SOURCE: Chalk Media Corp.

November 29, 2006 21:13 ET

Chalk Media Corp. Announces Third Quarter 2006 Financial Results

VANCOUVER, BC -- (MARKET WIRE) -- November 29, 2006 -- Chalk Media Corp. (TSX-V: CKM) ("Chalk") today announced its unaudited interim consolidated financial results for the three and nine month periods ended September 30, 2006.

Third Quarter 2006 Highlights:

* eLearning revenue in the third quarter of 2006 more than doubled over the
third quarter of 2005
* Won a Brandon Hall Excellence in Learning Award in the Custom Content
category, a top-level recognition in the eLearning industry
* New deals signed include BMW Canada, Florida A&M University, Howard
University, MTS Allstream, Research in Motion and Third Core

Chalk earned revenues of $1,164,803 for the three months ended September 30, 2006, compared to $534,436 for the same period in 2005.

Chalk sells two key products, its chalkboard™ LCMS software and its eLearning services. The software is of particular interest because it generates recurring revenue and the margins are much higher and more predictable than for traditional media services. Accordingly, the company's plan is to derive more of its revenues from software sales than from the sale of services.

The net loss for the three month period ended September 30, 2006 was $1,562,437, or $0.03 per share, compared to a net loss of $1,050,242, or $0.03 per share, for the same period in 2005. Higher research and development costs for continued development of chalkboard™ LCMS, higher selling and marketing expenses and costs, and higher general and administrative expenses all contributed to the higher net loss.

"We are making good progress in sales of our software and our eLearning services," said CEO Stewart Walchli. "Chalk has a strong pipeline of customers interested in buying our products and we are working hard to sign deals with those customers. We are also taking steps to reduce costs to improve the bottom line. Our eLearning business is maturing nicely," said Mr. Walchli. He went on to say, "In addition, we are in discussions to ramp up our airline in-flight revenues which traditionally have good margins. We are also in discussions to enter the internet advertising business. Completion of a deal there would add a new high margin revenue stream to Chalk."

Selected Financial Data (in $'000's, except per share numbers):

                                Three Months ended    Nine Months ended
                                   September 30,        September 30,
                                 2006        2005      2006      2005
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Revenue                         $1,165       $534     $2,545    $3,661
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Gross margin                      $324       ($62)      $483      $647
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Operating income / (loss)      ($1,505)   ($1,027)   ($4,963)  ($1,939)
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Net income / (loss)            ($1,562)   ($1,050)   ($5,222)  ($1,992)
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Earnings / (loss) per share     ($0.03)    ($0.03)    ($0.10)   ($0.06)
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Chalk's unaudited consolidated financial statements for the three and nine month periods ended September 30, 2006, as well as its management discussion and analysis, can be read at www.sedar.com.


Disclaimer:

While the information contained herein is believed to be accurate and reliable, Chalk and its subsidiaries and / or affiliates, and their respective directors, officers, employees and shareholders make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information, and Chalk expressly disclaims any and all liability that may be based on such information, or errors or omissions thereof.

The forward-looking statements contained herein (such as statements relating to the future anticipated direction of the media and high technology industries, plans for future expansion, revenue targets, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth and potential contracts) involve important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may vary materially from those expressed in any forward-looking statements made by or on behalf of Chalk.

There can be no assurance that Chalk will achieve the results projected or implied by the forward-looking statements included herein. These risks and uncertainties include, but are not limited to, those relating to Chalk's ability to raise sufficient financing to fund its business plan, development and expansion activities, dependence on existing management, financial activities, domestic and global economic conditions, changes in federal or provincial income tax laws, and market competition factors.

The TSX Venture Exchange has not reviewed the contents of this release and is not responsible for its accuracy.

About Chalk Media Corp.

Chalk (TSX-V: CKM) is a leading provider of interactive learning solutions and tools that help organizations communicate more effectively with their employees, business partners and consumers. The company's core focus is customized, results-driven eLearning solutions.

By combining in-house expertise in instructional design, content strategy, web development, quality assurance, Flash animation and video production, Chalk produces customized rich media content that focuses on the user experience. Chalk uses its proprietary software platform, chalkboard™ LCMS, to measure the effectiveness of their learning solutions and track ROI for their clients.

With a US office in Vienna, Virginia, and Canadian offices in Toronto, Ontario, Vancouver, British Columbia and Fredericton, New Brunswick, Chalk works with global blue-chip organizations such as AstraZeneca, Best Buy, Business Objects, Future Shop, Fujifilm, HSBC, Intrawest, Microsoft, RBC Financial, Research in Motion, Samsung, Scotiabank, Sony, TELUS Mobility, Terasen Gas and Verizon. For more information, please visit www.chalk.com.

Contact Information

  • For more information, please contact:

    Chalk Media Corp.
    Kris Sutherland
    Executive Vice President
    Tel: 604-453-4424
    Email Contact