Stockgroup Information Systems Inc.
TSX VENTURE : SWB
OTC Bulletin Board : SWEB

Stockgroup Information Systems Inc.

August 11, 2005 13:05 ET

Stockgroup Information Systems Inc.: Q2 Net Income Highest Ever Recorded. Increases 250% over Q2F04; 10th Consecutive Quarter Over Quarter Increase in Revenue

NEW YORK, NEW YORK--(CCNMatthews - Aug. 11, 2005) - Stockgroup Information Systems Inc., (OTCBB:SWEB)(TSX VENTURE:SWB) today announced its financial results for the quarter ended June 30th 2005 - its 10th consecutive quarter with increased revenue.



Q2 Financial Highlights (all USD) compared to Q2F04:

- Increased revenue 25% to $1,477,937
- Increased net income by 250% to $77,505
- Financial Software and Content Systems revenues increased 54% to
$722,640
- Gross profits increased 22%
- Gross margin was maintained at +80%
- Ended the quarter with more than $2.1 million in cash
- Produced positive operating cash flow of $255,580 vs. a loss of
$104,811 in Q2F04.
- EBITDA(1) was $207,260

(1) EBITDA is Earnings Before Interest, Taxes, Depreciation and
Amortization, which is a non-GAAP measure and has no standard
financial statement treatment. It is provided above for information
only.

--------------------------------------------------------------------
3 months 3 months 6 months 6 months
ended ended ended ended
June 30 June 30 June 30 June 30
'05 (Q2) '04 (Q2) '05 '04
--------------------------------------------------------------------
Revenues $1,477,937 $1,184,954 $2,934,612 $2,231,185
--------------------------------------------------------------------
Gross Profit $1,183,868 $ 967,769 $2,369,560 $1,810,603
--------------------------------------------------------------------
Net Income (Loss) $ 77,505 $ 22,140 $ 90,316 $ (36,168)
--------------------------------------------------------------------
Cash and Equivalents $2,198,039 $1,405,391 $2,198,039 $1,405,391
--------------------------------------------------------------------


Marcus New, Chief Executive Officer stated, "As evidenced by our strongest quarter ever with continued revenue growth, a strengthening cash position and our highest net profits to date, Stockgroup's business model clearly shows it has gained traction. We are in a solid financial position which will allow us to continue to execute on our key 2005 objectives."

Conference Call and Web cast

President and CEO Marcus New, and CFO Doug Keast, will host a conference call to discuss these results on August 11, 2005 (today) at 4:05 PM EST, which will be simultaneously Web cast. To participate in the conference call, please dial 1-800-525-6384 5 to 10 minutes prior to the start time or visit the 'Investors' section under 'Who We Are' at www.stockgroup.com for details on listening to the live Web cast.

The full 10-QSB is available for review at www.stockgroup.com, www.edgar.com.

Other Highlights of Q2:

- Stockgroup attracted Elisabeth DeMarse, a veteran of the online information industry who has held senior executive positions at Bloomberg, Hoover's and Bankrate.

- Stockgroup recruited seasoned financial executive Doug Keast to the role of Executive Vice President and CFO.

- Stockgroup announced a share buy back program for up to 1.6 million shares. Shares purchased will be held in treasury.

About Stockgroup Information Systems Inc.

As an online media company, Stockgroup Information Systems provides a complete financial data source for investors, investment advisory firms, press and media organizations as well as access to specific demographics for advertisers.

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.



Stockgroup Information Systems Inc.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - Expressed in U.S. Dollars)

June 30, December 31,
2005 2004 (1)
----------- -----------

ASSETS
CURRENT
Cash and cash equivalents $ 2,198,039 $ 1,837,012
Marketable securities 3,422 7,361
Accounts receivable (net of
allowances for doubtful
accounts of $96,143;
December 31, 2004
$107,344)(note 4) 534,762 595,848
Prepaid expenses 78,405 114,426
----------- -----------
TOTAL CURRENT ASSETS $ 2,814,628 $ 2,554,647
Property and equipment, net $ 229,891 $ 287,073
----------- -----------
$ 3,044,519 $ 2,841,720
----------- -----------
----------- -----------

LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT
Accounts payable and accrued
liabilities $ 426,988 $ 319,846
Accrued payroll liabilities 120,842 104,230
Deferred revenue 678,551 804,061
Current portion of capital
lease obligation 30,839 -
----------- -----------
TOTAL CURRENT LIABILITIES $ 1,257,220 $ 1,228,137
Capital lease obligation 63,525 -
----------- -----------
TOTAL LIABILITIES 1,320,745 1,228,137
----------- -----------
----------- -----------

COMMITMENTS AND CONTINGENCIES
(note 5)

SHAREHOLDERS' EQUITY (note 2)
Common Stock, No Par Value
Authorized shares - 75,000,000
Issued and outstanding shares
- 33,906,846 at June 30,
2005 (33,931,221 -
December 31, 2004) $13,542,568 $13,568,499
Additional paid-in capital 3,145,120 3,099,314
Accumulated deficit (14,963,914) (15,054,230)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY $ 1,723,774 $ 1,613,583
----------- -----------
$ 3,044,519 $ 2,841,720
----------- -----------
----------- -----------

(1) The balance sheet at December 31, 2004 has been derived from the
audited consolidated financial statements at that date.



Stockgroup Information Systems Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED - Expressed in U.S. Dollars)

Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUE
Revenues
(note 4) $ 1,477,937 $ 1,184,954 $ 2,934,612 $ 2,231,185
Cost of revenues
(note 4) 294,069 217,185 565,052 420,582
----------- ----------- ----------- -----------
Gross profit $ 1,183,868 $ 967,769 $ 2,369,560 $ 1,810,603

EXPENSES
Sales and
marketing $ 369,010 $ 410,932 $ 782,286 $ 727,690
General and
administrative 737,028 539,227 1,500,429 1,127,819
----------- ----------- ----------- -----------
$ 1,106,038 $ 950,159 $ 2,282,715 $ 1,855,509
----------- ----------- ----------- -----------
INCOME(LOSS) FROM
OPERATIONS $ 77,830 $ 17,610 $ 86,845 $ (44,906)

Interest income 6,594 5,487 10,428 10,358
Interest expense (2,000) (327) (2,038) (1,623)
Other income
(expense) (4,919) (630) (4,919) 3
----------- ----------- ----------- -----------
NET INCOME (LOSS)
AND COMPREHENSIVE
INCOME (LOSS) $ 77,505 $ 22,140 $ 90,316 $ (36,168)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

BASIC AND DILUTED
INCOME (LOSS)
PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Basic weighted
average
shares
Outstanding for
the period 34,075,846 32,498,721 34,015,745 32,597,290
Fully diluted
weighted
average
Shares
outstanding for
the period 35,062,932 33,948,596 35,021,189 32,792,224
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------


Stockgroup Information Systems Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - Expressed in U.S. Dollars)

Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
OPERATING
ACTIVITIES
Net income (loss) $ 77,505 $ 22,140 $ 90,316 $ (36,168)
Add non-cash items
Amortization 129,431 98,044 222,187 185,121
Bad debt expense (49,446) 30,081 (26,710) 35,863
Stock-based
compensation 29,747 - 45,806 -
----------- ----------- ----------- -----------
$ 187,237 $ 150,265 $ 331,599 $ 184,816
Net changes in
non-cash
working capital
Marketable
securities 3,939 (23,885) 3,939 (24,467)
Accounts
receivable 224,592 (155,974) 87,796 (158,273)
Prepaid expenses 691 (10,280) 36,021 (65,449)
Accounts payable
and accrued
liabilities 68,971 (36,140) 107,142 11,063
Accrued payroll
liabilities 22,029 (38,913) 16,612 (23,354)
Deferred revenue (251,879) 10,116 (125,510) 98,117
----------- ----------- ----------- -----------
CASH PROVIDED BY
(USED IN)
OPERATIONS $ 255,580 $ (104,811) $ 457,599 $ 22,453
----------- ----------- ----------- -----------
INVESTING
ACTIVITIES
Property and
equipment (net) $ (51,880) $ (6,243) $ (70,641) $ (37,212)
----------- ----------- ----------- -----------
CASH USED IN
INVESTING $ (51,880) $ (6,243) $ (70,641) $ (37,212)
----------- ----------- ----------- -----------
FINANCING
ACTIVITIES
Repurchase of
common stock
(net) $ (83,603) $ - $ (83,603) $ -
Proceeds on
exercise of
warrants 29,156 - 34,634 -
Proceeds on
exercise of
stock options 13,875 38,700 23,038 58,875
(Repayment) of
capital lease
obligation - (15,161) - (38,920)
----------- ----------- ----------- -----------
CASH PROVIDED BY
(USED IN)
FINANCING $ (40,572) $ 23,539 $ (25,931) $ 19,955
----------- ----------- ----------- -----------
INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS $ 163,128 $ (87,515) $ 361,027 $ 5,196
Cash and cash
equivalents,
beginning
of period 2,034,911 1,492,906 1,837,012 1,400,195
----------- ----------- ----------- -----------
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 2,198,039 $ 1,405,391 $ 2,198,039 $ 1,405,391
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------



This release has neither been approved nor disapproved by the TSX.

Contact Information

  • Stockgroup Information Systems Inc.
    Doug Keast
    Executive Vice President and CFO
    Toll Free: 1-800-650-1211
    www.stockgroup.com
    or
    The Howard Group
    David Gordon
    Investor Relations
    Toll Free: 1-888-221-0915