Comamtech Inc.
NASDAQ : COMT

November 11, 2008 16:05 ET

Copernic Inc. Announces 2008 Third Quarter Results

MONTREAL, CANADA--(Marketwire - Nov. 11, 2008) - 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 third quarter ended September 30, 2008. Unless otherwise stated, all figures in this release are in US dollars.

Financial Highlights

- Revenue was $1.7 million for the third quarter 2008, same as the last two quarters in 2008 and compared to $1.9 million in the third quarter of 2007.

- Total expenses were at $1.8 million for the quarter and favourably compared to the same period in 2007 of $2.4 million in expenses.

- Net loss of $0.6 million ($0.04 per share) for the third quarter 2008 compared to net loss of $1.0 million ($0.07 per share) in the third quarter 2007.

- Cash and cash equivalents were at $4.4 million as of September 30, 2008.

Marc Ferland, President and CEO of Copernic stated that search and graphic advertising revenue at $1.4 million for the quarter were below the comparable quarter in 2007 at $1.6 million but had improved over the previous quarter of $1.3 million. In addition, software sales including desktop search products at $0.3 million were comparable to the same quarter in 2007 but short $0.1 million from the previous quarter due to the European vacation break. Expenses net of severance and lease cancellation costs were $1.6 million for the quarter, lower than the second quarter of $1.7 million and first quarter 2008 of $2.2 million. These reductions are in line with our previously announced cost improvement programs and will further improve as a result of the closing of our Montreal office and the consolidation of operations in Quebec City that was announced today. With the focus on cost improvements and the launch in the third quarter of advanced desktop search products (CDS 3.0), management continues to drive for profitability and cash generation. For example although cash was at $4.4 million, working capital was at $4.8 million for the quarter and contribution margin was positive two quarters in a row.

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, including www.mamma.com and www.copernic.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. Additionally, Copernic Inc. provides both online advertising as well as pure content to its vast array of partnerships worldwide through its well established media placement channels. Copernic handles over 1 billion search requests per month and has media placement partnerships established not only in North America, but also in Europe and Australia.

More information can be found at www.copernic-inc.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

-----------------------------------------------------------------------
(unaudited) (expressed in U.S. dollars and in accordance with generally
accepted accounting principles in Canada)

As at As at
September 30, December 31,
2008 2007
$ $

Assets

Current assets
Cash and cash equivalents 4,394,139 2,099,560
Restricted Cash - 807,468
Temporary investments - 3,965,384
Accounts receivable 1,039,850 918,033
Income taxes receivable 340,687 221,205
Prepaid expenses 260,131 208,655
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6,034,807 8,220,305

Property and equipment 314,151 459,872

Intangible assets 1,567,423 2,320,676

Goodwill 7,357,003 7,357,003
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15,273,384 18,357,856
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Liabilities

Current liabilities
Accounts payable and accrued liabilities 958,039 1,520,619
Deferred revenue 199,401 211,455
Deferred rent 6,615 11,016
Income tax payable 8,100 8,100
Current portion capital lease obligations 65,594 56,071
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1,237,749 1,807,261
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Capital lease obligations 64,659 99,788
Future income taxes 432,462 650,413
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Commitments

Shareholders' Equity

Capital stock
Authorized
Unlimited common shares, no par value
Issued and outstanding
14,637,531 common shares 96,556,485 96,556,485

Additional paid-in capital 5,752,889 5,784,502

Accumulated other comprehensive income 561,137 561,137

Accumulated deficit (89,331,997) (87,101,730)
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13,538,514 15,800,394
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15,273,384 18,357,856
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Copernic Inc.
Condensed Consolidated Statements of Operations

-----------------------------------------------------------------------
(unaudited) (expressed in U.S. dollars and in accordance with generally
accepted accounting principles in Canada)

For the nine For the three
months ended months ended
September 30, September 30,
-----------------------------------------------------------------------
2008 2007 2008 2007
$ $ $ $

Revenues 5,101,983 6,462,056 1,672,148 1,866,606
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Cost of revenues 1,929,389 2,092,647 607,045 551,032
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Gross Margin 3,172,594 4,369,409 1,065,103 1,315,574
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Expenses
Marketing, sales and
services 777,809 1,417,291 159,488 447,089
General and
administration 2,382,655 3,670,863 766,075 970,195
Product development
and technical support 1,606,579 1,764,580 490,635 553,321
Amortization of
property and
equipment 155,703 183,289 55,842 65,655
Amortization of
intangible assets 764,413 1,479,902 255,980 495,531
Restructuring charges 31,391 - 31,391 -
Interest and other
income (122,118) (327,105) (22,249) (89,848)
Write-down of
property and
equipment 21,531 - - -
Loss (gain) on
foreign exchange (6,222) 73,907 21,819 1,741
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5,611,741 8,262,727 1,758,981 2,443,684
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Loss from operations
before income taxes (2,439,147) (3,893,318) (693,878) (1,128,110)

Current income taxes 9,072 954 450 136
Recovery of future
income taxes (217,952) (453,527) (72,651) (153,530)
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(2,230,267) (3,440,745) (621,677) (974,716)
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Net loss for the
period (2,230,267) (3,440,745) (621,677) (974,716)
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Basic and diluted
net loss per share (0.15) (0.24) (0.04) (0.07)
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Weighted average
number of shares
outstanding -basic
and diluted 14,637,531 14,540,416 14,637,531 14,637,531
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Copernic Inc.
Condensed Consolidated Statements of Cash Flows

-----------------------------------------------------------------------
(unaudited) (expressed in U.S. dollars and in accordance with generally
accepted accounting principles in Canada)

For the nine For the three
months ended months ended
September 30, September 30,
-----------------------------------------------------------------------
2008 2007 2008 2007
$ $ $ $

Cash flows from
(used for)

Operating activities
Loss from continuing
operations (2,230,267) (3,440,745) (621,677) (974,716)
Adjustments for
Amortization of
property and equipment 155,703 183,289 55,842 65,655
Amortization of
intangible assets 764,413 1,479,902 255,980 495,531
Employee stock-based
compensation (31,613) 484,744 (43,275) 109,484
Future income taxes (217,952) (453,527) (72,651) (153,530)
Write-down of
property and
equipment 21,531 - - -
Unrealized loss
(gain) on foreign
exchange (6,281) 12,134 (3,850) 10,546
Net change in
non-cash working
capital items (871,808) 972,766 (109,346) 288,669
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Cash used for
operating activities
from continuing
operations (2,416,274) (761,437) (538,977) (158,361)
Cash used for
operating activities
from discontinued
operations - (6,253) - -
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(2,416,274) (767,690) (538,977) (158,361)
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Investing activities
Purchase of
intangible assets (5,056) (65,001) - (3,614)
Purchase of property
and equipment (13,042) (136,754) (5,257) -
Net decrease in
temporary
investments 3,965,384 5,591,842 - 1,520,712
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Cash from (used for)
investing activities 3,947,286 5,390,087 (5,257) 1,517,098
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Financing activities
Issuance of capital
stock - 676,258 - -
Repayment of
obligations under
capital leases (43,901) (11,181) (15,431) (11,181)
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Cash from (used for)
financing activities (43,901) 665,077 (15,431) (11,181)
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Net change in cash
and cash equivalents
during the period 1,487,111 5,287,474 (559,665) 1,347,556

Cash and cash
equivalents -
Beginning of period 2,907,028 2,379,617 4,953,804 6,319,535
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Cash and cash
equivalents - End
of period 4,394,139 7,667,091 4,394,139 7,667,091
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Cash and cash
equivalents
comprise:
Cash 4,394,139 1,859,559 4,394,139 1,859,559
Short-term
investments - 5,807,532 - 5,807,532
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4,394,139 7,667,091 4,394,139 7,667,091
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