News

2010 | 2009

Mediagrif Reports Q1 FY2010 Financial Results

• Revenues of $11.7 million compared to $12.0 million for the same quarter last year.
• Earnings from operations of $1.9 million compared to $0.5 million for the same quarter last year.
• Loss of $0.2 million or $0.01 per share compared to net earnings of $0.3 million or $0.02 per share for the same quarter last year, mainly due to foreign exchange loss of $1.6 million on US dollar assets.

Longueuil, Canada – August 4, 2009: Mediagrif Interactive Technologies Inc. (TSX: MDF), a world-leading operator of e-commerce solutions, today announced its financial results for the first quarter of fiscal year 2010, ended June 30, 2009. Unless indicated otherwise, all amounts are in Canadian dollars.

Revenues from the first quarter amounted to $11.7 million compared to $12.0 million for the same quarter last year, an insignificant decrease considering the unfavorable economic conditions.

For the quarter ended June 30, 2009, total operating expenses decreased to $7.2 million compared to $8.6 million for the same quarter last year. This decrease is mainly due to the general headcount reduction throughout the Company, to certain office closures in the United States and to a decrease of the amortization expense due to the impairment done during the last quarter of the year ended March 31, 2009. Consequently, earnings from operations amounted to $1.9 million compared to $0.5 million for the same quarter last year.

Other income (expenses) amounted to ($1.1 million) for the quarter ended June 30, 2009, compared to $0.2 million for the same quarter last year. This decrease is mainly due to a foreign exchange loss of $1.0 million on our US dollar assets compared to a gain of $0.1 million for the same quarter last year. Furthermore, a foreign exchange loss of $0.6 million on US dollar future income taxes assets was recorded in the income tax provision.

Net loss and basic loss per share for the quarter amounted to $0.2 million and to $0.01 as compared to net earnings and basic earnings per share of $0.3 million or $0.02 for the same quarter last year.

Key Operating Highlights Of The First Quarter Of The Fiscal Year 2010:

In the third and fourth quarters of fiscal 2009, significant changes were made to the Company’s Board of Directors and senior management team. Following these changes, the newly appointed team conducted a strategic and operational review of Mediagrif’s business activities in order to reestablish positive operational margins in all Mediagrif’s business networks through headcount adjustments, office closures and employee relocation.

These initiatives enabled us to make an operating profit of $1.9 million for the quarter ended June 30, 2009 compared to $0.5 million for the same quarter last year.

Key Financial Highlights Of The First Quarter Of The Fiscal Year 2010:

Revenues for the quarter ended June 30, 2009 decreased by $0.3 million compared to the same quarter last year, from $12.0 million to $11.7 million. Our business networks BidNet, MERX, Carrus, epipeline, Construction Bidboard and Global Wine & Spirits operate in markets less affected by the difficult economic conditions and are showing healthy organic growth. However, our networks Power Source On-Line, The Broker Forum and Polygon are faced by the economic slowdown in their respective markets and their revenues are decreasing. The variation of the Canadian dollar compared to the American dollar generated a positive impact of $0.4 million. Thus during the quarter, 59% of the revenues were earned in US dollars compared to 64% during the same quarter last year. Consequently, on a constant currency basis, total revenues decreased by $0.6 million.

Gross margin as a percentage of revenue increased to 77.5% during the quarter ended June 30, 2009, compared to 75.8% for the same quarter last year. The increase is mainly explained by the lower cost of revenues following the headcount reduction.

Total operating expenses decreased to $7.2 million compared to $8.6 million for the same quarter last year. General and administrative expenses decreased to $2.7 million compared to $3.1 million mainly due to the general headcount reduction throughout the Company and certain office closures in the US during the last quarter of the year ended March 31, 2009. Sales and marketing expenses decreased to $2.3 million compared to $2.6 million mainly due to the general headcount reduction throughout the Company and lower representation expenses. Technology expenses decreased to $1.9 million compared to $2.2 million due to lower salary expenses and a decrease of the amortization expenses.

The amortization of acquired intangible assets decreased from $0.5 million for the same quarter last year to $0.2 million this quarter due to the impairment done during the last quarter of the year ended March 31, 2009.

Stock-based compensation expense decreased slightly to $67,000 compared to $142,000 for the same quarter last year, mainly due to a lower number of outstanding stock options.

As a result, earnings from operations reached $1.9 million compared to $0.5 million for the same quarter last year. This increase is mainly due to lower salary expenses.

Net loss and diluted loss per share for the quarter amounted to $0.2 million and to $0.01 compared to net earnings and basic earnings per share of $0.3 million and $0.02 for the same quarter last year.

As of June 30, 2009, our cash and cash equivalents reached $25.5 million, an increase from $25.2 million as at June 30, 2008 and a decrease from $27.7 million as at March 31, 2009. This decrease is partially due to severances that were recorded as expenses during the year ended March 31, 2009. Free cash flow, defined as cash flows from operating activities less capital expenditure, was ($2.6 million) during the quarter, compared to ($1.2 million) for the same quarter last year.

On March 3, 2009, the Company announced the renewal of a normal course issuer bid whereby it is authorized to purchase for cancellation, for the twelve-month period starting March 5, 2009, up to 700,865 common shares. As of June 30, 2009, 24,020 common shares were purchased for cancellation.

About Mediagrif Interactive Technologies Inc.

Mediagrif Interactive Technologies Inc. (TSX: MDF) is a world-leading operator of e-business solutions. Mediagrif's e-business networks allow buyers and sellers within specific industries to source, purchase or sell products and to exchange documents more efficiently using the Internet. Mediagrif operates 15 networks, including industry leaders The Broker Forum , Power Source On-Line , Telecom Finders , Global Wine & Spirits and Polygon . Mediagrif also owns MERX , the exclusive provider of e-publishing services to the Government of Canada, and is a leading provider of government bid aggregation services and e-procurement services in the U.S. Headquartered in Longueuil, Mediagrif has several offices in North America and Asia. For more information, please visit us at www.mediagrif.com or call 1 877 677-9088.

This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. We consider the assumptions on which these forward-looking statements are based to be reasonable, but caution the reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect us. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

Unaudited interim financial statements, accompanying notes and MD&A are available on www.mediagrif.com and have been filed with SEDAR.

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