Mamma.com Inc.
NASDAQ : MAMA

Mamma.com Inc.

August 10, 2006 16:05 ET

Mamma.com Releases Q2 2006 Results

MONTREAL, CANADA--(CCNMatthews - Aug. 10, 2006) - Mamma.com Inc. (NASDAQ: MAMA)



- Q2 net loss of $1.27 million ($0.09 per share) compared to $2.5
million ($0.20 per share) in Q2 2005
- Cash and cash equivalents still at $8.4 million
- Operating activities used cash of $290 thousand, cash and cash
equivalents increased by $74 thousand in Q2 2006
- Q2 revenues of $1.9 million compared to $2.4 million in Q2 2005


Mamma.com Inc., (the "Company"), reported its financial results for the second quarter ended June 30, 2006. Unless otherwise stated, all figures in this release are in US dollars.

The Company's Q2 2006 net loss was $1,266,196 ($0.09 per share) compared to a net loss of $2,499,253 ($0.20 per share) for the same period in 2005. Net loss for the six months ended June 30, 2006, was $2,141,279 ($0.15 per share) compared to $3,390,075 ($0.28 per share) for the same period in 2005. Revenues in the second quarter of 2006 were $1,929,251, 20% below the $2,413,194 revenues for the same period in 2005. The decrease of $483,943 was mainly due to a reduction in the graphic advertising revenues of $1,091,612 due to a delay in our graphic revenue pick up compared to the same period in 2005 and a significant shift in our sales strategy; offset by increased revenues in search advertising of $399,927 and software licensing and customized development and maintenance support of $207,742. Revenues for the six months ended June 30, 2006 were $4,138,913, 24% below the $5,414,909 revenues for the same period in 2005. The decrease of $1,275,996 was mainly due to a reduction in the graphic advertising revenues of $2,225,941 offset by increases from other types of revenues: search advertising $493,883, software licensing $196,927 and customized development and maintenance support $259,135.

Loss from continuing operations in Q2 2006 was $1,270,179, compared to $1,375,499 in Q2 2005. Payout costs in Q2 2006 over search and graphic advertising revenues were at 25%, compared with 40% in Q2 2005 mainly due to product mix between search and graphic, where search has an average payout cost lower than graphic, and due to the fact that for most of Copernic search revenues no payouts are incurred. General and administration expenses decreased by $698,649 mainly due to a reduction of professional fees related to the purported securities class action lawsuits and SEC investigation. Product development and technical support increased by $293,510 in Q2 2006 compared to Q2 2005 mainly due to the acquisition of Copernic. In Q2 2006 the amortization of intangible assets reflected the impact of the acquisition of Copernic.

Cash and cash equivalents at June 30, 2006 were $8,423,167, an increase of $74,518 compared with Q1 2006. This increase is mainly due to a reimbursement of $315,543 related to the Copernic business acquisition, positive effect of foreign exchange rate changes of $116,137 on cash and cash equivalents and cash used for operating activities from continuing operations of $290,158.

Guy Faure, the Company's President and CEO stated: "We continue to focus our efforts on strengthening the organization's underpinnings to assure that we will successfully execute our strategic objectives. Our revenues have increased in every segment over last year with the exception of our graphic ad business which was hit hard last year and has not recovered. At the same time, our gross margins have improved, we have reduced our costs, and have been closely managing our cash. During the second quarter we launched our private-label strategy for the Copernic Desktop Search application, a world class desktop search product providing large portals with a private branded desktop tool enabling them to increase their user retention, increase page views per user and increase web search revenues on a per user basis. In addition, we were able to complete the majority of the integration of the Copernic and Mamma teams, in particular the integration of the R&D functions under a common management structure."

The unaudited financial statements for the second quarter ended June 30, 2006 will soon be available on SEDAR and EDGAR and on www.mammainc.com.

About Mamma.com Inc.

Mamma Media Solutions™ is a leading provider of award winning search technology for both the Web and desktop space, delivered through its properties, www.mamma.com and www.copernic.com respectively. The Company is also a top provider of online marketing solutions to advertisers, providing keyword and graphic ad placement on its large publisher network.

Mamma.com The Mother of All Search Engines® (www.mamma.com) is one of the most popular metasearch engines on the Internet, as it makes it easier and faster for people to find information by gathering the most relevant results from the best search engines on the Internet.

Through its award winning Copernic Desktop Search product, the Company develops cutting edge search solutions bringing the power of a sophisticated, yet easy-to-use search engine right to the user's PC. It allows for instant searching of files, emails, and email attachments stored anywhere on a PC hard drive. Its desktop search application won the CNET Editors' Choice Award as well as the PC World " World Class award" in 2005.

More information can be found at www.mammamediasolutions.com and www.copernic.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 United States Securities and Exchange Commission and the Ontario Securities Commission and include but are not limited to the extent to which the results of the SEC investigation or the purported securities class action lawsuits negatively impact the Company. 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.



Mamma.com
Condensed Consolidated Balance Sheets
(Unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)

-------------------------------------------------------------------
As at As at
June 30, December 31,
2006 2005
$ $
Assets

Current assets

Cash and cash equivalents 8,423,167 4,501,201
Temporary investments - 4,013,312
Accounts receivable 1,365,088 2,623,940
Income taxes receivable 267,727 606,226
Prepaid expenses 668,184 295,288
Future income taxes 34,876 33,505
Assets of discontinued operations - 9,694
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10,759,042 12,083,166

Future income taxes 14,034 13,483

Income tax credit 57,158 54,912

Investments 720,000 720,000

Property and equipment 568,044 598,758

Intangible assets 7,583,420 8,601,848

Goodwill 15,481,683 16,255,031
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35,183,381 38,327,198
-------------------------------------------------------------------
-------------------------------------------------------------------
Liabilities

Current liabilities
Accounts payable and accrued liabilities 1,667,535 2,690,943
Deferred revenue 238,177 249,953
Deferred rent 9,605 -
Income tax payable 8,100 8,062
Liabilities of discontinued operations 74,761 189,223
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1,998,178 3,138,181
-------------------------------------------------------------------
Future income taxes 2,353,488 2,672,036
-------------------------------------------------------------------
Shareholders' Equity

Capital stock

Authorized
Unlimited common shares, no par value
Issued and outstanding 14,340,864
common shares 95,298,234 95,298,234

Additional paid-in capital 5,515,147 5,249,902

Cumulative translation adjustment 561,137 370,369

Accumulated deficit (70,542,803) (68,401,524)
-------------------------------------------------------------------
30,831,715 32,516,981
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35,183,381 38,327,198
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Mamma.com
Condensed Consolidated Statements of Operations
(Unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)

-------------------------------------------------------------------
For the six months For the three months
ended June 30 ended June 30
-------------------------------------------------------------------
2006 2005 2006 2005
$ $ $ $

Revenues 4,138,913 5,414,909 1,929,251 2,413,194

Cost of revenues 1,254,452 2,326,475 533,756 1,032,173
-------------------------------------------------------------------
2,884,461 3,088,434 1,395,495 1,381,021
-------------------------------------------------------------------
Expenses

Marketing, sales and
services 916,912 1,208,269 457,780 678,732
General and
administration 2,074,656 3,439,393 1,130,185 1,828,834
Product development and
technical support 1,308,601 635,148 631,452 337,942
Amortization of
property
and equipment 84,026 49,075 40,568 24,298
Amortization of
intangible assets 1,050,557 96,389 524,933 49,519
Interest and other
income (196,119) (311,158) (105,595) (160,387)
Loss (gain) on foreign
exchange 135,227 276 145,625 (2,418)
-------------------------------------------------------------------
5,373,860 5,117,392 2,824,948 2,756,520
-------------------------------------------------------------------
Loss from continuing
operations before
income taxes (2,489,399)(2,028,958)(1,429,453)(1,375,499)
Recovery of future
income taxes (318,548) - (159,274) -
-------------------------------------------------------------------
Loss from continuing
operations (2,170,851)(2,028,958)(1,270,179)(1,375,499)
Results of discontinued
operations 29,572 (1,361,117) 3,983 (1,123,754)
-------------------------------------------------------------------
Net loss for the period (2,141,279)(3,390,075)(1,266,196)(2,499,253)
-------------------------------------------------------------------
-------------------------------------------------------------------
Basic and diluted loss
per share from
continuing operations (0.15) (0.17) (0.09) (0.11)
Basic and diluted loss
per share from
discontinued operations 0.00 (0.11) 0.00 (0.09)
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Basic and diluted net
loss per share (0.15) (0.28) (0.09) (0.20)
-------------------------------------------------------------------
-------------------------------------------------------------------
Weighted average number
of shares outstanding -
basic and diluted 14,340,864 12,261,346 14,340,864 12,259,681
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-------------------------------------------------------------------



Mamma.com
Condensed Consolidated Cash Flows
(Unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)

--------------------------------------------------------------------
For the six months For the three months
ended June 30 ended June 30
--------------------------------------------------------------------
2006 2005 2006 2005
$ $ $ $
Cash flows from

Operating activities
Loss from continuing
operations (2,170,851)(2,028,958) (1,270,179) (1,375,499)
Adjustments for
Amortization of
property and
equipment 84,026 49,075 40,568 24,298
Amortization of
intangible assets 1,050,557 96,389 524,933 49,519
Employee stock-based
compensation 265,245 (17,859) 129,383 74,649
Future income taxes (318,548) - (159,274) -
Unrealized loss on
foreign exchange 1,722 - 1,722 -
Net change in
non-cash working
capital items 706,380 (115,971) 442,689 (856,273)
---------------------------------------------------------------------
Cash used for
operating activities
from continuing
operations (381,469)(2,017,324) (290,158) (2,083,306)
Cash used for
operating activities
from discontinued
operations (75,196) (445,100) (24,067) (294,687)
---------------------------------------------------------------------
(456,665)(2,462,424) (314,225) (2,377,993)
---------------------------------------------------------------------
Investing activities

Reimbursement
related to Copernic
business acquisition 315,543 - 315,543 -
Purchase of property
and equipment (36,341) (73,534) (23,163) (24,684)
Purchase of
intangible assets (24,643) (42,195) (19,774) (32,717)
Net decrease in
temporary investments 4,013,312 6,874,155 - 6,912,561
---------------------------------------------------------------------
Cash from investing
activities from
continuing operations 4,267,871 6,758,426 272,606 6,855,160
---------------------------------------------------------------------
Financing activities

Redemption of common
shares - (1,053,155) - (1,053,155)
---------------------------------------------------------------------
Cash used for
financing activities
from continuing
operations - (1,053,155) - (1,053,155)
---------------------------------------------------------------------
Effect of foreign
exchange rate
changes on cash
and cash
equivalents 110,760 - 116,137 -
---------------------------------------------------------------------
Net change in cash
and cash equivalents
during the period 3,921,966 3,242,847 74,518 3,424,012
Cash and cash
equivalents
Beginning of period 4,501,201 20,757,089 8,348,649 20,575,924
---------------------------------------------------------------------
Cash and cash
equivalents
End of period 8,423,167 23,999,936 8,423,167 23,999,936
---------------------------------------------------------------------
---------------------------------------------------------------------
Cash and cash
equivalents comprise:

Cash 8,423,167 1,494,165 8,423,167 1,494,165
Short-term
investments - 22,505,771 - 22,505,771
---------------------------------------------------------------------
8,423,167 23,999,936 8,423,167 23,999,936
---------------------------------------------------------------------
---------------------------------------------------------------------


Contact Information

  • For Financial Information: Mamma.com Inc.
    Daniel Bertrand
    Executive Vice President and Chief Financial Officer
    (514) 908-4318
    Toll Free: (877) 289-4682 #118
    www.mammainc.com
    or
    For Other Information: Mamma.com Inc.
    Guy Faure
    President and Chief Executive Officer
    (514) 908-4346
    Toll Free: (877) 289-4682 #146
    www.mammainc.com