Mediagrif Reports Q2 FY2010 Financial Results

    
    - Revenues of $11.5 million compared to $11.9 million for the
      corresponding quarter of 2009

    - Earnings from operations of $2.8 million compared to $0.9 million for
      the corresponding quarter of 2009

    - Net earnings of $0.7 million or $0.05 per share compared to net
      earnings of $0.8 million or $0.06 per share for the corresponding
      quarter of 2009

    - Adoption of a semi-annual dividend policy and payment of a cash
      dividend of $0.10 per share on December 15, 2009 to shareholders of
      record at the close of business on December 1st, 2009
    

LONGUEUIL, QC, Nov. 10 /CNW Telbec/ - Mediagrif Interactive Technologies Inc. (TSX: MDF), a world-leading operator of e-commerce solutions, today announced its financial results for the second quarter ended September 30, 2009 and the payment of a cash dividend of $0.10 per share planned for the third quarter of fiscal year 2010. Unless indicated otherwise, all amounts are in Canadian dollars.

KEY HIGHLIGHTS:

Revenues from the second quarter of 2010 amounted to $11.5 million compared to $11.9 million for the corresponding quarter of 2009, an insignificant decrease considering the unfavorable economic conditions.

Earnings from operations for the second quarter of 2010 increased by 207% to reach $2.8 million compared to $0.9 million for the corresponding quarter of 2009. This increase is explained by a decrease in total operating expenses to $6.3 million compared to $8.4 million for the corresponding quarter of 2009. This decrease is mainly due to the general headcount reduction throughout the Company and to lower representation and bad debt expenses.

Other income (expenses) amounted to ($1.0 million) for the second quarter of 2010, compared to $0.4 million for the second quarter of 2009. This decrease is mainly due to a foreign exchange loss on our US dollar assets of $0.9 million for the second quarter of 2010, compared to a foreign exchange gain of $0.4 million for the corresponding quarter of 2009.

Net earnings and basic earnings per share for the second quarter of 2010 amounted to $0.7 million and to $0.05 respectively, compared to $0.8 million and $0.06 for the corresponding quarter of 2009.

The Company announced today the adoption of a semi-annual dividend policy. Under this policy, the Company will pay a first cash dividend of $0.10 per share on December 15, 2009 to shareholders of record at the close of business on December 1st, 2009.

Claude Roy, President and Chief Executive Officer by interim since December 15, 2008, has accepted to remain in this role on a permanent basis.

    
    RESULTS OF THE SECOND QUARTER AND FIRST SIX MONTHS OF THE FISCAL YEAR
    2010:
    

Revenues decreased by $0.4 million in the second quarter of 2010, compared to the second quarter of 2009, from $11.9 million to $11.5 million. For the first six months of 2010, revenues decreased by $0.7 million, compared to the corresponding period of 2009, from $23.9 million to $23.2 million. Our business networks BidNet, MERX, Carrus, epipeline and Interactive Procurement Technologies ("IPT") operate in markets less affected by the difficult economic conditions and are showing healthy organic growth. However, revenues from our networks The Broker Forum, Power Source On-Line, Market Velocity and Polygon are affected by the economic slowdown.

The variation of the Canadian dollar compared to the American dollar generated a positive impact of $0.4 million during the second quarter of 2010. However, revenues earned in US dollars represent 59% of total revenues in the second quarter of 2010, compared to 64% in the second quarter of 2009. Consequently, on a constant currency basis, total revenues decreased by $0.6 million. For the first six months of 2010, the variation of the Canadian dollar compared to the American dollar generated a positive impact of $0.8 million. During the first six months of 2010, revenues earned in US dollars represent 59% of total revenues, compared to 64% for the corresponding period of 2009. Consequently, on a constant currency basis, total revenues decreased by $1.2 million.

Gross margin increased to 79% for the second quarter of 2010, compared to 78% for the second quarter of 2009. For the first six months of 2010, gross margin increased to 78%, compared to 77% for the corresponding period of 2009. The increase is mainly due to lower cost of revenues following the headcount reduction and a better cost control.

Operating expenses for the second quarter of 2010 decreased to $6.3 million, compared to $8.4 million for the second quarter of 2009. For the first six months of 2010, operating expenses decreased to $13.5 million, compared to $17.0 million for the corresponding period of 2009. The decrease in operating expenses is explained by the following items:

    
    - General and administrative expenses for the second quarter of 2010
      decreased to $2.1 million, compared to $3.2 million for the second
      quarter of 2009. For the first six months of 2010, general and
      administrative expenses decreased to $4.8 million compared to
      $6.3 million for the corresponding period of 2009. This decrease is
      mainly due to the general headcount reduction throughout the Company
      and certain office closures in the US during the last quarter of 2009.

    - Sales and marketing expenses for the second quarter of 2010 decreased
      to $2.2 million, compared to $2.6 million for the second quarter of
      2009. For the first six months of 2010, sales and marketing expenses
      decreased to $4.5 million compared to $5.2 million for the
      corresponding period of 2009 mainly due to the general headcount
      reduction throughout the Company and lower representation and bad debt
      expenses.

    - Technology expenses for the second quarter of 2010 decreased to
      $1.8 million compared to $2.1 million for the second quarter of 2009.
      For the first six months of 2010, technology expenses decreased to
      $3.7 million compared to $4.4 million for the corresponding period of
      2009. This decrease is mainly due to lower salaries expenses and a
      decrease of the amortization expenses offset by lower capitalization of
      research and development expenses.

    - The amortization of acquired intangible assets for the second quarter
      of 2010 decreased from $0.4 million to $0.2 million, compared to the
      second quarter of 2009. For the first six months of 2010, the
      amortization of acquired intangible assets decreased from $0.9 million
      to $0.3 million, compared to the corresponding period of 2009 due to
      the impairment done on March 31, 2009.
    

As a result, earnings from operations reached $2.8 million during the second quarter of 2010, compared to $0.9 million for the second quarter of 2009. For the first six months of 2010, earnings from operations reached $4.6 million, compared to $1.4 million for the corresponding period of 2009.

The basic earnings per share amounted to $0.05 during the second quarter of 2010, compared to earnings of $0.06 for the second quarter of 2009. The weighted average number of common shares outstanding for the second quarters of 2010 and 2009 was 14.0 million and 14.3 million respectively. For the first six months of 2010, the basic earnings per share amounted to $0.04, compared to earnings of $0.08 for the corresponding period of 2009. The weighted average number of common shares outstanding for the first six months of 2010 and 2009 was 14.0 million and 14.4 million respectively.

As of September 30, 2009, our cash and cash equivalents remained stable at $27.7 million, compared to its value as of March 31, 2009 and increased compared to $26.4 million as of September 30, 2008. Free cash flow, defined as cash flows from operating activities less capital expenditure, was $3.3 million during the second quarter of 2010, compared to $52,000 for the second quarter of 2009. For the first six months of 2010, free cash flow amounted to $0.8 million, compared to used cash flows of $1.2 million for the corresponding period of 2009.

On March 3, 2009, 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, 2009, up to 700,865 common shares. As of September 30, 2009, 63,828 common shares were purchased for cancellation.

About Mediagrif Interactive Technologies Inc.

Mediagrif Interactive Technologies Inc. (TSX: MDF) is a world-leading operator of e-commerce solutions. 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 The Broker Forum, Power Source On-Line, Telecom Finders, Global Wine & Spirits and Polygon. Mediagrif also owns MERX, the exclusive provider of e-publishing services to the Government of Canada, and is a leading provider of government bid 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.

Unaudited interim financial statements, accompanying notes and MD&A are available on www.mediagrif.com and have been filed with SEDAR.

SOURCE Mediagrif Interactive Technologies Inc.

For further information: For further information: Claude Roy, Chief Executive Officer, Mediagrif Interactive Technologies Inc., (450) 677-8797, ext. 2004, Toll Free: 1-877-677-9088, ext. 2004, croy@mediagrif.com; Suzanne Mercier, Chief Financial Officer, Mediagrif Interactive Technologies Inc., (450) 677-8797, ext. 2135, Toll Free: 1-877-677-9088, ext. 2135, smercier@mediagrif.com


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