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Intertainment Media Corporate UpdateKey Messages - Growth & Increased Performance for Year Ended June 30, 2011 (October 14, 2011)
TORONTO, CANADA -- (Marketwire) -- 10/14/11 -- Intertainment Media Inc. ("Intertainment" or the "Company") (TSX VENTURE:INT)(OTCQX:ITMTF)(FRANKFURT:I4T) is pleased to provide a corporate update to accompany its Financial Statements and Management Discuss & Analysis for the Year Ended June 30, 2011.
The year ended June 30, 2011 was a defining year for Intertainment. In prior years we had discussed the emergence from development to commercialization, but by the 3rd quarter this year we had the resources to fully enable our programs to impact and drive growth. The focus for the year was to invest in our program platforms, look to create greater user engagement for future financial benefit and intensify our efforts to deliver shareholder value through the continued monetization of our growing engaged user base.
Intertainment received the capital to begin to fully execute its mandate of growing the business which has been reflected in our balance sheet turnaround. With the need to move quickly and effectively we undertook a series of initiatives to accelerate the pace of our divisional growth including bringing in the right people internally and working with industry leading firms and consultants to build brand and user value. We are continually working to turn years of marketing, brand and market acceptance into months, and we believe the initial results were worth the efforts and investment.
As we analyzed the market for language on the Internet, we found that the majority of users on the Internet did not speak English. This provides both an opportunity and a challenge. With our partners at SaaS Technologies Inc., in late July 2010 we developed and launched Ortsbo, the real time experiential communications and language platform, and the acceptance globally was outstanding. What took Facebook its first 3 years to achieve in growth, Ortsbo managed in approximately 9 months. As Ortsbo has grown, we have added to the online offering by adding mobile applications for the Apple iPhone, iPad, Windows 7 Phone, and Android platforms, with continual development ongoing for exciting and innovative programs. Additionally we strengthened our product offering with 5 patent filings and acquired and integrated Commobility to increase our abilities in mobile and portable computing app development. We have also announced, since the year end, that we would be acquiring SaaS Technologies Inc. so that all the IP and future technology development would be 100% and exclusively owned by Ortsbo.
What is important to note is that most major social media platforms have taken years to achieve the current levels of our programs with little or no revenue in their first 3 to 5 years as the key focus is on growth and market leadership. Facebook is almost 7 years old and Twitter is almost 5 years old, while, by the end of Fiscal 2011, Ortsbo was only 10 months old, growing rapidly and providing a dominant and distinct presence in the marketplace. Ortsbo has accelerated swiftly having passed our first and second year growth estimates very quickly. This accelerated success did not go without challenges; the pace of growth did put a strain on our technology, support and development cycles. As such, investment was required to bolster the people, resources, development and technology environment, both internally and externally and allow us to stay in step with the growth and continue to deliver value back to our investors. We partnered with Microsoft on their backbone systems architecture and now have virtually unlimited capability for growth and deployment with the cloud based Azure Platform.
At the same time as we were growing Ortsbo, itiBiti was in final stages of launching its own "house brand" KNCTR??, while Ad Taffy was beginning to commercialize and agency feedback required additional capital investment in the platform to ensure an ability to capture longer term monetization opportunities. Magnum has also performed exceptionally well and is now looking at opportunities to integrate its traditional media offerings into the social media and online commerce arena.
By virtue of the investments we've made into our marketing, technology and development, we have seen significant increases in user traction for our programs, brand recognition, advertising testing and continued interest by the broader investment community in Canada, the US and overseas, all leading to the key mandate of the management team which is to continue growth, prove the business models and build shareholder value. In 2011, Ortsbo also launched its Live & Global format with Gene Simmons and Paul Stanley from KISS and with Two Time NBA MVP, Steve Nash. These programs, along with our mobile initiatives are showing strong growth indicators which we believe will assist the Company in creating long-term revenue based programs.
This year also saw a dramatic turnaround in our balance sheet, as we made significant strides in reducing debt and liabilities while increasing assets. At year end, we had over $24 Million in cash, with approximately $21 Million currently on hand. This year, we increased our overall Assets by 843%. It is important to note that under current accounting rules, the value of our technology assets cannot be fully realized in the Company's financial statements and this dramatic increase was without assessment of these values.
Our Current Liabilities were reduced almost in half by 49%, while our Shareholder Equity went from a deficit in 2010 of over ($4.6 MM) to $31.0 MM in 2011, an increase of 773%. Our current ratio (current assets over current liabilities) since the last fiscal year end has improved from 0.2:1 to 13.8:1 as at June 30, 2011, reflecting a healthy increase in assets and reduction of liabilities. This turnaround also required investment, as we had spent the past few years without the required working capital to move the programs forward. Our Working Capital increased 738% from a deficit of ($3.9 MM) in 2010 to $24.9 MM in 2011.
Revenues this year were up 21% over the previous years, with $5,324,690 recorded for the end of the Fiscal year, along with increased Gross Profit at 31.4% in 2011 as compared with 24% in 2010.
The Company continues to innovate and test revenue programs on a global scale and New Media revenue continues to show significant gains as both KNCTR and Ortsbo accelerate. New Media revenues grew 724% over the past quarter. With the recent commercial offerings of Ortsbo, the Company is seeing traction with its Live & Global platform with industry leaders in the Music, Entertainment, Studio, Sports and Corporate sectors and expects to continue to increase opportunities for revenue growth.
Adjusted EBITDA loss for the year end was $7.576 Million as compared to $2.487 Million in the previous year. While some may comment that this was an expensive year, we know it as a time of great beginnings with the launch of Ortsbo and KNCTR, allowing us to create a stronger balance sheet, accelerate growth, increase branding and program usage and increases in overall shareholder value. We believe that this process of corporate stabilization with increased working capital and high growth will allow us to move forward with new investment, merger and acquisition opportunities, create new and long-term revenue opportunity streams and bring Intertainment to the world stage through the delivery of innovative and exciting products and services.
As Intertainment moves towards the future, we believe there is a lot to look forward to as the Company is continually reviewing acquisition and investment opportunities to add programs and services to its offerings portfolio, but only those that strategically fit the overall goals and objectives of the divisions and the Company as a whole.
Our programs are receiving the attention of major Investment Banks and Institutions. Our products and services continue to grow at an accelerated pace and the management and Board of Intertainment have been closely reviewing the overall state of the industry to fulfill Intertainment's overall mandate as an "incubator" growth company.
In the past year, management and the board have rejected 2 independent offers for Ortsbo to effectively divest primary ownership of Ortsbo. The US investment market for social media acquisitions and public offerings continues to grow. The investment markets have seen highly successful IPO debuts of several social media companies and the much anticipated potential IPOs for Zynga and Facebook are continual newsworthy items.
Given the performance of Ortsbo, management and the board feel that the current overall corporate and shareholder value does not reflect the enterprise value of the sum of the divisions, especially Ortsbo. The Company is currently reviewing strategy and opportunities where Intertainment will potentially unlock maximum valuation for Ortsbo while retaining significant ownership and future benefits from the continual growth and performance in the program while potentially creating a special dividend for shareholders, rewarding them for the continual support of the Company. The Company will report on these efforts in due course.
About Intertainment Media Inc. www.intertainmentmedia.com
Connecting people with brands, Intertainment Media Inc. is a Rich Media Applications leader, focused on delivering leading edge technology and marketing solutions enabling clients to power enhanced branding, loyalty initiatives and consumer engagement.
Selected as a Microsoft Global Agency Initiative partner, Intertainment has joined an elite group of interactive agencies worldwide that Microsoft recommends to its Partners and Customers. Intertainment owns a number of key properties including Ortsbo, Ad Taffy, itiBiti and Magnum Fine Commercial Printing Limited.
Intertainment Media owns and operates a number of key properties including Ad Taffy, itiBiti, Ortsbo and Magnum. For more information on the Company and its properties, please visit www.intertainmentmedia.com.
Headquartered in the Toronto, Canada region, with offices in New York, Los Angeles and San Mateo, CA, Intertainment Media Inc. is listed on the Toronto Venture Exchange under the symbol "INT" (TSX VENTURE:INT) and in the US on the OTCQX Exchange under the symbol "ITMTF". Intertainment is also traded in Europe, on the XETRA Exchange under the symbol "I4T".
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Certain statements contained in this press release may constitute forward-looking statements. These statements relate to future events or Intertainment's future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Intertainment believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement.
In particular, this press release contains forward-looking statements pertaining to the following: Intertainment's operations, anticipated financial performance, business prospects and strategies. With respect to forward-looking statements contained in this press release, Intertainment has made assumptions regarding, among other things: acceptance of its products in the marketplace; the Corporation's operating cost structure; current and future trends in social media advertising; market demands; and the Corporation's ability to raise capital. Intertainment's actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors that may include, but are not limited to: overall economic conditions; the early stage of the Corporation's Ortsbo businesses; uncertainty of revenues, markets and profitability; the Corporation's lack of product revenues and history of operating losses; technological changes; dependence on the Internet; demand for the Corporation's products; the introduction of competing technologies; and ability to raise capital.
This forward-looking information represents Intertainment's views as of the date of this release and such information should not be relied upon as representing its views as of any date subsequent to the date of this release. Intertainment has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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