Invesprint Corporation

Invesprint Corporation

March 14, 2005 10:56 ET

Invesprint Corporation Announces Results For Third Quarter Ended January 31, 2005


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: INVESPRINT CORPORATION

TSX SYMBOL: INV

MARCH 14, 2005 - 10:56 ET

Invesprint Corporation Announces Results For Third
Quarter Ended January 31, 2005

TORONTO, ONTARIO--(CCNMatthews - March 14, 2005) - Invesprint
Corporation (TSX:INV) today announced its results for the third quarter
ended January 31, 2005.

On December 10, 2004, the Company announced that its subsidiary,
Jonergin Pacific, Inc. ("Jonergin Pacific") had ceased operations and
had reached a full and final settlement with all of its secured lenders.
In addition, the Company was fully released from its guarantee
obligations to these lenders. In the following commentary and attached
financial statements, Jonergin Pacific is treated as a discontinued
operation and comparative figures have been restated. The Company's only
remaining operating business is the Jonergin Division.

Sales for the third quarter of fiscal 2005 were $3.4 million compared to
$3.2 million in the third quarter of fiscal 2004. Sales for the nine
months ended January 31, 2005 were $10.9 million compared to $11.8
million in the same period last year. Year to date, the lower level of
sales in fiscal 2005 reflects the very competitive environment in which
the Company continues to operate. Consolidated gross margin expressed as
a percentage of sales was 12.6% in the third quarter this year compared
to 13.7% in the same period last year. Selling, general and
administrative expenses were 12% lower than in the second quarter last
year and 32% lower year-to-date. Administrative expenses include both
Jonergin and corporate expenses. Administrative expenses for the first
nine months of fiscal 2004 include severance expense of $74,000 related
to the closing of the corporate office in Toronto.

The loss from continuing operations for the third quarter was $173,000
($0.03 per share) compared to a loss of $227,000 ($0.04 per share) for
the third quarter of fiscal 2004. The net loss for the third quarter was
$1,527,000 ($0.29 per share) compared to a net loss of $609,000 ($0.12
per share) in the same period a year ago. For the nine months ended
January 31, 2005 the loss from continuing operations was $539,000 ($0.10
per share) compared to a loss of $825,000 ($0.15 per share) in the same
period last year. The net loss (including loss from discontinued
operations) for the first nine months of fiscal 2005 was $2,755,000
($0.52 per share) compared to a net loss of $2,642,000 ($0.50 per share)
last year.

Jonergin Pacific's operating loss and costs associated with the closure
totaled $1,354,000 in the third quarter and $2,216,000 for the nine
months ended January 31, 2005. These amounts are shown as "loss from
discontinued operations" in the financial statements.

As previously announced, on February 25, 2005, the Company entered into
a support agreement pursuant to which Metro Label Group Inc. will cause
a wholly owned subsidiary to offer to acquire all of the outstanding
common shares of Invesprint for a cash consideration of $1.20 per share
by way of a public takeover bid. The equity value of the acquisition,
assuming that all 5,333,600 Invesprint common shares outstanding are
tendered to the offer, is approximately $6.4 million, which implies a
total enterprise value of approximately $9 million.

The Board of Directors of Invesprint has unanimously agreed to support
the offer and will recommend that Invesprint shareholders tender their
shares. Invesprint's Board of Directors has received an opinion from its
independent financial advisor, The Hathaway Corporation, that the offer
is fair to Invesprint's shareholders from a financial point of view. The
offer documents are expected to be mailed to all shareholders within the
next ten days.

For over 50 years, Invesprint's Jonergin Division has been making high
quality labels in St-Hubert, Quebec.



INVESPRINT CORPORATION

Consolidated Statements of Operations
(unaudited)

Three months ended Nine months ended
January 31 January 31
thousands of dollars except
per share amounts 2005 2004 2005 2004
------------------------------------------

Sales from continuing
operations $ 3,462 $ 3,243 $ 10,855 $ 11,801

Cost of sales 3,026 2,799 9,597 10,243
---------- --------- ---------- ---------

Gross profit 436 444 1,258 1,558

Expenses
Selling 199 219 711 852
General and administrative 423 489 1,095 1,795
---------- --------- ---------- ---------
622 708 1,806 2,647
---------- --------- ---------- ---------

Loss from continuing
operations before interest
expense and income taxes (186) (264) (548) (1,089)

Interest expense 39 25 123 81
---------- --------- ---------- ---------

Loss from continuing
operations before
income taxes (225) (289) (671) (1,170)

Recovery of income taxes (52) (62) (132) (345)
---------- --------- ---------- ---------

Loss from continuing
operations (173) (227) (539) (825)

Discontinued operations
- note 4 (1,354) (382) (2,216) (1,817)
---------- --------- ---------- ---------

Net loss for the period (1,527) (609) (2,755) (2,642)

Deficit - Beginning of
period (13,588) (4,309) (12,360) (2,276)

---------- --------- ---------- ---------
Deficit - End of period $ (15,115) $ (4,918) $ (15,115) $ (4,918)
---------- --------- ---------- ---------
---------- --------- ---------- ---------

Loss per share from
continuing operations
Basic and diluted $ (0.03) $ (0.04) $ (0.10) $ (0.15)
---------- --------- ---------- ---------
---------- --------- ---------- ---------

Net loss per share for
the period
Basic and diluted $ (0.29) $ (0.12) $ (0.52) $ (0.50)
---------- --------- ---------- ---------
---------- --------- ---------- ---------

Common shares issued and
outstanding 5,333,600 5,333,600 5,333,600 5,333,600

Stock options unexercised 98,000 254,000 98,000 254,000



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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Invesprint Corporation
    Leland Verner
    Acting Chief Executive Officer
    (416) 823-7474