Stockgroup Information Systems Inc.
TSX VENTURE : SWB
OTC Bulletin Board : SWEB

Stockgroup Information Systems Inc.

November 14, 2007 15:18 ET

Stockgroup Reports 84% Revenue Increase

Achieves two year milestone with launch of new Stockhouse.com

NEW YORK, NEW YORK--(Marketwire - Nov. 14, 2007) - Stockgroup Information Systems Inc. (OTCBB:SWEB)(TSX VENTURE:SWB) today announced financial results for the third quarter ended September 30, 2007. A conference call and webcast will be held today at 4:05 PM EST to discuss the results. All results are reported in US Dollars under accounting principles generally accepted in the United States of America (US GAAP).

Stockgroup revenues for the third quarter of 2007 were $3.5 million, an increase of 84 percent year-over-year. The Company posted a loss of $2.3 million, primarily due to costs associated with the development of Stockhouse and the financial industry's first reputation system for citizen journalism as well as integration costs of the previously announced acquisition.

Q3'07 Financial Highlights Compared to Q3'06

- Increased revenues by 84% to $3.5 million

- Licensing and subscription revenues increased 177% to $2.6 million

- Advertising Revenues decreased 9% to 862 thousand

- Deferred Revenue increased 54% to $1.6 million



--------------------------------------------------------------------------
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
(in thousands) 2007 2006 2007 2006
--------------------------------------------------------------------------
Revenues $ 3,483 $1,889 $10,286 $5,475
--------------------------------------------------------------------------
Loss Before Interest,
Taxes,
Depreciation
and Amortization
(EBITDA)(1) $(1,993) $ (199) $(3,307) $ (755)
--------------------------------------------------------------------------
Net Loss $(2,266) $ (246) $(4,034) $ (880)
--------------------------------------------------------------------------
Cash and cash
equivalents $ 4,126 $2,449 $ 4,126 $2,449
--------------------------------------------------------------------------

(1.) Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization
is a non-GAAP measure that does not have a standardized meaning and
may not be comparable to similar measures disclosed by other issuers.
This measure does not have a comparable US GAAP measure. EBITDA is
calculated as Income (Loss) from operations less depreciation,
amortization, and interest income and tax provision.


"Our Q3 beta launch of the new Stockhouse.com is an achievement of a significant milestone in the Company's history," stated Marcus New, Stockgroup's chief executive officer. "The new Stockhouse represents over two years of strategic planning and development. Our new Reputation analytics system works to solve the quality and relevancy problem associated with user generated content. For the first time, the reputations of individuals who contribute content can be identified and ranked for the benefit of the community."

New continues, "There are very significant financial challenges facing traditional media organizations due to the high cost of editors and journalists and the desire for more content on the financial markets by individual market participants. We believe we are at the leading edge of being able to serve citizen journalist contributors and filter the highest quality content to create a new community news feed on the stock market. With our October 2nd launch of the new beta site, we have added reputation analytics, collaborative tools, citizen journalism and social networking features for investors, further positioning Stockgroup as a leader in online financial media."

Stockgroup's progress towards 2007 stated objectives:

1. Continue to invest in product development and launch the next generation of Stockhouse, to transform it into the leading Web 2.0 financial portal in North America.

Stockgroup completed its major development goals for Stockhouse during the third quarter and launched the beta version of the site on October 2nd. The new Stockhouse combines powerful reputation analytics to enable Stockhouse users to effectively search millions of user generated content items - filtered for quality and reputation of contributor - to help gain market advantage.

2. Increase revenue by more than 100 percent over 2006 results.

Third quarter revenues for Stockgroup were up 84% on a year-over year basis and 88% on a nine month basis.

3. Extend Stockgroup's existing backend infrastructure to create a more scalable and secure platform. This will enable the Company to gain a greater market share among intermediaries and individual investors.

In the third quarter, Stockgroup continued to make substantial progress in changing its back-end architecture to a Microsoft® .net platform, but due to the late launch of Stockhouse, this goal will not be fully achieved by year-end. We expect completion of this goal during our first quarter ending March 2008.

4. Continue to evaluate strategic acquisitions.

Stockgroup continues to evaluate the financial media landscape for companies with content, technology or traffic which would extend and accelerate its strategy.

Other Highlights in Q3

- Stockhouse averaged over 840,000 monthly unique users and 67 million page views per month for the third quarter, which traditionally has been the least active quarter due to seasonality.

- Stockhouse continues its leadership position for user engagement. During the third quarter Stockhouse users average nearly 95 minutes per visitor per month.

- Joe McWilliams joined as VP Monetization. Mr. McWilliams was formerly VP Advertising Sales for Highbeam and VP Global Advertising Sales for Hoovers before it was sold to Dun & Bradstreet. Mr. McWilliams brings a proven track record of building online advertising sales teams and monetizing traffic for online media companies.

- The Company also wishes to announce the retirement of Les Landes as Chairman of the Company. The Company thanks Mr. Landes for his nine years of hard work, dedication and support. Mr. David Caddey has replaced Mr. Landes as Chairman of the Board.

Conference Call and Web cast

To participate in the conference call scheduled for 4:05pm EST today, please call 1-866-400-3310 five to ten minutes prior to the start time. To listen to the live web cast, please go to www.stockgroup.com.

The earnings call will be recorded and accessible on our website for a period of one month. Participants intending to access the web cast should have Windows Media® Player installed prior to connecting to the call.

About Stockgroup Information Systems Inc.

Stockgroup is a leading financial media Company focused on user-generated content and collaborative technologies. The Stockgroup™ platform for web-based portfolio management and financial content is licensed to top North American brokerage firms and media companies. This platform is also extended through Stockhouse.com, a leading online financial portal owned and operated by Stockgroup. Stockhouse is home to BullBoards™ message board - Canada's largest community of active investors. Recognized for its engaged audience, Stockhouse.com provides a sought-after demographic for advertisers.

Legal notice regarding Trademarks

"Stockgroup", "Stockhouse" and "BullBoards" are either registered trademarks or trademarks of Stockgroup Information Systems Inc. and/or its affiliated companies in Canada, the United States and/or other countries.

"Microsoft", "Windows" and "Windows Media" are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

Other names may be trademarks of their respective owners.

Legal notice regarding Forward Looking Statements

This release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this document include, but are not limited to, statements that: (i) Stockgroup's new "Reputation analytics" system works to solve the quality and relevancy problem associated with user generated content; (ii) the reputation of individuals who contribute content can be identified and ranked for the benefit of the community; (iii) Stockgroup believes it is at the leading edge of being able to serve citizen journalist contributors and filter the highest quality content to create a new community news feed on the stock market; (iv) the addition of reputation analytics, collaborative tools, citizen journalism and social networking features for investors to the Stockhouse website will further position Stockgroup as a leader in online financial media; (v) one of Stockgroup's objectives is to continue to invest in product development and launch the next generation of Stockhouse.com to transform it into the leading Web 2.0 financial portal in North America; (vi) powerful reputation analytics will enable Stockhouse.com users to effectively search millions of user generated content items, filtered for quality and reputation of contributor, to help gain market advantage; (vii) one of Stockgroup's objectives is to increase revenue by more than 100 percent over 2006 results;
(viii) one of Stockgroup's objectives is to extend Stockgroup's existing backend infrastructure to create a more scalable and secure platform that will enable the Company to gain a greater market share among intermediaries and individual investors; (ix) Stockgroup expects to complete changing its back-end architecture to a Microsoft® .net platform during Stockgroup's first quarter ending March 2008, and (x) one of Stockgroup's objectives is to continue to evaluate strategic acquisitions, particularly financial media companies with content, technology or traffic which would extend and accelerate Stockgroup's strategy. Factors which could delay or prevent these forward looking statements from being achieved include that our product offerings may present greater technical challenges than anticipated, causing delays or preventing features we intend to offer; that competitors may offer better or cheaper alternatives to our products; we may lose key employees; we may not have sufficient capital to fund our plans; and that the market for our products may not grow. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this press release. In addition, this release should be read in conjunction with the Company's current periodic reports which are on file with the SEC and available at the SEC website at www.sec.gov. Stockgroup undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. All forward looking statements are qualified in their entirety by this cautionary statement.

To find out more about Stockgroup (OTCBB: SWEB, TSX-V: SWB), visit our website at www.stockgroup.com.



Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in Thousands of U.S. Dollars, except number of common shares in
thousands)
(Unaudited)

September 30, December 31,
2007 2 006(1)
---------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 4,126 $ 2,013
Accounts receivable (net of allowances
for doubtful accounts of $439;
December 31, 2006 - $98) 1,732 814
Prepaid and other current assets 757 186
---------------------------
TOTAL CURRENT ASSETS 6,615 3,013

Property and equipment, net 765 447
Goodwill 394 -
Intangible assets, net 1,547 -
---------------------------
TOTAL ASSETS $ 9,321 $ 3,460
---------------------------
---------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,775 $ 426
Accrued liabilities 2,625 473
Accrued compensation 395 176
Deferred revenues 1,626 810
Capital lease obligations 208 130
---------------------------
TOTAL CURRENT LIABILITIES 6,629 2,015

Long-term payable 32 -
Long-term capital lease obligations 109 97
Long-term deferred revenues 18 65
---------------------------
TOTAL LIABILITIES 6,788 2,177

Commitments and contingencies

Shareholders' Equity:
Common stock, no par value; authorized
75,000; issued an outstanding of 40,821
at September 30, 2007 and 35,350 at
December 31, 2006 18,864 13,793
Additional paid-in capital 3,607 3,394
Accumulated deficit (19,938) (15,904)
---------------------------
TOTAL SHAREHOLDERS' EQUITY 2,533 1,283
---------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,321 $ 3,460
---------------------------
---------------------------

(1) The balance sheet at December 31, 2006 has been derived from the audited
consolidated financial statements at that date.


Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in Thousands of U.S. Dollars, except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
---------------------------------------
REVENUES
Licensing and Subscriptions $ 2,621 $ 946 $ 7,409 $ 2,788
Advertising 862 943 2,877 2,687
---------------------------------------
$ 3,483 $ 1,889 $ 10,286 $ 5,475

OPERATING COSTS AND EXPENSES
Cost of revenues (exclusive
of amortization) 1,728 517 4,588 1,633
Sales and marketing 1,186 737 3,544 2,405
Research and development 846 170 1,518 510
General and administrative 1,842 721 4,286 1,837
Amortization of intangible assets 177 - 447 -
---------------------------------------
TOTAL OPERATING COSTS AND
EXPENSES 5,779 2,145 14,383 6,385
---------------------------------------

Loss from operations (2,296) (256) (4,097) (910)

Interest and other income, net 32 10 66 30
---------------------------------------

Net loss before income taxes (2,264) (246) (4,031) (880)
Provision for income taxes 2 - 3 -
---------------------------------------

Net loss and comprehensive loss $ (2,266) $ (246) $ (4,034) $ (880)
---------------------------------------
---------------------------------------

Net loss per common share:
Basic and diluted $ (0.06) $ (0.01) $ (0.10) $ (0.03)
---------------------------------------
---------------------------------------

Common shares used in computing
basic and diluted net loss per
share (in thousands) 40,794 33,619 38,726 33,511
---------------------------------------
---------------------------------------


Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Thousands of U.S. Dollars)
(Unaudited)

Nine Months Ended
September 30,
2007 2006
------------------
Operating activities:
Net loss $ (4,034) $ (880)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of property and equipment 343 155
Amortization of intangible assets 447 -
Stock-based compensation 137 102
Changes in operating assets and liabilities:
Accounts receivable 138 44
Allowance for doubtful accounts 153 2
Prepaid and other assets (250) (17)
Accounts payable 612 307
Accrued liabilities 620 67
Accrued compensation 197 37
Deferred revenues 253 389
------------------
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (1,384) 206
------------------

Investing activities:
Purchases of property and equipment (271) (116)
Acquisition of Mobile Finance Division (225) -
Acquisition of Semotus assets (216) -
------------------
CASH USED IN INVESTING ACTIVITIES (712) (116)
------------------

Financing activities:
Proceeds on exercise of stock options 161 45
Repurchase of common stock - (27)
Proceeds on private placement, net of costs 4,146 343
Repayment of capital lease obligations (98) (59)
------------------
CASH PROVIDED BY IN FINANCING ACTIVITIES 4,209 302
------------------

Net increase in cash and cash equivalents 2,113 392
Cash and cash equivalents, beginning of period 2,013 2,057
------------------
Cash and cash equivalents, end of period $ 4,126 $ 2,449
------------------
------------------

Supplemental Cash Flow Information:
----------------------------------
Interest paid $ 18 $ 16
Taxes paid 2 14
Assets acquired through capital lease transactions 186 192
Value of warrants issued in connection with private
placement - 93
Value of shares issued for acquisition of Mobile
Finance Division 840 -


The TSX Venture Exchange and the OTCBB have not reviewed and do not accept responsibility for the adequacy or accuracy of this press release.

Contact Information