GrandeTel Technologies Inc. releases first-quarter results
TORONTO--(BUSINESS WIRE)--June 27, 1997--GrandeTel Technologies Inc. (NASDAQ:GTTIF) Friday released its financial results for the three months ending April 30, 1997.
Net income for the first quarter was $15.1 million, or 82 cents a share, compared with a loss of $2.8 million, or 14 cents a share, for the same period a year ago.
The figures for 1997 include approximately $16.5 million in other income, reflecting an investment gain of approximately $21.8 million which was offset by a restructuring provision of approximately $4.9 million.
During the past quarter, the company exchanged its 10 percent interest in Lafe International Holdings Ltd. for approximately 9.7 million shares of Nakamichi Corp., a manufacturer and distributor of high-end audio and video products listed on the Tokyo Stock Exchange.
In computing the gain, each Nakamichi share was valued at (U.S.) $2.52 a share, a 10 percent discount of the closing price on April 30, 1997. On June 24, 1997, Nakamichi shares closed at 540 yen (U.S.$4.69). The Nakamichi shares are subject to a holding period until the end of 1998 unless regulatory approval is obtained.
While the company was able to reduce its expenses and improve its operating results, severe competition in the cellular telephone market in the People's Republic of China prompted significant reductions in the selling prices of telephone sets. The company has made a provision of $2.7 million for estimated reduction in realizable value of its inventories.
The company is streamlining its cellular telephone distribution operations in China. It will seek to increase its market share by marketing more major brands of cellular telephone products through its existing distribution channels.
The company is restructuring its consumer electronic manufacturing and distribution operation in China and Hong Kong, placing more emphasis on corded and cordless telephones.
The scale of the company's manufacturing operation in China, mainly in Hangzhou will be reduced. This restructuring will reduce overall inventory levels significantly. The company has made a $2.1 million provision for estimated costs or losses which may incur as a result of the restructuring.
In March, the company launched a value-added discount fax service package in China and Hong Kong. The company is now considering expanding the package to include long distance call-back services. The company is also seeking to improve the competitiveness of these services by exploring partnerships with U.S. carriers offering low long-distance rates.
The company is striving to control its legal expenses while vigorously defending itself against three class action lawsuits. Trial of the lawsuits is scheduled for early 1998.
GrandeTel is a Canadian company with its North American headquarters in Richmond, British Columbia, and its Asian headquarters in Hong Kong. The company holds interests in joint ventures that assemble and distribute cellular telephones and provide paging services in China.
GRANDETEL TECHNOLOGIES INC.
Consolidated Balance Sheet
April 30, 1997 with Comparative Figures for April 30, 1996
(Stated in Canadian Dollars - 000's)
(unaudited)
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Assets 1996 1997
---- ----
Current Assets
Cash & term deposits $ 10,817 $ 7,323
Accounts receivable 3,942 6,242
Inventories 14,744 9,068
Prepaids and deposits 797 1,542
--------- ---------
Total Current Assets 30,300 24,175
Long-term receivable 1,524 1,288
Investments 29,430 44,386
Capital assets 5,589 5,273
Pre-operating expenses 0 2,862
Deferred charges and others 403 217
--------- ---------
Total Assets $ 67,246 $ 78,201
--------- ---------
Liability and Shareholders' Equity
Current Liabilities
Accounts payable $ 13,563 $ 14,908
Long Term Liabilities
Deferred revenue 50 646
Long-term debt 30,902 21,769
44,515 37,323
Shareholders' Equity
Share capital
Issued and outstanding
18,329,376 common shares 154,389 141,393
(1996 - 20,014,076 common shares)
Contributed surplus 0 12,996
Retained earnings (deficit) (131,658) (113,511)
Total Liabilities and Shareholders'
Equity $ 67,246 $ 78,201
--------- --------
-0-
GRANDTEL TECHNOLOGIES INC.
Consolidated Statement of Earnings (Loss)
For the three months ended April 30, 1997 with comparative figures
for April 30, 1996
(Stated in Canadian Dollars - 000's)
(unaudited)
-------------------------------------------------------------------
1996 1997
Sales $ 1,745 $ 2,703
Cost of Sales 1,567 2,281
--------- ---------
Gross Profit 178 422
--------- ---------
Operating, Selling and Administrative Expenses
Advertising & Marketing 204 201
Salaries & Staff Benefits 763 552
Depreciation & Amortization 299 333
Other G & A 1,150 1,054
--------- ---------
2,416 2,140
--------- ---------
Operating Profit (Loss) (2,238) (1,718)
Other Income / (Expenses) 295 16,497
--------- ---------
Operating Income (Loss) before financing (1,943) 14,779
--------- ---------
Financing Expenses
Foreign exchange loss (gain) 358 (725)
Interest expenses (income) 546 424
--------- ---------
904 (301)
--------- ---------
Net Income (Loss) (2,847) 15,080
Retained Earnings (deficit),
beginning of period (128,811) (128,591)
--------- ---------
Retained Earnings (deficit),
end of period $ (131,658) $ (113,511)
__________ __________
Earnings (Loss) per share $ (0.14) $ 0.82
Weighted Average Common Shares
Outstanding 20,014,076 18,329,376
-0-
GRANDTEL TECHNOLOGIES INC.
Consolidated Statement of Changes in financial position.
For the three months ended April 30, 1997 with comparative figures
for April 30, 1996
(Stated in Canadian Dollars - 000's)
(unaudited)
-----------------------------------------------------------------
1996 1997
---- ----
Cash provided by (used in)
Operating activities
Net profit (loss) for the period $ (2,847) $ 15,080
Item not involving cash:
Amortization of capital assets 299 333
TV recall provision write back (250) 0
Provision for restructuring cost 0 2,795
Provision for inventory 0 2,096
Gain on swap of Lafe shares 0 (21,753)
------- -------
(2,798) (1,449)
Changes in non-cash working capital
balances 591 5,566
------- -------
(2,207) 4,117
Investing activities
Additions to capital assets
and pre-operating cost 0 (1,109)
Disposal of capital assets 163 0
Additions to investments (6,753) 73
Additions to deferred costs (353) (65)
------- -------
(6,943) (1,101)
------- -------
Increase (decrease) in cash during period (9,150) 3,016
Cash, beginning of period 19,967 4,307
Cash, end of period $ 10,817 $ 7,323
------- -------
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Contact:
Howe & Co.
J. Patrick Howe, 416-863-6632
416/863-6646 (fax)
howecomp@howeco.com (e-mail) |
