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SYNOPSIS
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December 31st, 2006 December 31 st, 2005
(audited) (audited)
GROSS SALES $ 3,634,252 $ 3,733,139
DIRECT EXPENSES $ 1,890,944 $ 2,181,869
GAIN/(LOSS) BEFORE TAXES $ (100,192) $ 84,500
NET LOSS $ 344,778 $ (126,902)
NET LOSS PER SHARE $ 0.011 $ 0.006
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LONGUEUIL, QC, April 27 /CNW Telbec/ - SECTION ROUGE MEDIA inc (TSX-V : SRO) today published its financial results for 2006 and announced that it had regained profitability in its publications division, but that its development expenditures in its cinema division caused a consolidated loss.
The Company's gross sales of $3,634,252 for the 2006 calendar year represents a decrease of 2% in comparison to the gross sales of $3,733,139 for the previous calendar year (2005). The restructuring measures implemented in the Company's publications division resulted in a pre-tax gain of $194,266. However, as envisioned within the planned development of the new cinema division acquired in July of 2006, the Company reports a divisional/departmental loss of $312,444. The consolidated loss of all operations is thus $118,178.
The Company's net loss is $344,778, compared to $126,902 for the period ending December 31 st, 2005. The net loss per share is $0.011 as compared to a net loss per share of $0.006 in 2005.
Company revenues are can be credited solely to its publications division, the 2% decrease being attributed essentially to a decrease in circulation for the newspaper Photo Police. The management is pleased to note that all the Company's publications are now profitable, including its family oriented magazine publications: Bebe, Junior and Grossesse.
In the cinema sector, revenues are slightly later in realization than originally anticipated. The Company therefore must absorb the administration costs generated by this sector since its acquisition in July of 2006, namely $312,444. Meanwhile, the independent appraisal of this acquisition establishes its value higher than the purchase price.
The financial results are equally affected by the transmission and financing costs incurred during the past year.
Because of the Company's positive cash flow and the financing obtained within the framework of the acquisition of the cinema division, the Company repaid its long-term debt, in full, as well as the balance ($399,799) of the purchase price.
The President and Chairman of the Board of Section Rouge Media inc., Mr. Richard Desmarais, is said to be particularly satisfied with the financial results, when considering that 2006 generated investments to diversify the expansion of the Company in the media field. Moreover,
"We are always searching for new products which will increase our revenues and our operating profits and we believe that we are now in a position to effectuate one or more important transactions in our field", stated Mr. Desmarais.
The administration report and the financial statements for the period ending December 31 st, 2006 are available on the SEDAR site www.sedar.com and on the Company's website at www.sectionrouge.com.
Section Rouge Media inc. is a company registered with the growth stock exchange TSX and the publisher of approximately 30 publications.
The growth stock exchange TSX has neither approved nor disapproved the
contents of this communique.