HispanicBusiness

Interest income increased in the three and nine months ended December 31, 2012, compared to the same periods of the prior fiscal year, mainly due to investing larger cash balances.

CMG is impacted by the movement of the US dollar against the Canadian dollar as approximately 67% (2011 - 72%) of CMG's revenue for the nine months ended December 31, 2012 is denominated in US dollars, whereas only approximately 22% (2011 - 23%) of CMG's total costs are denominated in US dollars.

                                                                  Nine month                                                                    trailingCDN$ to US$     At June 30   At September 30    At December 31       average--------------------------------------------------------------------------------------------------------------------------------------------------------2010                0.9429            0.9711            1.0054        0.96972011                1.0370            0.9626            0.9833        1.01322012                0.9813            1.0166            1.0051        0.9998--------------------------------------------------------------------------------------------------------------------------------------------------------

CMG recorded a foreign exchange gain of $0.1 million and $0.01 million for the three and nine months ended December 31, 2012, respectively, compared to a $0.03 million foreign exchange loss and a $0.8 million foreign exchange gain recorded in the three and nine months ended December 31, 2011, respectively.

The weakening of the Canadian dollar during the third quarter of the current fiscal year, contributed positively to the valuation of our US-denominated working capital for the three months ended December 31, 2012 compared to the same period of the previous fiscal year. On the other hand, the fluctuation in the exchange rates between the Canadian and the US dollars during the current fiscal year, has contributed negatively to the valuation of our US-denominated working capital for the nine months ended December 31, 2012 compared to the same period of the previous fiscal year.

Income and Other Taxes

CMG's effective tax rate for the nine months ended December 31, 2012 is reflected as 29.26% (2011 - 28.69%), whereas the prevailing Canadian statutory tax rate is now 25.0%. This is primarily due to a combination of the non-tax deductibility of stock-based compensation expense and the benefit of foreign withholding taxes being realized only as a tax deduction as opposed to a tax credit.

The benefit recorded in CMG's books on the SR&ED investment tax credit program impacts deferred income taxes. The investment tax credit earned in the current fiscal year is utilized by CMG to reduce income taxes otherwise payable for the current fiscal year and the federal portion of this benefit bears an inherent tax liability as the amount of the credit is included in the subsequent year's taxable income for both federal and provincial purposes. The inherent tax liability on these investment tax credits is reflected in the year the credit is earned as a non-current deferred tax liability and then, in the following fiscal year, is transferred to income taxes payable.

Operating Profit and Net IncomeFor the three months ended December 31,   2012     2011  $ change  % change($ thousands, except per share amounts)--------------------------------------------------------------------------------------------------------------------------------------------------------Total revenue                           16,802   15,898       904         6%Operating expenses                      (8,526)  (7,805)     (721)        9%----------------------------------------------------------------------------Operating profit                         8,276    8,093       183         2%Operating profit as a % of total revenue                                    49%      51%--------------------------------------------------------------------------------------------------------------------------------------------------------Net income for the period                6,119    5,790       329         6%Net income for the period as a % of total revenue                              36%      36%--------------------------------------------------------------------------------------------------------------------------------------------------------Earnings per share ($/share)              0.16     0.16         -         0%--------------------------------------------------------------------------------------------------------------------------------------------------------For the nine months ended December 31,    2012     2011  $ change  % change($ thousands, except per share amounts)--------------------------------------------------------------------------------------------------------------------------------------------------------Total revenue                           49,341   43,819     5,522        13%Operating expenses                     (24,928) (21,408)   (3,520)       16%----------------------------------------------------------------------------Operating profit                        24,413   22,411     2,002         9%Operating profit as a % of total revenue                                    49%      51%--------------------------------------------------------------------------------------------------------------------------------------------------------Net income for the period               17,569   16,771       798         5%Net income for the period as a % of total revenue                              36%      38%--------------------------------------------------------------------------------------------------------------------------------------------------------Earnings per share ($/share)              0.47     0.46      0.01         2%--------------------------------------------------------------------------------------------------------------------------------------------------------