Lingo Media Corporation
TSX VENTURE : LM
OTC Bulletin Board : LMDCF

Lingo Media Corporation

August 30, 2010 14:16 ET

Lingo Media Announces Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 30, 2010) - Lingo Media Corporation (TSX VENTURE:LM)(OTCBB:LMDCF) ("Lingo Media" or the "Company"), a leader in online and print-based English language learning solutions, announces its financial results for the second quarter ending June 30, 2010. All figures are reported in Canadian dollars, and are in accordance with Canadian GAAP unless otherwise noted.

Business Highlights
  • Acquired ELL Technologies Limited, an international leader in the development, production and marketing of innovative and proprietary English language instruction solutions distributed in 11 markets including China and the U.S. Unlike other English learning products, ELL Technologies has developed a platform to train employees and students not only to speak and listen, but also to read and write English.
  • Lingo Media's Beijing-based sales team has been trained on selling ELL Technologies' branded Q Group products in China.
  • Additional sales and marketing staff have been hired, the first hire being Martin Apel, who is leading the distribution of the Q Group products in South America.
  • ELL Technologies has signed its first distribution agreement in South America with Corporate Education Solution S.A.S. in Columbia, and the first contract has been sold to a national insurance company.
  • Parlo's consumer version, MyParlo.com has been launched. In conjunction with the launch, an affiliate marketing agreement has been signed with Australia Network, which is managed by the Australian Broadcast Corporation, Australia's national public broadcaster providing television, radio, online and mobile services throughout Australia.
  • Appointed Ryan Robertson as Chief Financial Officer. Mr. Robertson brings accounting and finance experience and joins executives Gali Bar-Ziv, Chief Operating Officer and Brent St. Pierre, Chief Technology Officer at Lingo Media.

Michael Kraft, President & CEO of Lingo Media said, "In keeping with our strategy of acquiring undervalued assets synergistic to our business model, we are pleased to have acquired ELL Technologies, which has been quickly and seamlessly integrated. During the second half of Q2 we started to report revenues from our new online training business units, ELL Technologies and Parlo, which increased online revenue. Management is also pleased with our ability to control costs and maintain gross profit margin of approximately 90%. Subsequent to the ELL Technology acquisition, it has been our priority to transition from a product development company to a sales and marketing organization. We have signed our first agreement in South America and going forward, we anticipate leveraging the ELL Technologies acquisition to continue building our sales distribution channels internationally and cross-selling our full suite of English-training technologies."

Financial Highlights

Revenue for the six month period ending June 30, 2010 totalled $694,732 compared to $709,678 for the six month period ending June 30, 2009. The revenue decrease was attributable to the decline in value of the US Dollar, which is the base currency for the Company's print-based royalty business. Royalties declined from $543,000 during the second quarter of 2009 to $490,000 for the second quarter of 2010 as a result of this currency decline. Revenue from the online English language learning division of the business increased 85% to $205,000 for the first six months of 2010 compared to $111,000 for the same period in 2009.

Gross profit for the first six months of 2010 totalled $627,433 compared to $629,040 for the same period in 2009. The gross profit margin increased slightly to 90% from 88% due to the increased revenue in the higher margin online training business units.

For the six months ended June 30, 2010, the Company recorded a net loss of $2.04 million or $0.16 per share outstanding compared to a net loss of $795,416 or $0.09 per share during the same period last year. The increase in net loss is primarily attributed to the amortization of software and web development of $1,177,798 as compared to $468,882 for the same period in 2009, in addition to the gain from discontinued operations of $351,109 in 2009 compared to $nil for the same period this year. Total assets for the period ended June 30, 2010 was $6,382,449.

The financial statements for the six months ended June 30, 2010 and Management Discussion & Analysis are available at www.sedar.com.

About Lingo Media (TSX VENTURE:LM)(OTCBB:LMDCF)

Lingo Media Corporation (www.lingomedia.com) is a diversified online and print-based education products and services company focused on English language learning ("ELL") on an international scale through its four distinct business units. ELL Technologies is a globally-established ELL multi-media and online training company marketed under the Q Group brand (www.qgroupplc.com). Parlo is a fee-based online ELL training and assessment service (www.parlo.com). Speak2Me is a free-to-consumer advertising-based online ELL service in China (www.speak2me.com/advertising). Lingo Learning is a print-based publisher of ELL programs in China. Lingo Media has formed successful relationships with key government and industry organizations, establishing a strong presence in China's education market of more than 300 million students. The Company continues to expand its ELL offerings in China and plans to extend its reach globally.

Portions of this press release may include "forward-looking statements" within the meaning of securities laws. Forward-looking statements contained in this press release are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties. Actual results may vary materially from management's expectations and projections and thus readers should not place undue reliance on forward-looking statements. Certain factors that can affect the Company's ability to achieve projected results are described in the Company's filings with the Canadian and United States securities regulators available on www.sedar.com or www.sec.gov/edgar.shtml.

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