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Message: Reports First Quarter March 31, 2009 Results
| May 31, 2009 | ||
| Xentel Reports First Quarter March 31, 2009 Results | ||
CALGARY, ALBERTA--(Marketwire - May 31, 2009) - Xentel DM Incorporated (TSX VENTURE:XDM) - --------------------------------------------------------------------- Three months ended March 31 2009 2008 --------------------------------------------------------------------- ($ 000's, except per share amounts) --------------------------------------------------------------------- Revenue $ 23,885 $ 24,434 --------------------------------------------------------------------- Gross margin $ 5,371 $ 5,681 --------------------------------------------------------------------- Net earnings $ 573 $ 285 --------------------------------------------------------------------- EBITDA $ 1,239 $ 1,290 --------------------------------------------------------------------- EPS, fully diluted $ 0.02 $ 0.01 --------------------------------------------------------------------- EBITDA, per share, fully diluted $ 0.05 $ 0.05 --------------------------------------------------------------------- --------------------------------------------------------------------- EBITDA - Net Earnings before income taxes, interest, depreciation and amortization. Since Gross Margin, EBITDA and diluted EBITDA per share have no standardized GAAP meaning, the comparability of these amounts to other enterprises may not be possible if the basis of calculation of differs. --------------------------------------------------------------------- The results for the first quarter 2009 were net earnings of $573 thousand compared to net earnings of $285 thousand for the first quarter 2008. Revenues amounted to $23,885 thousand compared to $24,434 thousand for the same period in 2008. EBITDA for the three months ended March 31, 200 was $1,239 thousand compared to $1,290 for the same period in 2008. EBITDA was essentially the same for the first quarter 2009 and 2008 in face of declining revenues quarter over quarter as a result of restructuring the labour utilization model, continuing to monitor and control costs and refocusing emphasis on data development. Additionally, the elimination of long term interest with the repayment of the subordinated debt in 2008 and the reduction of amortization relating to the fully amortized intangible assets from the 2003 acquisition contributed to the improved earnings quarter over quarter 2009 to 2008. David Winograd, President of the US operations stated, "The labour restructuring program is having a very positive impact on earnings. That combined with the improved balance sheet resulting from the elimination of interest on the payment of the subordinated debt and the reduction in amortization on fully amortized intangibles, bodes well for the future." "Improved earnings are to be expected as a result of the debt reduction and the revenue expense scaling, but the market remains challenging and the entire Xentel team must continue to focus on improving margins", said Michael Platz, Chairman. Xentel DM Incorporated is one of North America's leading relationship-marketing concerns and producers of cause related entertainment events. The Company's success is attributable to proprietary sales tools including technologically advanced teleservices and sophisticated customer databases. Xentel DM Incorporated has over 400 clients and 1,900 employees in over 25 offices across North America. Certain statements in this press release may constitute "forward looking statements" and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any performance or achievement expressed or implied by such "forward looking statements". Xentel DM Incorporated
Consolidated Balance Sheets March 31, March 31, December 31,
('000s) 2009 2008 2008
(unaudited) (unaudited) (audited)
Assets
Current assets
Cash and cash equivalents $ 1,346 $ 114 $ 1,365
Accounts receivable, net of
allowances 7,146 7,158 6,910
Inventory 585 628 617
Prepaid expenses 1,229 973 1,235
Due from related party 1,608 - 1,589
Future income taxes 1,203 2,341 1,568
-------- -------- --------
13,117 11,214 13,284
Due from related party - 1,327 -
Equipment 2,909 3,208 3,050
Future income taxes 3,120 3,233 3,089
Other intangible assets 62 938 64
Goodwill 1,253 1,034 1,239
-------- -------- --------
$ 20,461 $ 20,954 $ 20,726
-------- -------- --------
-------- -------- --------
Liabilities
Current liabilities
Bank indebtedness $ 608 $ 2,181 $ 86
Accounts payable and accrued
liabilities 5,316 5,132 5,877
Income taxes payable 89 88 275
Current portion of long term
liabilities 90 1,321 141
Future income taxes 710 662 715
Due to related party 2,661 - 3,244
-------- -------- --------
9,474 9,384 10,338
Long term debt 4 11 6
Future income taxes 38 1,060 38
Deferred tenant inducement 202 285 223
Due to related party - 2,603 -
-------- -------- --------
9,718 13,343 10,605
Shareholders' equity
Share capital 8,827 9,280 8,925
Warrants - 205 -
Contributed surplus 628 79 558
Accumulated other comprehensive
income (2,312) (3,747) (2,389)
Retained earnings 3,600 1,794 3,027
-------- -------- --------
10,743 7,611 10,121
-------- -------- --------
$ 20,461 $ 20,954 $ 20,726
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-------- -------- --------
Xentel DM Incorporated
Consolidated Statements of Operations and Retained
Earnings
For the three months ended March 31 2009 2008
('000s, except per share amounts) (unaudited) (unaudited-
restated)
Revenue $ 23,885 $ 24,434
Cost of revenue 18,514 18,753
-------- --------
Gross margin 5,371 5,681
-------- --------
Corporate expenses
Branch overhead and corporate administration 4,132 4,391
Interest expense 33 105
Amortization of equipment 250 291
Amortization of intangible assets 2 370
-------- --------
4,417 5,157
-------- --------
Earnings before undernoted items 954 524
Other items
Expenses relating to the 2003 privatization
lawsuit - 9
-------- --------
Earnings before income taxes 954 515
-------- --------
Income tax expense
Current income tax expense - 91
Future income tax expense 381 139
-------- --------
381 230
-------- --------
Net earnings 573 285
Retained earnings, beginning of period 3,027 1,509
-------- --------
Retained earnings, end of period $ 3,600 $ 1,794
-------- --------
-------- --------
Basic and diluted net earnings per share $ 0.02 $ 0.01
-------- --------
-------- --------
Basic weighted average number of shares 25,163 26,195
-------- --------
-------- --------
Diluted weighted average number of shares 25,163 26,195
-------- --------
-------- --------
Xentel DM Incorporated
Consolidated Statements of Contributed Surplus
For the three months ended March 31 2009 2008
('000s) (unaudited) (unaudited)
Balance, beginning of period $ 558 $ 79
Discount on share repurchase from stated value 70 -
--------- ---------
Balance, end of period $ 628 $ 79
--------- ---------
--------- ---------
Xentel DM Incorporated
Consolidated Statements of Comprehensive Income
For the three months ended March 31 2009 2008
('000s) (unaudited) (unaudited-
restated)
Net earnings for period $ 573 $ 285
Foreign currency translation adjustment from self
sustaining foreign operations 77 164
--------- ---------
Comprehensive income $ 650 $ 449
--------- ---------
--------- ---------
Xentel DM Incorporated
Consolidated Statements of Accumulated Other
Comprehensive Income
For the three months ended March 31 2009 2008
('000s) (unaudited) (unaudited-
restated)
Balance, beginning of period $ (2,389) $ (3,911)
Foreign currency translation adjustment from self
sustaining foreign operations 77 164
--------- ---------
Balance, end of period $ (2,312) $ (3,747)
--------- ---------
--------- ---------
Xentel DM Incorporated
Consolidated Statements of Cash Flows
For the three months ended March 31 2009 2008
('000s) (unaudited) (unaudited)
Cash flows from (used in) operating activities
Net earnings for the year $ 573 $ 285
Non cash transactions reflected in net earnings
Amortization 252 661
Future income tax expense 381 139
Adjustment for non cash interest - 61
----------- -----------
1,206 1,146
----------- -----------
Net change in non cash working capital items
Accounts receivable (197) (569)
Inventory 38 15
Prepaid expenses 10 (127)
Other current assets (12) -
Income taxes payable (195) 22
Accounts payable and accrued liabilities (587) (849)
----------- -----------
Net change in non cash working capital items (943) (1,508)
----------- -----------
263 (362)
----------- -----------
Cash flows from (used in) financing activities
Bank indebtedness 520 851
Long term debt repaid (692) (115)
Redemption of share capital (28) -
----------- -----------
(200) 736
----------- -----------
Cash flows (used in) investing activities
Investment in equipment (90) (467)
----------- -----------
(90) (467)
----------- -----------
Effect of exchange rate fluctuations on cash
balances 8 2
----------- -----------
Net decrease in cash and cash equivalents (19) (91)
Cash and cash equivalents, beginning of period 1,365 205
----------- -----------
Cash and cash equivalents, end of period $ 1,346 $ 114
----------- -----------
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