Mamma.com Releases 2005 Q3 Financials and Issues Media Advisory for Earnings Call on Friday, November 11, 2005.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- Mamma.com Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MAMA MAMA Mid-arm muscle area, see there ) - Q3 2005 revenue decrease by 27% to $2.4 million due to the streamlining of our distribution networks in order to better compete by improving conversion rates to our advertisers. - Opt-in Email operations were closed and presented as discontinued operations, additional write down and restructuring charges of $0.87 million. - Additional expenses of $0.24 million related to the SEC investigation. - Net loss of $1.5 million ($0.13/share). - Cash and cash equivalents still remain strong at $24 million. Mamma.com Inc., (the "Company"), (NASDAQ:MAMA), reported its financial results for the third quarter ended September September: see month. 30, 2005. Unless otherwise stated, all figures in this release are in US dollars. The Company's Q3 2005 net loss was $1,505,688 ($0.13 per share) compared to net earnings of $283,909 ($0.02 per share) for the same period in 2004. Revenue in the third quarter of 2005 was $2,390,634, 27% below the $3,291,204 revenue for the same period in 2004. The reduction in revenue reflects the industry pressure on delivering better conversion rates and improving traffic quality. Following the continuous poor performance of its Opt-in To purposefully accept some situation or condition ahead of time. For example, to opt-in to an e-mail campaign means that you want to receive periodic newsletters or information, which may include advertising from the publisher or third parties. Email operations, the Company discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the operations of its subsidiary, Digital Arrow ARROW Australian Research Repositories Online to the World (Clayton, Vic, Australia) ARROW Active Resistance to the Roots of War ARROW Antiresonant Reflecting Optical Waveguide . The remainder of the Property, Plant and Equipment, Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and Goodwill related to Digital Arrow were written down to nil in Q3 2005 and these results were presented as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in Q3 2005 was $574,314 including significant expenses such as: professional fees related to the SEC investigation of $241,000 and an increase in directors and officers insurance of $156,000. Payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. costs over revenues were at 44%, which was the same percentage in Q3 2004. Cash and cash equivalents still remained strong at $23,877,897, a decrease of $122,039 from the previous quarter. Guy Faure Fau·ré , Gabriel Urbain 1845-1924. French composer chiefly noted for his songs, including the cycle La Bonne Chanson (1891-1892), and for his Requiem (1887). , the Company's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated: "Revenues in the third quarter were below Q3 2004 as we have worked diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d with our advertisers to focus on advertising which yields an acceptable return. We have been able to effectively eliminate poor converting traffic from our Affiliates from both the Search, and Ad Networks, and have set up better processes to qualify new Affiliates who can provide good quality converting traffic for our advertisers. The Opt-in Email operations were discontinued because of declining demand for the service. We will now focus on the two main on-line advertising sectors that we know best; the search network that we intend to grow with the Copernic potential acquisition and the Ad Network that we believe offers significant organic growth opportunities." Guy Faure continued: "We are working at completing the definitive agreement for the Copernic acquisition and expect to close before the end of November November: see month. 2005 as previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). . We expect that the completion of this transaction will allow the Company to aggressively compete in the on-line advertising sectors for 2006." The unaudited financial statements for the third quarter ended September 30, 2005 will shortly be available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review and EDGAR Edgar or Eadgar (both: ĕd`gər), 943?–975, king of the English (959–75), son of Edmund, king of Wessex. In 957 the Mercians and Northumbrians rebelled against Edgar's brother Edwy and chose Edgar as their king. and on our Web site www.mammainc.com . The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number for Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , November 11, 2005 is: l-416-695-5261 (for local and international participants) or please call toll free l-877-888-3855 (North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. only). The live Web cast will be available on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Mamma Media Solutions website: www.mammamediasolutions.com/corporate/ir/financial.html. The archived Web cast will be made available on the Company's Web site starting one hour after the completion of the call. About Mamma.com Inc. Mamma Media Solutions(TM) is focused on providing first-rate quality information retrieval information retrieval Recovery of information, especially in a database stored in a computer. Two main approaches are matching words in the query against the database index (keyword searching) and traversing the database using hypertext or hypermedia links. on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through its metasearch engine The search engine software that is used to search other search engines. See metasearch site. and is a leading provider of integrated marketing solutions to online advertisers. Mamma.com The Mother of All Search Engines(R) (www.mamma.com) is one of the most popular metasearch engines on the Internet, as it makes it easier and faster for people to find information by gathering the most relevant results from the best search engines on the Internet. Mamma Media Solutions(TM) is equally focused on being one of the leading providers of online marketing solutions to advertisers as its integrated offer includes keyword (1) A word used in a text search. (2) A word in a text document that is used in an index to best describe the contents of the document. (3) A reserved word in a programming or command language. 1. search listings and numerous sizes of graphic ad units. Mamma Media Solutions(TM) maintains a large publisher network on which it distributes search and graphic ad units for its advertisers. The Company also holds minority interests in analog integrated circuit integrated circuit (IC), electronic circuit built on a semiconductor substrate, usually one of single-crystal silicon. The circuit, often called a chip, is packaged in a hermetically sealed case or a nonhermetic plastic capsule, with leads extending from it for products, and in the new media and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. sectors.For more information, visit www.mammamediasolutions.com . Statements contained in this press release, which are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are subject to risks and uncertainties that can cause actual results to differ materially from estimated results.Such risks and uncertainties are detailed in the Company's filings with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission and the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. and include but are not limited to the extent to which the results of the SEC investigation or the purported pur·port·ed adj. Assumed to be such; supposed: the purported author of the story. pur·port  ed·ly adv. securities class action law suits negatively affect the
Company.The Company expressly disclaims any intent or obligation to
update any description of the scope, focus or subject matter of the
statements in this press release.
Mamma.com Inc.
Condensed Consolidated Balance Sheets
(Unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)
As at As at
September 30, December 31,
2005 2004
$ $
Assets
Current assets
Cash and cash equivalents 23,877,897 20,609,089
Restricted cash - 148,000
Temporary investments - 6,874,155
Accounts receivable 1,762,079 2,502,535
Income taxes receivable 93,292 120,590
Prepaid expenses 507,305 129,390
Assets of discontinued operations 4,406 274,770
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26,244,979 30,658,529
Assets of discontinued operations - 1,882,857
Investments 720,000 720,000
Property, plant and equipment 314,598 304,624
Intangible assets 654,035 753,778
Goodwill 846,310 846,310
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28,779,922 35,166,098
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,178,965 2,244,958
Deferred revenue 262,849 233,459
Liabilities of discontinued operations 190,685 652,109
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2,632,499 3,130,526
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Shareholders' Equity
Capital stock
Authorized
Unlimited common shares, no par value
Issued and outstanding 11,960,864
common shares (12,263,029 in 2004) 88,258,195 90,496,088
Additional paid-in capital 5,474,394 5,255,249
Deferred stock-based compensation (307,081) (1,333,443)
Cumulative translation adjustment 360,884 360,884
Accumulated deficit (67,638,969) (62,743,206)
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26,147,423 32,035,572
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28,779,922 35,166,098
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Mamma.com Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)
For the nine months For the three months
ended September 30 ended September 30
---------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
Revenue 7,805,543 11,220,003 2,390,634 3,291,204
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Expenses
Search and graphic
ad serving 209,618 164,170 81,313 56,260
Marketing, sales and
services 4,957,521 6,478,849 1,551,083 1,957,168
General and
administration 4,546,230 2,416,315 1,106,836 681,784
Product development
and technical
support 940,938 612,682 305,790 231,811
Amortization of
property, plant and
equipment 72,315 91,177 23,240 30,300
Amortization of
intangible assets 147,714 143,385 51,325 48,145
Interest income (504,277) (116,928) (193,119) (87,710)
Loss on foreign
exchange 23,203 45,519 22,927 52,759
Write-down of
property, plant and
equipment 2,826 - 2,826 -
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10,396,088 9,835,169 2,952,221 2,970,517
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Earnings (loss) from
continuing
operations before
income taxes (2,590,545) 1,384,834 (561,587) 320,687
Provision for
(recovery of)
current income
taxes 12,727 159,299 12,727 (9,000)
Provision for future
income taxes - 392,200 - 4,000
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Earnings (loss) from
continuing
operations (2,603,272) 833,335 (574,314) 325,687
Results of
discontinued
operations (2,292,491) 942,639 (931,374) (41,778)
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Net earnings (loss)
for the period (4,895,763) 1,775,974 (1,505,688) 283,909
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Net earnings (loss)
per common share
- basic
Earnings
(loss) from
continuing
operations (0.21) 0.08 (0.05) 0.02
Results of
discontinued
operations (0.19) 0.09 (0.08) 0.00
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Net earnings (loss)
per common share
- basic (0.40) 0.17 (0.13) 0.02
Net earnings (loss)
per common share
- diluted
Earnings
(loss) from
continuing
operations (0.21) 0.08 (0.05) 0.02
Results of
discontinued
operations (0.19) 0.08 (0.08) 0.00
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Net earnings (loss)
per common share
- diluted (0.40) 0.16 (0.13) 0.02
Weighted average
number of shares
outstanding
- basic 12,159,498 10,253,834 11,959,125 12,189,768
Additions to reflect
the impact of:
Exercise of stock
options - 160,798 - 91,573
Exercise of
warrants - 603,130 - 44,866
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Weighted average
number of shares
outstanding
- diluted 12,159,498 11,017,762 11,959,125 12,326,207
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Mamma.com Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (expressed in U.S. and dollars in accordance with
generally accepted accounting principles in Canada)
For the nine months For the three months
ended September 30 ended September 30
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2005 2004 2005 2004
$ $ $ $
Cash flows from
Operating activities
Earnings (loss) from
continuing
operations (2,603,272) 833,335 (574,314) 325,687
Adjustments for
Amortization of
property, plant
and equipment 72,315 91,177 23,240 30,300
Amortization of
intangible
assets 147,714 143,385 51,325 48,145
Employee
stock-based
compensation 54,344 107,229 72,203 35,743
Tax credits - 81,505 - -
Future income
taxes - 392,200 - 4,000
Unrealized loss
on foreign
exchange - 14,192 - 830
Financial fees
paid by issuance
of capital stock
and warrants - 260,301 - 49,909
Write-down of
property, plant
and equipment 2,826 - 2,826 -
Net change in non-cash
working capital items 353,236 532,125 469,207 74,817
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Cash from (used for)
operating activities
from continuing
operations (1,972,837) 2,455,449 44,487 569,431
Cash from (used for)
operating activities
from discontinued
operations (600,694) (872,437) (155,594) 79,686
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(2,573,531) 1,583,012 (111,107) 649,117
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Investing activities
Purchase of property,
plant and equipment (85,115) (45,976) (11,581) (13,986)
Purchase of
intangible assets (47,971) (1,511) (5,776) -
Net decrease
(increase) in
temporary
investments 6,874,155 (2,977,309) - (3,000,485)
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Cash from (used for)
investing activities
from continuing
operations 6,741,069 (3,024,796) (17,357) (3,014,471)
Cash from investing
activities from
discontinued
operations - 411,799 - -
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6,741,069 (2,612,997) (17,357) (3,014,471)
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Financing activities
Issuance of capital
stock and warrants 6,425 22,760,261 6,425 266,390
Share issue costs - (1,058,819) - (23,820)
Redemption of common
shares (1,053,155) - - -
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Cash from (used for)
financing
activities (1,046,730) 21,701,442 6,425 242,570
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Effect of foreign
exchange rate
changes on cash
and cash equivalents - 79,375 - -
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Net change in cash
and cash
equivalents and
restricted cash
during the period 3,120,808 20,750,832 (122,039) (2,122,784)
Cash and cash
equivalents and
restricted cash
- Beginning of
period 20,757,089 4,489,077 23,999,936 27,362,693
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Cash and cash
equivalents and
restricted cash -
End of period 23,877,897 25,239,909 23,877,897 25,239,909
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Cash and cash
equivalents
comprise:
Cash 1,363,506 4,066,873 1,363,506 4,066,873
Short-term
investments 22,514,391 21,025,036 22,514,391 21,025,036
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23,877,897 25,091,909 23,877,897 25,091,909
Restricted cash - 148,000 - 148,000
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23,877,897 25,239,909 23,877,897 25,239,909
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