Mamma.com Releases Q1 2006 Results
Montreal, Canada -- May 15th, 2006 -- Mamma.com Inc., (the "Company"), (NASDAQ: MAMA), reported its financial results for the first quarter ended March 31, 2006. Unless otherwise stated, all figures in this release are in US dollars.
The Company's Q1 2006 net loss was $875,083 ($0.06 per share) compared to a net loss of $890,822 ($0.07 per share) for the same period in 2005. Revenues in the first quarter of 2006 were $2,209,662, 26% below the $3,001,715 revenues for the same period in 2005. The decrease of $792,053 was mainly due to a reduction in the graphic advertising revenues of $1,134,329 due to the loss of a significant number of sales people. Revenues in Q1 2006 included those of Copernic for the entire current quarter of $522,402. Q1 2006 revenues increased by $0.55 million compared to Q4 2005, representing a 33% increase.
* Q1 net loss of $0.875 million ($0.06 per share)
* Cash and cash equivalents at $8.3 million
* Operating activities used cash of $91 thousand during Q1 2006
Loss from continuing operations in Q1 2006 was $900,672, compared with Q1 2005 of $653,459. Payout costs over search and graphic advertising revenues were at 32%, compared with 41% in Q1 2005 mainly due to product mix between search and graphic. General and administration expenses decreased by $648,368 mainly due to a confirmed reimbursement of $460,000 by our insurance carrier for expenses related to the SEC investigation incurred in 2005, which was received in May 2006, and a general reduction in professional fees in relation to the purported securities class action lawsuits and SEC investigation. Product development and technical support increased by $362,223 in Q1 2006 compared to Q1 2005 mainly due to the acquisition of Copernic. In Q1 2006 the amortization of intangible assets reflected the impact of the acquisition of Copernic.
During the first quarter of 2006, the purchase price allocation relating to the 2005 acquisition of Copernic was adjusted to reflect additional assets and liabilities assumed by the Company. The purchase price allocation was therefore adjusted by increasing accounts receivable by $480,091, liabilities by $22,286 and consequently decreasing original goodwill by $457,805. The increase in accounts receivable, which was not accounted for in the audited closing balance sheet of Copernic at the date of acquisition, was due to revenue recognition adjustment related to a specific contract that existed prior to the date of the transaction.
Cash, cash equivalents and temporary investments at March 31, 2006 were $8,348,649, a reduction of $165,864 compared with December 31, 2005.
Guy Faur, the Company's President and CEO stated: "Following the acquisition of Copernic at the end of Q4 2005, Q1 2006 has been a quarter focused on rebuilding the organization. Our search advertising revenues remain fairly stable and we have concentrated our efforts on rebuilding the sales team for the graphic advertising and hiring new salespeople to market the Copernic Desktop Search (CDS) software. We have hired and trained five salespeople who are now actively prospecting clients for both the graphic advertising and CDS products and services. From Q4 2005 to Q1 2006 graphic advertising revenues have declined primarily because of our strategy to shift the focus from small advertisers to major advertising agencies, which results in a lag time before we can penetrate new markets. Search advertising revenues have increased from Q4 2005 to Q1 2006 because of the added revenues from the Copernic Agent browser traffic and because of an increase in our revenues resulting from an optimization effort with our partners. The increase in revenues for search advertising contrasts with the decline in these revenues last year."
Added Mr. Faur: "We believe advertisers are increasingly demanding high quality traffic for their campaigns and we have a competitive offer in this sector to respond to this demand. We also believe that our "white labeled" CDS offering can help major portals and Internet content providers to retain their precious users and generate more Web search revenues. We are pursuing the commercialization effort of CDS with positive expectations."
Guy Faur concluded: "Q1 has been a quarter during which the Company has strengthened its plan for the future with the addition of Copernic. We have competitive offerings and a stronger team."
The unaudited financial statements for the first quarter ended March 31, 2006 will soon be available on SEDAR and EDGAR and on www.mammamediasolutions.com.
For more detailed financial information, please click here.
About Mamma.com Inc.
Mamma Media Solutions 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 and graphic ad placement on its large publisher network.
Mamma.com The Mother of All Search Engines (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.
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 users PC. It allows for instant searching of files, emails, and email attachments stored anywhere on a PC hard drive. It's desktop search application won the CNET 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.
Source: Mamma Media Solutions
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