BURNABY, BC, Glentel Inc. says sales and profit increased in its 3rd quarter for both Canadian and U.S. retail divisions due in large part from the Samsung Galaxy S III and Apple iPhone 5 smartphones launched in the quarter. The company is the largest independent multi-carrier mobile phone retailer in Canada.
“These new smartphones should help drives sales in the 4th quarter as we move into the holiday selling season," stated Thomas Skidmore, Glentel’s President and Chief Executive Officer. "We are excited to continue our relationship with Costco Canada as its exclusive wireless retailer and start a new relationship with Target Canada to be the exclusive wireless retailer for Target Mobile."
Summary, 3rd quarter 2012 compared to 2011
-Consolidated sales increased 17%, to $174.8 million compared to $149.7 million
– Income was $14.6 million before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes, compared to $14.2 million
– Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes increased 6% to $12.0 million from $11.4 million
– Net income and basic earnings per common share were $8.3 million and $0.37 per share respectively, compared to $8.1 million and $0.37 per share
Summary, nine months ended 2012 compared to 2011
- Consolidated sales increased 15%, to $467.9 million compared to $408.8 million
- Income was $33.1 million before amortization, change in fair value of redeemable financial instruments, finance income and expenses, and taxes, compared to $37.4 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes decreased to $25.3 million, compared to $29.2 million
- Net income and basic earnings per common share were $16.5 million and $0.74 per share respectively, compared to $19.0 million and $0.86 per share.
Retail Canada 3rd quarter 2012 compared to 2011
- Sales of retail mobile phone products and services in the Retail Canada Division increased 6% to $106.9 million, compared to $100.5 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes remained the same at $13.5 million. The division's operating income was 13% of sales in both 2012 and 2011
- Sales increased in the 3rd quarter and same-store activations decreased from the prior year. The launch of the Samsung Galaxy S III and the Apple iPhone 5 helped increase sales. The division was able to increase operating income for the 3rd quarter of 2012 through increased margins and reduced operating expenses. In the 3rd quarter of 2012, the division renewed its contract with Costco Canada to be its exclusive wireless retailer.
- The division also announced a long-term agreement with Target Canada to be its exclusive wireless retailer for the Target Mobile brand. The division is working with Target on the planning and implementation of the program for a successful launch in 2013, and thus the division will incur development and training costs until the launch of Target Mobile. Also new to the 3rd quarter, the division is operating one mall-based store for a global brand under a management agreement.
Retail Canada nine months ended 2012 compared to 2011
- Sales of retail mobile phone products and services in the Retail Canada Division increased 6% to $284.0 million, compared to $267.6 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes decreased to $33.1 million, compared to $34.7 million
- The 1st two quarters of 2012 saw the carriers face competitive pressures and consumers moving to lower-term plans, which reduced margins for the business. The division is very well positioned to embrace these market changes given that we offer the multi-carrier solution to our customers. The division addressed its cost structure by adjusting operating expenses to align with the decrease in sales. We have concentrated on our operational procedures to align them with our carriers' focus on quality activations and churn management. The division continues to train its sales associates on the fundamentals of sales and product knowledge to provide the best customer service possible. The 3rd quarter saw increased sales and profits with the launch of the Samsung S III and Apple iPhone 5.
Retail U.S., 3rd Quarter 2012 compared to 2011
- Sales of retail mobile phone products and services in the Retail U.S. Division increased 45% to $59.9 million, compared to $41.2 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes increased to $4.0 million, compared to $2.6 million
- Sales increased in the 3rd quarter and for the nine months ended September 30, 2012, with the greater number of stores operating in the 3rd quarter of 2012 compared to the same period in 2011 and the sales of higher-priced smartphones. For the first part of the quarter, sales were slow with the rumours of the Apple iPhone 5 release. However, the launch of the Apple iPhone 5 helped increase sales in the late part of the quarter. The Verizon "Share everything plan" helped increase consumer interest in smartphones
- These smartphones have a higher selling price and higher cost of goods sold, which also increased sales from the prior period. Verizon continued to introduce promotions in the 3rd quarter of 2012 and the Company matched these promotions to remain competitive in the market; this reduced margins in the 3rd quarter of 2012 by 4% and for the nine months ended September 30, 2012 by 5% versus the previous year. However, margins improved by 2% in the 3rd quarter of 2012 versus the 1st quarter of 2012. The division saw margin improvements from hardware purchase programs and cost-control initiatives. The division rolled out with new energy and focus the employee product sales training program around the Apple iPhone 5 launch.
Retail U.S., nine months ended 2012 compared to 2011
- Sales of mobile phone products and services in the Retail U.S. Division increased 37% to $160.9 million, compared to $117.2 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes decreased to $8.0 million, compared to $8.7 million.
Business division, 3rd Quarter 2012 compared to 2011
- Business Division sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services decreased to $8.0 million, compared to $8.1 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes remained the same at $0.4 million.
Business division, nine months ended 2012 compared to 2011
- Sales of terrestrial narrowband and broadband radio systems, satellite network services, and implementation services in the Business Division decreased 4% to $23.0 million, compared to $24.0 million
- Operating income before change in fair value of redeemable financial instruments, finance income and expenses, and taxes increased to income of $0.5 million, compared to a loss of $0.3 million.
