0 million, a decrease of
        $1.8 million or 11.0% from the $16.8 million incurred during the year
        ended August 31, 2008.
    

For further information on Look's financial results, please review the Corporation's annual audited consolidated financial statements and management's discussion and analysis of financial condition and results of operations for the years ended August 31, 2009 and 2008.

About Look Communications Inc.

Look's shares are listed on the TSX Venture Exchange under the symbols "LOK" for Multiple Voting Shares and "LOK.A" for Subordinate Voting Shares. Look's website may be found at www.look.ca.

The corporate information contained in this release includes forward-looking statements regarding future events and the future performance of Look that involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by Look at the time of preparation, may prove to be incorrect. The actual results achieved may vary from the information provided herein and the variations may be material. Consequently, there is no representation by Look that actual results achieved will be the same in whole or in part as those forecast.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

    
    Look Communications Inc.

    CONSOLIDATED CONDENSED BALANCE SHEETS

    As at August 31, 2009 and 2008
    (In thousands of dollars)
    -------------------------------------------------------------------------
                                                            2009        2008
    -------------------------------------------------------------------------

    ASSETS
    Total current assets                               $  67,288   $   6,764
    Restricted cash                                          380         440
    Property and equipment                                 1,995       7,503
    Deferred charges                                           -          63
    -------------------------------------------------------------------------
                                                       $  69,663   $  14,770
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
    Liabilities
    Total current liabilities                          $  26,144   $  17,330
    Long-term liability component of convertible
     debentures                                            3,291       3,161
    -------------------------------------------------------------------------
    Total liabilities                                     29,435      20,491
    -------------------------------------------------------------------------

    Shareholders' equity (deficit)
    Share capital                                         33,566      33,247
    Equity component of convertible debentures             1,479       1,488
    Contributed surplus                                   11,151      11,033
    Deficit                                               (5,968)    (51,489)
    -------------------------------------------------------------------------
    Total shareholders' equity (deficit)                  40,228      (5,721)
    -------------------------------------------------------------------------
                                                       $  69,663   $  14,770
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Look Communications Inc.

    CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND DEFICIT

    Years ended August 31, 2009 and 2008
    (In thousands, except per share amounts)
    -------------------------------------------------------------------------
                                                            2009      2008(1)
    -------------------------------------------------------------------------

    Service and sales revenue                          $  12,518   $  16,884
    Carrier charges and cost of sales                      7,295       9,085
    -------------------------------------------------------------------------
    Gross margin from continuing operations                5,223       7,799
    -------------------------------------------------------------------------
    Operating expenses                                    37,945      16,841
    -------------------------------------------------------------------------
    Loss from continuing operations before the
     undernoted                                          (32,722)     (9,042)
    Interest and finance charges, net                       (137)        (73)
    Accretion on liability component of convertible
     debentures                                             (432)       (416)
    Gain on sale of spectrum and broadcast licence        78,106           -
    Gain on sale of Internet business                      1,630           -
    Loss on settlement of Bell litigation                 (5,457)          -
    Gain on sale of other property and equipment               2          10
    -------------------------------------------------------------------------
    Income (loss) for the year from continuing
     operations                                           40,990      (9,521)
    Income for the year from discontinued operations       4,531       2,202
    -------------------------------------------------------------------------
    Income (loss) and comprehensive income (loss)
     for the year                                         45,521      (7,319)
    Deficit, beginning of year                           (51,489)    (44,170)
    -------------------------------------------------------------------------
    Deficit, end of year                               $  (5,968)  $ (51,489)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Continuing operations
      Basic income (loss) per share                        $0.32      $(0.07)
      Diluted income (loss) per share                       0.22       (0.07)
    Discontinued operations
      Basic income per share                                0.04        0.02
      Diluted income per share                              0.02        0.02
    Income (loss) per share
      Basic                                                 0.36       (0.05)
      Diluted                                               0.24       (0.05)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of shares outstanding
      Basic                                              126,662     125,578
      Diluted                                            184,193     125,578
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) As restated



    Look Communications Inc.

    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

    Years ended August 31, 2009 and 2008
    (In thousands of dollars)
    -------------------------------------------------------------------------
                                                            2009        2008
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
      Income (loss) for the year                       $  45,521   $  (7,319)
      Less: Income for the year from discontinued
       operations                                         (4,531)     (2,202)
      Items not affecting cash                           (68,167)      5,791
      Changes in non-cash operating working capital       20,782      (2,655)
    -------------------------------------------------------------------------
    Cash used in continuing operations                    (6,395)     (6,385)
    Cash provided by discontinued operations                 333       2,252
    -------------------------------------------------------------------------
    Cash used in operating activities                     (6,062)     (4,133)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Cash provided by (used in) financing activities            1         (13)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Cash provided by (used in) continuing operations      13,310        (117)
    Cash provided by discontinued operations               3,440           -
    -------------------------------------------------------------------------
    Cash provided by (used in) investing activities       16,750        (117)
    -------------------------------------------------------------------------

    Increase (decrease) in cash and cash equivalents      10,689      (4,263)
    Cash and cash equivalents, beginning of year           3,565       7,828
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year             $  14,254   $   3,565
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00013414E

SOURCE Look Communications Inc.

For further information: For further information: Peter Block, Investor and Media Relations, investorinfo@look.ca, (647) 259-3284

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