Prestige Telecom records strong sales growth in first quarter



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

    MONTREAL, Aug. 29 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or
"the Company") (TSX-V:PR) today announced unaudited financial results for the
first quarter of fiscal 2009, which ended June 30, 2008, and filed its MD&A
for the period. All figures are in Canadian dollars.
    Sales for the first quarter were $12.6 million, an increase of 47% over
the first quarter a year ago. On a sequential basis, sales increased by 55%
compared to the quarter ended on March 31, 2008. In the first quarter,
normalized EBITDA(1) was $0.8 million, an increase of 65%, compared to EBITDA
of $0.5 million in the same period last year.
    Prestige has also experienced a positive increase in its gross margin
which was 24.5% for the first quarter compared to 21.9% a year ago and 13.3%
in the last quarter of the 2008 fiscal year.
    Net loss for the quarter was $1.6 million, or $0.03 per share, compared
to net income of $0.1 million, or $0.00 per share, a year ago. The first
quarter of fiscal 2009 included onetime transaction costs of $1.8 million
associated with the proposed uncompleted acquisition of WesTower
Communications LLC ("WesTower") and onetime severance costs of $0.4 million
related to the downsizing of head office administrative staff. Excluding these
costs, Prestige's pro forma net income would have equaled $0.3 million, or
$0.00 per share.
    The reduction in administrative staff is expected to result in an ongoing
annual reduction in selling, general and administrative costs of approximately
$1.2 million. The full impact of this reduction is expected in the third
quarter ending December 31, 2008.
    Mr. Pierre Yves Méthot, Chairman and CEO of Prestige, said, "Our industry
continues to show strong fundamentals as evidenced by the increased demand for
the services offered by Prestige. In the past quarter we expensed one
hundred percent of the professional fees associated with the proposed and
uncompleted acquisition of Westower and acted quickly to readjust head office
expenses associated with our acquisition strategy." He added: "Our immediate
priorities are to return to profitability and complete the announced
acquisition of Radian Communication Services (Canada) Limited ("Radian").
    "The re-acceleration of our sales in the quarter reflects significant new
contract activity across all three of our business units and in all regions of
Canada. The revenues we achieved in the first quarter are the largest in the
history of the company. In particular, the integration of the acquisitions of
Keen and Plantec made an important contribution to increased project volume
with our telco, cable and OEM customers. The Company has contracted 90 new
offshore resources and is in the process of hiring 120 local resources to
fulfill 3 major multi-year contracts."
    The Company continues to work on the banking and financing arrangements
necessary to conclude the planned acquisition of Radian, which recorded sales
of $57.7 million in the year ended December 31, 2007. Radian brings
complementary resources, aerial and technical services expertise,
infrastructure service offerings as well as strong wireless customer
relationships in Canada. After the integration of Radian and Prestige, the
Company will be in a position to offer full lifecycle infrastructure services
to both wireline and wireless networks to take advantage of the growing demand
for outsourced telecommunications infrastructure services.

    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.

    
    (1) Earnings before interest, taxes, depreciation and amortization,
        stock-based compensation, foreign exchange, transaction and
        reorganization costs

    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 August 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.


    CONSOLIDATED STATEMENT OF EARNINGS
    (UNAUDITED)

                             Three         Three
                            Months        Months
                             Ended         Ended           Q1 - 2009
                           June 30       June 30              over
                              2008          2007           Q1 - 2008
                                                             $             %
                      ------------  ------------  ---------------------------

    Sales             $ 12,589,119  $  8,592,398             $            47%
                                                      3,996721
    Cost of sales        9,507,118     6,714,318     2,792,800            42%
                      ------------  ------------  ------------
    Gross margin         3,082,001     1,878,080     1,203,921            64%

                              24.5%          21.9%

    Marketing and
     development           177,118       223,689       (46,571)          -21%
    General and
     administrative      2,134,033     1,187,329       946,704            80%
                      ------------  ------------  ------------
    NORMALIZED
     EBITDA           $    770,850  $    467,062  $    303,788            65%
                               6,1%          5,4%

    Interest on long
     term debt             241,691       117,734       123,957
    Depreciation and
     amortization          125,816        97,219        28,597
    Stock-based
     compensation           82,026             -        82,026
    Foreign exchange
     loss (gain)             1,550             -        19,504
                                         (17,954)
    Other interest          60,635       149,930       (89,295)
    Transaction and
     reorganization
     costs               2,238,753             -     2,238,753
                      ------------  ------------  ------------

    INCOME (LOSS)
     BEFORE TAX         (1,979,621)      120,132    (2,099,753)

    INCOME TAX             407,766       (26,075)      433,841
                      ------------  ------------  ------------
    NET (LOSS)
     INCOME           $ (1,571,855) $     94,057    (1,665,912)
                      ------------  ------------  ------------
                      ------------  ------------  ------------


    CONSOLIDATED BALANCE SHEET
    (UNAUDITED)

                                                       As at           As at
                                               June 30, 2008  March 31, 2008
                                                  (Unaudited)       (Audited)
    -------------------------------------------------------------------------
    CURRENT ASSETS
      Accounts receivable                      $   7,876,679  $    6,621,841
      Inventories                                  3,683,977       3,422,383
      Work in process                              3,052,780       1,780,652
      Prepaid expenses                               303,950         211,917
      Advances to officers, at prime rate
       plus 2%                                       347,372               -
                                               -------------  --------------
                                                  15,264,758      12,036,793

    DEFERRED CHARGES                                 395,563         123,095
    PROPERTY, PLANT AND EQUIPMENT                  2,406,041       2,148,750
    INTANGIBLE ASSETS                              1,975,722       1,822,740
    GOODWILL                                       1,304,549       1,304,549
    FUTURE INCOME TAXES                            1,599,837       1,162,748
                                               -------------  --------------
                                               $  22,946,470  $   18,598,675
                                               -------------  --------------
                                               -------------  --------------
    CURRENT LIABILITIES
      Bank indebtedness                        $   4,036,189  $      577,185
      Accounts payable and accrued
       liabilities                                 7,477,039       4,423,144
      Current portion of long-term debt            1,218,368       1,270,759
                                               -------------  --------------
                                                  12,731,596       6,271,088

    LONG-TERM DEBT                                 3,705,245       4,316,677
    DEFERRED GAIN ON SALE OF PROPERTY                328,271         339,723
                                               -------------  --------------
                                                  16,765,112      10,927,488
                                               -------------  --------------

    SHAREHOLDERS' EQUITY
      Capital stock                                9,926,321       6,251,953
      Warrants                                     1,857,364       5,531,732
      Deficit                                     (6,779,808)     (5,207,953)
      Contributed surplus                            657,481         575,455
      Equity component of convertible loan           520,000         520,000
                                               -------------  --------------
                                                   6,181,358       7,671,187
                                               -------------  --------------
                                               -------------  --------------
                                               $  22,946,470  $   18,598,675
                                               -------------  --------------
                                               -------------  --------------
    




For further information:

For further information: Pierre Yves Méthot, Chairman and Chief
Executive Officer, Prestige Telecom Inc., (514) 457-4488, Ext. 277

Organization Profile

PRESTIGE TELECOM 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