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Prestige Telecom reports record sales and pre-tax earnings in the first quarter of fiscal 2010

^{Published on 2009-08-28 12:21:21 - Market Wire}
 

 BAIE D'URFE, QC, Aug. 28 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSX-V:PR) today announced unaudited financial results for the first quarter of fiscal 2010, which ended June 30, 2009, and filed its MD&A for the period. All figures are in Canadian dollars. Sales for the first quarter were $31.1 million, an increase of 166% over the first quarter of a year ago. The record level of sales reflected the addition of business from Radian Communication Services (Canada) Limited ("Radian"), and strong organic growth in each of its engineering, installation and aerial construction businesses. For the first quarter, EBITDA(1) was a record $3.0 million, compared to EBITDA of $0.4 million last year. The EBITDA margin was a very healthy 9.5%, and reflected high utilization rates, as well as procurement, workforce and efficiency cost savings as part of the ongoing integration of Radian. Earnings before income taxes for the first quarter were $0.9 million. Income taxes recorded were $0.8 million, of which $0.4 million was a non-cash expense from a recovery of future income tax assets. Reported net earnings were $0.1 million, or $0.00 per share. This compared to a net loss of $1.5 million, or a loss of $0.03 per share, a year ago. The Company anticipates that its effective tax rate and cash tax expense will be reduced in future quarters once it has completed a review and restructuring of all its legal entities following the acquisition activity of the past two years. The Company also noted that its tax loss carryforwards exceed $30 million. Mr. Pierre Yves Méthot, President and CEO of Prestige, said, "We are very pleased to report on our progress for the beginning of our new fiscal year. These results clearly demonstrate that with the integration of Radian now well under way, we have both the capability to serve our customers with full lifecycle infrastructure services and the financial model to generate bottom line profitability." He added, "Our addressable market continues to grow rapidly. We continue to see increased outsourcing opportunities from the wireline segment and with the wireless industry having invested $4 billion in new spectrum last year, we expect incumbents and new entrants to continue to invest in network infrastructure to utilize that spectrum over the next several years. For example, new entrants have started to issue requests for quote ("RFQ") to develop their networks and have also announced partnerships with equipment manufacturers. We have streamlined our workforce and made excellent progress in procurement savings, and we will continue to extend quality systems throughout our organization in order to profitably take advantage of these market opportunities." The Company noted that, as expected, its operating results compared favourably with the previous quarter, which was negatively impacted by significant one-time costs associated with the integration and restructuring activities from the acquisition of Radian. On a sequential basis, operating results now reflect most of the synergies of combining Radian with Prestige as the gross margin in Q1 of fiscal 2009 was 24.7% compared to 15.9% in Q4 of fiscal 2009, and general and administrative expenses were $4.6 million compared to $6.4 million in the previous quarter. The Company said that its liquidity remains strong. Cash flow provided by operating income was $2.1 million. Working capital increased by $3.8 million due primarily to the growth in work in process reflecting increased activity across all operating segments. Prestige had drawn $11.5 million of its $16 million revolving credit facility and the Company expects to have sufficient liquidity to fund operations and growth to at least March 31, 2011. At June 30, 2009, assets were $53.5 million, shareholders' equity was $14.4 million and net debt was $24.1 million. Total shares outstanding were unchanged from the end of the previous fiscal year at 118.1 million. (1) Earnings before interest, taxes, depreciation and amortization, stock-based compensation, 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 28, 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 unaudited consolidated financial statements and Management's Discussion & Analysis of Financial Position and Operating Results 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 ]