MONTREAL – Despite an increase in sales, Prestige Telecom recorded a $0.4 million net loss for its first quarter of fiscal 2011 ended June 30, 2010.
For the same period in 2009, the company reported net earnings of $0.1 million. EBITDA for this quarter was $1.7 million, compared to $3.0 million last year.
Prestige posted sales of $33.5 million this quarter, up 7% from $31.1 million a year ago, which it said was mainly due to its acquisition of Majetel Inc. in April in addition to “organic growth”. Revenues for its construction segment were up 28% to $18.6 million on the strength of significant business from the new wireless entrants, and engineering segment revenues were up 7% to $10.4 million due to new customers. Installation segment revenues were down 34% to $4.5 million due to a decline in wireline business activity and a delay in capital spending by a major wireless telecommunications carrier, but the company said that it expects these sales to return to normal levels over the next few months.
Chairman and CEO Pierre Yves Méthot said that the company “will therefore be taking the steps required to achieve our objectives”, calling Q1 profitability “below expectations”.
"Prestige’s outlook for the coming quarters hasn’t changed”, he said in a statement. “The company continues to be extremely well positioned to benefit from the steps we have taken to increase our market share and improve our performance. We expect continued sales growth on the basis of a growing shift towards increased demand for outsourcing services from the telcos, as well as new engineering and infrastructure business from the new wireless entrants."
Gross margin for the first quarter decreased by $0.9 million to $6.8 million (20% of sales) from $7.7 million (25% of sales) last year, mainly due to the installation segment, where gross margin as a percentage of sales decreased from 29% to 20%.
Prestige also announced that COO Brian W. McFadden will be leaving the company in order to pursue other interests. He will not be replaced, and his duties will be divided up among the company’s executive team.
