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Cossette Communication Group - Fiscal Year 2008 Results - Gross income increases to $253.3 million, net earnings at $8.9 million following goodwill impairment

Posted on: Tuesday, 2 December 2008, 15:30 CST

KOS (TSX)

MONTREAL, Dec. 2 /PRNewswire-FirstCall/ - Cossette Communication Group Inc. ("Cossette" or the "Company") recorded gross income of $253.3 million for its fiscal year ended September 30, 2008, an increase of 8.2 per cent from $234.1 million in fiscal year 2007. Net earnings amounted to $8.9 million ($0.54 per share), or $11.2 million ($0.68 per share) excluding the after-tax effect of the goodwill impairment ($0.14 per share), compared to $15.8 million ($0.94 per share) in fiscal 2007.

"Despite the challenging environment that we faced, over the past year we recorded the highest revenues in Cossette's history. We are very satisfied with those results, which are in line with the financial outlook that we provided earlier this year," said Claude Lessard, Chairman, Chief Executive Officer and President. "Our management team is also working hard to realign our cost structure to reflect a responsible approach for the coming year and to ensure that we are in a favourable position. We are confident that the quality of the product delivered by the people of Cossette will continue to benefit our client relationships and to contribute to their business success. Dedication to a spectacular product and services will contribute to our overall success and support our pursuit of new business gains."

For the year, earnings from operations were $17.9 million ($28.4 million excluding non-recurring charges totalling $10.5 million), compared with $28.4 million in 2007. Cash flows from operating activities excluding the net change in non-cash working capital items amounted to $23.5 million, compared to $25.1 million last year.

For the fourth quarter ended September 30, 2008, gross income amounted to $66.7 million, an increase of 1.3 per cent compared to gross income of $65.9 million reported for the fourth quarter of last year. Net earnings for the period were $2.5 million ($0.16 per share) compared to $4.1 million ($0.25 per share) for the same period in fiscal 2007.

Management's Discussion and Analysis containing a full analysis of financial results is available on SEDAR (www.sedar.com).

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 strategic planning and research, advertising, media buying and channel planning, sales promotion, direct response, database and direct marketing, customer relationship management, interactive marketing and technology solutions, public relations, organizational communication and change management, sponsorship and alliance marketing, branding and design, ethnic marketing, business-to-business communications (B2B practices) and print and video production. Cossette has approximately 1,630 employees and offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York, Irvine, Los Angeles, London, Moscow and Shanghai.

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, unless required by applicable laws. In the event the Company does update any forward-looking statements, no inference should be made that the Company will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

Financial analysts are invited to participate in a conference call with management tomorrow December 3, 2008, at 11:00 a.m. The media and any stakeholders may attend the call in listening mode only. Please dial 514-861-1681 or 877-677-7769 (Canada & U.S.) or 00-800-6578-9898 (Global Toll Free). A replay will be available at 514-861-2272 or 800-408-3053, passcode 3272656# until December 19, 2008 and in the Investor Relations section of our website at www.cossette.com.

Appendix: Selected Financial Information

Cossette Communication Group Inc. Selected Financial Information (in thousands of Canadian dollars, except the number of shares and per share data) Results for the 12-month period ended September 30 (audited) 2008 2007 Gross income 253,310 234,086 Operating expenses before goodwill impairment 231,368 205,709 Goodwill impairment 4,067 - Earnings from operations 17,875 28,377 Earnings before income taxes and non controlling interest 17,851 28,780 Earnings after income taxes 11,956 19,184 Non-controlling interest (3,051) (3,410) Net earnings 8,905 15,774 Cash flows from operations (before the net change in non-cash working capital items) 23,498 25,131 Net earnings per share Basic 0.54 0.94 Diluted 0.54 0.93 Weighted average number of shares outstanding ('000) Basic 16,385 16,773 Diluted 16,524 16,914 Results for the 3-month period ended September 30 (unaudited) 2008 2007 Gross income 66,748 65,859 Operating expenses 60,954 57,946 Earnings from operations 5,794 7,913 Earnings before income taxes and non controlling interest 5,626 7,788 Earnings after income taxes 3,601 5,476 Non-controlling interest (1,098) (1,420) Net earnings 2,503 4,056 Cash flows from operations (before the net change in non-cash working capital items) 5,658 6,666 Net earnings per share Basic 0.16 0.25 Diluted 0.15 0.24 Weighted average number of shares outstanding ('000) Basic 16,022 16,501 Diluted 16,287 16,685 Balance sheet (audited) As at As at Sept. 30, Sept. 30, 2008 2007 Cash and cash equivalents 13,685 3,484 Current assets 200,985 188,788 Intangible assets and deferred charges 5,505 6,384 Goodwill 93,122 84,244 Total assets 324,140 299,100 Short-term borrowings, including bank overdraft 37,649 - Current portion of long-term debt 99 411 Balances of purchase price of subsidiaries (current portion) 14,566 16,009 Long-term debt 219 108 Balances of purchase price of subsidiaries 106 529 Shareholders' equity 134,212 132,123

SOURCE COSSETTE COMMUNICATION GROUP INC.

Source: PR Newswire

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