Canbras Releases First Quarter Results.Business Editors MONTREAL--(BUSINESS WIRE)--May 27, 2004 Canbras Communications Corp. (NEX NEX abbr. Navy exchange BOARD:CBC (1) (Cell Broadcast Center) See cell broadcast. (2) (Cipher Block Chaining) In cryptography, a mode of operation that combines the ciphertext of one block with the plaintext of the next block. .H) ("Canbras" or the "Corporation") today released unaudited results for the first quarter of 2004. As the Corporation completed the sale of all of its broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications operations on December 24, 2003 (the "Sale Transaction"), the Corporation's unaudited consolidated statements of earnings for the first quarter of 2004 reflect only the winding up activities of the Corporation. Canbras anticipates that distributions of proceeds from the Sale Transaction in the total estimated amount of $28.1 million ($0.51 per share) will be made to shareholders in one or more instalments. The initial distribution is estimated to be made during the first half of 2004, subject to receipt by the Corporation of tax clearance certificates from the federal and certain provincial taxation authorities in Canada. The final distribution will be made in one or more instalments after the receipt of the balance of the purchase price payable by Horizon under the one-year note (the "Note"), the satisfaction of all remaining liabilities of the Corporation and the receipt by the Corporation of up-dated tax clearance certificates. The Corporation expects that the initial distribution will be approximately $11.8 million ($0.21 per share), and the final distributions will aggregate approximately $16.3 million ($0.30 per share). In light of requests received by the Corporation in May 2004 for indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from in respect of legal fees and related expenses expected to be incurred by certain individuals who formerly served as directors or managers of certain of Canbras' former subsidiaries operating in Brazil, as well as extended delays in obtaining final determinations from certain regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. in Brazil in respect of possible fees payable in relation to periods prior to the Sale Transaction, the estimated amount of the initial distribution has been reduced by $2.0 million. At this time, however, the estimated amount of the total proceeds to be distributed to shareholders is unchanged from the amount estimated on March 18, 2004. Estimated total proceeds to be distributed to shareholders of $28.1 million reflect Canbras' net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. as at March 31, 2004 of $29.4 million less estimated net costs of wind-up of $1.3 million and assume no unforeseen claims are asserted against the Corporation. Accounts payable and accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. of $0.8 million at March 31, 2004 represent the provision for estimated remaining costs of completing the Sale Transaction. Cash held by the Corporation pending shareholder distributions in the amount of $19.2 million at March 31, 2004, is being invested in high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. money market instruments Money market instruments See: Cash investments . First Quarter Results As at March 31, 2004, Canbras' shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $29.4 million, up from $29.3 million at December 31, 2003. This increase reflects first quarter earnings of $0.1 million comprised of $0.4 million in accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. income on the Note due from Horizon offset by administrative expenses. Canbras' cash and cash equivalents and the Note due from Horizon (including accrued interest) as at March 31, 2004 were $19.2 million and $10.7 million respectively. Accrued liabilities were $0.8 million at the end of the first quarter of 2004, down $2.1 million from December 31, 2003 mainly as a result of the payment of the professional fees related to the Sale Transaction. The estimated future net assets of Canbras at December 31, 2005 are $28.1 million. The only difference between shareholders equity on the consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. at March 31, 2004 and the estimated future net assets at December 31, 2005 is the deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. of future net costs from April 1, 2004 to December 31, 2005. Such future net costs are estimated at approximately $ 1.3 million comprised of wind-up costs of approximately $2.5 million and interest income of approximately $1.2 million. These future net costs exclude any amounts that may be required to settle unforeseen claims against the Corporation including indemnification claims which might be asserted by Horizon under the Sale Transaction. The future net costs relative to the amount estimated on March 18, 2004 increased because of lower interest income as a result of lower expected interest rates. Earnings for the first quarter were $0.1 million. Election of Directors at Annual General Meeting In light of the limited activities of the Corporation following the completion of the Sale Transaction, the Board of Directors of the Corporation determined it was appropriate to reduce the size of the board from nine to four directors, and at the annual shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. held on April 27, 2004, the following four persons were re-elected as directors of the Corporation: Messrs. Howard N. Hendrick, Robert Kearney Robert Kearney (born 26 March 1986) is an Irish rugby player, currently playing for the Leinster rugby team. He was called into the Irish training squad for 2005's autumn internationals and toured with Ireland A in the summer taking part in the Churchill cup. , Philip R. Patterson and Louis A. Tanguay. 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. This news release may contain certain forward-looking statements that reflect the current views and/or expectations of Canbras with respect to future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future events, and may contain words like "believe" "anticipate", "expect", "will likely result", or words or phrases of similar meaning. Such statements are subject to a number of important risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. Whether actual events and developments conform with the Corporation's expectations and predictions are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual events to differ materially from current expectations include, among other things: whether any claims are asserted which would reduce the amounts due under the one-year promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. ; the collectibility of amounts due under the one-year promissory note; whether any unforeseen claims are asserted against the Corporation (or its directors and officers) in connection with the winding up and liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of the Corporation or otherwise; the timing or amount of distributions of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the Horizon Sale transaction to shareholders; the timing of and costs associated with the final winding up and liquidation of the Corporation; and certain other factors set forth in the Corporation's filings with the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. securities commissions. In addition, forward-looking statements do not reflect the potential impact of future monetizations of potential assets or any legal or regulatory proceedings that may be announced after these statements are made. Canbras disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
CANBRAS COMMUNICATIONS CORP.
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Estimated Net Assets for Distribution to Shareholders
(unaudited, in thousands of Canadian dollars)
Assets as at March 31, 2004
Cash and cash equivalents $19,172
Note and interest receivable 10,711
Prepaid expenses and other 356
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Total Assets 30,239
Liabilities as at March 31, 2004
Accounts payable and accrued liabilities 825
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Total liabilities 825
Net assets as at March 31, 2004 29,414
Estimated future net costs for wind-up
to December 31, 2005 (1) (1,314)
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Estimated future net assets as at Dec 31, 2005 (2) 28,100
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(1) Includes interest income of $0.8 million on the $10.4 million one
year promissory note from Horizon
(2) Before distributions to shareholders
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