Mamma.com Reports 2.5 Million Dollar Loss
Mamma.com Inc., (the "Company"), (NASDAQ: MAMA), reported its financial results for the second quarter ended June 30, 2005. Unless otherwise stated, all figures in this release are in US dollars.
The Company's Q2 2005 net loss was $2,499,253 ($0.20 per share) compared to net earnings of $108,387 ($0.01 per share) for the same period in 2004. Revenue in the second quarter of 2005 was $2,590,220, 35% below the $3,957,428 revenue for the same period in 2004. The reduction in revenue reflects the decline in business with a major customer from over $1.4 million to $146,000. This is partially offset by revenue growth in the Company's Search and Ad Network revenue streams.
Significant cost variances were: professional fees related to the purported securities class action lawsuits and SEC investigation of $784,000, increased directors and officers insurance of $165,000, $794,092 write-down of assets and restructuring charges of $127,874 related to Digital Arrow due to the poor performance of its opt-in e-mail business unit. Payout costs over revenues decreased to 41% compared to 44.9% for the same quarter of 2004 due to a decrease in the percentage paid to partners combined with an increase in revenue generated from our meta search engine for which no payout costs are incurred.
Cash and cash equivalents still remained strong at $23,999,936 after the redemption of 304,665 common shares for $1,053,155, payments of directors and officers' insurance and additional fees related to the purported securities class action lawsuits and SEC investigation.
Guy Faure, the Company's President and CEO stated: "Revenues in the current second quarter were below Q2 2004 due to a revenue decline of a major customer and as we reduced distribution of paid advertising in the search and Ad networks offering our advertisers only high demand traffic. The Opt-in email operations have not delivered management expected results and we are now taking action to reduce operational expenses and transfer most of the sales and operations to our Montreal head office."
Guy Faure continued: "On June 20th Mamma announced the launch of its Mammahealth.com initiative. This specialised search application is the first in a series that will offer Internet users a unique search tool that queries "on-line & real-time"specialized data bases. The application provides search results from various specialized sources, and aggregates and presents content to the user in a consistent fashion. We have also recently announced an agreement with InfoSpace where they will provide distributed search results to be placed on the Mamma.com search engine beginning August 1, 2005. In the terms of the deal, InfoSpace will supply search results from some of the leading search engines on the Web. Also, as part of the agreement, the distribution of InfoSpace paid links on Mamma.com is expected to increase the number of paid clicks to InfoSpace's paid search distribution network and increase search revenues for both companies. Our ability to compete should be strengthened as we increase distribution and develop premium services, which should allow Mamma to increase its average selling price.
The unaudited financial statements for the second quarter ended June 30, 2005 will shortly be available on SEDAR and EDGAR and on our Web site www.mammainc.com .
For more detailed financial information, please click here.
About Mamma.com Inc.
Mamma Media Solutions is focused on providing quality information retrieval on the Internet through its metasearch engine, www.mamma.com, and is a leading provider of integrated marketing solutions to online advertisers. For more information, visit www.mammamediasolutions.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 United States Securities and Exchange Commission and the Ontario Securities Commission and include but are not limited to the extent to which the results of the SEC investigation or the purported 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.
[ Comment, Edit or Article Submission ]
