Mediagrif Reports Q3 FY2009 Financial Results



    
    - Revenues stable at $12.2 million
    - Net earnings of $2.6 million compared to $0.6 million in the previous
      quarter mainly due to the reversal of a tax provision
    - EPS of $0.18 compared to $0.04 in the previous quarter
    - Cash position increased to $27.7 million from the corresponding nine-
      month period of last year due to positive cash flow generated by
      operations
    

    Note: Unaudited financial statements, accompanying notes and MD&A are
    available on www.mediagrif.com and have been filed with SEDAR. All dollar
    figures are in Canadian dollars, unless otherwise specified.

    LONGUEUIL, QC, Feb. 6 /CNW Telbec/ - Mediagrif Interactive Technologies
Inc. (TSX: MDF), a world-leading developer of e-business networks and provider
of complete <a href="http://www.mediagrif.com/">B2B</a> <a href="http://www.mediagrif.com/">e-business solutions</a>, today announced its financial results
for the third quarter of fiscal year 2009, ended December 31, 2008.
    Revenues for the quarter remain stable at $12.2 million compared to the
corresponding quarter of last year. Again this quarter, most of Mediagrif's
<a href="http://www.mediagrif.com/">e-business networks</a> experienced better organic growth, especially MERX,
BidNet, Market Velocity ("MVI"), Carrus Technologies ("Carrus") and Global
Wine & Spirits ("GWS"). Such growth was partially offset by a decrease in the
revenues of The Broker Forum ("TBF") and Power Source On-Line ("PSO").
    Operating expenses increased to $10.7 million during the third quarter
from $8.9 million in the corresponding quarter of last year mainly due to
non-recurring expenses regarding severance payments of $1.6 million, to the
write-off of capitalized acquisition costs for an unrealized acquisition for
$0.4 million and to higher bad debts due to economic environment.
    Loss from operations amounted to $1.4 million as compared to an earning
of $0.6 million in the corresponding quarter of last year. Net earnings and
basic earnings per share for the third quarter amounted to $2.6 million or
$0.18 per share, as compared to $0.6 million or $0.04 per share for the
corresponding quarter of the previous year, mainly due to the reversal of a
tax provision.

    KEY FINANCIAL HIGHLIGHTS OF Q3 FY2009:

    Revenues for the quarter remained stable at $12.2 million compared to the
corresponding quarter of last year. The foreign exchange fluctuation
positively impacted the quarterly revenues by $0.3 million. Again this
quarter, most of Mediagrif's <a href="http://www.mediagrif.com/">e-business networks</a> experienced better organic
growth, especially MERX, BidNet, MVI, Carrus and GWS. Such growth was offset
by a decrease in TBF due to lower membership as well as a decrease in PSO,
caused by lower average revenue per members. On a constant currency basis,
total revenues decreased by $0.2 million compared to last quarter.
    Revenues for the nine-month period ended December 31, 2008 reached $36.1
million, as compared to $35.6 million in the corresponding period of the
previous year. The foreign exchange fluctuation negatively impacted revenues
by $0.8 million. Most of Mediagrif's <a href="http://www.mediagrif.com/">e-business networks</a> such as MERX, Carrus,
BidNet, CBI and GWS showed particularly healthy growth as compared to the
corresponding period of last year. Such growth was offset by a decrease in TBF
due to lower membership revenues as well as a decrease in PSO, caused by lower
average revenue per members. On a constant currency basis, total revenues
increased by $1.3 million compared to last year.
    Gross margin as a percentage of revenue decreased to 76.1% during the
quarter and 76.6% during the nine-month period as compared to 78.1% for the
previous quarter and 79.6% for the nine-month period. The decrease is
explained by the impact of EPI and Carrus, which have a lower gross margin.
    Total operating expenses for the quarter amounted to $10.7 million as
compared to $ 8.9 million for the previous year. General and administrative
charges increased to $4.8 million as compared to $3.1 million in the
corresponding quarter of last year. This increase is mainly due to
non-recurring expenses regarding severance payments of $1.6 million and to the
write-off of capitalized acquisition costs for an unrealized acquisition for
$0.4 million. Sales and marketing expenses increased from $2.9 million last
year to $3.2 million for the quarter ended December 31, 2008. This is
attributable to higher bad debts due to economic environment. Technology
expenses remained stable at $2.1 million as compared to the corresponding
quarter of last year. The amortization of acquired intangible assets decreased
from $0.6 million to $0.4 million. Lastly, the Stock-based compensation
expense remained stable at $0.2 million as compared to the corresponding
quarter of last year.
    For the nine-month period, total operating expenses amounted to $27.7
million as compared to $25.2 million for the previous year. General and
administrative expenses increased from $9.1 million to $11.1 million mainly
due to non-recurring expenses regarding severance payments of $1.7 million and
to the write-off of capitalized acquisition costs for an unrealized
acquisition for $0.4 million. Sales and marketing expenses increased from $7.9
million last year to $8.4 million for the nine months ended December 31, 2008.
This increase is partly attributable to the impact of the MVI and EPI
acquisitions and higher bad debts due to economic environment offset by lower
salaries and advertising expenses. Technology expenses remained stable at $6.5
million.
    As a result, loss from operations during the quarter ended December 31,
2008 amounted to $1.4 million as compared to an earning of $0.6 million in the
corresponding quarter of last year. This decrease is mainly due to
non-recurring expenses regarding unrealized acquisitions and severance
payments. Diluted earnings per share, for the current quarter, were $0.18 as
compared to $0.04 for the same period last year, mainly due to the reversal of
a tax provision of $2.1 million.
    Loss from operations for the nine-month period ended December 31, 2008
amounted to $22 thousands as compared to an earning of $3.1 million last year.
This decrease is mainly due to the same elements explained above. Diluted
earnings per share, for the current period, were $0.26 as compared to $0.14
for the same period last year, mainly due to the reversal of a tax provision
of $2.1 million.
    As of December 31, 2008, our cash and cash equivalents reached $27.7
million, a decrease from $27.8 million as of March 31, 2008 and an increase
from $26.0 million as of December 31, 2007. Free cash flow, defined as cash
flow from operating activities less capital expenditure, was $2.7 million
during the current quarter, as compared to $0.1 million for the corresponding
quarter of the previous year.
    On March 3, 2008, the Company announced the renewal of a normal course
issuer bid whereby it is authorized to purchase for cancellation for the
twelve-month period starting March 5, 2008 up to 598,465 common shares. As of
December 31, 2008, 547,331 common shares have been repurchased for
cancellation. Today, in accordance with the Toronto Stock Exchange approval,
the Board approved the increase of its current share buy-back program to
735,962, leaving a total of 188,631 shares to be purchased, starting February
11, 2009, and expiring March 4, 2009. Subject to regulatory and Toronto Stock
Exchange approvals, the Board also approved the renewal of this program, for
the twelve-month period starting March 5, 2009.

    About Mediagrif Interactive Technologies Inc.

    <a href="http://www.mediagrif.com/">Mediagrif Interactive Technologies</a> Inc. (TSX: MDF) is a world-leading
operator of e-business networks and provider of complete <a href="http://www.mediagrif.com/">B2B</a> <a href="http://www.mediagrif.com/">e-commerce</a> and
<a href="http://www.mediagrif.com/">e-business solutions</a>. Mediagrif's e-business networks allow buyers and sellers
within specific industries to source, purchase or sell products and to
exchange documents more efficiently using the Internet. Mediagrif operates 15
networks, including industry leaders <a href="http://www.brokerforum.com/">The Broker Forum</a>, <a href="http://www.powersourceonline.com">Power Source On-Line</a>,
<a href="http://www.telecomfinders.com/">Telecom Finders</a>, <a href="http://www.globalwinespirits.com/">Global Wine & Spirits</a> and <a href="http://www.polygon.net/">Polygon</a>. Mediagrif also owns <a href="http://www.merx.com/">MERX</a>,
the exclusive provider of e-publishing services to the Government of Canada,
and is a leading provider of <a href="http://www.governmentbids.com/">government bid</a> aggregation services and
e-procurement services in the U.S. 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.

    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.




For further information:

For further information: Catherine Allard, Chief Financial Officer,
Mediagrif Interactive Technologies Inc., (450) 677-8797, ext. 2133, Toll Free:
1-877-677-9088, ext. 2133, callard@mediagrif.com; Kathy Roberge, Director,
Communications, Mediagrif Interactive Technologies Inc., (450) 677-8797, ext.
3014, Toll Free: 1-877-677-9088, ext. 3014, kroberge@mediagrif.com


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