Stockgroup Information Systems Inc.
OTC Bulletin Board : SWEB

Stockgroup Information Systems Inc.

March 15, 2007 15:07 ET

Stockgroup Announces Record Q4 and Fiscal 2006 Year End Revenue

16th Consecutive Quarter of Revenue Growth

NEW YORK, NEW YORK--(CCNMatthews - March 15, 2007) - Stockgroup Information Systems Inc. (OTCBB:SWEB)(TSX VENTURE:SWB), a leading financial media company focused on user-generated content and collaborative technologies, announced today that it reported record revenue for Q4 and fiscal 2006. A conference call will be held today at 4:05 PM EST to discuss the results.

Selected comparative financial information for the three-month and twelve-month periods ended December 31, 2006 and 2005 is shown below (All numbers expressed in US dollars):

3-month 3-month 12-month 12-month
Period Period Period Period
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Revenues $ 2,291,402 $ 1,795,813 $ 7,766,128 $ 6,099,528
Cost of Revenues $ 626,419 $ 411,628 $ 2,258,970 $ 1,459,319
Total Expenses
(excluding cost
of revenues) $ 1,593,881 $ 1,333,092 $ 6,345,952 $ 4,699,122
Net Income (Loss) $ 88,459 $ 58,717 $ (791,197) $ (58,590)
EPS $ 0.00 $ 0.00 $ (0.02) $ (0.00)

Stockgroup™ reported record Q4 revenue of US$2.3 million, up 28% over the previous year and 21% over Q3 '06, and Q4 earnings of US$88,000. The Company ended fiscal 2006 with US$7.8 million in revenue, an improvement of 27% over fiscal 2005. The Company posted a loss of US$791,000 or US$0.02 per share for 2006 due to the previously announced investment in product development, sales, and leadership to support the Company's growth. The Company used US$290,000 of cash from operations for the year and maintains a strong cash balance of over US$2 million.

"We are very pleased to have finished a record year with a strong 4th quarter. The leadership team we have built over the past sixteen months has demonstrated execution success," stated Marcus New, President and CEO. "Web 2.0 is creating some of the fastest brands in history and we believe that the progress we made in 2006 has positioned us well to capitalize on this trend in 2007."

2006 Review

Last year, Stockgroup set three key objectives:

1. Focus on building the StockHouse™ brand in its existing community of users and extending this brand throughout North America to capture a larger segment of the online advertising market.

Significant components of StockHouse were successfully launched in 2006, including enhanced collaborative functionality in the form of StockHouse Blogs. StockHouse Editorial also grew significantly in the number of industry articles produced, thus offering greater depth and diversity in editorial content to users.

The Company's success in meeting its objective can be measured by record traffic on StockHouse with an average 767,000 unique visitors per month, up 30% over 2006, and an average 74 million page views per month, up 27%. was ranked #1 in Pages Per Visitor by comScore Media Metrix Ad Focus report in December 2006, delivering more pages per user than any other online entity in Canada. comScore reported that the average minutes per visit on StockHouse by visitors 35+ was 5 times that of Yahoo! Finance Canada, Sympatico MSN Finance and The Globe and Mail's Globe Finance in the Business/Finance - News and Research category. Advertising revenues for 2006 increased 36% over the previous year to US$4.2 million.

2. Take Stockgroup's core strengths in collaboration technologies, portfolio management tools and analytics, and the enablement of social networks to the professional portfolio solutions market, where it will participate in an estimated $2 billion market opportunity.

The official launch of Stockgroup's portfolio management solution, StockStream™, took place in 2006 and represents the only web-based portfolio management application on the market that combines tools and analytics with a variety of news and investment-related information, including user-generated content from online social networks. This fee-based application on StockHouse allows users to view their favorite online content while monitoring their stocks. StockStream Platinum, the licensable version of StockStream, uses Stockgroup's collaborative technologies to strengthen the advisor-client relationship through co-browsing, model portfolios, advisor set alerts, and extensive functionality to enhance business knowledge for the advisor and the firm.

3. Invest in product development and marketing to increase Stockgroup's position in its selected North American markets. This includes expanding the community aspect of StockHouse and integrating collaboration technologies into the Company's portfolio management and desktop applications to enhance Stockgroup's leadership position in the North American media and software markets.

Stockgroup's new product offerings discussed above are examples of the Company's success in delivering on its third objective for 2006.

In addition, the Company continued to build its executive leadership team and board, adding proven experienced leaders in finance and sales and two outstanding industry executives to its board.

Thomas Baker, Stockgroup Board of Directors

Mr. Baker has more than 25 years of experience in print and online media. He was the founder and general manager of The Wall Street Journal Online (, a publication of Dow Jones & Company, where he led the start-up effort and grew the Online Journal into a $60 million business unit and the largest paid news and information site on the web.

Steve Zacharias, Stockgroup Board of Directors

Mr. Zacharias is the founder and managing director of Transact Capital Partners LLC, a Richmond Virginia based investment banking firm serving small to middle market privately-owned businesses. Before founding Transact, he served as corporate treasurer for Media General Inc (NYSE: MEG), a Fortune 1000 TV and newspaper media company, where he was responsible for more than $2 billion in debt and equity financings.

Focus for 2007

In 2007, Stockgroup will continue to fulfill its mission of helping investors create and manage wealth through its platform of Analytics, Content - aggregated and proprietary user-generated - and Collaborative technologies. The core initiative will be the launch of the next generation of StockHouse. This next generation of StockHouse will combine the Company's existing financial community focused on user-generated content with its collaborative technologies and some of the best social network functionality to create the next generation of how investors communicate in the financial markets.

The following objectives provide the framework through which Stockgroup will achieve its goals:

1. Continue to invest in product development and launch the next generation of StockHouse, to transform it into the leading Web 2.0 financial portal in North America.

2. Internal growth and a recent acquisition will enable the Company to increase its revenue by more than 100 percent over 2006 results.

3. Extend Stockgroup's existing backend infrastructure to create a more scalable and secure platform. This will enable the company to gain a greater market share among intermediaries and individual investors.

4. Continue to evaluate strategic acquisitions.

In January 2007, Stockgroup acquired the Mobile Finance Division of TeleCommunications Systems Inc., a Maryland based provider of wireless data solutions. Stockgroup gained a proven set of wireless financial products for migration onto the Company's platform, which saves Stockgroup significant development costs and go-to-market time. The Company also gains a large customer-base through which it can leverage its existing product line.

Conference Call Details

To participate in the conference call, please call 1-866-400-2280 five to ten minutes prior to the start time at 4:05 PM EST. To listen to the live webcast, please go to

The earnings call will be recorded and accessible on our website for a period of one month. Participants intending to access the webcast should have Windows Media Player installed prior to connecting to the call.

Stockgroup Information Systems Inc.
(Expressed in U.S. Dollars, except number of common shares)

December 31,
2006 2005
----------- -----------
Current Assets:
Cash and cash equivalents $ 2,013,075 $ 2,056,761
Accounts receivable, net 814,047 760,294
Prepaid and other current assets 185,719 134,183
----------- -----------
TOTAL CURRENT ASSETS 3,012,841 2,951,238
Property and equipment, net 447,411 338,686
----------- -----------
TOTAL ASSETS $ 3,460,252 $ 3,289,924
----------- -----------
----------- -----------


Current Liabilities:
Accounts payable $ 425,816 $ 431,826
Accrued liabilities 472,522 366,792
Accrued compensation 175,559 157,570
Deferred revenues 810,273 656,805
Capital lease obligations 130,380 63,647
----------- -----------

Long-term capital lease obligations 97,205 75,233
Long-term deferred revenues 64,936 89,113
----------- -----------
TOTAL LIABILITIES 2,176,691 1,840,986

Commitments and contingencies
Shareholders' Equity:
Common stock, no par value: authorized
75,000,000; issued and outstanding
35,350,413 and 33,522,346 13,793,188 13,359,341
Additional paid-in capital 3,394,390 3,202,417
Accumulated deficit (15,904,017) (15,112,820)
----------- -----------
TOTAL SHAREHOLDE RS+EQUITY 1,283,561 1,448,938
----------- -----------
----------- -----------
----------- -----------

Stockgroup Information Systems Inc.
(Expressed in U.S. Dollars, except number of common shares)

December 31,
2006 2005
----------- -----------
Advertising Services $ 4,233,702 $ 3,117,501
Financial Software and Content Systems 3,532,426 2,982,027
----------- -----------
TOTAL REVENUES 7,766,128 6,099,528

Costs of revenues (exclusive of amortization) 2,258,970 1,459,319
Sales and marketing 3,041,307 2,111,451
Research and development 683,776 324,646
General and administrative 2,620,869 2,263,025
----------- -----------
TOTAL OPERATING EXPENSES 8,604,922 6,158,441

Loss from operations (838,794) (58,913)
Interest and other income (expense), net 51,587 27,789
----------- -----------
Loss before provision for income taxes (787,207) (31,124)
Provision for income taxes 3,990 27,466
----------- -----------
Net loss and comprehensive loss $ (791,197) $ (58,590)
----------- -----------
----------- -----------
Net loss per common share:
Basic and diluted $ (0.02) $ (0.00)
----------- -----------
----------- -----------

Common shares used in computing basic and
diluted net loss per share 33,910,350 33,928,920
----------- -----------
----------- -----------

Stockgroup Information Systems Inc.
(Expressed in U.S. Dollars)

December 31,
2006 2005
----------- -----------
Operating activities:
Net loss $ (791,197) $ (58,590)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Amortization of property and equipment 217,102 274,600
Stock-based compensation expense 120,957 41,977

Changes in operating assets and liabilities:
Accounts receivable, net (53,753) (164,446)
Prepaid and other current assets (51,536) (12,396)
Accounts payable 15,845 340,273
Accrued liabilities 105,730 138,499
Accrued compensation 17,989 53,340
Deferred revenues 129,291 (58,143)
----------- -----------
ACTIVITIES (289,572) 555,114
----------- -----------

Investing activities:
Purchases of property and equipment (155,734) (166,241)
----------- -----------
----------- -----------

Financing activities:
Repurchase of common stock (27,333) (214,490)
Proceeds on exercise of warrants - 41,920
Proceeds on exercise of stock options 189,594 24,538
Proceeds on private placement, net of costs 342,602 -
Repayment of capital lease obligation (103,243) (21,092)
----------- -----------
ACTIVITIES 401,620 (169,124)
----------- -----------
Net (decrease) increase in cash and cash
equivalents (43,686) 219,749
Cash and cash equivalents, beginning of the
period 2,056,761 1,837,012
----------- -----------
Cash and cash equivalents, end of the period $ 2,013,075 $ 2,056,761
----------- -----------
----------- -----------

Supplemental Cash Flow Information
Interest paid 23,755 7,366
Taxes paid 13,987 -
Assets acquired through capital lease
transactions 191,947 159,972
Value of warrants issued in connection with
private placement 93,474 -

About Stockgroup Information Systems Inc.

Stockgroup™ is a financial media company focused on user-generated content and collaborative technologies. The Stockgroup platform for web-based portfolio management and financial content is licensed to top North American brokerage firms and media companies. The Stockgroup platform is also extended through, a leading online financial portal owned and operated by Stockgroup. is home to BullBoards™ message board - Canada's largest community of active investors. Recognized for its engaged audience, provides a sought-after demographic for advertisers.


Stockgroup, StockStream, StockStream Platinum, StockHouse, BullBoards and @ The Bell are proprietary trademarks of Stockgroup Information Systems Inc. and/or its affiliates. Other names may be trademarks of their respective owners.

To find out more about Stockgroup (OTCBB: SWEB, TSX-V: SWB), visit our website at

This release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects", "anticipates," "estimates", "believes", or statements indicating certain actions "may", "could", or "might" occur. This release should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto, and other parts of Management's Discussion and Analysis included in our Report on Form 10-KSB filed on for the year ended December 31, 2006, and other recent periodic reports which are on file with the SEC and available at the SEC website at Stockgroup undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this press release. All forward looking statements are qualified in their entirety by this cautionary statement.

The TSX Venture Exchange and the OTCBB have not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Stockgroup Information Systems Inc.
    Steve Gear
    Director of Capital Markets
    (604) 288-2861 or Toll Free: 1-800-650-1211