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

Stockgroup Information Systems Inc.

November 09, 2006 15:12 ET

Stockgroup Reports 38% Revenue Growth

Achieves its 15th Quarter of Consecutive Revenue Growth

NEW YORK, NEW YORK--(CCNMatthews - Nov. 9, 2006) - Stockgroup Information Systems Inc. (OTCBB:SWEB)(TSX VENTURE:SWB) today announced the financial results for its third quarter ended September 30, 2006. A conference call and webcast will be held November 9 (today) at 4:05 PM EST to discuss the results. All results are reported in US Dollars under accounting principles generally accepted in the United States of America (US GAAP).

Stockgroup™ revenues for the third quarter of 2006 were $1,889,638, an increase of 38 percent year-over-year. This is the Company's 15th consecutive quarter of revenue growth. The Company posted a loss of $245,989, due primarily to continued investment in product development and sales infrastructure.

Q3'06 Financial Highlights:

- Increased revenues by 38% over Q3 '05 to $1,889,638

- Advertising services revenues increased 74% over Q3 '05 to $1,048,469

- Completed the quarter with $2,448,857 in cash

- 10 Board and senior managers subscribe for a $350,000 restricted private placement



--------------------------------------------------------------------------
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Sept 30, 2006 Sept 30, 2005 Sept 30, 2006 Sept 30, 2005
--------------------------------------------------------------------------
Revenues $ 1,889,638 $ 1,369,103 $ 5,474,726 $ 4,303,715
--------------------------------------------------------------------------
Earnings
(Loss) Before
Interest, Taxes,
Depreciation and
Amortization
(EBITDA)(1) $ (199,234) $ (172,620) $ (755,076) $ 136,412
--------------------------------------------------------------------------
Net Loss $ (245,989) $ (207,623) $ (879,656) $ (117,307)
--------------------------------------------------------------------------
Cash and cash
equivalents $ 2,448,857 $ 2,327,321 $ 2,448,857 $ 2,327,321
--------------------------------------------------------------------------
(1) Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization
is a non-GAAP measure that does not have a standardized meaning and
may not be comparable to similar measures disclosed by other issuers.
This measure does not have a comparable US GAAP measure. Earnings
(Loss) Before Interest, Taxes, Depreciation and Amortization is
calculated as Income (Loss) from operations less depreciation and
amortization.


"We are pleased to report that our revenues grew 38 percent year-over-year and advertising grew 74 percent in traditionally the weakest quarter of the year. This quarter, Stockgroup continued its focus on product development and anticipates launching our enterprise version of StockStream™ in Q4. Furthermore we continued to build our sales team under our newly appointed VP of Sales, and added two key experienced leaders to our board," stated Marcus New, President and CEO of Stockgroup.

Continued Investment in Product Innovation

This quarter Stockgroup continued to invest in the enterprise version of StockStream with the expected launch in the 4th quarter. The enterprise version is strategically aligned to help brokerage firms increase client retention, understand wallet share, and has a number of features to allow the advisor to service their customer more effectively. Continued development was also made in the next generation of StockHouse™. Development on StockStream and StockHouse is strongly focused on adding collaborative technologies and features. Stockgroup expects to launch the next generation of StockHouse next year.

10 Board and Senior Management Members Invest in Stockgroup

Stockgroup's senior management team and Board demonstrated their continued commitment to the Company's success through investing in a restricted private placement for $350,000.

Conference Call and Webcast

President and CEO Marcus New and CFO Susan Lovell will host a conference call to discuss these results on November 9 at 4:05 PM EST, which will be simultaneously webcast. To participate in the conference call, please dial 1-866-400-2280 five to ten minutes prior to the start time. To listen to the live webcast, visit www.stockgroup.com for details.

The full 10-QSB is available for review at www.stockgroup.com and www.sec.gov.

About Stockgroup Information Systems Inc.

Stockgroup is a leading financial media company that licenses client portfolio products and web-based financial content to retail investment institutions, designed to increase customer retention and profitability. Top brokerage firms use Stockgroup products to differentiate their brands and develop stronger, more profitable client relationships. Stockgroup owns and operations StockHouse.com, an online financial portal that hosts the BullBoards™ message board - Canada's largest community of active investors. StockHouse.com provides a highly targeted audience and sought-after demographic for advertisers.

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

This release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. 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", "will", "anticipates", "estimates", "believes", or statements indicating certain actions "may", "could," or "might" occur. More information about potential risk factors that could affect our business is included in the Company's Form 10-QSB for the quarter ended September 30, 2006, which are on file with the SEC and available at the SEC website at www.sec.gov. Stockgroup is not obligated to update these forward-looking statements to reflect events or circumstances after the date of this document.



Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars, except number of common shares)
(unaudited)
September 30, December 31,
2006 2005
------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 2,448,857 $ 2,056,761
Accounts receivable (net of allowances
for doubtful accounts of $81,955;
December 31, 2005 - $79,982) 714,365 760,294
Prepaid and other current assets 151,312 134,183
------------------------------
TOTAL CURRENT ASSETS 3,314,534 2,951,238

Property and equipment, net 491,538 338,686
------------------------------
TOTAL ASSETS $ 3,806,072 $ 3,289,924
------------------------------
------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 738,921 $ 431,826
Accrued liabilities 434,266 366,792
Accrued payroll liabilities 194,175 157,570
Deferred revenues 1,057,796 656,805
Capital lease obligations 132,698 63,647
------------------------------
TOTAL CURRENT LIABILITIES 2,557,856 1,676,640

Long-term capital lease obligations 139,561 75,233
Long-term deferred revenues 77,506 89,113
------------------------------
TOTAL LIABILITIES 2,774,923 1,840,986

Commitments and contingencies

Shareholders' Equity:
Authorized shares - 75,000,000 common shares,
no par value
- 5,000,000 preferred shares,
no par value
Common shares issued and outstanding -
34,751,663 at September 30, 2006
(December 31, 2005 - 33,522,296) 13,639,040 13,359,341
Additional paid-in capital 3,384,585 3,202,417
Accumulated deficit (15,992,476) (15,112,820)
------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,031,149 1,448,938
------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,806,072 $ 3,289,924
------------------------------
------------------------------


Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars, except number of common shares)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
-----------------------------------------------------------
REVENUES
Revenues $ 1,889,638 $ 1,369,103 $ 5,474,726 $ 4,303,715

OPERATING COSTS
AND EXPENSES
Cost of
revenues
(exclusive of
amortization) 517,554 482,639 1,632,551 1,047,691
Sales and
marketing 737,092 568,167 2,405,517 1,496,165
General and
administrative 890,732 515,148 2,346,554 1,869,865
-----------------------------------------------------------
Total operating
expenses 2,145,378 1,565,954 6,384,622 4,413,721
-----------------------------------------------------------

Loss from
operations (255,740) (196,851) (909,896) (110,006)

Interest income
(expense), net 9,751 7,996 30,240 16,386
Other income
(expense), net - 3,727 - (1,192)
-----------------------------------------------------------

Net loss before
income taxes (245,989) (185,128) (879,656) (94,812)
Provision for
income taxes - (22,495) - (22,495)
-----------------------------------------------------------

Net loss and
comprehensive
loss $ (245,989) $ (207,623) $ (879,656) $ (117,307)
-----------------------------------------------------------
-----------------------------------------------------------

Net loss per
common share:
Basic and
diluted $ (0.01) $ (0.01) $ (0.03) $ 0.00
-----------------------------------------------------------
-----------------------------------------------------------

Common shares
used in
computing basic
and diluted net
loss per share 33,618,982 34,764,042 33,511,038 34,951,150


Stockgroup Information Systems Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(unaudited)
Nine Months Ended
September 30,
2006 2005
------------------------------
Operating activities:
Net loss $ (879,656) $ (117,307)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Depreciation and amortization of
property and equipment 154,820 246,418
Stock-based compensation expense 102,060 45,806

Changes in operating assets and liabilities
Accounts receivable 45,929 13,353
Prepaid and other current assets (17,129) 35,284
Accounts payable 307,095 249,150
Accrued liabilities 67,474 114,252
Accrued payroll liabilities 36,605 69,927
Deferred revenues 389,384 5,547
------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 206,582 662,430
------------------------------

Investing activities:
Purchases of property and equipment (115,725) (119,062)
------------------------------
NET CASH USED IN INVESTING ACTIVITIES (115,725) (119,062)
------------------------------

Financing activities:
Repurchase of common shares (27,333) (118,017)
Proceeds on exercise of stock options 44,538 23,038
Proceeds on exercise of warrants - 41,920
Proceeds on private placement, net of costs 342,602 -
Repayment of capital lease obligations (58,568) -
------------------------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 301,239 (53,059)
------------------------------

Net increase in cash and cash equivalents 392,096 490,309
Cash and cash equivalents,
beginning of period 2,056,761 1,837,012
------------------------------
Cash and cash equivalents, end of period $ 2,448,857 $ 2,327,321
------------------------------
------------------------------

Supplemental Cash Flow Information:
Interest paid $ 16,141 $ 4,666
Taxes paid 13,987 -
Assets acquired through capital
lease transactions 191,947 96,932
Value of warrants issued in connection
with private placement 93,474 -



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

Contact Information

  • Stockgroup Information Systems Inc.
    Susan Lovell
    CFO
    1-800-650-1211
    Website: www.stockgroup.com