Fortsum Business Solutions Inc. Releases 2006 Financial Statements



    
    Financial Highlights

    - Consolidated annual revenues of $21.5M up 48% over 2005
    - EBITDA up 85% over 2005
    - Annual loss down 70% over 2005
    - Cash flows related to operating activities of $3,4 M, up 188% over 2005
    - Solid financial position - cash flows of $6.1M
    - End of large expense in terms of amortization of intangible assets of
      $4.7M
    

    QUEBEC, March 26 /CNW Telbec/ - Fortsum Business Solutions Inc.
(Fortsum Business Solutions) (TSX Venture Exchange: FRT) is pleased to present
shareholders with its financial results for fiscal 2006, which show
significant improvement over 2005.

    ANNUAL OPERATING RESULTS

    In 2006, the Corporation experienced a sharp increase in revenues, which
rose 48% to $21,539,789 compared with $14,551,397 and a 13% increase in the
previous year. This stellar performance resulted in large part from a targeted
acquisition strategy, which accounted for 37% of growth.
    For fiscal 2007, we anticipate significant overall revenue growth. This
expected growth will result from the impact of acquisitions made in 2006 in
the Integration segment, as these acquisitions will include twelve months of
operations. In addition, we expect to achieve revenue growth comparable to the
2006 level for the Manufacturing segment, as management gradually focuses
sales efforts on more profitable product lines. The Corporation continues to
seek attractive acquisition opportunities for both its Manufacturing and
Integration segments.

    EBITDA

    For the year ended December 31, 2006, EBITDA amounted to $2,483,612, up
85% from $1,344,146 in 2005. As a percentage of revenue, EBITDA stood at 12%
in 2006, compared with 9% in 2005.
    Management is confident there will be an overall improvement in EBITDA in
2007, primarily as a result of the corrective steps slated for gradual
implementation in the Integration segment during the year.

    Net Loss

    The Corporation's results improved significantly with a 70% reduction in
its loss for 2006, which stood at $393,990 compared with $1,302,314 in 2005.
This loss includes a charge of $1,906,250 for the amortization of intangible
assets originating primarily from the November 3, 2003 transaction. Note that
2006 saw the completion of the amortization of this transaction's
technological value, which will positively impact future results.
    Whereas fiscal 2005 was a transition year in which the Corporation sought
to establish a management structure designed to support its growth plan,
fiscal 2006 has provided, as expected, a clearer picture of the performance
and potential of its business model.
    The Manufacturing segment's operating structure is now generating
attractive profitability. As for the Integration segment, it presents an
equally positive yield potential, although first-year results fell below
management's objectives. Management will spare no effort to reach its target
returns for this segment. In light of the foregoing, management expects to
report positive results in 2007.

    Cash Flows Related to Operating Activities

    Cash flows related to operating activities of the Corporation amounted to
$3,446,673 for fiscal 2006, compared with $1,194,111 for 2005. This result
underscores the Corporation's effectiveness in generating significant
operating cash flows from year to year. This remarkable 188% increase in cash
flows related to operating activities resulted from the reduction in the loss
and stringent management of non-cash working capital items.

    Financial Position

    As at December 31, 2006, corporate liquidities, consisting of cash and a
temporary investment, totalled $6,094,177 compared with $5,851,738 as at
December 31, 2005. The Corporation's solid financial position is even more
enviable considering that a total of $2,799,134 was paid in respect of the
year's two business acquisitions and $752,787 was paid to service the
Corporation's long-term debt. In accordance with the corporate development
plan, a major portion of these cash resources are available for making
strategic acquisitions.

    
    SUMMARY OF QUARTERLY RESULTS


                                      1st Quarter ($)         2nd Quarter ($)
    -------------------------------------------------------------------------
                                March 31,   March 31,    June 30,    June 30,
                                    2006        2005        2006        2005
    Revenues
      Manufacturing            4,154,951   3,646,560   3,841,732   3,448,416
      Integration                 66,025           -   1,784,230           -
    -------------------------------------------------------------------------
                               4,220,976   3,646,560   5,625,962   3,448,416
    -------------------------------------------------------------------------

    Development costs            504,881     447,674     210,500     497,341

    EBITDA
      Manufacturing              558,106     388,027     792,408     138,964
      Integration               (114,371)          -      55,802           -
    -------------------------------------------------------------------------
                                 443,735     388,027     848,210     138,964
    -------------------------------------------------------------------------

    Amortization of intangible
     assets
      Manufacturing              511,368     514,536     511,368     514,536
      Integration                      -           -      39,500           -
    -------------------------------------------------------------------------
                                 511,368     514,536     550,868     514,536
    -------------------------------------------------------------------------

    Income (loss) before
     interest and income taxes
      Manufacturing                  758    (162,404)    232,571    (411,467)
      Integration               (137,771)          -     (20,763)          -
    -------------------------------------------------------------------------
                                (137,013)   (162,404)    211,808    (411,467)
    -------------------------------------------------------------------------

    Net earnings (loss)         (263,932)   (296,787)     37,688    (439,790)

    Basic and diluted net
     loss per share                (0,01)      (0,01)          -       (0,01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                      3rd Quarter ($)         4th Quarter ($)
    -------------------------------------------------------------------------
                                Sept. 30,   Sept. 30,    Dec. 31,    Dec. 31,
                                    2006        2005        2006        2005
    Revenues
      Manufacturing            4,119,402   3,524,328   3,986,266   3,932,093
      Integration              1,519,465           -   2,067,718           -
    -------------------------------------------------------------------------
                               5,638,867   3,524,328   6,053,984   3,932,093
    -------------------------------------------------------------------------

    Development costs            424,134     469,376     545,035     335,129

    EBITDA
      Manufacturing            1,062,789     424,295     175,491     392,860
      Integration                (57,474)          -      10,861           -
    -------------------------------------------------------------------------
                               1,005,315     424,295     186,352     392,860
    -------------------------------------------------------------------------

    Amortization of intangible
     assets
      Manufacturing              511,368     534,259     250,246     528,096
      Integration                 39,500           -      42,900           -
    -------------------------------------------------------------------------
                                 550,868     534,259     293,146     528,096
    -------------------------------------------------------------------------
    Income (loss) before
     interest and income taxes
      Manufacturing              500,957    (149,644)   (122,624)   (181,506)
      Integration               (135,443)          -     (80,885)          -
    -------------------------------------------------------------------------
                                 365,514    (149,644)   (203,509)   (181,506)
    -------------------------------------------------------------------------

    Net earnings (loss)           95,685    (277,936)   (263,430)   (287,801)

    Basic and diluted net
     loss per share                    -       (0,01)      (0,01)      (0,01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                    Total ($)
    -------------------------------------------------------------------------
                                             Dec. 31,                Dec. 31,
                                                2006                    2005
    Revenues
      Manufacturing                       16,102,351              14,551,397
      Integration                          5,437,438                       -
    -------------------------------------------------------------------------
                                          21,539,789              14,551,397
    -------------------------------------------------------------------------

    Development costs                      1,684,550               1,749,520
    EBITDA
      Manufacturing                        2,588,794               1,344,146
      Integration                           (105,182)                      -
    -------------------------------------------------------------------------
                                           2,483,612               1,344,146
    -------------------------------------------------------------------------

    Amortization of intangible
     assets
      Manufacturing                        1,784,350               2,091,427
      Integration                            121,900                       -
    -------------------------------------------------------------------------
                                           1,906,250               2,091,427
    -------------------------------------------------------------------------

    Income (loss) before
     interest and income taxes
      Manufacturing                          611,662                (905,021)
      Integration                           (374,862)                      -
    -------------------------------------------------------------------------
                                             236,800                (905,021)
    -------------------------------------------------------------------------
    Net earnings (loss)                     (393,990)             (1,302,314)

    Basic and diluted net
     loss per share                            (0,01)                  (0,04)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Revenues

    In the fourth quarter of 2006, the Corporation's revenues totalled
$6,053,984 as compared to $3,932,093 in the corresponding quarter of the
previous year. This is the sixth consecutive quarterly increase, with revenues
up an exceptional 53% (51% for the Integration segment and 2% for the
Manufacturing segment) compared with the corresponding quarter of 2005.
    The slowdown in sales for the fourth quarter in the Manufacturing segment
had a major impact on the results for this period. However, the Corporation
experienced its best quarter ever in the fourth quarter of 2005. In
management's opinion, the pace of the Manufacturing segment's revenues will
pick up again in 2007. The newly created Integration segment reported its best
quarter from a revenue perspective in the fourth quarter of 2006, thanks in
part to the acquisition of Implanciel completed on November 30, 2006.

    EBITDA

    The Corporation reported EBITDA totalling $186,352 (3% of revenues) in
the fourth quarter of 2006 compared with EBITDA amounting to $392,860 (10% of
revenues) for the corresponding quarter of 2005.
    EBITDA for the period for the Manufacturing segment was $175,491 (4% of
revenues) compared with $392,860 (10% of revenues) for the corresponding
period of 2005. Two main factors were behind this variance: the recognition of
a research and development tax credit amounting to $226,958 in the fourth
quarter of 2005 and the recognition of nearly $100,000 in 2006 in
non-recurring expenses, such as restructuring fees, acquisition integration
costs as well as fees related to an uncompleted acquisition. The Integration
segment, for which management expects to take corrective steps to enhance its
profitability in 2007, generated modest EBITDA of $10,861 for the period in
question.
    Management believes that one-time factors specific to the fourth quarter
must be taken into account in the analysis of this financial indicator and
anticipates a return to higher EBITDA levels in the first quarter of 2007.

    Net loss

    Net loss reduced by 9% for the fourth quarter of 2006. Net loss for the
period stood at $263,430 compared with $287,801 for the corresponding period
of 2005. This reduction is owed primarily to the end, in October 2006, of the
amortization of the intangible assets related to the November 3, 2003
transaction, which will favourably impact the Corporation's results throughout
the next fiscal year.
    As a result, given the one-time factors and the impact of the future
reduction of its amortization of intangible asset expense, management remains
optimistic it will report positive results in 2007.

    Quarterly Fluctuations

    Fortsum Business Solutions is currently in a high growth cycle, which
necessarily results in fluctuations in its results due in part to business
acquisitions and the subsequent integration process, the launch of new
business divisions and the receipt of research and development tax credits.
The cash resources needed in connection with these activities also have an
impact on our cash flows. Setting up promotions at specific times of the year,
launching new products and intense periods of activity in certain segments of
our customer base also influence our quarterly financial results. In 2006, the
acquisitions completed in April and November have had a major impact on our
results, as did the start-up of our MBB business division.

    OUTLOOK

    "Fiscal 2007 looks promising for Fortsum Business Solutions. The
Corporation should continue to benefit from the various strategic and
operational initiatives launched in 2006, notably its business acquisitions,
and see another large increase in revenues in 2007," announced Corporate CEO,
François Taschereau upon releasing 2006 financial statements. "The
Manufacturing segment's target market is a more mature one and the potential
for organic growth is limited. Therefore, we will concentrate our efforts on
maximizing net profits in this activity sector, for which we are always
seeking attractive acquisition opportunities."
    "Concerning the Integration segment, while 2006 financial results for the
MBB division were not up to our expectations, significant strategic advances
were made in the markets targeted by this division. Management is confident
that major business agreements will produce positive results for this division
over the next fiscal year. In general, we predict an improvement in results
for the Integration segment over those for 2006. In addition to posting a full
12 months' income from our new subsidiaries, we plan to concentrate efforts on
developing synergy between these organizations and the Manufacturing segment
to maximize profits generated by this segment as well on following our growth
by acquisition plan," added Taschereau.

    Corporate financial statements and the MD&A are available at
www.sedar.com and on our Web site at www.fortsum.com.

    About Fortsum Business Solutions

    Fortsum Business Solutions Inc. is mainly involved in the development,
integration, marketing and support of accounting, commercial and banking data
management software. For more information: www.fortsum.com.

    Forward-looking Information

    This press release may contain forward-looking information. Statements
based on current management expectations involve inherent risks and
uncertainties, both known and unknown. Actual results may vary from forecasts.
The reader should not place undue faith in forward-looking information.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of the release.
    %SEDAR: 00019855EF




For further information:

For further information: François Taschereau, Chief Executive Officer,
ftaschereau@fortsum.com; Dany Beaudet, Shareholder Communications Coordinator,
(418) 877-0088, ext. 2272, Toll-free: 1-888-268-0088, Fax: (418) 877-9994,
dbeaudet@fortsum.com

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FORTSUM BUSINESS SOLUTIONS INC.

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