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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of OCTOBER , 2002.
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VHQ ENTERTAINMENT INC.
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(Translation of registrant's name into English)
6201 - 46th Avenue, Red Deer, Alberta Canada T4N 6Z1
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): _______
Note: Regulation S-T Rule 101(b)(1) only permits the submission in
paper of a Form 6-K if submitted solely to provide an attached annual report to
security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): _______
Note: Regulation S-T Rule 101(b)(7) only permits the submission in
paper of a Form 6-K if submitted to furnish a report or other document that the
registrant foreign private issuer must furnish and make public under the laws of
the jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
<page>
Indicate by check mark whether by furnishing the information contained
in this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
VHQ ENTERTAINMENT INC.
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(Registrant)
Date December 2, 2002 By /s/ TREVOR M. HILLMAN
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(Signature)1
Trevor M. Hillman
Chief Executive Officer
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1 Print the name and title of the signing officer under his signature.
[VHQ WHERE ENTERTAINMENT BEGINS!(TM) logo]
VHQ ENTERTAINMENT INC. ANNOUNCES PROFITABLE FIRST QUARTER RESULTS,
INCREASED REVENUE AND SAME-STORE SALES
CALGARY, AB/OCTOBER 31, 2002/CNW/ Trevor Hillman, CEO of VHQ Entertainment Inc.
("VHQ") (TSE: VHQ, OTC Pink: VHQIF), is pleased to present its first quarter
fiscal 2003 financial results for the period ended August 31, 2002.
Revenue for the quarter was $6.75 million, up 12.2% from $6.01 million recorded
for the previous quarter ended August 31, 2001. Sales growth resulted from an
8.9% increase in the number of operating stores, and a 7.2% increase in
same-store sales results, a comparative measure of mature store sales results
achieved by outlets in operation for more than one full year. The strong
same-store sales growth resulted from VHQ's successful on-going sales and
marketing campaigns, and is indicative of the growing market foothold enjoyed by
VHQ stores in their respective communities. "The 7.2% same- store sales increase
is impressive given the overall lackluster performance recently reported by most
retailers. It re-confirms that VHQ continues to outperform its competitors in
growing same-store sales" commented Michael McKelvie, Sr. VP Marketing and
Communications.
VHQ posted an EBITDA income of $1.7 million for the quarter, an impressive
increase of 72.9% as compared with the $985,866 recorded for the quarter ended
August 31, 2001. Operating income also rose to $174,604 for the first quarter,
as compared to an operating loss of $3,106 for the quarter ended in the prior
year. Net income favorably increased to $71,402 as compared to a net loss of
$422,113 recorded for the same quarter in the year ago period. Commenting on the
improved results, Derrek Wong, Sr. VP Finance and CFO stated "management has
focused on improving bottom line results and has implemented several
initiatives, including operational cost controls and purchasing policies that
have improved and will continue to improve overall gross margins on sales".
Commenting on the Company's impressive first quarter results, Trevor Hillman,
stated, "Our return to profitability has been the result of a dedicated effort
to fine tune our operational expenses and to implement new marketing initiatives
designed to keep the VHQ brand top of mind for more customers than ever before.
Going forward, we are committed to our fundamental business of expansion within
secondary markets. Having made many operational improvements we look forward to
a profitable holiday retailing season, featuring one of the most exciting movie
lineups in home video entertainment history."
FINANCIAL HIGHLIGHTS
THREE MONTHS ENDED AUGUST 31
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2002 2001
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REVENUES $6,751,461 $6,015,656
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GROSS MARGIN $3,812,113 $3,435,920
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OPERATING INCOME $174,604 $(3,106)
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NET PROFIT $71,402 $(422,113)
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EBITDA $1,704,207 $985,866
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PER SHARE
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BASIC EARNINGS $0.01 $(0.04)
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BASIC EBITDA $0.14 $0.08
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ABOUT VHQ ENTERTAINMENT INC.
VHQ Entertainment Inc. is listed on the Toronto Stock Exchange under the trading
symbol "VHQ", and is the recipient of the 'Profit Magazine' 2001 award for being
one of Canada's Hottest Start-up companies. VHQ is the fastest-growing chain of
home entertainment retail stores in Canada. With 49 retail store locations now
operating, VHQ provides both urban and rural customers with high quality, well
stocked and conveniently located stores offering movies, music, games and more.
The corporate web site located at WWW.VHQ.CA.
THE TORONTO STOCK EXCHANGE HAS NOT APPROVED OR DISAPPROVED THE INFORMATION
CONTAINED HEREIN.
STATEMENTS IN THIS RELEASE ARE MADE PURSUANT TO THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE CAUTIONED
THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISK AND UNCERTAINTIES INCLUDING,
WITHOUT LIMITATION, RISKS ASSOCIATED WITH THE COMPANY'S FINANCIAL CONDITION AND
PROSPECTS, THE CONTINUED ACCEPTANCE OF THE COMPANY'S SERVICES, INCREASED LEVELS
OF COMPETITION FOR THE COMPANY, AND DEPENDENCE ON THE PERFORMANCE OF THE
MANAGEMENT OF THE COMPANY AND OTHER RISKS DETAILED IN THE COMPANY'S FILINGS WITH
SECURITIES REGULATORY AUTHORITIES. WHEN USED HEREIN, THE WORDS "MAY", "WOULD",
:"COULD", "WILL", "INTEND", "PLAN", "ANTICIPATE", "BELIEVE", "SEEK", "PROPOSE",
"ESTIMATE", "EXPECT", AND SIMILAR EXPRESSIONS, AS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES
MATERIALIZE, OR SHOULD ASSUMPTIONS UNDERLYING FORWARD-LOOKING STATEMENTS PROVE
INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS AS INTENDED, PLANNED, ANTICIPATED, BELIEVED,
ESTIMATED, OR EXPECTED. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY
OBLIGATION, TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
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For further information, contact:
VHQ ENTERTAINMENT INC.:
Trevor M. Hillman, Derrek R. Wong, CFA
Chairman and CEO S.V.P. Finance and CFO
Tel: (403) 340-2760 Tel: (403) 346-8119
E-mail: TREVORH@VHQ.CA E-mail: DRWONG@VHQ.CA