Mktg, Inc. : MKTG INC Reports 48% Increase in Operating Income for Its Third Quarter Ended December 31, 2011

MKTG INC Reports 48% Increase in Operating Income for Its Third Quarter Ended December 31, 2011

NEW YORK, Feb. 3, 2012 /PRNewswire/ -- MKTG INC (OTC BB: CMKG), a full service marketing agency, today announced its operating results for its third quarter ended December 31, 2011.

Operating Results - Third Quarter, Fiscal 2012

For its third quarter ended December 31, 2011, Operating Revenue increased $930,000 or 11% to $9.5 million, compared to
$8.6 million for the quarter ended December 31, 2010. Compensation and general and administrative expenses were $8.5 million for the quarter, compared to $7.9 million for the quarter ended December 31, 2010. Operating income for the quarter increased 48% to $1,015,000, compared to $687,000 for the third quarter of the previous year. Modified EBITDA for the quarter was $1,365,000, compared to $1,077,000 for the quarter ended December 31, 2010.

Operating Results - Nine Months Ended December 31, 2011

For the nine months ended December 31, 2011, Operating Revenue increased $2.1 million or 8% to $28.0 million, compared to
$25.9 million for the nine months ended December 31, 2010. Compensation and general and administrative expenses were
$24.8 million for the nine-month period, compared to $23.3 million for the nine months ended December 31, 2010. Operating income for the period increased to $3.2 million, compared to $2.6 million for the nine months ended December 31, 2010.
Modified EBITDA for the period was$4.2 million, compared to $3.9 million for the nine months ended December 31, 2010.
"We delivered another solid quarter driven by our broad and diversified service offering," said Charlie Horsey, President and Chief Executive Officer. Mr. Horsey concluded, "In addition, we are excited to announce the opening of our newLondon office in January and the immediate revenue and work generated by some of our existing US clients looking to utilize our services abroad. This geographic expansion and our continued emphasis on new business and corporate development provide new growth opportunities and momentum as we head into our fourth quarter and Fiscal 2013."
"We repaid in full $2.5 million of debt outstanding under our Senior Notes and secured a new $4.0 million revolving credit facility," saidPaul Trager, Chief Financial Officer. Mr. Trager continued, "Our increasing liquidity and access to credit stabilizes our balance sheet and positions us well for continued growth."

Operating Revenue and Modified EBITDA

The Company believes Operating Revenue and Modified EBITDA are key performance indicators. The Company defines Operating Revenue as sales less reimbursable program costs and expenses and outside production and other program expenses. Operating Revenue is the net amount derived from sales to customers that management believes is available to fund compensation, general and administrative expenses and capital expenditures. The Company defines Modified EBITDA as income before interest, income taxes, depreciation and amortization plus other non-cash expenses. The Company uses Modified EBITDA as a supplemental measure to evaluate operational performance. Operating Revenue and Modified EBITDA are Non-GAAP financial measures disclosed by management to provide additional information to investors in order to provide them with alternative methods for assessing the Company's financial condition and operating results. These measures are not in accordance with, or a substitute for, GAAP and may be different from or inconsistent with Non-GAAP financial measures used by other companies. Reconciliations of Operating Revenue to sales and Modified EBITDA to operating income are provided at the end of this press release.
About MKTG INC
MKTG INC is a full service marketing agency headquartered in New York with full service offices in San Francisco, Los Angeles, Chicago, Cincinnati and London, England. The Company currently serves a variety of the world's most recognizable brands. Its services include experiential marketing, digital marketing, retail promotions and strategic research and planning. The firm's programs help its clients profitably connect with consumers and create networks of brand advocates to generate brand awareness and higher sales for its customers. For more information, please visit www.mktg.com.
This press release includes statements which constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally
subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward- looking statements. Actual results may vary materially from those expressed or implied by the statements herein. Factors that could cause actual results to differ materially from the Company's expectations are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2011 under "Risk Factors," and include the risk that projected business opportunities will fail to materialize or will be delayed. The Form 10-K may be obtained by visiting the Company's website or by accessing the database maintained by the Securities and Exchange Commission at http://www.sec.gov.

MKTG INC

Condensed Consolidated Statements of Operations

For The Three and Nine Months Ended December 31, 2011 and 2010 (Unaudited)

Three Months Ended Nine Months Ended

December 31, December 31,

2011 2010 2011 2010

Sales	$ 36,177,898	$ 31,744,668	$ 95,914,022	$ 89,437,543
Operating revenue	$ 9,503,941	$ 8,573,678	$ 27,975,836	$ 25,897,201
Operating income	$ 1,014,582	$ 687,006	$ 3,180,557	$ 2,591,533
Income before provision for income taxes	$ 1,562,474	$ 1,082,276	$ 3,964,944	$ 1,181,738
Provision for income taxes	$ 60,000	$ -	$ 150,000	$ -
Net income	$ 1,502,474	$ 1,082,276	$ 3,814,944	$ 1,181,738

Earnings per share:
Basic	$ 0.18	$ 0.13	$ 0.47	$ 0.15
Diluted	$ 0.09	$ 0.07	$ 0.24	$ 0.08

MKTG INC

Condensed Consolidated Balance Sheets

December 31, 2011 and March 31, 2011

December 31,

2011

March 31,

	(Unaudited)	2011
Total assets	$ 31,965,019	$ 32,240,753
Total liabilities	$ 21,538,997	$ 25,947,885
Preferred stock	$ 2,433,131	$ 2,003,085
Total stockholders' equity	$ 7,992,891	$ 4,289,783

MKTG INC

Operating Revenue Schedule

For The Three and Nine Months Ended December 31, 2011 and 2010 (Unaudited)

Three Months Ended Nine Months Ended

December 31, December 31,

2011 2010 2011 2010

Sales $ 36,177,898 $ 31,744,668 $ 95,914,022 $ 89,437,543

Reimbursable program costs and expenses 5,876,567 5,881,340 18,377,515 17,462,036

Outside production and other program expenses 20,797,390 17,289,650 49,560,671 46,078,306

Operating Revenue $ 9,503,941 $ 8,573,678 $ 27,975,836 $ 25,897,201

MKTG INC

Modified EBITDA Schedule

For The Three and Nine Months Ended December 31, 2011 and 2010 (Unaudited)

Three Months Ended Nine Months Ended

December 31, December 31,

2011 2010 2011 2010

Operating income	$ 1,014,582	$ 687,006	$ 3,180,557	$ 2,591,533
Depreciation and amortization	235,451	270,132	713,021	828,984
Income tax expense	-	15,000	-	45,000
Share based compensation expense	114,864	104,641	331,809	388,626
Modified EBITDA	$ 1,364,897	$ 1,076,779	$ 4,225,387	$ 3,854,143

SOURCE MKTG INC
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