Mediagrif reports Q1 FY11 Financial results

    
    -   Net earnings of $2.6 million compared to a loss of $0.2 million for
        the first quarter of 2010;

    -   Earnings from operations of $3.4 million compared to $1.9 million for
        the first quarter of 2010;

    -   EBITDA of $3.7 million compared to $2.6 million for the first quarter
        of 2010;

    -   Revenues of $11.2 million compared to $11.7 million for the first
        quarter of 2010;

    -   Cash and cash equivalents reached $35.6 million on June 30, 2010
        compared to $25.5 million on June 30, 2009 and $34.4 million on
        March 31, 2010.
    

LONGUEUIL, QC, Aug. 3 /CNW Telbec/ - Mediagrif Interactive Technologies Inc. (TSX: MDF), a world-leading operator of e-commerce solutions, today announced its financial results for the first quarter of fiscal year 2011, ended June 30, 2010. Unless indicated otherwise, all amounts are in Canadian dollars.

FINANCIAL HIGHLIGHTS:

Revenues decreased in the first quarter of 2011 compared to the first quarter of 2010, from $11.7 million to $11.2 million.

Our business networks MERX, BidNet, GovernmentBids, Carrus and Interactive Procurement Technologies ("IPT") are showing healthy organic growth while economic conditions of North American markets are slighty turning around positively for The Broker Forum. However, revenues from Power Source On-Line, Market Velocity, Global Wine and Spirits and Polygon networks are still affected by the economic slowdown in their respective industries.

In original currencies, revenues decreased by $0.3 million for the first quarter of 2011 compared to the first quarter of 2010. Revenues earned in US dollars represent 56% of total revenues in the first quarter of 2011 compared to 59% in the first quarter of 2010. As a result, the variation in the value of the Canadian dollar compared to the US dollar combined with our hedge coverage generated a negative impact on revenues of $0.2 million during the first quarter of 2011.

Gross margin for the first quarter of 2011 remains stable at 76.9% compared to 77.5% for the first quarter of 2010.

Operating expenses for the first quarter of 2011 decreased to $5.2 million compared to $7.2 million for the first quarter of 2010. The decrease in operating expenses is explained by the following items:

    
    -   General and administrative expenses for the first quarter of 2011
        decreased to $1.6 million compared to $2.7 million for the first
        quarter of 2010. This decrease is mainly due to the general headcount
        reduction throughout the Company, to the reversal of a penalty of
        $0.2 million related to a tax assessment that was recorded in the
        first quarter of 2010 and to a better cost control.

    -   Sales and marketing expenses for the first quarter of 2011 decreased
        to $2.0 million compared to $2.3 million for the first quarter of
        2010 mainly due to the general headcount reduction throughout the
        Company and lower representation fees.

    -   Technology expenses for the first quarter of 2011 decreased to
        $1.8 million compared to $1.9 million for the first quarter of 2010
        also due to the general headcount reduction.

    -   Amortization of acquired intangible assets remained stable at
        $172,000 compared to the first quarter of 2010.

    -   Due to the cancellation of stock options in the first quarter of
        2011, a stock-based compensation expense was reversed and resulted in
        a credit of $360,000 compared to an expense of $67,000 for the first
        quarter of 2010.
    

Earnings from operations reached $3.4 million during the first quarter of 2011 compared to $1.9 million for the first quarter of 2010. This increase is mainly due to the reversal of a penalty related to a tax assessment, to the reversal of a stock-based compensation expense, to the general headcount reduction throughout the Company and to a better cost control.

The basic earnings per share amounted to $0.19 for the first quarter of 2011 compared to a basic loss of $0.01 for the first quarter of 2010. The basic weighted average number of common shares outstanding for the first quarters of 2011 and 2010 was 13.9 million and 14.0 million respectively.

As at June 30, 2010, our cash and cash equivalents amounted to $35.6 million, an increase compared to $25.5 million as at June 30, 2009 and $34.4 million as at March 31, 2010.

Free cash flow, defined as cash flows from operating activities less the acquisition of premises and equipment and intangible assets and dividends paid, amounted to $0.3 million in the first quarter of 2011 compared to the use of cash flow of $2.6 million in the first quarter of 2010. This increase is mainly due to better results in the first quarter of 2011 compared to the first quarter of 2010.

OTHER HIGHLIGHTS:

On March 3, 2010, the Company announced the renewal of its normal course issuer bid whereby it is authorized to purchase for cancellation for the twelve-month period which started on March 5, 2010 up to 695,425 common shares. No common share was purchased for cancellation during the three-month period ended June 30, 2010.

It is with pleasure that the Company announces the nomination of Mr. André Gauthier, President of Holding André Gauthier Inc., on August 3, 2010, on the board of directors of the Company, following the resignation of Mr. Patrice Commune on June 10, 2010.

About Mediagrif Interactive Technologies Inc.

Mediagrif Interactive Technologies Inc. (http://www.mediagrif.com/) (TSX: MDF) delivers innovative e-commerce solutions to businesses since 1996. Its networks operate as dedicated Web platforms within specific business sectors, enabling Mediagrif's clients to find, purchase and sell products, to exchange information and to access business opportunities with greater speed and efficiency. Mediagrif provides e-commerce solutions in the fields of electronics components, computer equipment and telecommunications, medical equipment, automotive aftermarket, wine & spirits, diamonds and jewelry and government opportunities. Several of Mediagrif's networks are industry leaders, including The Broker Forum (http://www.brokerforum.com/), Power Source On-Line (http://www.powersourceonline.com/), Market Velocity (http://www.marketvelocity.com/), Global Wine & Spirits (http://www.globalwinespirits.com/), Polygon (http://www.polygon.net/), BidNet (http://www.bidnet.com/) and MERX (http://www.merx.com/). Headquartered in Longueuil, Mediagrif has several 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 GAAP, the Company shows earnings from operations 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 premises and equipment and intangible assets presented in investing activities and less dividends paid presented in financing activities. Earnings from operations, EBITDA and free cash flow are not intended to be measures that should be regarded as an alternative to other financial operating performances prepared in accordance with Canadian GAAP. Those measures do not have a standardized meaning prescribed by GAAP 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 interim financial statements, accompanying notes and MD&A are available on www.mediagrif.com and have been filed with SEDAR.

For further information: Claude Roy, Chief Executive Officer, Mediagrif Interactive Technologies Inc., Tel.: [phone] ext. 2004, Toll Free: 1 877 677-9088 ext. 2004, Email: [email protected]; Suzanne Mercier, Chief Financial Officer, Mediagrif Interactive Technologies Inc., Tel.: [phone] ext. 2135, Toll Free: 1 877 677-9088 ext. 2135, Email: [email protected]