Prestige Telecom Announces Restatement of Q1 Financial Statements



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    BAIE D'URFE, QC, Oct. 29 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige"
or the "Company") (TSX:V-PR) of Montreal, Quebec, has proceeded with a
restatement of the financial statements it initially filed for the three month
period ended June 30, 2008. The net effect of the changes on Q1 results is a
reduction of the net loss by $47,122.

    Revenue recognition

    The Company provides certain sale of goods and certain services to its
customers under fixed price contracts for which revenues were historically
recognized under the completed contract method whereby revenues are only
recognized when the sale of goods or rendering of services under a contract is
completed or substantially completed. In the first quarter of fiscal 2009, the
Company decided to harmonize its accounting policy with respect to the
recognition of revenues for fixed price contract by adopting the
percentage-of-completion method for all fixed price contracts. The percentage
of completion method is a method of accounting for fixed price contracts that
recognizes revenue proportionately with the degree of completion of goods or
services under a contract. The Company considers that the
percentage-of-completion method better reflects the substance and the effort
for such contracts and as such provides better information to the reader of
the financial statements.
    This voluntary change in accounting principles was originally applied
prospectively while it should have been applied retroactively with restatement
of prior period numbers as required under CICA 1506 - Accounting Changes. The
negative impact amounts to $335,476 for Q1-2009 ($46,629 for Q1-2008).

    Transaction and reorganization costs

    Restated transaction and reorganization costs totalled $1,876,587 for the
first quarter of fiscal 2009, down from $2,238,753 as previously reported.
They include one-time transaction and reorganization costs of
$1,470,887 associated with the proposed uncompleted acquisition of WesTower
Communications LLC. The one-time transaction and reorganization costs were
overstated by $362,166 due to over accruals.

    
                                                            Three months
                                                            Ended June 30
                                              -------------------------------
                                                         2008           2007
                                              -------------------------------
    IMPACT OF RESTATEMENT ON NET INCOME (LOSS):
    Net income (loss) as previously reported      $ (1,571,855)   $   94,057
      Adjustments
      Sales                                           (884,698)     (101,156)
      Cost of sales                                    549,223        54,527
                                                  -------------   -----------
      Revenue recognition adjustment                  (335,476)      (46,629)

      Transaction and reorganization costs             362,166             -
      Income taxes                                      20,431        14,921
                                                  -------------   -----------
      Net change                                        47,122       (31,708)
                                                  -------------   -----------
      Net income (loss) - as restated             $ (1,524,733)   $   62,349
                                                  -------------   -----------
                                                  -------------   -----------


                                                     June 30, 2008
                                  -------------------------------------------
                                    As previously           As
                                         reported     restated      Variance
                                  -------------------------------------------
    IMPACT OF RESTATEMENT ON THE
     CONSOLIDATED BALANCE SHEET
      Deferred charges                    395,563      367,721       (27,842)
      Future income taxes               1,599,837    1,512,917       (86,920)
      Accounts payable and accrued
       liabilities                      7,477,039    7,087,031      (390,008)
      Deficit                           6,779,808    6,504,562       275,246
    

    About Prestige Telecom Inc.

    Prestige Telecom is a leading provider of network engineering, materials
furnishing, installation and support services (commonly referred to as EF&I
services) required to construct, operate and maintain wireline, wireless and
cable television networks. Prestige assists telecommunications original
equipment manufacturers and service providers to engineer, install and upgrade
their infrastructures to support enhanced voice, high speed data and video
services.
    In Canada, Prestige operates from three full service locations based in
Montreal, Québec; Toronto, Ontario and Edmonton, Alberta and has 350
professional and technical personnel. Prestige operates in the United States
market through a mutual subcontractor agreement with Comforce Telecom Inc.
under the trade name Prestige Comforce Professional Services ("PCPS"). PCPS is
based in Plano, Texas and provides services to customers throughout the United
States.

    Forward-Looking Statements

    This press release contains certain forward-looking statements with
respect to the Company. Such forward-looking statements are dependent upon a
certain number of factors and are subject to risks and uncertainties. Actual
results may differ from those expected. The information contained in this
press release is dated October 27, 2008, the date on which the Directors
approved the press release. Management does not assume any obligation to
update or revise any forward-looking statements, whether as a result of new
information or future events, except when required by the regulatory
authorities.

    Note to readers: Complete unaudited consolidated financial statements and
Management's Discussion & Analysis of Financial Position and Operating Results
were posted on SEDAR and are available at www.sedar.com.

    The TSX Venture Exchange accepts no responsibility for the adequacy or
    the accuracy of this press release.




For further information:

For further information: Pierre Yves Méthot, Chairman and Chief
Executive Officer, Prestige Telecom Inc., (514) 457-4488, Ext. 277,
pymethot@prestige-tel.com; Source: Prestige Telecom Inc.

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PRESTIGE TELECOM INC.

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