Glentel Inc. reports results for 2nd quarter 2006

TSX Stock Symbol: GLN BURNABY, BC, July 27 /CNW/ - Glentel Inc. today reported its results for the 2nd quarter ended June 30, 2006. Sales for the 2nd quarter increased 46%, to $43,620,000 compared to $29,834,000 in the same period of 2005. Operating income before interest and taxes was $1,707,000 for the 2nd quarter of 2006 compared to $2,396,000 in 2005. Net income for the quarter was $1,089,000, $0.11 per share, compared to $1,370,000, $0.16 per share, for the quarter in 2005. Sales for the six months ended June 30, 2006 increased 53%, to $81,694,000 compared to $53,265,000 in the same period of 2005. Operating income before interest and taxes was $1,708,000 compared to $2,748,000 in 2005. Net income for the same period was $1,106,000, $0.11 per share, compared to $1,613,000, $0.19 per share, in the first six months of 2005. Consolidated sales grew in both the Retail Division and the Business Division in the 2nd quarter. Retail Division sales of retail cellular products and services grew 56%, to $35,453,000 for the 2nd quarter compared to $22,663,000 in 2005. Growth in sales was primarily due to operating 153 retail stores in the Retail Division in the 2nd quarter of 2006 compared to 90 stores (plus 49 acquired stores for one month) in 2005. The number of same-store cellular phones and other wireless devices sold by WirelessWave grew 28% in the 2nd quarter, for stores that were open throughout both the 2006 and 2005 fiscal years. While sales increased significantly, operating income before interest and taxes for the division was $2,937,000 for the 2nd quarter compared to $3,475,000 the same period the previous year. During the quarter, the Retail Division's operational team spent considerable time on re-branding and development of The Telephone Booth/La Cabine Téléphonique. This valuable redirection of the management team enables the division to put The Telephone Booth/La Cabine Téléphonique on a solid footing for the two upcoming historically strong quarters. We are pleased with the progress of the turnaround; however, it is not complete and there is considerable progress yet to be achieved. It was imperative to have re-engineered our recent acquisition The Telephone Booth/La Cabine Téléphonique, which came at the expense of not being able to maximize on performance revenues in the 2nd quarter compared to the same period last year. Business Division sales of terrestrial radio systems, satellite network services, advanced mobile solutions, and service/engineering support grew 14%, to $8,167,000 for the 2nd quarter compared to $7,171,000 in the quarter in 2005. During the quarter, the Business Division acquired certain assets and agreements of the radio business from Quasar Communications Ltd. ("Quasar") located in Fort St John, British Columbia, and consolidated the Glentel and Quasar operations in one location. Strength of the oil and gas sector in Alberta and northern BC continues to be a contributing factor to the success of the division for the quarter and year-to-date. As a result, operating income before interest and taxes doubled in the quarter to $738,000 compared to $355,000 in 2005. "With the re-engineering of the Retail Division well underway, management is satisfied that it has been prudent in foregoing short-term profit gains in this quarter so that it might shore up its key profit zones for future strong selling seasons in its three retail brands: WirelessWave, TBooth, and Wireless etc.," said Thomas Skidmore, Glentel's president and chief executive officer. "Profit stability and normal profit levels in this division are expected to be restored in the 3rd quarter." Financial highlights, in thousands of Canadian dollars (except per share data), are as follows: << ------------------------------------------------------------------------- Three months ended Six months ended June 30th June 30th ------------------------------------------------------------------------- 2006 2005 2006 2005 ------------------------------------------------------------------------- Sales $43,620 $29,834 $81,694 $53,265 ------------------------------------------------------------------------- Income, before interest, taxes and amortization 2,845 3,301 3,914 4,484 ------------------------------------------------------------------------- Operating income, before interest and taxes 1,707 2,396 1,708 2,748 ------------------------------------------------------------------------- Net income $1,089 $1,370 $1,106 $1,613 ------------------------------------------------------------------------- Income per share $0.11 $0.16 $0.11 $0.19 ------------------------------------------------------------------------- >> About Glentel: Glentel is an international wireless solutions provider operating 163 corporate locations in Canada through its retail and business divisions. Forward-Looking Statements: Statements in this release relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third-party manufacturing, managing rapid growth, limited intellectual property protection, and other risks and uncertainties described in Glentel's public filings with securities regulatory authorities. NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN. To request a copy of Glentel's annual report, go to www.newswire.ca, Tools for Investors, and click on reports@cnw. For further information: Thomas E. Skidmore, President & CEO, Tel (604) 431-2302, tskidmore@glentel.com; or Dale B. Belsher, Chief Financial Officer & Investor Relations, Tel (604) 415-6500