Stockgroup Information Systems Inc.

Stockgroup Information Systems Inc.

March 16, 2005 15:00 ET

Stockgroup Announces Fiscal 2004 Year End Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: STOCKGROUP INFORMATION SYSTEMS INC.

OTC Bulletin Board SYMBOL: SWEB
TSX VENTURE SYMBOL: SWB

MARCH 16, 2005 - 15:00 ET

Stockgroup Announces Fiscal 2004 Year End Results

NEW YORK, NEW YORK--(CCNMatthews - March 16, 2005) - Stockgroup
Information Systems Inc. (OTCBB:SWEB)(TSX VENTURE:SWB)

Revenues up 60% Year over Year. Company Posts First Annual Net Income.

Stockgroup Information Systems Inc. today announced its financial
results for the year ended December 31st 2004. Management is pleased
that the company's business model has gained significant momentum as
supported by eight consecutive quarters of revenue growth, an
improvement of over $900,000 (USD) in operating cash flow, and 3 out of
4 quarters of positive net earnings.

President and CEO Marcus New, and CFO David Gillard, will host a
conference call to discuss these results March 16th 2005 (today) at 4:05
PM EST, which will be simultaneously Webcast. To participate in the
conference call, please dial 1-877-895-3312 approximately 5-10 minutes
prior to the start time or visit the investor relations section of
www.stockgroup.com for details on listening to the live web cast.

2004 Financial Highlights (all USD):

- Increased revenue 60% to $4.8 million

- Public Company Disclosure services revenues increased 69% to $3.1
million

- Financial Content Systems Licensing revenues increased 45% to $1.7
million

- Increased gross margin from 78% to 81%

- Posted net income of $15,623 vs. a net loss of $1.6 million in the
year previous

- Posted EPS of $0.00 vs. a loss of $0.06 in the previous year

- Produced positive operating cash flow of $0.5 million vs. ($0.44) in
the previous year

- Ended the year with over $1.8 million in cash and cash equivalents

- The Company is debt free

Marcus New, Chief Executive Officer, stated "Stockgroup is built on a
solid fixed cost foundation, we have developed and paid for our
infrastructure and have passed break even. Going forward the incremental
costs of product delivery are very low. Shareholders will increasingly
see a substantial portion of incremental revenues go directly to the
bottom line."

Over the next Fiscal year, Stockgroup is committed to profitably
increase revenues by:

1. Maintaining an innovative pipeline of products which will:

- Increase the value of current client licensing arrangements

- Make Stockgroup's services more appealing to new licensors

- Drive traffic to the websites and increase status with advertisers

2. Enhancing credibility with ad agencies through 3rd party research and
new ad formats; thus increasing advertising status and revenue dollars
per unit of inventory

3. Increasing the sales force across Canada and the United States by
30%; thus driving new licensing agreements and increasing revenues from
current licensing relationships.

4. Launching a paid subscription product to brokerage firm clients and
to the more than 600,000 investors at StockHouse

The full 10-KSB will be available tomorrow for review at
www.stockgroup.com, www.edgar.com.

About Stockgroup Information Systems Inc.

Stockgroup Information Systems Inc. utilizes an information technology
platform to provide a complete financial data source. The company
provides a) access to financial information for investors, investment
advisory firms and media organizations and b) access to very specific
demographics for advertisers.

A) Licensing services: Stockgroup employs its proprietary technologies
to enable licensors to provide financial data and software applications
to their clients and employees at a fraction of the cost of traditional
internal methods.

B) Advertising: Stockgroup maintains two major websites StockHouse and
Smallcapcenter, along with several other specialty sites. These sites
receive over 65 million page views and have over 600,000 unique visitors
per month. Due to the high traffic, and specific demographics on
visiting these sites, companies and media buyers see a high value in
advertising through Stockgroup.

To find out more about Stockgroup (OTCBB:SWEB)(TSX VENTURE:SWB), visit
our website at www.stockgroup.com.

This document contains forward-looking statements, including, in
particular, statements about Stockgroup Information Systems Inc.'s
plans, strategies and prospects. These have been based on the Company's
current assumptions, expectations and projections about future events.

Although the Company believes that the expectations reflected in these
forward-looking statements are reasonable, the Company can give no
assurance that these expectations will prove to be correct or that
results anticipated in the forward-looking statements will be achieved.
These forward-looking statements include risks and uncertainties. These
risks and uncertainties include, among other things, market conditions,
industry uncertainty and other factors.



CONSOLIDATED BALANCE SHEETS

As at December 31 (expressed in US dollars)

2004 2003
$ $
--------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents 1,837,012 1,400,195
Marketable securities 7,361 2,616
Accounts receivable (net of
allowances for doubtful accounts of
$107,344; 2003 - $45,016) (note 3) 595,848 325,057
Prepaid expenses 114,426 79,648
--------------------------------------------------------------------
Total current assets 2,554,647 1,807,516
--------------------------------------------------------------------
Property and equipment, net (note 4) 287,073 311,632
--------------------------------------------------------------------
2,841,720 2,119,148
--------------------------------------------------------------------
--------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current
Accounts payable 319,846 217,110
Accrued payroll liabilities 104,230 115,208
Deferred revenue 804,061 499,525
Current portion of capital lease
obligation (note 6) - 38,920
--------------------------------------------------------------------
Total current liabilities 1,228,137 870,763
--------------------------------------------------------------------
Commitments and contingencies (note 11)

Shareholders' equity
Common stock, no par value (note 8)
Authorized shares - 75,000,000
Issued and outstanding
shares - 33,977,221
(2003 - 32,498,721) 13,568,499 13,218,924
Additional paid-in capital 3,099,314 3,099,314
Accumulated deficit (15,054,230) (15,069,853)
--------------------------------------------------------------------
Total shareholders' equity 1,613,583 1,248,385
--------------------------------------------------------------------
2,841,720 2,119,148
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--------------------------------------------------------------------

See accompanying notes in audited financial statements filed on edgar
Stockgroup Information Systems Inc.


CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in US dollars)


3 Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
$ $ $ $
--------------------------------------------------------------------

REVENUE
Revenues (note 9) 1,365,056 984,355 4,823,227 3,020,399
Cost of revenues 252,413 153,549 910,949 637,764
--------------------------------------------------------------------
Gross profit 1,112,643 830,806 3,912,278 2,382,635
--------------------------------------------------------------------

EXPENSES
Sales and marketing 414,775 305,529 1,515,280 851,221
General and
administrative 659,304 516,099 2,398,034 2,267,906
--------------------------------------------------------------------
1,074,079 821,628 3,913,314 3,119,127
--------------------------------------------------------------------
Income (loss) from
operations 38,564 9,178 (1,036) (736,492)
Interest income 9,119 2,366 24,058 2,500
Interest expense
(notes 6 and 7) (423) (2,069) (2,083) (895,870)
Other income (expense) (6,918) (129) (5,316) 1,392
--------------------------------------------------------------------
Net income (loss) 40,342 9,346 15,623 (1,628,470)
--------------------------------------------------------------------
--------------------------------------------------------------------

Basic and diluted loss
per share 0.00 0.00 0.00 (0.06)

Weighted average number
of common shares
outstanding 33,931,221 31,122,088 33,364,834 26,309,835
Fully diluted weighted
average number of
common shares
outstanding 34,749,716 32,032,384 34,307,410 26,309,835
--------------------------------------------------------------------
--------------------------------------------------------------------

See accompanying notes in audited financial statements filed on edgar

Stockgroup Information Systems Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(expressed in US dollars)

3 Months Ended Year Ended
December 31 December 31
2004 2003 2004 2003
$ $ $ $
--------------------------------------------------------------------

OPERATING ACTIVITIES
Net income (loss) 40,342 9,346 15,623 (1,628,470)
Add (deduct) non-cash
items
Amortization 98,150 101,679 393,168 388,032
Bad debt allowance
(recovery) 30,610 (61,506) 62,328 4,150
Non-cash interest on
convertible
notes and debentures - - - (51,464)
Realized foreign exchange
loss - 537 - 24,298
--------------------------------------------------------------------
169,102 50,056 471,119 (351,639)
--------------------------------------------------------------------

Net change in operating
assets and liabilities
(note 12) 42,724 254,363 23,652 (64,109)
--------------------------------------------------------------------
Cash used in operating
activities 211,826 304,419 494,771 (415,748)
--------------------------------------------------------------------

FINANCING ACTIVITIES
Net proceeds from issuance
of common stock - - - 840,559
Proceeds on exercise of
warrants - 293,225 - 875,000
Proceeds on exercise of
stock options - 6,540 58,875 18,960
Net proceeds from
(repayments of)
notes payable - (10,928) - (266,086)
Repayment of convertible
notes - - - (35,332)
Repayment of capital lease
obligation - (19,985) (38,920) (96,129)
--------------------------------------------------------------------
Cash provided by financing
activities - 268,852 19,955 1,336,972
--------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of property and
equipment 1,045 (33,140) (77,909) (60,999)
--------------------------------------------------------------------
Cash used in investing
activities 1,045 (33,140) (77,909) (60,999)
--------------------------------------------------------------------

Increase in cash and
cash equivalents 212,871 540,131 436,817 860,225
Cash and cash
equivalents, beginning
of period 1,624,141 860,064 1,400,195 539,970
--------------------------------------------------------------------
Cash and cash
equivalents, end of
period 1,837,012 1,400,195 1,837,012 1,400,195
--------------------------------------------------------------------
--------------------------------------------------------------------

See accompanying notes in audited financial statements filed on edgar



-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Stockgroup Information Systems Inc.
    David Gillard
    CFO
    1-800-650-1211
    www.stockgroup.com
    or
    The Howard Group
    Grant Howard, President
    Investor Relations
    1-888-221-0915
    or
    The Howard Group
    David Gordon
    Investor Relations
    1-888-221-0915
    This release has neither been approved nor disapproved by the TSX.