SRX Post Holdings Inc.
TSX : SRX

August 12, 2008 16:31 ET

SRX Post Holdings Reports Second Quarter 2008 Results

MONTREAL, QUEBEC--(Marketwire - Aug. 12, 2008) - SRX Post Holdings Inc. (TSX:SRX), formerly SR Telecom Inc., today released its unaudited second quarter results for the period ended June 30, 2008. All dollar figures are in Canadian funds unless otherwise indicated.

The Company has been operating under the protection of the Companies' Creditors Arrangement Act (CCAA) since November 19, 2007. On May 1, 2008, the protection was extended to August 15, 2008 and the Company intends to file for an additional extension.

On March 24, 2008, the Company entered into a definitive agreement with Lagasse Communications & Industries Inc. (Groupe Lagasse) to sell all of its property and assets related to the WiMAX business and symmetry™ line of products. The transaction closed on April 4, 2008 and the Company received cash proceeds of $6.05 million before transaction costs of $1.49 million.

Following the sale of substantially all of its assets to Groupe Lagasse, the Company ceased operations and continues to pursue the monetization of its remaining assets.

The unaudited consolidated financial statements for the period ended June 30, 2008 were prepared on an estimated net realizable value basis, in accordance with Canadian generally accepted accounting principles (GAAP). Accordingly, assets held for sale have been accounted for at their estimated net realizable value based on proceeds from the sale of asset transaction, net of transaction costs. The liabilities were adjusted to their allowed claimed amount.

Consolidated financial results

Following the sale of substantially all of its assets to Groupe Lagasse, revenue for the period was $0.4 million compared to $21.3 million during the same period in 2007.

Operating profit from continuing operations was $3.7 million, up from a loss of $13.7 million in 2007. Net loss and comprehensive loss for the period ended June 30, 2008 was $0.6 million, compared to $14.9 million in the prior period. The results in 2008 were due to large expense recoveries and adjustments to provisions recorded in prior quarters. These included the reversal to income of the unamortized deferred gain on sale of building in the amount of $2.9 million, the reversal of amounts accrued in anticipation of claims of $2.4 million and an adjustment to the asset impairment, restructuring and other charges of $1.7 million.

Total assets amounted to $12.8 million as at June 30, 2008 compared to $37.0 million as at December 31, 2007. This is a reflection of managements continued efforts in monetizing the Companys remaining assets. Total liabilities decreased by $6.8 million to $141.3 million as at June 30, 2008 due to the repayment of debt to securred creditors in the amount of $11.1 million, offset by interest paid in kind on the outstanding debt.

Consolidated cash and cash equivalents decreased by $8.9 million to $8.1 million as at June 30, 2008. On April 8, 2008 the Company repaid $11.1 million of the Term Loan. The Company's current expectations are that there will not be enough funds to fully reimburse secured creditors.

Claims process validation

During the period ended June 30, 2008, Management of the Company and the Monitor proceeded with the validation of the claims filed through the claims process. No adjustments were recorded during the quarter, as the process is still ongoing. Management expects to record final adjustments following the completion of the claims process.

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 August 12, 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 period ended June 30, 2008 as supplemented 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.

The forward-looking information contained in this news release represents expectations of the Company as of August 12, 2008 and, accordingly, is subject to change. However, the Company 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.

Contact Information

  • SRX Post Holdings Inc.
    Marc Girard
    Senior Vice-President and CFO
    514-335-2429 Ext. 4690