Cossette - 2009 Second Quarter Results - Gross income at $55.1 million, earnings from operations at $0.1 million



    KOS (TSX)

    QUEBEC CITY, May 6 /CNW Telbec/ - Cossette Inc. ("Cossette" or the
"Company") recorded gross income of $55.1 million for the second quarter of
fiscal 2009, ended March 31, 2009, compared to $60.1 million in the
corresponding quarter of the previous fiscal year. Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA)(1) amounted to $2.4 million for
the second quarter of fiscal year 2009, ended March 31, 2009, compared to $4.3
million in the corresponding quarter of fiscal year 2008. For the quarter,
Earnings from operations were $0.1 million, compared with $2.3 million in
2008. Net loss amounted to $0.5 million ($0.03 per share), compared to net
earnings of $0.9 million ($0.05 per share) for the second quarter of 2008. For
the quarter, cash flows from operating activities before changes in non-cash
working capital items reached $2.0 million, compared with $4.0 million in
2008.
    "During this quarter our results were visibly impacted by the negative
economic environment, as were most of the businesses in our sector. In this
context, we have managed with care and are taking measures to reduce our cost
base while continuing to invest in our future," said Claude Lessard, Chairman
of the Board, Chief Executive Officer and President. "Though in some regions
performance is better than in others, we are seeking to develop new business
opportunities provided by the economic context in all our markets, and to
invest in the quality of our spectacular product by hiring top senior
resources. With an effective and exceptional team, we expect to be
well-positioned when the economic environment picks up the pace" he concluded.
    The Company reports that this quarter it obtained an insurance policy
minimizing its exposure to the credit risk of certain clients. This measure is
part of a series of steps taken by the Company in order to reduce its
financial risk and protect its current and future cash flows.
    First Half Review - For the six-month period ended March 31, 2009, gross
income amounted to $113.0 million, compared to $119.3 million reported in the
first half of fiscal 2008. EBITDA amounted to $8.1 million for the six-month
period ended March 31, 2009, compared to $11.8 million in the corresponding
period of fiscal 2008. Earnings from operations for the first half of fiscal
2009 were $3.6 million as compared to $7.8 million for the same period in
2008. Net earnings in the first half of fiscal 2009 were $1.0 million ($0.06
per share) down from $4.2 million ($0.25 per share) for the same period in
fiscal 2008.
    Cash flows from operating activities before changes in non-cash working
capital items in the first six months of fiscal 2009 were $6.7 million as
compared to $9.6 million for the same period of fiscal year 2008.
    Management's Discussion and Analysis, containing a full analysis of
financial results, is available on SEDAR (www.sedar.com).

    Cossette Inc. offers a full range of leading-edge communication services
to clients of all sizes, including some of the most prestigious brands in the
world. A customer-driven organization built around highly specialized business
units, Cossette also offers Convergent Communications(TM), a unique working
method that brings added value to the client by integrating various services
offered by the Group, including strategic planning and research, advertising,
media buying and channel planning, sales promotion, direct response, database
and direct marketing, customer relationship management, interactive marketing
and technology solutions, public relations, organizational communication and
change management, sponsorship and alliance marketing, branding and design,
ethnic marketing, business-to-business communications (B2B practices) and
print and video production. Cossette has approximately 1,630 employees and
offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York,
Irvine, Los Angeles, London and Shanghai.

    Forward-looking statements - This press release may contain statements
that are forward-looking in nature. These forward-looking statements may
involve, but are not limited to, comments with respect to the Company's
business or financial objectives, its strategies or future actions, its
targets, expectations for financial condition or outlook for operations and
future earn-out and additional equity interest obligations. Forward-looking
statements are not guarantees of future performance and actual results may
differ materially from those in the forwardlooking statements as a result of
various factors, including downturns in general economic conditions and
resulting changes in client business and marketing strategies, consolidation
and globalization of client brand strategies, the highly competitive nature of
the communications industry, the greater resources available to much larger
global agencies, low entry barriers for new competitors, dependence upon a
limited number of clients contributing a significant percentage of income,
inability to acquire new clients or new assignments from existing clients due
to client policies prohibiting performance of similar services for competing
products or companies, the Company's ability to successfully integrate
acquired and to-beacquired businesses and the retention of key management,
creative and technical personnel. Assumptions relating to the foregoing
involve judgments and risks, all of which are difficult or impossible to
predict accurately and many of which are beyond the control of the Company.
Although management believes that the expectations reflected in the
forward-looking statements are reasonable based on information currently
available, it cannot assure that the expectations will prove to have been
correct. Accordingly, undue reliance should not be placed on forward-looking
statements.

    Financial analysts are invited to participate in a conference call with
management tomorrow May 7, 2009, at 10:00 a.m. The media and any stakeholders
may attend the call in listening mode only. Please dial (514) 392-9193 or
866-696-5911 (Canada & US) or 00-800-9559-6849 (Global Toll Free). A replay
will be available at (514) 861-2272 or 800-408-3053, passcode 7355620# until
May 23, 2009 and on the investor relations section of our website at
www.cossette.com.

    Appendix: Selected Financial Information

    
               Cossette Inc. - Selected Financial Information
       (in thousands of Canadian dollars, except the number of shares
                             and per share data)

    Results for the 3-month period ended March 31, 2009 (unaudited)

                                                            2009        2008

    Gross income                                          55,085      60,050
    Salary, general and administrative expenses           52,689      55,743
    EBITDA(1)                                              2,396       4,307
    Earnings from operations                                 111       2,290
    Earnings before income taxes and non-controlling
     interest                                                233       2,439
    Earnings after income taxes                               65       1,544
    Non-controlling interest                                (613)       (672)
    Net earnings (loss)                                     (548)        872
    Cash flows from operations
     (before changes in non-cash working capital items)    2,002       3,999
    Net earnings (loss) per share
      Basic                                                (0.03)       0.05
      Diluted                                              (0.03)       0.05
    Weighted average number of shares outstanding ('000)
      Basic                                               15,797      16,578
      Diluted                                             15,797      16,621


    Results for the 6-month period ended March 31, 2009 (unaudited)

                                                            2009        2008

    Gross income                                         113,029     119,342
    Salary, general and administrative expenses          104,970     107,543
    EBITDA(1)                                              8,059      11,799
    Earnings from operations                               3,568       7,778
    Earnings before income taxes and non-controlling
     interest                                              3,871       8,110
    Earnings after income taxes                            2,258       5,358
    Non-controlling interest                              (1,239)     (1,135)
    Net earnings                                           1,019       4,223
    Cash flows from operations
     (before changes in non-cash working capital items)    6,670       9,638
    Net earnings per share
      Basic                                                 0.06        0.25
      Diluted                                               0.06        0.25
    Weighted average number of shares outstanding ('000)
      Basic                                               15,813      16,600
      Diluted                                             16,205      16,665


               Cossette Inc. - Selected Financial Information
                     (in thousands of Canadian dollars)

    Balance sheet
                                                           As at       As at
                                                        March 31,   Sept. 30,
                                                            2009        2008
                                                      (unaudited)   (audited)

    Cash and cash equivalents                             24,230      13,685
    Current assets                                       218,932     225,201
    Intangible assets                                      5,803       5,505
    Goodwill                                             102,298      93,122
    Total assets                                         351,554     348,356
    Short-term borrowings, including bank overdraft            -      37,649
    Current portion of long-term debt                         12          99
    Balances of purchase price of subsidiaries
     (current portion)                                     6,668      14,566
    Long-term debt                                        25,402         219
    Balances of purchase price of subsidiaries                 -         106
    Shareholders' equity                                 137,260     134,212

    (1) EBITDA is not a performance measure consistent with Canadian
        generally accepted accounting principles ("GAAP"). The information
        regarding measures not consistent with Canadian GAAP is contained in
        the Management's Discussion and Analysis filed on SEDAR.
    
    %SEDAR: 00012070EF




For further information:

For further information: Financial Analysts only: Martin Faucher,
Vice-President and Chief Financial Officer, (418) 521-3784; Investors: Francis
Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633;
Medias: Mathieu Claise, Optimum Public Relations, (418) 521-3770; Source:
Cossette Inc., www.cossette.com

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COSSETTE INC.

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