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Mediagrif Reports FY2011 Financial Results

  • Increase of 3% in revenues reaching $47.1 million for fiscal year 2011, compared to $45.7 million for the previous year;
  • Increase of 236% in net earnings reaching $8.4 million or $0.61 per share for fiscal year 2011, compared to $2.5 million or $0.18 per share for the previous year;
  • Increase of 37% in earnings from operations reaching $13.0 million for fiscal year 2011, compared to earnings from operations of $9.5 million for the previous year;
  • Increase of 23% in EBITDA reaching $15.3 million for fiscal year 2011, compared to $12.4 million for the previous year;
  • Cash and cash equivalents reached $26.5 million on March 31, 2011, compared to $34.4 million on March 31, 2010;
  • Cash dividend of $0.08 per share, payable July 15, 2011 to shareholders of record at the close of business on July 4, 2011.
Longueuil, Canada – June 14, 2011: Mediagrif Interactive Technologies Inc. (TSX: MDF), a world-leading operator of e-commerce solutions, announced today its financial results for the fiscal year ended March 31, 2011. All dollar figures in the present document are in Canadian dollars, unless otherwise specified.

KEY FINANCIAL HIGHLIGHTS OF FY2011:

The Company shows an increase in financial results for fiscal year ended March 31, 2011, while maintaining adequate cash flow level for future achievements. The Company acquired Laval based InterTrade Systems Inc. (“InterTrade”) for a cash consideration of $8.1 million. InterTrade did not significantly contribute to net earnings increase for the current period considering its integration during the period.

For the year ended March 31, 2011, revenues increased, in comparison to last year, from $45.7 million to $47.1 million.

In original currencies and excluding InterTrade revenues of $1.4 million, revenues increased by $1.2 million for the year ended March 31, 2011, compared to the previous year. Increase in revenues is mainly due to the business networks MERX, The Broker Forum and Carrus. Our business networks BidNet, GovernmentBids, Interactive Procurement Technologies and Global Wine & Spirits do not show growth while revenues from Power Source On-Line, Market Velocity, CBI and Polygon networks operate in markets affected by uncertain North American economic conditions and in highly competitive markets. Price decreases and discounts had to be given to members for competitive reasons.

Revenues earned in US dollars represent 58% of total revenues for the year ended March 31, 2011, compared to 57% 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 negative impact on revenues of $1.2 million during the year ended March 31, 2011.

Gross margin reaches 78.2% during the year ended March 31, 2011, compared to 77.5% for the previous year. This increase is mainly due to cost savings related to activities previously outsourced.

For the year ended March 31, 2011, operating expenses decreased to $23.8 million, compared to $26.0 million for the previous year. The decrease in operating expenses is explained by the following items:

  • General and administrative expenses decreased by 7% to $8.1 million this year, compared to $8.7 million for the previous year. This decrease is mainly due to payroll savings of $0.7 million and penalty reversal related to a tax assessment with impact of $0.4 million offset by InterTrade expenses amounting to $0.5 million.
  • Sales and marketing expenses decreased by 11% to $7.7 million this year, compared to $8.7 million for the previous year. This decrease is due to payroll savings, lower bad debt expenses offset by $0.2 million in expenses of InterTrade.
  • Technology expenses decreased to $7.4 million this year, compared to $7.6 million for the previous year. This decrease is mainly due to payroll savings and lower amortization expenses offset by tax credits decrease. InterTrade expenses reached $0.2 million during current period.
  • Amortization of acquired intangible assets increased by $0.3 million this year to $1.0 million, compared to previous year due to the acquisition of assets related to the InterTrade acquisition on December 2010.
  • Stock-based compensation expense was reversed due to stock options cancellation to create a credit balance of $335,000, compared to an expense of $281,000 during previous year.
For the year ended March 31, 2011, earnings from operations reached $13.0 million compared to $9.5 million for the previous year. This increase is mainly due to payroll savings, lower bad debts, expense reversal related to stock-based compensation, and penalty reversal related to tax assessment.

The basic and diluted earnings per share for the year were $0.61, showing an increase of 236%, compared to basic earnings per share of $0.18 last year. The basic and diluted weighted average number of common shares outstanding for the years ended March 31, 2011 and 2010 were 13.8 million and 13.9 million respectively.

As at March 31, 2011, our cash, cash equivalents and investments amounted to $30.0 million including $3.5 million in investments, a decrease compared to $34.4 million as at March 31, 2010 without any investment.

Free cash flow, defined as cash flows from operating activities less the acquisition of premises and equipment and intangible assets and dividends paid, reached $5.0 million, compared to $9.2 million last year. This decrease is mainly due to the increase in acquisition of capital assets, and increase of cash dividend payment.

DIVIDEND:

Mediagrif declares today a quarterly cash dividend of $0.08 per share payable on July 15, 2011 to shareholders of record at the close of business on July 4th, 2011.

About Mediagrif Interactive Technologies Inc.

Mediagrif Interactive Technologies Inc. (TSX: MDF) delivers innovative e-commerce solutions to businesses since 1996. Its web platforms enable clients to find, purchase and sell products, exchange information, gain access to business opportunities and manage supply chain collaboration with greater speed and efficiency. The Company provides e-commerce solutions in the fields of electronics components, computer equipment and telecommunications, medical equipment, automotive aftermarket, wine & spirits, diamonds and jewelry, retail markets and government opportunities. Mediagrif has its headquarters in Longueuil and has 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 performance measures 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 at the following address: www.sedar.com. Request to obtain a copy of these documents may be made to the Corporate Secretary at (450) 449-0102 ext. 2012 or toll free at 1 877 677-9088 ext. 2012.

For further information:

Claude Roy
Chief Executive Officer
Tel.: (450) 449-0102 ext. 2004
Toll Free: 1 877 677-9088 ext. 2004
Email: croy@mediagrif.com

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