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Mediagrif reports third quarter results of fiscal 2012

Highlights of the third quarter ended December 31, 2011:
  • The Company completed the acquisition of LesPAC on November 14, 2011;
  • Revenue up 17% or $1.9 million to $13.6 million;
  • EBITDA of  $4.8  million (before  expenses related  to  the  acquisition of  LesPAC  of $1.5 million) compared to $4.0 million in the third quarter of fiscal 2011;
  • Net  earnings of  $1.0  million  ($0.07  per  share), compared to  $1.9  million  ($0.14  per share) in the third quarter ended December 31, 2010;
  • Repayment of $4.0 million on the term loan contracted in connection with the acquisition of LesPAC; 
  • Cash and cash equivalents of $6.3 million as at December 31, 2011;
  • Board of Directors declared a cash dividend of $0.08 per share, payable on April 16, 2012 to shareholders of record at the close of business on April 2nd, 2012.

Longueuil, Canada – February  14, 2012: Mediagrif Interactive Technologies Inc. (TSX: MDF), a world-leading  operator  of  e-commerce  solutions,  today  announced  its  financial  results  for  the third  quarter ended December 31, 2011. Unless indicated otherwise, all amounts are in Canadian dollars.

SUMMARY OF CONSOLIDATED RESULTS

(in thousands of Canadian dollars, except for numbers related to shares)
(unaudited)
Three months ended
Dec. 31st
Nine months ended
Dec. 31st 
2011 2010 2011 2010

Revenues
EBITDA
Operating profit
Net earings

13,617
3,373
2,250
965
11,664
3,958
3,364
1,923
38,960
11,841
9,207
6,870
34,329
11,440
9,579
6,095
Earnings per share    
- Basic
- Diluted
0,07*
0,07*
0,14
0,14
0,50
0,50
0,44
0,44
Weighted average number of share outstanding (in thousands)    
- Basic
- Diluted
13,710
13,762
13,680
13,694
13,699
13,743
13,818
13,836

*Costs related to the acquisition of LesPAC had a negative impact of $0.10 per share.


THIRD QUARTER RESULTS OF  FISCAL  2012,  COMPARED  WITH THIRD QUARTER RESULTS OF FISCAL 2011

The earnings analysis takes into consideration the impact of the acquisitions of Systèmes InterTrade Inc. ("InterTrade") completed on December 22, 2010 and of LesPAC completed on November 14, 2011.

For  the  third  quarter  of  fiscal  2012,  revenues  reached  $13.6  million, an  increase  of $1.9  million when compared to the third quarter of fiscal 2011 revenues of $11.7 million.  The increase is mainly due to the revenues of InterTrade and LesPAC which amounted to $2.6 million in the third quarter of fiscal 2012.

This  increase  was  partly  offset  by  a  decrease  in  revenues from  the development  of e-commerce solutions for external customers of $0.3 million and a net decrease in the business networks revenues of $0.2 million. Furthermore, the  changes  in  the  value  of the  Canadian  dollar  compared  to  the  U.S.  dollar, combined  with  hedge  coverage,  generated  a  negative  impact  on  revenues  of  $0.2 million in  the  third quarter of fiscal 2012.

Operating expenses of the third quarter of fiscal 2012 reached $8.6 million, compared to $5.9 million for the third quarter  of fiscal 2011.  The  increase  in  operating  expenses  is  mainly  due  to  the  addition  of InterTrade and LesPAC  related  operating  expenses  of  $1.2  million  and  the  $1.5  million  non-recurring costs related to the acquisition of LesPAC.

EBITDA  totalled $3.4  million for  the  third  quarter  of  fiscal  2012  compared to  $4.0  million in  the third quarter  of  fiscal 2011. Excluding  the  $1.5  million  acquisition  related  costs  of  LesPAC, EBITDA was $4.8 million or 35.5% of revenues compared to $ 4.0 million or 33.9% of revenues during the third quarter of fiscal 2011.

Net earnings reached  $1.0 million ($0.07 per share)  during the third quarter  of fiscal 2012, compared to $1.9 million ($0.14 per share) in the third quarter of fiscal 2011. Acquisition related costs had a negative impact of $1.3 million ($0.10 per share) on net earnings during the third quarter of fiscal 2012.


NINE MONTHS ENDED  DECEMBER 31,  2011 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2010

For the first nine months ended December 31, 2011, total revenues reached $38.9 million, an increase of $4.6 million  when  compared  with revenues of  $34.3 million  for  the  corresponding  period  of  2010.  This increase  is mainly  due  to  the  revenues  of  InterTrade and  of  LesPAC which  amounted  to  $5.3 million during the nine-month period ended December 31, 2011.

Furthermore,  revenues  in  original  currencies  increased  by  $0.1 million for  the nine-month  period ended December  31,  2011  compared  to  the nine-month  period  ended December  31,  2010.  However,  the changes in the value of the Canadian dollar compared to the U.S. dollar, combined with hedge coverage, generated a negative impact on revenues of $0.8 million during the nine-month period ended December 31, 2011. 

Operating  expenses for  the  nine-month  period  ended December  31,  2011  reached  $21.9 million, compared  to  $17.5 million  for  the corresponding  period  of  2010.  The  increase  in  operating  expenses  is mainly  due  to the  addition  of  InterTrade and  LesPAC  related  operating  expenses  of $3.5  million,  the acquisitions costs of LesPAC of $1.5 million partly offset by lower salaries & benefits.

EBITDA  totalled $11.8 million  for  the nine-month  period of  fiscal  2012  compared to  $11.4 million in  the corresponding  period  of  2010. Excluding  the  $1.5  million  acquisition  related costs  of  LesPAC, EBITDA was $13.3 million or 34.1%  of  revenues compared to  $11.4 million or  33.3%  of the revenues for the nine-month period ended December 31, 2010.

Net earnings reached $6.9 million compared to $6.1 million for the first nine months ended December 31, 2010.


CASH FLOW AND FINANCIAL POSITION

On November 10, 2011, in connection with the acquisition of LesPAC, the Company entered into a credit agreement providing a long-term financing comprised of a $40.0 million, guaranteed, non renewable term loan and a $20.0 million,  guaranteed, revolving  credit  facility  for  general  corporate  purposes, including acquisitions. Both the term loan and the revolving facility extend over five years. The Company used the entire amount of the term loan and $ 7.5 million of the revolving credit facility to finance the acquisition at closing.

During the third quarter of fiscal 2012, operating activities generated $5.4 million of cash flow compared to $2.6 million for the corresponding period of 2010. The Company used these funds and a portion of its cash  and  cash equivalents  to repay  an  amount of  $4.0  million  on  the  term  loan  and  an  amount of  $1.0 million on the revolving credit facility.

At December 31, 2011, the Company had $6.3 million of cash and cash equivalents.


TRANSITION TO IFRS

Mediagrif’s unaudited condensed consolidated interim financial statements for the nine  months ended December 31, 2011 have been prepared using IFRS. Amounts relating to the year ended March 31, 2011 have been restated to reflect the adoption of IFRS. Details of the accounting differences can be found in the notes to the interim financial statements.


OUTLOOK

Given strong  year-to-date performance and the acquisition of LesPAC,  which generated $12.7 million  in revenues  for  the  twelve-month period ended December 31, 2010, Mediagrif’s outlook for the balance of fiscal 2012 is positive. 

The  Company  expects  its  consolidated revenues  for the  year  ended  March  31,  2012  to  increase  by approximately  20%  on  an  annualized  basis  and  EBITDA  to  be  in  the  range  of  $17.5  million  to  $19.5 million, without  taking  into  account  costs  relating  to  the  acquisition.  These  projections  are  based  on certain  assumptions,  including  that  there  would  be  no  significant  change  in  the  current  value  of  the Canadian  dollar compared  to  the  U.S.  dollar,  no  significant  increase  or  decrease  in  revenues  and operating expenses and stable market conditions.

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 electronic components, computer equipment and telecommunications, medical equipment, automotive aftermarket, wine & spirits, diamonds and jewelry, classified ads and retail markets, 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 IFRS, the Company shows operating profit 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 fixed assets and intangible assets presented in investing activities and less dividends paid that are presented in financing activities. Operating profit, 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 IFRS. Those measures do not have a standardized meaning prescribed by IFRS 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.

Unaudited condensed interim 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.

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
Paul Bourque
Chief Financial Officer
Tel.: (450) 449-0102 ext. 2135
Toll Free: 1 877 677-9088 ext. 2135
Email: pbourque@mediagrif.com

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