TORONTO and MONTREAL – Third quarter 2005 revenue at Look Communications was $9.2 million and gross margin $4.6 million, leading to a loss of $153,000 for the period ended May 31st.
For the three month period ended June 30, 2004, revenue was $10.3 million and gross margin $5.1 million. Revenue for the nine months ended May 31, 2005 was $28.9 million and gross margin $14.2 million. For the nine month period ended June 30, 2004, revenue was $33.7 million and gross margin $17.7 million. “The decline in revenue was the result of a lower subscriber base in 2005, mainly in the resale segment of residential dial-up customers,” said the company’s Q3 release today.
The differing dates when comparing 2004 and 2005 are because Look changed its year-end to August 31 in order to standardize financial reporting periods with its parent company Unique Broadband Systems (UBS).
While the company no longer actively markets its TV product to consumers, Look still has 30,100 video customers, placing it in the top 12 video providers in Canada. On May 31, 2005, Look had 93,800 total subscribers. Besides the video customers, it has 3,700 Internet high speed customers and 60,000 resale subscribers, comprised of 37,700 residential Internet dial-up subscribers, 9,100 Internet DSL subscribers and 13,200 web hosting subscribers.
However, in the quarter, Look lost 6,200 customers, 2,100 of which were digital video subscribers.
Look’s release says it continues to aggressively pursue a new business strategy of becoming a “Mobile Multi Media Broadband Service Provider.” This mobile multi-media network is in beta test at present.
It will first be launched in Toronto, then Montreal and eventually will cover the Windsor to Quebec City corridor. The Mobile Multi Media network will provide over 80 channels of live video, data carousel broadcasting channels and over 100 channels of digital audio broadcasting. Beta sites will be completed by August 2005 and the service is expected to be launched in 2006.
"We see the transition to mobile broadband as inevitable and services like Mobile TV, Mobile Internet and voice communication are now being tested in single hand held devices throughout North America and actual services are being offered in Korea and in some European cities," said Gerald McGoey, vice-chairman and CEO. "Look is ideally positioned to offer these exciting new services. Look has the necessary licensed spectrum to deliver Mobile Multi Media services and has a broadcasting license which allows us to provide extensive content on news, sports, finance, weather and other programming. Discussions with potential suppliers and distributors are on going and the company is confident of having successful arrangements in calendar 2005."
While revenue decreased in the quarter thanks to those lost subs, operating performance improved, resulting in an EBITDA loss for the quarter of $153,000 compared to a loss of $1.5 million for the three-month period.
The net loss for the three months of 2005 was $2.1 million, or $0.02 per share compared to a net loss of $3.2 million or $0.05 per share in the three months of 2004, again a 34% improvement in year over year results.
EBITDA for the nine months ended May 31, 2005 was negative-$1.4 million compared to negative-$1.3 million for the nine month period ended June 30, 2004. The net loss for the nine months ending May 31, 2005 was $7.3 million, or $0.07 per share, compared to a net loss of $6.6 million or $0.15 per share in the nine months ending June 30, 2004.
