CALGARY, AB,
Q3 2023 Financial & Operating Highlights
- Network Services revenue was
$7.8 million , a$0.3 million increase from the$7.5 million in Q3 2022, with the commencement of new projects atCommunity Network Partners being offset by declines in the revenues of WireIE and Galaxy. The Network Services segment contributed a net loss before income taxes of$(1.1) million , inclusive of depreciation and amortization expense totaling$0.7 million and accrued restructuring costs of$0.5 million . This compares with net income before income taxes of$1.1 million in Q3 2022. The reduction in profitability in this segment is due to both an ongoing contraction of WireIE's business and the wind-down of certain high-margin contracts at Galaxy, with multiple growth initiatives within itsCommunity Network Partners and Galaxy subsidiaries still at early stages of ramping up. - Distribution Services revenue of
$8.9 million was consistent on a quarter-over-quarter basis and increased by 28% compared with Q3 2022 due primarily to increased capacity utilization and customer activity levels at facilities that commenced operations in 2022. This segment reported a net loss before income taxes of$(0.4) million , inclusive of depreciation expense totaling$1.4 million . Capacity utilization was 70% atSeptember 30, 2023 , consistent withJune 30, 2023 and compared with 39% atDecember 31, 2022 . Crown expects capacity utilization to be higher in Q4 2023 and to increase significantly in 2024 leading to a material increase in the revenue and operating earnings from this segment. - In Q3 2023, Crown's share of earnings of
Crown Partners Fund totaled$0.2 million (Q3 2022 –$0.1 million ), including$0.01 million in respect of Crown's general partnership interest as a result of an increase in the accrued performance bonus payable to Crown by the fund and$0.2 million in respect of Crown's limited partnership interest. Compared withJune 30, 2023 , the carrying value of Crown's investment inCrown Partners Fund increased by$0.1 million to$24.1 million . - Crown reported a net loss of
$(1.8) million ($0.32 loss per basic share) in Q3 2023, compared with a net loss of$(2.1) million ($0.38 loss per basic share) in Q3 2022. - Total equity at quarter-end was
$46.6 million , down from$50.7 million at the end of 2022, reflecting the net loss attributable to shareholders in the first nine months of 2023. Total equity per share was$8.33 per basic share, compared with$8.98 as atDecember 31, 2022 . - As at
September 30, 2023 , the Corporation did not satisfy certain financial covenant clauses of its credit agreement with its bank. Accordingly, the bank is contractually entitled to request immediate repayment of the outstanding loan in the amount of$24.5 million and the outstanding balance is presented as a current liability as atSeptember 30, 2023 . The Corporation's Bank has not requested early repayment of the loan. Management is renegotiating the terms of the credit agreement and expects that revised terms will be in place in Q4 2023.
"Q3 2023 was clearly a disappointing quarter for the Corporation. The transition of Galaxy's customer base to new low earth orbit satellites has taken longer and has been more competitive than we had anticipated. We still see great potential in this technology and are expecting to make meaningful progress over the next year. Somewhat countering the softness in the satellite division, our fibre projects continue to move along well and our outlook on this division continues to improve. Our distribution services business is also coming along well with profitability increasing at all but one of our facilities. Our focus continues to be on filling our available capacity, and the current pipeline of new customers is strong. Finally, our real estate business continues to make progress on our two residential developments; albeit, the residential market in
Q3 2023 Financial Results Summary
Selected Quarterly Information | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
FOR THE PERIODS ENDED SEP. 30 | 2023 | 2022 | 2023 | 2022 | ||||||
Revenue: | ||||||||||
Distribution services revenue…............................................................................ | $ 8,915 | $ 6,971 | $ 26,154 | $ 7,543 | ||||||
Network services revenue…...................................................................................................... | 7,843 | 7,522 | 21,530 | 20,648 | ||||||
Fees and other income…............................................................................................................ | 1,816 | 428 | 4,115 | 1,485 | ||||||
Interest revenue…........................................................................................................................ | 686 | 409 | 1,852 | 1,090 | ||||||
Net gain (loss) on investments…............................................................................................................ | - | - | - | 2 | ||||||
Total revenue…................................................................................................................................. | 19,260 | 15,330 | 53,651 | 30,768 | ||||||
Share of (losses) earnings of Crown Partners Fund….............................................. | 210 | 136 | 2,500 | (3,976) | ||||||
Loss attributable to Shareholders........................................................................................... | (1,807) | (2,122) | (3,674) | (4,210) | ||||||
Comprehensive loss attributable to Shareholders…................................................ | (1,871) | (2,087) | (3,704) | (4,175) | ||||||
Total assets…................................................................................................................................... | 179,002 | 157,152 | 179,002 | 157,152 | ||||||
Total equity….................................................................................................................................. | 46,553 | 53,934 | 46,553 | 53,934 | ||||||
Per share: | ||||||||||
- Net loss to Shareholders - basic............................................................................................... | $ (0.32) | $ (0.38) | $ (0.65) | $ (0.70) | ||||||
- Net loss to Shareholders - diluted........................................................................................... | (0.32) | (0.38) | (0.65) | (0.70) | ||||||
- Total equity per share - basic................................................................................................... | 8.33 | 9.56 | 8.33 | 9.56 | ||||||
Number of common shares: | ||||||||||
- Outstanding at end of period.................................................................................................. | 5,588,646 | 5,642,546 | 5,588,646 | 5,642,546 | ||||||
- Weighted average outstanding - basic.................................................................................. | 5,605,536 | 5,642,546 | 5,626,132 | 6,002,945 | ||||||
- Weighted average outstanding - diluted............................................................................... | 5,605,536 | 5,642,546 | 5,626,132 | 6,002,945 | ||||||
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