Cossette Communication Group - 2007 Third Quarter Results Gross income up 7.3%, net earnings up 23.8%

    KOS (TSX)

    QUEBEC CITY, Aug. 7 /CNW Telbec/ - Cossette Communication Group Inc.
("Cossette" or the "Company") recorded gross income of $57.9 million for the
third quarter of fiscal 2007, ended June 30, 2007, up 7.3 per cent from
$54.0 million from the corresponding quarter of the previous fiscal year. Net
earnings amounted to $4.7 million ($0.28 per share), compared to $3.8 million
($0.22 per share) for the third quarter of 2006, an increase of 23.8 per cent.
    "We continue to see steady quarter-over-quarter improvement in our
results," said Claude Lessard, Chairman, Chief Executive Officer and
President. "Our disciplined focus on organic growth and operating margins has
once again contributed to delivering a solid quarter."
    For the quarter, earnings from operations were $7.9 million, compared
with $6.9 million in 2006. Cash flows from operating activities before changes
in non-cash working capital items reached $6.8 million, compared with
6.0 million in 2006.
    First nine-month period review - For the nine-month period ended June 30,
2007, gross income amounted to $168.2 million, an increase of $9.0 million or
5.7 per cent compared to gross income of $159.2 million reported for the
nine-month period of fiscal 2006. Net earnings for the period were $11.7
million ($0.69 per share) compared to $9.4 million ($0.54 per share) for the
same period in fiscal 2006.
    Earnings from operations for the first nine months of fiscal 2007 were
$20.5 million as compared to $16.5 million for the same period in 2006. Cash
flows from operations before changes in non-cash working capital items in the
first nine months of fiscal 2007 were $18.8 million as compared to
$16.1 million in the comparable period of 2006.

    Management's Discussion and Analysis, containing a full analysis of
financial results, is available on SEDAR (

    Cossette Communication Group 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
CommunicationsTM, a unique working method that brings added value to the
client by integrating various services offered by the Group, including
advertising, media planning and buying, sales promotion, database and direct
marketing, customer relationship management, interactive solutions, public
relations and alliance marketing, brand management and graphic design,
strategic planning and research services, ethnic marketing, urban youth
marketing, sports marketing, branded content and product placement,
business-to-business communications (B2B practices). Cossette has
approximately 1,600 employees and offices in Quebec City, Montreal, Toronto,
Vancouver, Halifax, New York, Boston, Irvine, Los Angeles, London, Moscow and

    Forward-looking statements - This press release is not an offer of
securities for sale. It may contain forward-looking statements concerning the
Company's business, operations and strategies, including forward-looking
statements within the meaning of section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 in the United States. The
Company cautions that, by their nature, forward-looking statements involve
risks and uncertainties and the Company's actual results may differ materially
from those expressed or implied in such statements, due to a variety of
factors including downturns in general economic conditions and resulting
changes in client business and marketing strategies, consolidation and
globalisation 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, our ability to successfully integrate our acquired and
to-be-acquired businesses and the retention of key management, creative and
technical personnel. Reference should be made to the most recent annual
Management's Discussion and Analysis for an in-depth description of major risk
factors. The Company assumes no obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or any other reason.

    Financial analysts and media are invited to participate in a conference
call with management on August 8, 2007, at 10:00 a.m. Please dial (514)
861-0443 or 1-866-696-5911. A replay will be available at (514) 861-2272 or
1-800-408-3053, passcode 3230544# until September 5, 2007.

    Appendix: Selected Financial Information

    Cossette Communication Group Inc.
    Selected Financial Information
    (in thousands of Canadian dollars, except for amounts per share)

    Results for the 3-month period ended June 30 (unaudited)

                                                           2007        2006

    Gross income                                         57,945      53,989
    Operating expenses                                   50,042      47,128
    Earnings from operations                              7,903       6,861
    Earnings before income taxes                          7,755       6,956
    Earnings after income taxes                           5,125       4,370
    Non-controlling interest                               (389)       (545)
    Net earnings                                          4,736       3,825
    Cash flows from operations  (before changes in
     non-cash working capital items)                      6,767       5,982
    Net earnings per share
      Basic                                                0.28        0.22
      Diluted                                              0.28        0.22
    Weighted average number of shares outstanding ('000)
      Basic                                              16,729      17,032
      Diluted                                            16,856      17,032

    Results for the 9-month period ended June 30

                                                           2007        2006

    Gross income                                        168,227     159,192
    Operating expenses                                  147,763     142,715
    Earnings from operations                             20,464      16,477
    Earnings before income taxes                         20,992      16,737
    Earnings after income taxes                          13,708      10,700
    Non-controlling interest                             (1,990)     (1,263)
    Net earnings                                         11,718       9,437
    Cash flows from operations  (before changes in
     non-cash working capital items)                     18,840      16,088
    Net earnings per share
      Basic                                                0.69        0.54
      Diluted                                              0.69        0.54
    Weighted average number of shares outstanding ('000)
      Basic                                              16,866      17,326
      Diluted                                            16,936      17,326

    Balance sheet

                                                          As at       As at
                                                        June 30,   Sept. 30,
                                                           2007        2006
                                                     (unaudited)   (audited)

    Cash and cash equivalents                             9,935      24,406
    Current assets                                      216,432     166,688
    Intangible assets and deferred charges                3,513       4,271
    Goodwill                                             64,240      60,972
    Total assets                                        299,865     248,181
    Current portion of long-term debt                       448         451
    Balances of purchase prices of subsidiaries
     (current portion)                                      900       1,238
    Long-term debt                                          221         300
    Balances of purchase prices of subsidiaries             553       1,367
    Shareholders' equity                                132,914     126,534
    %SEDAR: 00012070EF

For further information:

For further information: Jean Royer, Executive Vice-President and Chief
Financial Officer, (418) 521-3784; Source: Cossette Communication Group Inc.,

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