- Record revenues of $124.2 million in 2010, up 87% from 2009
- EBITDA of $8.4 million in 2010 vs loss of $2.9 million in 2009
- Earnings before income taxes of $0.6 million in 2010 vs loss of
$10.5 million in 2009
- Access to over $37 million in tax loss carryforwards for fiscal 2011
MONTREAL, July 13 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSX-V: PR) reported its audited financial results today for its fiscal year ended March 31, 2010, and filed its financial statements and MD&A for the year. All figures are in Canadian dollars.
Prestige had record sales of $124.2 million for fiscal 2010, an increase of 87% compared to $66.5 million a year ago. This was mainly due to the acquisition of Radian Communication Services (Canada) Limited ("Radian") on December 15, 2008, which contributed $50.1 million to the sales increase. EBITDA(1) for the year was a record $8.4 million, compared to an EBITDA loss of $2.9 million last year.
Pierre Yves Méthot, Chairman and CEO of Prestige, said, "This has been a milestone year for Prestige. With the acquisition of Radian, we became the leader in engineering and infrastructure outsourcing services for the telecommunications industry in Canada. With 19 offices across the country, we now possess the necessary critical mass to handle large outsourcing projects from major telcos. We also demonstrated our capacity to integrate larger companies, as synergies with Radian generated savings of over $4 million on an annualized basis. We believe that there is still room for operational improvement in fiscal 2011, and we will continue to focus on generating new business and increasing our profitability."
Work volumes across most of the customers and regions positively impacted engineering revenues, which included a $2.8 million increase from activities associated with the wireless service business introduced last year, and a $2.0 million increase from a contract outsourced to an Indian partner that started in June 2008. Installation revenues were marginally up in almost all regions, more than offset by lower products sales. The construction segment also generated increased revenues for the year, reflecting additional activity with the new wireless carriers during the fourth quarter, partly offset by lower sales from the broadcast business in the United States during the same period.
Gross margin for fiscal 2010 increased by $16.4 million to $29.2 million (23% of sales) from $12.8 million (19% of sales) last year, mainly due to the acquisition of Radian, which contributed $12.1 million to the gross margin increase. General and administrative expenses increased by $5.9 million to $20.0 million (16% of sales) for fiscal 2010 from $14.1 million (21% of sales) a year ago.
Working capital increased by $3.6 million to $6.9 million as at March 31, 2010, compared to $3.3 million as at March 31, 2009, mainly due to increases in accounts receivable and work in process associated with a higher level of activity. The Company also has access to a $19.5 million revolving credit facility, of which $14.9 million was used as at March 31, 2010.
Prestige recorded earnings before income taxes of $0.6 million for fiscal 2010, compared to a loss of $10.5 million a year ago. However, because some of its subsidiary companies were profitable, it recorded an income tax expense of $1.4 million in fiscal 2010. Consequently, the Company recorded a net loss of $0.8 million, or $0.01 per share, compared to a net loss of $11.5 million, or $0.16 per share, last year.
In the fourth quarter of fiscal 2010, the Company completed a restructuring of all its legal entities following the acquisition activity of the past two years. Going forward, the Company will be able to use its tax loss carryforwards to reduce any cash tax expenses.
At March 31, 2010, total assets were $57.6 million, shareholders' equity was $13.9 million and net debt was $29.3 million. A total of 118.2 million shares were outstanding.
In April 2010, the Company acquired Majetel Inc., a Quebec-based company specializing in tower construction, maintenance and project management services for the Canadian wireless telecommunications industry. In 2009, Majetel recorded revenues of about $10 million from its activities in Quebec, Ontario and New Brunswick, and its 45 experienced field employees. "The acquisition of Majetel will have a positive impact on our revenues and is part of our growth strategy of acquiring companies that can increase our service offering capabilities and expand our qualified workforce across Canada," added Mr. Méthot.
Mr. Méthot concluded by saying, "Prestige is extremely well positioned to benefit from the steps we have taken to increase our market share and improve our performance. For fiscal 2011, 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. We will also see improved profitability from cost-cutting measures implemented in fiscal 2010, and tax savings from our tax loss carryforwards. Finally, we will continue to target strategic acquisitions that will be immediately accretive to our overall business and growth plans, as well as providing us with much-needed skilled employees."
(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 July 7, 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 audited 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 at (514) 457-4488, Ext. 273; www.prestige-tel.com