BURNABY, BC, Nov. 14, 2013 /CNW/ -GLENTEL Inc. (TSX: GLN) today reported its results for the three and nine months ended September 30, 2013. Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data) follow.
|
Three months ended
September 30 |
Nine months ended
September 30 |
| 20132 |
20123 |
20132 |
20123 |
| Sales |
$338,561 |
$174,834 |
$965,061 |
$467,890 |
| Income before amortization, change in fair value of financial instruments, impairment of intangible assets and goodwill, (loss) gain on disposition of property and equipment, finance income and expense, and taxes ("EBITDA")1 |
$12,704 |
$14,699 |
$38,578 |
$32,714 |
| EBITDA before one-time startup costs and transaction costs ("Adjusted EBITDA")1 |
$15,115 |
$15,500 |
$42,883 |
$35,148 |
| Income before change in fair value of financial instruments, impairment of intangible assets and goodwill, (loss) gain on disposition of property and equipment, finance income and expense, and taxes ("EBIT")1 |
$6,298 |
$12,056 |
$19,757 |
$24,855 |
| Impairment of intangible assets and goodwill |
$23,057 |
- |
$23,057 |
- |
| Net (loss) income |
($12,280) |
$8,315 |
($3,622) |
$16,695 |
| Basic and diluted net (loss) income per common share |
($0.55) |
$0.37 |
($0.16) |
$0.75 |
| Adjusted net income1 |
$7,499 |
$8,909 |
$14,589 |
$18,500 |
| Adjusted basic net income per common share1 |
$0.34 |
$0.40 |
$0.66 |
$0.83 |
| Adjusted diluted net income per common share1 |
$0.34 |
$0.40 |
$0.65 |
$0.83 |
| 1 EBITDA, Adjusted EBITDA, EBIT, Adjusted net income, and Adjusted basic and diluted net income per common share are not defined under IFRS and, as a result, may not be comparable to similarly titled measures presented by other publicly traded entities, nor should they be construed as an alternative to other earnings measures determined in accordance with IFRS. Adjusted net income, and Adjusted basic and diluted net income per common share normalize net (loss) income for one-time recoveries/(costs), gain/(loss) on disposal of property and equipment, and impairment of intangible assets and goodwill. |
| 2 In the 4th quarter of 2012, the Company acquired AMT Group and Automotive Technologies Inc. dba Wireless Zone®. |
| 3 The Company adopted amendments to IAS 19 effective January 1, 2013. On adoption of this standard, which has been applied retrospectively, the Company now recognizes changes in defined benefit obligations and plan assets when they occur rather than utilizing the corridor approach. |
"We are pleased to announce that our Retail Divisions in both Canada and the United States, as well as our Business Division, delivered solid earnings in the 3rd quarter," stated Tom Skidmore, GLENTEL's President and Chief Executive Officer.
"In Canada, the Company continued its Target Mobile in-store rollout within new Target stores, having opened 82 stores as of September 30, 2013 and opening a total of 124 stores by year end. Our Retail Canada Division sustained its profitability, in spite of competitive and government regulatory pressures within the industry during the quarter. In the United States, we experienced a smooth transition and a good financial performance from the Company's newest acquisition, Wireless Zone. Verizon Wireless awarded Wireless Zone with the 2013 national Customer Loyalty agent award. Diamond Wireless, also a Verizon Wireless national premium retailer within the Retail U.S. Division, delivered solid earnings during the quarter while absorbing into its operations a 154 existing Verizon Wireless kiosk operation within BJ's Wholesale Clubs in 13 eastern U.S. states.
"Unfortunately, our recent acquisition of AMT, operating within the Retail Australia Division, realized the full negative impact to its earnings resulting from the national retail distribution exit by two of Australia's carrier brands marketed by our Allphones stores within Australia. As a result, Company management believes it is prudent to recognize a one-time intangible asset and goodwill impairment in the 3rd quarter of 2013. Initiatives have been implemented to reposition Allphones' carrier brand offerings in Australia with a continued strategic focus on the Allphones licensed store rollout in the Philippines. As the global supply of popular smartphones continues to increase to match consumer demand in the 4th quarter and throughout 2014, this should strengthen our well-positioned wireless retail distribution channels in the countries that we serve."
Consolidated highlights
3 months ended September 30, 2013 compared to respective period in 2012
- Sales for the 3rd quarter ended September 30, 2013 increased 94% to $338.6 million compared to $174.8 million in 2012. Sales for the 3rd quarter of 2013 include sales from Wireless Zone and AMT/Allphones, both of which were acquired in the 4th quarter of 2012. EBITDA decreased 14% to $12.7 million for the 3rd quarter compared to $14.7 million in 2012. EBIT decreased 48% to $6.3 million for the 3rd quarter compared to $12.1 million in 2012.
- In the 3rd quarter of 2013, GLENTEL recorded a $23.1 million ($17.6 million, net of tax) impairment charge on its investment in AMT as a result of the Optus and Virgin Mobile Australia brands exiting the Allphones retail channel in Australia. AMT is now marketing Vodafone, with Vodafone's new national 4G/LTE network, as the premier carrier brand offering of Allphones in Australia. During the 3rd quarter, Allphones operating as a MVNO (Virtual Network Operator) also introduced its own MySaver brand, which allows a consumer to activate their smartphone on the Telestra network. Additionally, AMT has partnered with two other national carriers to sell their respective MVNO offerings in Allphones locations across Australia. AMT has maintained its relationship with Virgin, and continues to operate 45 Virgin corporate retail stores through its Retail Management Services business.
- In the 3rd quarter of 2013, including GLENTEL's impairment charge on its investment in AMT, the Company incurred one-time costs, net of tax, of $19.8 million ($0.89 per common share) compared to $0.6 million ($0.03 per common share) in 2012.
- In the 3rd Quarter of 2013, net loss and basic loss per common share were $12.3 million and $0.55, respectively, compared to net income and basic earnings per common share of $8.3 million and $0.37 in 2012.
- Consolidated Adjusted net income and Adjusted basic earnings per share for the 3rd quarter ended September 30, 2013 were $7.5 million and $0.34, compared to $8.9 million and $0.40 in 2012.
9 months ended September 30, 2013 compared to respective period in 2012
- Sales for the nine months ended September 30, 2013 increased 106% to $965.1 million compared to $467.9 million in 2012. Sales for the nine months ended September 30, 2013 include sales from Wireless Zone and AMT/Allphones, both of which were acquired in the 4th quarter of 2012. EBITDA increased 18% to $38.6 million compared to $32.7 million in 2012, and EBIT decreased 21% to $19.8 million compared to $24.9 million in 2012.
- In the nine months ended September 30, 2013, the Company incurred one-time costs of $24.2 million ($18.2 million, net of tax) compared to $2.4 million ($1.8 million, net of tax) in 2012. One-time costs incurred in 2013 relate primarily to the Company's $23.1 million ($17.6 million, net of tax) impairment of its investment in AMT offset by gains attributable to the sale of tower site assets in the Company's Business Division. One-time costs negatively impacted basic earnings per common share by $0.82