Mamma.com Releases 2005 Results.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 ) - Q4 revenues decreased by 51% to $1.659 million due to the loss of a significant number of sales people from our Ad Network team, yearly revenues decreased by 35% to $9,464,000 - Q4 net loss of $0.763 million ($0.06 per share), yearly net loss of $5,658,000 ($0.46 per share) - Copernic acquisition successfully completed on December 22, 2005. - Cash, cash equivalents and temporary investments at $8.5 million post-Copernic transaction. Mamma.com Inc., (the "Company"), (NASDAQ:MAMA), reported its financial results for the fourth quarter ended December December: see month. 31, 2005. Unless otherwise stated, all figures in this release are in US dollars. The Company's Q4 2005 net loss was $762,555 ($0.06 per share) compared to a net loss of $671,567 ($0.06 per share) for the same period in 2004.Net loss for the year was $5,658,318 ($0.46 per share) compared to net earnings of $1,104,407 ($0.10 per share) for the year of 2004.Revenues in the fourth quarter of 2005 were $1,659,017, 51% below the $3,416,315 revenues for the same period in 2004.The decrease was due to a reduction in search revenues of $903,392 mostly due to the industry pressure to deliver better conversion rates and to improve traffic quality by cutting non-converting clicks in our search network and a reduction in the Ad Network revenues of $853,906 due to the loss of a significant number of sales people.Revenues for the year 2005 were $9,464,560, 35% below the $14,636,318 revenues for the year 2004.The decrease of revenues was due to a reduction in revenues for search of $4,662,959 explained by a significant reduction in business with a major customer for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.8 million and a reduction in revenues for Ad Networks of $508,799. 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 Q4 2005 was $739,711, compared with Q4 2004 of $462,582, including significant expenses such as: professional fees related to the ongoing SEC investigation and securities class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax of $81,000 and an increase in directors' and officers' insurance of $108,000. These expenses were offset by, among other things, a reduction in other professional fees.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 45%, compared with 41% in Q4 2004. Product development and technical support increased by $66,124 in Q4 2005 compared to Q4 2004 mainly because of an increase of approximately $56,000 in salaries due to additional staff.Loss from continuing operations for the year 2005 was $3,342,983 compared to earnings from continuing operations of $370,753 in 2004. Cash, cash equivalents and temporary investments are at $8,514,513, after the Copernic transaction which used $15,851,922 of cash and cash equivalents net of cash acquired. 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: "Following a good year in 2004, 2005 was disappointing as it was a year in which the industry had to compete fiercely fierce adj. fierc·er, fierc·est 1. Having a savage and violent nature; ferocious. See Synonyms at cruel. 2. Extremely severe or violent; terrible: for clicks and impressions of high quality.The fourth quarter was particularly disappointing because of a significant decline in revenues due to the loss of several sales people and a network manager.Together, the former employees started a competitive business in the Ad Network space. The Company believes that this business was initiated when most of the founding members were still employed with Mamma.com.We have taken an aggressive stance stance the posture or position. sawhorse stance see sawhorse posture. stance A body position. See Pugilistic stance. about this matter and are pursuing legal action against the company and its principals." Added Mr. Faure: "Through recent hiring, we are confident about our ability to succeed in ramping up the Ad Network revenues to previously experienced levels.We have also recently deployed our premium network offering, which should provide for higher CPM's (cost per thousand impressions) and eventually, higher margins." Guy Faure continued: "We are very pleased with the completion of the Copernic acquisition which should be accretive to earnings in 2006 and should position the Company as a leader in search technologies and applications and as a multi-channel See multichannel. on-line marketing services provider.We have high expectations for the Copernic Desktop Search (CDS) award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" product.This world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. software has already seen a healthy adoption rate in blue chip customer agreements and we expect that other major portals will also want to adopt CDS in order to protect user attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: and generate more cost per click revenues from their search partners. Guy Faure concluded: "We have managed to navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. through a tough year in 2005 fighting through legal and operational issues and have come out of the storm a stronger company.With a healthy network of partners and with the addition of Copernic we believe that the Company is well poised to succeed in 2006". Following the acquisition of Copernic completed on December 22, 2005, the Company has filed its Business Acquisition Report on both 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. on March 7th, 2006. The unaudited financial statements for the fourth quarter ended December 31, 2005 will soon be available on SEDAR and EDGAR and on 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 Monday Monday: see week. , March 13, 2006 at 10:30 am (Eastern time) is: 1-416-695-5261 (for local and international participants) or please call toll free 1-800-769-8320 (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: http://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 a leading provider of award winning search technology for both the Web and desktop space, delivered through its properties, www.mamma.com and www.copernic.com respectively. The Company is also a top provider of online marketing solutions to advertisers, providing 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. and graphic ad placement on its large publisher network. Mamma.com The Mother of All Search Engines(R) (www.mamma.com) is one of the most popular metasearch engines The search engine software that is used to search other search engines. See metasearch site. 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 , 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. Through its award winning Copernic Desktop Search product, Copernic Technologies develops cutting edge search solutions bringing the power of a sophisticated, yet easy-to-use search engine right to the user's PC.It allows for instant searching of files, emails, and email attachments See e-mail attachment. stored anywhere on a PC hard drive.Its desktop search application won the CNET (body) CNET - Centre national d'Etudes des Telecommunications. The French national telecommunications research centre at Lannion. Editors' Choice Award as well as the PC World " World Class award" in 2005. More information can be found at www.mammamediasolutions.com and www.copernic.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 lawsuits negatively impact 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
Condensed Consolidated Balance Sheets
(Unaudited) (expressed in U.S. dollars and in accordance
with generally accepted accounting principles in Canada)
As at As at
December 31, December 31,
2005 2004
$ $
Assets
Current assets
Cash and cash equivalents 4,501,201 20,609,089
Restricted cash - 148,000
Temporary investments 4,013,312 6,874,155
Accounts receivable 2,623,940 2,502,535
Income taxes receivable 606,226 120,590
Prepaid expenses 295,288 129,390
Future income taxes 33,505 -
Current assets of discontinued operations 9,694 274,770
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12,083,166 30,658,529
Future income taxes 13,483 -
Income tax credit 54,912 -
Assets of discontinued operations - 1,882,857
Investments 720,000 720,000
Property, plant and equipment 598,758 304,624
Intangible assets 8,601,848 753,778
Goodwill 16,255,031 846,310
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38,327,198 35,166,098
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,690,943 2,244,958
Deferred revenue 249,953 233,459
Income tax payable 8,062 -
Liabilities of discontinued operations 189,223 652,109
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3,138,181 3,130,526
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Future income taxes 2,672,036 -
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Shareholders' Equity
Capital stock
Authorized
Unlimited common shares,
no par value
Issued and outstanding 14,340,864
common shares (12,263,029 in 2004) 95,298,234 90,496,088
Additional paid-in capital 5,985,077 5,255,249
Deferred stock-based compensation (735,175) (1,333,443)
Cumulative translation adjustment 370,369 360,884
Accumulated deficit (68,401,524) (62,743,206)
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32,516,981 32,035,572
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38,327,198 35,166,098
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Mamma.com
Condensed Consolidated Statements of Operations
(Unaudited) (expressed in U.S. dollars and in accordance
with generally accepted accounting principles in Canada
For the For the
twelve months ended three months ended
December 31 December 31
--------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
Revenues 9,464,560 14,636,318 1,659,017 3,416,315
Cost of revenues 4,204,030 6,539,213 739,276 1,404,294
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Gross margin 5,260,530 8,097,105 919,741 2,012,021
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Expenses
Marketing, sales
and services 2,023,925 2,188,488 321,541 679,964
General and
administration 5,692,092 3,567,247 1,145,862 1,150,933
Product development
and technical
support 1,286,345 891,541 345,407 279,283
Amortization of
property, plant
and equipment 106,788 133,123 31,647 41,945
Amortization of
intangible assets 242,031 191,218 94,317 47,833
Interest and
other income (768,738) (233,506) (264,461) (116,578)
Write-down
of investment - 365,286 - 365,286
Loss on
foreign exchange 47,080 68,275 23,876 22,756
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8,629,523 7,171,672 1,698,189 2,471,422
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Earnings (loss)
from continuing
operations before
income taxes (3,368,993) 925,433 (778,448) (459,401)
Provision for
(recovery of)
income taxes (12,046) 153,825 (24,773) (5,474)
Provision for
future income taxes (13,964) 400,855 (13,964) 8,655
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Earnings (loss)
from continuing
operations (3,342,983) 370,753 (739,711) (462,582)
Results of
discontinued
operations,
net of
income taxes (2,315,335) 733,654 (22,844) (208,985)
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Net earnings (loss)
for the period (5,658,318) 1,104,407 (762,555) (671,567)
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Net earnings (loss)
per common share
- basic and
diluted
Earnings (loss)
from continuing
operations (0.27) 0.03 (0.06) (0.04)
Results of
discontinued
operations (0.19) 0.07 (0.00) (0.02)
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Net earnings
(loss) per
common share - basic (0.46) 0.10 (0.06) (0.06)
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Mamma.com
Condensed Consolidated Cash Flows
(Unaudited) (expressed in U.S. dollars and in accordance
with generally accepted accounting principles in Canada)
For the For the
twelve months ended three months ended
December 31 December 31
--------------------------------------------------------------------
2005 2004 2005 2004
$ $ $ $
Cash flows from
(used for)
Operating activities
Earnings (loss)
from continuing
operations (3,342,983) 370,753 (739,711) (462,582)
Adjustments for
Amortization of
property, plant
and equipment 106,788 133,123 31,647 41,945
Amortization of
intangible
assets 242,031 191,218 94,317 47,833
Employee
stock-based
compensation 136,933 281,367 82,589 174,138
Write-down of
investment - 365,286 - 365,286
Financial fees
paid by issuance
of capital and
warrants - 260,301 - -
Future income
taxes (13,964) 400,855 (13,964) 8,655
Tax credits - 81,505 - -
Unrealized loss
on foreign exchange - 14,622 - 430
Net change in
non-cash
working
capital items 1,420,013 (302,567) 1,066,776 (834,691)
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Cash from (used for)
operating activities
from continuing
operations (1,451,182) 1,796,463 521,654 (658,986)
Cash from
(used for)
operating activities
from discontinued
operations (630,288) (790,370) (29,594) 82,067
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(2,081,470) 1,006,093 492,060 (576,919)
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Investing
activities
Business
Acquisitions (15,851,922) - (15,851,922) -
Purchase of
intangible assets (54,943) (9,434) (6,972) (7,923)
Purchase of
property, plant
and equipment (85,687) (70,284) (572) (24,308)
Net decrease
(increase) in
temporary
investments 2,860,843 (6,850,979) (4,013,312) (3,851,505)
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Cash used for
investing
activities from
continuing
operations (13,131,709) (6,930,697)(19,872,778) (3,883,736)
Cash from
investing
activities from
discontinued
operations - 434,975 - -
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(13,131,709) (6,495,722)(19,872,778) (3,883,736)
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Financing
activities
Issuance of
capital stock 6,424 22,760,261 - -
Share issue costs - (1,058,819) - -
Redemption of
common shares (1,053,155) - - -
-------------------------------------------------------------------
(1,046,731) 21,701,442 - -
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Effect of foreign
exchange rate
changes on cash
and cash equivalents 4,022 79,375 4,022 -
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Net change in
cash and cash
equivalents and
restricted
cash during
the period (16,255,888) 16,291,188 (19,376,696) (4,460,655)
Cash and cash
equivalents and
restricted cash
- Beginning
of period 20,757,089 4,465,901 23,877,897 25,217,744
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Cash and cash
equivalents
and restricted
cash - End of
period 4,501,201 20,757,089 4,501,201 20,757,089
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-------------------------------------------------------------------
Cash and cash
equivalents
comprise:
Cash 4,501,201 1,565,600 4,501,201 1,565,600
Short-term
investments - 19,043,489 - 19,043,489
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4,501,201 20,609,089 4,501,201 20,609,089
Restricted cash - 148,000 - 148,000
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4,501,201 20,757,089 4,501,201 20,757,089
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