MONTREAL, Aug. 30 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSX-V: PR) reported its unaudited financial results today for the first quarter ended June 30, 2010, and filed its financial statements and MD&A for the period. All figures are in Canadian dollars.
Prestige posted sales of $33.5 million for the first quarter of fiscal 2011, compared to $31.1 million a year ago. The 7% increase was mainly due to the acquisition of Majetel Inc. in April 2010, which contributed $1.8 million to the sales increase, with the balance due to organic growth. Revenues for the construction segment were up 28% to $18.6 million on the strength of significant business from the new wireless entrants, and engineering segment revenues were up 7% to $10.4 million due to new customers. Installation segment revenues were down 34% to $4.5 million due to a decline in wireline business activity and a delay in capital spending by a major wireless telecommunications carrier, but the Company expects these sales to return to normal levels over the next few months.
Gross margin for the first quarter decreased by $0.9 million to $6.8 million (20% of sales) from $7.7 million (25% of sales) last year, mainly due to the installation segment, where gross margin as a percentage of sales decreased from 29% to 20%. Lower installation sales volumes in the first quarter had a negative impact on the recovery of indirect costs.
Pierre Yves Méthot, Chairman and CEO of Prestige, said, "Our Q1 profitability is below expectations, and we will therefore be taking the steps required to achieve our objectives. We strongly believe that Prestige Telecom has reached a critical mass that will allow us to maximise synergies and reduce operational costs."
General and administrative expenses increased by $0.2 million to $4.8 million (14% of sales) for the first quarter from $4.6 million (15% of sales) a year ago, due mainly to the acquisition of Majetel. General and administrative expenses as a percentage of sales continued to decrease in the first quarter due to the impact of cost-cutting measures initiated in the last fiscal year.
EBITDA(1) for the quarter was $1.7 million, compared to $3.0 million last year.
For the first quarter ended June 30, 2010, Prestige recorded a net loss of $0.4 million or $0.004 per share, compared to net earnings of $0.1 million or $0.001 per share for the same period last year.
Working capital stood at $4.9 million as at June 30, 2010, compared to $6.9 million as at March 31, 2010. The Company also has access to a $19.5 million revolving credit facility, of which $16.6 million was used as at June 30, 2010.
At June 30, 2010, total assets were $66.8 million, shareholders' equity was $13.6 million and net debt was $33.7 million. A total of 118.2 million shares were outstanding.
During the quarter, the Company acquired Majetel Inc., which specializes in tower construction, maintenance and project management services for the Canadian wireless telecommunications industry, and completed its integration into the construction segment. Prestige also successfully implemented its JD Edwards system throughout the Company, a powerful tool that will help the Company enhance its operational efficiencies.
The Company also announces that Brian W. McFadden, Chief Operating Officer of Prestige, will be leaving the Company in order to pursue other interests. Prestige will not be replacing Mr. McFadden; his duties will be divided up among the Company's executive team.
Mr. Méthot concluded by saying, "Prestige's outlook for the coming quarters hasn't changed. The Company continues to be extremely well positioned to benefit from the steps we have taken to increase our market share and improve our performance. We expect continued sales growth on the basis of a growing shift towards increased demand for outsourcing services from the telcos, as well as new engineering and infrastructure business from the new wireless entrants."
(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.
Prestige has over 1,000 professional and technical personnel. In Canada, Prestige operates from 19 service locations in 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 August 26, 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 have been posted on SEDAR and are available at www.sedar.com.
The TSX Venture Exchange accepts no responsibility for the adequacy or accuracy of this press release.
SOURCE PRESTIGE TELECOM INC.
For further information: For further information: Maryanne Golden, Director - Corporate Affairs of Prestige, (514) 457-4488, Ext. 273; www.prestige-tel.com