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iMarketing Solutions Group Inc. Reports Third Quarter September 30, 2011 Results

(November 28, 2011)

CALGARY, ALBERTA -- (Marketwire) -- 11/28/11 -- iMarketing Solutions Group Inc. (TSX VENTURE:XDM) -

------------------------------------------------------------ 3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended September 30, September 30, September 30, September 30, ($000's) 2011 2010 2011 2010 --------------------------------------------------------------------------- Revenue 20,684 21,529 69,397 66,896 Net Earnings/(Loss) (706) (782) 761 1,396 EBITDA (427) (672) 2,865 1,723 EPS (Basic) $ (0.02) $ (0.02) $ 0.02 $ 0.04 EPS (Fully diluted) $ (0.02) $ (0.02) $ 0.02 $ 0.04 ------------------------------------------------------------

iMarketing Solutions Group Inc. a North American specialty entertainment and relationship marketing company, today reported its financial results for the nine months ending September 30, 2011.

The amounts in this earnings release, MD&A and interim financial statements for the nine months ended September 30, 2010, have been restated to reflect the adoption of IFRS, with effect from January 1, 2010. Further disclosure on the transition to IFRS can be found in the Company's MD&A and notes to the Company's consolidated condensed interim financial statements for the nine months ended September 30, 2011. This disclosure contains a description of the IFRS adjustments and reclassifications on transition and a reconciliation of the Company's financial statements previously prepared under Canadian GAAP to those prepared under IFRS for the three and nine months ended September 30, 2010, and for the year ended December 31, 2010.


Net loss for the three months ended September 30, 2011 amounted to $706 thousand or $0.02 per share on a fully diluted basis. This compares to the net loss for the three months ended September 30, 2010 of $782 thousand or $0.02 per share on a fully diluted basis. Net earnings for the nine months ended September 30, 2011 amounted to $761 thousand or $0.02 per share on a fully diluted basis. This compares to the net earnings for the nine months ended September 30, 2010 of $1,396 thousand or $0.04 per share on a fully diluted basis. Net earnings for the nine months ended September 30, 2010, as restated under IFRS, include a positive earnings adjustment of $988 thousand reflecting the merger executed in March 2010.

EBITDA for the three and nine months ended September 30, 2011 amounted to ($427) thousand and $2,865 thousand respectively. This compares positively to EBITDA for the three and nine months ended September 30, 2010 of ($672) thousand and $1,723 thousand respectively.

iMarketing Solutions Group Inc. 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.

Certain statements in this press release may constitute "forward looking statements" reflecting our current beliefs, plans, estimates and expectations. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or the combined companies to be materially different from any performance or achievement expressed or implied by such "forward looking statements". Except as required by applicable securities laws, we undertake no obligation to update any forward looking statements for any reason after the date hereof to conform these statements to actual results or to changes in our expectations.

iMarketing Solutions Group Inc. Consolidated Condensed Statements of Financial Position Unaudited (In thousands of Canadian dollars) ---------------------------------------------------------------------- As at September 30, December 31, 2011 2010 ---------------------------------------------------------------------- Assets Current assets Cash and cash equivalents 235 2,322 Accounts receivable 10,644 9,923 Income taxes recoverable - 16 Prepaid expenses and other current assets 2,205 1,604 ---------------------------------------------------------------------- Total current assets 13,084 13,865 ---------------------------------------------------------------------- Equipment 4,589 3,658 Intangible assets 1,886 2,235 Deferred income taxes 2,779 2,626 ---------------------------------------------------------------------- Total assets 22,338 22,384 ---------------------------------------------------------------------- ---------------------------------------------------------------------- Liabilities Current liabilities Bank indebtedness 1,296 $ 1,483 Accounts payable and accrued liabilities 5,580 6,131 Income taxes payable 629 - Due to related parties - 400 Deferred revenue 218 518 Current portion of long term liabilities 303 561 ---------------------------------------------------------------------- Total current liabilities 8,026 9,093 ---------------------------------------------------------------------- Deferred tenant inducement 2 56 Deferred income taxes 1,097 1,067 Long term debt 34 - ---------------------------------------------------------------------- ---------------------------------------------------------------------- Total liabilities 9,159 10,216 ---------------------------------------------------------------------- iMarketing Solutions Group Inc. Consolidated Condensed Statements of Financial Position Unaudited (In thousands of Canadian dollars) ---------------------------------------------------------------------- As at September 30, December 31, 2011 2010 ---------------------------------------------------------------------- Shareholders' equity Share capital 10,686 10,797 Contributed surplus 783 769 Accumulated other comprehensive loss (3,511) (3,858) Retained earnings 5,221 4,460 ---------------------------------------------------------------------- Total shareholders' equity 13,179 12,168 ---------------------------------------------------------------------- ---------------------------------------------------------------------- Total liabilities and shareholders' equity $ 22,338 $ 22,384 ---------------------------------------------------------------------- ---------------------------------------------------------------------- iMarketing Solutions Group Inc. Consolidated Condensed Statements of Operations Unaudited (In thousands of Canadian dollars, except per share amounts) For the periods ended September 30 Three months ended Nine months ended ------------------------------------------------------------------------ 2011 2010 2011 2010 ------------------------------------------------------------------------ Revenue 20,684 21,529 69,397 66,896 Cost of revenue 15,305 16,952 50,214 49,755 ------------------------------------------------------------------------ Gross margin 5,379 4,577 19,183 17,141 ------------------------------------------------------------------------ Operating expenses Branch overhead and corporate administration 5,791 5,249 16,318 15,418 Depreciation of equipment 376 333 1,101 952 Amortization of intangible assets 138 2 350 6 Transaction charges for business combination - - - 291 Bargain purchase gain - - - (1,231) ------------------------------------------------------------------------ ------------------------------------------------------------------------ Total operating expenses 6,305 5,584 17,769 15,436 ------------------------------------------------------------------------ ------------------------------------------------------------------------ Operating earnings (loss) (926) (1,007) 1,414 1,705 ------------------------------------------------------------------------ Non operating income (expense) Interest expense (17) (31) (63) (72) ------------------------------------------------------------------------ Total non operating income (expense) (17) (31) (63) (72) ------------------------------------------------------------------------ ------------------------------------------------------------------------ Earnings (loss) before income taxes (943) (1,038) 1,351 1,633 ------------------------------------------------------------------------ Income tax expense (recovery) Current income tax expense (recovery) - (4) - 325 Deferred income tax expense (recovery) (237) (252) 590 (88) ------------------------------------------------------------------------ Total income tax expense (recovery) (237) (256) 590 237 ------------------------------------------------------------------------ Net earnings (loss) for the period (706) $ (782) 761 1,396 ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------ Basic and diluted earnings (loss) per share $(0.02) $(0.02) $0.02 $0.04 ------------------------------------------------------------------------ Basic weighted average number of shares outstanding 32,107 33,379 32,416 31,414 Diluted weighted average number of shares outstanding 32,163 33,560 32,264 31,634 iMarketing Solutions Group Inc. Consolidated Statements of Comprehensive Income (Loss) Unaudited (In thousands of Canadian dollars, except per share amounts) Three months ended Nine months ended ------------------------------------------------------------------------ For the periods ended September 30 2011 2010 2011 2010 ------------------------------------------------------------------------ Net earnings for the period (706) $ (782) 761 1,396 Foreign currency translation adjustment from self-sustaining foreign operations 544 (94) 342 (20) ------------------------------------------------------------------------ Comprehensive income for the period 162 $ (876) 1,103 1,376 ------------------------------------------------------------------------ ------------------------------------------------------------------------ iMarketing Solutions Group Inc. Consolidated Condensed Statements of Changes in Equity Unaudited (In thousands of Canadian dollars, except per share amounts) Nine months ended ---------------------------------------------------------------------- For the periods ended September 30 2011 2010 ---------------------------------------------------------------------- Share capital Balance, beginning of period 10,797 $ 8,765 Issued for business combination - 2,217 Issued for business combination under collateralized note - 534 Exercise of options - 33 Repurchase and cancellation of shares (111) - Share purchase financing - (534) ---------------------------------------------------------------------- Balance, end of period 10,686 11,015 ------------------------------ ------------------------------ Contributed surplus Balance, beginning of period 769 646 Discount from book value on share repurchase 14 - Fair value of shares financed by promissory note - 105 ---------------------------------------------------------------------- Balance, end of period 783 751 ------------------------------ ------------------------------ Accumulated other comprehensive loss Balance, beginning of period (3,858) (3,655) Foreign currency translation change 342 (114) ---------------------------------------------------------------------- Balance, end of period (3,516) (3,769) ------------------------------ ------------------------------ Retained earnings Balance, beginning of period 4,459 4,849 Net earnings for the period 761 1,396 ---------------------------------------------------------------------- Balance, end of period 5,220 6,245 ------------------------------ iMarketing Solutions Group Inc. Consolidated Condensed Statements of Cash Flows Unaudited (In thousands of Canadian dollars, except per share amounts) Nine months ended ---------------------------------------------------------------------- For the periods ended September 30 2011 2010 ---------------------------------------------------------------------- Cash flow from (used in) operating activities Net earnings (loss) for the period 761 1,396 Items not affecting cash: Depreciation of equipment 1,101 952 Amortization of intangible assets 350 6 Adjustment for non-cash tenant inducement rent credit (56) (61) Deferred income tax expense 107 (88) Bargain purchase gain - (1,231) ---------------------------------------------------------------------- 2,263 974 ---------------------------------------------------------------------- Non-cash working capital Accounts receivable (467) (1,040) Prepaid expenses and other current assets (579) (561) Accounts payable and accrued liabilities (932) 203 Income taxes recoverable/payable 538 525 ---------------------------------------------------------------------- Change in non-cash working capital items (1,440) (873) ---------------------------------------------------------------------- Cash flow from (used in) operating activities 823 101 ---------------------------------------------------------------------- Cash flow from (used in) financing activities Increase (decrease) in bank indebtedness (208) (814) Long term debt repaid (224) (200) (Repayments to) advances from related parties (400) 300 Issuance of shares on option exercise - 33 Repurchase of share capital (96) - Cash flow from (used in) financing activities (929) (681) ---------------------------------------------------------------------- iMarketing Solutions Group Inc. Consolidated Condensed Statements of Cash Flows Unaudited (In thousands of Canadian dollars, except per share amounts) Nine months ended ---------------------------------------------------------------------- For the periods ended September 30 2011 2010 ---------------------------------------------------------------------- Cash flow from (used in) investing activities Investment in equipment (1,974) (599) Adjustment for transaction costs for business combination expensed above - 291 Cash flow from (used in) investing activities (1,974) (308) ---------------------------------------------------------------------- Effect of exchange rate fluctuations on cash and cash equivalents (7) (36) ---------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (2,087) (924) ---------------------------------------------------------------------- Cash and cash equivalents, beginning of period 2,322 3,445 ---------------------------------------------------------------------- Cash and cash equivalents, end of period $ 235 $ 2,521 ---------------------------------------------------------------------- ----------------------------------------------------------------------

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contacts:
iMarketing Solutions Group Inc.
Peter Pielsticker
(416) 633-4646


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