Prestige Telecom reports solid third-quarter results



    
      - Sales growth of 63.9% over last year to $10.6 million
      - Q3 EBITDA margin of 6.7%, up from 6.5% in Q2 and 3.9% last year
      - Net earnings of $111,784, versus a net loss of $57,838 a year earlier
    

    MONTREAL, Feb. 15 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or the
"Company") (TSX Venture: PR) a leading provider of engineering, materials
furnishing and installation (EF&I) services to the Canadian telecommunications
industry, today reported its third-quarter and nine-month results for the
period ended December 31, 2007.
    Sales for the third quarter increased by $4.1 million, or 63.9%, to  
$10.6 million. Internal growth exceeded 32% year-over-year while Plantec Inc.,
acquired in June 2007, and Keen Communication Services Ltd., which was
acquired early in the third quarter on October 22, 2007, contributed sales of
approximately $2.0 million to the quarter.
    Profitability further improved in the third quarter, reflecting greater
business volume and efficiencies stemming from the integration of recent
acquisitions. EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation and foreign exchange) reached    
$703,154, or 6.7% of sales, up sequentially from $629,850, or 6.5% of sales in
the second quarter, and sharply above EBITDA of $248,221, or 3.9% of sales,
for the same period last year. Prestige recorded net earnings of $111,784
compared with a loss of $57,838 in the same period a year ago.
    For the nine-month period ended December 31, 2007, Prestige recorded
sales of $28.8 million, representing an increase of 68.9% over sales of    
$17.1 million for the same period a year prior. EBITDA was $1.9 million, or
6.5% of sales, up significantly from $503,992, or 3.0% of sales for the nine
months ended December 31, 2006. Net earnings for the first nine months of the
current fiscal year amounted to $109,533, compared with a net loss of    
$189,011 for the corresponding period last year.

    
    -------------------------------------------------------------------------
    Financial Highlights
     (in '000s of $, except    Three months ended        Nine months ended
     per share data)              December 31,               December 31,
    -------------------------------------------------------------------------
                              2007          2006          2007          2006
    -------------------------------------------------------------------------
    Sales                   10,558         6,443        28,841        17,077
    Gross margin              24.9%         21.3%         24.4%         20.9%
    EBITDA margin              6.7%          3.9%          6.5%          3.0%
    Net earnings (loss)        112           (58)          110          (189)
    Per share - basic and
     diluted ($)              0.00         (0.00)         0.00         (0.01)
    Weighted-avg. shares
     outstanding (basic,
     in '000s)              46,090        23,889        36,053        23,889
    -------------------------------------------------------------------------


    "Our results continue to support our conviction that there is a
fundamental need to outsource EF&I services in the telecommunications
industry," said Brian McFadden, President and Chief Operating Officer of
Prestige Telecom. "All aspects of our business experienced solid growth and we
are particularly pleased with improvements in operating profitability that
continue to meet our operating objectives. With a broadened national
geographical footprint and service offerings through recent acquisitions,
Prestige has clearly positioned itself as the preferred partner in its
domain."
    During the third quarter, engineering services more than doubled to reach
$5.9 million. Material furnishing operations generated sales of $2.1 million,
representing an increase of 52.3%, while installation services accounted for
sales of $2.6 million, 18.1% higher than a year ago. For the nine-month
period, engineering services doubled to $14.6 million. Material furnishing
services grew 64.1% to $7.6 million and installation services grew 25.6% to
reach $6.6 million.
    On January 29, 2008, Prestige announced the signing of a two-year services
agreement with Expertech Network Installation Inc. to provide central office
installation services in Ontario and Quebec. The scope of work for this
agreement includes telecom equipment installation, testing and commissioning,
cable rack and frame installations as well as services associated with the
installation of central office power systems. The contract covers activities
in all regions of Ontario and Quebec for all of Expertech's customers.
    "The agreement with Expertech validates our business strategy and market
conditions remain favourable to the execution of our plan. In addition, the
upcoming spectrum auction in the wireless industry is conducive to creating
additional business opportunities for Prestige Telecom, as it should lead to
greater capital spending by market participants. We also intend to further
solidify our leading position in Canada and to be an active consolidator in a
very fragmented industry," concluded Mr. McFadden.

    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 Telecom assists telecommunications
original equipment manufacturers ("OEM") and service providers to engineer,
install and upgrade their infrastructures to support enhanced voice, high
speed data and video services.
    In Canada, Prestige Telecom operates from three full service locations
based in Montreal, Quebec; Toronto, Ontario and Calgary, Alberta and has 350
professional and technical personnel. Prestige Telecom 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 February 14, 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 Months                Nine Months
                            Ended December 31           Ended December 31
                      --------------------------  ---------------------------
                              2007          2006          2007          2006
                      --------------------------  ---------------------------
    SALES             $ 10,558,304  $  6,443,331  $ 28,841,496  $ 17,077,487
    COST OF SALES        7,925,099     5,070,901    21,791,266    13,510,045
                       ------------  ------------  ------------  ------------
    GROSS PROFIT         2,633,205     1,372,430     7,050,230     3,567,442
    OPERATING EXPENSES   1,930,051     1,124,209     5,181,815     3,063,450
                       ------------  ------------  ------------  ------------
    EBITDA                 703,154       248,221     1,868,415       503,992
      Depreciation and
       amortization        217,014       113,381       644,545       251,204
      Interest charges     253,955       201,592       945,577       501,713
      Foreign exchange     (12,620)        9,055       (45,014)       (4,949)
      Issuance of
       shares to a
       lender                    0             0       100,000             0
      Stock-based
       compensation         54,684             0        54,684             0
                       ------------  ------------  ------------  ------------
    EARNINGS (LOSS)
     BEFORE INCOME TAX     190,121       (75,807)      168,623      (243,976)
    INCOME TAX              78,337       (17,969)       59,090       (54,965)
                       ------------  ------------  ------------  ------------
    NET EARNINGS
     (LOSS)           $    111,784  $    (57,838) $    109,533  $    189,011
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------
    BASIC AND DILUTED
     EARNINGS (LOSS)
     PER SHARE        $       0.00  $      (0.00) $       0.00  $      (0.01)
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------
    WEIGHTED AVERAGE
     NUMBER OF
     COMMON SHARES
     OUTSTANDING        46,090,000    23,889,031    36,053,324    23,889,031
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------


    CONSOLIDATED BALANCE SHEET
     (UNAUDITED)
    -------------------------------------------------------------------------
                                                    As at              As at
                                        December 31, 2007     March 31, 2007
                                               (Unaudited)          (Audited)
                                        -------------------------------------
    CURRENT ASSETS
      Accounts receivable                    $  7,989,632       $  4,343,997
      Inventories                               5,202,873          4,465,742
      Prepaid expenses                            333,202            501,653
                                              ------------       ------------
                                               13,525,707          9,311,392
    DEFERRED CHARGES                            1,206,343            594,987
    PROPERTY AND EQUIPMENT                      2,708,651          1,852,229
    GOODWILL                                    2,477,370            578,166
    FUTURE INCOME TAXES                            36,222                  0
                                              ------------       ------------
                                             $ 19,954,293       $ 12,336,774
                                              ------------       ------------
                                              ------------       ------------
    CURRENT LIABILITIES
      Bank indebtedness                      $  5,404,562       $  4,139,573
      Accounts payable and accrued
       liabilities                              3,364,804          3,438,841
      Current portion of long-term debt         1,297,622          1,193,415
                                              ------------       ------------
                                               10,066,988          8,771,829

    LONG-TERM DEBT                              5,912,870          3,971,950
    DEFERRED GAIN ON SALE OF PROPERTY             351,174            385,529
    FUTURE INCOME TAXES                                 0             34,906
                                              ------------       ------------
                                               16,331,032         13,164,214
                                              ------------       ------------
    SHAREHOLDERS' EQUITY (DEFICIENCY)
      Capital stock                             5,089,739          1,000,106
      Deficit                                  (2,523,013)        (2,632,546)
      Contributed surplus                         536,535            285,000
      Equity component of convertible loan        520,000            520,000
                                              ------------       ------------
                                                3,623,261           (827,440)
                                              ------------       ------------
                                             $ 19,954,293       $ 12,336,774
                                              ------------       ------------
                                              ------------       ------------
    




For further information:

For further information: Brian McFadden, President and Chief Operating
Officer, Prestige Telecom Inc., (514) 457-4488, Ext. 263,
bmcfadden@prestige-tel.com; Martin Goulet, CFA, MaisonBrison, (514) 731-0000,
martin@maisonbrison.com

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