Cabletel Communications Reports Third Quarter and Nine Months Results; Company Reorganizes to Save $1.8 Million Annually.Business Editors MARKHAM, Ontario--(BUSINESS WIRE)--Nov. 5, 2001 Cabletel Communications Corp. (AMEX AMEX See: American Stock Exchange : TTV TTV Transfusion Transmitted Virus TTV Total Thickness Variation (semiconductor wafer planarity) TTV TechTV TTV Total Transaction Value TTV Tapping the Vein (band) TTV Target Test Vehicle , TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : TTV), the leading distributor of broadband equipment to the Canadian television Canadian television may refer to:
loonie dollar - the basic monetary unit in many countries; equal to 100 cents .) Reflecting the ongoing lag in Canadian cable sector spending, Cabletel's net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter amounted $15,041,835, down 22.7% from the $19,458,441 reported for the third quarter of 2000. Net sales for the nine months ended September 30, 2001 were $43,344,711, down 17.5% from sales of $52,517,439 recorded for the nine months of 2000. The Company noted that sales in the third quarter were up 9.26% over the second quarter and cited strengthening sales in September and October of 2001 as indicators of an upward revenue trend for 2002. Cabletel's backlog at the close of the third quarter was $6.1 million up from $4.5 at the end of the second quarter. In September 2001 the Company reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. taking $1,625,446 in charges consisting of increases in inventory obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. (which are reflected in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold ) amounting to $500,000, additional charges also taken (reflected in selling general and administrative expenses) include increased provisions for bad debts of $250,000, employee termination costs of $607,446, write down of prepaid legal and consulting costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc equity offerings and acquisitions of $168,000, and $100,000 in additional financing fees. Excluding the above referenced charges, the net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. before income taxes would have been $0.07 per share for the three months and $0.15 for the 9 months ended September 30, 2001 as compared to net income before income taxes of $0.10 per share and $0.11 per share for the three and nine months ended September 30, 2000. The Company also noted that the September 30, 2001 three and nine month results include income tax charges of $687,865 and $418,807 respectively, relating to the reevaluation of future income taxes. As a result of this the Company now has approximately $3.0 million of unrecognized future income tax assets available to offset future taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . The Company also noted that EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become without reorganization charges for the three and nine month periods ended September 30, 2001 would have been a loss of $238,537 and a loss of $196,837 respectively. Including reorganization charges EBITDA losses for the three and nine months period ended September 30, 2001 were $1,863,983 and $1,822,283 respectively. EBITDA for the three and nine months ended September 30, 2000 were $1,002,375 and $1,488,870 respectively. There were no reorganization charges recorded in the 2000 periods. Greg Walling, Cabletel's President and Chief Executive Officer, stated, "There are signs that the worst may be behind us. Although the Canadian cable industry has experienced difficultly this quarter, we have taken aggressive action to position the company for profitable operations at current sales levels. We expect the reorganization described above will save the company approximately $1.8 million annually in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and should enable the company to be cash flow positive." Wallling continued, "Cabletel's main lender has extended the expiration of our credit facility to January 31, 2002. At the same time, we have received several financing proposals for an increased revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. line from asset-based lenders and expect, subject to due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. and other customary closing conditions, to use this financing to replace the existing main lender." Cabletel Communications offers a wide variety of products to the Canadian television and telecommunications industries required to construct, build, maintain and upgrade systems. The Company's engineering division offers technical advice and integration support to customers. Stirling Connectors, Cabletel's manufacturing division supplies national and international clients with proprietary products for deployment in cable, DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. and other wireless distribution systems. More information about Cabletel can be found at www.cabletelgroup.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed time to time in the Company's filings with the Securities and Exchange Commission (SEC).
CABLETEL COMMUNICATIONS CORP.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(Canadian Funds)
(Unaudited)
For the Three Month For the Nine Month
Period Ended September 30 Period Ended September 30
2001 2000 2001 2000
SALES $15,041,835 $19,458,441 $43,344,711 $52,517,439
COST OF SALES 13,276,649 15,527,971 36,506,769 42,441,247
GROSS PROFIT 1,765,186 3,930,470 6,837,942 10,076,192
EXPENSES
Selling, general
and administrative 3,629,169 2,928,095 8,660,225 8,587,322
Amortization 57,598 58,142 178,647 179,390
Interest on long-
term debt 21,398 24,363 68,966 48,478
Interest - other 186,097 185,932 635,059 500,756
3,894,262 3,196,532 9,542,897 9,315,946
EARNINGS (LOSS) FROM
OPERATIONS BEFORE
INCOME TAXES (2,129,076) 733,938 (2,704,955) 760,246
Income taxes 687,866 470,260 418,807 341,847
NET EARNINGS (LOSS)
FOR THE PERIOD $(2,816,942) $263,678 $(3,123,762) $418,399
DEFICIT, beginning
of period $(7,467,128) $(7,938,372) $(7,160,308) $(8,093,093)
DEFICIT, end
of period $(10,284,070) $(7,674,694) $(10,284,070) $(7,674,694)
Earnings (loss)
per share
Basic ($ 0.39) $ 0.04 ($ 0.44) $ 0.06
Diluted ($ 0.39) $ 0.04 ($ 0.44) $ 0.06
Weighted average
number of shares:
Basic 7,167,612 7,068,112 7,108,237 6,986,549
Diluted 7,196,701 7,323,629 7,182,097 7,491,656
Supplemental Information to the Statements of Operations:
Excluding the effects of the following items previously described:
Severance costs related to employee termination amounting to $607,446,
an increased inventory obsolescence provision of $500,000, an
increased provision for accounts receivable of $250,000 a write-down
of pre-paid expenses amounting to $168,000, additional financing fees
of $100,000, results would have been as follows:
For the Three Month For the Nine Month
Period Ended September 30 Period Ended September 30
2001 2000 2001 2000
Gross profit $2,265,186 $3,930,470 $7,337,942 $10,076,192
Operating (loss)
income before
taxes $(503,630) $733,938 $(1,079,509) $760,246
Operating income
(loss) per share
Basic ($ 0.07) $ 0.10 ($ 0.15) $ 0.11
Diluted ($ 0.07) $ 0.10 ($ 0.15) $ 0.10
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