Mediagrif Reports FY2010 Financial Results and increases its semi-annual dividend by 40%
- Net earnings of $2.5 million compared to a loss of $1.3 million for the previous year;
- Earnings from operations of $9.5 million compared to a loss of $7.8 million for the previous year;
- Earnings before interest, taxes, depreciation and amortization (EBITDA) of $12.4 million compared to $5.2 million for the previous year;
- Revenues of $45.7 million, compared to $47.9 million for the previous year;
- Cash and cash equivalents reached $34.4 million compared to $27.7 million for the previous year;
- 40% increase of semi-annual dividend reaching $0.14 per share.
Longueuil, Canada – June 8, 2010: Mediagrif Interactive Technologies Inc. (TSX: MDF), a worldleading operator of e-commerce solutions, today announced its financial results for the fiscal year ended March 31, 2010. All dollar figures in the present document are in Canadian dollars, unless otherwise specified.
Mediagrif declares today a cash dividend of $0.14 per share payable on July 15, 2010 to shareholders of record at the close of business on July 1st, 2010. The operational strategy put in place during the last fiscal year allowed the Company to reach its financial objectives and increase its cash and cash equivalents therefore justifying the increase of its dividend.
Key Financial Highlights Of FY2010:
Revenues for the year ended March 31, 2010 reached $45.7 million, compared to $47.9 million in the previous year.
Our business networks MERX, BidNet, GovernmentBids, Carrus, epipeline and Interactive Procurement Technologies (“IPT”) operate in markets less affected by the economic conditions of North American markets and are showing healthy organic growth. However, revenues from The Broker Forum, Power Source On-Line, Market Velocity and Polygon networks are affected by the economic slowdown of their respective industries.
In original currencies, revenues decreased by $2.8 million for the year ended March 31, 2010 compared to the previous year. Revenues earned in US dollars represent 57% of total revenues for the year ended March 31, 2010, compared to 63% in the previous year. As a result, the variation in the value of the Canadian dollar compared to the US dollar combined with our hedge coverage generated a positive impact on revenues of $0.6 million during the year ended March 31, 2010.
Gross margin increased to 77.5% during the year ended March 31, 2010, compared to 76.8% for the previous year. The increase is mainly due to the headcount reduction and a better cost control.
Operating expenses decreased to $26.0 million, compared to $44.6 million for the previous year.
The decrease in operating expenses is explained by the following items:
- General and administrative expenses decreased to $8.7 million this year, compared to $16.2 million for the previous year. This decrease is mainly due to the general headcount reduction throughout the Company during the last quarter of 2009 which caused severance payments of $3.2 million. This reduction represents a payroll saving of $2.9 million this year. During the previous year, an expense of $0.4 million was incurred for an unrealized acquisition. The decrease in amortization expenses represents a saving of $0.4 million. In addition, various savings have been achieved this year, including reducing the number of the Company’s offices.
- Sales and marketing expenses decreased to $8.7 million this year, compared to $11.2 million for the previous year. This decrease is due to the general headcount reduction throughout the Company and lower representation fees and bad debt expenses.
- Technology expenses decreased to $7.6 million this year compared to $8.3 million for the previous year. This decrease is mainly due to lower salary expenses and a decrease in amortization expenses offset by lower capitalization of development expenses.
- Amortization of acquired intangible assets decreased this year to $0.7 million from $1.6 million in the previous year due to the impairment recorded on March 31, 2009.
- Operating expenses in fiscal year 2009 include impairment of acquired intangible assets of $3.6 million, write off of capitalized software of $3.0 million and loss on disposal of an investment of $0.2 million.
Earnings from operations reached $9.5 million compared to a loss of $7.8 million for the previous year. This increase is mainly due to lower salary expenses and severance payments, to the decrease in expenses related to amortization and to the impairment recorded in fiscal year 2009 on intangible assets and acquired intangible assets.
The basic earnings per share for the year was $0.18 compared to a basic loss per share of $0.09 last year. The basic weighted average number of common shares outstanding for the years ended March 31, 2010 and 2009 was 13.9 million and 14.3 million respectively.
As at March 31, 2010, our cash and cash equivalents amounted to $34.4 million, an increase compared to $27.7 million as at March 31, 2009.
Free cash flow, defined as cash flows from operating activities less the acquisition of premises and equipment and intangible assets and less dividends paid, was $9.2 million during the current fiscal year, as compared to $1.4 million for the previous year.
On March 3, 2010, the Company announced the renewal of its normal course issuer bid whereby it is authorized to purchase for cancellation for the twelve-month period which started on March 5, 2010 up to 695,425 common shares. As at March 31, 2010, 9,638 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.
In addition to providing an earnings measure in accordance with GAAP, the Company shows earnings from operations and earnings before interest, taxes, depreciation and amortization (“EBITDA”) as supplementary earnings measures. The Company sometimes refers to the free cash flow measure in its documents. Free cash flow is defined as cash flows from operating activities less the acquisition of premises and equipment and intangible assets presented in investing activities and less dividends paid presented in financing activities. Earnings from operations, EBITDA and free cash flow are not intended to be measures that should be regarded as an alternative to other financial operating performances prepared in accordance with Canadian GAAP. Those measures do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies.
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. All amounts are in Canadian dollars.
Audited financial statements, accompanying notes and MD&A are available on www.mediagrif.com and have been filed with SEDAR.
For further information:
Chief Executive Officer
Tel.: (450) 449-0102 ext. 2004
Toll Free: 1 877 677-9088 ext. 2004