Call Genie Inc.
TSX : GNE

Call Genie Inc.

August 07, 2009 08:30 ET

Call Genie Reports Second Quarter 2009 Financial Results

Debt Financing provides $2.5 million of working capital

TORONTO, ONTARIO--(Marketwire - Aug. 7, 2009) - Call Genie (TSX:GNE), a leading provider of mobile local search and advertising solutions, today announced financial results for the three and six months ended June 30, 2009.

First Half 2009 Results

- Deferred Revenues increased to $1.9 million at June 30, 2009 from $0.6 million at the end the second quarter of 2008.

- Recognized revenues of $1.8 million compares to $2.4 million for the first six months of 2008.

- Net loss of $6.3 million ($0.08 per share) compares to $10.3 million ($0.13 per share) for the first six months of 2008.

- Cash used in operations was $5.1 million compared to $8.7 million for the first six months of 2008.

- At June 30, 2009 the Company had a cash balance of $2.3 million.

Second Quarter 2009 Results

- Recognized revenues of $0.9 million compares to $1.4 million for Q2, 2008.

- Net loss excluding stock based compensation expense was $3.1 million compared to $4.9 million in 2008.

- Cash used in operations was $2.0 million compared to $4.5 million for the second quarter of 2008.

Highlights

- The Company signed a contract amendment with RH Donnelley that extends the term of the contract and expands the scope of the solutions deployed. Under the terms of the agreement, US$2,750,000 is expected to be paid to Call Genie in 2009 on account of upfront fees and payments for product deployment and custom development work.

- Effective June 26, 2009, the Company completed a $2.5 million debt financing involving the distribution of secured convertible debentures and common share purchase warrants. The debentures will bear interest at a rate of 10% per annum, payable semi-annually, and will mature on May 30, 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.

- Net loss in Q2, excluding stock based compensation expense, is the lowest quarterly loss since Q2 of 2007 and represents the 5th straight quarter of declining quarterly net loss excluding stock based compensation expense.

- Total Cash used in the quarter was $0.4 million compared to $4.7 million for the second quarter of 2008.

Mr. Michael Durance, the Company's Chief Executive Officer, remarked: "Despite the extremely poor economic climate, in the past quarter the Company has successfully closed significant new business and secured additional working capital financing to help fund our growth."

This news release should be read in conjunction with Call Genie's interim financial statements and the accompanying notes as at and for the three and six months ended June 30, 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

"Net Loss before stock compensation expense", a non-GAAP measure as defined by the Company, means Net Loss without the inclusion of any stock-based compensation expense and is derived from the Company's consolidated statement of operations. Readers are cautioned that non-GAAP definitions are not recognized measures under Canadian GAAP, do not have standardized meanings prescribed by GAAP, and should not be construed to be alternatives to net income determined in accordance with GAAP or as indicators of performance or liquidity or cash flows. The Company's method of calculating these measures may differ from methods used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities. The Company uses these measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.

Certain information set out in this News Release constitutes forward-looking information, including information concerning the fees estimated to be payable to the Corporation by RH Donnelley in 2009. Readers are referred to the cautionary statement concerning forward-looking information that appears at the end of this News Release.

About Call Genie Inc.

Call Genie is a leading global 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 around the world. 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, and the 118 Tracker Awards for both Technology Innovation in the UK and most recently, Outstanding Contribution to the Industry. www.callgenie.com.

Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are based upon the opinions and estimates of management as of the effective date of such statements and, in some cases, information provided or disseminated by third parties. Although Call Genie believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions and such third party information is reliable, it can give no assurance that such expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties (known and unknown) that could cause actual results or outcomes to differ materially from those anticipated or implied by any Call Genie forward-looking statements. Those factors include, but are not limited to, such things as prevailing economic conditions (both domestic and international), the Corporation's current stage of development, its reliance upon third parties and third party technology, its reliance upon key employees, its limited financial resources and the availability of financing to fund future operating and other needs, the ability of the Corporation to meet deadlines and perform other contractual obligations, user acceptance of the voice search technology, the Corporation's ability to continually improve the user experience associated with its voice search technology, the emergence of competitive technologies, and the continued ability of counterparties to discharge contractual obligations agreed to with the Corporation and its affiliates. Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this News Release, and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes.
Forward-looking information respecting the fees estimated to be payable to the Corporation in 2009 is based upon: (i) the terms of commercial agreements entered into between the Corporation and RH Donnelley, as amended; and (ii) the current schedule for deployment of upgrades to the Call Genie enabled 1-800 CALL DEX service. Except to the extent required under applicable securities laws, Call Genie does not undertake any obligation to publicly revise any forward-looking statements set out in this News Release to reflect subsequent events or circumstances. Call Genie's forward-looking statements are qualified in their entirety by this cautionary statement. Certain 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 Management's Discussion and Analysis relating to the interim financial statements of the Corporation as at and for the three and six month period ended June 30, 2009 and the 2008 Annual Information Form filed by the Corporation with certain securities regulatory authorities in Canada. The foregoing Management's Discussion and Analysis and Annual Information Form are available through SEDAR, at www.sedar.com.

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

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