VANCOUVER, British Columbia, Canada, March 21, 2003 (PRIMEZONE) -- Stockgroup Information Systems Inc., (OTCBB:SWEB) (TSX Venture Exchange:SWB) a financial media and technology company, announces its financial results for the fourth quarter and year ending December 31, 2002.
Revenue was US$0.55 million in Q4 compared to $0.50 million in Q4 2001 an increase of 10%. The Company's net loss for Q4 2002 was $282,556 or $0.01 cent per share compared to $51,269 in Q4 2001. A significant portion of the Q4 loss related to the integration of the Stockhouse acquisition, which has been completed and fully expensed. This was the company's third consecutive quarter of decreasing losses.
Revenue for the full year was US$2.0 million compared to $2.9 million in 2001. The decrease in revenue is primarily the result of the discontinuation of E-Business consulting revenue, which was nil in 2002, compared to $0.6 million in 2001. The Company's net loss for 2002 was $306,677 or $0.02 per share after an extraordinary gain of $1,088,586 compared to $541,552 or $0.06 per share in 2001 an improvement of 57%.
"Over the last couple of years business conditions in the financial service and technology sectors have been very negative," stated Marcus New, Chairman and CEO of Stockgroup. "Many companies have not survived. Consumer confidence deteriorated and corporations stopped making buying decisions regarding new services, even if those services could save or make them money. There was no part of the industry that wasn't negatively affected. While we are certainly not happy with the results that we have achieved for our shareholders we are convinced that given the market conditions that exist the strategic course that we laid out for the company in late 2001 is proving to be the right strategy. We have a high degree of confidence that the moves that have been made and are continuing today will prove to be winners regardless of the state of the economy in the coming months and years, it will just be a matter of degree."
The Stockgroup strategic plan that was developed in late 2001 called in part for the company to;
1. Expand its market reach through the creation of alliances and
partnerships with significant companies that have established
client bases and the acquisition of certain key signature accounts
2. To capitalize on the strength of the company's technology
infrastructure through the offering of leading edge financial
content and delivery systems with identifiable immediate monetized
prospects
3. To create and market systems that allow for scaleable, profitable
recurring revenue streams
4. To aggressively insure that the company become a low cost
provider by sharing the costs of our technology infrastructure
among several lines of business and insuring that all costs were
minimized and directed towards saleable products
5. To restructure our balance sheet and corporate financing in a
manner that would provide the best prospects for the company and
its shareholders
During 2002 and the ensuing months and in accordance with the company's strategic plan we are pleased to report the following accomplishments;
In 2002 we entered into a strategically important exclusive reseller agreement with The Canadian Press, Canada's oldest and most important news organization. We signed and executed key recurring revenue producing contracts for our Financial Software and Content systems with signature reference clients in the United States and Canada including but not limited to, Microsoft MSN.ca, Credential Securities, Clear Channel, Global Securities Information, National Bank Financial, Marsh & McLennan, QLT, Intrawest, Dupont, Molson and BCE Emergis.
Subsequent to the end of the year we entered into an agreement with the Associated Press for them to re sell our Financial Content products. The Associated Press is the world's largest and most important news organization. We view the potential of this agreement as one of the most significant in Stockgroup's history.
During the year we increased the number and the quality of the financial tools that we license to our customers. We added to our traditional ASP and API delivery methods by becoming leaders in the delivery of financial content via XML. This allows our customers the newest and most flexible method of incorporating financial content and our software products into their infrastructure. Stockgroup recently announced Union Bank of California was licensing our XML product line for the banking industry. Stockgroup's XML product allows our customers the ability to incorporate and utilize financial information and software in their corporate, media or financial services infrastructure. We expanded our product offering to traditional newspaper and magazine publishers through our Media Charts and Media Table Product lines and expanded our Mutual Funds product line to incorporate some of the latest research tools.
During the year we were successful in eliminating costs that were not directly related to revenue production. We acquired the Web Site assets and software systems of StockHouse. The integration of Stockhouse into Stockgroup was completed and expensed during the second half of the year. Stockhouse had an invested capital base of $24 million. Today with the exception of bandwidth and equipment related costs all Stockhouse overhead or duplication of service costs have been eliminated. In addition to providing Stockgroup with an increasing revenue base this acquisition allows us to spread all of our technology, infrastructure and overhead cost over a wider base. Since acquiring StockHouse we have entered into new advertising contracts for 2003 with Porsche, Bank of Montreal, Canaccord Capital, TalVest, and others.
We made progress in restructuring the company's balance sheet. Early in 2002 we entered into new agreements with our two convertible debt holders to convert their $1.7MM in notes to a fixed conversion price of $0.50 with all accrued interest and premiums eliminated. Subsequent to the end of the year we reduced our debt by $0.4MM.
We inter listed the Company on the TSX Venture exchange. We did this in order to provide the company with visibility in the equity market where we are doing business and where we have the best opportunity of achieving significant recognition. Our Canadian customer base has been expanding. The acquisition of StockHouse made us one of the two biggest financial Web Sites in Canada in addition to the significant presence that StockHouse enjoys as a leading site in the United States. Both our shareholders and the company should benefit from the opportunities afforded by this listing.
In 2003 we feel confident that the plan that we set out to accomplish late in 2001 remains sound. We will leverage our technology infrastructure and state of the art products. Our new signature reference clients and re sellers provide us with the solid base necessary for growth. Our cost base is low. We are positioned to reap the rewards of an improving economy when it happens. We are continuing the process of improving our balance sheet. We are well positioned to improve all aspects of our performance regardless of what happens in the economy.
Other 2002 Accomplishments
-- Stockgroup announced that it restructured its Convertible Notes
with its two bond holders to fix the conversion price of the
debentures to $0.50.
-- The Canadian Press, Canada's national news agency, signed a market
exclusive agreement with Stockgroup Information Systems Inc.
-- The company completed two rounds of new funding with private
investor groups
-- Profit Magazine has recognized the Company's Canadian subsidiary
as one of Canada's fastest growing companies. This is the second
consecutive year that Stockgroup has been eligible and recognized
on the Profit 100.
-- Stockgroup purchased certain assets of StockHouse Media Corp.
including all of its financial communities, StockHouse.com,
StockHouse.ca and StockHouse.au, its proprietary software
applications and infrastructure, trademarks, contracts and
customer lists
-- Stockgroup Inter listed on TSX Venture exchange
ABOUT STOCKGROUP
Stockgroup Information Systems Inc. is a financial media and technology company. It is a leading provider of private labeled financial software and content solutions to media, corporate and financial services companies. Stockgroup employs proprietary technologies which enable its clients to provide financial data streams and news combined with cutting-edge 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 for publicly traded companies. Its financial web sites, including www.stockhouse.com, www.stockhouse.ca and www.smallcapcenter.com, are state-of-the-art online research centers for the investment community. To find out more about Stockgroup (OTCBB:SWEB) (TSX: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.
The TSX Venture has neither approved nor disapproved this news release.
Stockgroup Information Systems Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter and year ended December 31
(expressed in US dollars)
Q4 02 Q4 01 F 2002 F 2001
$ $ $ $
---------- ---------- ---------- ----------
REVENUE
Revenues 551,274 504,138 1,964,699 2,857,151
Cost of revenues 151,276 101,572 706,911 1,045,326
---------- ---------- ---------- ----------
Gross profit 399,998 402,566 1,257,788 1,811,825
---------- ---------- ---------- ----------
EXPENSES
Sales and marketing 109,597 43,869 475,038 466,954
Product development 15,929 66,018 78,792 241,392
General and
administrative 502,693 262,101 1,712,056 1,776,710
---------- ---------- ---------- ----------
628,219 371,988 2,265,886 2,485,056
---------- ---------- ---------- ----------
Profit (loss) from
operations (228,221) 30,578 (1,008,098) (673,231)
Interest income 8 379 195 4,020
Interest expense (54,652) (70,319) (319,641) (596,097)
Gain (loss) on
warrants liability -- -- (55,000) 242,000
Gain on restruc-
turing of
convertible notes -- -- 1,088,586 --
Gain on convertible
note redemptions -- -- -- 58,701
Other income
(expense) 309 (11,907) (12,719) 9,509
---------- ---------- ---------- ----------
Loss before
cumulative effect
of change in
accounting
principle (282,556) (51,269) (306,677) (955,098)
Cumulative effect
of change in
accounting
principle -- -- -- 413,546
Net loss (282,556) (51,269) (306,677) (541,552)
---------- ---------- ---------- ----------
Basic and diluted
earnings (loss)
per share
Loss before
cumulative change
in accounting
principle (0.02) (0.01) (0.02) (0.10)
Cumulative effect
of change in
accounting
principle -- -- -- 0.04
---------- ---------- ---------- ----------
Net loss (0.02) (0.01) (0.02) (0.06)
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Weighted average
number of
common shares
outstanding 16,029,498 10,125,207 14,151,349 9,305,391
========== ========== ========== ==========