iMarketing Solutions Group Inc. reports results for year ended December 31, 2011

(in thousands of Canadian dollars except per share data)

	3 Months Ended December 31, 2011	3 Months Ended December 31, 2010	Year Ended December 31, 2011	Year Ended December 31, 2010
Revenue	18,742	21,803	83,767	85,232
Net Earnings/(Loss)	(6,109)	(782)	(5,253)	232
EBITDA	(2,856)	(666)	(87)	961
EPS (Basic)	(0.19)	(0.02)	(0.16)	0.01
EPS (Fully diluted)	(0.19)	(0.02)	(0.16)	0.01

 

CALGARY, April 30, 2012 /CNW/ - iMarketing Solutions Group Inc. (TSX Venture Exchange: XDM) a North American specialty events and relationship marketing company, today reported its financial results for the year ended December 31, 2011.

The amounts in this earnings release, MD&A and audited financial statements for the year ended December 31, 2011, 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 audited financial statements. 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 and year ended December 31, 2011 and as at the Balance Sheet date January 1, 2010.

Net loss for the three months ended December 31, 2011 amounted to 6,109 or $0.19 per share on a fully diluted basis.  This compares to the net loss for the three months ended December 31, 2010 of 782 or $0.02 per share on a fully diluted basis.  Net loss for the year ended December 31, 2011 amounted to 5,253 or $0.16 per share on a fully diluted basis.  This compares to the net earnings for the year ended December 31, 2010 of 232 or $0.01 per share on a fully diluted basis.  Net earnings for the year ended December 31, 2010, as restated and under IFRS, include a positive earnings adjustment of 891 thousand reflecting a business combination executed in March 2010. The net loss for the year-ended December 31, 2011 includes a deferred income tax expense of 2,504 which arose as part of the Company's valuation of its probable future tax assets in light of its current stage of business.

EBITDA for the three months and year ended December 31, 2011 amounted to (2,856) and (87) respectively.  This compares to EBITDA for the three months and year ended December 31, 2010 of (666) and 961 respectively.

The Company is in the process of a complete restructuring, rationalization and technology upgrade during which time there will be significant transformation of the Company operations. Until that process is complete in 2012 it will be necessary to maintain parallel information technology platforms together with the associated duplication of costs.  The company has recorded a one-time charge in the fourth quarter of 2011 totaling 895 consisting of employee severance related expenses largely arising from the closure of the Company's Calgary facility as well as information technology integration activities.

Management believes that its restructuring, rationalization and upgrade plans will yield significant cost reductions and much greater operating efficiencies into the future.

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.

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.

  

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

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Financial Position
(In thousands of Canadian dollars)

As at		December 31,		December 31,		January 1,
		2011		2010		2010
Assets
Current assets
Cash	$	448	$	1,801	$	3,382
Trade and other receivables		8,242		9,686		6,555
Income taxes recoverable		-		16		-
Prepaid expenses and other current assets		1,110		1,729		959
Total current assets		9,800		13,232		10,896
Equipment		4,020		4,574		2,298
Intangible assets		2,111		2,376		57
Deferred income taxes		-		2,626		2,391
Total assets	$	15,931	$	22,808	$	15,642
Liabilities
Current liabilities
Bank indebtedness	$	498	$	962	$	-
Trade and other payables		6,331		7,347		4,533
Other provisions		153		-		-
Income taxes payable		-		-		66
Due to related parties		-		400		-
Deferred revenue		268		326		436
Accrued restructuring charges		543		-		-
Bank loans		144		478		33
Total current liabilities		7,937		9,513		5,068
Deferred tenant inducement		56		139		195
Accrued restructuring charges - non-current		352		-		-
Deferred income taxes		1,275		1,410		838
Finance lease obligation		31		-		-
Total liabilities		9,651		11,062		6,101

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Financial Position (continued)
(In thousands of Canadian dollars)

As at		December 31,		December 31,		January 1,
		2011		2010		2010
Shareholders' equity
Share capital		10,791		10,902		8,765
Contributed surplus		678		664		646
Accumulated other comprehensive loss		(4,358)		(4,242)		(4,060)
Retained earnings (deficit)		(831)		4,422		4,190
Total shareholders' equity		6,280		11,746		9,541
Total liabilities and shareholders' equity	$	15,931	$	22,808	$	15,642

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Operations
(In thousands of Canadian dollars, except per share amounts)

For the years ended December 31,			2011		2010
Revenue		$	83,767	$	85,232
Cost of revenue			61,599		62,244
Gross margin			22,168		22,988
Operating expenses
Branch overhead and corporate administration			22,255		22,027
Depreciation of equipment			1,448		1,330
Amortization of intangible assets			265		222
Total operating expenses			23,968		23,579
Operating loss			(1,800)		(591)
Non-operating income (expense)
Interest expense			(79)		(98)
Restructuring charges			(895)		-
Transaction costs for business combination			-		(291)
Bargain purchase gain on business combination			-		1,182
Total non-operating income (expense)			(974)		793
Earnings before income taxes			(2,774)		202
Income tax expense (recovery)
Current income tax expense (recovery)			(25)		142
Deferred income tax expense (recovery)			2,504		(172)
Total income tax expense (recovery)			2,479		(30)
Net earnings (loss) for the year		$	(5,253)	$	232
	Basic earnings (loss) per share	$	(0.16)	$	0.01
	Diluted earnings (loss) per share	$	(0.16)	$	0.01
	Basic weighted average number of shares outstanding		32,206		31,568
	Diluted weighted average number of shares outstanding		32,206		31,747

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars)

For the years ended December 31,		2011		2010
Net earnings (loss) for the year	$	(5,253)	$	232
Foreign currency translation change		(116)		(182)
Comprehensive income (loss) for the year	$	(5,369)	$	50

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Changes in Equity
(In thousands of Canadian dollars)

For the years ended December 31,																2011		2010
Share capital
Balance, beginning of year															$	10,902	$	8,765
Issued for business combination																-		2,322
Issued for business combination under collateralized note																-		534
Exercise of options																-		33
Repurchase and cancellation of shares																(111)		(218)
Share purchase financing																-		(534)
Balance, end of year															$	10,791	$	10,902

Contributed surplus
Balance, beginning of year																												$	664	$	646
Gain on share purchase from book value																													14		18
Balance, end of year																												$	678	$	664

Accumulated other comprehensive loss
Balance, beginning of year																							$	(4,242)	$	(4,060)
Foreign currency translation change																								(116)		(182)
Balance, end of year																							$	(4,358)	$	(4,242)

Retained earnings (deficit)
Balance, beginning of year																																		$	4,422	$	4,190
Net earnings (loss) for the year																																			(5,253)		232
Balance, end of year																																		$	( 831)	$	4,422

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)

For the years ended December 31,										2011		2010
Cash flow from (used in) operating activities
Net earnings (loss) for the year									$	(5,253)	$	232
Items not affecting cash:
Depreciation of equipment										1,448		1,330
Amortization of intangible assets										265		222
Adjustment for non-cash tenant inducement rent credit										(83)		(83)
Deferred income tax expense (recovery)										2,504		(172)
Bargain purchase gain on business combination										-		(1,182)
Restructuring charges										895		-
										(224)		347
Non-cash working capital
Trade and other receivables										1,444		(647)
Prepaid expenses and other current assets										619		328
Trade and other payables										(152)^(a)		776^(a)
Other provisions										153		-
Deferred revenue										(58)		(110)
Income taxes recoverable										16		279
Change in non-cash working capital items										2,022		626
Cash flow from operating activities										1,798		973

Cash flow from (used in) financing activities
Repayment of bank indebtedness															(464)			(858)
Repayment of bank loans															(334)			(284)
Repayment of finance lease obligation															(5)			-
Repayments to related parties															(400)			-
Advances from related parties															-			300
Repurchase of share capital															(97)			(200)
Issuance of shares on option exercise															-			33
Cash flow used in financing activities															(1,300)			(1,009)

iMarketing Solutions Group Inc.
(formerly Xentel DM Inc.)
Consolidated Statements of Cash Flows (continued)
(In thousands of Canadian dollars)

For the years ended December 31,																						2011		2010
Cash flow used in investing activity
Investment in equipment																						(1,839)^(a)		(1,453)^(a)
Cash flow used in investing activity																						(1,839)		(1,453)

Effect of exchange rate fluctuations on cash balances								(12)		(92)
Net decrease in cash								(1,353)		(1,581)
Cash, beginning of year								1,801		3,382
Cash, end of year							$	448	$	1,801

Supplemental information
Cash payments (receipts)
			•     Income taxes paid						$			269			$	228
			•     Income taxes recovered						$			(310)			$	(339)
			•     Interest paid						$			79			$	98

(a)	During fiscal 2010 the Company acquired equipment in the amount of $981 which was unpaid and included in trade and other payables as of December 31, 2010.  Cash flows from (used in) investing and operating activities have been adjusted to reflect the payment of this amount in fiscal 2011.

 Amounts paid for interest are included in cash flows from operating activities in the consolidated statements of cash flows.

 

 

 

 

For further information:

3710 Westwinds Dr NE, Unit 24
Calgary, AB  T3J 5H3
Tel: [phone]  Fax:[phone]