Updates shareholders following closing of Inukshuk transaction
The major event for fiscal 2009 was the sale of Look's spectrum and broadcast licence to the Inukshuk Wireless Partnership ("Inukshuk") (a joint venture between Rogers Communications and
"The last quarter of fiscal 2009 and the first quarter of fiscal 2010 were very busy for Look. Following the Corporation's sale of its major operating assets, the Corporation obtained regulatory approval for the transfer of its spectrum licenses, and as a result, received the full consideration of
While the Agreement contemplated Inukshuk making up to three separate payments to Look over a period of up to three years, depending upon regulatory approval, the parties were able to complete the transaction in less than four months. The majority of the human resource restructuring expenses were contingent upon, among other things, the entire consideration of
"I am pleased with the speed of closing the transaction and the dedication of all employees towards a 'soft landing' for all of our subscribers, suppliers and regulatory authorities. This is a tremendous accomplishment considering the complex nature of a seven party transaction in an economic and financial environment that is more severe than anyone had anticipated," said Gerald McGoey.
The Board of Directors and Management would like to acknowledge the ongoing support of Look's parent company, Unique Broadband Systems, Inc., in helping Look to realize the maximum value for its remaining assets by, amongst other things, indicating that it will consider the sale of its controlling interest in Look to facilitate the full value of Look's tax losses. The Board of Directors and Management will continue to pursue various opportunities available to the Corporation while attempting to monetize its approximately
In addition to the above, the Corporation has also taken steps to significantly reduce its cash burn through the elimination and reduction of other operating expenses.
The Corporation's remaining assets consist of the Milton facility and related infrastructure, which has been listed for sale, approximately
The Corporation will continue to keep its shareholders apprised of any material developments as they occur.
Operating highlights include the following:
- The Corporation entered into an agreement, as discussed above, with Inukshuk for the sale of its spectrum and broadcast licence for $80 million of cash. The final $50 million short-term receivable, outstanding at August 31, 2009, was collected by Look in September 2009; - During the first and fourth quarters of fiscal 2009, the Corporation completed the sale of its web hosting and domain name business and its Internet business recording gains of $4.2 million and $1.6 million respectively. The Corporation also successfully executed an agreement whereby its video subscribers transitioned to Bell; and - The Corporation has reduced its full-time equivalent staff from: - 70 at August 31, 2008, to - 64 at August 31, 2009, to - ~5 by December 31, 2009. Financial highlights for the year ended August 31, 2009 included the following: - Cash and cash equivalents at August 31, 2009 totalled $14.3 million which represents an increase of $10.7 million from August 31, 2008 as a result of the first instalment of $30 million paid to the Corporation by Inukshuk which was partially offset by a payment of $16 million to Bell in settlement of its outstanding payables and litigation; - Net income from all operations was $45.5 million, or $0.36 per share on a basic basis; and - Operating expenses, excluding impairment and restructuring charges related to the sale of the spectrum and broadcast licence to Inukshuk, for the year totalled $15.0 million, a decrease of $1.8 million or 11.0% from the $16.8 million incurred during the year ended August 31, 2008.
For further information on Look's financial results, please review the Corporation's annual audited consolidated financial statements and management's discussion and analysis of financial condition and results of operations for the years ended
About Look Communications Inc.
Look's shares are listed on the TSX Venture Exchange under the symbols "LOK" for Multiple Voting Shares and "LOK.A" for Subordinate Voting Shares. Look's website may be found at www.look.ca.
The corporate information contained in this release includes forward-looking statements regarding future events and the future performance of Look that involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by Look at the time of preparation, may prove to be incorrect. The actual results achieved may vary from the information provided herein and the variations may be material. Consequently, there is no representation by Look that actual results achieved will be the same in whole or in part as those forecast.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Look Communications Inc. CONSOLIDATED CONDENSED BALANCE SHEETS As at August 31, 2009 and 2008 (In thousands of dollars) ------------------------------------------------------------------------- 2009 2008 ------------------------------------------------------------------------- ASSETS Total current assets $ 67,288 $ 6,764 Restricted cash 380 440 Property and equipment 1,995 7,503 Deferred charges - 63 ------------------------------------------------------------------------- $ 69,663 $ 14,770 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Liabilities Total current liabilities $ 26,144 $ 17,330 Long-term liability component of convertible debentures 3,291 3,161 ------------------------------------------------------------------------- Total liabilities 29,435 20,491 ------------------------------------------------------------------------- Shareholders' equity (deficit) Share capital 33,566 33,247 Equity component of convertible debentures 1,479 1,488 Contributed surplus 11,151 11,033 Deficit (5,968) (51,489) ------------------------------------------------------------------------- Total shareholders' equity (deficit) 40,228 (5,721) ------------------------------------------------------------------------- $ 69,663 $ 14,770 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Look Communications Inc. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND DEFICIT Years ended August 31, 2009 and 2008 (In thousands, except per share amounts) ------------------------------------------------------------------------- 2009 2008(1) ------------------------------------------------------------------------- Service and sales revenue $ 12,518 $ 16,884 Carrier charges and cost of sales 7,295 9,085 ------------------------------------------------------------------------- Gross margin from continuing operations 5,223 7,799 ------------------------------------------------------------------------- Operating expenses 37,945 16,841 ------------------------------------------------------------------------- Loss from continuing operations before the undernoted (32,722) (9,042) Interest and finance charges, net (137) (73) Accretion on liability component of convertible debentures (432) (416) Gain on sale of spectrum and broadcast licence 78,106 - Gain on sale of Internet business 1,630 - Loss on settlement of Bell litigation (5,457) - Gain on sale of other property and equipment 2 10 ------------------------------------------------------------------------- Income (loss) for the year from continuing operations 40,990 (9,521) Income for the year from discontinued operations 4,531 2,202 ------------------------------------------------------------------------- Income (loss) and comprehensive income (loss) for the year 45,521 (7,319) Deficit, beginning of year (51,489) (44,170) ------------------------------------------------------------------------- Deficit, end of year $ (5,968) $ (51,489) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Continuing operations Basic income (loss) per share $0.32 $(0.07) Diluted income (loss) per share 0.22 (0.07) Discontinued operations Basic income per share 0.04 0.02 Diluted income per share 0.02 0.02 Income (loss) per share Basic 0.36 (0.05) Diluted 0.24 (0.05) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of shares outstanding Basic 126,662 125,578 Diluted 184,193 125,578 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) As restated Look Communications Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Years ended August 31, 2009 and 2008 (In thousands of dollars) ------------------------------------------------------------------------- 2009 2008 ------------------------------------------------------------------------- OPERATING ACTIVITIES Income (loss) for the year $ 45,521 $ (7,319) Less: Income for the year from discontinued operations (4,531) (2,202) Items not affecting cash (68,167) 5,791 Changes in non-cash operating working capital 20,782 (2,655) ------------------------------------------------------------------------- Cash used in continuing operations (6,395) (6,385) Cash provided by discontinued operations 333 2,252 ------------------------------------------------------------------------- Cash used in operating activities (6,062) (4,133) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash provided by (used in) financing activities 1 (13) ------------------------------------------------------------------------- ------------------------------------------------------------------------- INVESTING ACTIVITIES Cash provided by (used in) continuing operations 13,310 (117) Cash provided by discontinued operations 3,440 - ------------------------------------------------------------------------- Cash provided by (used in) investing activities 16,750 (117) ------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 10,689 (4,263) Cash and cash equivalents, beginning of year 3,565 7,828 ------------------------------------------------------------------------- Cash and cash equivalents, end of year $ 14,254 $ 3,565 ------------------------------------------------------------------------- -------------------------------------------------------------------------
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For further information: Peter Block, Investor and Media Relations, [email protected], (647) 259-3284
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