MONTREAL, QUEBEC, Apr 04 (MARKET WIRE) --
SR Telecom Inc. (TSX: SRX) today released its year-end audited financial
results and its fourth quarter results for the period ended December 31,
2007. All dollar figures are in Canadian funds unless otherwise indicated.
SR Telecom (the Company) has been operating under the protection of the
Companies' Creditors Arrangement Act (CCAA) since November 19, 2007. On
February 29, the protection was extended to May 2, 2008.
On March 24, 2008, the Company entered into a definitive agreement with
Lagasse Communications & Industries Inc. (Groupe Lagasse) to sell the
majority of its property and assets related to the WiMAX business and
symmetryTM line of products. SR Telecom received cash proceeds of $6.05
million, before transaction fees. The transaction closed today.
The audited consolidated financial statements for the year ended December
31, 2007 have been prepared using a different basis than the standard
going concern assumption.
-All the Company's assets were valued at their net realizable value for a
total of $37.0 million. As a result, a significant asset impairment of
$40.6 million was recognized in the fourth quarter financial statements.
-Since the Company filed for creditor protection under CCAA, the
liabilities were presented in the financial statements at their "allowed
claim amount", triggering an increase in liabilities of $17.7 million.
Total liabilities amounted to $150.3 million. The allowed claim amount
represents the estimated maximum amount to be potentially claimed by
creditors.
-No provision has been recorded in 2007 for the losses expected to occur
from January 1, 2008 to the liquidation date as the audited financial
statements for the year ended December 31, 2007 have not been prepared on
a liquidation basis.
Consolidated financial results
SR Telecom's revenue for the year was $75.7 million compared to $68.7
million in 2006. Despite this increase, the revenue generated in 2007 was
below management's expectations for its symmetry product line. This
revenue shortfall was mainly due to the impact of liquidity restrictions
on sales efforts, delays in manufacturing and product/technology
development and to additional delays incurred in the ongoing
implementation of major contracts in Mexico and Argentina.
Operating loss from continuing operations was $115.5 million, up from
$98.0 million in 2006. Net loss and comprehensive loss for 2007 was
$132.4 million, compared to $115.6 million in the prior year. Results in
2007 were significantly impacted by asset impairment and restructuring
charges of $60.6 million resulting from CCAA proceedings, which includes
an asset impairment charge of $40.6 million to bring assets to their net
realizable value based on the proceeds from the asset sale to Groupe
Lagasse, with the remainder related to an increase in long-term
liabilities to their allowed claim amount. The impact of asset impairment
and restructuring charges was partially offset by lower selling, general
and administrative expenses and reduced research and development expenses
compared to 2006.
Total assets amounted to $37.0 million as at December 31, 2007 compared
to $150.6 million in 2006. The decrease over the prior year by $113.6
million was a result of the asset impairment charge and the discontinued
operations of CTR, the Company's Chilean subsidiary operating in the
Telecommunications Service Provider Segment, sold at the beginning of
2007.
Liabilities increased by $10.6 million to $150.3 million as at December
31, 2007 due to the additional financing obtained in July 2007 and the
adjustment of liabilities to their allowed claim amount. The increase was
partially offset by CTR discontinued operations and elimination of
related liabilities.
Consolidated cash and cash equivalents decreased from $18.5 million as at
December 31, 2006 to $17.0 million as at December 31, 2007.
Selected Financial Information
(in thousands of
Canadian dollars,
except per share Three-months ended Year ended
and share December 31, December 31, December 31, December 31,
information) 2007 2006 2007 2006
--------------------------------------------------------------------------
$ $ $ $
Revenue 12,523 18,293 75,682 68,707
Gross profit (loss) (1,062) (7,580) 4,190 (1,084)
Asset impairment,
restructuring and
other charges (59,295) (107) (60,594) 24,313)
Operating loss from
continuing operations (73,411) (27,310) (115,528) (98,050)
Loss from continuing
operations (83,078) (31,293) (131,843) (109,285)
Earning (loss) from
discontinued
operations, net of
income taxes - 69 (582) (6,342)
Net loss and
comprehensive loss (83,078) (31,224) (132,425) (115,627)
Net loss per share
basic and diluted (0.11) (0.04) (0.18) (0.17)
As at December 31,
2007 2006
--------------------------------------------------------------------------
Total assets 36,963 150,553
Total liabilities 150,300 139,620
--------------------------------------------------------------------------
About SR Telecom
SR Telecom (TSX: SRX). For more information, visit www.srtelecom.com.
Forward-looking statements
Certain information in this news release, in various filings with
Canadian and US regulators, in reports to shareholders and in other
communications, is forward-looking within the meaning of certain
securities laws, and is subject to important risks, uncertainties and
assumptions. This forward-looking information includes, among others,
information with respect to the Company's objectives and the strategies
to achieve those objectives, as well as information with respect to the
Company's beliefs, plans, expectations, anticipations, estimates and
intentions. The words "may", "could", "should", "would", "suspect",
"outlook", "believe", "anticipate", "estimate", "expect", "intend",
"plan", "target" and similar words and expressions are used to identify
forward-looking information. The forward-looking information in this news
release describes the Company's expectations as of April 4, 2008.
The results or events predicted in such forward-looking information may
differ materially from actual results or events. When relying on the
Company's forward-looking information to make decisions, investors and
others should carefully consider the foregoing factors and other
uncertainties and potential events.
For a more complete discussion of the assumptions and risks underlying
our forward-looking statements, please refer to the section entitled
Risks and uncertainties in the Company's management's discussion and
analysis for the year ended December 31, 2007 as updated by the Company's
Management's discussion and analysis and the section entitled Risk
factors in the Company's Annual Information Form for the year ended
December 31, 2007, which can be found under the Company's name at
www.sedar.com and on the Company's website at www.srtelecom.com.
The forward-looking information contained in this news release represents
expectations of SR Telecom as of April 4, 2007 and, accordingly, is
subject to change. However, SR Telecom expressly disclaims any intention
or obligation to revise any forward-looking information, whether as a
result of new information, events or otherwise, except as required by
applicable law.
Contacts:
SR Telecom
Marc Girard
Senior vice-president and CFO
514-335-2429 Ext. 4690
www.srtelecom.com
Copyright 2008, Market Wire, All rights reserved.
-0-
