Consolidated Balance Sheets
(Unaudited - Prepared by Management)
June 30 September 30
As at 2000 1999
Assets
Current assets:
Cash $27,244,581 $15,300,454
Accounts receivable 23,922,719 27,229,929
Contract work in process 3,570,237 3,392,111
Prepaid expenses 1,978,254 1,310,608
56,715,791 47,233,102
Restricted cash 850,136 545,982
Capital assets 8,510,589 7,869,486
Goodwill and other assets 34,657,758 22,186,265
Deferred income taxes 678,573 625,587
$101,412,847 $78,460,422
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $32,130,881 $27,713,688
Deferred revenue 5,039,335 4,457,822
Income taxes payable 742,540 1,698,638
Current portion of long-term debt 168,758 1,827,086
38,081,514 35,697,234
Long-term debt 5,421,638 2,151,185
Shareholders' equity:
Share capital 50,607,772 35,613,907
Retained earnings 7,695,137 5,492,940
Cummulative translation adjustment (393,214) (494,844)
57,909,695 40,612,003
$101,412,847 $78,460,422
Consolidated Statements of Operations and Retained Earnings
(Unaudited - Prepared by Management)
June 30 June 30
For the nine months ended 2000 1999
Revenue $140,490,919 $101,384,170
Cost of Sales 101,131,951 73,462,770
Gross Margin 39,358,968 27,921,400
Operating expenses:
Salaries and benefits 23,524,816 17,346,508
General and administrative 7,190,469 4,746,086
Occupancy costs 1,640,810 987,917
Earnings before interest expense, income taxes,
depreciation and goodwill amortization 7,002,873 4,840,889
Depreciation 1,269,901 960,456
Interest expense 245,966 266,130
Income before income taxes and
goodwill amortization 5,487,006 3,614,303
Income taxes 2,374,993 1,259,812
Income before goodwill amortization 3,112,013 2,354,491
Goodwill amortization, net of taxes of
$18,000 (1999-nil) 909,816 390,691
Net income $2,202,197 $1,963,800
Retained earnings, beginning of period 5,492,940 2,682,142
Less loss on redemption of shares - 65,965
Retained earnings, end of period $7,695,137 $4,579,977
Net income per share - basic $ 0.12 $ 0.14
Net income per share - fully diluted 0.12 0.14
Income per share before goodwill
amortization - basic 0.17 0.17
Income per share before goodwill
amortization - fully diluted 0.17 0.17
Consolidated Statements of Cash Flows
(Unaudited-Prepared by Management)
June 30 June 30
For the nine months ended 2000 1999
Cash provided by (used in):
Cash flows from operating activities:
Net income $2,202,197 $1,963,800
Items not involving cash:
Deferred income taxes 1,032 (512,910)
Depreciation 1,269,901 960,456
Goodwill amortization 927,816 390,691
Net changes in non-cash working capital balances:
Accounts receivable 6,148,981 (10,064,721)
Contract work in process (154,227) 852,730
Prepaid expenses (626,661) 215,169
Accounts payable and accrued liabilities (5,371,285) 6,557,363
Income taxes payable (895,264) 1,135,271
Deferred revenue 544,029 3,553,987
Net cash provided by operating activities 4,046,519 5,051,836
Cash flows from financing activities:
Long-term debt 3,391,756 5,000,000
Long-term debt repayments (1,779,630) (1,425,240)
Issuance of common shares for cash 10,478,808 978,122
Redemption of common shares (65,965)
Increase (reduction) in restricted cash (300,854) 365,750
Net proceeds from special warrant issue 7,250,000
Net cash provided by financing activities 11,790,080 12,102,667
Cash flows from investing activities:
Acquisition of subsidiaries
(net of (bank indebtedness assumed)
cash acquired of ($866,031); 1999 - $5,919,627) (2,205,892) (8,676,394)
Purchase of capital assets (1,765,020) (830,046)
Net cash used in investing activities (3,970,912) (9,506,440)
Change in cash balance due to foreign exchange 78,440 (313,410)
(Decrease)/Increase in cash 11,944,127 7,334,653
Cash, beginning of period 15,300,454 3,120,158
Cash, end of period $27,244,581 $10,454,811
Supplementary information:
Interest paid $218,891 $261,048
Income taxes paid 2,903,844 68,507
Shares issued for non-cash consideration 6,848,173 3,691,800
Consolidated Statements of Operations and Retained Earnings
(Unaudited - Prepared by Management)
June 30 June 30
For the three months ended 2000 1999
Revenue $44,469,269 $36,911,205
Cost of Sales 30,753,164 25,547,652
Gross Margin 13,716,105 11,363,553
Operating expenses:
Salaries and benefits 8,044,640 7,064,106
General and administrative 2,274,531 2,019,347
Occupancy costs 598,192 479,158
Earnings before interest expense, income taxes,
depreciation and goodwill amortization 2,798,742 1,800,942
Depreciation 439,684 280,756
Interest expense 82,956 94,964
Income before income taxes and goodwill
amortization 2,276,102 1,425,222
Income taxes 930,874 492,110
Income before goodwill amortization 1,345,228 933,112
Goodwill amortization, net of taxes of
$6,000 (1999-nil) 374,493 160,774
Net income $970,735 $772,338
Net income per share - basic 0.05 0.05
Net income per share - fully diluted 0.05 0.05
Income per share before goodwill
amortization - basic 0.07 0.07
Income per share before goodwill
amortization - fully diluted 0.07 0.07
Consolidated Statements of Cash Flows
(Unaudited-Prepared by Management)
June 30 June 30
For the three months ended 2000 1999
Cash provided by (used in):
Cash flows from operating activities:
Net income $970,735 $772,338
Items not involving cash:
Deferred income taxes 26,189 (209,066)
Depreciation 439,684 280,756
Goodwill amortization 380,493 160,774
Net changes in non-cash working capital balances:
Accounts receivable 7,571,046 (11,222,175)
Contract work in process 4,772,852 39,224
Prepaid expenses (444,966) 191,665
Accounts payable and accrued liabilities (8,706,342) 8,366,110
Income taxes payable 1,469,988 492,109
Deferred revenue (3,207,278) 2,842,509
Net cash provided by operating activities 3,272,401 1,714,244
Cash flows from financing activities:
Long-term debt 2,841,756 -
Long-term debt repayments (152,764) (756,369)
Issuance of common shares for cash 9,915,158 447,072
Redemption of common shares - -
Net proceeds from special warrant issue - 7,250,000
Reduction in restricted cash 293,969 365,750
Net cash provided by financing activities 12,898,119 7,306,453
Cash flows from investing activities:
Acquisition of subsidiaries (19,687) (7,218,693)
Purchase of capital assets (218,818) (137,048)
Net cash used in investing activities (238,505) (7,355,741)
Change in cash balance due to foreign
exchange 155,163 (206,634)
(Decrease)/Increase in cash 16,087,178 1,458,322
Cash, beginning of period 11,157,403 8,996,489
Cash, end of period $27,244,581 $10,454,811
Supplementary Information:
Interest paid $56,503 $88,711
Income taxes paid 433,861 (3,429)
Shares issued for non-cash consideration 4,417,973 470,000
Segmented Information:
The Company provides integrated marketing communication services to its clients.
While the Company has subsidiaries in Canada and the United States,
it operates as a global business and has no distinct operating segments
The tables below set out the following information:
By Customer Location By Geographic Area
June 30, 2000 Revenue Gross Capital Goodwill
Margin Assets
Canada $36,996,306 $14,537,694 $7,625,559 $23,045,522
United States 103,494,613 24,821,274 885,030 11,256,691
$140,490,919 $39,358,968 $8,510,589 $34,302,213
June 30, 1999
Canada $38,789,962 $13,428,418 $5,642,058 $10,010,206
United States 62,594,208 14,492,982 1,301,277 6,445,206
$101,384,170 $27,921,400 $6,943,335 $16,455,412
