FYE Results 2001
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XENTEL REPORTS : 2001 – BEST YEAR IN THE COMPANY’S 23 YEAR HISTORY!
-Earnings per share of $0.34 exceeds forecast by $0.05 per share-

Calgary, Alberta April 2, 2002 - XENTEL DM Incorporated (CDNX:XDM) ), a North American specialty entertainment and relationship marketing company, today reported record year end results for the 12 months ended December 31, 2001.

Net earnings for fiscal 2001were $6.5 million or $0.34 per share, compared to net earnings for fiscal 2000 of $0.4 million or $0.02 per share, an increase of $6.1 million. Revenues for fiscal 2001 were $97.4 million compared to $93.9 million for fiscal 2000, an increase of $3.5 million or 4%. EBITDA was $9.6 million or $0.50 per share for the year ended December 31, 2001 compared to $4.5 million or $0.25 per share for the same period in 2000.

Fourth quarter 2001 results were also strong. Net earnings were $2.6 million or $0.13 per share for the 4Q2001 compared to net earnings for the same period in 2000 of $1.3 million or $0.07 per share, an increase of $1.3 million. Fourth quarter 2001 revenues were $25.9 million compared to fourth quarter 2000 revenues of $22.6 million, an increase of $3.3 million or 15%.

Gross margin for the year ended December 31, 2001 was $31.1 million or 32% of revenues compared to the year ended December 31, 2000 where gross margin was $24.3 million or 26%. Fourth quarter 2001 gross margin was $8.6 million or 33% of revenues compared to fourth quarter 2000 of $6.9 million or 31% of revenues. Much of the improved earnings year over year is attributable to the continual cost cutting measures in the operations combined with improved profitability on the contractual arrangements with clients, primarily focused on the US operations.

At December 31, 2001, the Company’s working capital was $9.0 million compared to $0.7 million at December 31, 2000. Beginning in late 2001 and in the first quarter of 2002, the Company has made early long term debt retirement payments of $2.0 million which will reduce interest costs by approximately $240 thousand.

Mike Platz, Chairman stated, “These are outstanding results. We thank our shareholders who have displayed faith and confidence in management to successfully lead this enterprise. The hard work and commitment of our people have made this happen.”


President, Geoff Pickering added, “This is a strong company with a solid balance sheet and a track record of impressive earnings. Our future will be to build on this with quality growth, both organically and with selective acquisitions.”

Outlook

A Comparison of Canadian and US Operations

For the year ended December 31, 2001, revenues from Canadian operations were $45.7 million and from US operations $51.7 million or 47% from Canada and 53% from the US. By comparison, for the year ended December 31, 2000, revenues from Canadian operations were $46.0 million and from US operations $47.9 million or 49% from Canada with 51% from the US. In the future, the organic growth is expected to be generated by the US operations.

Earnings from operations (before pre acquisition charges and income taxes) for fiscal 2001 were $3.6 million from Canada and $3.4 million from the US as compared to fiscal 2000 where the Canadian operations were $3.1 million while the US operations incurred a loss of $1.2 million.

Net earnings in Canada for the year ended December 31, 2001 were $2.0 million and for the US operations $4.5 million. In the fourth quarter of 2001, there was an increase to earnings in the US relating to the recognition of the benefit of income tax losses amounting to $2.6 million. Overall the results for both the Canadian and US operations are generally evenly split if the tax adjustment is not taken into consideration.

General

The Company is projecting a reasonable level of internal growth for 2002, primarily from the US operations. It is expected that profitability levels will be maintained, ignoring the significant adjustment for income taxes that affected the 2001 results. The Company is continuing its program of technologically upgrading its telephony systems which will further improve operational efficiency. Management is continuing to effect cost cutting measures, which when combined with reduced interest costs due to debt reductions result in strong positive projected net earnings for 2002.

XENTEL DM Incorporated 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. XENTEL DM Incorporated has over 300 clients and 1,800 employees in 22 offices across North America, has been profitable 22 years of its 23 year history and is traded on the Canadian Venture Exchange under the symbol XDM.
Revenues for the US operations were $12,505,000 for the third quarter 2001 compared to revenues of $12,520,000 for the third quarter 2000 and for the nine months ended September 30, 2001 and 2000 were $36,924,000 and $36,990,000 respectively.

The net earnings for the third quarter 2001 were $1,128,000 compared to $615,000 for the third quarter 2000, an increase of $513,000 or 83%. For the year to date, year over year, net earnings increased $4,377,000 from a loss of $1,856,000 to net earnings of $2,521,000.


XENTEL DM Incorporated is one of North America’s leading producers of family oriented live entertainment and expects to stage approximately 500 events in North America in 2001. The Company’s success is attributable to its proprietary sales tools including its technologically advanced teleservices organization and sophisticated customer databases. These tools are used to effectively pre-sell its events, thereby increasing revenue and reducing risk by minimizing the number of unsold event tickets. XENTEL DM Inc. has over 300 clients and approximately 2,000 employees in 21 offices across North America. The Company is traded on the Canadian Venture Exchange under the symbol XDM.

The Canadian Venture Exchange has neither approved nor disapproved of the contents of this announcement.

View Consolidated Balance Sheet
View Consolidated Statement of Operations and Retained Earnings
View Consolidated Statement of Cash Flows
View Geographic Segmented Information

For more information, please contact:

Caren Holtby
Investor Relations
Tel: (866) 204-9861
carenh@xentel.com

ASSETS

Revenue

Non cash transactions reflected in net earnings