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Envoy Communications Group Inc. announces fiscal 2005 second quarter results

Envoy Communications Group Inc. (NASDAQ:ECGI, TSX:ECG) today announced its financial results for its second quarter and six months ended March 31, 2005.

Revenue for the quarter increased 6% to $11.2 million compared to $10.6 million for the second quarter of 2004. Revenue this quarter compared to last quarter increased by 12%. Net earnings for this quarter was $0.8 million, or $0.04 per common share, compared to a net loss of ($3.6) million, or ($0.30) per common share for the same period last year.

Envoy completed the acquisition of Parker Williams Design Limited in the United Kingdom at the beginning of March and was, therefore, only included in our results for one month.

For the six months ended March 31, 2005, revenues increased 8% to $21.2 million, versus revenues of $19.6 million for the same period last year. Net earnings were $1.5 million or $0.06 per common share, compared to a net
loss of ($4.1) million or ($0.40) per common share for the same period last year. Our investment income for the six months ended March 31, 2005 was $1.5 million.

Envoy's subsidiaries, Watt International and Watt Gilchrist continue to acquire new accounts. In our second quarter, they were awarded $3.0 million in new business contracts in the following sectors: food and beverage, shopping center, packaged goods, fashion, jewelry, department store, publishing and foodservice.

"Remarkably, these new business wins span six countries including China, England, the United Arab Emirates, Chile, Canada and the United States. The results of these new accounts will begin to positively impact our third and fourth quarters," said Geoffrey Genovese, CEO of Envoy Communications Group Inc.

"We are on track with our guidance of $0.20 per share for the current fiscal year. Our earnings have traditionally been heavily weighted to the last half of the year, in particular our earnings will be strongest in the last
quarter of this year," said Genovese.

In the first six months of this fiscal year, Envoy repurchased 1,457,336 shares under its normal course issuer bid program. This resulted in a total of 21,959,264 shares outstanding as of March 31, 2005.

About Envoy
Envoy Communications Group (NASDAQ: ECGI/TSX:ECG) is an international consumer and retail branding company with offices throughout North America and Europe. For more information on Envoy visit www.envoy.to .

Cautionary Statement
Certain statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 21E(i)(1) of the United States Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Envoy's actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: general economic and business conditions, changes in demand for Envoy's services, changes in competition, the ability of Envoy to integrate acquisitions or complete future acquisitions, interest rate fluctuations, currency exchange rate fluctuations, dependence upon and availability of qualified personnel and changes in government regulation. In light of these and other uncertainties, the forward-looking statements included in this press release should not be regarded as a representation by Envoy that Envoy's plans
and objectives will be achieved. These forward-looking statements speak only as of the date of this press release, and we undertake no obligation to update or revise the statements.

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Financial Highlights
Envoy Communications Group Inc.
Consolidated Statements of Operations
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
-------------------------------------------------------------------------
For the six months ended: March 31 March 31
2005 2004
------------------------------

Net revenue $ 21,216,530 $ 19,625,938
------------------------------

Operating expenses:
Salaries and benefits 14,113,614 13,357,627
General and administrative 4,006,262 3,571,930
Occupancy costs 1,950,252 1,409,668
------------------------------
20,070,128 18,339,225

Depreciation 1,204,042 1,162,973

Investment earnings (1,502,555) (49,465)

Accreted interest imputed on warrants
and debentures - 2,552,991

Interest expense (income) and financing
costs (21,846) 991,100
------------------------------
19,749,769 22,996,824
------------------------------

Earnings (loss) before income taxes,
minority interest and discontinued
operations 1,466,761 (3,370,886)

Income tax expense - 215,121

------------------------------
Earnings (loss) before minority
interest and discontinued operations 1,466,761 (3,586,007)

Minority interest 8,012 -

------------------------------
Earnings (loss) from continuing
operations 1,458,749 (3,586,007)

Income from discontinued operations, net
of income taxes - (465,142)

------------------------------
Net earnings (loss) $ 1,458,749 $ (4,051,149)

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-------------------------------------------------------------------------

Earnings (loss) per share
Basic $ 0.06 $ (0.40)
Diluted 0.06 (0.40)

-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average number of common
shares outstanding 22,705,236 10,031,191



-------------------------------------------------------------------------
Envoy Communications Group Inc.
Consolidated Statements of Deficit
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
-------------------------------------------------------------------------
For the six months ended: March 31 March 31
2005 2004
------------------------------

Deficit, beginning of period $ (48,344,277) $ (45,237,473)

Net earnings (loss) 1,458,749 (4,051,149)
------------------------------
Deficit, end of period $ (46,885,528) $ (49,288,622)
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Envoy Communications Group Inc.
Consolidated Balance Sheet highlights
Unaudited - Prepared by Management
(Expressed In Canadian dollars)

As at: March 31 September 30
2005 2004
-------------------------------------------------------------------------

Current assets $ 37,533,458 $ 59,258,764
Long-term assets 49,116,953 29,620,763
------------------------------
86,650,411 88,879,527
------------------------------
------------------------------

Current liabilities 12,277,745 11,626,798
Long-term liabilities 297,831 361,230
------------------------------
12,575,576 11,988,028

Minority interest 175,339 -

Shareholders' equity 73,899,496 76,891,499
------------------------------

$ 86,650,411 $ 88,879,527
------------------------------
------------------------------

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-------------------------------------------------------------------------



-------------------------------------------------------------------------
Envoy Communications Group Inc.
Consolidated Statements of Operations
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
-------------------------------------------------------------------------
For the three months ended: March 31 March 31
2005 2004
------------------------------

Net revenue $ 11,227,895 $ 10,584,234
------------------------------

Operating expenses:
Salaries and benefits 7,342,214 7,537,871
General and administrative 2,186,345 1,764,766
Occupancy costs 1,008,985 717,197
------------------------------
10,537,544 10,019,834

Depreciation 620,605 585,771

Investment Earnings (487,038) (49,465)

Accreted interest imputed on warrants
and debentures - 2,302,111

Interest expense (income) and financing
costs (29,945) 603,971
------------------------------
10,641,166 13,462,222
------------------------------
Earnings (loss) before income taxes,
minority interest and discontinued
operations 586,729 (2,877,988)

Income taxes (233,402) 215,121

------------------------------
Earnings (loss) before minority interest
and discontinued operations 820,131 (3,093,109)

Minority interest 8,012 -

------------------------------
Earnings (loss) before discontinued
operations 812,119 (3,093,109)

Loss from discontinued operations,
net of income taxes - (465,576)

------------------------------
Net earnings (loss) $ 812,119 $ (3,558,685)

-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings per share
Basic $ 0.04 $ (0.30)
Diluted 0.04 (0.30)

-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average number of common
shares outstanding 22,329,631 11,795,962



-------------------------------------------------------------------------
Envoy Communications Group Inc.
Consolidated Statements of Deficit
Unaudited - Prepared by Management
(Expressed In Canadian dollars)
-------------------------------------------------------------------------
For the three months ended: March 31 March 31
2005 2004
------------------------------

Deficit, beginning of period $ (47,697,647) $ (46,309,785)

Net earnings (loss) 812,119 (3,558,685)
------------------------------
Deficit, end of period $ (46,885,528) $ (49,868,470)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

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For further information: Envoy Communications Group Inc., Contact:
Geoffrey Genovese, Tel: (416) 593-1212; or contact our investor
relations department at: info@envoy.to

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