Montreal, Canada – (The Hosting News) – March 13, 2006 – Financial results for the fourth quarter ending in December, 2005 have been released by metasearch engine provider Mamma Media Solutions.
The Company’s Q4 2005 net loss was $762,555 ($0.06 per share) compared to a net loss of $671,567 ($0.06 per share) for the same period in 2004. Net loss for the year was $5,658,318 ($0.46 per share) compared to net earnings of $1,104,407 ($0.10 per share) for the year of 2004.
The decrease in revenues in the fourth quarter of 2005 were $1,659,017, 51% below the $3,416,315 was due to a reduction in search revenues of $903,392 mostly because of industry pressure to deliver better conversion rates and to improve traffic quality by cutting non-converting clicks in our search network and a reduction in the Ad Network revenues of $853,906 due to the loss of a significant number of sales people. The decrease in revenues for the year 2005 were $9,464,560, 35% below the $14,636,318 revenues for the year 2004 due to a reduction in revenues for search of $4,662,959 explained by a significant reduction in business with a major customer for approximately $3.8 million and a reduction in revenues for Ad Networks of $508,799.
Expenses were offset by a reduction in other professional fees. Payout costs over revenues were at 45%, compared with 41% in Q4 2004. Product development and technical support increased by $66,124 in Q4 2005 compared to Q4 2004 mainly because of an increase of approximately $56,000 in salaries due to additional staff. Loss from continuing operations for the year 2005 was $3,342,983 compared to earnings from continuing operations of $370,753 in 2004.
Loss from continuing operations in Q4 2005 was $739,711, compared with Q4 2004 of $462,582, including significant expenses such as: professional fees related to the ongoing SEC investigation and securities class action lawsuits of $81,000 and an increase in directors’ and officers’ insurance of $108,000.
Cash, cash equivalents and temporary investments are at $8,514,513, after the Copernic transaction which used $15,851,922 of cash and cash equivalents net of cash acquired.
Other statistics include:
– Q4 revenues decreased by 51% to $1.659 million due to the loss of a
significant number of sales people from our Ad Network team, yearly
revenues decreased by 35% to $9,464,000
– Q4 net loss of $0.763 million ($0.06 per share), yearly net loss of
$5,658,000 ($0.46 per share)
– Copernic acquisition successfully completed on December 22, 2005.
– Cash, cash equivalents and temporary investments at $8.5 million post-Copernic transaction.
Guy Faure, Mamma Media Solutions’ President and CEO stated, ”Following a good year in 2004, 2005 was disappointing as it was a year in which the industry had to compete fiercely for clicks and impressions of high quality. The fourth quarter was particularly disappointing because of a significant decline in revenues due to the loss of several sales people and a network manager. Together, the former employees started a competitive business in the Ad Network space. The Company believes that this business was initiated when most of the founding members were still employed with Mamma.com. We have taken an aggressive stance about this matter and are pursuing legal action against the company and its principals.”
Mr. Faure added, ”Through recent hiring, we are confident about our ability to succeed in ramping up the Ad Network revenues to previously experienced levels. We have also recently deployed our premium network offering, which should provide for higher CPM’s (cost per thousand impressions) and eventually, higher margins. We are very pleased with the completion of the Copernic acquisition which should be accretive to earnings in 2006 and should position the Company as a leader in search technologies and applications and as a multi-channel on-line marketing services provider.”
Mr. Faure concluded, ”We have high expectations for the Copernic Desktop Search (CDS) award-winning product. This world-class software has already seen a healthy adoption rate in blue chip customer agreements and we expect that other major portals will also want to adopt CDS in order to protect user attrition and generate more cost per click revenues from their search partners. We have managed to navigate through a tough year in 2005 fighting through legal and operational issues and have come out of the storm a stronger company. With a healthy network of partners and with the addition of Copernic we believe that the Company is well poised to succeed in 2006.”
The company filed its Business Acquisition Report on both SEDAR and EDGAR on March 7th, 2006 following the acquisition of Copernic completed on December 22, 2005.
To access the live web cast on the Investor Relations section of the Mamma Media Solutions website, please visit: http://www.mammamediasolutions.com/corporate/ir/financial.html.