Comamtech Inc.
NASDAQ : COMT

March 26, 2010 17:14 ET

Copernic Inc. Announces 2009 Fourth Quarter Results

QUEBEC CITY, CANADA--(Marketwire - March 26, 2010) - Copernic Inc., (the "Company"), (NASDAQ:CNIC), a leading software development company in the technology sector, specializing in internet, desktop and mobile search products, today reported its financial results for the fourth quarter ended December 31, 2009 (''Q4 2009''). Unless otherwise stated, all figures in this release are in US dollars. For comparison purposes, comparative figures have been re-casted to reflect the sale of Mamma.com and its AD Network.

Financial Highlights

  • Revenues from continuing operations were $0.37 million for Q4 2009, compared to $0.69 million for Q4 2008. Revenues from continuing operations for the year 2009 were $1.65 million, compared to $2.22 million for 2008.

  • Gross margin from continuing operations in Q4 2009 was 98% compared to 98% for Q4 2008. For the year 2009 gross margin from continuing operations was 96% compared to 95% for 2008.

  • Expenses from continuing operations in the fourth quarter of 2009 were at $1.1 million, compared to $5.5 million in the comparable period in 2008, including write-downs of $4.3 million. Expenses from continuing operations for the year 2009 were at $4.5 million, compared to $10.5 million for the year 2008, including write-downs of $4.3 million.

  • Net loss in Q4 2009 was $0.7 million ($0.34 per share) compared to a net loss of $4.2 million ($2.04 per share) for the same period in 2008. Net income for the year 2009 was $2.1 million ($1.01 per share) compared to a loss of $6.5 million ($3.10 per share) for 2008.

  • Liquidities sufficient to meet normal operating requirements until end of 2010 were at $4 million as of December 31, 2009, compared to $5.1 million as of December 31, 2008.

Recent Highlights

  • As announced on February 12, 2010, Copernic Inc. amended the agreement signed on November 12, 2009, pursuant to which the Company will issue, by way of private placement, 500,000 shares at $4.00 per share for a total proceeds of $2,000,000. The amended agreement also proposes a purchase, by Copernic, of 70.1% of the common shares outstanding of Sunbay Canada Corporation (''Sunbay''), a company registered in Ontario. The Board of Directors of Sunbay will be comprised of three members elected by Copernic, one of which will be Mr. Marc Ferland, Chief Executive Officer of Copernic who will also hold this position for Sunbay. In addition, Newlook Industries Corporation and Sunbay Energy Corporation will each elect a representative. Based on this amended agreement, Copernic will issue 150,000 common shares in exchange of its equity position in Sunbay valued at $600,000 and 450,000 shares for cash of $1,400,000. The closing is scheduled no later than April 30, 2010.

"Our sales shortfall compared to last year was the result of unfavorable economic conditions, particularly in corporate sales. Therefore we continued our rigorous cost reduction plan in an attempt to offset the sales shortfall and right size our operations as the result of the sale of our AD Network. Since December 2007, we have taken out $3.6 Million in operating expenses'', stated Mr. Marc Ferland President and CEO of Copernic.

About Copernic Inc.

Copernic Inc. specializes in developing, marketing and selling cutting-edge search technology, providing innovative home and business software products and solutions for desktop, web and mobile users, through its online properties www.copernic.com and www.mycopernic.com. With its award winning Copernic Desktop Search software search engine product, the Company brings the power of a sophisticated, yet easy-to-use search engine to the user's PC.

More information can be found at www.copernic.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 Securities and Exchange Commission and the Ontario Securities Commission. 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.

Copernic Inc.        
Condensed Consolidated Balance Sheets        
As at December 31, 2009 and 2008        
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada)        
  2009   2008  
  $   $  
Assets        
         
Current assets        
Cash 465,949   1,066,817  
Temporary investments 3,504,930   4,006,115  
Accounts receivable 256,110   907,560  
Income taxes receivable 337,802   110,121  
Balance of sale receivable 655,131   -  
Prepaid expenses 118,149   170,864  
  5,338,071   6,261,477  
Balance of sale receivable 3,694,060   -  
Property and equipment 115,110   240,094  
Intangible assets 202,597   918,485  
Goodwill 3,362,003   3,362,003  
  12,711,841   10,782,059  
Liabilities        
         
Current liabilities        
Accounts payable and accrued liabilities 1,010,140   991,142  
Deferred revenue 103,668   156,789  
Deferred rent 1,534   4,805  
Current portion of obligations under capital leases 50,630   57,267  
  1,165,972   1,210,003  
Obligations under capital leases 7,906   39,992  
Future income taxes 45,146   259,848  
Commitments        
Shareholders' Equity        
Capital stock        
Authorized        
  Unlimited number of common shares, no par value        
Issued and outstanding        
  2,091,437 common shares 96,556,485   96,556,485  
Contributed Surplus 5,853,737   5,747,028  
Accumulated other comprehensive income 561,137   561,137  
Accumulated deficit (91,478,542 ) (93,592,434 )
  11,492,817   9,272,216  
  12,711,841   10,782,059  

 

         
Copernic Inc.        
Condensed Consolidated Statements of Operations        
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada)        
  For the twelve months   For the three months  
  ended   ended  
  December 31,   December 31,  
  2009   2008   2009   2008  
  $   $   $   $  
                 
Revenues 1,653,026   2,218,264   372,943   693,467  
Cost of revenues 62,304   105,338   7,136   16,513  
Gross Margin 1,590,722   2,112,926   365,807   676,954  
Expenses                
Marketing, sales and services 625,243   386,486   193,312   72,239  
General and administration 2,329,947   2,907,964   566,536   525,309  
Product development and technical support 1,125,102   1,836,986   271,085   315,403  
Amortization of property and equipment 117,909   89,169   30,834   979  
Amortization of intangible assets 720,729   980,285   182,335   244,688  
Write-downs and settlement costs 10,924   4,381,840   10,924   4,381,840  
Restructuring charges 33,677   101,012   13,053   69,621  
Interest and other income (333,979 ) (162,880 ) (149,272 ) (40,306 )
Gain on disposal of an investment (169,239 ) -   -   -  
Loss (gain) on foreign exchange 70,772   (24,440 ) 23,643   (18,218 )
  4,531,085   10,496,422   1,142,450   5,551,555  
Loss from continuing operations before income taxes and                
discontinued operations (2,940,363 ) (8,383,496 ) (776,643 ) (4,874,601 )
   
Current income taxes 1,498   522   -   (8,550 )
Future income taxes (656,347 ) (854,914 ) (60,067 ) (306,410 )
Recovery of income taxes (654,849 ) (854,392 ) (60,067 ) (314,960 )
Loss from continuing operations (2,285,514 ) (7,529,104 ) (716,576 ) (4,559,641 )
Results of discontinued operations, net of income taxes 4,399,406   1,038,400   14,295   299,204  
Net earnings (loss) for the year 2,113,892   (6,490,704 ) (702,281 ) (4,260,437 )
Basic and diluted loss / share - continuing operations (1.09 ) (3.60 ) (0.34 ) (2.18 )
Basic and diluted earnings / share - discontinued                
operations 2.10   0.50   0.01   0.14  
Basic and diluted net earnings (loss) / share 1.01   (3.10 ) (0.34 ) (2.04 )

 

         
Copernic Inc.        
Condensed Consolidated Statements of Cash Flows      
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada)      
       
  For the twelve months ended   For the three months ended  
  December 31,   December 31,  
  2009   2008   2009   2008  
  $   $   $   $  
Cash flows from (used for)                
Operating activities                
Loss from continuing operations (2,285,514 ) (7,529,104 ) (716,576 ) (4,559,641 )
Adjustments for         -   -  
  Amortization of property and equipment 117,909   89,169   30,834   979  
  Amortization of intangible assets 720,729   980,285   182,335   244,688  
  Employee stock-based compensation 106,709   8,249   21,991   (5,317 )
  Write-down of goodwill -   3,995,000   -   3,995,000  
  Write-down of intangible assets 1,462   343,768   1,462   343,768  
  Write-down of investment -   -   -   -  
  Write-down of property and equipment 9,462   43,072   9,462   43,528  
  Gain on disposal of an investment (169,239 ) -   -   -  
  Future income taxes (656,347 ) (854,914 ) (60,067 ) (306,410 )
  Accreted interest on balance of sale receivable (200,823 ) -   (74,730 ) -  
  Unrealized loss (gain) on foreign exchange 10,529   (25,201 ) 2,027   (18,920 )
Net change in non-cash working capital items 130,297   (391,011 ) (48,642 ) 439,726  
Cash used for operating activities from continuing                
operations (2,214,826 ) (3,340,687 ) (651,904 ) 177,401  
Cash provided by discontinued operations 1,051,219   1,620,116   (18,104 ) 518,304  
Cash used for operations (1,163,607 ) (1,720,571 ) (670,008 ) 695,705  
   
Investing activities                
Proceeds on the disposal of an investment 169,239   -   -   -  
Purchase of intangible assets (14,373 ) (5,054 ) (11,149 ) -  
Purchase of property and equipment (30,627 ) (15,879 ) (1,730 ) (2,837 )
Net decrease (increase) in temporary investments 3,005,227   960,157   -   (3,005,227 )
Cash provided by (used for) continuing operations 3,129,466   939,224   (12,879 ) (3,008,064 )
Cash used in discontinued operations (579 ) -   229,090   -  
Cash provided from (used for) investing activities 3,128,887   939,224   216,211   (3,008,064 )
   
Financing activities                
Issuance of capital stock -   -   -   -  
Repayment of obligations under capital leases (62,106 ) (57,976 ) (17,641 ) (14,075 )
Cash provided from (used for) financing activities (62,106 ) (57,976 ) (17,641 ) (14,075 )
Net change in cash and cash equivalents during the period 1,903,174   (839,323 ) (471,438 ) (2,326,434 )
Cash and cash equivalents – Beginning of the period 2,067,705   2,907,028   4,442,317 ) 4,394,139  
Cash and cash equivalents – End of year 3,970,879   2,067,705   3,970,879   2,067,705  
Cash and cash equivalents comprise:                
  Cash 465,949   1,066,817   465,949   1,066,817  
  Temporary investments 3,504,930   4,006,115   3,504,930   4,006,115  
  Less: temporary investments with maturity date                
  in excess of 3 months from date of issuance -   (3,005,227 ) -   (3,005,227 )
  3,970,879   2,067,705   3,970,879   2,067,705  

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