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Press Release ENVOY COMMUNICATIONS GROUP INC. ANNOUNCES
FISCAL 2004 SECOND QUARTER RESULTS
Envoy eliminates debt  has over $51 million in cash for acquisitions/investments TORONTO, ON  UNDER EMBARGO UNTIL May 20, 2004 at 9:00 AM- Envoys second
quarter results have improved significantly over the previous year, excluding
non-recurring items and discontinued/sold operations. Envoy recorded revenues
of $10.6 million for the three months ending March 31, 2004, compared to $8.7
million for the three months ending March 31, 2003. Net revenue in the prior
year included $0.7 million from subsidiaries disposed of or shutdown during
fiscal 2003. Net revenue from continuing business increased 33% in the three
months ended March 31, 2004, compared to the same period of fiscal 2003. Earnings before interest, taxes, depreciation and amortization (EBITDA) also
showed significant improvement, excluding discontinued/sold operations. EBITDA
for the three months ending March 31, 2004 was $0.6 million, compared to
earnings of $0.5 million for the three months ending March 31, 2003. EBITDA in
the prior year included a deferred foreign exchange gain of $0.8 million
relating to the shutdown of one of our subsidiaries. Excluding the foreign
exchange gain, EBITDA increased $0.9 million in the three months ended March
31, 2004, compared to the same period of fiscal 2003. As a result of Envoys refinancing during the first quarter ended December 31,
2003 and the repayment of its long-term debt during the second quarter ended
March 31, 2004, Envoy incurred a non-cash, imputed interest charge of $2.6
million as well as a cash penalty and interest expense of $0.4 million. Linda
Gilbert, CFO of Envoy, said Envoy will not only save millions of dollars in
interest expense over the next several years as a result of the debt repayment,
but will also generate interest income, due to the strong cash position on its
balance sheet. Envoy recorded a loss on disposal of $0.5 million, due to the sale of its
wholly-owned subsidiary, Communique Incentive Inc. Excluding the one-time
loss from the sale of Communique and the non-cash interest expense, Envoy
incurred a net loss of $.02 per share. Envoy has successfully completed two equity financings for gross proceeds of
approximately $67.8 million. Envoy raised gross proceeds of $40.2 million
during the second quarter and additional gross proceeds of $27.6 million
during the third quarter. The $27.6 million additional gross proceeds will be
reflected in our third quarter balance sheet. These two equity financings
significantly strengthened Envoys balance sheet and will allow Envoy to
implement its strategic acquisition and investment plan. At this time, Envoy
does not foresee a need to raise any further capital. - more -




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Geoff Genovese, CEO of Envoy, states: One of our important goals this year was
to establish a strong foundation on which to build for future growth. We now
have this foundation in place, which includes a strengthened balance sheet with
over $51 million in cash available for investment and acquisitions. Envoy has a
strategic acquisition plan in place. This plan includes acquiring companies
that will be synergistic with our current businesses, both in the United
Kingdom and North America. Consequently, we have recently initiated discussions
with potential target companies. In addition to Envoys strategic acquisition plan, it has a strong management
team at its operations level. This team is focused on growing the businesses of
its clients as well as the Envoy Group of Companies. This is evidenced by
Envoys 33% organic growth from operations in this quarter. Envoys management
team is confident that Envoy can turn the accomplishments of the past 12 months
into continued growth and profitability in the coming quarters and beyond.




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Financial Highlights Envoy Communications Group Inc.
Income Statement highlights
(Expressed In Canadian dollars)
(Unaudited  Prepared by Management) For the six months endedMarch 31
    
    March 312004
    
    2003Net revenue
    
    $
    19,625,938
    
    
    $
    20,178,101Operating expenses
    
    
    18,339,225
    
    
    
    19,082,556Earnings before interest, taxes, depreciation and amortization
(EBITDA)
    
    
    1,286,713
    
    
    
    1,095,545Depreciation
    
    
    1,162,973
    
    
    
    1,142,225Amortization of intangible asset
    
    
    
    
    
    
    Investment Earnings
    
    
    (49,465
    )
    
    
    Accreted interest imputed on warrants and debentures
(non cash interest)
    
    
    2,552,991
    
    
    
    374,728Interest expense and financing costs
    
    
    991,100
    
    
    
    1,119,385Loss before sale of subsidiary, income taxes and
discontinued operations
    
    
    (3,370,886
    )
    
    
    (1,540,793
    )Gain on disposal of subsidiary
    
    
    
    
    
    
    (2,271,811
    )(Loss) income before income taxes and discontinued operations
    
    
    (3,370,886
    )
    
    
    731,018Income taxes
    
    
    215,121
    
    
    
    (Loss) income before discontinued operations
    
    
    (3,586,007
    )
    
    
    731,018(Loss) income from discontinued operations, net of income taxes
    
    
    (465,142
    )
    
    
    59,181Net (loss) income
    
    
    (4,051,149
    )
    
    
    790,199Deficit, beginning of period
    
    
    (45,090,767
    )
    
    
    (47,629,529
    )Deficit, end of period
    
    $
    (49,141,916
    )
    
    $
    (46,839,330
    )Earnings (loss) per share from continuing operations
    
    $
    (0.07
    )
    
    $
    0.03Basic
    
    $
    (0.07
    )
    
    $
    0.03DilutedEarnings (loss) per share from discontinued operationsBasic
    
    $
    (0.01
    )
    
    $
    0.00Diluted
    
    $
    (0.01
    )
    
    $
    0.00Weighted average number of common shares outstanding
    
    
    50,155,954
    
    
    
    21,258,693




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Envoy Communications Group Inc.
Balance Sheet highlights
(Expressed In Canadian dollars)
(Unaudited  Prepared by Management) As atMarch 31
    
    September 302004
    
    2003AssetsCurrent Assets
    
    $
    45,402,892
    
    
    $
    18,843,965Long term assets
    
    
    19,703,944
    
    
    
    19,122,798$
    65,106,836
    
    
    $
    37,966,763Current Liabilities
    
    
    11,515,458
    
    
    
    20,703,891Long-term debt
    
    
    636,412
    
    
    
    4,904,369Shareholders equity
    
    
    52,954,966
    
    
    
    12,358,503$
    65,106,836
    
    
    $
    37,966,763




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Envoy Communications Group Inc.
Income Statement highlights
(Expressed In Canadian dollars)
(Unaudited  Prepared by Management) For the three months endedMarch 31
    
    March 312004
    
    2003Net revenue
    
    $
    10,584,234
    
    
    $
    8,667,650Operating expenses
    
    
    10,019,834
    
    
    
    8,146,587Earnings before interest, taxes, depreciation and
amortization (EBITDA)
    
    
    564,400
    
    
    
    521,063Depreciation
    
    
    585,771
    
    
    
    582,414Amortization of intangible asset
    
    
    
    
    
    
    6,049Investment Earnings
    
    
    (49,465
    )
    
    
    Accreted interest imputed on warrants and debentures
(non cash interest)
    
    
    2,302,111
    
    
    
    195,239Interest expense and financing costs
    
    
    603,971
    
    
    
    606,415Loss before sale of subsidiary, income taxes and
discontinued operations
    
    
    (2,877,988
    )
    
    
    (869,054
    )Gain on disposal of subsidiary
    
    
    
    
    
    
    (2,272,123
    )(Loss) income before income taxes and discontinued operations
    
    
    (2,877,988
    )
    
    
    1,403,069Income taxes
    
    
    215,121
    
    
    
    122,562(Loss) income before discontinued operations
    
    
    (3,093,109
    )
    
    
    1,280,507(Loss) income from discontinued operations, net of income taxes
    
    
    (465,576
    )
    
    
    111,340Net (loss)
    
    
    (3,558,685
    )
    
    
    1,391,847Deficit, beginning of period
    
    
    (45,583,231
    )
    
    
    (48,231,177
    )Deficit, end of period
    
    $
    (49,141,916
    )
    
    $
    (46,839,330
    )Earnings (loss) per share from continuing operationsBasic
    
    $
    (0.05
    )
    
    $
    0.06Diluted
    
    $
    (0.05
    )
    
    $
    0.06Earnings (loss) per share from discontinued operationsBasic
    
    $
    (0.01
    )
    
    $
    0.01Diluted
    
    $
    (0.01
    )
    
    $
    0.01Weighted average number of common shares outstanding
    
    
    58,979,809
    
    
    
    21,258,693




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