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Prestige Telecom reports continued sales growth and improved EBITDA in Q3 2011

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^{Published in Science and Technology on Wednesday, March 2nd 2011 at 14:05 GMT by Market Wire}  

MONTREAL, March 2 /CNW Telbec/ - Prestige Telecom Inc. ("Prestige" or "the Company") (TSXV: PR) reported its unaudited financial results today for the third quarter and nine-month period ended December 31, 2010, and filed its financial statements and MD&A for the period. All figures are in Canadian dollars.

Prestige posted a 23% increase in sales to $36.9 million for the third quarter of fiscal 2011, compared to $29.9 million a year ago. Revenues for the construction segment were up 40% to $18.7 million on the strength of continuing significant business from new wireless entrants and increased sales as a result of the Majetel acquisition. Engineering segment revenues increased by 13% to $13.3 million. Installation segment revenues were down 8% to $4.8 million. For the nine-month period, sales increased by 14% to $108.9 million from $95.8 million last year.

Gross margin in the third quarter increased by $38,147 to $6.74 million (18% of sales) from $6.71 million (22% of sales) for the same period last year. The decline in gross margin as a percentage of sales was mainly due to lower margins from lower installation sales, training expenses and higher content of material and outsourced services.

Pierre Yves Méthot, Chairman and CEO of Prestige, said that: "We are continuing to see very positive results due to increased demand from the wireless sector and cost-cutting measures implemented since August 2010, as Q3 sales showed robust growth and general and administrative expenses declined sharply in the third quarter. As a result, EBITDA improved over last year's numbers."

General and administrative expenses decreased by 18% or $0.9 million to $4.1 million (11% of sales) for the third quarter, compared to $5.0 million (17% of sales) a year ago. For the nine-month period, general and administrative expenses decreased to $14.2 million (13% of sales), compared to $14.8 million (15% of sales). The Company was successful in containing general and administrative expenses during the second and third quarters despite sales increases, due to the headcount reduction program initiated in August 2010.

EBITDA¹ for the third quarter was $2.4 million (7% of sales), compared to $1.5 million (5% of sales) last year. For the nine-month period, EBITDA was $6.7 million (6% of sales), compared to $7.8 million (8% of sales) a year ago.

For the third quarter ended December 31, 2010, Prestige recorded a net loss of $0.4 million or $0.003 per share, compared to a net loss of $0.6 million or $0.005 per share for the same period last year. For the nine-month period, the Company recorded a net loss of $0.8 million or $0.007 per share, compared to net earnings of $0.5 million or $0.004 per share.

Working capital stood at $2.7 million as at December 31, 2010, compared to $6.9 million as at March 31, 2010. The decrease was mainly due to the use of restricted cash on hand at March 31 in connection with the Majetel acquisition as well as the classification as short-term debt of two loans which are due within a year.

At December 31, 2010, total assets were $70.6 million, shareholders' equity was $13.4 million and net debt was $37.4 million. A total of 118.2 million shares were outstanding.

Mr. Méthot concluded by saying that: "Business activity continues to show strong growth in the construction and engineering sectors and is slowly improving in the installation sector, which should have a positive impact on our margins going forward. Combined with our continued efforts to improve our market share and cost structure, we expect this to result in an improvement in Prestige's bottomline performance into fiscal 2012, allowing us to further consolidate our position as an outsourcing partner of choice to the Canadian telecommunications industry."

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 telecommu-nications 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 nine 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 February 24, 2011, 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 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.