Copernic Inc., (the "Company"), (NASDAQ: CNIC), a leading software
development company in the technology sector, specializing in
internet, desktop and mobile search products, today reported its
financial results for the third quarter ended September 30, 2009
(Q3). Unless otherwise stated, all figures in this release are in
US dollars. For comparison purposes, comparative figures have been
re-casted to reflect the sale of Mamma.com and its AD Network.
Financial Highlights
- Revenues from continuing operations were $0.35 million for Q3
2009, compared to $0.49 million in Q3 2008, a decline of 29%
- Gross margin from continuing operations in Q3 2009 was 92.7%
compared to 94.5% for Q3 2008
- Expenses from continuing operations in the third quarter of
2009 were at $1.1 million, compared to $1.6 million in the
comparable period, an improvement of 31%.
- Net loss from continuing operations of $0.8 million ($0.37 per
share) for the third quarter 2009 compared to net loss of $1.1
million ($0.50 per share) in the third quarter 2008
- Liquidities sufficient to meet normal operating requirements
until end of Q3 2010 were at $4.4 million as of September 30, 2009,
compared to $5.1 million as of December 31, 2008.
Recent Highlights
- Announced the approval of the consolidation of issued and
outstanding shares, effective as of September 14, 2009. The
consolidation factor was 7:1. No fractional shares were issued. The
purpose of the consolidation was to allow the Company to achieve
compliance with the NASDAQ Capital Market's minimum bid requirement
for continued listing. Prior to the completion of the
consolidation, the Company had 14,637,531 common shares
outstanding, and upon completion of the consolidation, the Company
had approximately 2,091,437 common shares outstanding.
"Our sales shortfall compared to last year is still the result
of the current economic environment in all our major markets in as
much as retail sales are comparable to last year but corporate
sales are very soft compared to the previous year. Therefore we
continue our rigorous cost reduction plan in an attempt to offset
most of the sales shortfall and right size our operations as the
result of the sale of our AD Network in the third quarter", stated
Mr. Marc Ferland President and CEO of Copernic.
Financial Results for the Quarter Ended September 30, 2009
Revenues from continuing operations in the third quarter of 2009
totaled $353,000, down from $498,000 in the third quarter of 2008
mainly due to a decline in software licensing revenues. Revenues in
Q3 2009 were lower than Q2 2009 by $60,000.
Gross margin from continuing operations in Q3 2009 was 92.7%
compared to 94.5% for Q3 2008.
Expenses in the third quarter of 2009 were at $1,147,000,
compared to $1,592,000. The difference is mainly due to the
continued cost reduction plan.
Net loss from continuing operations in the third quarter 2009
was $765,000 ($0.37 per share), compared to a net loss of
$1,048,000 ($0.50 per share) in the same quarter 2008.
Net loss from discontinued operations in the third quarter 2009
was $55,000 ($0.027 per share), compared to a net income of
$426,000 ($0.20 per share) in the same quarter 2008. This variance
is explained by the sale of the assets of Mamma.com and its AD
Network in Q2 2009.
Net loss in the third quarter 2009 was $821,000 ($0.39 per
share), compared to a net loss of $622,000 ($0.30 per share) in the
same quarter 2008.
Liquidities totaled $4,442,000 which was a decrease of $325,000
from June 30, 2009. During Q3 2009, the Company paid professional
fees and other costs related to the consolidation of issued and
outstanding shares. Liquidities including temporary investment of
$4,003,761 should be entirely available by the end of Q4 2009.
About Copernic Inc.
Copernic Inc. specializes in developing, marketing and selling
cutting-edge search technology, providing innovative home and
business software products and solutions for desktop, web and
mobile users, through its online properties www.copernic.com and
www.mycopernic.com. With its award winning Copernic Desktop Search
software search engine product, the Company brings the power of a
sophisticated, yet easy-to-use search engine to the user's PC.
More information can be found at www.copernic.com.
Statements contained in this press release, which are not
historical facts, are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act 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 Securities and Exchange
Commission and the Ontario Securities Commission. 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.
Copernic Inc.
Condensed Consolidated Balance Sheet
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(unaudited) (expressed in U.S. dollars and in accordance with generally
accepted accounting principles in Canada)
As at As at
September 30, December 31,
2009 2008
$ $
(audited)
Assets
Current assets
Cash and cash equivalents 438,556 2,067,705
Temporary investments 4,003,761 3,005,227
Accounts receivable 256,975 907,560
Income taxes receivable 244,818 110,121
Balance of sale receivable 2,032,834 -
Prepaid expenses 164,917 170,864
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7,141,861 6,261,477
Balance of sale receivable 2,466,192 -
Property and equipment 149,507 240,094
Intangible assets 375,245 918,485
Goodwill 3,362,003 3,362,003
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13,494,808 10,782,059
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-------------------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities 992,186 991,142
Deferred revenue 158,533 156,789
Deferred rent 2,180 4,805
Current portion of obligations
under capital lease 61,409 57,267
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1,214,308 1,210,003
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Obligations under capital lease 8,572 39,992
Future income taxes 98,821 259,848
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Commitments
Shareholders' Equity
Capital stock
Authorized
Unlimited number of common shares,
no par value
Issued and outstanding
2,091,437 common shares 96,556,485 96,556,485
Additional paid-in capital 5,831,746 5,747,028
Accumulated other
comprehensive income 561,137 561,137
Accumulated deficit (90,776,261) (93,592,434)
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12,173,107 9,272,216
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13,494,808 10,782,059
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Copernic 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,
-------------------------------------------------------------------------
2009 2008 2009 2008
$ $ $ $
Revenues 1,280,083 1,524,797 353,293 497,527
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Cost of revenues 55,168 88,825 25,725 25,343
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Gross Margin 1,224,915 1,435,972 327,568 472,184
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Expenses
Marketing, sales
and services 431,931 314,247 146,777 53,641
General and
administration 1,763,411 2,382,655 616,796 766,075
Product development
and technical support 854,017 1,521,583 297,076 474,082
Amortization of property
and equipment 87,075 88,190 32,845 23,023
Amortization of
intangible assets 538,394 735,597 182,531 245,344
Restructuring charges 20,624 31,391 (4,998) 31,391
Interest and other income (184,707) (122,574) (161,025) (22,704)
Gain on disposal of
an investment (169,239) - - -
Loss (gain) on
foreign exchange 47,129 (6,222) 37,118 21,819
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3,388,635 4,944,867 1,147,120 1,592,671
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Income (loss) from
operations before income
taxes and discontinued
operations (2,163,720) (3,508,895) (819,552) 1,120,487
Current income taxes 1,498 9,072 - 450
Future income taxes
recovey (161,027) (217,952) (53,676) (72,651)
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Net loss from continuing
operations (2,004,191) (3,300,015) (765,876) (1,048,286)
Net income from
discontinued operations 4,820,364 1,069,748 (55,858) 426,609
Net income (loss) for
the period 2,816,173 (2,230,267) (821,734) (621,677)
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Basic and diluted loss
from continuing
operations per share (0.96) (1.58) (0.37) (0.50)
Basic and diluted earnings
(loss) per share 1.35 (1.07) (0.39) (0.30)
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Weighted average number of
common shares outstanding
Basic 2,091,437 2,091,437 2,091,437 2,091,437
Diluted 2,091,932 2,091,437 2,091,437 2,091,437
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Copernic Inc.
Condensed Consolidated Statements of Cash Flows
-------------------------------------------------------------------------
(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,
-------------------------------------------------------------------------
2009 2008 2009 2008
$ $ $ $
Cash flows from (used for)
Operating activities
Loss from continuing
operations (2,004,191) (3,300,015) (765,876) (1,048,286)
Adjustments for
Amortization of property
and equipment 87,075 88,190 32,845 23,023
Amortization of intangible
assets 538,394 735,597 182,531 245,344
Employee stock-based
compensation 84,718 13,566 29,493 (37,530)
Future income taxes (161,027) (217,952) (53,676) (72,651)
Write-down of property
and equipment - (456) - (456)
Gain on disposal of
an investment (169,239) - - -
Accreted interest on
balance of sale
receivable (126,093) - (126,093) -
Unrealized loss (gain)
on foreign exchange 8,502 (6,281) 4,785 (3,850)
Net change in non-cash
working capital items 178,939 (830,735) 137,571 (104,738)
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Cash and cash equivalents
used for operating
activities from
continuing operations (1,562,922) (3,518,086) (558,420) (999,144)
-------------------------------------------------------------------------
Investing activities
Net change in cash and
cash equivalents from
discontinued operations 765,357 1,101,812 181,648 460,167
Proceeds on the disposal
of an investment 169,239 - - -
Purchase of intangible
assets (3,224) (5,056) - -
Purchase of property
and equipment (28,897) (13,042) (5,423) (5,257)
Capital payment on balance
of sale receivable 74,297 - 74,297 -
Net decrease (increase)
in temporary investments (998,534) 3,965,384 (3,406) -
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Cash and cash equivalents
from (used for) investing
activities (21,762) 5,049,098 247,116 454,910
-------------------------------------------------------------------------
Financing activities
Repayment of obligations
under capital lease (44,465) (43,901) (16,922) (15,431)
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Cash and cash equivalent
used for financing
activities (44,465) (43,901) (16,922) (15,431)
-------------------------------------------------------------------------
Net change in cash and
cash equivalents during
the period: (1,629,149) 1,487,111 (328,226) (559,665)
Cash and cash equivalents
- Beginning of period 2,067,705 2,907,028 766,782 4,953,804
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Cash and cash equivalents
- End of period 438,556 4,394,139 438,556 4,394,139
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Cash and cash equivalents
comprise:
Cash 438,556 4,394,139 438,556 4,394,139
Short-term investments - - - -
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438,556 4,394,139 438,556 4,394,139
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Contacts: Copernic Inc. Jean-Rock Fournier, CA Vice President
Finance and Chief Financial Officer 418-527-0528 ext. 1271 / Toll
Free: 877-289-4682 jrfournier@copernic.com www.copernic.com
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