iMarketing Solutions Group Inc.
TSX VENTURE : XDM

iMarketing Solutions Group Inc.

August 29, 2011 18:57 ET

iMarketing Solutions Group Inc. Reports Second Quarter June 30, 2011 Results

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



($000's)
3 Months
Ended
June 30, 2011
3 Months
Ended
June 30, 2010
6 Months
Ended
June 30, 2011
6 Months
Ended
June 30, 2010
Revenue 23,798 24,153 48,713 45,367
Net Earnings 878 812 1,466 2,178
EBITDA 1,790 1,529 3,277 2,396
EPS (Basic) $ 0.03 $ 0.02 $ 0.05 $ 0.07
EPS (Fully diluted) $ 0.03 $ 0.02 $ 0.05 $ 0.07

iMarketing Solutions Group Inc., a North American specialty entertainment and relationship marketing company, today reported its financial results for the six months ending June 30, 2011.

The amounts in this earnings release, MD&A and interim financial statements for the six months ended June 30, 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 six months ended June 30, 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 and six months ended June 30, 2010, and for the year ended December 31, 2010.

Net earnings for the three months ended June 30, 2011 amounted to $878 thousand or $0.03 per share on a fully diluted basis. This compares to the net earnings for the three months ended June 30, 2010 of $812 thousand or $0.02 per share on a fully diluted basis. Net earnings for the six months ended June 30, 2011 amounted to $1,466 thousand or $0.05 per share on a fully diluted basis. This compares to the net earnings for the six months ended June 30, 2010 of $2,178 thousand or $0.07 per share on a fully diluted basis. Net earnings for the six months ended June 30, 2010, as restated under IFRS, include a positive earnings adjustment of $988 thousand reflecting the merger executed in March 2010.

EBITDA for the three and six months ended June 30, 2011 amounted to $1,790 and $3,277 respectively. This compares positively to EBITDA for the three and six months ended June 30, 2010 of $1,529 and $2,396 respectively.

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.

iMarketing Solutions Group Inc.
Consolidated Statements of Financial Position
Unaudited
(In thousands of Canadian dollars)
As at June 30, December 31, January 1,
2011 2010 2010
Assets
Current assets
Cash and cash equivalents $ 259 $ 2,322 $ 3,445
Accounts receivable 10,847 9,923 6,555
Income taxes recoverable - 16 -
Prepaid expenses and other current assets 2,208 1,604 959
Total current assets 13,314 13,865 10,959
Equipment 4,886 3,658 2,298
Intangible assets 2,003 2,235 57
Deferred income taxes 2,559 2,626 2,391
Goodwill - - 1,064
Total assets $ 22,762 $ 22,384 $ 16,769
Liabilities
Current liabilities
Bank indebtedness $ 1,249 $ 1,483 $ 63
Accounts payable and accrued liabilities 5,379 6,131 4,969
Income taxes payable - - 66
Due to related parties - 400 -
Deferred revenue 435 518 -
Current portion of long term liabilities 394 561 89
Total current liabilities 7,457 9,093 5,187
Deferred tenant inducement 14 56 139
Deferred income taxes 1,873 1,067 838
Long term debt 34 - -
Total liabilities 9,378 10,216 6,164
Shareholders' equity
Share capital 10,744 10,797 8,765
Contributed surplus 774 769 646
Accumulated other comprehensive loss (4,060) (3,858) (3,655)
Retained earnings 5,926 4,460 4,849
Total shareholders' equity 13,384 12,168 10,605
Total liabilities and shareholders' equity $ 22,762 $ 22,384 $ 16,769
iMarketing Solutions Group Inc.
Consolidated Statements of Operations
Unaudited
(In thousands of Canadian dollars, except per share amounts)
Three months ended Six months ended
For the periods ended June 30 2011 2010 2011 2010
Revenue $ 23,798 $ 24,153 $ 48,713 $ 45,367
Cost of revenue 16,884 16,891 34,922 32,803
Gross margin 6,914 7,262 13,791 12,564
Operating expenses
Branch overhead and corporate administration 5,124 5,733 10,514 10,168
Depreciation of equipment 400 386 725 619
Amortization of intangible assets 97 2 212 4
Transaction charges for business combination - 58 - 291
Bargain purchase gain - - - (1,231)
Total operating expenses 5,621 6,179 11,451 9,851
Operating earnings 1,293 1,083 2,340 2,713
Non operating income (expense)
Interest expense (18) (30) (46) (41)
Total non operating income (expense) (18) (30) (46) (41)
Earnings before income taxes 1,275 1,053 2,294 2,672
Income tax expense
Current income tax expense - 195 - 329
Deferred income tax expense 397 46 828 165
Total income tax expense 397 241 828 494
Net earnings for the period $ 878 $ 812 $ 1,466 $ 2,178
Basic earning per share $ 0.03 $ 0.02 $ 0.05 $ 0.07
Diluted earnings per share $ 0.03 $ 0.02 $ 0.05 $ 0.07
Basic weighted average number of shares outstanding 32,323 33,254 32,345 30,379
Diluted weighted average number of shares outstanding 32,509 33,440 32,542 30,287
iMarketing Solutions Group Inc.
Consolidated Statements of Comprehensive Income (Loss)
Unaudited
(In thousands of Canadian dollars, except per share amounts)
Three months ended Six months ended
For the periods ended June 30 2011 2010 2011 2010
Net earnings for the period $ 878 $ 812 $ 1,466 $ 2,178
Foreign currency translation adjustment from self sustaining foreign operations 20 (400) (202) (20)
Comprehensive income for the period $ 898 $ 412 $ 1,264 $ 2,158
iMarketing Solutions Group Inc.
Consolidated Statements of Changes in Equity
Unaudited
(In thousands of Canadian dollars, except per share amounts)
Three months ended Six months ended
For the periods ended June 30 2011 2010 2011 2010
Share capital
Balance, beginning of period $ 10,797 $ 10,993 $ 10,797 $ 8,765
Issued for business combination - - - 2,217
Issued for business combination under collateralized note - - - 534
Exercise of options - 22 - 33
Repurchase and cancellation of shares (53) - (53) -
Share purchase financing - - - (534)
Balance, end of period $ 10,744 $ 11,015 $ 10,744 $ 11,015
Contributed surplus
Balance, beginning of period $ 769 $ 751 $ 769 $ 646
Discount from book value on share repurchase 5 - 5 -
Fair value of shares financed by promissory note - - - 105
Balance, end of period $ 774 $ 751 $ 774 $ 751
Accumulated other comprehensive loss
Balance, beginning of period $ (4,080) $ (3,275) $ (3,858) $ (3,655)
Foreign currency translation change 20 (400) (202) (20)
Balance, end of period $ (4,060) $ (3,675) $ (4,060) $ (3,675)
Retained earnings
Balance, beginning of period $ 5,048 $ 6,215 $ 4,460 $ 4,849
Net earnings for the period 878 812 1,466 2,178
Balance, end of period $ 5,926 $ 7,027 $ 5,926 $ 7,027
iMarketing Solutions Group Inc.
Consolidated Statements of Cash Flows
Unaudited
(In thousands of Canadian dollars, except per share amounts)
Three months ended Six months ended
For the periods ended June 30 2011 2010 2011 2010
Cash flow from (used in) operating activities
Net earnings for the period $ 878 $ 812 $ 1,466 $ 2,178
Items not affecting cash:
Depreciation of equipment 400 386 725 619
Amortization of intangible assets 97 2 212 4
Adjustment for non cash tenant inducement rent credit (21) (21) (42) (40)
Deferred income tax expense 397 47 833 165
Bargain purchase gain - - - (1,231)
1,751 1,226 3,194 1,695
Non cash working capital
Accounts receivable 2,487 (309) (1,006) (1,158)
Prepaid expenses and other current assets 300 (762) (632) (190)
Accounts payable and accrued liabilities (2,702) 168 (803) 516
Income taxes recoverable/payable - (561) - (824)
Change in non cash working capital items 85 (1,464) (2,441) (1,656)
Cash flow from (used in) operating activities 1,835 (238) 753 39
Cash flow from (used in) financing activities
Increase (decrease) in bank indebtedness (1,452) 529 (232) (157)
Long term debt repaid (83) (85) (167) (115)
(Repayments to) advances from related parties (200) (100) (400) 300
Issuance of shares on option exercise - 22 - 33
Repurchase of share capital (47) - (47) -
Capital lease financing 35 - 35 -
Cash flow from (used in) financing activities (1,747) 366 (811) 61
Cash flow from (used in) investing activities
Investment in equipment (443) (259) (1,974) (427)
Adjustment for transaction costs for business combination expensed above - 58 - 291
Cash flow from (used in) investing activities (443) (201) (1,974) (136)
Effect of exchange rate fluctuations on cash and cash equivalents 4 18 (31) (13)
Net increase (decrease) in cash and cash equivalents (351) (55) (2,063) (49)
Cash and cash equivalents, beginning of period 610 3,451 2,322 3,445
Cash and cash equivalents, end of period $ 259 $ 3,396 $ 259 $ 3,396

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

Contact Information

  • iMarketing Solutions Group Inc.
    Corporate Office East
    8000 Jane St, Tower A, Suite 401
    Concord, ON L4K 5B8
    416-633-4646
    Fax: 416-633-4643

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