MONTREAL, Feb. 26 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSX-V: PR) today reported its unaudited financial results for the third quarter of fiscal 2010, which ended December 31, 2009, and filed its MD&A for the period. All figures are in Canadian dollars.
Sales for the third quarter were $29.9 million, an increase of 92% over the third quarter a year ago, which included the sales of Radian Communication Services (Canada) Limited ("Radian") for only two weeks after its acquisition date of December 15, 2008. For the third quarter, EBITDA(1) was $1.5 million, compared to an EBITDA loss of $0.3 million last year.
As anticipated, the sales performance in the third quarter was down on a sequential basis from the record sales of $34.8 million reported in the second quarter ended September 30, 2009, with the majority of this decline due to the seasonality of the aerial construction business, where activity typically slows in the winter months.
The Company noted that its Q3 gross margin of 22.5%, while much higher than last year's 18.0%, was lower than the 25% level achieved in Q1 and Q2 of this fiscal year. This reflected a slight shift in mix toward more material and less labour compared to the previous quarters. This, along with weather, mostly impacted the gross margin.
The Company said that, as expected, cash flow from operating activities increased significantly compared to the second quarter. Cash flow from operations was $0.8 million and changes in working capital generated an additional $1.4 million of cash to generate cash from operating activities of $2.3 million. Most of this was used to pay down long-term debt and to reduce the amount drawn under the Company's credit facility. At December 31, 2009, $10.4 million of its $16 million credit facility was drawn down.
Pierre Yves Méthot, Chairman and CEO of Prestige, said, "We are continuing to achieve record growth because of the Radian acquisition and organic growth from our three business segments. During the quarter, we started to work with a number of new wireless carriers and their OEM partners and we expect this new business activity to increase in the coming quarters. Also, our cost-cutting measures continue to have a strong impact on our bottom line and will enable us to become more profitable as the level of activity picks up in the spring."
Prestige recorded a loss before income taxes for the third quarter of $0.2 million; however, because certain of its subsidiary companies were profitable, it recorded a cash income tax expense of $0.4 million. In the fourth quarter of this fiscal year, the Company will complete a restructuring of all its legal entities following the acquisition activity of the past two years, and it anticipates that its effective tax rate and cash tax expense will be sharply reduced. The Company also noted that its tax loss carryforwards exceed $30 million. The net loss in the third quarter was $0.6 million, or a loss of $0.01 per share, compared to a net loss of $1.9 million, or a loss of $0.03 per share, last year.
For the nine-month period ended December 31, 2009 Prestige reported sales of $95.8 million, EBITDA of $7.8 million, earnings before taxes of $2.3 million and net income of $0.5 million, or $0.00 per share. These compared to sales of $41.3 million, EBITDA of $0.6 million and a net loss of $3.7 million, or a loss of $0.07 per share.
At December 31, 2009, assets were $51.9 million, shareholders' equity was $15.0 million and net debt was $24.6 million. Total shares outstanding were 118.2 million.
Mr. Méthot concluded by saying, "Looking forward into our fiscal 2011 year, which commences on April 1, 2010, we anticipate strong growth from our existing customers which now include all of the incumbents as well as the new wireless players. We plan to continue to grow our share of the outsourced infrastructure services required by our customers as they expand and upgrade their networks to enable the delivery of next generation telecommunications services.
(1) Earnings before interest, taxes, depreciation and amortization,
stock-based compensation, foreign exchange, transaction and
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. Prestige Telecom also provides technical and aerial services to the Canadian communications and broadcast industries, including tower supply, engineering, site construction, and infrastructure and equipment maintenance.
In Canada, Prestige has over 950 professional and technical personnel operating from seventeen (17) service locations in nine (9) provinces. Prestige's head office is located in Baie d'Urfé (Montreal), Quebec.
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 February 25, 2010, 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.
SOURCE PRESTIGE TELECOM INC.
For further information: For further information: Maryanne Golden, Director, Corporate Affairs, Prestige Telecom Inc., (514) 457-4488 ext: 273, firstname.lastname@example.org; www.prestige-tel.com