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 fourth quarter ended December 31, 2009
(''Q4 2009''). 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 $0.37 million for Q4 2009,
compared to $0.69 million for Q4 2008. Revenues from continuing
operations for the year 2009 were $1.65 million, compared to $2.22
million for 2008.
-- Gross margin from continuing operations in Q4 2009 was 98% compared to
98% for Q4 2008. For the year 2009 gross margin from continuing
operations was 96% compared to 95% for 2008.
-- Expenses from continuing operations in the fourth quarter of 2009 were
at $1.1 million, compared to $5.5 million in the comparable period in
2008, including write-downs of $4.3 million. Expenses from continuing
operations for the year 2009 were at $4.5 million, compared to $10.5
million for the year 2008, including write-downs of $4.3 million.
-- Net loss in Q4 2009 was $0.7 million ($0.34 per share) compared to a net
loss of $4.2 million ($2.04 per share) for the same period in 2008. Net
income for the year 2009 was $2.1 million ($1.01 per share) compared to
a loss of $6.5 million ($3.10 per share) for 2008.
-- Liquidities sufficient to meet normal operating requirements until end
of 2010 were at $4 million as of December 31, 2009, compared to $5.1
million as of December 31, 2008.
Recent Highlights
-- As announced on February 12, 2010, Copernic Inc. amended the agreement
signed on November 12, 2009, pursuant to which the Company will issue,
by way of private placement, 500,000 shares at $4.00 per share for a
total proceeds of $2,000,000. The amended agreement also proposes a
purchase, by Copernic, of 70.1% of the common shares outstanding of
Sunbay Canada Corporation (''Sunbay''), a company registered in Ontario.
The Board of Directors of Sunbay will be comprised of three members
elected by Copernic, one of which will be Mr. Marc Ferland, Chief
Executive Officer of Copernic who will also hold this position for
Sunbay. In addition, Newlook Industries Corporation and Sunbay Energy
Corporation will each elect a representative. Based on this amended
agreement, Copernic will issue 150,000 common shares in exchange of its
equity position in Sunbay valued at $600,000 and 450,000 shares for cash
of $1,400,000. The closing is scheduled no later than April 30, 2010.
"Our sales shortfall compared to last year was the result of
unfavorable economic conditions, particularly in corporate sales.
Therefore we continued our rigorous cost reduction plan in an
attempt to offset the sales shortfall and right size our operations
as the result of the sale of our AD Network. Since December 2007,
we have taken out $3.6 Million in operating expenses'', stated Mr.
Marc Ferland President and CEO of Copernic.
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 Sheets
As at December 31, 2009 and 2008
----------------------------------------------------------------------------
(expressed in U.S. dollars and in accordance
with generally accepted accounting
principles in Canada)
2009 2008
$ $
Assets
Current assets
Cash 465,949 1,066,817
Temporary investments 3,504,930 4,006,115
Accounts receivable 256,110 907,560
Income taxes receivable 337,802 110,121
Balance of sale receivable 655,131 -
Prepaid expenses 118,149 170,864
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5,338,071 6,261,477
Balance of sale receivable 3,694,060 -
Property and equipment 115,110 240,094
Intangible assets 202,597 918,485
Goodwill 3,362,003 3,362,003
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12,711,841 10,782,059
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----------------------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,010,140 991,142
Deferred revenue 103,668 156,789
Deferred rent 1,534 4,805
Current portion of obligations under capital
leases 50,630 57,267
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1,165,972 1,210,003
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Obligations under capital leases 7,906 39,992
Future income taxes 45,146 259,848
----------------------------------------------------------------------------
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
Contributed Surplus 5,853,737 5,747,028
Accumulated other comprehensive income 561,137 561,137
Accumulated deficit (91,478,542) (93,592,434)
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11,492,817 9,272,216
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12,711,841 10,782,059
----------------------------------------------------------------------------
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Copernic Inc.
Condensed Consolidated
Statements of Operations
----------------------------------------------------------------------------
(expressed in U.S. dollars
and in accordance with
generally accepted
accounting principles in
Canada)
For the twelve months For the three months
ended ended
December 31, December 31,
2009 2008 2009 2008
$ $ $ $
Revenues 1,653,026 2,218,264 372,943 693,467
Cost of revenues 62,304 105,338 7,136 16,513
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Gross Margin 1,590,722 2,112,926 365,807 676,954
----------------------------------------------------------------------------
Expenses
Marketing, sales and
services 625,243 386,486 193,312 72,239
General and administration 2,329,947 2,907,964 566,536 525,309
Product development and
technical support 1,125,102 1,836,986 271,085 315,403
Amortization of property and
equipment 117,909 89,169 30,834 979
Amortization of intangible
assets 720,729 980,285 182,335 244,688
Write-downs and settlement
costs 10,924 4,381,840 10,924 4,381,840
Restructuring charges 33,677 101,012 13,053 69,621
Interest and other income (333,979) (162,880) (149,272) (40,306)
Gain on disposal of an
investment (169,239) - - -
Loss (gain) on foreign
exchange 70,772 (24,440) 23,643 (18,218)
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4,531,085 10,496,422 1,142,450 5,551,555
----------------------------------------------------------------------------
Loss from continuing
operations before income
taxes and
discontinued operations (2,940,363) (8,383,496) (776,643) (4,874,601)
Current income taxes 1,498 522 - (8,550)
Future income taxes (656,347) (854,914) (60,067) (306,410)
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Recovery of income taxes (654,849) (854,392) (60,067) (314,960)
----------------------------------------------------------------------------
Loss from continuing
operations (2,285,514) (7,529,104) (716,576) (4,559,641)
Results of discontinued
operations, net of income
taxes 4,399,406 1,038,400 14,295 299,204
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Net earnings (loss) for the
year 2,113,892 (6,490,704) (702,281) (4,260,437)
----------------------------------------------------------------------------
Basic and diluted loss /
share - continuing
operations (1.09) (3.60) (0.34) (2.18)
Basic and diluted earnings /
share - discontinued
operations 2.10 0.50 0.01 0.14
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Basic and diluted net
earnings (loss) / share 1.01 (3.10) (0.34) (2.04)
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Copernic Inc.
Condensed Consolidated Statements of Cash Flows
----------------------------------------------------------------------------
(expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)
For the twelve months For the three months
ended ended
December 31, December 31,
2009 2008 2009 2008
$ $ $ $
Cash flows from (used for)
Operating activities
Loss from continuing
operations (2,285,514) (7,529,104) (716,576) (4,559,641)
Adjustments for - -
Amortization of property
and equipment 117,909 89,169 30,834 979
Amortization of intangible
assets 720,729 980,285 182,335 244,688
Employee stock-based
compensation 106,709 8,249 21,991 (5,317)
Write-down of goodwill - 3,995,000 - 3,995,000
Write-down of intangible
assets 1,462 343,768 1,462 343,768
Write-down of investment - - - -
Write-down of property and
equipment 9,462 43,072 9,462 43,528
Gain on disposal of an
investment (169,239) - - -
Future income taxes (656,347) (854,914) (60,067) (306,410)
Accreted interest on
balance of sale
receivable (200,823) - (74,730) -
Unrealized loss (gain) on
foreign exchange 10,529 (25,201) 2,027 (18,920)
Net change in non-cash
working capital items 130,297 (391,011) (48,642) 439,726
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Cash used for operating
activities from continuing
operations (2,214,826) (3,340,687) (651,904) 177,401
Cash provided by
discontinued operations 1,051,219 1,620,116 (18,104) 518,304
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Cash used for operations (1,163,607) (1,720,571) (670,008) 695,705
----------------------------------------------------------------------------
Investing activities
Proceeds on the disposal of
an investment 169,239 - - -
Purchase of intangible
assets (14,373) (5,054) (11,149) -
Purchase of property and
equipment (30,627) (15,879) (1,730) (2,837)
Net decrease (increase) in
temporary investments 3,005,227 960,157 - (3,005,227)
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Cash provided by (used for)
continuing operations 3,129,466 939,224 (12,879) (3,008,064)
Cash used in discontinued
operations (579) - 229,090 -
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Cash provided from (used
for) investing activities 3,128,887 939,224 216,211 (3,008,064)
----------------------------------------------------------------------------
Financing activities
Issuance of capital stock - - - -
Repayment of obligations
under capital leases (62,106) (57,976) (17,641) (14,075)
----------------------------------------------------------------------------
Cash provided from (used
for) financing activities (62,106) (57,976) (17,641) (14,075)
----------------------------------------------------------------------------
Net change in cash and cash
equivalents during the
period 1,903,174 (839,323) (471,438) (2,326,434)
Cash and cash equivalents -
Beginning of the period 2,067,705 2,907,028 4,442,317) 4,394,139
----------------------------------------------------------------------------
Cash and cash equivalents -
End of year 3,970,879 2,067,705 3,970,879 2,067,705
----------------------------------------------------------------------------
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Cash and cash equivalents
comprise:
Cash 465,949 1,066,817 465,949 1,066,817
Temporary investments 3,504,930 4,006,115 3,504,930 4,006,115
Less: temporary
investments with maturity
date
in excess of 3 months from
date of issuance - (3,005,227) - (3,005,227)
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3,970,879 2,067,705 3,970,879 2,067,705
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Contacts: Copernic Inc. Jean-Rock Fournier, CA Executive Vice
President and Chief Financial Officer 418-527-0528 ext. 1271 / Toll
Free: 877-289-4682 jrfournier@copernic.com www.copernic.com
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