GLENTEL Inc. reports 1st quarter earnings of $0.21 per share

BURNABY, BC, May 4 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 1st quarter ended March 31, 2010.

Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data), are:

    
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                                                          Three months ended
                                                               March 31
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                                                            2010       2009
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    Sales                                                 $74,785    $67,444
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    Income, before interest, taxes and amortization        $5,298     $5,006
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    Operating income, before interest and taxes            $3,411     $3,513
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    Net income                                             $2,327     $2,416
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    Basic net income per share                              $0.21      $0.22
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    Diluted net income per share                            $0.21      $0.22
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Consolidated sales for the three months ended March 31, 2010 grew 11%, to $74,785,000 compared to $67,444,000 in the same period of 2009. Income before interest, taxes and amortization for the three months was $5,298,000 compared to $5,006,000 in 2009. Operating income before interest and taxes for the three months was $3,411,000 compared to $3,513,000 in 2009. Net income and basic earnings per share for the three months were $2,327,000, and $0.21 per share respectively, compared to $2,416,000, and $0.22 per share, for the same period in 2009.

"We are pleased with the growth in sales of the Company in the 1st quarter, and with the contribution of both the Retail and Business Divisions," said Thomas Skidmore, GLENTEL's President and Chief Executive Officer.

Retail Division sales of mobile phone products and services were $63,255,000 for the 1st quarter compared to $57,823,000 for the same period in 2009. In the 1st and 2nd quarter of 2009, the Canadian wireless industry experienced significant growth with consumers' acceptance of Smartphone technology. The Retail Division capitalized on that trend to produce strong sales. In the 4th quarter, net subscriber additions across the wireless industry were down and this carried over into the 1st quarter of 2010. As a result, the Retail Division saw a 2% growth in same-store activations of mobile phones and other wireless devices sold in stores that were open throughout both 2010 and 2009. The 9% growth in sales was mainly due to the division operating 269 stores in the 1st quarter, compared to 252 at the end of 1st quarter 2009.

In the Retail Division, income before interest, taxes and amortization for the 1st quarter was $7,411,000 compared to $7,797,000 in 2009. Operating income before interest and taxes for the 1st quarter was $6,380,000 compared to $7,026,000 in the previous year.

Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $11,530,000 for the 1st quarter compared to $9,621,000 in the same period in 2009. Sales in the 1st quarter were impacted positively due to the successful completion of large project installations that began in 2009. The division continues to focus on the reorganization of the business by reducing headcount and fixed costs and on improving business processes. As a result, in the Business Division, income before interest, taxes and amortization for the 1st quarter was $768,000 compared to $476,000 in 2009. Operating income before interest and taxes for the 1st quarter was $77,000 compared to a loss of $93,000 in 2009.

Corporate operating expenses for the 1st quarter of 2010 decreased to $2,881,000 compared to $3,267,000 last year. The decrease is a result of incurring professional service fees in 2009 of approximately $475,000 related to corporate development activities, which did not reoccur in the 1st quarter of 2010.

About Glentel

GLENTEL (TSX: GLN) is a leading provider of innovative and reliable telecommunications services and solutions in Canada and the United States. Founded in 1963 and headquartered in Burnaby, B.C., GLENTEL comprises two operating divisions - Retail and Business - that service thousands of consumers and commercial telecommunications customers. Together with its divisions, the company operates more than 280 locations across Canada located in retail malls and high pedestrian-traffic street-front locations, Costco Wholesale stores, and business centers. As the largest multi-carrier mobile phone retailer in Canada, it offers a choice of network carrier and wireless device or phone. To its business and government customers, GLENTEL offers wireless service, rental equipment, satellite and terrestrial network systems, tower sites, and wireless asset monitoring. GLENTEL operates its business under the trading names Glentel Wireless, WirelessWave, The Telephone Booth (Tbooth and la cabine T) and WIRELESS etc.

Forward-Looking Statements:

Statements in this release relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third-party manufacturing, managing rapid growth, limited intellectual property protection, and other risks and uncertainties described in GLENTEL's public filings with securities regulatory authorities.

NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

To secure a copy of GLENTEL's annual report or for additional information visit www.glentel.com or www.sedar.com.

For further information: Investor Relations Contact: Dale B. Belsher, Chief Financial Officer, GLENTEL INC., [phone], [email protected]; Media Contact: Shafiq Jamal, VP, James Hoggan & Associates, [phone], [email protected]