stockbastard.com has a great review on Look--just click on the "reviews" section when you get to the site.
BTW, here are the latest financials:
Thursday August 10, 3:55 pm Eastern Time
Press Release
SOURCE: Look Communications Inc.
Look Communications Inc. Announces Strong Second Quarter Revenue Growth and Closing of $208 Million Bank Credit Facility
TORONTO, Aug. 10 /CNW-PRN/ - Look Communications Inc. (CDNX: LKC - news), Canada's leading wireless broadband provider of high-speed Internet access, Web-related services and digital television, today reported strong revenue growth for the second quarter 2000. The company also announced today that it has closed the revolving bank credit facility with The Bank of Nova Scotia and Bank of Montreal worth $208 million CDN that it first announced on August 1, 2000.
This financing is underwritten by the banks and is partially guaranteed by Teleglobe and Telesystem. As part of this transaction, Look has received its first non-guaranteed debt.
``We are delighted both with the continuing support of our major shareholders and with the fact that we have secured our first segment of non-guaranteed debt,'' says David Parkes, President and CEO of Look Communications Inc. ``This company still has a lot of growing to do. With this financing now securely in place we will turn our attention to our expected return to the equity markets and/or high yield debt markets later this fall.''
The facility will enable Look to refinance its existing debt, while bringing in new funds to finance the company's growth and expansion across Canada. In payment for the guarantees, Look will, subject to regulatory approval, issue 1,445,927 of its Class A Limited Voting Shares to Teleglobe Inc and warrants to acquire 3,371,022 Class A Limited Voting Shares at an exercise price of $6.70 per share to Telesystem Ltd.
Second Quarter Results
Look Communications reported strong second quarter results with revenue reaching $16.5 million, up 18% from first quarter 2000, and up 686% from revenue of $2.1 million for the same period in 1999. Look's results in 1999 include only the results of its broadcast distribution (digital television) business and do not include the results of its Internet access and Web-related services business, which was acquired as of October 31, 1999.
Internet access and Web-related services contributed $9.7 million, while Look's broadcast distribution services contributed the remaining $6.7 million to second quarter revenues. The overall increase in revenue was driven by internal expansion and acquisitions leading to a strong growth in subscriber base.
At June 30, 2000, Look reported that it had a total of 234,007 subscribers including 60,117 digital television customers representing a quarter-over-quarter increase of 34.7%. Internet services customers totaled 173,890 as of the end of the quarter. Of this total, 158,815 were residential dial-up subscribers, 2,668 were wireless high-speed Internet subscribers, and 12,407 were business services subscribers. High-speed customers increased by 136.7% in the quarter while business services customers increased by 30.2%. Additionally, domain name registrations rose to over 56,000 during the quarter.
Contracts with Multiple Unit Dwelling owners increased to over 150,000 units at quarter end, up from 80,000 at December 31, 1999. The company has subsequently announced signing of additional contracts to take the total to over 230,000 currently.
``Our second quarter growth is further indication that the path we have chosen for our company is the right one,'' says David Parkes, President and CEO of Look Communications Inc. ``We have increased our revenues and our subscriber base by 18% and 16% respectively, in only one quarter. With our merger integration almost complete; the re-launch of our company in April; the success of value-added services such as domain name registration and Web-hosting; and the upcoming deployment of our MCS licenses across Canada, I am confident that this trend will continue.''
Costs and expenses in the second quarter of 2000 totaled $34.2 million, including in excess of $5.6 million in one-time costs. These costs include advertising and promotion expenditures associated with the integration and re-launch of the company under the Look brand. Additionally, new sales and distribution channels were developed during the period resulting in costs for commissions, design, training, and production of sales materials. Customer care centres were also expanded to accommodate increased call volumes related to subscriber growth.
The company reported negative EBITDA (earnings before interest, taxes, depreciation, amortization) of $17.6 million for second quarter 2000, as compared to $9.3 million reported in the first quarter 2000, and $6.4 million reported for the same period last year. Excluding the one-time costs, EBITDA was $12.0 million negative.
Before amortization of goodwill, Look reported a second quarter loss of $27.4 million or $0.28 per share, compared with $16.8 million or $0.17 per share in first quarter 2000. After amortization of goodwill, the reported net loss was $45.2 million or $0.46 per share.
Corporate Developments
During the second quarter 2000, Look successfully completed the roll out of Look Ultrafast(TM) - its one-way 1.54 Mb wireless high-speed Internet service delivering download speeds of as much as 100 times faster than regular telephone modems - to homes and businesses across its coverage area in Ontario and Quebec.
In addition to the one-way wireless service, Look launched the next generation of Look Ultrafast(TM) - a bi-directional wireless high speed Internet service - in Hamilton. This product offers download speeds of up to 3 mbps and upload speeds of up to 200 kb. The roll out of the two-way service across Look's coverage area in Ontario and Quebec will begin this month and will be completed by the end of the year.
Look is also a 50% owner of INUKSHUK Internet Inc. The company was recently awarded licenses to provide high-speed wireless broadband services across Canada to every province except Manitoba and Saskatchewan. This service will be deployed to major markets first, with plans to deploy the service throughout the entire licensed area over the next five years. The MCS technology (Multipoint Communications System) will provide high capacity, broadband internet access to homes and businesses, leveraging Look's already well developed expertise from the Look Ultrafast(TM) service available today.
Look completed the purchase of Barrie Connex Inc., an Internet service provider in Barrie, Ont. with over 9,000 residential and business subscribers in the quarter.
Look signed partnership agreements with Ezuz, Bridgewater and Rhythms Canada. Ezuz, a global e-commerce company, will power the shopping site featured on Look's portal www.looktown.com. Bridgewater, a global IP services management software supplier, will partner with Look to optimize the continued expansion and introduction of Look's IP services. Rhythms Canada will partner with Look to provide high-performance, digital subscriber line (DSL)-based Internet connectivity to businesses.
In April, Look introduced a new brand identity and advertising campaign promoting its products and services through print, radio and television spots. As part of the re-branding effort, Look launched its new Web site and its portal www.looktown.com.
``Our focus for the future is on creating superior shareholder value by growing our business,'' says Mr. Parkes. ``To do this we will expand both our broadcast and Internet businesses by completing the rollout of our two-way high-speed wireless network in our entire coverage area in Ontario and Quebec, continuing to acquire Internet Service Providers, and further developing our Business Internet services such as Web-hosting.''
About Look Communications Inc.
Look Communications Inc. (CDNX: LKC - news) is a leading wireless broadband carrier, delivering a full spectrum of communications services including digital television distribution, high speed Internet access and Web-related services. Through its advanced MDS technology (Multipoint Distribution System), Look provides superior, digital entertainment services to homes across Quebec and Ontario. Look's Internet service, formerly known as Internet Direct, is available throughout Canada and has established itself as one of Canada's largest independent service providers offering both high speed and dial-up Internet access, in addition to other Web-based applications.
Look Communications is a Canadian company whose principal shareholders are Telesystem Ltd., Teleglobe Inc., Covington Wireless Communications (Ontario) Ltd. and GTC Transcontinental Group Ltd. The company is listed on the Canadian Venture Exchange under the symbol LKC.
The corporate information contained in this release contains forward-looking statements regarding future events and the future performance of Look that involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by Look at the time of preparation, may prove to be incorrect. The actual results achieved will vary from the information provided herein and the variations may be material. Consequently, there is no representation by Look that actual results achieved will be the same in whole or in part as those forecast.
The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Look Communications Inc.
FINANCIAL STATEMENTS
June 30, 2000
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BALANCE SHEETS
As at
June 30 June 30
2000 1999
$(000's) $(000's)
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(unaudited) (unaudited)
ASSETS
Current assets 4,033 2,288
Capital assets, net 128,415 67,868
Goodwill, net of accumulated
amortization of $35,703 170,648 -
Other assets, net 3,350 3,170
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306,446 73,326
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LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities 152,518 26,838
Long term debt 4,398 -
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Total liabilities 156,916 26,838
Shareholders' equity
Share capital 301,841 80,161
Deficit (152,311) (33,673)
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Total shareholders' equity 149,530 46,488
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306,446 73,326
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Look Communications Inc.
STATEMENTS OF LOSS AND DEFICIT
Three months ended Six months ended
(unaudited) (unaudited)
June 30, June 30, June 30, June 30
2000 1999 2000 1999
$(000's) $(000's) $(000's) $(000's)
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SERVICE AND SALES REVENUE 16,514 2,102 30,517 3,342
Carrier charges and cost of sales 8,125 749 14,524 1,093
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Gross margin 8,389 1,353 15,993 2,249
Operating Expenses 26,030 7,711 42,952 16,195
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Loss before the following 17,641 6,358 26,959 13,946
Interest expense (income) 4,677 1,062 7,760 1,012
Amortization of capital assets
and deferred charges 5,053 2,417 9,403 4,399
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Loss for the period before
amortization of goodwill 27,371 9,837 44,122 19,357
Amortization of goodwill (net
of income taxes of nil) 17,851 - 35,703 -
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Net loss for the period 45,222 9,837 79,825 19,357
Deficit, beginning of period 107,089 23,836 72,486 14,316
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Deficit, end of year 152,311 33,673 152,311 33,673
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Loss per share before amortization
of goodwill
Basic $0.28 $0.23 $0.45 $0.45
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Net loss per share
Basic $0.46 $0.23 $0.81 $0.45
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Look Communications Inc.
STATEMENTS OF CASH FLOWS
Three Months ended Six Months ended
June 30 June 30
(unaudited) (unaudited)
2000 1999 2000 1999
$(000's) $(000's)
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OPERATING ACTIVITIES
Net loss for the period (45,222) (9,837) (79,825) (19,357)
Add items not affecting cash
Amortization of capital assets
and deferred charges 5,053 2,417 9,403 4,399
Non-cash interest and finance
charges 2,417 1,012 4,290 1,012
Amortization of goodwill 17,851 - 35,703 -
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(19,901) (6,408) (30,429) (13,946)
Net change in non-cash working
capital balances related to
operations (2,610) (6,715) (742) (8,163)
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Cash used in operating activities (22,511) (13,123) (31,171) (22,109)
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INVESTING ACTIVITIES
Purchase of capital assets, net (13,946) (13,758) (29,638) (22,630)
Deferred charges, net 1,001 (151) 247 -
Business Acquisition (2,557) - (2,557) -
Investment in Inukshuk Internet Inc. (101) - (101) -
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Cash used in investing activities (15,603) (13,909) (32,049) (22,630)
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FINANCING ACTIVITIES
Issuance of share capital 4,662 - 6,127 21,352
Issuance of convertible promissory
notes - (2,638) - (2,638)
Proceeds from term loans 29,130 24,500 50,130 24,500
Proceeds (Repayment) of long
term debt 2,880 2,688 2,838 50
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Cash provided by financing
activities 36,672 24,550 59,095 43,264
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Net increase (decrease) in cash
during the period (1,442) (2,482) (4,125) (1,475)
Cash and cash equivalents,
beginning of period 1,649 3,799 4,332 2,792
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Cash and cash equivalents,
end of period 207 1,317 207 1,317
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SOURCE: Look Communications Inc. |
