Glentel Inc. reports earnings per share of $0.15 for the first quarter ended March 31, 2012
BURNABY, BC, May 1, 2012 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 1st quarter ended March 31, 2012. Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data) follow.
Three months ended March 31 |
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2012 | 2011 | |
Sales | $148,347 | $121,062 |
Income before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes | $7,719 | $10,763 |
Income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes | $5,120 | $8,195 |
Net income | $3,268 | $4,745 |
Basic net income per common share | $0.15 | $0.21 |
Diluted net income per common share | $0.15 | $0.21 |
"We are pleased to report a stellar sales performance in our first quarter, year over year in both Canada and the United States, reflecting sales growth of smartphones and tablets while opening new stores," stated Thomas Skidmore, GLENTEL's President and Chief Executive Officer, "However, our year over year retail margins decreased this quarter as a consequence of certain of our wireless providers contributing less compensation to its distributors for the acquisition or retention of some new and upgrading customers who in January and February were enticed to low cost / low commitment smartphone and data plan offerings by some wireless providers. In the U.S. we also continue to see opportunities for growth both organically and through acquisition, as we opened our first Diamond Wireless Verizon stores in Upstate New York."
Consolidated highlights
1st Quarter 2012 compared to 2011
- Consolidated sales increased 23%, to $148.3 million compared to $121.1 million.
- Income was $7.7 million before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes, compared to $10.8 million.
- Operating income before change in fair value of redeemable financial instruments, interest and taxes decreased to $5.1 million, compared to $8.2 million.
- Net income and basic earnings per common share were $3.3 million and $0.15 per share, compared to $4.7 million and $0.21 per share.
Retail Canada
1st Quarter 2012 compared to 2011
- Sales of retail mobile phone products and services in the Retail Canada Division increased 18% to $90.6 million, compared to $77.0 million.
- Operating income before change in fair value of redeemable financial instruments, interest and taxes decreased to $8.2 million, compared to $9.9 million.
- Sales increases in the 1st quarter 2012 were primarily from the increased mix of smartphones and tablets sold having higher selling prices and cost of goods to purchase than traditional feature phones. The competitive landscape has forced our carrier partners to introduce programs that generate lower monthly service fees and shorter terms in order to compete with the new entrants. These types of programs yield lower than normal commission rates, which impacted overall margins in the 1st quarter.
- Operating expenses were impacted by the competitors that have opened up in the Canadian wireless landscape, creating pressure to increase wages and incentives to retain quality personnel.
Retail U.S.
1st Quarter 2012 compared to 2011
- Sales of retail mobile phone products and services in the Retail U.S. Division increased 38% to $50.3 million, compared to $36.4 million.
- Operating income before change in fair value of redeemable financial instruments, interest and taxes decreased to $2.2 million, compared to $2.9 million.
- Sales increased in the 1st quarter 2012, with the number of stores operating increased to 200 and with the increased sales of smartphones. Smartphones have higher selling prices and cost of goods to purchase than traditional feature phones.
- Verizon introduced in the 1st quarter a buy-one, get-one free offer on a top selling smartphone, and Diamond Wireless was compelled to match in order to provide competitive pricing, which reduced margins.
Business Division
1st Quarter 2012 compared to 2011
- Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services decreased 2% to $7.5 million, compared to $7.6 million.
- Operating income before change in fair value of redeemable financial instruments, interest and taxes increased to $0.02 million, compared to a loss of $0.2 million.
Corporate
1st Quarter 2012 compared to 2011
- Corporate operating and administrative expenses increased to $5.3 million (4% of sales), compared to $4.4 million (4% of sales). This includes Retail U.S. corporate costs of approximately $1.2 million (2011 - $0.9 million) and corporate development costs of $0.5 million.
About GLENTEL
GLENTEL (TSX: GLN) is the largest multi-carrier mobile phone retailer in Canada and a leading provider of innovative and reliable telecommunications services and solutions in North America. Founded in 1963 and headquartered in Burnaby, BC, Canada, GLENTEL comprises three operating divisions - Retail Canada, Retail U.S. and Business - that service thousands of consumers and commercial communications customers. The company operates more than 325 locations across Canada located in retail malls, Costco Wholesale stores, and business centers, as well as more than 200 retail locations in the United States. GLENTEL offers a choice of network carrier and wireless device or phone to Canadian consumers and is a Verizon National Premium Retailer in the U.S. To its business and government customers, GLENTEL offers wireless service, rental equipment, satellite and terrestrial network systems, tower sites, and wireless asset monitoring. GLENTEL operates its business under the trading names Glentel Wireless, WIRELESSWAVE, WAVE SANS FIL, Tbooth wireless, la cabine T sans fil, WIRELESS etc., WAVE SANS FIL etc., Mac Station, and Diamond Wireless - Verizon National Premium Retailer in the U.S.
Forward-Looking Statements
Statements in this release relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third-party manufacturing, managing rapid growth, limited intellectual property protection, and other risks and uncertainties described in GLENTEL's public filings with securities regulatory authorities.
NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
Investor Relations Contact:
Jas Boparai, Chief Financial Officer
GLENTEL Inc.
604.415.6500
[email protected]
Media Contact:
Melanie Mitchell
GLENTEL Inc.
604.415.7002
melanie.mitchell@glentel.com
For a copy of GLENTEL's annual report or for additional information visit www.glentel.com or www.sedar.com.
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