SRX Post Holdings Inc.
TSX : SRX

November 11, 2008 16:05 ET

SRX Post Holdings Reports Third Quarter 2008 Results

MONTREAL, QUEBEC--(Marketwire - Nov. 11, 2008) - SRX Post Holdings Inc. (TSX:SRX), formerly SR Telecom Inc., today released its unaudited third quarter results for the period ended September 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 August 14, 2008, the protection was extended to December 19, 2008.

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.

On August 15, 2008, the Company entered into a definitive arrangement agreement with Bonterra Energy Income Trust, Bonterra Energy Corp. and Novitas Energy Ltd. providing for the reorganization and recapitalization of the parties thereto. On September 23, 2008, the Company filed a plan of compromise and reorganization with RSM Richter, the court-appointed monitor in SRX's proceedings under the CCAA. The plan is in furtherance of the previously announced arrangement agreement, and will result in (i) all liabilities of the Company being extinguished or settled, (ii) Bonterra Trust making an investment of approximately $11,250,000 in the Company, (iii) the share capital of the Company being reorganized to enable the redemption of all outstanding common shares for no consideration, and (iv) the corporate name of the Company being changed to Bonterra Oil & Gas Ltd. or such other name acceptable to Bonterra.

On October 16, 2008, the requisite majority of creditors of SRX approved the Company's plan of compromise and reorganization and, on October 20, 2008, the Superior Court of Quebec sanctioned the plan, making it binding on all creditors of the Company. It is expected that the plan will be implemented by November 14, 2008.

The unaudited consolidated financial statements for the period ended September 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, the Company ceased operations with no revenue for the three-month period ended September 30, 2008, compared to $18.0 million during the corresponding period in 2007.

Operating loss from continuing operations was $1.2 million compared to a loss of $19.6 million in 2007. Net loss and comprehensive loss for the three-month period ended September 30, 2008 was $9.3 million, compared to $22.2 million in the prior year. The third quarter results in 2008 reflect legal and consulting fees incurred as management continues to pursue the monetization of the Company's remaining assets.

Total assets amounted to $7.3 million as at September 30, 2008, compared to $37.0 million as at December 31, 2007. This is a reflection of management's continued efforts in monetizing the Company's remaining assets. Total liabilities amounted to $145.1 million as at September 30, 2008, compared to $148.1 million as at December 31, 2007, due to the repayment of debt to securred creditors in the amount of $14.6 million, offset by interest paid in kind on the outstanding debt.

Consolidated cash and cash equivalents decreased by $12.1 million from $17.0 million as at December 31, 2007 to $4.9 million as at September 30, 2008. On April 8, 2008, the Company repaid out of available cash $11.1 million of the term loan, and a further $3.5 million was repaid on August 15, 2008. The Company's current expectations are that there will not be enough funds to fully reimburse secured creditors.

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 November 11, 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 September 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 November 11, 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