Canadian NEX: TOM
TORONTO, Feb. 6 /CNW/ - T S Telecom Ltd. (the "Company") reported a net
loss of approximately $2.214 million for the three months period ended
September 30, 2007. As at September 30, 2007, the Company had approximately
$0.312 million or $0.0142 per share of cash.
For the three months ended September 30, 2007 2006
(in thousands of Canadian dollars except loss $ $
per share amounts)
Gross sales 0 0
Income/(loss) from continuing operations (218) (102)
Income/(loss) from discontinued operations (1,996) 60
Net income/(loss) for the period (2,124) (42)
(Loss) per share - basic (0.10) (0.00)
RESULTS OF OPERATIONS
There were no sales generated by the Company as substantially all of the
activities of the Company are carried through the Subsidiary Group of T S
Telecom Technologies Limited.
The general and administrative expenses increased from $0.102 million to
$0.218 million compared with the corresponding period of last year, primarily
due to the increase in wages & benefits and professional expenses.
The Company posted a net loss of approximately $2.214 million for the
three months ended September 30, 2007. The increase in the net loss was mainly
attributable to the discontinued operations which have incurred a loss in
sales, inventories obsolescence and bad debts.
CASH FLOW ANALYSIS
As at September 30, 2007, the Company had approximately $0.312 million or
$0.01 per share of cash, compared to $0.089 million or $0 per share of cash as
of March 31, 2007. The increase in cash was mainly due to the receipt of the
balance of proceeds derived from the Sale Transaction on August 31, 2007.
A Cash outflow provided by operating activities for the three months
ended September 30, 2007 were approximately $1.262 million as compared to net
loss of $0.124 million for the corresponding period of last year.
Cash provided by investing activities for the three months ended
September 30, 2007 were approximately $1.074 million as compared to the cash
provided of approximately $0.005 million for the corresponding period of last
year. The net cash inflow was primarily due to the receipt of the balance of
proceeds derived from the Sale Transaction on August 31, 2007.
Cash provided by financing activities for the three months ended
September 30, 2007 were approximately $0.091 million as compared to the cash
provided of approximately $0.046 million for the corresponding period of last
ANALYSIS OF FINANCIAL CONDITION
Accounts receivable decreased from $0.154 million as of March 31, 2007 to
$0 as of September 30, 2007.
There was no Inventory after the completion of the Sale Transaction in
Accounts payable and accrued liabilities decreased from $1.756 million as
of March 31, 2007 to $0.541 million as of September 30, 2007.
LIQUIDITY, FINANCIAL RE
SOURCES AND CAPITAL STRUCTURE
As at September 30, 2007, the Company had approximately $0.312 million of
cash. The cash balance increased from $0.089 million as of March 31, 2007 was
mainly due to the receipt of the balance of proceeds derived from the Sale
Transaction on August 31, 2007.
The Company expects to use the balance of the proceeds derived from the
Sale Transaction for investment opportunities in the future and for general
working capital purposes. Until such time as such opportunities are identified
by the Board of Directors of the Company, the Company will invest such
proceeds in 90 day term deposits or Treasury Bills with a Canadian Schedule I
or II bank or other short term investments. In view of this, the Company will
have sufficient working capital for the foreseeable future.
As at September 30, 2007, the Company had net current liabilities of
approximately $0.541 million.
As at September 30, 2007 the Company had no foreign exchange contracts,
interest or currency swaps or other financial derivatives for hedging
As at September 30, 2007, the Company has no financial instruments nor
any foreign currency investments held for hedging purposes.
The Company neither has material contingent liabilities nor legal
proceedings against the Company as of September 30, 2007.
In January 2008, the Company settled approximately $107 of related party
obligations by offsetting receivables from other related parties.
BUSINESS REVIEW AND PROSPECTS
In the past years, the Company continued to encounter pressure from
customers demanding for concession in contract terms including lower pricing
and longer payment period, causing the Company to take a longer time to close
and sign contracts. It is quite clear that the business environment of the
telecom monitoring equipment industry in China had become more unfavorable and
competitive. To avoid duplication and accumulation of marketing costs by using
multiple sales vehicle and further depletion of the Company's resources in
telecom manufacturing, the Directors (including the independent non-executive
directors) of TST Technologies consider it is best for the Company to dispose
of those loss-making subsidiaries to Mr. Lau See Hoi and to identify and
analyze potential business to acquire in order to improve its financial
IMPACT ON INFLATION
Impact on inflation in the current quarter remains substantially
unchanged as disclosed in the annual report for the fiscal year ended
March 31, 2007.
RISK AND UNCERTAINTIES
The Company has a working capital deficiency of approximately
$144 (March 31, 2007 - $1,296 and sustained a net loss of $2,929 (Fiscal 2007
- $1,281). The ability of the Company to continue as a going concern is
dependant on the receipt of additional financing to meet its on going
obligations, in addition the Company is currently using its cash balance to
identify and analyze potential business to acquire in order to improve its
If the Company is unable to continue as a going concern, material
adjustments may be required to the carrying value of assets and liabilities,
and the classification used on the balance sheets.
Any inability to generate sufficient funds from operations or from the
raising of additional capital when needed would have a material adverse affect
on the Company including possibly requiring the Company to reduce or possible
cease its operations.
OUTSTANDING SHARE DATA
As at September 30, 2007, the Company has total issued and outstanding
shares of 21,990,005. During the period, no option had been granted or
exercised under the Stock Option Plan as at September 30, 2007.
The NEX has neither approved nor disapproved the information contained
For further information:
For further information: Cindy Lau, Director of T S Telecom Ltd., at