PR Newswire, Friday, June 26, 1998 at 11:13
VANCOUVER, British Columbia, June 26 /PRNewswire/ -- SUNCOM
Telecommunications Inc. (BB: SNLMF), a rapidly growing call-
center industry consolidator, today announced its financial results for the
year ended Feb. 28, 1998. Revenues for the year ended Feb. 28, 1998 were
$1,274,385, compared to revenues of $38,328,435 for the year ended Feb. 28,
1997. All denominations are expressed in Canadian dollars.
The company reported a net income of $24,535,877, or $0.50 per share for
the year ended Feb. 28, 1998, versus a net loss of $40,698,248 or $0.99 per
share for the year ended Feb. 28, 1997. The company reduced its deficit by 70
percent to $10,092,186, for the 1998 year end, versus a deficit of $34,628,063
for the year ended Feb. 28, 1997. SUNCOM also increased its cash position to
$1,064,908 for the year ended Feb. 28, 1998, versus $179,770 for the 1997 year
end.
"Our year-end results reflect our accomplishment of successfully
satisfying all obligations to our creditors. Of particular note, on the
accompanying financials, is the fact that we are effectively debt-free, with
restricted cash (held in trust) of $2,291,662, credited against the restricted
accounts payable of $2,374,315. The acceptance by creditors of our
reorganization plan, the sale of certain assets and the significant reduction
of overhead, has given the company a new start," said Dennis Sinclair,
president and chief executive officer of SUNCOM.
"We have embarked on becoming a service bureau company, providing a wide
range of teleservices to our clients. Specifically, we handle order input and
customer service for our client companies which includes, billing and
collections, automated voice response, credit card clearing and cash
management. Our primary customers include, but are not limited to: small cable
operators, Internet service providers and sales promotion clients."
Sinclair continued, "Our strategic business plan is to continue acquiring
call centers with an existing revenue base which in turn, enhances shareholder
value. We have acquired one call center already and are in the process of
acquiring a training company that will facilitate the specialized training of
our customer care operators in our targeted markets."
Safe Harbor Statement
Included in this release are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. There are certain
important factors that could cause results to materially differ from those
described in the statements made above. These factors include, but are not
limited to the continued performance of SUNCOM at or above, historical levels;
and fluctuations in worldwide economic conditions. Although the company
believes that the expectations reflected in such forward-looking statements
are reasonable; it can give no assurance that such expectations reflected in
such forward-looking statements will prove to have been correct.
SUNCOM has made the successful transition from the low margin long
distance business to servicing and outsourcing large users of inbound 800
numbers, handling customer care and concentrating on outsourcing of customer
service facilities. The company has targeted four specific industries for
penetration: small cable companies, Internet service providers, medical and
healthcare products, and consumer products. The company's focus is on two
core businesses: the telephone call center business and the teleconstruct
business (the business of installing the fiber optic network in order to
install curb-to-office capabilities).
SUNCOM Telecommunications, Inc.
Consolidated Balance Sheets
(Expressed in Canadian dollars)
Years Ended February 28,
1998 1997
Assets
Current assets:
Cash and cash equivalents $1,064,908 $179,770
Restricted cash held in trust 2,291,662 --
Assets held for resale -- 6,750,000
Accounts receivable 25,282 --
Prepaid expenses and advances 15,357 2,839,445
3,397,209 9,769,215
Capital assets 157,957 --
$3,555,166 $9,769,215
Liabilities and Shareholders' Equity
(Deficiency in Assets)
Current liabilities:
Accounts payable and accrued liabilities $147,599 $11,937,093
Restricted accounts payable and
accrued liabilities 2,374,315 --
Current portion of long-term debt 150,150 19,159,271
2,672,064 31,096,364
Employee obligations 434,000 --
Long-term debt 722,932 --
Shareholders' equity (deficiency in assets):
Share capital 9,818,356 9,290,446
Shares to be issued -- 4,010,468
Deficit (10,092,186) (34,628,063)
(273,830) (21,327,149)
Contingencies
Subsequent events $3,555,166 $9,769,215
Consolidated Statements of Operations and Deficit
(Expressed in Canadian dollars)
Years Ended Feb. 28,
1998 1997 Feb. 29,
1996
Revenue $1,274,385 $38,328,435 $46,344,583
Costs and expenses:
Direct costs 814,465 34,036,369 43,211,488
Selling, general and
administrative expenses (schedule)
3,047,122 17,279,989 21,266,137
Depreciation and amortization 7,167 9,325,803 12,989,345
3,868,754 60,642,161 77,466,970
Loss before other income (expense) 2,594,369 22,313,726 31,122,387
Other income (expense):
Gain on forgiveness of debt 25,672,726 -- --
Gain on sale of CNC and CNT 3,010,000 -- --
Loss on settlement of TeleHub
lawsuit (1,560,420) -- --
Interest revenue 81,469 -- --
Foreign exchange gains (losses) 6,143 (261,167) (364,050)
Income tax interest and
penalties (125,021) -- --
Miscellaneous 45,349 173,921 112,023
Loss on settlement of class
action lawsuit -- (3,312,000) --
Write-down of assets held for resale -- (15,207,861) --
Gain on sale of ITI and BTC -- 663,783 --
VisionTel lawsuit expenses -- (441,198) (1,152,044)
Write-down of acquired customer base -- -- (9,719,957)
Write-down of deferred costs and
capital assets -- -- (5,551,834)
Telecommunication and capital taxes -- -- (742,001)
27,130,246 (18,384,522) (17,417,863)
Net income (loss) for the year 24,535,877 (40,698,248) (48,540,250)
Deficit, beginning of year (34,628,063) (111,464,815) (62,924,565)
Reduction of common share
stated capital -- 117,535,000 --
Deficit, end of year $(10,092,186) $(34,628,063)$(111,464,815)
Net income (loss) per common share $0.50 $(0.99) $(2.78)
Consolidated Statements of Changes in Financial Position
(Expressed in Canadian dollars)
Years Ended Feb. 28,
1998 1997 Feb. 29,
Operations: 1996
Net income (loss) for the year $24,535,877 $(40,698,248)$(48,540,250)
Items not involving cash:
Loss on settlement of
TeleHub lawsuit 1,560,420 -- --
Depreciation and amortization 7,167 9,325,803 12,989,345
Gain on sale of CNC and CNT (3,010,000) -- --
Gain on forgiveness of debt(25,672,726) -- --
Amortization of deferred
foreign exchange loss -- 261,167 235,848
Gain on sale of ITI and BTC -- (663,783) --
Write-down of assets held for resale -- 15,207,861 --
Write-down of deferred costs
and capital assets -- -- 5,551,834
Write-down of acquired customer base -- -- 9,719,957
Change in non-cash operating working capital:
Accounts receivable (25,282) 4,780,681 2,281,177
Prepaid expenses and advances 1,263,668 (1,756,083) 371,659
Accounts payable and
accrued liabilities (2,901,724) (6,824,661) 106,181
Unearned revenue and
tenant inducements -- (230,115) (26,490)
(4,242,600) (20,597,378) (17,310,739)
Financing:
Issuance of common shares 527,910 28,102,576 17,106,480
Shares to be issued (4,010,468) (3,692,790) 7,703,258
1999 convertible debentures
issued 722,932 -- --
Proceeds from issuance of notes 150,150 -- --
Employee obligations 434,000 -- --
1998 series convertible
debentures issued -- 15,512,330 --
1998 series convertible
debentures repaid -- (6,933,000) --
1998 series convertible
debentures converted -- (1,021,905) --
Demand loans incurred (repaid) -- (5,814,363) 5,814,363
Bank indebtedness of U.S.
subsidiaries at disposal date -- 1,758,355 --
Capital lease obligations -- -- 2,058,769
Capital lease payments -- (1,134,285) (2,290,767)
Interest portion of lease payments -- 362,141 399,269
(2,175,476) 27,139,059 30,791,372
Investments:
Proceeds on sale of subsidiaries3,010,000 -- --
Proceeds on sale of assets 6,750,000 -- --
Restricted cash held in trust (2,291,662) -- --
Acquisition of capital assets (165,124) (68,425) (3,012,504)
Deferred financing costs -- (6,290,306) (1,584,032)
License and acquired customer base -- (41,030) (8,580,849)
Deferred advertising and media
research costs -- -- (204,706)
Deferred acquisition costs -- -- (176,622)
7,303,214 (6,399,761) (13,558,713)
Increase (decrease) in cash and
cash equivalents 885,138 141,920 (78,080)
Cash and cash equivalents,
beginning of year 179,770 37,850 115,930
Cash and cash equivalents,
end of year $1,064,908 $179,770 $37,850
SOURCE SUNCOM Telecommunications Inc.
-0- 06/26/98
/CONTACT: Jane Graham, Manager, Investor Relations of SUNCOM
Telecommunications, 604-893-1513; or Media & Investor Relations:
Shannon Squyres, President, or Greg Facktor, Director of Market Pathways,
949-955-1860/
/Web site: marketpathways.com |
