Call Genie Inc.
TSX : GNE

Call Genie Inc.

March 26, 2010 20:30 ET

Call Genie Reports Fiscal 2009 Financial Results

4th Quarter Debt Financing provides $4.0 million of working capital

TORONTO, ONTARIO--(Marketwire - March 26, 2010) - Call Genie, a leading provider of mobile local search and advertising solutions, today announced financial results for the year ended December 31, 2009 and the three months ended December 31, 2009.

Certain information set out in this News Release constitutes forward-looking information, including the Company's expectation that a number of key projects will move into the commercialization phase in 2010, the range of anticipated revenues for the first quarter of 2010, expectations concerning cash flow used in operations for the first quarter of 2010, anticipated revenues for the 2010 financial year and the generation of positive net income from operations by Q4 2010. Readers should refer to the cautionary statement concerning forward-looking that appears at the end of this News Release.

2009 Annual Results

  • The Company invoiced customers $7.2 million during the year ended December 31, 2009 compared to $4.8 million in 2008.
  • Revenues recognized for 2009 of $3.5 million compares to $4.3 million for 2008.
  • Deferred revenues increased to $4.7 million at December 31, 2009 from $0.9 million at December 31, 2008.
  • Net loss for the year ended December 31, 2009 was $12.4 million ($0.15 per share) compared to $20.5 million in 2008 ($0.25 per share).
  • At December 31, 2009 the Company had a cash balance of $3.5 million compared to $5.0 million at December 31, 2008.

Fourth Quarter 2009 Highlights

  • Deferred revenues increased to $4.7 million at December 31, 2009 from $2.6 million at the end the third quarter of 2009.
  • Revenues recognized for the fourth quarter of $0.8 million compares to $1.0 million for Q4, 2008.
  • Net loss from Operations in the fourth quarter was $2.7 million compared to $5.4 million in 2008.

HIGHLIGHTS

  • During the quarter, the Company completed a $4.0 million debt financing in the form of convertible secured debentures. The debentures bear interest at a rate of 12% per annum, payable semi-annually, and mature on October 31, 2012. Principal and accrued interest under the debentures is convertible into common shares of the Company, at the option of the debenture holder, based on a conversion price of $0.50 per share (subject to adjustment).
  • Cash used in operations for the fourth quarter was $0.5 million compared to $2.4 million for the fourth quarter of 2008. This represents the 7th straight quarter of improved quarterly cash usage since the first quarter of 2007.

FINANCIAL OUTLOOK

Mr. Michael Durance, the Company's Chief Executive Officer, remarked, "In 2010, the Company expects a number of key projects to move into the commercialization phase, as a result of which the Company will begin to realize performance based recurring revenues. For the first quarter of 2010, the Company expects revenues to range from $0.5 million to $0.8 million and cash flow used in operations to range from $2.0 million to $2.5 million. For the year ended December 31, 2010, the Company expects total revenues to grow by 100% to $7.0 million, which will support the generation of positive net income from operations in Q4."

This news release should be read in conjunction with Call Genie's audited financial statements and the accompanying notes as at and for the year ended December 31, 2009 and the related Management Discussion and Analysis ("MD&A"), which have been filed with certain securities regulatory authorities in Canada and available on SEDAR (www.sedar.com) and on the Call Genie website at www.callgenie.com.

About Call Genie Inc.

Call Genie is a leading international provider of local mobile search and advertising solutions that connect ready to transact consumers directly with local merchants for local directory businesses, directory assistance services and local media publishers. Call Genie solutions offer an exceptional experience for both advertisers and consumers and are deployed in 11 countries. Call Genie has been awarded the Excellence in Integrated Ad Management award by the Pelorus Group, has won the Yellow Page Association Industry Excellence Award for Marketing Innovation, the Whitaker Innovation Award, the 118 Tracker Awards for both Technology Innovation in the UK and most recently, Outstanding Contribution to the Industry. www.callgenie.com.

Certain statements included in this News Release are not historical facts, but rather are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "hope", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "scheduled", "believe" and similar expressions. The financial information set out in this News Release under the heading "Financial Outlook" was approved by management and the Board of Directors of the Company on March 23, 2010 and such information has been included to provide readers with an estimate of certain financial results that may be generated by the Company as it moves into a new phase with the commercialization of various technologies. Readers are cautioned that such information may not be appropriate for other purposes.

Forward-looking statements are based upon the opinions, expectations and estimates of management and, in some cases, information received from or disseminated by third parties, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include such things as the Company's current stage of development, the lack of a track record with respect to the generation of revenues from performance-based arrangements with customers, its reliance on third parties and third party technology, the existence of competition, the availability of external financing, the inherent risks associated with research and development activities and commercialization of emerging technologies (such as lack of market acceptance), timing of execution of various elements of the Company's business plan, the availability of human resources, the emergence of competing business models, new laws (domestic or foreign) and the other risk factors noted below in this cautionary statement. In respect of the range of revenue that is expected to be reported for the three months ending March 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the level of transactions causing deferred revenue to be recognized as revenue not increasing as expected, the ability of the Company to obtain the necessary documentation required under GAAP to permit the recognition of revenue, material changes in the business terms agreed to by the Company and one or more of its existing customers, and changes in GAAP or the Company's application of GAAP. In respect of expectations concerning cash flow used in operations for the quarter ended March 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, lack of a sufficient level of demand for services that generate performance based revenues, the ability to invoice customers and collect the amounts owed, the continued solvency of the Company's customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized as revenue not increasing as expected, the ability of the Company to obtain the necessary documentation required under GAAP to permit the recognition of revenue, material changes in the business terms agreed to by the Company and one or more of its existing customers, changes in GAAP or the Company's application of GAAP and disruptions in the level and timing of cash disbursements and cash receipts. In respect of the revenue that is expected to be reported for the 12 months ending December 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, lack of a sufficient level of demand for services that generate performance based revenues, anticipated call volumes under performance-based arrangements entered into with customers not materializing as expected (with the result that performance based revenue generated by the Company falls short of expectations), the ability to invoice customers and collect amounts owed, the continued solvency of the Company's customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized as revenue not increasing as expected, the ability of the Company to obtain the necessary documentation required under GAAP to permit the recognition of revenue, material changes in the business terms agreed to by the Company and one or more of its existing customers, changes in GAAP or the Company's application of GAAP. In respect of expectations concerning net income from operations by the quarter ended December 31, 2010, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, lack of a sufficient level of demand for services that generate performance based revenues, anticipated call volumes under performance-based arrangements entered into with customers not materializing as expected (with the result that performance-based revenue generated by the Company falls short of expectations), the ability to invoice customers and collect amounts owed, the continued solvency of the Company's customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized as revenue not increasing as expected, the ability of the Company to obtain the necessary documentation required under GAAP to permit the recognition of revenue, material changes in the business terms agreed to by the Company and one or more of its existing customers, changes in GAAP or the Company's application of GAAP and the Company's ability to maintain quarterly cash expenses at an amount equal to or less than $2.5 million on a going forward basis. In respect of the number and impact of key customer projects expected to move into the commercialization phase in 2010, resulting in the Company earning performance based revenues, those risks, uncertainties and factors include, but are not limited to, such things as the ability of the Company to meet its contractual commitments, lack of a sufficient level of demand for services that generate performance based revenues, anticipated call volumes under performance-based arrangements entered into with customers not materializing as expected (with the result that performance-based revenue generated by the Company falls short of expectations), the ability to invoice customers and collect amounts owed, the continued solvency of the Company's customers, the ability to complete legal agreements on a timely basis, the level of transactions causing deferred revenue to be recognized as revenue not increasing as expected, the ability of the Company to obtain the necessary documentation required under GAAP to permit the recognition of revenue, material changes in the business terms agreed to by the Company and one or more of its existing customers and changes in GAAP or the Company's application of GAAP.

Forward-looking information:

  1. respecting the range of revenues that is expected to be reported for the quarter ended March 31, 2010 is based upon management's estimates of revenues to be derived from existing customer arrangements, the terms of the agreements entered into with those customers, information received from customers with respect to anticipated call volumes for Call Genie enabled services (upon which performance-based compensation is dependent), customers devoting sufficient resources to the advertising of Call Genie-enabled services to effectively promote awareness and usage of such services (which is necessary to permit the Company to earn performance-based revenues in accordance with business plan expectations), the Company earning between $25,000 and $300,000 from performance-based arrangements with customers, management estimates respecting the timing of execution and delivery of services to be performed, the historical pattern of timing of cash receipts, amounts invoiced to customers to March 23, 2010, customer receipts to March 23, 2010, the Company's revenue recognition policy and management's understanding of GAAP;
  2. respecting the expected range of cash flow used in operations for the quarter ended March 31, 2010 is based upon the existing terms of the arrangements with customers, customer receipts to March 23, 2010, the historical pattern of timing of cash receipts, the Company's planned expenditure rate and contractual requirements with respect to existing cash payments;
  3. respecting the revenues that are expected to be reported for the year ended December 31, 2010 is based upon management's estimates of revenues to be derived from existing customer arrangements, the terms of agreements entered into with those customers, information received from customers with respect to anticipated call volumes for Call Genie enabled services (upon which performance-based compensation is dependent), customers devoting sufficient resources to the advertising of Call Genie-enabled services to effectively promote awareness and usage of such services (which is necessary to permit the Company to earn performance-based revenues in accordance with business plan expectations), the Company earning not less than $4.4 million from performance-based arrangements with customers, management's estimates respecting the timing of execution and delivery of services to be performed, the historical pattern of timing of cash receipts, amounts invoiced to customers to March 23, 2010, customer receipts to March 23, 2010, the Company's revenue recognition policy and management's understanding of GAAP;
  4. respecting the expected net income from operations for the quarter ended December 31, 2010 is based upon customer receipts to March 23, 2010, the existing terms of arrangements with customers, the Company's historical experiences with prior customer projects (including the time required to move from contract negotiations to commercialization), information received from customers with respect to anticipated call volumes for Call Genie enabled services (upon which performance-based compensation is dependent), the Company earning not less than $4.4 million from performance-based arrangements with customers, management's estimates of revenues to be derived from existing customer arrangements, the terms of agreements entered into with those customers, customers devoting sufficient resources to the advertising of Call Genie-enabled services to effectively promote awareness and usage of such services (which is necessary to permit the Company to earn performance-based revenues in accordance with business plan expectations) and the Company's planned expenditure rate and contractual arrangements with respect to existing staff, facilities and administrative support costs; and
  5. respecting the number and impact of key customer projects moving into the commercialization phase in 2010, resulting in the Company earning performance based revenues, is based upon the Company's historical experiences with prior customer projects (including the time required to move from contract negotiations to commercialization), information received from customers with respect to anticipated call volumes for Call Genie enabled services (upon which performance-based compensation is dependent), customers devoting sufficient resources to the advertising of Call Genie-enabled services to effectively promote awareness and usage of such services (which is necessary to permit the Company to earn performance-based revenues in accordance with business plan expectations), management's estimates of revenues to be derived from existing customer arrangements and the terms of the agreements entered into with those customers.

Call Genie Inc. does not assume responsibility for the accuracy and completeness of the forward-looking statements set out herein and, subject to applicable securities laws, does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Call Genie Inc.'s forward-looking statements are expressly qualified in their entirety by this cautionary statement. Additional information relating to various risk factors to which Call Genie is exposed in the conduct of its business (and which may affect the expectations or outcomes reflected in the forward-looking statements contained in this news release) are described in the Company's annual MD&A for the year ended December 31, 2009, which has been filed with certain securities regulatory authorities in Canada and is available through SEDAR, at www.sedar.com.

The TSX Exchange has neither approved nor disapproved the contents of this news release.

Contact Information