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Nurun: Revenues Up 16%, Net Income Triples

Nurun: Revenues Up 16%, Net Income Triples

MONTREAL, QUEBEC -- (MARKET WIRE) -- 05/03/06 -- Nurun Inc. (TSX:NUR), a subsidiary of Quebecor Media Inc., today reported its financial results for the first quarter ended March 31, 2006. Unless otherwise indicated, all amounts are in Canadian dollars.

- Revenues up 16% to $18.0 million
- Operating income up $726,000 to $1,463,000
- Net earnings of $945,000 or $0.03 per share, compared with
  $308,000 or $0.01 per share in the same period of 2005

"We kicked off 2006 with another increase in quarterly revenues, and most notably very significant increases in operating income and net earnings, which equalled 8.1% and 5.2% of sales respectively," said Jacques-Herve Roubert, President and Chief Executive Officer of Nurun. "These results reflect our balanced development strategy of expanding in growth markets and segments, while enriching our value-added service offerings. We continue supporting the corporate communications and eCommerce strategies of both long-established and recently acquired customers, including Europcar, Thales, Home Depot Canada, Gaz de France, and W.L. Gore and Associates, by developing large-scale portals and eCommerce sites. At the same time, we have beefed up our competencies in interactive advertising, relationship marketing, and online media planning and placement. We are now equipped to leverage new media and the latest-generation technology to meet the needs of a diversified customer base of companies engaged in industry, distribution and services, such as Pirelli, AutoTrader.com, MedPointe Pharmaceuticals, TD Meloche Monnex/TD Insurance, and FAW-VW Volkswagen in China."


Nurun's revenues continued to climb, increasing by $2.5 million or 16% from $15.5 million in the first quarter of 2005 to $18.0 million in the first quarter of 2006. The strong revenue growth was driven by expansion of the Company's interactive marketing and media placement service offerings, the favourable impact of new customers such as NADAguides and Pirelli, strengthened relationships with existing customers such as the government of Quebec and Louis Vuitton, and the acquisition of China Interactive.

Nurun's operating income nearly doubled to $1,463,000 in the first quarter of 2006, compared with $737,000 in the same quarter of 2005, a $726,000 increase. As a percentage of revenues, operating income was 8.1% in the first quarter of 2006, compared with 4.8% in the same quarter of 2005. The improvement was due to the revenue growth, which allowed for improved productivity yielding a 5.7% decrease in labour costs.

Nurun's net earnings totalled $945,000 or $0.03 per share in the first quarter of 2006, compared with $308,000 or $0.01 per share in the same quarter of 2005, a $637,000 increase. As a percentage of revenues, net earnings were 5.2% in the first quarter of 2006, compared with 2.0% in the first quarter of 2005.


The Company defines operating income as earnings before interest, income taxes, foreign exchange gains (losses), depreciation and amortization.

Operating income, as defined above, is not a measure of results that is consistent with generally accepted accounting principles. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. Operating income is used by the Company because management believes it is a meaningful measure of performance. Operating income is commonly used by the investment community to analyze and compare corporate performance. It also facilitates year-over-year comparison of results, since operating income excludes, among other things, unusual items that are not readily comparable from year to year. The Company's definition of operating income may not be identical to similarly titled measures reported by other companies.


The statements in this press release that are not historical facts are forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause Nurun's actual results for future periods to differ materially from those set forth in the forward-looking statements. Certain factors that may cause actual results to differ from current expectations include competition, dependence on major customer, pricing, general changes in the economic environment, international expansion, ability to attract key personnel, further acquisitions and foreign exchange exposure. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause Nurun's actual results to differ from current expectations, please refer to Nurun's public filings available at www.sedar.com and www.nurun.com including, in particular, the "Risks and Uncertainties" section of Nurun's Management's Discussion and Analysis for the year ended December 31, 2005 and updated information found in Nurun's quarterly Management's Discussion and Analysis.

The forward-looking statements in this press release reflect Nurun's expectations as of May 3, 2006 and are subject to change after this date. Nurun expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.


Nurun Inc. (TSX:NUR), a subsidiary of Quebecor Media Inc., is a global company which strategizes, executes and measures interactive programs that use new technologies. From building awareness to acquiring and retaining customers, our solutions provide exceptional user experiences which enable eCommerce/transactions and leverage the lifetime value of customer relationships.

Since 1985, Nurun has worked with many companies and organizations, including L'Oreal, Groupe Danone, Cingular Wireless, Louis Vuitton, Thales, Club Med, Pfizer, SkyTeam, Home Depot, Pleasant Holidays, Renault, Europcar, AutoTrader.com, Equifax, Telecom Italia, the Government of Quebec and the State of Georgia. Nurun Inc. employs approximately 600 professionals in Canada, the US, Europe and China. For more information, visit www.nurun.com.

Consolidated Balance Sheets
March 31, 2006, with comparative figures as at December 31, 2005
(in thousands of dollars)
                                                  2006         2005
                                            (unaudited)    (audited)


Current assets:
  Cash and cash equivalents                   $ 34,562     $ 31,834
  Temporary investment                             120          120
  Accounts receivable                           16,419       16,914
  Work in process                                9,548        7,417
  Income taxes and tax credits receivable        1,824        2,755
  Prepaid expenses                                 889        1,165
  Future tax assets                              1,057        1,039
                                                64,419       61,244

Capital assets                                   2,891        2,918
Intangible assets                                  360          357
Future tax assets                                3,293        3,248
Goodwill                                        10,233        7,343

                                               $81,196      $75,110

Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable and accrued liabilities     $17,614     $ 14,644
  Income taxes payable                             400          467
  Deferred revenues                              3,546        2,420
                                                21,560       17,531

Shareholders' equity:
  Share capital                                304,919      305,079
  Contributed surplus                            5,895        4,978
  Deficit                                     (247,018)    (247,963)
  Cumulative translation adjustment             (4,160)      (4,515)
                                                59,636       57,579

                                               $81,196      $75,110

Consolidated Statements of Earnings
Three-month periods ended March 31, 2006 and 2005
(in thousands of dollars, except amounts per share) (unaudited)
                                                  2006         2005

Revenues                                       $17,999      $15,501

  Cost of revenues                              10,974        9,616
  Selling and administrative                     5,562        5,148
                                                16,536       14,764

Operating income                                 1,463          737

Interest income, net                              (201)        (277)
Loss on foreign exchange                            58           33
Depreciation and amortization                      426          415
Earnings before income taxes                     1,180          566

Income taxes                                       235          258
Net earnings                                      $945         $308

Net earnings per share - basic and diluted       $0.03        $0.01

Basic weighted average number of shares
 outstanding (in thousands)                     33,089       33,294
Diluted weighted average number of shares
 outstanding (in thousands)                     33,708       33,333

Consolidated Statements of Deficit
Three-month periods ended March 31, 2006 and 2005
(in thousands of dollars) (unaudited)
                                                  2006         2005

Deficit, beginning of period                 $(247,963)   $(251,630)

Net earnings                                       945          308

Deficit, end of period                       $(247,018)   $(251,322)

Consolidated Statements of Cash Flows
Three-month periods ended March 31, 2006 and 2005
(in thousands of dollars) (unaudited)
                                                  2006         2005

Cash flows related to operating activities:
  Net earnings                                    $945         $308
  Adjustments for:
    Depreciation and amortization                  426          415
    Future income taxes                             28           48
    Stock-based compensation and other             289          176
                                                 1,688          947
  Net change in non-cash operating working
   capital items
    Accounts receivable                            811       (2,159)
   Work in process                              (1,814)        (592)
   Income taxes and tax credits receivable         933          819
   Accounts payable and accrued liabilities      2,531        2,455
   Deferred revenues                             1,073          841
   Other                                           213         (309)
                                                 5,435        2,002

Cash flows related to financing activities:
  Increase in bank indebtedness                      -            5
  Issuance of shares                                42            -
  Redemption of shares                            (415)        (232)
                                                  (373)        (227)

Cash flows related to investing activities:
  Net proceeds from disposal of a subsidiary         -        3,839
  Business acquisition, net of acquired cash and
   cash equivalents                             (2,168)           -
  Additions to capital assets                     (273)        (542)
                                                (2,441)       3,297

Effect of exchange rate changes on cash and
 cash equivalents                                  107           38

Net increase in cash and cash equivalents        2,728        5,110

Cash and cash equivalents, beginning of period  31,834       28,312

Cash and cash equivalents, end of period       $34,562      $33,422

Nurun Inc.
Guy Lemieux
Vice President, Finance
(514) 392-4300
[email protected]

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