Xentel DM Incorporated
TSX VENTURE : XDM

Xentel DM Incorporated

August 27, 2010 16:30 ET

Xentel Reports Second Quarter June 30, 2010 Results

CALGARY, ALBERTA--(Marketwire - Aug. 27, 2010) - Xentel DM Incorporated (TSX VENTURE:XDM) -

Period ended June 30 Three months Six months
  2010 2009 2010 2009
($ 000's, except per share amounts)        
Revenue $ 24,392 $ 23,729 $ 45,825 $ 47,614
Gross Margin 7,191 5,566 12,511 10,937
Net earnings 798 681 1,185 1,254
EBITDA 1,458 1,483 2,343 2,722
EPS, fully diluted $ 0.02 $ 0.03 $ 0.04 $ 0.05
EBITDA, per share, fully diluted $ 0.05 $ 0.06 $ 0.07 $ 0.11
         
*EBITDA – Net Earnings before income taxes, interest, depreciation and amortization. Since Gross Margin, EBITDA and diluted EBITDA per share have no standardized GAAP meaning, the comparability of these amounts to other enterprises may not be possible if the basis of calculation of differs.

Xentel DM Incorporated, a North American specialty entertainment and relationship marketing company, today reported its financial results for the three and six months ended June 30, 2010.

Net earnings for the three months ended June 30, 2010 amounted to $798 thousand or $0.02 per diluted share. This compares to the net earnings for the three months ended June 30, 2009 of $681 thousand or $0.03 per diluted share. Similarly, net earnings for the six months ended June 30, 2010 compared to the six months ended June 30, 2009 were $1,185 thousand or $0.04 per diluted shares and $1,254 thousand or $0.05 per diluted share respectively

Revenues for the three months ended June 30, 2010 amounted to $24,392 thousand compared to $23,729 thousand for the three months ended June 30, 2009, an increase of $663 thousand, primarily as a result of the first full quarter in 2010 of the recently merged operations of The Responsive Marketing Group Inc. (RMG).

EBITDA for the three and six months ended June 30, 2010 was $1,458 thousand and $2,343 thousand respectively. This compares to EBITDA for the three and six months ended June 30, 2009 of $1,483 thousand and $2,722 thousand respectively.

Cash reserves and working capital continue to improve. Since December 31, 2009 to June 30, 2010 working capital improved by $2,088 thousand to $7,354 thousand. Cash and cash equivalents at June 30, 2010 were $3,396 thousand.

Xentel DM Incorporated is one of North America's leading relationship-marketing concerns and producers of cause related entertainment events. The Company's success is attributable to proprietary sales tools including technologically advanced teleservices and sophisticated customer databases. Xentel DM Incorporated has over 400 clients and 1,900 employees in over 25 offices across North America.

Certain statements in this press release may constitute "forward looking statements" reflecting our current beliefs, plans, estimates and expectations. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or the combined companies to be materially different from any performance or achievement expressed or implied by such "forward looking statements". Except as required by applicable securities laws, we undertake no obligation to update any forward looking statements for any reason after the date hereof to conform these statements to actual results or to changes in our expectations.

       
Xentel DM Incorporated June 30, June 30, December 31,
Consolidated Balance Sheets 2010 2009 2009
('000s) (Unaudited) (Unaudited) (Audited)
       
       
Assets      
Current assets      
       
Cash and cash equivalents $ 3,396 $ 1,594 $ 3,445
Accounts receivable, net of allowances 10,316 7,267 6,555
Income taxes recoverable 463 18 -
Prepaid expenses and other current assets 1,310 1,388 959
Due from related party - 1,500 -
Future income taxes 540 817 332
  _______ ______ ______
  16,025 12,584 11,291
       
Equipment 3,582 2,608 2,298
Future income taxes 1,716 2,782 2,059
Intangible assets 375 60 57
Goodwill 1,090 1,168 1,064
  ______ ______ ______
  $ 22,788 $ 19,202 $ 16,769
  ===== ===== =====
Liabilities      
Current liabilities      
       
Bank indebtedness $ 1,727 $ 681 $ 63
Accounts payable and accrued liabilities 5,032 4,992 4,969
Income taxes payable 235 - 66
Current portion of long term liabilities 419 90 89
Future income taxes 858 715 838
Due to related party 400 2,193 -
  ______ ______ ______
  8,671 8,671 6,025
       
Long term debt 311 2 -
Future income taxes 122 36 -
Deferred tenant inducement 99 180 139
  ______ ______ ______
  9,203 8,889 6,164
Shareholders' equity      
       
Share capital 10,580 8,827 8,765
Contributed surplus 646 628 646
Accumulated other comprehensive income (3,675) (2,923) (3,655)
Retained earnings 6,034 3,781 4,849
  _______ ______ ______
  13,585 10,313 10,605
  ______ ______ ______
  $ 22,788 $ 19,202 $ 16,769
  ===== ===== =====
       
       
 
 
Xentel DM Incorporated
Consolidated Statements of Operations and Retained Earnings
('000s, except per share amounts)
  Three Months Ended Six Months Ended
  June 30 June 30
  2010 2009 2010 2009
  (unaudited) (unaudited) (unaudited) (unaudited)
         
Revenue $ 24,392 $ 23,729 $ 45,825 $ 47,614
         
Cost of revenue 17,201 18,163 33,314 36,677
  ______ ______ ______ ______
         
Gross margin 7,191 5,566 12,511 10,937
  ______ ______ ______ ______
Corporate expenses        
         
Branch overhead and corporate administration 5,733 4,083 10,168 8,215
Interest expense 30 49 41 82
Amortization of equipment 386 245 619 495
Amortization of intangible assets 2 2 4 4
  ______ ______ ______ ______
         
  6,151 4,379 10,832 8,796
  ______ ______ ______ ______
         
Earnings before income taxes 1,040 1,187 1,679 2,141
  ______ ______ ______ ______
Income tax expense        
Current income tax expense 195 30 329 30
Future income tax expense 47 476 165 857
  ______ ______ ______ ______
         
  242 506 494 887
  ______ ______ ______ ______
         
Net earnings 798 681 1,185 1,254
         
Retained earnings, beginning of period 5,236 3,600 4,849 3,027
         
Dividends paid - 500 - 500
  _____ _____ _____ _____
         
Retained earnings, end of period $ 6,034 $ 3,781 $ 6,034 $ 3,781
  ===== ===== ===== =====
         
Basic net earnings per share $ 0.02 $ 0.03 $ 0.04 $ 0.05
  ===== ===== ===== =====
         
Diluted net earnings per share $ 0.02 $ 0.03 $ 0.04 $ 0.05
  ===== ===== ===== =====
         
Basic weighted average number of shares outstanding 33,254 25,163 30,379 25,072
  ===== ===== ===== =====
Diluted weighted average number of shares outstanding 33,440 25,545 30,287 25,267
  ===== ===== ===== =====
         
 
 
Xentel DM Incorporated
Consolidated Statements of Contributed Surplus
('000s)
  Three Months Ended Six Months Ended
  June 30 June 30
         
  2010 2009 2010 2009
         
Balance, beginning of period $ 646 $ 628 $ 646 $ 558
         
Discount on share repurchase from book value - - - 70
  ____ _____ _____ _____
Balance, end of period $ 646 $ 628 $ 646 $ 628
  ==== ===== ===== =====
 
 
Xentel DM Incorporated
Consolidated Statements of Comprehensive Income
('000s)
  Three Months Ended Six Months Ended
  June 30 June 30
  2010 2009 2010 2009
         
Net earnings for the period $ 798 $ 681 $ 1,185 $ 1,254
         
Foreign currency translation adjustment from self sustaining foreign operations (400) (611) (20) (534)
  ____ ____ ____ ____
Comprehensive income $ 398 $ 70 $ 1,165 $ 720
  ==== ==== ==== ====
 
 
Xentel DM Incorporated
Consolidated Statements of Accumulated Other Comprehensive Income
('000s)
  Three Months Ended Six Months Ended
  June 30 June 30
  2010 2009 2010 2009
         
Balance, beginning of period $ (3,275) $ (2,312) $ (3,655) $ (2,389)
         
Foreign currency translation adjustment from self sustaining foreign operations (400) (611) (20) (534)
  _____ _____ _____ _____
Balance, end of period $ (3,675) $ (2,923) $ (3,675) $ (2,923)
  ===== ===== ===== =====
         
         
         
Xentel DM Incorporated        
Consolidated Statements of Cash Flows        
('000s) Three Months Ended Six Months Ended
  June 30 June 30
  2010 2009 2010 2009
         
Cash flows from (used in) operating activities        
         
Net earnings for the period $ 798 $ 681 $ 1,185 $ 1,254
         
Non cash transactions reflected in net earnings        
Amortization 388 247 623 499
Future income tax expense 47 476 165 857
Adjustment for non cash tenant inducement rent credit (21) (21) (40) (42)
  ______ ______ ______ ______
  1,212 1,383 1,933 2,568
  ______ ______ ______ ______
Net change in non cash working capital items        
Accounts receivable (309) (380) (1,158) (577)
Prepaid expenses and other current assets (769) 353 (134) 389
Income taxes payable / recoverable 247 (85) 513 (280)
Accounts payable and accrued liabilities (561) (168) (824) (755)
  ______ ______ ______ ______
Net change in non cash working capital items (1,392) (280) (1,603) (1,223)
  ______ ______ ______ ______
         
  (180) 1,103 330 1,345
  ______ ______ ______ ______
         
Cash flows from (used in) financing activities        
         
Bank indebtedness 529 80 (157) 600
Due to related party (repaid) received (100) (305) 300 (915)
Long term debt repaid (85) (1) (115) (62)
Repurchase of share capital - - - (28)
Dividends paid - (500) - (500)
Issuance of share capital on option exercise 22 - 33 -
  ______ ______ ______ ______
  366 (726) 61 (905)
  ______ ______ ______ ______
Cash flow (used in) investing activities        
         
Investment in equipment (259) (63) (427) (153)
  _______ _______ _______ _______
         
Effect of exchange rate fluctuations on cash balances 18 (66) (13) (58)
  _______ _______ _______ _______
         
Net increase (decrease) in cash and cash equivalents (55) 248 (49) 229
         
Cash and cash equivalents, beginning of period 3,451 1,346 3,445 1,365
  _______ _______ _______ _______
         
Cash and cash equivalents, end of period $ 3,396 $ 1,594 $ 3,396 $ 1,594
  ===== ===== ===== =====

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information