2014

GLENTEL Inc. Reports Earnings Per Share of $0.15 for the First Quarter Ended March 31, 2013

BURNABY, BC, May 15, 2013 /CNW/ - GLENTEL Inc. (TSX: GLN) today reported its results for the 1st quarter ended March 31, 2013. Financial highlights (tabular amounts in thousands of Canadian dollars, except per share data) follow.

   Three months ended 
March 31
  2013 2012
Sales $305,664 $148,347
Income before amortization, change in fair value of redeemable
financial instruments, other, finance income and expenses, and taxes  
$13,959 $7,227
Income before change in fair value of redeemable financial
instruments, other, finance income and expenses, and taxes
$7,606 $4,628
Net income $3,261 $3,322
Basic and diluted net income per common share $0.15 $0.15

"We are pleased to report strong worldwide sales performance in the first quarter, with our Canadian, United States, and Australian operations all providing robust results," stated Thomas Skidmore, GLENTEL's President and Chief Executive Officer.  "In the first quarter of 2013, GLENTEL, with Target® Canada, successfully launched 24 new Target Mobile® stores in the Greater Toronto area. On May 7, GLENTEL opened an additional 22 Target Mobile stores across British Columbia, Alberta, and Manitoba, with a planned build out of 124 stores across Canada in 2013. With store expansions in Canada, US, and Australian, including our recent entry into the Philippines with our first four mall stores in Manila, growth opportunities seem abundant for GLENTEL, as we now operate in four countries on three continents."

Consolidated highlights

1st Quarter 2013 compared to 2012

  • Consolidated sales increased 106%, to $305.7 million, compared to $148.3 million.
  • Income before amortization, change in fair value of redeemable financial instruments, other, finance income and expenses, and taxes was $14.0 million, compared to $7.2 million.
  • Operating income before change in fair value of redeemable financial instruments, other, finance income and expenses, and taxes was $7.6 million, compared to $4.6 million.

Net income and basic earnings per common share were $3.3 million and $0.15 per share, respectively, compared to $3.3 million and $0.15 per share.

Highlights for each business unit follow.

Retail Canada

1st Quarter 2013 compared to 2012

  • Sales of retail mobile phone products, tablets and services in the Retail Canada Division decreased 1% to $89.4 million compared to $90.6 million.
  • Operating income before change in fair value of redeemable financial instruments, other, finance income and expense, corporate costs, and taxes was $8.1 million compared to $8.2 million.
  • Retail Canada saw gross postpaid activations decline but experienced strong growth in hardware upgrades. The division continues to train its sales associates on the fundamentals of sales and product knowledge to provide the best customer service possible and to evolve our training and procedures to align with the carriers' focus on quality activations and churn management. Retail management and staff have spent a considerable amount of energy and time in launching Target Mobile, and at March 31, 2013, 24 stores were open in the Greater Toronto area. The divisions will continue the phased roll out and look to open over 120 stores across Canada in 2013.

Retail U.S. Division - Diamond Wireless

1st Quarter 2013 compared to 2012

  • Sales of retail mobile phone products, tablets and services in the Retail U.S. Division - Diamond Wireless increased 20% to $60.1 million, compared to $50.3 million.
  • Operating income before change in fair value of redeemable financial instruments, other, finance income and expense, corporate costs, and taxes increased to $2.6 million, compared to $1.7 million.
  • Sales increased as a result of greater number of stores operating in the quarter compared to the same period in 2012, and with the increased price points of smartphones. The Samsung Galaxy S III and the Apple iPhone 5, in association with new price points for Apple iPhone 4 and iPhone 4S helped increase sales in the 1st quarter. The Verizon "Share everything plan" helped increase consumer interest in smartphones. The division continued to roll out employee promotions and training programs during the 1st quarter of 2013, with much of the training focused on new devices and promotion initiatives. The division continues to focus on the "connected device," such as mobile broadband and tablets that tie into Verizon Wireless' "Share Everything" program, where it saw increased activations by customers.

Retail U.S. Division - Wireless Zone®

1st Quarter 2013

  • Sales of retail mobile phone products, tablets and services were $103.2 million.
  • Operating income before change in fair value of redeemable financial instruments, other, finance income and expense, corporate costs, and taxes was $5.1 million.
  • Verizon's "Share Everything Plan" had a positive impact in the 1st quarter of 2013. The launch of iPhone 5 in October of 2012 continues to drive customers to Wireless Zone stores contributing to strong sales.  Sales of higher priced iPhones contributed to strong wholesale sales in 1st quarter of 2013. The continued shift to smart phones contributed to higher carrier compensation per transaction.  In order to promote increased store sales, the division has continued its numerous operational efforts in the 1st quarter of 2013, with a focus on exceeding carrier transactional minimums and KPI's, remodeling stores to enhance customer experience, and increasing the level of training directed towards franchisees and sales representatives.

Retail Australia Division

1st Quarter 2013

  • Sales of retail mobile phone products, tablets and services were $45.6 million.
  • Operating income before change in fair value of redeemable financial instruments, finance income and expense, corporate costs, and taxes was $0.8 million.
  • The Australia retail landscape remains competitive, driven particularly by the largest national wireless carrier. While Allphones remained competitive in both the postpaid and outright handset market in the 1st quarter of 2013, the poor retail environment affected overall performance. The 45 Retail Managed Stores were profitable, and the April launch of the Samsung Galaxy S4 and HTC One are proving encouraging.
  • In the quarter start-up cost was incurred in relation to AMT licensing its ALLPHONES brand and store design under an IP & Technology transfer agreement within the Philippines. AMT has agreed to deliver software, technology and consultation to TAO Corporation in the Philippines to support the management of a new retail network.

Business Division

1st Quarter 2013 compared to 2012

  • Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services were $6.3 million compared to $7.5 million.
  • Operating income before change in fair value of redeemable financial instruments, other, finance income and expense, corporate costs and taxes was $0.1 million compared to $0.02 million.

Corporate

1st Quarter 2013 compared to 2012

  • Corporate operating and administrative expenses increased to $9.1 million (3% of sales), compared to $5.3 million (4% of sales).
  • Corporate costs include administrative, finance, information technology, and marketing services that are managed centrally in Canada, the U.S. and Australia and are not allocated directly to the operating divisions. Management strives to leverage the divisional cost structure to maximize productivity and value from its resources. Corporate operating costs include Retail U.S. Division - Diamond Wireless corporate costs of $1.3 million (2012 - $1.2 million), Retail U.S. Division - Wireless Zone corporate divisional costs of $2.0 million and Retail Australia Division corporate costs of $1.4 million for the 1st quarter ended March 31, 2013.

About GLENTEL

Celebrating its 50th anniversary in 2013 and based in Burnaby, BC, Canada, GLENTEL (TSX: GLN), is the largest independent multi-carrier mobile phone retailer in Canada and Australia. In the United States, GLENTEL operates two of the six National Premium Retailers for Verizon Wireless. GLENTEL is a leading provider of innovative and reliable wireless communications services and solutions, offering a choice of network carrier and wireless or mobile products to consumers and commercial customers. 

GLENTEL's brands - GLENTEL Wireless, WIRELESSWAVE, WAVE SANS FIL, Tbooth wireless, la cabine T sans fil, WIRELESS etc., SANS FIL etc…, Mac Station, Diamond Wireless, Wireless Zone, and Allphones - span four countries and three continents. The Company employs over 3,800 employees and operates more than 1,180 locations including more than 360 locations in Canada located in retail malls, Costco Wholesale stores, Target Canada stores, and business centres; more than 620 retail locations in the United States; and more than 195 retail locations in Australia and 4 mall stores in the Phillipines. In addition, Target Canada has licensed GLENTEL to open and operate in 2013 more than 120 mobile communications sales and service kiosks within its stores, under the brand Target Mobile®, of which 46 are now open.

Forward-Looking Statements

Certain statements in this release about our current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements.  The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indicates", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.  Forward-looking statements are based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable in the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct.  Certain assumptions have been made in respect of the determination of (i) impairment of property and equipment, intangible assets and goodwill, (ii) useful lives of property and equipment, intangible assets, (iii) fair value of financial instruments, (iv) fair values of assets and liabilities acquired in business contributions, (v) taxes, (vi) contingencies, and (vii) provisions.  Many factors could cause our actual results, level of activity, performance, achievements, future events or developments to differ materially from those expressed or implied by the forward-looking statements.

You should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement (and such risks, uncertainties, and other factors) speak only as of the date on which it was originally made, and GLENTEL expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this document to reflect any change in expectations with regard to those statements or any other change in events, conditions or circumstances on which any such statement is based, except as required by law. New factors emerge from time to time, and it is not possible for GLENTEL to predict what factors will arise or when. In addition, GLENTEL cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. 

NO STOCK EXCHANGE, SECURITIES COMMISSION, OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

SOURCE Glentel Inc.



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