SelectCore Ltd.
TSX VENTURE : SCG

SelectCore Ltd.

December 01, 2008 16:35 ET

SelectCore Announces Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Dec. 1, 2008) - SelectCore Ltd. (TSX VENTURE:SCG), Canada's premier provider of prepaid telecom and transaction solutions, is pleased to report its financial results for the three and nine months ended September 30, 2008.

Financial highlights:

- Revenues increased 22% to $19.8 million from the same period 2007

- Gross Profit was up 53% from the same period 2007

- Normalized EBITDA grew to $30k from ($359k) in the same period 2007

- Second quarter of positive normalized EBITDA in 2008

- Improved working capital position by $2.6M from Q3 of 2007


Record revenues of $19.8 million in the third quarter of 2008 represented an increase of 22% as compared to $16.1 million in the same period in 2007. Revenues also increased 21% from the prior three-month period. Year-to-date revenues were $51.5 million, an increase of 50% over the same period in 2007. This consistent sales growth is attributable to the strong market demand for the Company's proprietary point of sale activation (POSA) solution for prepaid wireless and long distance and the introduction of new prepaid product offerings.

Gross profit for the third quarter of 2008 was over $1 million, an increase of 53% over the same period in 2007 and 14% over the second quarter of 2008. Gross profit for year to date was over $3 million, a significant improvement of 114% from the same period in 2007. The continual increase is attributable to the migration of the Company's sales channel to its proprietary points of sale activation (POSA) solution.

Normalized EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, foreign exchange and capital raising costs) for the third quarter of 2008 was $30k compared to negative $389k over the same period in 2007. On a quarter over quarter basis, normalized EBITDA increased by $145k compared to the three months ended June 30, 2008. Year to date normalized EBITDA was $48k compared to negative $672k in the same period in 2007.

The Company's working capital deficit was reduced by $2.6M to $1.6M from the third quarter of 2007 to the third quarter of 2008.

"Since the start of the year, we have improved our key performance metrics including sales, gross margins and normalized EBITDA. We expect this steady growth to continue as we approach $70 million in revenue for 2008" said Peter Burdon, CFO of SelectCore.

"Our results this quarter illustrate the successful execution of our corporate strategy" commented Ryan Deslippe, President of SelectCore. "With current market conditions, we are actually experiencing favorable quarter-over-quarter growth as more and more credit challenged consumers turn to prepaid alternatives for their telecommunications needs."

The Company's Financial Statements and Management Discussion and Analysis for the three and nine month periods ending September 30, 2008 are available on SEDAR at www.sedar.com.

About SelectCore:

SelectCore (TSX VENTURE:SCG) is in the business of providing prepaid telecom and transaction-based POSA (point of sale activation) solutions for the convenience and grocery store channel in Canada. The company supports a nation-wide distribution network of over 10,000 retail locations utilizing its own network infrastructure and proprietary technology. Profit 100 ranked SelectCore one of Canada's fastest-growing companies in 2006 and again in 2007.

This news release contains projections and other forward-looking statements regarding future events. Such statements are predictions, which may involve known and unknown risks, uncertainties and other factors, which could cause the actual events or results and objections to differ materially from those expressed.

The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information