Mamma.com Inc.
NASDAQ : MAMA

Mamma.com Inc.

March 07, 2007 16:05 ET

Mamma.com Releases Q4 and Year-End 2006 Results

MONTREAL, QUEBEC--(CCNMatthews - March 7, 2007) - Mamma.com Inc. (NASDAQ:MAMA)

- Q4 revenues increased by 118% to $3.57 million due to a significant increase in search advertising revenues, new software licensing contracts and increase in customized development and maintenance support, year-end revenues were at $9.60 million

- Q4 net earnings of $420,175 ($0.03 per share), year-end net loss of $4.27 million ($0.30 per share) including amortization of $2.25 million, write-downs and settlement costs of $1.68 million and employee stock-based compensation of $0.46 million

- Cash, cash equivalents and temporary investments at $7.97 million

Mamma.com Inc., (the "Company"), (NASDAQ:MAMA), reported its financial results for the fourth quarter and year ended December 31, 2006. Unless otherwise stated, all figures in this release are in US dollars.

The Company's Q4 2006 net earnings were $420,175 ($0.03 per share) compared to a net loss of $762,555 ($0.06 per share) for the same period in 2005. Net loss for the year was $4,269,380 ($0.30 per share) compared to $5,638,318 ($0.47 per share) for the year 2005. Revenues in the fourth quarter of 2006 were $3,566,421, 118% above the $1,638,431 revenues for the same period in 2005. The increase was due to improvement in search revenues of $1,430,369 mostly due to expanded distribution and new clients for $1,204,915 and by Copernic's contribution for the entire quarter in 2006 of $225,454. The Company executed new software licensing contracts which mainly accounted for its revenue increase of $694,511 as well as an increase in customized development and maintenance of $219,303. In Q4 2006, Graphic advertising decreased by $416,193 or 76% to $131,633 compared to $547,826 for the same period in 2005 due to the decline in pop-up campaigns and a decrease in demand for all other graphic ad units. Total revenues for the year 2006 were $9,596,402 compared to $9,443,975 in 2005. The product mix significantly changed during the year where revenues increased in search advertising by $2,227,495, software licensing by $950,817 and customized development and maintenance support by $603,410 offset by revenue decrease in graphic advertising by $3,629,295. This change of product mix generated a better gross margin of 72% in 2006 compared to 56% in 2005. The Company is focusing its energy on search advertising and software licensing.

The earnings from continuing operations in Q4 2006 were $365,347, compared to a loss from continuing operations in Q4 2005 of $739,711. Loss from continuing operations for the year 2006 was $4,358,708 compared to $3,342,983 in 2005. The 2006 loss from continuing operations included amortization of $2,245,201, write-downs and settlement cost of $1,683,238 and employee stock-based compensation of $456,281.

Cash, cash equivalents and temporary investments are at $7,971,459.

Subsequent to the year end, two officers resigned from their positions. In connection with their resignations, the Company will pay most of the termination costs of CDN$550,000 in Q1 2007, it will change the duration of option agreements and allow accelerated vesting options for one of the officers. These changes will represent an additional non-cash item expense of approximately $270,000.

Martin Bouchard, the Company's President and CEO stated: "During the fourth quarter, we have significantly increased our search revenues by expanding our search network and by signing new clients thus generating our best quarterly results this year. We also executed new software licensing contracts of our award-winning desktop search technology. In addition, we have launched two new specialized search engines: Mamma Jobs and Mamma Videos. And, finally, we have completed the integration of Mamma.com/Copernic to provide the Company with a unified management team with a focused vision. The new licensing of software in the quarter was a major contributor to the quarter's profitability. Unlike our search activities, licensing software fluctuates quarterly.

Mr. Bouchard concluded: "2007 will be an important year for the Company. We intend to focus our resources in sales and marketing, mainly in the USA and Europe. We also expect to announce new innovative products and services that are very unique in the market."

The live Web cast will be available on the Investor Relations section of the Mamma Media Solutions website:http://corporate.mamma.com/ir/financial.html. The archived Web cast will be made available on the Company's Web site starting one hour after the completion of the call.

About Mamma.com Inc.

Mamma.com Inc. 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, Copernic Technologies 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. In 2007 PC Pro, UK's most respected IT magazine for professionals and Micro Hebdo, one of France's most read IT magazine, have selected Copernic Desktop Search 2.0 as the top desktop search tool.

More information can be found at corporate.mamma.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 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
December 31, December 31,
2006 2005
$ $

Assets

Current assets

Cash and cash equivalents 2,379,617 4,501,201
Temporary investments 5,591,842 4,013,312
Accounts receivable 2,734,172 2,623,940
Income taxes receivable 110,002 606,226
Prepaid expenses 261,885 295,288
Future income taxes - 33,505
Assets of discontinued operations - 9,694
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11,077,518 12,083,166

Future income taxes - 13,483

Income tax credits - 54,912

Investments 150,000 720,000

Property and equipment 503,828 598,758

Intangible assets 6,190,298 8,601,848

Goodwill 15,417,844 16,255,031
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33,339,488 38,327,198
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--------------------------------------------------------------------
Liabilities

Current liabilities
Accounts payable and
accrued liabilities 2,289,686 2,690,943
Deferred revenue 227,660 249,953
Deferred rent 12,273 -
Income tax payable 8,100 8,062
Liabilities of discontinued
operations 6,253 189,223
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2,543,972 3,138,181
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Future income taxes 1,900,866 2,672,036
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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 5,706,183 5,249,902

Cumulative translation adjustment 561,137 370,369

Accumulated deficit (72,670,904) (68,401,524)
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28,894,650 32,516,981
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33,339,488 38,327,198
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Mamma.com Inc.
Condensed Consolidated Statements of Operations
--------------------------------------------------------------------
(unaudited) (expressed in U.S. dollars and in accordance with
generally accepted accounting principles in Canada)

For the twelve months For the three months
ended December 31 ended December 31
--------------------------------------------------------------------
2006 2005 2006 2005
$ $ $ $

Revenues 9,596,402 9,443,975 3,566,421 1,638,431

Cost of revenues 2,704,101 4,183,445 918,920 718,690
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6,892,301 5,260,530 2,647,501 919,741
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Expenses
Marketing, sales
and services 1,850,176 2,023,925 502,415 321,541
General and
administration 3,996,327 5,692,092 1,029,243 1,145,862
Product development
and technical support 2,538,867 1,286,345 614,340 345,407
Amortization of
property and
equipment 178,192 106,788 48,968 31,647
Amortization of
intangible assets 2,067,009 242,031 487,914 94,317
Write-downs and
settlement costs 1,683,238 - - -
Interest and
other income (415,950) (768,738) (102,978) (264,461)
Loss
on foreign exchange 82,203 47,080 (51,392) 23,876
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11,980,062 8,629,523 2,528,510 1,698,189
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Earnings (loss)
From continuing
operations before
income taxes (5,087,761) (3,368,993) 118,991 (778,448)

Recovery of current
income taxes (4,876) (12,046) - (24,773)
Recovery of future
income taxes (724,177) (13,964) (246,356) (13,964)
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Earnings (loss)
From continuing
operations (4,358,708) (3,342,983) 365,347 (739,711)

Results of
discontinued
operations,
net of income taxes 89,328 (2,315,335) 54,828 (22,844)
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Net earnings (loss)
for the period (4,269,380) (5,658,318) 420,175 (762,555)
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Net earnings (loss)
per common share --
basic and diluted
Earnings (loss)
from continuing
operations (0.31) (0.27) 0.03 (0.06)
Results of
discontinued
operations 0.01 (0.19) 0.00 (0.00)
Net earnings (loss)
per common share --
basic and
diluted (0.30) (0.46) 0.03 (0.06)
Weighted average
number of shares
outstanding - basic 14,340,864 12,168,117 14,340,864 12,263,029
Additions to
reflect the impact
of: Exercise of
stock options - - 13,136 -
Exercise of warrants - - - -
Weighted average
number of shares
outstanding -
diluted 14,340,864 12,168,117 14,354,000 12,263,029
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Mamma.com 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 twelve months For the three months
ended December 31 ended December 31
--------------------------------------------------------------------
2006 2005 2006 2005
$ $ $ $

Cash flows from
(used for)

Operating activities
Earnings (loss)
from continuing
operations (4,358,708) (3,342,983) 365,347 (739,711)
Adjustments for
Amortization of
property and
equipment 178,192 106,788 48,968 31,647
Amortization
of intangible
assets 2,067,009 242,031 487,914 94,317
Employee
stock-based
compensation 456,281 136,933 66,703 82,589
Future income taxes (724,177) (13,964) (246,356) (13,964)
Long term
income tax credits 54,912 - 54,912 -
Write-down of
property and
equipment 9,813 - - -
Write-down of
Intangible assets 403,425 - - -
Write-down
of investment 570,000 - - -
Unrealized loss
on foreign
exchange - - (1,151) -
Net change in
non-cash working
capital items 515,619 1,420,013 (1,291,099) 1,066,776
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Cash from (used for)
operating activities
from continuing
operations (827,634) (1,451,182) (514,762) 521,654
Cash used for
operating activities
from discontinued
operations (83,948) (630,288) (9,396) (29,594)
--------------------------------------------------------------------
(911,582) (2,081,470) (524,158) 492,060
--------------------------------------------------------------------
Investing activities
Business acquisition - (15,851,922) - (15,851,922)
Reimbursement
related to Copernic
business acquisition 379,382 - - -
Purchase of property
and equipment (76,104) (85,687) (26,513) (572)
Purchase of
intangible assets (51,400) (54,943) (8,373) (6,972)
Net decrease
(increase) in
temporary
investments (1,578,530) 2,860,843 (2,557,521) (4,013,312)
--------------------------------------------------------------------

Cash used for
Investing
activities
from continuing
operations (1,326,652)(13,131,709) (2,592,407)(19,872,778)
--------------------------------------------------------------------
Financing activities
Issuance of capital
stock and warrants - 6,424 - -
Redemption of common
shares - (1,053,155) - -
--------------------------------------------------------------------
Cash used for
financing activities - (1,046,731) - -
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Effect of foreign
exchange rate
changes on cash
and cash equivalents 116,650 4,022 5,890 4,022
--------------------------------------------------------------------

Net change in cash
and cash
equivalents
during the period (2,121,584)(16,255,888) (3,110,675)(19,376,696)

Cash and cash
equivalents --
Beginning of period 4,501,201 20,757,089 5,490,292 23,877,897
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Cash and cash
equivalents -
End of period 2,379,617 4,501,201 2,379,617 4,501,201
--------------------------------------------------------------------
--------------------------------------------------------------------

Cash and cash
equivalents
comprise:
Cash 777,637 4,501,201 777,637 4,501,201
Short-term
investments 1,601,980 - 1,601,980 -
--------------------------------------------------------------------
2,379,617 4,501,201 2,379,617 4,501,201
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