NEW YORK, Nov. 10, 2004 (PRIMEZONE) -- Stockgroup Information Systems Inc. (OTCBB:SWEB) (TSX Venture Exchange:SWB), a financial media and technology company, is pleased to announce its financial results for the third quarter ended September 30, 2004. There was a conference call to discuss the Q3 results Tuesday, Nov. 9 at 4:05pm EST. The full quarterly report on Form 10-QSB will be available on EDGAR and SEDAR today.
Highlights Q3, 2004 compared to Q3, 2003 (All amounts US$)
-- Revenue increased 64% to $1.23 million -- Gross Profit increased 66% to $0.99 million -- Gross Profit Margin of 81% -- Cash From Operations of $0.26 million
Revenue for Q3, 2004 was US$1.23 million compared to US$0.75 million for Q3, 2003, an increase of 64%. Gross profit improved 66% to US$0.99 million from US$0.60 million in Q3 2003. Gross Profit Margin increased to 81% from 80% in 2003. Net Income for the Company was US$0.011 million and $0.00 per share compared to loss from operations of US$0.276 million ($0.01 per share) for Q3 2003.
Cash from operations was US$0.26 million compared to a loss of US$0.17 million in Q3 2003 an improvement of $0.43 million.
"Although traditionally the summer quarter is one of the slowest, we are proud to have delivered our seventh consecutive quarterly increase in revenue and second consecutive quarter of profits," stated Marcus New, CEO. "Our licensing business continues to sign new customers and our strategy of fulfilling more market information needs of our enterprise clients continues to generate success with additional incremental revenue. We are also delighted to see an increase in advertising for our media property Stockhouse.com."
Highlights 9-Months 2004 compared to 9-Months 2003 (All amounts US$)
-- Revenue increased 70% to $3.46 million -- Gross Profit increased 80% to $2.80 million -- Net loss decreased 99% to $24,700 from $1.64 million -- Loss per share was $0.00 compared to a loss of $0.07
Revenue for the nine months ended September 30, 2004 was US$3.46 million compared to US$2.04 million for the same period 2003, an increase of 70%. Gross profit improved 80% to $2.80 million in 2004 from $1.55 million to the same period 2003. Loss from operations for the nine months was US$24,700 ($0.00/share) compared to US$1.64 million ($0.07/share) in fiscal 2003.
Management Changes
Mr. Leslie Landes, President and COO of Stockgroup will be retiring from his full time position with the company on December 31, 2004. Effective January 1, 2005, Mr. Landes will assume the role of Chairman of the Board replacing Marcus New who will be resigning as Chairman. Mr. New will continue in the capacity of President and Chief Executive Officer.
"We are thankful for the tremendous contribution Mr. Landes has made to the Company over the past six years. Mr. Landes has been instrumental in creating a Company that has stabilized itself financially, grown its customer base, built a great team of people, and has one of the most positive outlooks for the upcoming year that we have seen in the Company's history. On behalf of the entire company we want to thank Mr. Landes for his contribution and look forward to his continued involvement as the Chairman of the Board," stated Marcus New, CEO.
"I'm proud of the progress and accomplishments that Stockgroup has demonstrated," stated Leslie Landes, President. "We have been through the incredible turmoil that so negatively affected our industry sectors and resulted in so many terminal casualties. Today Stockgroup has the experience, the products and the people to do great things. We are better positioned today than ever before in our history to seize the market opportunities available to us."
Conference Call
A conference call and web cast was held on Tuesday, November 9, 2004 at 4:05pm EST to discuss the Company's third quarter results. To participate in the conference call, please dial 1-877-895-3312. Approximately 5-10 minutes prior to the start time or log on to the Company's website at www.stockgroup.com. The call will be archived for a period of thirty days.
ABOUT STOCKGROUP
Stockgroup Information Systems Inc. is a financial media and technology company. It is a provider of private labeled Financial Software and Content Systems 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. Its financial Web sites, including www.stockhouse.com, www.stockhouse.ca and www.smallcapcenter.com, are online research centers for the investment community. To find out more about Stockgroup (OTCBB: 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
(UNAUDITED -- Expressed in U.S. Dollars)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 2004 30, 2003 30, 2004 30, 2003
------------ ------------ ------------ ------------
REVENUE
Revenues $ 1,226,986 $ 745,801 $ 3,458,171 $ 2,036,044
Cost of revenues 237,954 150,529 658,536 484,215
------------ ------------ ------------ ------------
Gross profit $ 989,032 $ 595,272 $ 2,799,635 $ 1,551,829
EXPENSES
Sales and
marketing $ 372,815 $ 220,877 $ 1,100,505 $ 545,692
General and
administrative 610,911 640,018 1,738,730 1,751,807
------------ ------------ ------------ ------------
$ 983,726 $ 860,895 $ 2,839,235 $ 2,297,499
------------ ------------ ------------ ------------
INCOME (LOSS)
FROM
OPERATIONS $ 5,306 $ (265,623)$ (39,600)$ (745,670)
Interest income 4,581 134 14,939 134
Interest expense (37) (8,803) (1,660) (893,801)
Other income
(expense) 1,599 (1,604) 1,602 1,521
------------ ------------ ------------ ------------
NET INCOME (LOSS)
AND
COMPREHENSIVE
INCOME (LOSS) $ 11,449 $ (275,896)$ (24,719)$ (1,637,816)
============ ============ ============ ============
BASIC AND DILUTED
INCOME (LOSS)
PER SHARE $ 0.00 $ (0.01)$ (0.00)$ (0.07)
============ ============ ============ ============
Weighted average
shares
outstanding for
the period 34,643,763 29,246,784 34,064,667 24,688,123
============ ============ ============ ============
Stockgroup Information Systems Inc.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - Expressed in U.S. Dollars)
September 30, December 31,
2004 2003 (1)
----------- ------------
ASSETS
CURRENT
Cash and cash equivalents $ 1,624,141 $ 1,400,195
Marketable securities 52,314 2,616
Accounts receivable
(net of allowances for
doubtful accounts of
$76,734; December 31, 2003
$45,016)
451,488 325,057
Prepaid expenses 111,669 79,648
------------ ------------
TOTAL CURRENT ASSETS $ 2,239,612 $ 1,807,516
Property and equipment, net $ 386,268 $ 311,632
------------ ------------
$ 2,625,880 $ 2,119,148
============ ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT
Accounts payable and accrued
liabilities $ 267,824 $ 217,110
Accrued payroll liabilities 99,218 115,208
Deferred revenue 685,597 499,525
Capital lease obligation -- 38,920
------------ ------------
TOTAL LIABILITIES $ 1,052,639 $ 870,763
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
COMMON STOCK, No Par Value
Authorized shares - 75,000,000
Issued and outstanding shares
- 33,931,221
at Sept. 30, 2004
(32,498,721 - December 31,
2003) $ 13,568,499 $ 13,218,924
ADDITIONAL PAID-IN CAPITAL 3,099,314 3,099,314
ACCUMULATED DEFICIT (15,094,572) (15,069,853)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY $ 1,573,241 $ 1,248,385
------------ ------------
$ 2,625,880 $ 2,119,148
============ ============
(1) The balance sheet at December 31, 2003 has been derived from
the audited consolidated financial statements at that date.
The Accompanying Notes Are An Integral Part
Of These Unaudited Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED -- Expressed in U.S. Dollars)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 2004 30, 2003 30, 2004 30, 2003
OPERATING
ACTIVITIES ----------- ----------- ----------- -----------
Net income (loss) $ 41,701 $ (275,896) $ 5,533 $(1,637,816)
Add (deduct)
non-cash items
Amortization 79,625 96,500 264,746 286,353
Effective interest
on convertible
notes and
debentures -- -- -- 860,351
Bad debt expense
(recovery) (4,145) 13,003 31,718 65,656
Unrealized foreign
exchange gain -- -- -- 23,761
----------- ----------- ----------- -----------
$ 117,181 $ (166,392) $ 301,997 $ (401,695)
Net changes in
non-cash
working capital
Marketable
securities (25,231) 1,603 (49,698) (1,511)
Accounts
receivable 146 (6,916) (158,127) (249,483)
Prepaid expenses 33,428 3,655 (32,021) 21,595
Accounts payable
and accrued
liabilities 39,649 (9,369) 50,712 (28,874)
Accrued payroll
liabilities 7,364 10,955 (15,990) (42,556)
Accrued interest
notes payable -- (15,836) -- (23,763)
Deferred revenue 87,955 14,181 186,072 6,120
----------- ----------- ----------- -----------
CASH PROVIDED BY
(USED IN)
OPERATIONS $ 260,492 $ (168,119) $ 282,945 $ (720,167)
----------- ----------- ----------- -----------
INVESTING
ACTIVITIES
Property and
equipment (net) $ (41,742)$ (10,220) $ (78,954)$ (27,859)
----------- ----------- ----------- -----------
CASH USED IN
INVESTING $ (41,742)$ (10,220) $ (78,954)$ (27,859)
----------- ----------- ----------- -----------
FINANCING
ACTIVITIES
Issuance of common
stock and
warrants (net) $ -- $ 215,278 $ -- $ 840,559
Proceeds on
exercise of
warrants -- 498,000 -- 581,775
Proceeds on
exercise of stock
options -- 450 58,875 12,420
Repayment of
(proceeds from)
convertible debt -- -- -- (35,332)
Repayment of notes
payable -- (208,158) -- (255,158)
Repayment of
capital lease
obligation -- (20,525) (38,920) (76,144)
----------- ----------- ----------- -----------
CASH PROVIDED BY
FINANCING $ -- $ 485,045 $ 19,955 $ 1,068,120
----------- ----------- ----------- -----------
INCREASE IN CASH
AND CASH
EQUIVALENTS $ 218,750 $ 306,706 $ 223,946 $ 320,094
Cash and cash
equivalents,
beginning of
period 1,405,391 553,358 1,400,195 539,970
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 1,624,141 $ 860,064 $ 1,624,141 $ 860,064
=========== =========== =========== ===========
The Accompanying Notes Are An Integral Part
Of These Unaudited Financial Statements.