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Prestige Telecom reports results for fiscal year 2009 and provides general update to shareholders

^{Published on 2009-07-29 15:10:38, Last Modified on 2009-07-29 15:10:47 - Market Wire}
 

 BAIE D'URFE, QC, July 29 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSX-V:PR) today announced financial results for the fourth quarter and audited results for the fiscal year ended March 31, 2009, and filed its MD&A for the period. All figures are in Canadian dollars. Results for fourth quarter In summary, the fourth quarter results reflected the increased financial and operational scale of Prestige, as well as significant one-time costs associated with the integration and restructuring activities from the acquisition of Radian Communication Services (Canada) Limited ("Radian"). Revenues for the fourth quarter were $25.2 million, which was a tripling over the $8.5 million reported in the fourth quarter of last year. The record level of sales reflected a full quarter's contribution from Radian, which was acquired on December 15, 2008. In the fourth quarter, EBITDA(1) was a loss of $3.6 million, compared to an EBITDA loss of $1.5 million in the same period last year. EBITDA was negatively impacted by a non-cash inventory adjustment of $1.0 million. SG&A expenses included Radian overhead costs for the full quarter, and several items of a one-time nature, including severance and other downsizing and integration costs, which together added up to approximately $2.0 million. Net loss for the quarter was $7.8 million, or a loss of $0.07 per share, and included a non-cash write-down of future income taxes of $3.4 million. In the fourth quarter of fiscal 2008, the net loss was $1.7 million, or a loss of $0.04 per share. Results for fiscal 2009 For the fiscal year ended March 31, 2009 revenues were $66.5 million, which represented an 80% increase from $37.0 million the previous year. EBITDA was a loss of $3.0 million, compared to EBITDA of $0.1 million a year ago. The net loss was $11.5 million, or a loss of $0.16 per share, and included transaction and reorganization costs of a one-time nature of $2.1 million associated with the uncompleted WesTower transaction, which were recorded in the first quarter, severance and other integration costs recorded in the fourth quarter, as noted above, of approximately $2.0 million, and non-cash write-downs of inventory and tax assets totaling $4.4 million. In fiscal 2008, the net loss was $2.1 million, or a loss of $0.05 per share. At the end of the fiscal year, Prestige had assets of $53.2 million, shareholders' equity of $14.2 million and net debt of $21.8 million. There were 118.2 million shares outstanding. Mr. Pierre Yves Méthot, Chairman and CEO of Prestige, said, "We ended our transformational fiscal 2009 year with an annual revenue run-rate of $100 million in what is typically our seasonally weakest quarter, with a recapitalized balance sheet, new financial and strategic investors, and strong additions to our management team. In addition, the integration of Radian and Prestige is substantially complete, and the synergies and cost savings are already having a positive impact on our margins." He continued, "With the transformational year behind us, we are now completely focused on growing our business profitably, taking advantage of the rapid upgrading and expansion of our customers' networks, and the trend to increased outsourcing of telecommunications infrastructure services." Business and financial drivers for fiscal 2010 Prestige's revenues are now approximately equally divided between wireline and wireless telecommunications services. As the largest out-source provider, Prestige has a strong reputation in the marketplace, and is already approved by and has master service agreements with all of the major Telcos. In wireline, Prestige's addressable market continues to increase notwithstanding the overall market is declining, because Telcos are increasingly outsourcing this business. In wireless, significant upgrades in telecommunications infrastructure will be required in order to enable the delivery of next generation telecommunications services. Prestige's addressable market is growing rapidly with the combination of the incumbents spending on new technologies, and the new carriers (who purchased spectrum in last year's Canadian federal Advanced Wireless Services ("AWS") spectrum auction), now starting to address their state-of-the-art network requirements, all on an out-sourced basis. Several new entrants have issued requests for quotation ("RFQs"), to which Prestige has responded. The Company reports in its three business segments, Engineering, Installation and Construction. The Engineering segment produces drawings and plans for outside plants and central offices, the Installation segment provides technical services and sales of products, and the aerial Construction segment builds and upgrades broadcast and cellular towers and performs equipment maintenance. Since the start of fiscal 2010, Prestige is benefiting from favourable industry conditions, as well as procurement, workforce and efficiency cost savings, and the result is that it is achieving high utilization rates and gross margin percentages in the range of the low 20s in each of its business segments. SG&A expenses have been reduced to an estimated $4.5 million per quarter, or approximately $18 million on an annualized basis. Restructuring activities and the synergies obtained from combining Radian with Prestige resulted in annual headcount savings of $2.1 million. As well, a global procurement initiative is expected to provide annual savings of $1.5 million. The majority of these combined savings of $3.6 million is expected to impact gross margin performance, commencing in the first quarter of fiscal 2010. With these financial metrics, the Company anticipates strong levels of operating cash flow, or EBITDA, in fiscal 2010. Free cash flow will be available for debt reduction which should result in a steady reduction in the ratio of debt/cash flow throughout the year in spite of the expected growth in revenue which will require an investment in working capital. Mr. Méthot concluded, "With our integration and restructuring activities largely complete, we are already seeing strong revenue and EBITDA performance in our new fiscal year, which commenced April 1, and we look forward to reporting this progress to shareholders in early September." (1) Earnings before interest, taxes, depreciation and amortization, stock-based compensation, loss on disposal of property, plant and equipment, foreign exchange, transaction and reorganization costs 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. In Canada, Prestige has over 750 professional and technical personnel operating from fifteen service locations in eight (8) provinces. Prestige's head office is located in Baie d'Urfé (Montreal), Quebec. 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 July 29, 2009, 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 discussion & analysis of operating results and financial condition were posted on SEDAR and are available at [ www.sedar.com ]. The TSX Venture Exchange accepts no responsibility for the adequacy or the accuracy of this press release 

For further information: Pierre Yves Méthot, Chairman and Chief Executive Officer, Prestige Telecom Inc., (514) 457-4488, Ext. 277, [ pymethot@prestige-tel.com ]