VANCOUVER, B.C., March 11, 2004 (PRIMEZONE) -- Stockgroup Information Systems Inc. (OTCBB:SWEB) (TSX-V:SWB), a financial media and technology company, announces its financial results for the fourth quarter and year ended December 31, 2003.
Chairman and CEO Marcus New and CFO David Gillard, will host a conference call to discuss these results today at 4:05 PM EST, which will be simultaneously Webcast. To participate in the conference call, please dial 1-800-525-6384 approximately 5-10 minutes prior to the start time.
2003 Financial Highlights
- Achieved profitability in the fourth quarter after 4th sequential quarter of revenue growth
- Eliminated US$1.8 million in debt and increased cash on hand from US$0.5 million at December 31, 2002 to US$1.4 million at December 31, 2003.
- Gross profit margins increased from 61% to over 79% for the year
- Revenue increased 78% in Q4 2003 over Q4 2002
- Increased institutional ownership with US Global Funds buying 7% of the Company
"2003 was a year of significant accomplishments," said Marcus New, CEO. "Firstly we achieved financial stability as reflected in our cash position of US$1.4 million, zero debt, positive earnings in Q4 and the removal by Ernst & Young LLP of the `going concern' comments from our audited financial statements. Secondly, we are positioned for scalable growth. We developed a partnership with the largest news company in the world, the Associated Press (AP), who is now actively selling our joint products to their customers and members. The AP partnership is one of the most significant developments in our history. Thirdly, our revenue is growing quarter over quarter and more importantly we have achieved profitability.
"For the first time in our history we are executing our business plan from a position of strength. We have cash, partnerships and we are positioned in key markets. We are well-positioned to improve all aspects of the company's performance and profitability regardless of what happens in the economy."
Financial Results
Revenue was US$0.98 million in Q4, 2003 compared to US$0.55 million in Q4 2002, an increase of 78%. The Company's net income for Q4 2003 was US$9,346 compared to a net loss of US$282,556 in Q4 2002. This was the Company's fourth consecutive sequential quarter of increasing revenues.
Revenue for the full year was US$3.02 million compared to $1.96 million in 2002, an increase of 54%. The Company's net loss for 2003 was US$1.63 million or $0.06 per share including a one-time non-cash interest expense of US$0.86 million on the conversion if its convertible notes. Loss from operations was US$0.74 million compared to US$1.01 million in 2002, an improvement of 27%.
The Company ended the year 2003 with US$1.4 million dollars in Cash and $0 debt compared to US$0.5 million in cash and US$1.8 million in debt at the end of 2002.
Strategic Plan
The company completed its third year under a comprehensive strategic plan that saw it enter the Financial Software and Content Systems business with a model focused on creating recurring revenue and profit and called for the company to:
1. Expand its market reach through the creation of alliances and partnerships with significant companies that have established client bases
2. Restructure our balance sheet and corporate financing to position the company to rapidly increase revenue
3. Capitalize on the strength of the company's technology infrastructure through the offering of leading edge financial content and delivery systems
4. Create new products that allow for scaleable, profitable recurring revenue streams
In accordance with the Company's strategic plan, Stockgroup is pleased to report the following accomplishments for 2003;
Stockgroup made significant progress improving its balance sheet. It eliminated all US$1.8 million of company debt and generated net positive operating cash flow and profits in the fourth quarter. This has been a contributing factor in the Company's auditors removing the 'going concern' note from the audited financial statements for the year ended December 31, 2003.
In 2003 Stockgroup signed and renewed key recurring revenue producing contracts for its Financial Software and Content Systems with signature reference clients including CitiBank, Union Bank of California, Microsoft MSN.ca, Credential Securities, Mellon Investor, Global Securities Information, National Bank Financial, Octagon Capital and Dundee Securities. Stockgroup's Public Company Disclosure and Awareness Products were licensed by notable clients such as Molson and Sun Life in addition to a diverse range of other companies.
In early 2003, Stockgroup entered into a distribution agreement with the Associated Press to market and resell a custom designed suite of Financial Tools to their members. The Associated Press is the world's largest news organization. On June 17th, 2003 the Associated Press and Stockgroup officially launched Stockgroup's co-branded AP Financial Tools at NEXPO in Las Vegas. NEXPO is the leading publisher convention in the world. Since the launch, Stockgroup has added some of the largest newspapers in the US as customers including The Orange County Register, St. Petersburg Times and the Milwaukee Journal Sentinel as well as AP Digital customers that include Time Warner Cable's Road Runner, Netster.com, Sphere Analytics and Data Call.
During the year Stockgroup increased the number of financial tools that it licenses to customers. It also invested in improving the quality of its financial tools offering. The Associated Press partnership has led to the development of a number of customized financial tools specific to the newspaper industry and the demands of their local readers. Some examples of customized tools are Local Stock Watch Lists, Calculated Local Indexes and the ability for online newspapers to integrate quotes and charts into news stories. These new tools are expected to add significant value to a newspaper's online Business and Finance sections, creating increased repeat traffic and greater advertising inventory for the online newspapers. Stockgroup has also created a syndicated version of StockHouse BullBoards.
The Company has added Mutual Funds, Technical Analysis, Stockscores, Option Chains and Zacks Financials to its financial portal StockHouse to ensure that it remains one of the top financial web portals in North America.
As a leading source of financial news and trading information for individual investors, Stockgroup web sites, including StockHouse, generate 50 million monthly page views, have a loyal base of over 750,000 high-income unique investor users monthly and have more than 450,000 registered members. This audience gives Stockgroup the ability to sell advertising and create revenues. In addition to providing Stockgroup with an increasing revenue base, the StockHouse financial web portals allow Stockgroup to share all of its technology, infrastructure and overhead cost over several revenue streams. Some companies advertising on StockHouse include Porsche, General Motors, Wells Fargo, Royal Bank, BMO (Bank of Montreal) and many more.
Our Goals for the Year 2004 include:
- Create consistent profitability in every quarter
- Leverage our relationship with the Associated Press to include distribution of new products to their more than 1500 publisher members
- Scale our revenue through continuing acquisition of new customers to license our products and to increase the penetration of our products within large financial services and publishing Companies.
- Identify and pursue acquisitions that would be accretive to revenue growth and profitability
"In 2004, we feel confident that the goals we have outlined are aggressive but achievable," said Marcus New. "Stockgroup will continue to capitalize on the scalability of its technology infrastructure and state of the art products and services and leverage its current contracts with large financial service companies to generate new business in each of their separate divisions. We are positioned to reap the rewards of an improving economy and expect 2004 to be a great year."
A summary of the financials is attached. A conference call to discuss these results will be held Thursday March 11, 2004 at 4:05 p.m. PST. Analysts, investment professionals, shareholders, members of the media and other interested parties wishing to participate may call 1.800.525.6384 (toll free) five minutes prior to the scheduled time. Alternatively, you may listen to a live audio Webcast of the conference call at http://www.stockgroup.com.
The call will be archived at http://www.stockgroup.com. Select 'Investors' at the top of the page, and then select 'Conference Call' in the navigation bar. This earnings call will be accessible using Windows Media Player for a period of one year.
About Stockgroup Information Systems Inc.
Stockgroup Information Systems Inc. is a financial media and technology company. It is a provider of private labeled financial software and content solutions to media, corporate and financial services companies. Stockgroup employs proprietary technologies which enable its clients to provide financial data streams and news combined with fundamental, technical, productivity and disclosure tools to their customers, shareholders and employees at a fraction of the cost of traditional internal methods. Stockgroup is also a provider of Public Company Disclosure and Awareness Products for publicly traded companies. Its financial web sites, including www.stockhouse.com, www.stockhouse.ca, are online research centers for the investment community. To find out more about Stockgroup (OTC BB: SWEB, TSX-V: SWB), visit our website at www.stockgroup.com
This release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects", "will," "anticipates," "estimates," "believes," or statements indicating certain actions "may," "could," or "might" occur.
This release has neither been approved or disapproved by the TSX
Stockgroup Information Systems Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter and year ended December 31 (expressed in US dollars)
Q4 03 Q4 02 F 2003 F 2002
$ $ $ $
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REVENUE
Revenues 984,355 551,274 3,020,399 1,964,699
Cost of revenues 153,549 151,276 637,764 706,911
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Gross profit 830,806 399,998 2,382,635 1,257,788
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EXPENSES
Sales and marketing 305,529 109,597 851,221 475,038
General and
administrative 516,099 518,622 2,267,906 1,790,848
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821,628 628,219 3,119,127 2,265,886
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Profit (loss) from
operations 9,178 (228,221) (736,492) (1,008,098)
Interest income 2,366 8 2,500 195
Interest expense (2,069) (54,652) (895,870) (319,641)
Loss on warrants
liability -- -- -- (55,000)
Gain on restructuring
of convertible notes -- -- -- 1,088,586
Other income (expense) (129) 309 1,392 (12,719)
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Net income (loss) 9,346 (282,556) (1,628,470) (306,677)
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Basic and diluted
earnings (loss)
per share 0.00 (0.02) (0.06) (0.06)
Weighted average
number of common
shares outstanding 31,122,088 16,029,498 26,309,835 14,151,349
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