Excellent Q2 results !!!!!!!!!
I agree, Mosaic will hit $10.00 before we know it. The TSE 300 Index and the Canadian Small Caps Index listing of July 16th, 1999 will most definitely bring in the big boys.
Mosaic is not a fad, they are really doing well and making cash.
Listen to the "Q2-Results - Conference Call" q1234.com
Web site: mosaicgroupinc.com
I re-posted the Q2 press release that includes financials.
===============
Tuesday August 10, 7:29 am Eastern Time
Company Press Release
Mosaic Posts 11th Consecutive Quarter Of Year
Over Year Revenue, Cash Flow & Earnings
Growth
TORONTO, ONTARIO--
Revenue Up 94 percent, Cash Flow Up 95 percent, Eps Up 67 percent
Mosaic Group Inc. (TSE:MGX - news), Canada's leading outsourced marketing services agency today announced
record levels of financial performance. Net earnings increased by 74 percent, from $1.91 million to $3.32
million for the second quarter. After tax cash flow from operations exhibited strong growth, rising 95 percent
year over year to $7.14 million in the second quarter of 1999. On a per share basis fully diluted earnings
increased 67 percent to $0.05 in the second quarter of 1999, with year-to-date fully diluted EPS of $0.08 up 60
percent from the prior year. For the first six months of the year fully diluted cash flow per share was $0.18, up
50 percent from the prior year.
''I am very happy with our Company's results so far in 1999,'' said Michael Preston, Mosaic Group Inc.'s
chairman and chief executive officer. ''As we look back over the first six months of 1999, our financial results
are illustrating that our growth strategy is working. The new services that we are adding and the new geographic
areas that we are entering are enhancing not just our revenues, but more importantly our per share earnings and
cash flow. When you consider our successful track record of acquisitions in conjunction with the solid 26
percent organic revenue growth rate posted in the second quarter, you have an understanding of the building
blocks that we use to enhance shareholder value. That's why our per share results continue to improve, quarter
after quarter.''
''Our record results have been achieved even while expensing year to date $1.5 million in new investment
related to our e-commerce initiatives. We expect our e-commerce initiatives to generate operating earnings by
the end of the third quarter. Our run rate revenues in e-commerce and new media activities now exceeds $20
million, up from $8 million last year.
Mosaic Expands: Size Opens New Doors
''Mosaic has expanded quickly, both in terms of the number of geographic markets that we serve and the variety
of services that we offer,'' Preston continued. ''Our acquisition criteria have two key dimensions: each must
contribute a new capability or geographic area, and they must add to the bottom line and cash flow on a per-share
basis. By focusing on these acquisition criteria, and by effectively integrating the businesses that we acquire, we
have been able to enjoy growth that is both substantial and well-managed.
''A significant part of our integration program is the development of cross-selling initiatives among our
business units. We have scored some significant cross-selling wins in 1999, including new work for Sony,
United Distillers, Iomega, Bell World, Charles Schwab and the Ontario Lottery Corporation. Cross-selling is a
key part of the value proposition that Mosaic can offer the marketplace - business wins that our units could not
have achieved as stand-alone companies. As Mosaic grows, we are proving that the sum is greater than the parts.
''We are also capitalizing on the benefits that come from the critical mass that we have built up in the areas in
which we operate. We are able to bid on progressively larger pieces of business - multinational, integrated sales
and marketing programs that we can offer to the world's largest companies. Many of the opportunities that
Mosaic is currently pursuing are of an unprecedented scale - pieces of business that were not available to us
when we were a younger and smaller company. A prime example of the scope of these business opportunities is
the $150 million five year program that we recently secured with the Prudential and which commences in
January, 2000.
''The development of larger opportunities is already beginning to affect Mosaic's healthy strong internal growth
rates. In the second quarter, Mosaic had an internal revenue growth rate of 26 percent, excluding the impact of
acquisitions. The rate was 27 percent for the six months ended June 30, 1999.
''Looking to the end of the year, we look forward to continued growth as we enter our clients' peak summer and
holiday spending periods. For 1999 we anticipate full year revenues approaching $400 million,'' Preston
concluded.
Mosaic Group Inc., with operations in the United States, Europe and Canada, provides outsourced marketing
services on an integrated basis to leading corporations serving international markets. Mosaic combines strategic
thinking with leading edge technologies to effectively deliver immediate and measurable results for its clients.
Marketing solutions include electronic marketing, e-commerce, new media services, contract sales,
merchandising, field marketing, direct marketing, database development and management, product promotion,
corporate communications and sales force training. Mosaic, which has approximately 71 million shares
outstanding, trades on the TSE under the symbol MGX.
Mosaic Group Inc.
Selected Financial Information
June 30, 1999
Three months ended June 30,
(in thousands except per share amounts)
1999 1998 Percent
Change
Revenues $ 86,476 $ 44,684 94 percent
Gross profit 31,078 16,016 94 percent
EBITDA (1) 9,472 4,780 98 percent
Net earnings 3,319 1,912 74 percent
Cash flow from
operations (2) 7,137 3,656 95 percent
Per share amounts:
Earnings:
Basic $ 0.05 $ 0.04 25 percent
Fully diluted $ 0.05 $ 0.03 67 percent
Cash flow from
operations (2):
Basic $ 0.11 $ 0.07 57 percent
Fully diluted $ 0.11 $ 0.06 83 percent
Six months ended June 30,
(in thousands except per share amounts)
1999 1998 Percent
Change
Revenues $ 168,094 $ 81,513 106 percent
Gross profit 57,340 28,607 100 percent
EBITDA (1) 15,842 7,833 102 percent
Net earnings 5,096 2,568 98 percent
Cash flow from
operations (2) 11,776 5,910 99 percent
Per share amounts:
Earnings:
Basic $ 0.08 $ 0.06 33 percent
Fully diluted $ 0.08 $ 0.05 60 percent
Cash flow from
operations (2):
Basic $ 0.19 $ 0.13 46 percent
Fully diluted $ 0.18 $ 0.12 50 percent
(1) Earnings before interest, tax, depreciation and
amortization.
(2) Cash flow from operations has been calculated
using cash provided from operations excluding net changes
in non-cash operating working capital.
Mosaic Group Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands of dollars, except per share amounts)
---------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
---------------------------------------------------------------
1999 1998 1999 1998
Revenues $ 86,476 $ 44,684 $ 168,094 $ 81,513
Direct costs 55,398 28,668 110,754 52,906
Gross profit 31,078 16,016 57,340 28,607
Selling,
general and
administrative 21,606 11,236 41,498 20,774
---------------------------------------------------------------
Earnings before
depreciation and
amortization,
interest and
income taxes
(EBITDA) 9,472 4,780 15,842 7,833
Depreciation
and other
amortization 1,384 673 2,563 1,351
Goodwill
amortization 1,498 756 2,854 1,301
Interest costs 1,946 482 3,374 1,194
---------------------------------------------------------------
Earnings before
income taxes 4,644 2,869 7,051 3,987
---------------------------------------------------------------
Income taxes:
Current 556 719 859 1,110
Deferred 769 238 1,096 309
1,325 957 1,955 1,419
---------------------------------------------------------------
Net earnings $ 3,319 $ 1,912 $ 5,096 $ 2,568
---------------------------------------------------------------
Earnings per share:
Basic $ 0.05 $ 0.04 $ 0.08 $ 0.06
Fully diluted $ 0.05 $ 0.03 $ 0.08 $ 0.05
Weighted average
number of shares
outstanding
(in thousands):
Basic 63,811 49,921 63,225 45,225
Fully diluted 67,912 56,183 67,609 49,191
---------------------------------------------------------------
Mosaic Group Inc.
Consolidated Balance Sheets
(June 30, 1999 - Unaudited)
(In thousands of dollars)
---------------------------------------------------------------
June 30, December 31,
1999 1998
---------------------------------------------------------------
Assets
Current assets:
Cash and short-term
investments $ 3,913 $ 4,735
Accounts receivable 60,451 54,587
Work in progress and
unbilled revenue 15,531 10,408
Prepaid expenses 7,474 3,888
87,369 73,618
---------------------------------------------------------------
Property and equipment 16,338 9,640
Goodwill, net
of accumulated
amortization 193,579 184,510
Other assets 4,867 4,217
---------------------------------------------------------------
$ 302,153 $ 271,985
---------------------------------------------------------------
Liabilities and
Shareholders' Equity
Current liabilities:
Bank indebtedness $ 10,197 $1,590
Accounts payable and
accrued liabilities 47,402 40,785
Deferred revenue 21,703 27,247
Accrued acquisition
liabilities 9,062 13,121
Income taxes payable 1,909 1,979
Current portion of long-term
debt 247 1,471
---------------------------------------------------------------
90,520 86,193
Long-term debt 91,392 66,075
Deferred income taxes 2,169 1,073
Shareholders' equity:
Share capital 105,635 98,415
Contributed surplus - 317
Foreign currency
translation adjustment (5,705) 6,866
Retained earnings 18,142 13,046
---------------------------------------------------------------
118,072 118,644
---------------------------------------------------------------
$ 302,153 $ 271,985
---------------------------------------------------------------
Contact:
Mosaic Group Inc.
Michael Preston
Chairman and CEO
(416) 588-7788
or
Ben Kaak
CFO
(416)588-7788
or
Catherine Linley
Public Relations
(416)588-7788 |
