iMarketing Solutions Group Inc.
TSX VENTURE : XDM

iMarketing Solutions Group Inc.

June 29, 2011 10:44 ET

iMarketing Solutions Group Inc. Reports First Quarter March 31, 2011 Results

CALGARY, ALBERTA--(Marketwire - June 29, 2011) - iMarketing Solutions Group Inc. (TSX VENTURE:XDM) -

Period ended March 31Three months
20112010
($ 000's, except per share amounts)
Revenue$ 24,915$ 21,214
Gross Margin6,8775,302
Net earnings5881,366
EBITDA1,488867
EPS, fully diluted$ 0.02$ 0.03

iMarketing Solutions Group Inc., a North American specialty entertainment and relationship marketing company, today reported its financial results for the three months ending March 31, 2011 in accordance with the newly adopted International Financial Reporting Standards ("IFRS").

The amounts in this earnings release, MD&A and interim financial statements for the three months ended March 31, 2010, have been restated to reflect the adoption of IFRS, with effect from January 1, 2010. Further disclosure on the transition to IFRS can be found in the Company's MD&A and notes to the Company's consolidated condensed interim financial statements for the three months ended March 31, 2011. This disclosure contains a description of the IFRS adjustments and reclassifications on transition and a reconciliation of the Company's financial statements previously prepared under Canadian GAAP to those prepared under IFRS for the three months ended March 31, 2010, and for the year ended December 31, 2010.

Net earnings for the three months ended March 31, 2011 amounted to $588 thousand or $0.02 per share on a fully diluted basis. This compares to the net earnings for the three months ended March 31, 2010 of $1,366 thousand or $0.05 per share on a fully diluted basis. Net earnings for the three months ended March 31, 2010, as restated under IFRS, include a positive earnings adjustment of $988 thousand reflecting the merger executed in March 2010.

Revenues for the three months ended March 31, 2011 increased to $24,915 thousand compared to $21,214 thousand for the three months ended March 31, 2010. The increase of $3,701 thousand primarily resulted from additional revenues generated by the recently merged operations.

The company is also pleased to announce two new appointments to the senior executive team. Andrew Langhorne has been appointed Chief Operating Officer and Jeffrey Irwin has been appointed Chief Financial Officer.

iMarketing Solutions Group Inc. 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. The Company 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.

Consolidated Statements of Financial Position
Unaudited
(In thousands of Canadian dollars)
As atMarch 31,December 31,January 1,
201120102010
Assets
Current assets
Cash and cash equivalents$ 610$ 2,322$ 3,445
Accounts receivable13,3129,9236,555
Income taxes recoverable1516-
Prepaid expenses and other current assets2,5161,604959
Total current assets16,45313,86510,959
Equipment4,8243,6582,298
Intangible assets2,1192,23557
Deferred income taxes2,5122,6262,391
Goodwill--1,064
Total assets$ 25,908$ 22,384$ 16,769
Liabilities
Current liabilities
Bank indebtedness$ 2,701$ 1,483$ 63
Accounts payable and accrued liabilities8,2996,1314,969
Income taxes payable355-66
Due to related parties200400-
Deferred revenue216518-
Current portion of long term liabilities47856189
Total current liabilities12,2499,0935,187
Deferred tenant inducement3556139
Deferred income taxes1,0901,067838
Total liabilities13,37410,2166,164
Shareholders' equity
Share capital10,79710,7978,765
Contributed surplus769769646
Accumulated other comprehensive loss(4,080)(3,858)(3,655)
Retained earnings5,0484,4604,849
Total shareholders' equity12,53412,16810,605
Total liabilities and shareholders' equity$ 25,908$ 22,384$ 16,769
iMarketing Solutions Group Inc.
Consolidated Statements of Operations
Unaudited
(In thousands of Canadian dollars, except per share amounts)
For the three months ended March 3120112010
Revenue$ 24,915$ 21,214
Cost of revenue18,03815,912
Gross margin6,8775,302
Operating expenses
Branch overhead and corporate administration5,3894,435
Depreciation of equipment325233
Amortization of intangible assets1152
Transaction charges for business combination-233
Bargain purchase gain-(1,231)
Total operating expenses5,8293,672
Operating earnings1,0481,630
Non operating income (expense)
Interest expense(29)(11)
Total non operating income (expense)(29)(11)
Earnings before income taxes1,0191,619
Income tax expense (recovery)
Current income tax expense445134
Deferred income tax expense (recovery)(14)119
Total income tax expense431253
Net earnings for the period$ 588$ 1,366
Basic earnings per share$ 0.02$ 0.05
Diluted earnings per share$ 0.02$ 0.05
Basic weighted average number of shares outstanding32,36727,474
Diluted weighted average number of shares outstanding32,57327,778
iMarketing Solutions Group Inc.
Consolidated Statements of Comprehensive Income (Loss)
Unaudited
(In thousands of Canadian dollars)
For the three months ended March 3120112010
Net earnings for the period$ 588$ 1,366
Foreign currency translation change(222)380
Comprehensive income for the period$ 366$ 1,746
iMarketing Solutions Group Inc.
Consolidated Statements of Changes in Equity
Unaudited
(In thousands of Canadian dollars)
For the three months ended March 3120112010
Share capital
Balance, beginning of period$ 10,797$ 8,765
Issued for business combination-2,217
Issued for business combination under collateralized note-534
Exercise of options-11
Share purchase financing-(534)
Balance, end of period$ 10,797$ 10,993
Contributed surplus
Balance, beginning of period$ 769$ 646
Fair value of shares financed by promissory note-105
Balance, end of period$ 769$ 751
Accumulated other comprehensive loss
Balance, beginning of period$ (3,858)$ (3,655)
Foreign currency translation change(222)380
Balance, end of period$ (4,080)$ (3,275)
Retained earnings
Balance, beginning of period$ 4,460$ 4,849
Net earnings for the period5881,366
Balance, end of period$ 5,048$ 6,215
iMarketing Solutions Group Inc.
Consolidated Statements of Cash Flows
Unaudited
(In thousands of Canadian dollars)
For the three months ended March 3120112010
Cash flow from (used in) operating activities
Net earnings for the period$ 588$ 1,366
Items not affecting cash:
Depreciation of equipment325233
Amortization of intangible assets1152
Adjustment for non cash tenant inducement rent credit(21)(19)
Deferred income tax expense (recovery)(9)119
Bargain purchase gain-(1,231)
998470
Non cash working capital
Accounts receivable(3,492)(850)
Prepaid expenses and other current assets(932)572
Accounts payable and accrued liabilities1,899(181)
Income taxes recoverable/payable445265
Change in non cash working capital items(2,080)(194)
Cash flow from (used in) operating activities(1,082)276
Cash flow from (used in) financing activities
Increase (decrease) in bank indebtedness1,219(686)
Long term debt repaid(83)(30)
(Repayments to) advances from related parties(200)400
Issuance of shares on option exercise-11
Cash flow from (used in) financing activities936(305)
Cash flow from (used in) investing activities
Investment in equipment(1,531)(167)
Transaction costs for business combination expensed-233
Cash flow from (used in) investing activities(1,531)66
Effect of exchange rate fluctuations on cash balances(35)(31)
Net increase (decrease) in cash and cash equivalents(1,712)6
Cash and cash equivalents, beginning of period2,3223,445
Cash and cash equivalents, end of period$ 610$ 3,451
Supplemental information
Capital lease payments$ -$ 4
Cash payments (receipts)
Income taxes141
Interest expense2911

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

Contact Information

  • iMarketing Solutions Group Inc.
    Caren Holtby
    Investor Relations
    866-204-9861
    416-633-4643 (FAX)