Advantex Announces Improvement in Results for Three and Nine Months Ended March 31, 2012

TORONTO, ONTARIO--(Marketwire - May 10, 2012) - Advantex Marketing International Inc. ("Advantex" or the "Company") (CNSX:ADX), a leading specialist in merchant funding and loyalty marketing programs, today announced its results for the three and nine months ended March 31, 2012.

"The January to March quarter is normally the low point in Advantex's business cycle and it reflects a slow-down in consumer spending, at merchants participating in the Company's programs, after the October - December high season. The Company has weathered this quarter much better compared with corresponding period previous year," said Kelly Ambrose, Advantex President and Chief Executive Officer.

"Typically from April through December consumer spending progressively increases. Furthermore, during this period merchants explore avenues to improve their business and this is an opportunity for the Company to sell its working capital and / or loyalty marketing programs thereby increasing merchant participation. We are confident in our ability to continue to grow merchant base and ensure growth in future revenues and profitability," said Mr. Ambrose.

Financial Highlights (ii):
														(CAD)
		Three months ended March 31												Nine months ended March 31
		2012				2011				Change				2012			2011				Change
Average # of participating merchants			1,184				763				55.2	%			1,090			754				44.6	%
Revenues		$	3,494,000			$	2,876,000			$	618,000			$	11,563,000		$	9,856,000			$	1,707,000
Gross Profit		$	2,548,000			$	1,887,000			$	661,000			$	8,405,000		$	6,811,000			$	1,594,000
Earnings from operations before Amortization and Interest (EBITDA (i))		$	387,000			$	135,000			$	252,000			$	2,364,000		$	1,769,000			$	595,000
Cash Interest		$	486,000			$	377,000			$	(109,000	)		$	1,495,000		$	1,162,000			$	(333,000	)
Earnings after Cash Interest (i)		$	(99,000	)		$	(242,000	)		$	143,000			$	869,000		$	607,000			$	262,000
Amortization		$	119,000			$	79,000			$	(40,000	)		$	313,000		$	350,000			$	37,000
Non cash interest - Accretion		$	136,000			$	136,000			$	-			$	402,000		$	478,000			$	76,000
Discontinued operations		$	-			$	10,000			$	(10,000	)		$	-		$	(19,000	)		$	19,000
Net Profit / (Loss)		$	(354,000	)		$	(446,000	)		$	92,000			$	154,000		$	(240,000	)		$	394,000

(i) EBITDA, and Earnings after cash interest, are non-GAAP financial measures which do not have any standardized meaning prescribed by the issuer's GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. For the Company, the most directly comparable measure to EBITDA is Earnings from operations before amortization and interest, and in case of Earnings after cash interest is Earnings from operations before amortization and interest less Stated interest expense and is presented to illustrate the Company's assessment of cash generated from its operating activities after reflecting stock based compensation expense but prior to changes in working capital items.

(ii) Some numbers in the presentation under Financial Highlights may not add due to rounding.

The increase in the Company's revenues and profitability is primarily a reflection of increase in the number of merchants participating in its programs.

The higher dollar cash interest cost is mainly a reflection of an increase in the utilization of the line of credit facility (Loan payable on the balance sheet) which the Company utilizes to expand its Advance Purchase Marketing (APM) program business. The APM program is the Company's premier product and source of revenue.

About Advantex Marketing International Inc.

Advantex is a specialist in the marketing services industry. Advantex partners with Canadian Imperial Bank of Commerce (CIBC), and Aeroplan Canada Inc. (Aeroplan). On a combined basis, Advantex has contractual marketing access to more than five million Canadian consumers with above-average personal and household income. The Company's merchant partner base currently consists of over 1,200 merchants operating restaurants, golf courses, independent inns, resorts and selected hotels, spas, retailers of men's and ladies fashion, footwear and accessories, retailers of sporting goods, florists and garden centres, book and newspaper stores, health and beauty centres, and gift stores, many of which are leaders in their respective categories. Advantex is traded on the Canadian National Stock Exchange under the symbol "ADX". For additional information on Advantex, please visit www.advantex.com.

Forward-Looking Information

This Press Release contains certain "forward-looking information". All information, other than information comprised of historical fact, that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitutes forward-looking information. Forward-looking information is typically identified by words such as: anticipate, believe, expect, goal, intend, plan, will, may, should, could and other similar expressions. Such forward-looking information relates to, without limitation, information regarding: the Company's belief that the April through December period provides an opportunity to increase merchant participation; the Company's belief in its ability to continue to grow its merchant base and ensure growth in future revenues and profitability; and other information regarding financial and business prospects and financial outlook is forward-looking information.

Forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company, including certain assumptions and expectations of Management. With respect to the forward-looking information contained in this Press Release, the Company has made assumptions regarding, continued affinity partner participation; continued support from providers of loan payable and non-convertible debentures; the size of the market for its programs and its ability to increase merchant participation; its ability to access future financing to expand its APM program; future business levels and the cost structure required to operate at those levels; and future interest rates.

Forward-looking information is subject to a number of risks, uncertainties and assumptions that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, those listed under "General Risks and Uncertainties" and "Economic Dependence" in the Management's Discussion and Analysis for the three and nine month periods ended March 31, 2012 available on www.sedar.com.

All forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Advantex Marketing International Inc.
Consolidated Statement of Financial Position
As at March 31, 2012 and June 30, 2011- (Unaudited)
		March 31, 2012				June 30, 2011
Assets
Current assets
Cash and cash equivalents			539,879				5,000
Accounts receivable			835,094				842,249
Transaction credits			13,939,071				12,408,060
Inventory (note 4)			218,000				66,451
Prepaid expenses and sundry assets			243,798				248,541
		$	15,775,842			$	13,570,301
Non-current assets
Other asset (note 5)			100,000				100,000
Property, plant and equipment, and intangibles			618,079				761,177
			718,079				861,177
Total assets		$	16,493,921			$	14,431,478
Liabilities
Current liabilities
Bank Indebtedness			-				83,262
Loan payable (note 6)			6,455,218				4,917,446
Accounts payable and accrued liabilities			3,449,652				3,319,363
Liabilities of discontinued operations (note 12)			324,647				432,440
		$	10,229,517			$	8,752,511
Non-current liabilities
14% Non-convertible debentures payable (note 7)			1,762,745				1,747,497
12% Non-convertible debentures payable (note 8)			5,649,815				5,300,492
		$	7,412,560			$	7,047,989
Total Liabilities		$	17,642,077			$	15,800,500
Shareholders' equity
Share capital (note 9)			24,110,096				24,110,096
Contributed surplus (note 10)			793,198				726,795
Equity portion of debentures (note 8)			2,114,341				2,114,341
Warrants (note 7/8)			1,196,013				1,196,013
Deficit			(29,361,804	)			(29,516,267	)
Total equity		$	(1,148,156	)		$	(1,369,022	)
Total liabilities and equity		$	16,493,921			$	14,431,478

Commitments (note 13)

Approved by the Board:

Director:	"William Polley"	Director:	"Kelly Ambrose"
	William Polley		Kelly E. Ambrose

Advantex Marketing International Inc.
Consolidated Statement of Profit/ (Loss)
For the three and nine months ended March 31, 2012 and 2011 - (Unaudited)
			For the Three months ended						For the nine months ended
			March 31						March 31
			2012			2011			2012		2011
			$			$			$		$
Revenues			3,493,635			2,875,626			11,563,064		9,855,889
Direct expenses			945,919			988,195			3,158,395		3,044,483
Gross profit			2,547,716			1,887,431			8,404,669		6,811,406
Operating Expenses
Selling and marketing			1,015,805			731,756			2,717,218		2,045,588
General and administrative			1,145,110			1,020,361			3,323,748		2,996,613
Earnings from operations before amortization and interest from continuing operations			386,801			135,314			2,363,703		1,769,205
Depreciation of property, plant and equipment, and intangibles			118,706			78,672			313,109		350,436
Interest expense:
	Stated interest expense - loan payable, debentures		485,748			377,083			1,494,472		1,161,955
	Non-cash interest expense on loan payable, and debentures		135,997			136,073			401,659		477,781
Net income / (Loss) from continuing operations			(353,650	)		(456,514	)		154,463		(220,967	)
Net income / (Loss) from discontinued operations			-			10,069			-		(18,886	)
Net income / (loss) and Comprehensive income / (loss)			(353,650	)		(446,445	)		154,463		(239,853	)
Earnings per share:
Basic and Diluted			0.00			0.00			0.00		0.00

Advantex Marketing International Inc.
Consolidated Statements of Changes in Equity
(Unaudited)
			Class A preference shares		Common shares		Contributed surplus		Equity portion of debentures		Warrants		Deficit			Total
			$		$		$		$		$		$			$
Balance - July 1, 2010			3,815		24,106,281		645,879		2,114,341		374,554		(29,023,988	)		(1,779,118	)
Net (loss) for the period													(239,853	)		(239,853	)
Other comprehensive income (net of tax):													-			-
Net (loss) and Comprehensive (loss) for the period													(239,853	)		(239,853	)
Employee share options:
	Value of services recognized						88,880									88,880
Balance - March 31, 2011			3,815		24,106,281		734,759		2,114,341		374,554		(29,263,841	)		(1,930,091	)
Balance - July 1, 2011			3,815		24,106,281		726,795		2,114,341		1,196,013		(29,516,267	)		(1,369,022	)
Net income for the period													154,463			154,463
Other comprehensive income (net of tax):													-			-
Net income and Comprehensive income for the period													154,463			154,463
Employee share options:
	Value of services recognized						66,403									66,403
Balance - March 31, 2012			3,815		24,106,281		793,198		2,114,341		1,196,013		(29,361,804	)		(1,148,156	)

Advantex Marketing International Inc.
Consolidated Statement of Cash Flow
For the nine months ended March 31, 2012 and 2011 - (Unaudited)
				2012			2011
				$			$
Cash flow provided by (used in)
Operating activities
Net income / (loss) for the period - continuing operations				154,463			(220,967	)
Adjustments for:
	Depreciation of property, plant and equipment, and intangibles			313,109			350,436
	Stock-based compensation			66,403			88,880
	Accretion charge for debentures			401,659			477,781
				935,634			696,130
Changes in items of working capital
	Accounts receivable			7,155			(420,941	)
	Transaction credits			(1,531,011	)		(1,917,406	)
	Inventory			(151,549	)		133,024
	Prepaid expenses and sundry assets			4,743			(40,507	)
	Accounts payable and accrued liabilities			130,289			484,404
				(1,540,373	)		(1,761,426	)
Net cash generated from operating activities				(604,739	)		(1,065,296	)
Investing activities
Purchase of property, plant and equipment, and intangibles				(170,011	)		(218,842	)
Investment in other asset				-			(100,000	)
Net cash generated from investing activities				(170,011	)		(318,842	)
Financing activities
Loan Payable				1,537,772			651,125
Debenture renewal - additional transaction costs				(37,088	)		-
Net cash generated in financing activities				1,500,684			651,125
Movement in cash and cash equivalents during the period
		- From continuing operations		725,934			(733,013	)
		- From discontinued operations (note 12)		(107,793	)		276,384
				618,141			(456,629	)
Increase (decrease) in cash and cash equivalents				618,141			(456,629	)
Cash and cash equivalents - Beginning of period				(78,262	)		505,941
Cash and cash equivalents - End of period				539,879			49,312