Look Communications reports second quarter 2010 results
Not recommencing Management Services Agreement with UBS
TORONTO, April 22 /CNW/ - Look Communications Inc. ("Look" or the "Corporation") (TSX Venture: LOK and LOK.A) today reported its financial and operating results for the second quarter of fiscal 2010, ended February 28, 2010.
As part of its ongoing restructuring plan, Look also announced that its Board of Directors has notified its parent company, Unique Broadband Systems ("UBS"), that it will not be recommencing the Management Services Agreement ("MSA") on its May 19, 2010 anniversary date. The decision not to recommence the MSA means that it will expire on the completion of the existing term, being May 19, 2012, or such earlier date that is mutually agreed to by the Corporation and UBS. Since the Corporation has maintained an annual pre-paid fee of $2.4 million, the cash impact to Look for annual fees over the remaining term of the MSA will be $2.4 million.
Operating highlights for the quarter include the following:
- As of December 31, 2009 the Corporation has decommissioned its wireless network across Ontario and Quebec; and - The Corporation has reduced its full-time equivalent staff from 21 at November 30, 2009 to six by February 28, 2010.
Financial highlights for the quarter included the following:
- Cash and cash equivalents and short-term investments at February 28, 2010 totalled $35.1 million, which represents an increase of $20.8 million from August 31, 2009. This increase is due primarily to the receipt of the final $50 million of consideration due from Inukshuk partially offset by the payment of the Corporation's restructuring charges; - Operating expenses for the quarter totalled $1.8 million, a decrease of $3.0 million or 62.9 per cent from the $4.8 million incurred during the quarter a year ago; and - Net loss for the quarter was $1.9 million, or a basic loss per share of $0.02.
The Corporation continues to pursue opportunities with interested parties to maximize the value of its remaining assets consisting primarily of its cash and short-term investment position of approximately $35 million, approximately $360 million of tax attributes and the Milton facility and related infrastructure.
About Look Communications Inc.
Look's shares are listed on the TSX Venture Exchange under the symbols "LOK" for Multiple Voting Shares and "LOK.A" for Subordinate Voting Shares. Look's website may be found at www.look.ca.
The corporate information contained in this release includes forward-looking statements regarding future events and the future performance of Look that involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by Look at the time of preparation, may prove to be incorrect. The actual results achieved may vary from the information provided herein and the variations may be material. Consequently, there is no representation by Look that actual results achieved will be the same in whole or in part as those forecast.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Look Communications Inc. INTERIM UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS As at (In thousands of dollars) ------------------------------------------------------------------------- February 28 August 31 2010 2009 ------------------------------------------------------------------------- ASSETS Total current assets $ 38,608 $ 67,288 Restricted cash 316 380 Property and equipment 1,831 1,995 ------------------------------------------------------------------------- $ 40,755 $ 69,663 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Total current liabilities $ 2,081 $ 26,144 Liability component of convertible debentures 3,367 3,291 ------------------------------------------------------------------------- Total liabilities 5,448 29,435 ------------------------------------------------------------------------- Shareholders' equity Share capital 33,568 33,566 Equity component of convertible debentures 1,478 1,479 Contributed surplus 11,152 11,151 Deficit (10,891) (5,968) ------------------------------------------------------------------------- Total shareholders' equity 35,307 40,228 ------------------------------------------------------------------------- $ 40,755 $ 69,663 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Look Communications Inc. INTERIM UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND DEFICIT Three and six months ended February 28, 2010 and 2009 (In thousands, except per share amounts) ------------------------------------------------------------------------- Three months ended Six months ended February 28 February 28 2010 2009 2010 2009 ------------------------------------------------------------------------- Service and sales revenue $ - $ 3,327 $ 434 $ 6,915 Carrier charges and cost of sales - 1,814 425 3,754 ------------------------------------------------------------------------- Gross margin from continuing operations - 1,513 9 3,161 ------------------------------------------------------------------------- Expenses 1,788 4,822 4,715 9,073 ------------------------------------------------------------------------- Loss from continuing operations before the undernoted (1,788) (3,309) (4,706) (5,912) Interest and finance charges, net (6) (24) (17) (48) Accretion on liability component of convertible debentures (111) (107) (222) (214) Adjustment to gain on sale of spectrum and broadcast licence - - (61) - Gain on sale of other property and equipment 5 - 5 2 ------------------------------------------------------------------------- Loss for the period from continuing operations (1,900) (3,440) (5,001) (6,172) Income for the period from discontinued operations - - 78 4,531 ------------------------------------------------------------------------- Loss and comprehensive loss for the period (1,900) (3,440) (4,923) (1,641) Deficit, beginning of period (8,991) (49,690) (5,968) (51,489) ------------------------------------------------------------------------- Deficit, end of period $ (10,891) $ (53,130) $ (10,891) $ (53,130) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Continuing operations Basic loss per share $ (0.02) $ (0.03) $ (0.04) $ (0.05) Diluted loss per share (0.02) (0.03) (0.04) (0.05) Discontinued operations Basic income per share - - - 0.04 Diluted income per share - - - 0.04 Loss per share Basic (0.02) (0.03) (0.04) (0.01) Diluted (0.02) (0.03) (0.04) (0.01) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of shares outstanding Basic 127,488 126,494 127,486 126,220 Diluted 127,488 126,494 127,486 126,220 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Look Communications Inc. INTERIM UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Three and six months ended February 28, 2010 and 2009 (In thousands of dollars) ------------------------------------------------------------------------- Three months ended Six months ended February 28 February 28 2010 2009 2010 2009 ------------------------------------------------------------------------- OPERATING ACTIVITIES Loss for the period $ (1,900) $ (3,440) $ (4,923) $ (1,641) Less: Income for the period from discontinued operations - - (78) (4,531) Items not affecting cash 117 1,087 370 2,409 Changes in non-cash operating assets and liabilities (407) 535 (22,699) 439 ------------------------------------------------------------------------- Cash used in continuing operations (2,190) (1,818) (27,330) (3,324) Cash provided by (used in) discontinued operations - (12) 78 495 ------------------------------------------------------------------------- Cash used in operating activities (2,190) (1,830) (27,252) (2,829) ------------------------------------------------------------------------- ------------------------------------------------------------------------- FINANCING ACTIVITIES Cash provided by (used in) financing activities (1,946) 1 (1,946) 1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- INVESTING ACTIVITIES Cash provided by (used in) continuing operations 3,033 (5) 16,951 (12) Cash provided by discontinued operations - 1,436 - 3,393 ------------------------------------------------------------------------- Cash provided by investing activities 3,033 1,431 16,951 3,381 ------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents (1,103) (398) (12,247) 553 Cash and cash equivalents, beginning of period 3,110 4,516 14,254 3,565 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 2,007 $ 4,118 $ 2,007 $ 4,118 ------------------------------------------------------------------------- -------------------------------------------------------------------------
%SEDAR: 00013414E
For further information: Peter Block, Investor and Media Relations, [email protected], (647) 259-3284
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