Prestige announces financial results for the fourth quarter and fiscal year ended March 31, 2008


    MONTREAL, July 25 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or
"the Company") (TSX-V:PR) today announced audited financial results for the
fiscal year ended March 31, 2008, and filed its MD&A for the period. All
figures are in Canadian dollars.
    Sales for the fourth quarter were $8.1 million, an increase of 37% over
the fourth quarter a year ago, and sales for the fiscal year were
$37.0 million, an increase of 61% over the $23.0 million reported in fiscal
2007. These results were consistent with preliminary financial highlights
released on May 20, 2008.
    For the fourth quarter, EBITDA(1) was a loss of $1.8 million, compared to
an EBITDA loss of $0.9 million in the previous year. Net loss for the quarter
was $2.2 million, compared to a loss of $1.4 million a year ago. For the
fiscal year, EBITDA was $0.1 million, compared to an EBITDA loss of
$0.5 million a year ago, and the net loss was $2.1 million versus a net loss
of$1.6 million in the previous fiscal year.
    The fourth quarter included significant business development expenses due
to a surge in request for proposal activities. These included the opening of
two new offices in the Maritimes, ramping up of staff in Western Canada and
business development expenses related to other recently signed contracts. SG&A
expenses in the quarter also included consulting and other external costs
related to the Company's growth and acquisition strategy and the $5.7 million
private placement which was completed on March 28, 2008.
    As previously announced, sales and EBITDA for the fourth quarter declined
from the levels recorded in the first three quarters of the fiscal year due to
sharp reductions in Telco capital expenditures in that quarter, which
corresponds with the first quarter of the 2008 calendar year. Specifically,
wireline and wireless capital spending by the major Canadian Telcos declined
in the three months ended March 31, 2008 on a sequential basis by 33% and 45%,
respectively, as investment decisions were delayed ahead of the Advanced
Wireless Services (AWS) Spectrum Auction which was completed earlier this
    Mr. Pierre Yves Méthot, President and CEO of Prestige, said, "While we
were disappointed by the loss recorded in the fourth quarter, during the year
we executed on our business plan, including integrating the acquisitions of
Plantec and Keen, deepening our relationships with the major Canadian Telcos,
and leveraging our strategic partnership with RAMTeCH in order to provide
scalable resource requirements to our customers. In the fourth quarter, we
also expended significant time, effort and resources in pursuing selective
acquisitions consistent with our strategy to be the outsource partner of
choice to telecommunications customers across North America, including
strengthening our balance sheet through a private placement. We look forward
to concluding the planned acquisition of Radian Communication Services
(Canada) Limited ("Radian"), which is an important step in expanding our
wireless capabilities."
    The Company noted that the fourth quarter gross margin was 13.3%, higher
than the 6.4% recorded in the year-ago quarter, but lower than the levels of
the previous three quarters, where it exceeded 24%. The sequential decline
reflected the absolute decline in quarterly sales as well as a shift in sales
mix. Products revenues, which typically have higher gross margins than
engineering and installation revenues, declined to 16% of total sales in the
fourth quarter, compared to an average of 26% of sales in the first nine
months of the year. Selling, general and administrative ("SG&A") expenses
totaled $2.9 million in the quarter, an increase from $1.2 million last year
and $1.9 million in the previous quarter. The increase was partly due to the
acquisitions of Keen and Plantec, which closed in the third quarter and second
quarter, respectively.
    Prestige said that the pace of its revenue growth re-accelerated in its
first quarter which ended June 30, reflecting new contract activities with
telco, cable and OEM customers. Looking ahead, positive growth drivers for
fiscal 2009 include the recent appointment of a new CEO of BCE Inc. and its
re-focus on improving the customer experience as well as the conclusion of the
AWS Spectrum Auction, which resulted in several new Canadian wireless players.
Prestige is focused on positioning itself for the anticipated increase in
network build-out and upgrade activity, and transitioning its business model
to absorb the costs of this rapid sales growth. These expenses include hiring
talented engineers and other technical staff, other contract start-up costs,
as well as continuing higher initial costs of executing its organic growth and
acquisition strategies.
    The Company continues to work on the banking and financing arrangements
necessary to conclude the planned acquisition of Radian, which recorded sales
of $57.7 million in the year ended December 31, 2007. Radian brings
complementary resources, aerial and technical services expertise,
infrastructure service offerings as well as strong wireless customer
relationships in Canada. After the integration of Radian and Prestige, the
Company will be in a position to offer full lifecycle infrastructure services
to both wireline and wireless networks to take advantage of the growing demand
for outsourced telecommunications infrastructure services.

    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
    In Canada, Prestige operates from three full service locations based in
Montreal, Québec; Toronto, Ontario and Edmonton, Alberta and has
350 professional and technical personnel. Prestige 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.

    (1) Earnings before interest, taxes, depreciation and amortization,
        stock-based compensation, foreign exchange, loss on disposal of fixed
        assets and goodwill impairment.

    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 November 22, 2007, 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
    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

    The TSX Venture Exchange accepts no responsibility for the adequacy or
    the accuracy of this press release.

    YEARS ENDED MARCH 31, 2008 AND 2007

                                                          2008          2007

    SALES                                         $ 36,953,765  $ 22,984,248

    COST OF SALES                                   28,825,053    19,038,901
                                                  ------------  ------------

    GROSS PROFIT                                     8,128,712     3,945,347
                                                  ------------  ------------


      Marketing and development                        782,297       529,082
      General and administrative                     7,250,477     3,782,973
      Interest on long-term debt                     1,132,733       361,469
      Depreciation and amortization                    611,527       402,064
      Stock-based compensation                         239,710       285,000
      Loss on disposal of property, plant
       and equipment                                   110,265         2,345
      Foreign exchange loss (gain)                     (42,430)        9,071
      Other interest                                   523,215       563,127
                                                  ------------  ------------

                                                    10,607,794     5,935,131
                                                  ------------  ------------

    LOSS BEFORE INCOME TAXES                        (2,479,082)   (1,989,784)

    INCOME TAXES                                      (403,595)     (436,865)
                                                  ------------  ------------

    NET LOSS AND COMPREHENSIVE INCOME             $ (2,075,487) $ (1,552,919)
                                                  ------------  ------------
                                                  ------------  ------------

    Basic and diluted loss per share                   $ (0.05)      $ (0.05)
                                                       -------       -------
                                                       -------       -------

    Weighted average number of outstanding
     common shares to compute basic and
     diluted loss per share                         40,480,442    30,000,000
                                                    ----------    ----------
                                                    ----------    ----------

    AS AT MARCH 31, 2008 AND 2007

                                                          2008          2007

      Accounts receivable                         $  6,621,841  $  4,343,997
      Inventories                                    5,203,035     4,465,742
      Prepaid expenses                                 211,917       501,653
                                                  ------------  ------------
                                                    12,036,793     9,311,392

    DEFERRED CHARGES                                   123,095       594,987
    PROPERTY, PLANT AND EQUIPMENT                    2,148,750     1,538,876
    INTANGIBLE ASSETS                                1,822,740       313,353
    GOODWILL                                         1,304,549       578,166
    FUTURE INCOME TAXES                              1,162,748             -
                                                  ------------  ------------
                                                  $ 18,598,675  $ 12,336,774
                                                  ------------  ------------
                                                  ------------  ------------

      Bank indebtedness                           $    577,185  $  4,139,573
      Accounts payable and accrued liabilities       4,423,144     3,438,841
      Current portion of long-term debt              1,270,759     1,193,415
                                                  ------------  ------------

                                                     6,271,088     8,771,829

    LONG-TERM DEBT                                   4,316,677     3,971,950
    DEFERRED GAIN ON SALE OF PROPERTY                  339,723       385,529
    FUTURE INCOME TAXES                                      -        34,906
                                                  ------------  ------------

                                                    10,927,488    13,164,214
                                                  ------------  ------------
      Capital stock                                  6,251,953     1,500,026
      Warrants                                       5,531,732             -
      Deficit                                       (5,207,953)   (3,132,466)
      Contributed surplus                              575,455       285,000
      Equity component of convertible loan             520,000       520,000
                                                  ------------  ------------

                                                     7,671,187      (827,440)
                                                  ------------  ------------

                                                  $ 18,598,675  $ 12,336,774
                                                  ------------  ------------
                                                  ------------  ------------

For further information:

For further information: Prestige Telecom Inc.: Pierre Yves Méthot,
Chairman and Chief Executive Officer, (514) 457-4488, Ext. 277

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890